Narelle Maree Walsh, Delegate of the Chief Executive Officer of Customs v Allegretta

[1999] WASC 136

NARELLE MAREE WALSH, Delegate of the Chief Executive Officer of Customs -v- ALLEGRETTA & ANOR [1999] WASC 136

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[1999] WASC 136
Case No:	CIV:1883/1997	Heard:	19-22 JULY 1999
Coram:	WHITE J	Delivered:	19/08/99
No of pages:	38	Judgment Part:	1 of 1
Result:	Judgment for plaintiff against first defendant Claim against second defendant dismissed
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Parties:	NARELLE MAREE WALSH, Delegate of the Chief Executive Officer of Customs GIACOMO ALLEGRETTA FRANCESCO ALLEGRETTA THE CHIEF EXECUTIVE OFFICER OF CUSTOMS
Catchwords:	Customs Act Offences Removal of goods from bonded warehouses and failure to deal with them in accordance with the Customs authorisation Turns on own facts
Legislation:	Excise Act 1901 (Cth) Customs Act 1901 (Cth) Crimes Act 1914
Case References:	L Vogel & Son Pty Ltd v Anderson (1969-1970) 120 CLR 157 R v Raso (1993) 68 A Crim R 495 Chullani v Chief Executive Officer of Customs, unreported; SCt of WA; Library No 960660; 15 November 1996 Collector of Customs (NSW) v Southern Shipping Co Ltd (1962) 107 CLR 279 Collector of Customs (Vic) v Wilh Wilhelmsen Agency Pty Ltd (1956) 102 CLR 147 Goben Pty Ltd v Chief Executive Officer of Customs (1997) 149 ALR 102 Ha v State of New South Wales (1997) 189 CLR 465 Hansen v Comptroller-General of Customs, unreported; SCt of NSW; Smart J; 1 March 1996 Jolley v Commissioner of Taxation (Cth) (1989) 86 ALR 297 Keith Spicer Ltd v Mansell [1070] 1 WLR 333 Ludwigs Canberra Bond Cellar Pty Ltd v Sheen (1982) 65 FLR 347 Minister for Immigration, Local Government & Ethnic Affairs v Dela Cruz (1992) 34 FCR 348 R v Don Santos (1995) 80 A Crim R 350 Wilson v Chambers & Co Pty Ltd (1926) 38 CLR 131

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA CITATION : NARELLE MAREE WALSH, Delegate of the Chief Executive Officer of Customs -v- ALLEGRETTA & ANOR [1999] WASC 136 CORAM : WHITE J HEARD : 19-22 JULY 1999 DELIVERED : 19 AUGUST 1999 FILE NO/S : CIV 1883 of 1997 BETWEEN : NARELLE MAREE WALSH, Delegate of the Chief Executive Officer of Customs

Plaintiff

AND

GIACOMO ALLEGRETTA
First Defendant

FRANCESCO ALLEGRETTA
Second Defendant

FILE NO/S : CIV 1157 of 1998 BETWEEN : THE CHIEF EXECUTIVE OFFICER OF CUSTOMS

Plaintiff

AND

GIACOMO ALLEGRETTA
First Defendant

FRANCESCO ALLEGRETTA

Second Defendant

(Page 2)

Catchwords:

Customs Act - Offences - Removal of goods from bonded warehouses and failure to deal with them in accordance with the Customs authorisation - Turns on own facts

Legislation:

Excise Act 1901 (Cth)

Customs Act 1901 (Cth)
Crimes Act 1914

Result:

Judgment for plaintiff against first defendant
Claim against second defendant dismissed

Representation:

CIV 1883 of 1997

Counsel:

Plaintiff : Ms L B Price
First Defendant : In person
Second Defendant : In person

Solicitors:

Plaintiff : Australian Government Solicitor
First Defendant : In person
Second Defendant : In person

CIV 1157 of 1998

Counsel:

Plaintiff : Ms L B Price
First Defendant : In person
Second Defendant : In person

(Page 3)

Solicitors:

Plaintiff : Australian Government Solicitor
First Defendant : In person
Second Defendant : In person

Case(s) referred to in judgment(s):

L Vogel & Son Pty Ltd v Anderson (1969-1970) 120 CLR 157
R v Raso (1993) 68 A Crim R 495

Case(s) also cited:

Chullani v Chief Executive Officer of Customs, unreported; SCt of WA; Library No 960660; 15 November 1996
Collector of Customs (NSW) v Southern Shipping Co Ltd (1962) 107 CLR 279
Collector of Customs (Vic) v Wilh Wilhelmsen Agency Pty Ltd (1956) 102 CLR 147
Goben Pty Ltd v Chief Executive Officer of Customs (1997) 149 ALR 102
Ha v State of New South Wales (1997) 189 CLR 465
Hansen v Comptroller-General of Customs, unreported; SCt of NSW; Smart J; 1 March 1996
Jolley v Commissioner of Taxation (Cth) (1989) 86 ALR 297
Keith Spicer Ltd v Mansell [1070] 1 WLR 333
Ludwigs Canberra Bond Cellar Pty Ltd v Sheen (1982) 65 FLR 347
Minister for Immigration, Local Government & Ethnic Affairs v Dela Cruz (1992) 34 FCR 348
R v Don Santos (1995) 80 A Crim R 350
Wilson v Chambers & Co Pty Ltd (1926) 38 CLR 131

(Page 4)

1 WHITE J: These two cases were heard together, the plaintiff in CIV 1157 of 1998 relying upon the evidence given in CIV 1883 of 1997.

CIV 1183 of 1997

2 In CIV 1883 of 1997, the plaintiff claims penalties in respect of a number of alleged offences against the Excise Act 1901 (Cth) and the Customs Act 1901 (Cth) respectively.

3 The claims, which are set out in the 777 paragraphs of the statement of claim, relate to:

(a) 35 alleged offences of contravening s 61 of the Excise Act 1901 between 24 January 1994 and 19 July 1995, 35 alleged offences against s 114D(1)(a) of the Customs Act 1901 between the same dates,

(b) 35 alleged offences against s 116(2)(a) of the Customs Act 1901 between the same dates, and

(c) 35 alleged offences against s 234(1)(d)(i) of the Customs Act 1901 between 24 January 1994 and 22 June 1995.

Section 61 of the Excise Act 1901 provides:

"61. All excisable goods are, until delivered for home consumption or for exportation to a place outside Australia, whichever first occurs, subject to the control of Customs and must not be moved, altered or interfered with except as authorised by this Act."

4 Section 114D(1)(a), s 116(2)(a) and s 234(1)(d)(i) of the Customs Act 1901 provide:

"114D Goods to be dealt with in accordance with export

entry

(1) The owner of goods in respect of which an export entry has been communicated to Customs:

(a) must, as soon as practicable after an authority to deal with the goods is granted, deal with the goods in accordance with the entry; and … "

(Page 5)

"(2) Where an authority to deal with goods entered under section 114 is taken, under subsection (1), to have been totally or partially revoked, the owner of the goods must, within 7 days after the end of the period referred to in that subsection:

(a) if the authority to deal was taken to be totally revoked -
withdraw the entry relating to the goods; and … "

and

"234 Customs offences

(1) …

(d) knowingly or recklessly:

(i) make a statement to an officer that is false or misleading in a material particular; or … "

5 The first defendant was at all material times the registered sole proprietor of the business name "Western Australia Ship Supplies" (to which I shall refer as "WASS"), which carried on business as ship provedores. The plaintiff alleges that the second defendant was at all material times the partner of the first defendant in WASS. In the alternative, the plaintiff alleges that the second defendant aided, abetted or was directly or indirectly concerned in the commission by the first defendant of the offences alleged against the latter and, by operation of s 236 of the Customs Act 1901 is deemed to have committed the contraventions in question. In summarising the alleged offences below, I shall use the term "WASS" in lieu of the pleaded term "The First Defendant and/or the Second Defendant".

