R v Sam Alhassan
[2010] ACTSC 84
•17 August 2010
R v SAM ALHASSAN [2010] ACTSC 84 (17 August 2010)
CRIMINAL LAW – obtaining a financial advantage by deception – no case to answer submission – whether failure to declare tobacco in container imported to Australia produces a financial advantage where tobacco confiscated and liability to pay customs duty on tobacco remains – postponement of fixing of date for payment of pay customs duty – postponement of liability to pay is a financial advantage – no case to answer submission rejected.
CRIMINAL LAW – obtaining a financial advantage by deception – no case to answer submission – whether financial advantage was obtained by deception – providing an inaccurate customs declaration deferred the fixing of a date for the customs duty to be paid – financial advantage arose before Customs officers became aware of deception – Customs officers’ awareness of deception did not break chain of causation – no case to answer submission rejected.
CUSTOMS LAW – consideration of when customs duty becomes payable – interaction of s 15 Customs Tariff Act 1995 (Cth) and ss 132 and 132AA Customs Act 1901 (Cth).
Chief Executive Officer of Customs v John Deere Ltd (2006) 155 FCR 208
Chief Executive Officer of Customs v Tony Longo Pty Ltdt/as Aquila Shoes (2001) 52 NSWLR 458
R v Vasic (2005) 11 VR 380
Wilson v Chambers Company Pty Ltd (1926) 38 CLR 131
Criminal Code Act 1995 (Cth), s 134.2
Customs Act 1901 (Cth), ss 68, 132, 132AA
Customs Tariff Act 1995 (Cth), s 15
Explanatory Memorandum for Criminal Code Amendment (Theft, Fraud, Bribery and Related Offences) Bill 1999 (Cth)
R Watson, Australian Criminal Law Federal Offences (Lawbook Co, subscription service) at [10.32848] (update 105)
No. SCC 147 of 2009
Judge: Penfold J
Supreme Court of the ACT
Date: 17 August 2010
IN THE SUPREME COURT OF THE )
) No. SCC 147 of 2009
AUSTRALIAN CAPITAL TERRITORY )
R
v
SAM ALHASSAN
REASONS FOR JUDGMENT
Judge: Penfold J
Date: 17 August 2010
Place: Canberra
Introduction
Sam Alhassan was charged with one count of obtaining a financial advantage by deception from the Commonwealth contrary to s 134.2 of the Criminal Code Act 1995 (Cth). His trial began on 21 June 2010.
The prosecution evidence was that in March 2008, Mr Alhassan travelled to Lebanon. On 8 May 2008, Mr Alhassan went to see a customs broker, Barry Allen at International Trade Management (ITM), about a container that he had arranged to be sent from Lebanon. He gave Mr Allen an invoice provided by a firm trading in Beirut, the Dhaine Group, listing the contents of the container. The invoice listed a variety of building materials and bathroom products, including tiles and hand soap. It did not mention any tobacco.
On 13 May Mr Allen lodged a customs declaration on behalf of Mr Alhassan. An Import Declaration Advice setting out the assessment of duty payable on the declared goods was generated on behalf of Customs and came to Mr Allen’s attention (the operation of the Integrated Cargo System (ICS), the Customs computer system by which the import of the container was processed, is described in more detail at [24] below). At some point Mr Allen notified Mr Alhassan of the amount of duty payable.
On 14 May Mr Alhassan’s container arrived in Port Botany and was unloaded. It was sent to be x-rayed, and as a result of the x-ray, Customs officers decided that it would be opened so that the contents could be checked.
On 15 May the container was opened. As well as the goods identified in the customs declaration, Customs officers found 147 cardboard boxes containing, in total, roughly 1,000 kg of uncut tobacco, the duty payable on which was over $360,000. Customs officers seized 140 of the boxes, but repacked into the container all the other goods, and the other seven boxes of tobacco.
