Munchies Management Pty Ltd v Belperio

[1988] FCA 413

. S ' . , . . L .

C A T C H W O R D S

ADMINISTRATIVE LAW - judicial review - seizure of documents - Customs Act - validity of notice - principle governing stay - serious question to be tried.

CUSTOMS - Notice to Produce Documents - information on oath in writing - allegation that goods unlawfully imported, entered or undervalued - disjunctive allegation - arguably insufficient.

Customs Act 1901 s.214

Administrative Decisions (Judicial Review)	Act 1977 s.15
Federal Court of Australia Act 1976
Pearce v Button (1985) 60 ALR 537

Snow v Deputy Commissioner of Taxation (1986) 70 ALR 672

Perkins v Cuthill (1981) 34 ALR 669

KELLOGG OVERSEAS CORPORATION, JGC CORPORATION & KAISER ENGINEERS
(AUSTRALIA) PTY LTD T/AS KJR V JOHN D LAMBERT, COLLECTOR OF
CUSTOMS FOR WESTERN AUSTRALIA, DENIS JOHN LEWIS and COMPTROLLER
GENERAL OF CUSTOMS

No. WAG 107 of 1988

22 JULY 1988

FRENCH J.
PERTH

IN THE FEDERAL COURT	)
OF AUSTRALIA	)
WESTERN AUSTRALIA	)
DISTRICT REGISTRY	)
GENERAL DIVISION	1 No. WAG 107 of 1988
B E T W E E N :	KELLOGG OVERSEAS CORPORATION, JGC CORPORATION & KAISER ENGINEERS (AUSTRALIA) PTY LTD T/AS KJR

Applicants

and

JOHN D LAMBERT, COLLECTOR OF

CUSTOMS FOR WESTERN AUSTRALIA

First Respondent

and

DENIS JOHN LEWIS

Second Respondent

and

COMPTROLLER GENERAL OF CUSTOMS

Third Respondent

MINUTE OF ORDER

JUDGE MAKING ORDER:	FRENCH J.
DATE OF ORDER:	22 JULY 1988

WHERE MADE:	PERTH
THE COURT ORDERS	THAT:

1. The respondents do until further order refrain from

perusing, copying or otherwise dealing with the documents seized from the offices of the applicants on 20 July 1988 pursuant to the notice dated 13 July 1988

under the hand of the first respondent except in

accordance with this order.

2 .         The respondents do as soon as practicable seal up the documents so seized and any copies or extracts therefrom.

3 .         There will be liberty to either party to apply on short notice to vary or discharge this order.

4 .         Costs of the day reserved.

Note: Settlement and entry of orders is dealt with In
Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT

OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION	No. WAG 107 of 1988
B E T W E E N :	KELLOGG OVERSEAS CORPORATION,
JGC CORPORATION  & KAISER
ENGINEERS (AUSTRALIA) PTY  LTD
T/AS KJR

Applicants

and

JOHN D LAMBERT, COLLECTOR OF

CUSTOMS FOR WESTERN AUSTRALIA

First Respondent

and

DENIS JOHN LEWIS

Second Respondent

and

COMPTROLLER GENERAL OF CUSTOMS

Third Respondent

CORAM:  FRENCH J.
22 JULY 1988

EX TEMPORE REASONS FOR JUDGMENT

ON APPLICATION FOR INTERLOCUTORY INJUNCTION

On Wednesday, 2 0 July 1988 officers of the Australian

Customs Service seized a large quantity of documents from the

offices of the applicants at 140 St. George's	Terrace, Perth. The
documents were taken	under the authority of a notice to produce
documents and a warrant said to have been issued by the	Collector
of Customs on 13 July. The applicants have today	filed an

application for an order of review of the following decisions:-

1. The decision of the first respondent to issue a customs warrant under s.214(2) of the Customs Act 1901.

2.   The conduct of the second respondent in taking

possession of, removing and impounding books and

documents purportedly in pursuance thereof.

3 . The decision of the first respondent to issue a notice under s.214(1) of the Customs Act; and

4.    The decision of the second respondent to serve the notice and the warrant.

The applicants have come to the court on an urgent ex parte claim for interlocutory relief in the form of an order:-

the respondents do forthwith:

desist from dealing with the Documents save in

accordance with this order

seal up and deliver the Documents to the Registrar
of this Court."

Counsel for the appllcant sought to justify proceedlng ex parte by the suggestion that in the absence of an order the respondent would use the weekend to maximise the amount of information and

the copies that could be extracted and produced from the seized

documents and that such information and evidence might be avallable for use in subsequent prosecution proceedings notwithstanding that it was unlawfully obtained.

I was not persuaded that the circumstances ~ustified the

claim being heard ex parte and directed that contact be made with

the respondents. Within the space of half an hour counsel

appeared for the respondents, instructed by the Australian

Government Solicitor and opposed the order sought.