6 Goods intended for export from Australia and required to be entered with the Australian Customs Service ("Customs") may be so entered by way of the Customs EXIT computer system by a registered EXIT user as or on behalf of the owner of the goods in question. A computer entry of goods intended for export transmitted to Customs via EXIT must contain, inter alia, statements concerning the goods to be exported, the warehouse code for excisable goods, the name of the owner of the goods, the consignee, the country of destination, the ports of loading and discharge and the date of export.

(Page 6)

7 At all material times, each of Ramson Holdings Pty Ltd trading as IMES Shipsupply ("IMES"), Sealanes [1985] Pty Ltd ("Sealanes") and Nanami Pty Ltd trading as BC Marine/Seven Ocean Ship Supply ("BC Marine") was a registered user of EXIT and when acting as agent for WASS was duly authorised so to act. I shall refer to each of them hereunder as "the supplier", the identity of the supplier being apparent from the context. Each of the suppliers operated a bonded warehouse which contained, inter alia, cigarettes, beer and spirits which were excisable goods, subject to the control of Customs.

8 From time to time, WASS purchased and took delivery from the bonded warehouse of IMES or Sealanes or BC Marine of a quantity of Winfield or other cigarettes, being excisable goods. In respect of each of those transactions, the supplier, as agent of WASS prepared and transmitted to Customs an EXIT computer export entry ("the Entry") in relation to the relevant goods. In each case, the Entry stated that the goods were intended to be delivered to a ship; that the goods were ship's stores, not subject to excise duty or to customs duty, to be exported overseas on the ship referred to on the date of export given.

9 In each case, in reliance on the statements contained in the relevant Entry, Customs provided to the supplier concerned an export entry advice ("EEA") with an export clearance number ("ECN") in respect of the goods in question. By the EEA, Customs authorised WASS to deliver the goods therein described to the ship named therein for exportation to a place outside Australia within 30 days of the date of export specified in the Entry. In each case, the ship described in the Entry was engaged in making international voyages with Fremantle as one of its ports of call. In the event that, for any reason, goods referred to in an EEA are not delivered in accordance with the authority contained in that EEA, the person authorised to deliver the goods is obliged to return them to the supplier to be taken back into the bonded warehouse, and to withdraw the Entry relating to such goods.

10 As will appear, there are only two consignments the subject of an EEA issued to WASS which were returned to the relevant bonded warehouse and in respect of which the Entry was withdrawn. Those two consignments were in respect of goods to be delivered respectively to the M/V CHC # 1 and the M/V Gopali. I shall advert to these later.

11 The 35 alleged offences relate to the following transactions:

(Page 7)

12 1. 40,000 Winfield cigarettes, obtained by WASS from IMES on or before 24 January 1994 for delivery to the Master of the EL Cordero as ship's stores.

13 2. 40,000 Winfield cigarettes, obtained by WASS from IMES on or before 12 March 1994 for delivery to the Master of the EL Cordero as ship's stores.

14 3. 60,000 Winfield cigarettes, obtained by WASS from IMES on or before 24 May 1994 for delivery to the Master of the EL Cordero as ship's stores.

15 4. 20,000 Benson & Hedges cigarettes obtained by WASS from Sealanes on or before 28 May 1994 for delivery to the Victoria Bay as ship's stores.

16 5. 60,000 Winfield cigarettes, obtained by WASS from IMES on or before 28 May 1994 for delivery to the Master of the Uniceb as ship's stores.

17 6. 50,000 Winfield cigarettes, and 10,000 Benson & Hedges cigarettes obtained by WASS from IMES on or before 13 July 1994 for delivery to the Master of the EL Cordero as ship's stores.

18 7. 20,000 Winfield cigarettes, obtained by WASS from IMES on or before 12 August 1994 for delivery to the Master of the Contship Jork as ship's stores.

19 8. 40,000 Winfield cigarettes, obtained by WASS from IMES on or before 12 August 1994 for delivery to the Master of the Ace Enterprise as ship's stores.

20 9. 60,000 Winfield cigarettes, obtained by WASS from IMES on or before 25 August 1994 for delivery to the Master of the Uniceb as ships store's.

21 10. 30,000 Winfield cigarettes, obtained by WASS from IMES on or before 16 September 1994 for delivery to the Master of the Anangel Pride as ship's stores.

22 11. 40,000 Winfield cigarettes, obtained by WASS from IMES on or before 1 October 1994 for delivery to the Master of the Ace Enterprise as ship's stores.

(Page 8)

23 12. 40,000 Winfield cigarettes and 20,000 Benson & Hedges cigarettes, obtained by WASS from IMES on or before 12 October 1994 for delivery to the Master of the El Cordero as ship's stores.

24 13. 30,000 Winfield cigarettes, obtained by WASS from IMES on or before 21 October 1994 for delivery to the Master of the Rubin U as ship's stores.

25 14. 30,000 Winfield cigarettes, obtained by WASS from IMES on or before 8 November 1994 for delivery to the Master of the Rubin Rose as ship's stores.

26 15. 40,000 Winfield cigarettes, and 21,000 Peter Jackson cigarettes obtained by WASS from BC Marine on or before 24 November 1994 for delivery to the Master of the El Cordero as ship's stores.

27 16. 59,400 Winfield cigarettes obtained by WASS from BC Marine on or before 15 December 1994 for delivery to the Master of the Uniceb as ship's stores.

28 17. 40,000 Winfield cigarettes obtained by WASS from BC Marine on or before 23 December 1994 for delivery to the Master of the Princess Wave as ship's stores.

29 18. 50,000 Winfield cigarettes obtained by WASS from BC Marine on or before 9 January 1995 for delivery to the Master of the El Cordero as ship's stores.

30 19. 10,000 Winfield cigarettes obtained by WASS from BC Marine on or before 11 January 1995 for delivery to the Master of the El Cordero as ship's stores.

31 20. 20,000 Winfield cigarettes obtained by WASS from BC Marine on or before 12 January 1995 for delivery to the Master of the Golden Jade as ship's stores.

32 21. 40,000 Winfield cigarettes, obtained by WASS from IMES on or before 20 January 1995 for delivery to the Master of the Handy Silver as ship's stores.

33 22. 60,000 Winfield cigarettes obtained by WASS from BC Marine on or before 5 March 1995 for delivery to the Master of the El Cordero as ship's stores.

(Page 9)

34 23. 20,000 Winfield cigarettes obtained by WASS from BC Marine on or before 29 March 1995 for delivery to the Master of the La Loma as ship's stores.

35 24. 40,000 Winfield cigarettes, obtained by WASS from IMES on or before 31 March 1995 for delivery to the Master of the Fairwind Express as ship's stores.

36 25. 30,000 Winfield cigarettes obtained by WASS from BC Marine on or before 10 April 1995 for delivery to the Master of the Charles LD as ship's stores.

37 26. 40,000 Winfield cigarettes obtained by WASS from BC Marine on or before 21 April 1995 for delivery to the Master of the Rubin Lotus as ship's stores.

38 27. 20,000 Winfield cigarettes obtained by WASS from BC Marine on or before 21 April 1995 for delivery to the Master of the El Cordero as ship's stores.

39 28. 20,000 Winfield cigarettes and 20,000 Benson & Hedges cigarettes, obtained by WASS from IMES on or before 24 April 1995 for delivery to the Master of the El Cordero as ship's stores.

40 29. 20,000 Winfield cigarettes obtained by WASS from BC Marine on or before 28 April 1995 for delivery to the Master of the La Loma as ship's stores.

41 30. 40,000 Winfield cigarettes, obtained by WASS from IMES on or before 1 May 1995 for delivery to the Master of the Marlin Trader as ship's stores.

42 31. 40,000 Winfield cigarettes obtained by WASS from BC Marine on or before 5 May 1995 for delivery to the Master of the C S Sunny as ship's stores.

43 32. 20,000 Winfield cigarettes obtained by WASS from BC Marine on or before 29 May 1995 for delivery to the Master of the La Loma as ship's stores.

44 33. 10,000 Winfield cigarettes obtained by WASS from BC Marine on or before 31 May 1995 for delivery to the Master of the La Loma as ship's stores.