Also on 15 May, Mr Alhassan paid the amount of duty payable on the declared goods to ITM by a bank deposit, and on 16 May he faxed proof of that payment to Mr Allen. In turn Mr Allen made a payment from ITM to Customs, apparently electronically. That payment was cleared on 19 May, and the ICS generated an Authority to Deal which was received by Mr Allen and which permitted Mr Alhassan’s container to be released to him.
On 20 May the container was delivered to Canberra by a road transport company. It was first taken to the house in Giralang where Mr Alhassan was living, but was then re-directed to a house in Bruce where Mr Alhassan and several other men were waiting to unload it. As the unloading began, Customs officers arrived at the premises and seized the remaining seven boxes of tobacco.
No-case submission
At the close of the prosecution case defence counsel made a submission that Mr Alhassan had no case to answer because the prosecution evidence, taken at its highest, could not support a finding that Mr Alhassan’s conduct resulted in him obtaining a financial advantage by deception. I rejected counsel’s submissions, and the trial proceeded. In rejecting that submission I gave both counsel a draft of my reasons for so doing, and indicated that I would publish those reasons because they seemed to raise issues relevant not only to this particular trial but more generally to the offence charged. These are those reasons.
Was a financial advantage obtained?
Defence counsel’s first submission was that no financial advantage was obtained. That submission was, at first glance, attractive. Despite failing to declare the tobacco included in his shipping container to the customs agent who went on to arrange a customs clearance for him, Mr Alhassan became and, the prosecutor advised, remains liable for the payment of customs duty amounting to about $360,000. Not only does Mr Alhassan have this continuing liability for a large amount of money, but he also has no tobacco, because it has been seized. A financial advantage is not immediately obvious.
However, I came to the conclusion that Mr Alhassan did obtain a financial advantage as a result of the combination of the presence of the tobacco in his container and the lodgement of an incorrect declaration about the contents of the container, although as will emerge it was not a financial advantage in the order of $360,000.
Under s 15 of the Customs Tariff Act 1995 (Cth), customs duty is imposed on goods imported into Australia.
The tobacco in the container was imported into Australia, at the latest, when Mr Alhassan’s shipping container loaded with 147 boxes of tobacco was unloaded at Port Botany (Wilson v Chambers Company Pty Ltd (1926) 38 CLR 131 at 136 and 139). At that point, or possibly earlier, duty was imposed on the 147 boxes of tobacco (Chief Executive Officer of Customs v John Deere Ltd (2006) 155 FCR 208 at [12] to [14]).
Under s 68 of the Customs Act 1901 (Cth), a person who imports goods is required to enter them, either for home consumption or for another purpose not relevant here. Under s 132 of the Customs Act, duty on goods entered for home consumption is payable at the rate in force when the goods are entered for home consumption and under s 132AA of that Act, duty is generally payable when the goods are entered for home consumption (again the exceptions do not seem to be relevant in this case).
Thus, the tobacco in Mr Alhassan’s shipping container became subject to customs duty, at the latest, when it arrived at Port Botany. The other goods in the container were entered for home consumption, and duty was paid, shortly afterwards. The effect of the failure to declare the tobacco and enter it for home consumption meant that no date for payment was fixed under s 132AA. To that extent, the liability to pay the duty was postponed.
That also seems to mean that the applicable rate of duty was not initially fixed as would have happened on the entry of the goods for home consumption. However, on the authority of Chief Executive Officer of Customs v Tony Longo Pty Ltdt/as Aquila Shoes (2001) 52 NSWLR 458 (at [115] and [116]), I am prepared to accept that goods that should have been, but were not, entered for home consumption are dutiable at the rate in force on the date of importation. It is not clear when, in normal circumstances, duty can be assessed on the basis that the goods are not going to be entered for home consumption, unless, for instance, there is some period starting from importation after which the goods can no longer be entered for home consumption, but this did not seem to be a question that needed to be answered for the purposes of Mr Alhassan’s trial.
Postponing the payment of a debt is itself a financial advantage. R v Vasic (2005) 11 VR 380 is authority for that proposition in relation to the use of a valueless cheque in purported payment of an existing debt, and delaying the date on which a debt falls due would seem to provide an even clearer advantage – that is, for instance, a large part of the advantage for which many of us pay an annual credit card charge.