The factual background to the present application appears from the affidavit of Alan Victor Riley, who is the legal officer for the applicants. Mr Riley says in his affidavit that since about March this year, the applicants have made available to the Australian Customs Service voluntarily, access to their books and documents at their offices at 140 St. George's Terrace, Perth,

for the purpose of conducting an audit with regard to the

importation of goods for the North West Shelf project. on

Wednesday, 20 July, he said he was called to the applicants'

boardroom where he met Denis John Lewls who introduced himself as a Senlor Investigatlon Officer with the Australlan Customs Service and also introduced him to two other customs offlcers. Riley was then informed that Lewis had produced to the managing director of Kaiser Engineers a notice to produce documents, which notlce was exhibited to his affldavit. Some discussion ensued between himself and Lewis. Subsequently the first respondent, with

assistance from others, proceeded to seize and remove from the

premises a large quantity of documents occupylng approximately 80

mentioned in a list entitled up "KJR Under Valuation", which had

boxes. These documents evidently refer to various transactlons

been produced and given to other representatives of the applicant companies present in the boardroom prior to Riley's arrival. A copy of that document is exhibited to his affidavit. It lists a number of purchases of equipment and the alleged under-valuation of each of the items of equipment together with a column settlng out what is said to be duty short paid. There are a considerable number of those transactions relating to importation of goods from France, Italy, Japan, the United States, the United Kingdom and the Netherlands.

The documents are presently believed to be held by the

respondents, who are presumably in the process of examining and taking copies or extracts from them in accordance with the powers conferred by 5.214 of the Customs Act.

The notice to produce documents which was relied upon by the respondents as grounding their power to seize the documents in question, exhibited to Mr Rlley's affidavit, was addressed to the

applicants and began with the following recital:-

"Whereas information in writing has been given on oath that certain goods to wlt 6 Capstans F68.11V complete with Footswitch and Junction Box; imported at the port

of Fremantle on or about 13 January, 1988 per the vessel "DELORIS" and entered per Customs Entry NO. 5F.8007.0213P and invoiced as 6 Capstans F68.11V complete with Footswitch and Junction Box have been unlawfully imported, entered or undervalued."

The recital was followed by a demand by the Collector of Customs

duly authorlsed officer of customs, "to receive the same, all	that the applicants produce and hand over to Denis John Lewis, a
books and documents relating to such goods and relating to all
other goods imported by you at any time within the period of five years immediately preceding this request". The document further requires the applicants to produce for the inspection of the said Denis John Lewis, and to allow hlm to make copies of or extracts from, all books or documents of any kind whatsoever wherein any entry OK memorandum appears in any way relating to any such goods.

The notice is issued under the hand of the Collector of

Customs pursuant to the provisions of s.214 of the Customs Act

1901 which in the relevant parts in sub-s.(l) provides:-

"Whenever information in writing has been given on oath to the Collector that goods have been unlawfully imported exported undervalued or entered or illegally dealt with ... the owner shall immediately upon being required so to do by the Collector produce and hand over

to him all books and documents relating to the goods so imported exported entered seized or detained undervalued or illegally dealt with, and of all other goods imported or exported by hlm at any time within the period of 5 years immediately preceding such request seizure or detention, and shall also produce for the inspection of the Collector or such other officer as he may authorize for that purpose and allow such Collector or officer to make coples of or extracts from all books or documents of any kind whatsoever wherein any entry or memorandum appears in any way relatlng to any such goods."

The short point on the law made by the applicant is that the descriptlon of the content of the informatlon in writing referred to in the notice to produce, indicates that it asserts that the goods in questlon, that is the six capstans, have been

unlawfully imported, entered or undervalued, that is to say, it

makes dis~unctive allegations and does not assert positively that	one or the other or all the alleged offences or contraventions
have been committed. Although the disjuntive use of "or" appears
in s.214 it is contended that the intention and proper
construction of the section requires a commitment by the person swearing out the information to one or more of the unlawful acts there set out. That is to say, this complaint could not have been
made of the notice and its backing information if the word "and"
had appeared before "undervalued" instead of the word "or".
In support of the general submissions reference was made to the judgment of Pincus J. in Pearce v Button (1985) 60 ALR 537
at 545 where, referring to 5.214, his Honour said:-

"I think Mr Joyner was actlng under the mlsapprehenslon that he was entitled to swear out an information if he merely had reasonable cause to believe the matters mentioned. That is not what the section says. The informant must commit himself to swearing that goods have been unlawfully imported, or whatever the allegation is. The difference is not, at least in this case, merely a matter of the mode of expression. I think Mr Joyner would not have been able to swear that

any goods had been unlawfully imported by	the
applicants, as a matter of positive allegation.	For

this reason, the information was void; that is, it was necessary that the Collector be given information on oath by a person able to swear simply that goods had been unlawfully imported, entered or illegally dealt with: Mr Joyner was not such a person, nor did he swear to precisely what s.214 requires."