(Page 10)

45 34. 60,000 Winfield cigarettes obtained by WASS from BC Marine on or before 2 June 1995 for delivery to the Master of the El Cordero as ship's stores.

46 35. 30,000 Winfield cigarettes, obtained by WASS from IMES on or before 21 June 1995 for delivery to the Master of the Princess Wave as ship's stores.

47 It is the plaintiff's contention that, in each case, the defendants did not:

(a) deliver the relevant goods to the vessel named in the Entry;

(b) deal with the relevant goods in accordance with the EEA;

(c) export the goods on the relevant ship within 30 days of the date of export specified in the Entry

(d) enter the relevant goods for home consumption;

(e) retain the relevant goods safely;

(f) properly account for the relevant goods or

(g) withdraw the relevant Entry.

48 The plaintiff alleges that the defendants moved the goods to a retail outlet or other premises in Western Australia and contrary to the permission contained in the relevant EEA. Accordingly, the plaintiff contends, the defendants contravened s 61 of the Excise Act 1901.

49 Furthermore, by failing to deal with the relevant goods in accordance with the Entry and as soon as practicable after the authority in the relevant EEA was given, the defendants contravened s 114D(1)(a) of the Customs Act 1901.

50 The plaintiff then pleads that, in the premises, the authority in the relevant EEA was, by operation of s 116(1) of the Customs Act 1901, taken to be revoked and the defendants' failure to withdraw the relevant Entry was a contravention of s 116(2)(a) of the Customs Act 1901.

51 The plaintiff pleads that the statements in each Entry were false or misleading in material particulars to the knowledge of the defendants in that:

(Page 11)

(a) the relevant goods were stated to be ships stores when the defendants knew they were not;

(b) as the defendants knew, the goods were not in fact to be consigned to the named vessel

(c) The defendants did not intend to export the goods overseas on the named vessel or to export the goods within 30 days of the date of export specified in the relevant Entry, or at all.

52 The plaintiff pleads that the defendants knowingly or recklessly caused, authorised, instructed or directed the relevant supplier to make each of the statements contained in each Entry to officers of Customs, knowing that or reckless as to whether, the statements were false or misleading in the material particulars referred to above. Accordingly, the plaintiff pleads, the defendants have contravened s 234(1)(d)(i) of the Customs Act 1901.

53 The plaintiff claims the various penalties prescribed for each contravention of s 61 of the Excise Act 1901, and of s 114D(1)(a), s 116(2)(a) and s 234(1)(d)(i) of the Customs Act 1901.

54 The defence puts in issue, firstly, the existence of a partnership between the defendants. The defendants say that the first defendant at all material times carried on the business of WASS as the sole proprietor thereof and that, at various times material to the action, the second defendant was employed by the first defendant to carry out work for the business under the instruction of the first defendant.

55 The defendants deny that any of the suppliers was authorised to act as the agent of the second defendant but say that at all material times, the suppliers were authorised to act as the agents of the first defendant.

56 The defendants deny that any of the goods concerned was purchased by or delivered to the second defendant but admit that such goods were purchased by the first defendant and delivered to him.

57 The defendants do not deny that the goods concerned were subject to the control of Customs and they admit that the statements alleged were contained in each relevant Entry.

58 The defendants deny the plaintiffs' allegations that they did not:-

(Page 12)

(a) deliver the relevant goods to the vessel named in the Entry;

(b) deal with the relevant goods in accordance with the EEA;

(c) export the goods on the relevant ship within 30 days of the date of export specified in the Entry

(d) retain the relevant goods safely;

(e) properly account for the relevant goods and

(f) withdraw the relevant Entry, where there was an obligation so to do.

59 and advise that they did not enter the relevant goods for home consumption.

60 The defendants admit that they did not and have not withdrawn any Entry, deny that they moved goods to a retail outlet or other premises in Western Australia and deny that they have contravened either the Excise Act 1901 or the Customs Act 1901.

61 Accordingly, the major disputes between the parties are:

(1) was the second defendant a partner in WASS, or, if not, did he aid and abet the first defendant in contravening the Excise Act 1901 and Customs Act 1901 as alleged?

(2) were the goods, the subject of each EEA, delivered to the vessels named in the relevant Entry, in accordance with the authority contained in each EEA?

62 In respect of each of the 35 transactions, a statement has been obtained from each of the Masters of the relevant vessels and admitted pursuant to s 79C of the Evidence Act.In each case, the Master has denied receiving the goods in question. In the majority of such cases, there is therefore a straight conflict between the first defendant's evidence on the one hand, that he did deliver the goods in question to the relevant vessel and the denial, on the other hand, by the ship's Master that the goods were delivered. The onus to establish her case lies on the plaintiff. There are, however, certain significant matters which tend to discredit the first defendant's allegations that he complied with the terms of each authority and delivered the goods to the vessel named in the relevant Entry.
(Page 13)

63 The averments of fact made by the plaintiff constitute prima facie evidence of the facts alleged. These averments go into considerable detail, as one might expect in the circumstances. The first defendant's evidence was very general in its terms. He said, in chief:

"Your Honour, basically it's pretty difficult to remember the evidence that's been given forward for the last 3 days or so, but the point that's most clear in my mind is obviously the last bit of evidence in regards to Hetherington Kingsbury. I'd like to point out, your Honour, that I've been a ships provedore for nearly 20 years from 1976 to 1996. It's basically the only industry I've ever been in. It's the only employment I've ever had, whether it was for a different provedore company, and over that period of time I met a lot of captains, a lot of chief stewards, a lot of crew, a lot of shipping agents. I had contact with people that were in that industry for the same length of time, 20-odd years, so I built up a rapport with these people that, you know, we were on basically first-name basis and they would willingly help me or pass on information to me in the sense of shipping movements coming in, going out, master's name - general information that any provedore can acquire from any particular agent at any given time. In the instance of the Gopali I had actually rung Mr Ian Mace that afternoon to inquire when the vessel was sailing because I was under the impression that I did have an order for that vessel, and I told him so, that I would be putting on board later that evening. As it turned out, the order was cancelled, but Mr Mace did not know that. The reason why he was ringing me was basically to say, 'I thought you had stores to put on. The vessel's sailing. Where are you?' I informed him then that, no, the order had been cancelled and that's why I wasn't there. Your Honour, the provedoring game is a funny industry because I'd been in it 20 years, and 5 years of it on my own, and it doesn't work on written contracts or anything like that. It's on who you know, how friendly you are with them, how much they trust you, how you look after them. It's based on a lot things that sort of - personal things, more or less, and basically the whole thing is based on trust. I recall Mr Greenwood's first statement saying that he felt that Western Australian Ships Supply was only in the provedoring industry because basically once the investigation commenced, within 6 months the business closed down. He was very correct in saying that because basically I had no written contracts with any

(Page 14)

of the vessels I was supplying, with customs - well, not so much harassment, but during their course of investigation of calling on all my vessels, talking with people, basically all my clients - I basically lost all my clients. None of the provedoring companies that I was - purchasing bond stores or purchasing any other stores, would have any dealings with me whatsoever, and basically drove Western Australian Ships Supply to close its doors because no-one would have anything to do with us because of the investigation, even to the extent, your Honour, that once Western Australian Ships Supply closed there was a job advertised for Sealanes Supplies which I applied for, and basically it was a role that I could've walked in one day and commenced work the next because it was something that I'd been doing all the time. The managing director interviewed me that day and said, 'Look, the job is yours, but unfortunately I can't give it to you because of the investigation that surrounds you' - and that the bad name, or whatever you like to call it, that I may basically bring with me, even though I'd not been proven guilty in any sense whatsoever. Your Honour, I did establish a market for Winfield cigarettes and it was a unique market because none of the other provedores had ever done it and I was the only one that was doing it, and I'll admit that quite freely because no-one had ever taken the time to actually analyse the situation between international cigarettes and Australian cigarettes. It probably cost me a lot of money to establish that market because, your Honour, I commenced business on my own in 1990 and basically I called on everyone's ships - Sealanes ships, Imes (sic) ships, my ships.

