FEDERAL COURT OF AUSTRALIA
Pearce v Coynes Freight Management Group Pty Ltd [2010] FCA 320
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 687 of 2009
BETWEEN: STEPHEN PEARCE (A COLLECTOR UNDER THE CUSTOMS ACT 1901)
ApplicantAND: COYNES FREIGHT MANAGEMENT GROUP PTY LTD (ACN 005 283 821)
Respondent
JUDGE:
DODDS-STREETON J
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- Case
- [2010] FCA 320
- Decision Date
CaseChat Overview and Summary
The primary legal issues before the court were whether Coynes is entitled to apply for a remission of duty on the stolen goods under section 163 of the Customs Act 1901 and whether such a remission, if granted, would be a defence to the recovery proceeding. Additionally, the court had to determine if Coynes is liable to pay the full amount of the duty and GST demanded by Customs and whether any remission would affect the proceedings. The court also needed to consider the appropriate orders to be made in the event that Coynes was found liable.
In its judgment, the court held that Coynes is not entitled to apply for a remission of duty on the stolen goods as it does not meet the criteria under section 163 of the Customs Act. The court also ruled that any remission granted would not be a defence to the recovery proceeding. The court found Coynes liable for the full amount of the duty and GST demanded by Customs, as it had failed to keep the goods safely. Consequently, the court granted the declarations and orders sought by Pearce, including an order for Coynes to pay the amount of $194,519.64 plus interest and costs.
The court's final orders included a declaration that Coynes is not entitled to apply for a remission of duty on the stolen goods, that any remission would not be a defence to the recovery proceeding, and that Coynes must pay the full amount demanded by Customs. Additionally, the court ordered Coynes to pay interest from the date the cause of action arose to the date of judgment and costs of the proceeding. These orders reflect the court's determination that Coynes is liable for the full duty and GST on the stolen vodka.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
By an amended application dated 11 November 2009, the applicant, Stephen Pearce (an officer of the Australian Customs and Border Protection Service (“Customs”) and a collector under the Act) seeks:Declarations:1.A declaration that the Respondent –(a)is not a person who is entitled to apply for a remission of duty on the goods (as referred to at paragraph 5 in the Applicant’s Fast Track Statement) pursuant to section 163 of the Customs Act 1901 or at all; and(b)is therefore not entitled to apply to the Administrative Appeals Tribunal for a review of the decision of an officer of Customs dated 21 August 2009 not to remit the duty.2.A declaration that, if any remission is granted, such remission is no defence to the present Federal Court recovery proceeding.Orders:3.An order under subs. 35A(2) of the Act that the Respondent that it pay the Applicant the sum of $194,519.64.4.An order for costs pursuant to s.43 of the Federal Court of Australia Act 1976.5.An order for interest from the date on which the cause of action arose to the date of judgment pursuant to s. 51A of that Act.6.Such further or other orders as the Court deems appropriate.The Facts The respondent, Coynes Freight Management Group Pty Ltd (“Coynes”), at all material times operated and managed two warehousing businesses under the respective names “Argus Bond” and “Coynes Storage Solutions” at 5‑29 Frederick Road, Brooklyn, Victoria (“the premises”). The warehouse was licensed under s 79 of the Act to store underbond goods. The warehouse bore the Warehouse Establishment ID 2011C. On 30 May 2008, Armik Group Pty Ltd (“Armik”) imported a quantity of vodka from the Ukraine into Australia. The vodka was subject to duty pursuant to ss 15 and 16 of the Customs Tariff Act 1995 (Cth). The vodka was covered by Import Declaration N20 Declaration ID AALFJ3A96 lodged on 29 May 2008. The Import Declaration relevantly stated:Importer Details: ABN CAC or CCID 3405873 5470 1Name: Armik Group Pty LtdRef Inv 199Warehouse establishment ID 2011C Name: Argus Bond The vodka the subject of Import Declaration N20 AALFJ3A96 was entered for warehousing in the Argus Bond at Coynes’ premises. On or about 7 June 2008, 849 cartons of the vodka imported by Armik containing 2,825.2 litres of alcohol (“the goods”) were stolen from the premises by persons unknown. By the letter of the applicant as Manager, Cargo Control and Audit Victoria, Australian Customs Service to Coynes dated 2 January 2009 (“the letter of demand”) the applicant demanded that Coynes pay a total amount of $216,003.26. The letter stated:File NO: V02/06749 Customs HouseCargo Control & AuditGPO Box 2809 Melbourne Vic 30012 January 2009The SecretaryCoynes Freight Managements Group Pty LtdC/- Mutual Trust Pty LtdLevel 33, 260 Collins StreetMELBOURNE VIC 3000Dear Sir,DEMANDS FOR AMOUTN EQUAL TO DUTY AND FOR GST ON VODKA STOLEN FROM BONDI refer to the theft of 849 cartons of vodka containing 2825.2 litres of alcohol (“the goods”) from your licensed warehouse on or about 7 June 2008 and to subsequent correspondence. Please note that the demand dated 24 July 2008 previously issued for this matter is withdrawn and replaced by this one. I am writing to demand payment from your company of – (a)the sum of $194,519.64, being the amount equal to the duty that would have been payable if the goods were entered for home consumption on the date of this letter; and(b)the sum of $21,483.62, being the assessed amount of GST that the company is liable to pay in respect of the goods. The total amount demanded in this letter is therefore $216,003.26. (a)Demand under s.35A of the Customs Act 1901 for amount equal to dutySubsection 35A(1) of the Customs Act 1901 (“the Act”) provides as follows:-(1)Where a person who has, or has been entrusted with, the possession, custody or control of dutiable goods which are subject to the control of the Customs: (a) fails to keep those goods safely; or(b)when so requested by the collector, does not account for those goods to the satisfaction of a Collector; that person shall, on demand in writing made by a Collector, pay to the Commonwealth an amount equal to the amount of the duty of Customs which would have been payable on those goods if they had been entered for home consumption on the day on which the demand was made. At the time when the goods were stolen, your company was a (legal) person who had, or had been entrusted with, possession, custody or control of the goods, being dutiable goods which were subject to the control of Customs. I consider that your company failed to keep those goods safely within the meaning of subs. 35A(1).Accordingly, pursuant to paragraph 35A(1)(a) of the Act, I demand that your company pay the sum of $194.519.64, being an amount equal to the customs duty which would have been payable if the goods were entered for home consumption on the date of this demand. Details of how this amount is made up are set out in Annexure A. This sum should be paid to Customs by no later than the close of business on 14 January 2009. I make this demand under subs. 35A(1) in my capacity as a Collector within the meaning of the Act. If this amount is not paid, Customs intends to proceed with legal action to recover it as a debt to the Commonwealth under subs. 35A(2) of the Act.(b) Demand for GST amount payable on the vodkaAnnexure A sets out the duty and GST amounts in terms of the affected import entry. A replacement Notice of Assessment for the GST for $21,483.62 is provided at Annexure B. Please note that the applicable subsection is 105-5(2).This sum should also be paid no later than the close of business on 14 January 2009. This demand is made by me as an officer with the delegation from the Commissioner of Taxation to bring a recovery proceeding under s. 255-5 of Schedule 1 to the Taxation Administration Act 1953 for GST that is due and payable. If this GST amount is not paid, I intend to proceed with legal action to recover it as a debt to the Commonwealth under that section. Yours sincerely, Stephen PearceManagerCargo Control & Audit – VictoriaAustralian Customs Service