And his Honour's view appears not to have been disapproved on appeal in that case which is reported at 6 5 ALR 83 and was expressly approved in the judgment of Spender J. at 99 where his Honour said:-

"The learned primary judge held that the information

sworn by Mr Joyner was void because It did not state that the cars had been unlawfully imported, as required by s.214. The respondents flled a notlce of contention

under 0.52, r.22(3) challenging this finding. I	agree
with the conclusion of	the learned trial judge for the

reasons he gave and, in addition, in my opinion the information did not identify the goods and so did not entitle the Collector of Customs, acting under s.214, to deduce that the goods referred to in the information referred to, or included, goods imported by mister Cars,

Gold Coast. "

The claim for interlocutory relief appears to be made

under s.15 of the Administrative Decisions (Judicial Review) Act

1977 which provides:-

"(1) The making of an application to the Court under section 5 in relation to a decision does not affect the operation of the decision or prevent the taklng of action to implement the decision but -

(a)	the Court or a Judge may, by order, on such
conditions if any as it or he thinks fit, suspend

the operation of the decision; and

(b) the Court or a Judge may order, on such conditions (if any) as it or he thinks fit, a stay of all or any proceedings under the decislon.

( 2 ) The Court or a Judge may make an order under

sub-section (1) of its or his own motlon or on the application of the person who made the application under section 5."

There is also, of course, the power of the Court under s.23 of the

Federal Court of Australia Act 1976, which is not excluded by the

special power under s.15. I have previously had occasion to

consider the principles governing the discretion	conferred by s.15
in Snow v Deputy Commissioner of Taxation (1986)	70 ALR 672. AS
indicated there, the test which I think is to be	preferred is that
enunciated by Keely J. In Perkins v Cuthlll ( 1	981) 3 4 ALR 669,
that reasons or clrcumstances exist whlch make it lust that the	that while s.l5(l)(a) requires an applicant to satlsfy the court
court should make the orders sought, it 1 s not necessary to show that those reasons are special or exceptional. It may be that in
some cases the test satisfying that criterion will be that
traditionally applied to the grant of interlocutory relief, namely, the demonstration of a serious question to be trled and a balance of convenience favouring the applicants.

In this case, on the face of the notice to produce

documents, it is at least arguable that the backing information has not made that commitment to the allegation of a particular offence or offences which is required by s.214 as a condition of the power to require the handing over of books and documents to the Collector of Customs or his authorised officer. I do not, at this stage, comment on the probability that that argument will ultimately succeed. There has been too little opportunity for either party to make properly considered submissions on the question. All I say for the moment is that the argument is at least open and in that sense raises a serious question to be tried.

As to the balance of convenience, the applicant contends that continued inspection, perusal and copying of the documents, on the part of the officers of the Australian Customs Service, will give them access to informatlon which it may turn out has been unlawfully obtained but which may on established rules nevertheless be admlssible in subsequent prosecution proceedings. On the other hand the respondents have not been able to indicate	at thls stage that they have planned	any Intensive programme of
inspection of the documents over the weekend.	the	In

circumstances, the appropriate course of action is to maintain the posltion at least for the next 4 8 hours or so that the respondents take no further action in relation to the documents. That is to say, they will not be permitted to peruse or take extracts or copies from the documents until further order of this Court and I anticipate that an application for variation or discharge of this order will be brought urgently, or at least on short notice early next week.

The second limb of the relief that the applicant seeks I
think is at this stage simply impracticable. It is unreasonable,

in my oplnion, to require the respondents to seal up the documents

and deliver them to the Registrar over the weekend or indeed to

deliver them as was the alternative suggestion, to the solicitors

for the respondents. If I make the order that is proposed some

degree of trust will have to be placed in the respondents and their officers that they will comply with that order until the court has had an opportunity to hear further argument on the matter on Monday if that is suitable to all parties.

The order then that I would propose to make would be in

the followlng terms:-

1. The respondents do until further order refrain from

peruslng, copying or otherwise dealing with the documents seized from the offices of the applicants on

20 July 1988 pursuant to the notice dated 13 July 1988

under the hand of the first respondent except in

accordance with this order.

2.     The respondents do as soon as practicable seal up the documents so seized and any copies or extracts therefrom.

3 .    There will be liberty to either party to apply on short notice to vary or discharge this order.

4 .    Costs of the day reserved.

I certify that this and the preceding nine

(9) pages are a true copy of the
Ex tempore Reasons for Judgment of

his Honour Justice French.

Date : 

Counsel for the Applicant: Mr P. Foss

Solicitors for the Applicant:  Mallesons Stephen Jaques

Counsel for the Respondent: MC P. MacLiver

Solicitors for the Respondent: The Australian Government Solicitor

Date of Hearing:  22 July 1988

Date of Judgment: 22 July 1988