In the early days people I was talking to then would have only been first officers, second officers, assistant cooks, but in the years to follow those people did return on different vessels with different titles. The first cook was no longer first cook, he was the chief cook, or the assistant steward was no longer assistant steward, he was a chief steward, or the first officer became the chief officer and so forth. Because I have been there for such a long time, these people were quite prepared to deal with me and help me out. There's even one of the statements that one of the captains says that he basically dealt with Western Australian Ships Supplies - which is one of the livestock carriers - because he knew me and he thought, because I was only a small company, that he wanted to help me out and that's why he dealt

(Page 15)

with me. Basically, your Honour, that's how the industry was basically made up - on trust. People liked you so they helped you. If they didn't like you, they wouldn't have a bar of you and that's basically - your Honour, I really can't say much more.

I think you might like to turn your mind to these cheques that were apparently banked to - - -?---Yes. Actually, now that you have brought that up, your Honour, I would like to bring that up.

Yes?---Mr Russell, who's a very good friend of my brother's and during the course of the years has become a friend of mine - he was basically purchasing soft drinks from us and selling them and distributing to delicatessens that he was supplying bread to. When he was purchasing from us and reselling them, basically when the shopkeepers were paying him for the goods they would give him cash cheques, so in return when he came back to pay us would pay us with cash cheques or whatever other cash there was and then he would keep the difference and that is the reason why those cheques ended up into our account from those delicatessens, but in actual fact they're from Mr Russell because that's what he was using to give us for payment of the goods that he was purchasing from us and that's how they basically came into our system.

Do you want to deal with the suggestion that Winfield cigarettes were purchased from you or that you got paid for them by shops in town?---Your Honour, we never sold any cigarettes to any shops.

You didn't? All right. Is there anything else you wanted to tell me about the case?---As I said earlier, your Honour, I can only go on what's fresh in my mind, but, no, at the moment I can't think of anything else."

64 He was cross-examined and the following took place:

"PRICE, MS: Mr Allegretta, you have sat here for the last 2 and a half days and heard all the evidence that the plaintiff, Australian Custom Service, has put forward. We have made a number of allegations on the basis of that evidence. One of those related to the partnership - we have alleged a partnership, and what I'm saying to you is that there was a partnership between yourself and your brother. That you were in

(Page 16)

partnership as Western Australian Ships Supply. Do you agree with that?---No, not at all. I started the business in 1990 as a sole trader. I basically worked on my own for about the first 18 months to 2 years. My brother in that time period was helping me on occasions when I was storing ships and I needed a hand because I was basically doing it on my own. As the business grew and I was able to afford to give my brother some sort of salary or wage he then came and worked for me. But he was never a partner in Western Australian Ships Supply. I solely started that off my own back. He had never been in the industry before and that was the only industry I've ever been in.

So you don't agree with the plaintiff's assertion that there was a partnership between you and Mr Frank Allegretta?--- It's not a matter of agreeing. It's a fact that my brother was not my partner. He might be my partner because he's my brother, but he wasn't a partner as in the business sense of Western Australian Ships Supply.

The plaintiff has put forward considerable evidence to the court that you arranged for certain provedore companies - Imes (sic) Shipsupply, BC Marine, and Sealanes - to make entries with customs for you?---That's correct.

Those entries falsely stated, in our submission, that the goods were ships stores to be exported overseas on ships?---That's correct.

So you are admitting that they were falsely stated to be ships store for exportation?---No, no, sorry. The ECNs are correct. They were instructed by me that those goods were going on board the ship and that they raise those documents in accordance with what they had to do so that I could move the goods. I totally agree with that; I've never denied the fact.

Because it is our submission that on the evidence you caused various statements to be made and those statements were false and they were misleading. Do you agree with me on that?---I don't know what you mean.

You made statements that you would deliver goods to vessels?---Yes.

That the goods were to be ships stores?---Yes.

(Page 17)

And that the goods were to go overseas and in fact isn't it correct that you had no intention of sending the goods overseas?---No, the statements were made as correct, that they were ships stores. The goods did go on board and that they were going overseas. There was nothing false about that; that is correct.

But the goods didn't go on board, did they, Mr Allegretta? They actually went into your premises and then went from there to all sorts of outlets around the state, of which prime examples were Mr Macfarlane's supermarket and Mr Valentine's mini-mart?---Mr Macfarlane, I've never met the man and I've never had any dealings with him. So if he has acquired cigarettes from somewhere, he certainly hasn't acquired them from me. The statements we made as in the goods were being shipped is all true and correct.

It's also the plaintiff's position, Mr Allegretta, that because you didn't make a proper entry with customs and you didn't deliver the goods in accordance with the entry, you then added to that by failing to withdraw an entry - - -

What we are saying is that you failed to withdraw that entry, as you should have done?---I would have failed in the sense if I hadn't have shipped the goods, but because the goods were shipped I didn't fail in anything. If I had have withdrawn the actual documents when the goods went on board, that would be incorrect. Why would have I failed in withdrawing them when the actual events happened and the cigarettes went?

PRICE, MS: Yes, that's right, and what I'm saying to him - that he didn't deliver them in accordance with the ECNs, that they were delivered to local premises?---But I did deliver them in accordance with the ECN, which was ships stores to be exported.

Mr Allegretta, did your brother Mr Frank Allegretta assist you in delivering goods to various premises in the metropolitan area of Perth?---We didn't deliver goods to various premises all over Perth. We delivered goods to ships, and my brother did assist me in delivering provisions and bonded stores to vessels, yes.

Did your brother assist you in collecting bonded goods from Imes (sic) warehouse?---Yes, he did.

(Page 18)

Did he assist you in collecting goods from BC Marine's warehouse?---Yes, he did.

Did he assist you in collecting bonded goods from Sealanes' warehouse?---Yes, he did.

Finally, Mr Allegretta, you mentioned in your evidence that you cancelled the order for the Gopali?---That's correct.

Who did you receive the order from?---I can't recall exactly, but I'm pretty sure it would have been from one of the officers or one of the stewards, but I can't recall exactly who it was.

You can't recall?---Not exactly.

Isn't it the case because it never happened, that you never did actually receive an order for goods from the Gopali?---In a period of 20 years as a provedore and a period of 5 years on my own, I'd boarded a lot of vessels, I met a lot of ships people, and I couldn't possibly recall every single individual person that I met.

When you received an order from a ship - and in this case you say you received an order from the Gopali - did you record the order?---Did I recall the order in what sense?

Record the order, write it down?---I would have taken a mental note of it or, yes, I would have scribbled it down on a piece of paper, or something, somewhere. Basically all the orders that I'd received, depending on the size of it - if it was only one item obviously I'd remember it, but if it was more than that, I would write them down somewhere on the back of a notebook that I carried in my briefcase.

Do you recall who cancelled the order?---Again it would have been the person that ordered it would have cancelled it.

How often did you deal with the Gopali?---Again by memory I think we might have supplied the Gopali maybe two or three times, but I can't be sure of that.

Could the witness be shown volume 4, please.

(Page 19)

Mr Allegretta, can you have a look at 928. This is an invoice apparently for the master and owners of the Gopali for 31 December 94?---That's correct.

Who drew up the invoice?---Who drew up the invoice - I drew up all the invoices.

Right. Did you draw this up on 31 December 94?---I drew up all invoices of Western Australian Ships Supplies. I drew them up myself.

Did you draw this one up on the date it's on, 31 December 1994?---If I dated it the 31st, I would probably say yes. I could only go by that date, yes.

Do you recall when you got the order from the Gopali, what time and what day?---No, I couldn't recall.

But you would have written a handwritten note for it? ---Well, for something like that I would have probably memorised it.

You memorised. Do you recall at about what time you got the order to cancel the invoice?---It was late. I think it was 8, 9 o'clock at night, but I can't be sure. It was late.

Did the person who cancelled the order tell you why the order was being cancelled?---Again I'm only going by memory, but I think he had basically done a deal with somebody else. I can't recall exactly. 1994 was 5 years ago. I honestly can't.