On this analysis, at some point in the period starting when Mr Alhassan gave ITM the incorrect information about what was in the container, and for practical purposes at least ending when the last seven boxes of tobacco were delivered to Mr Alhassan and immediately seized by Customs officers, a financial advantage came into existence, that being that the fixing of the date on which Mr Alhassan was liable to pay the duty on the tobacco was deferred indefinitely (a fixed deferral could also have been a financial advantage). On the basis of the prosecutor’s advice that the obligation to pay duty has survived the seizing of the tobacco, it is important to emphasise that what Mr Alhassan has obtained is not an escape from liability for the duty, but only the deferral of his obligation to make a payment in respect of that debt.
Thus, there was evidence to go to the jury on which the jury, guided by a careful explanation of the elements of the offence as they apply in this case, could find that a financial advantage was obtained.
Was the financial advantage obtained by deception?
Defence counsel’s second submission concerned the element of deception. It was not disputed by the defence that the information given by Mr Alhassan to Mr Allen of ITM was incorrect and thus deceptive in omitting any reference to the tobacco in the container. Whether this involved any deliberate deception on Mr Alhassan’s part was still a live issue because it depended on what Mr Alhassan knew or believed about what was in the container. For the purposes of the no-case submission, however, I assumed that when Mr Alhassan gave that information to Mr Allen he knew that it was incorrect and that therefore he engaged in a deception. The question was whether, if the financial advantage already identified was obtained, it was obtained “by” that deception.
First, there needs to be a causal link between the deceptive conduct and the obtaining of the financial advantage. The Explanatory Memorandum for the Criminal Code Amendment (Theft, Fraud, Bribery and Related Offences) Bill 1999 (Cth) at [162] said of s 134.1 of the Criminal Code, which applies to obtaining property “by a deception”, that “the fact that the defendant practised a deception will not be enough if that deception was not the cause of the obtaining”.
R Watson, Australian Criminal Law Federal Offences (Lawbook Co, subscription service) contains the following commentary about s 134.2:
There is a requirement of concurrence in that, at the time of the obtaining by D of a financial advantage from a Commonwealth entity, D did so dishonestly. However, the deception by which the financial advantage was obtained (and any deemed fault element for that physical element) need not occur concurrently with these other elements of the offence.
I take this to mean that the deception and the obtaining of the advantage need not be contemporaneous. If a deception occurs after the obtaining it would be difficult (perhaps impossible) to establish the required causal link, but there is clearly scope for the obtaining to occur some time after the deception.
Defence counsel’s submission was that the inaccuracy in the customs declaration lodged on Mr Alhassan’s behalf was uncovered by Customs officers before Mr Alhassan obtained any financial advantage, and that therefore any deception represented by that inaccurate declaration could not have been the cause of the obtaining of any such financial advantage.
This again was an attractive submission at first glance. Before dealing with it, it is necessary to describe the Integrated Cargo System used by Customs for processing imports, which was the subject of evidence from both Customs officers and Mr Allen from ITM. The ICS is a computer system operated by Customs into which approved or authorised customs agents and brokers can enter information directly. The information entered allows an apparently automatic calculation of the duty payable in respect of the relevant imports. The results of this calculation are made available to the customs agent or broker concerned via the same computer system. When duty is paid, presumably by some kind of electronic funds transaction into that same system, the system, again apparently automatically, generates a document called an Authority to Deal, which permits the goods imported to be released to the importer. The monitoring of the actual goods being imported, and decisions about which imports are to be subjected to specific checking, are apparently done by human beings somewhere in Customs in reliance on the initial declaration information entered by the customs agent or broker.
Mr Alhassan provided the incomplete and therefore inaccurate information about the goods in the container to Mr Allen of ITM on 8 May 2008, and another relevant document was sent to ITM on 12 May.