It's a bit strange, isn't it, Mr Allegretta, that this order is cancelled when you know that the customs are taking a particular interest in this one. We have seen evidence all the way through this case of various orders being taken out of Imes' (sic) warehouse and our (sic) of BC Marine's warehouse and out of Sealanes' warehouse. None of them were ever cancelled by any ship's master or officer, but then suddenly customs take an interest in the Gopali and you cancelled the order at about 2 to 3 hours before its departure?---I can't make any comment on that.

Mr Allegretta, I think you said earlier that the withdrawal was obtained from the ship at about 9 o'clock?---Well, I have estimated. As I say, it was 31/12/94. I couldn't particularly remember what time it was, whether it was day, afternoon or

(Page 20)

whatever. I don't know, honestly. It would depend on what time the ship was sailing. Obviously I would have received a phone call before that.

Do you remember was it 9 am? You said 9.00. 9 am or 9 pm? Which time was it?---I used to get a lot of phone calls a night time and I used to get a lot of phone calls early in the morning. I used to get a lot of phone calls during the day. In this particular instance I honestly couldn't tell you. It would have been - prior to the ship sailing I would have had a phone call to cancel it. I wouldn't have possibly been able to cancel after the ship had sailed. Therefore it would have had to have been beforehand. I don't know what time the ship sailed. I couldn't tell you right now.

Did Mr Ian Mace from Hetherington Shipping Agents phone you as the Gopali was leaving?---I can't remember. I don't know.

I thought you said earlier that he had made a call to you to check whether your order was on board?---I thought we were talking about the CHC No 1.

No. My recollection of your evidence was that you said, about the Gopali, that Ian Mace phoned because he didn't know whether the order had been cancelled?---Well, Ian Mace rang up at midnight or so to find out where I was and if it was going on board, but the order would have been cancelled prior to that.

This ship left, as I understand it, Mr Allegretta, at 12.30 pm on 31 December 1994 and that Mr Mace was in attendance at the vessel?---Yes.

Your evidence was earlier that he had phoned you from the vessel to find out if the order had been cancelled?---If the goods had gone or if I was delivering goods on board, that's true.

Isn't it the case that he actually phoned you to tell you that customs had been on board and that you had better get your order sorted out with customs because they no doubt will have checked bond and realised that there was no bond from Western Australian Ships Supply on board and that you would need to withdraw that entry quick smart?---No, he didn't, not on that fact, no.

(Page 21)

Do you recall the discussion with Mr Mace?---It was very brief because it was very late and I was already in bed.

I think that doesn't really ring true, does it, Mr Allegretta, because would you have been in bed at 12.30 pm in the day?---12.30 pm night-time?

No, 12.30 pm is the middle of the day, isn't it?---Lunchtime. That's why I thought you were saying before that we were talking about the CHC No 1. 12.30 afternoon

You just said you didn't remember the conversation with Mr Mace because you were in bed?---Because I thought it was of a night-time that you were referring to, 12.30.

You are making it up, aren't you, Mr Allegretta, because I said to you that the Gopali had departed from the berth at 12.30 pm on 31 December 1994 and I asked you what - I confronted you with what Mr Mace had actually phoned you about, which was to alert you that customs had been on board, and you said to me, 'I don't remember what Mr Mace said because it was late and I was in bed.' That was just not the truth, was it, Mr Allegretta?---I can't remember exactly back to 94 what events happened that afternoon, that evening or that morning. I'm only going by memory.

I'm saying to you that the fact was that none of your orders for bonded goods for Winfield cigarettes were withdrawn by the vessels' masters or chief officers or whoever ordered them from you or allegedly ordered them from you, except for the two ships the CHC No 1 and the Gopali that you were informed that customs were interested in and were actually checking bond on store. That's the truth, isn't it, Mr Allegretta?---No, it's not. The orders were cancelled for whatever reason and everything else was put on board, whatever time it was.

All these orders for Winfield Blue cigarettes, they never went on board the ships, did they, because the ships didn't want them, did they?---Whoever ordered Winfield Blue and Winfield Red, they went on board, yes.

The evidence has been that ships' captains on international ships like cigarettes that they can barter in other parts of the

(Page 22)

world?---From my understanding, Winfield have been a good bartering tool overseas as well.

There's no evidence of that, Mr Allegretta, and what I say to you is that these Winfield Blues were very marketable in the local supermarket market and elsewhere within Western Australia and this was a wonderful opportunity, as long as it lasted, to sell Winfield Blue cigarettes, a popular local brand locally and to add to your cash flow?---Our cigarettes never hit the local market.

The plaintiff's argument is that they did and the evidence shows that they did, Mr Allegretta. There's no evidence to show that they went on the ships at all. The masters' statements clearly indicate that they did not go on the ships. That's correct, isn't it? You have seen the masters' statements and they clearly indicate that those orders were never received on the ship?---A lot of masters don't tell the truth, for whatever reason at whatever particular time. They are basically concerned about looking after themselves or whatever they've got going at the particular time. A lot of good English speaking masters when it suits themselves really can't speak very good English when it suits them.

That's a mighty lot of masters all being inclined not to tell the truth, isn't it, Mr Allegretta? There were something like 60 to 70 masters involved here. They are all not telling the truth. Is that what you are saying?---I don't know. As far as I'm concerned they're not telling the truth; no, for whatever reason they haven't on those occasions."

65 In relation to the Gopali, the evidence was that it departed from the wharf at 12:25 or 12:30pm on 31 December 1994 and the record of telephone calls made that day on the mobile telephone which had been supplied to the ship by the shipping agent shows a call to the telephone number of WASS at 12:20pm that day. Officer Greenwood said that all visitors are required to leave a departing vessel about 15 or 20 minutes before the vessel leaves the wharf and he deduced therefore that the telephone call was probably made from the wharfside after the ship's gangway had been returned on board and probably by the shipping agent, one Ian Mace. The Gopali had been boarded by Customs officers that day and Mr Greenwood speculated that the purpose of the telephone call was to alert the first defendant to that fact, so that he could return the goods to
(Page 23)

the bonded warehouse and withdraw the Entry in the knowledge that the Customs would have ascertained that the goods said to have been destined for the Gopali had not been delivered to it. I have set out above what the first defendant said was the purpose of the telephone call. The timing of the call makes the first defendant's version improbable, in my opinion.

66 Mr Guilford gave evidence in relation to the supply in Port Hedland to the vessel Charles L-D of certain goods the subject of WASS invoices 0936 (which listed bonded goods including 10 cartons of Marlboro cigarettes and two of Salem cigarettes) in the sum of $1,689 less a discount of 5 per cent; and 0937, listing unbonded provisions. Mr Guilford had received a note from the first defendant in relation to the goods to be delivered to the Charles L-D, in which he says, inter alia:

67 "IF CAPTAIN WANTS TO PAY CASH FOR BOND GIVE HIM 10% DISCOUNT FROM $1,689 = $AUST 1520.10 EXCHANGE RATE US $0.75 -AUST $1.00 US $1,140.00"

68 Invoices 0936 and 0937 were signed by the Chief Officer of the Charles L-D and bear the ship's stamp at the foot thereof. Mr Guilford remembered delivering the goods the subject of those two invoices to the vessel in Port Hedland.

69 There was also produced a WASS invoice 0938 (listing 30 cartons of Winfield cigarettes and 40 cases each of Coca Cola and assorted soft drinks) in the sum of $2,965. That invoice is dated the same date as the two referred to immediately above, namely 17 April 1995. Unlike the others, however, it is not signed by the Chief Officer of the vessel, it has no ship's stamp and makes no provision for any discount. It is endorsed "PAID CASH" and appears to have been initialled by the first defendant. Mr Guilford did not recollect delivering the goods reflected in that invoice and the Master of the vessel has denied receiving the goods. There is no suggestion that the first defendant was in Port Hedland at the relevant time and the first defendant did not deal with the issue nor, strangely enough, was he cross-examined as to this invoice. In my opinion, the probabilities are that this was a false invoice. The cigarettes the subject of that invoice were included in the ECN 5F951001224XLC dated 11 April 1995, as were the other cigarettes reflected in Invoice 0936 and were delivered to WASS from the BC Marine bonded warehouse. I am satisfied that they were not dealt with in accordance with the relevant ECN.

(Page 24)

70 The evidence of the first defendant is directly opposed to that of the several Masters of the ships named in the various ECNs. At the outset of the trial, I ruled that the statements of those Masters were admissible pursuant to the provisions of s 79C of the Evidence Act and that they need not be called as witnesses as they came within the ambit of s 79C(2)(c) and (g) of that Act. By s 79D of the Evidence Act, in estimating the weight, if any, to be attached to a statement rendered admissible by s 79C, regard is to be had to all the circumstances from which any inference can reasonably be drawn as to the accuracy or otherwise of the statement and, in particular, to the matters set out in paragraphs (a) to (f) of s 79D. Of those particular matters, only paragraphs (a) and (b) are relevant to the present case. Those paragraphs are as follows:

"(a) to the question of whether or not the statement was made contemporaneously with the occurrence or existence of the facts stated;

(b) to the question of whether or not the qualified person or any person concerned with making or keeping the document containing the statement, had any incentive to conceal or misrepresent the facts … "

71 The statements were not made contemporaneously with the events, but they were made after consideration of the contemporaneous records of the ships.

72 There is no discernible reason for the Masters to have concealed or misrepresented the facts and none has been suggested by the defendants. It is, I think, significant that so many of the Masters have given the same evidence in circumstances in which there appears no reasonable possibility of their having got together to agree on an untrue story. Although the first defendant has said that these Masters have been untruthful, there is really nothing to substantiate such an allegation and the probabilities are, I consider, overwhelmingly against it.

73 Evidence was given by Mr Macfarlane who was formerly a partner in a firm known as Chapman Road Supermarket to the following effect (I have edited the transcript by deleting irrelevant parts of the evidence):

"So this was in 1994-1995 you were trading under that business name?---That's right.

Were you an active partner, actively involved in running the supermarket?---Yes.

(Page 25)

Did your role involve ordering stores for the supermarket?---Yes.

Were you ever approached to purchase cigarettes other than through a tobacco distributor?---Yes.

Would you mean (sic) explaining who approached you and when the approach was made?---I don't know the exact dates but it was Stuart, or Stewie as I know him. He was a De Campo driver.

Do you know his full name?---Stuart Russell.

Was Mr Russell making bread deliveries to the supermarket?---That's right.

What did Mr Russell offer to you?---Just Winfield Red and Winfield Blue.

Cigarettes?---Cigarettes.

Packets, small packets, cartons?---Cartons.

Were they big shipper's cartons or small?---Shipper's, yep.

Can you recollect how many would be in such a box?---I think it was about 40.

40 what?---Cartons.

Smaller cartons?---Yes.

Did you agree to accept supplies of cigarettes from Mr Russell?---Yes.

Do you recall what price he offered them to the supermarket?---Yes, $4.

Was that a good price by comparison with the normal wholesale price?---Yep, about 50 cents cheaper.

Was Mr Russell delivering these cigarettes to you when he made his bread deliveries?---No, after.

Did he use a De Campo's van for that?---No.

(Page 26)

Can you say what sort of vehicle he normally delivered in? ---It was just like a white Hiace van.

When he made deliveries, did he have someone else with him?---Not all the time, no.

How often would you say he had someone with him?---Maybe about half the time.

Do you know the person that was with him?---I didn't at the time, no.

Can you describe what that person looked like that was with him?---Yes.

Would you be able to say whether that person was in the courtroom today?---Yes.

Would you mind pointing him out, please. You were pointing to the two Mr Allegrettas. Which one are you saying?---The one to the left.

Dark-haired Mr Frank Allegretta. Yes, thank you. How did you normally pay for these cigarettes when they were delivered?---With a cheque.

By a cheque, and it was a partnership cheque. Was there a special account it came out of?---No, just the shop account.

How did you make the cheques out?---Just to cash.

They were just made out to cash and, what, you handed them to Mr Russell?---That's right.

Did you ever hand them to Mr Frank Allegretta?---No.

Are they the chequebooks that you wrote the cash cheques out from?---Yes.

Would you mind just describing into the record what's written on the cheque stubs? The first one is - perhaps you had better tell me which one you have got there, which stub?---The first one is 1/7/94. It has got STS, cigs, and the amount.

What is the amount?---4800.

(Page 27)

You have written on there 'cigs' and what was the other thing that was written?---STS.

Why was STS written on there?---It's another - just sort of my record so I knew what it was for. I think it was another smoke company that I didn't deal with, but it was just so I knew what the difference was.

Yes, so you had written a cash cheque out to Mr Russell, or written a cash cheque out, given it to Mr Russell and on your cheque stub you wrote the amount of the cash cheque?---Yes.

And you wrote the word 'cigs' to indicate to yourself that they were for cigarettes, that you had purchased cigarettes?---That's right.

Then the STS, if I'm understanding your evidence correctly, is some sort of signal to yourself. Can you just explain what the signal was - - -?---I think it was another smoke distributor. I don't know the exact name offhand. I don't remember.

If I can understand you correctly, you weren't prepared to write on your cheque stubs that you had paid cash and given a cheque to Stuart Russell for cigarettes?---That's right.

So to remind yourself what the cheque was for, you wrote STS?---That's correct, yes.

Which was an acronym for another cigarette supplier?---That's right.

Did you use that form of shorthand on all the cheque stubs for all the cash cheques you made out and gave to Stuart Russell?---I would say yes.

Would you mind just having a look at cheque stub 913. I think it's for 14 November 1994?---The 14th of the 11th, was it?

Yes, 14/11/94?---Yes.

That description there is not cigs. Can you say what it was?---It's sort of like D apostrophe S

All right. Can you say from your recollection that that stub was for the purchase of cigarettes?---Yes.

(Page 28)

And that you changed the 'c i g' to 'DGS'?---That's right.

That's your handwriting that it has been changed. Would you mind just having a look at cheque stub 968 for 19 December 1994?---Yes.

That one has got the word 'cigs' on it or the word 'DGS'?---It's about the same.

It has got 'DGS' has it? Would you mind just confirming that that was a cheque stub you wrote for a cash cheque for cigarettes?---Yes.

Would you please have a look at cheque stub 900 for 12 January 1995? Again has that one got 'cigs' on it or "DGS"?---"DGS".

Would you please confirm whether or not that was a cheque stub for a cash cheque for cigarettes?---Yes, it was.

Lastly would you please have a look at cheque stub 929 for 10 February 1995?---Yes.

Has that got the word 'cigs' on it or the letters 'DGS'?---DGS.

Would you kind (sic) please confirming whether or not that was a stub for a cash cheque for cigarettes?---It was.

Mr Macfarlane, do you recall when the supply of cigarettes from Mr Russell ceased?---Not the exact dates, no.

According to what I have been told, the last cheque stub was 929 and that was written on 10 February 1995?---The exact date would have been somewhere around there.

Somewhere after February 95?---Yes.

Do you recall when you were told that there would be no more cigarettes? Do you recall the occasion?---Earlier.

Who told you that there would be no more cigarettes?---Stuart."

74 Cross-examined by the first defendant, the witness said:

"Mr Macfarlane, were you dealing directly with Mr Russell or Western Australian Ships Supplies?---Just with Stewart, yes.

(Page 29)

Just with Stewart. Were you purchasing soft drinks from Mr Russell?---I had a few soft drinks, yes.

Would it be possible that you met Mr Allegretta on an occasion when Mr Russell was delivering soft drinks to your shop?---It's quite possible. I'm not too sure, I can't quite remember.

Mr Macfarlane, do you know for certain where Mr Russell was acquiring whatever goods he was selling to you from?---No."

75 An examination of the cheque stubs of Chapman Road Supermarket and the duplicate bank deposit slips of WASS demonstrates that the following cheques drawn by Chapman Road Supermarket were deposited to the credit of the bank account of WASS on the date indicated.