On 13 May 2008 ITM entered the import declaration into the ICS. An Import Declaration Advice setting out the assessment of duty payable on the declared goods was generated by the ICS; unfortunately the document in evidence was undated, and also had a blank under Effective Duty Date (this may reflect the somewhat challenging fact that the effective duty date would only be determined when the duty was paid and the goods entered). However, apparently as a result of that Advice, on 15 May Mr Alhassan paid the duty assessed to ITM by a bank deposit, and sent proof of that payment to ITM on 16 May. ITM’s payment to the ICS appears to have been made electronically on 16 May, but it was not “cleared” until 19 May, on which date the ICS generated an Authority to Deal, which permitted the container to be released to Mr Alhassan.
In the meantime, Mr Alhassan’s container had arrived on 14 May 2008 and had been identified by Customs officers for special checking. On that date, the container was sent to be x-rayed, and a Customs officer checked the contents as shown by x‑rays against Mr Alhassan's declaration of its contents. This revealed anomalies, and on 15 May the container was opened, revealing 147 boxes of tobacco not shown on the declaration.
Defence counsel’s argument was that by 15 May Customs was aware of the inaccuracy of the customs declaration, and that any advantage obtained by Mr Alhassan could not therefore have been caused by the inaccurate declaration.
The actions of Customs in allowing the container to be processed and released knowing that it had contained and still contained undeclared tobacco raise interesting questions, but I do not think that those actions break the causal connection between the inaccurate declaration and any financial advantage obtained by Mr Alhassan, for two reasons, both of which depend on the analysis of financial advantage that I have already set out.
First, the effect of entering the inaccurate declaration into the ICS the day before the goods were imported meant that the date on which the duty on the tobacco needed to be paid would not be fixed when the payment date for the other goods was fixed. On that basis, the deferral advantage identified at [17] above arose as a result of the original deception as soon as the goods were imported, being the day before the Customs officers discovered the tobacco in the container.
Alternatively, even if the deferral advantage did not arise until the day when payment of duty in respect of the other goods in the container was required, which was the date of entry for home consumption and therefore 19 May, that advantage arose as a direct result of the entry of the inaccurate information into the ICS and the subsequent “dealings” between the ICS and the customs brokers, not as a result of any action on the part of any Customs officer who was aware of the tobacco in the container. The failure by those Customs officers to intervene to stop the processing of the inaccurate customs declaration does not seem to me to break the chain of causation.
In any case, if an advantage was obtained, that advantage was not the processing of the inaccurate declaration so as to obtain the release of the container but the absence of the fixing of a date for the duty on the tobacco to be paid. It is not clear to me that this could have been stopped by any action by Customs officers after they found the tobacco. For instance, intervening to stop the processing of the declaration and the release of the container would not have deprived Mr Alhassan of the advantage of not becoming immediately liable for payment of the duty on the tobacco – if anything, it might have further deferred the fixing of that liability by deferring the date on which it could be said, by reference to the release of the container, that liability to pay the imposed duty should have arisen.
Conclusions
In summary, I found that it was possible to identify a financial advantage arising out of the events that were in evidence, and it was also possible to identify a causal connection between Mr Alhassan’s provision of inaccurate information to his customs broker and that financial advantage. However, in each case the arguments were very technical, and would require a careful set of directions to the jury. If the jury was satisfied beyond reasonable doubt of the facts as alleged by the prosecution, then clearly Mr Alhassan had done something that is or ought to be illegal. It was not clear to me why he was prosecuted for an offence that could only be explained in such a complex and technical way rather than one that more appropriately focused on the obviously dishonest aspects of the conduct alleged against him.
I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of her Honour, Justice Penfold.
Associate:
Date: 17 August 2010
Counsel for the Crown: Ms S Cronan
Solicitor for the Crown: Commonwealth Director of Public Prosecutions
Counsel for the defendant: Mr R Livingston
Solicitor for the defendant: Legal Aid Office (ACT)
Date of hearing: 23 June 2010
Date of decision: 24 June 2010
Date of judgment: 17 August 2010
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