ChequeDeposit

Date Amount Date Amount

-.12.93 $1,976

25.1.94 $2,560

14.3.94 $1,200 15.3.94 $1,200

30.3.94 $1,200 31.3.94 $1,200

31.5.94 $4,640 31.5.94 $4,640

1.7.94 $4,800 1.7.94 $4,800

31.8.94 $4,800 1.9.94 $4,800

28.9.94 $2,000 28.9.94 $2,000

14.11.94 $3,200 15.11.94 $3,200

19.12.94 $3,450 20.12.94 $3,450

12.1.95 $2,000

76 I have mentioned the evidence of the first defendant to the effect that the cash cheques were given to WASS by Mr Russell in payment for soft drinks sold to him, but I am not persuaded that that explanation is true in the light of the evidence of Mr Macfarlane generally. When cross-examined by the first defendant, Mr Macfarlane gave the following evidence:

"Mr Macfarlane, were you dealing directly with Mr Russell or Western Australian Ships Supplies?---Just with Stewart, yes.

(Page 30)

Just with Stewart. Were you purchasing soft drinks from Mr Russell?---I had a few soft drinks, yes.

Would it be possible that you met Mr Allegretta on an occasion when Mr Russell was delivering soft drinks to your shop?---It's quite possible. I'm not too sure, I can't quite remember.

Mr Macfarlane, do you know for certain where Mr Russell was acquiring whatever goods he was selling to you from?---No."

77 The probabilities seem against the proposition that Mr Russell purchased soft drinks from WASS to a value in excess of $21,000 in a period of some 10 months and there is no evidence supporting any such proposition. One would have expected the production by the defendants of evidence of an account reflecting the dealings between Mr Russell and WASS, debiting the cost of soft drinks supplied and crediting the amounts of the cheques and any other payments (of which there was no evidence) made by or to Mr Russell as the case might be. I do not accept the first defendant's evidence that the cheques were given to WASS by Russell in payment of the latter's indebtedness to WASS for soft drinks supplied to him.

78 Mr Valentine, who had at the relevant time operated his own "deli mini-mart" at Rostrata Avenue in Willetton, the Rostrata Mini Mart, gave the following evidence in relation to his purchase of cigarettes:

"Do you recall ever being approached by anyone to take delivery of cigarettes?---Yes. A guy that used to deliver bread for us from De Campo's Bakery, a chap by the name of Stewie. I don't know his second name. He approached us one day and asked us if we wanted to buy any cheap cigarettes.

Do you recall what sort of brand of cigarettes he was offering?---Winfield Blue, to the best of my recollection.

Do you recall what you said to him when you were offered the cigarettes?---The first immediate reaction, I asked him if they were hot. That was a natural thing that came to mind. He basically replied, 'No, don't be stupid, they're not.'

All right. Did you decide to take an order of cigarettes from him?---We purchased one carton of cigarettes from Stewie, yes.

(Page 31)

Do you recall what the carton was like? Big, small?---It was just a complete carton. Each packet of cigarettes was a single packet of cigarettes in the box - ie, the outer wrappers were taken off the carton.

How big was the box? Was it a big shipper's carton or - - -?---About so square. It could take 300 packets.

All right. Were these being offered to you at a good price?---$4 a packet at the time.

How did that compare with the normal wholesale price you had to pay?---I believe we were paying at FAL around about $5.20 a packet at the time, something like that.

Okay. So you say you bought one carton. Do you recall actually paying Stewie for the cigarettes?---I didn't pay but my wife did.

Do you recall now what bank you ran the supermarket through, what bank account?---For the deli, the National Bank, Booragoon.

You wouldn't by any chance remember the total amount she paid for the carton?---$1600. $4 a packet.

1600. Do you have any knowledge at all as to what the cheque was made out to?---I made it out to cash because Stewie asked for cash dollars. It was a Tuesday that we actually paid him and of course we did the banking on the Monday from the weekend's takings, so we didn't have $1600 in cash available, so I wrote a cash cheque for 1600.

You said to me earlier that your wife paid him?---Yes.

She physically handed the cheque over to Stewie?---I believe that was the case, yes.

But the arranging of the cheque was done by yourself. Is that correct?---I can't recall whether I wrote the cheque or whether the wife wrote the cheque, to be honest with you.

How do you know then it was a cash cheque?---Because I told my wife to give him a cash cheque, I believe, at the time, yes.

(Page 32)

Did you take delivery of any more packets of cigarettes? ---No, we only took the one box.

You only took the one box?---Yes.

Were you ever offered any more?---On occasions, yes, we were; but, to tell you the truth, $1600, being a small businessman, is a big outlay for me and we couldn't afford to keep doing it that way and have $1600 worth of cigarettes sitting down. So we only took the one box."

79 He was cross-examined as follows:

"Mr Valentine, do you know Western Australian Ships Supply or anyone thereof?---No.

Have you ever had any dealings with Western Australian Ships Supply?---None whatsoever."

80 A cheque for $1,600 drawn by Rostrata Mini Mart was deposited to the credit of the bank account of WASS on 1 July 1994, on the same date as the deposit of $4,800 received from Chapman Road Supermarket.

81 There was evidence that WASS had placed an order with Port Stationery for the manufacture of a rubber stamp in the name of the M/V Pontonikis, Limassol and in the form of a ship's stamp. The stamp had been ordered to reproduce an impression similar to that which had been placed on a document by the genuine stamp of the M/V Pontonikis. No explanation was given by the first defendant for having obtained such a rubber stamp, to which, at least prima facie, he was not entitled. The probabilities are that the stamp was obtained in order to forge a document, purporting to have been stamped by an officer of the Pontonikis. This evidence clearly called for an explanation by the first defendant but none was given.

82 The evidence satisfies me that the plaintiff is entitled to the relief claimed in the statement of claim as against the first defendant.

83 In relation to the second defendant, I am not persuaded that the evidence establishes that he was a partner in WASS. The only evidence to that effect is the statements by the Customs Officers Greenwood and Scarfe as to his answer to an informal question asked by Officer Greenwood, not either tape-recorded or written down at the time but formulated by their mutual agreement as to what had been said, effected

(Page 33)

some weeks later. They gave evidence in identical terms as to what the second defendant had said during the visit when the search warrant was executed. Part of what was said during that visit was tape-recorded and there was no reason why the alleged admission could not have been recorded at the time. The direct evidence of the first defendant was to the effect that the second defendant was not a partner in the firm at any time, although he was employed to assist the first defendant in the business and did, at times, collect cigarettes from the bonded warehouse of a supplier.

84 My attention was drawn to the provisions of s 23V of the Crimes Act (Cth) and to the decision in R vRaso (1993) 68 A Crim R 495, in relation to the question whether what the second defendant was alleged to have said was inadmissible. In the absence of any appropriate argument on behalf of the defendants, I prefer to express no view on that question. I am, however, prepared to discount the evidence of the alleged admission by the second defendant for the reasons that:

(a) I am concerned at the fact that the two customs officers got together to agree upon the words alleged to have been said by the second defendant some weeks before, and their identical statements on oath as to what words were said by him; and

(b) there is, in any event, no reason to suppose that the second defendant has any real appreciation of the legal elements of a partnership or of the legal meaning of the word "partner".

85 Coupled with the direct evidence under oath of the first defendant that the second defendant was not his partner and the fact that only the first defendant is shown as proprietor of the business name, together with the absence of any supporting documentary evidence which might tend to establish the existence of a partnership between the defendants, I find that I am not satisfied that such a partnership did in fact exist.

86 The plaintiff alleges in the alternative that the second defendant aided and abetted the first defendant in the commission of the offences charged. There was some evidence that, on occasions, the second defendant had collected goods from the bonded warehouse of a supplier, and that there were occasions when he had accompanied Russell on visits to Mr Macfarlane's business (not necessarily when cigarettes were supplied to Mr Macfarlane). However, there was no evidence which connected the second defendant to any specific offence.

(Page 34)

87 I raised this problem with counsel for the plaintiff. The following was said:

"PRICE, MS: It is our submission, your Honour, obviously enough that the acts which the second defendant undertook in this whole matter points quite clearly to the fact that he was assisting the first defendant in the commission of any offences. He played a substantial part. Alternatively, we would say that even if it was found on the evidence that it can't be inferred that he played any part, there is evidence that he did not know what was going on and that he made no effort to stop or prevent the occurrence of the offence. In regard to his active assistance in the commission of the offence, we point to the fact that he has been sighted by a number of witnesses collecting goods from the licensed warehouse premises.

WHITE J: Did they identify any particular collection of goods with any particular claim in the statement of claim?

PRICE, MS: No, they couldn't. My recollection was I did ask them about that, but their sightings of the second defendant were general - certainly with Mr Dennett it was a general recollection of sighting the second defendant. Mr Dennett, as I understand his evidence, knew the first and second defendants, particularly the first defendant, socially; that he really didn't have a great role in good (sic) being removed out of the warehouse at Imes (sic), but he would be down in the warehouse on occasions when the first and second defendants came in to collect goods.

WHITE J: I think what I am saying is this: if the evidence shows that on some unidentified number of occasions the second defendant assisted the first defendant, if the first defendant was committing an offence, does that mean that the second defendant is liable for all the offences committed by the first defendant? If so, why?

PRICE, MS: I would say yes if the evidence was sufficient to establish a pattern of behaviour in which he was consistently and regularly assisting.

…

(Page 35)

WHITE J: In this case let's assume that the evidence established the commission by the first defendant of some of these offences that you have charged him with. How does one tie in the second defendant to a specific offence with this evidence?

PRICE, MS: It's going to be extremely difficult, your Honour, because all the evidence is related to his presence at various unspecified occasions.

WHITE J: On some occasions, but not very well identified occasions.

PRICE, MS: No. That's right. They're all unspecified in time.

WHITE J: Is that enough to give rise to a criminal conviction, even on the balance of probabilities; that because he was seen there on certain occasions, unidentified, therefore he is guilty of a specific offence committed on a particular day? How does one make that transition?

PRICE, MS: Yes. I will have to perhaps do some work on that one, your Honour, if I can, because I agree with you. It seems extremely difficult. If he can't be targeted to an offence in the same way that the first defendant could be targeted to an offence, it's very hard to draw the inference that he was assisting in that offence.

WHITE J: There would be no evidence that he was assisting in any particular offence.

PRICE, MS: That's right. That's the thing that the plaintiff is faced with at the moment; that there is no evidence of specific assistance in relation to any one of the 35 occasions.

WHITE J: That may well be a difficulty in the way of the plaintiff succeeding against the second defendant.

PRICE, MS: Yes, your Honour. That's something I will have to … "

88 Nothing further was offered in support of the plaintiff's case as against the second defendant. In my opinion, the evidence is insufficient to establish on a balance of probabilities that the second defendant committed any of the offences alleged and the plaintiff's case against him
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must therefore rest upon the averments made in the statement of claim. It is therefore necessary to consider these in the context of the statement of claim.

89 Section 255 of the Customs Act 1901 and s 144 of the Excise Act 1901 are in similar terms and provide that, in any Customs or Excise prosecution the averment of the prosecutor or plaintiff contained in the information, complaint, declaration or claim shall be prima facie evidence of the matter or matters averred. That provision does not, by sub-section (4) of the relevant section, apply to an averment of the intent of the defendant.

90 In this case, the plaintiff has so framed her pleadings that the relevant averments affecting the second defendant are stated in the alternative. For example, in relation to the alleged partnership between the defendants, the plaintiff pleads in par 4:

"4. At all times material to this action the First Defendant and the Second Defendant as partners, alternatively the First Defendant as sole proprietor, carried on a business as ship providores under the business name 'Western Australia Ship Supplies' ('WASS')."

91 That pleading, by virtue of the sections of the Customs Act 1901 and the Excise Act 1901 to which I have referred establish, prima facie, that the defendants as partners, alternatively, the first defendant as sole proprietor, carried on the business pleaded. The averment cannot, in my opinion, be severed so as to afford prima facie evidence of the alleged partnership but must be taken in its full context.

92 Again, in par 8 of the statement of claim, for example, the plaintiff pleads:

"On or before 24 January 1994 the First Defendant and/or the Second Defendant purchased from IMES and took delivery of 30,000 Winfield Blue cigarettes and 10,000 Winfield red cigarettes, being excisable goods for the purpose of the Excise Act 1901 ('the First Goods')."

93 As framed, therefore, the averment is not that the second defendant purchased or took delivery of the cigarettes, so as to constitute prima facie evidence of such an allegation. Each of the subsequent allegations referring to the second defendant are pleaded as against "the First Defendant and/or Second Defendant".
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94 Accordingly, in my view, the plaintiff is not assisted by the provisions of those sections of the Customs Act 1901 or the Excise Act 1901 to which I have referred in establishing the case against the second defendant.

95 Accordingly, I dismiss the case as against the second defendant.

96 The plaintiff asks that I impose the maximum penalty for each offence and refers me to the decision in L Vogel & Son Pty Ltd v Anderson (1969-1970) 120 CLR 157, affirming the decision of Kitto J at first instance. Kitto J said, at 164 - 165:

"Consideration of the maximum penalties in a case to which s 240 applies gives little assistance, if any, in deciding what penalty is appropriate to particular circumstances. Though the defendants' fraudulent conduct has been continuous the amounts of duty evaded have varied greatly, being in some instances very substantial and in others comparatively small. All things considered I think that upon each charge of smuggling there should be a penalty of four times the amount of the duty evaded or intended to be evaded, and it will then be sufficient to impose minimum penalties in respect of the other offences."

97 The plaintiff seeks, inter alia, an order that the defendants each pay an aggregate penalty of $700,000 in respect of 35 contraventions of s 61 of the Excise Act 1901; $35,000 in respect of 35 contraventions of s 114D(1)(a) of the Customs Act 1901; $175,000 in respect of 35 contraventions of s 116(2)(a) of the Customs Act 1901; $175,000 in respect of 35 contraventions of s 234(1)(d)(i) of the Customs Act 1901; a total of $1,085,000 each by way of penalty (in addition to the sum of $428,354.88 claimed in Action CIV 1157 of 1998 as duty).

98 There is no evidence before me as to the financial position of the first defendant, save for his statement that the Customs investigation caused the collapse of his business and that he has been unable to afford to employ a lawyer to appear for him in the present case. The various penalties sought by the plaintiff are the maximum penalties provided for in the relevant Act. In assessing an appropriate penalty in the present case, I have regard to the fact that each of the 35 groups of offences (against s 61 of the Excise Act 1901 and against s 114D(1)(a), s 116(2)(a) and s 234(1)(d)(i) of the Excise Act/Customs Act 1901 respectively) was part of a single criminal exercise designed to obtain goods from bonded warehouses for sale within Australia in circumstances where no duty was

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paid for those goods. In my opinion, although the first defendant has, in my judgment, committed each of the offences alleged against him, the penalty in each case should take into account that there were, in fact, 35 criminal exercises rather than 140 such criminal exercises.

99 In the circumstances, I consider that an appropriate aggregate penalty of $122,500 should be imposed on the first defendant. That will be arrived at as follows:

100 In respect of each of the 35 offences against s 61 of the 1901, I impose a penalty of $1,500. In respect of each of the 35 offences against s 114D(1)(a) of the Customs Act 1901 , I impose a penalty of $500. In respect of each of the 35 offences against s 116(2)(a) of the Customs Act 1901, I impose a penalty of $750. In respect of each of the 35 offences against s 234(1)(d)(i) of the Customs Act 1901, I impose a penalty of $750. There will be judgment in favour of the plaintiff as against the first defendant as prayed in pars 1 to 9, inclusive and 11, with the penalties assessed, however, as stated above.

CIV 1157 of 1998

101 The result of this action will follow that of the preceding action. In the result, I award judgment in favour of the plaintiff against the first defendant in the sum of $428,354.88.

102 The question of interest was not debated before me and I make no order in respect of interest.

103 The plaintiff is entitled to the costs of the action.