Sternberg v R

[1953] HCA 15

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646

HIGH COUET

[1963.

[HIGH COURT OF AUSTRALIA.]

STEKNBEEG . A ppl ic a n t

;

AGAINST

THE QUEEN

E e s p o n d e n t .

H. C. OF A.

Customs—Offence—A!on-genuine invoice—False entry—Declaration— Belief that

1953.                contents true—Liability for acts of agent— Entry ”—Prosecution—Intervention by High Court— Customs Act 1901-1947 {No. 6 of 1901—No. 54 of 1947),

S y d n e y , ss. 155, 234

{d) (e).

April 17.

Section 234 (d) of the Customs Act 1901-1947 is as follows :—“ No person Dixon C.J., Webb and shall— . . . ( d ) Make any entry which is false in any particular ” .

K itto

JL

Held that this section makes it an offence to enter goods by an entry which in any particular is contrary to fact.

Special leave to appeal from the decision of the Court of Criminal Appeal of New South Wales : Ex parte Sternberg ; Re Maher (1952) 53 S.R. (N.S.W.)

199; 70 W.N. 127, refused.

A ppl ic a t io n for special leave to appeal from tlie Court of Criminal

Appeal of New SoutE Wales.

On 29tE September 1948 one, Falstein, was convicted in a court of summary jurisdiction upon six charges under s. 234 of the Customs Act 1901-1947. That section provides, inter alia, that “ No person shall . . . (c) Prepare pass or present any document purporting to be a genuine invoice which is not in fact a genuine invoice ; {d) Make any entry which is false in any particular ; (e) Make in any declaration or document produced to any officer any statement which is untrue in any particular or produce or deliver to any ofiicer any declaration or document containing any such statement . . . ” An appeal by Falstein from his conviction was dismissed by the Court of Criminal Appeal of New South Wales, and the decision of the magistrate remained undisturbed.

In July 1948 six informations were laid against one, Sternberg, charging him under s. 236 of the Customs Act 1901-1947, with being directly concerned in the commission of the six offences of

88 C.L.R.] OF AUSTRALIA.

647

which Falstein had been convicted. Three of these were charges alleging that a document purporting to be a genuine invoice, which was not a genuine invoice in that the actual money price gTERNBERc

paid or to be paid was not shown, had been presented, and the

v.

other three charges alleged that Sternberg had been concerned in h e Q p e e n .

making an entry false in certain particulars.

Sternberg was convicted by the magistrate on 25th July 1949, and an appeal to quarter sessions was lodged in August 1949 and was heard in September and October 1949, and an order dismissing the appeal was made on 30th May 1950. The facts on which the charges already referred to were based were that Falstein, having obtained licences to import certain watches from a specific firm in Switzerland, found that this firm was unable to supply the goods which were required. Sternberg was also engaged in the business of selling watches made by another firm in Switzerland, and, according to the evidence, his usual practice was to receive these watches as having been consigned to him for sale by the Swiss firm. At the relevant date when Falstein desired to import watches from Switzerland the licences under which Sternberg was obtaining watches were not available for any further use by Sternberg as he had imported all that were permitted by his licence. Falstein therefore sought to import watches through Sternberg from the firm in Switzerland which was in the habit of supplying Sternberg with watches, and to this Sternberg agreed. In effect the watches were to be brought in under the licence given to Falstein, but the lodging of the order in Switzerland was to be done by Sternberg and the watches were to be sent to him by the firm with which he usually dealt.

So far as concerned the actual proceedings in relation to the making of the necessary customs entries when these watches arrived, there was not any evidence that Falstein knew that any false state­ ment was intended to be made or was in fact made. At a meeting at which there w’ere present Falstein, Sternberg and a customs agent named Preston, Falstein engaged Preston to act for him in the matter of these watches in connection with all customs formalities, informing him that Sternberg would supply him with all the neces­ sary information and documents in order to pass the goods through the Customs Department. When the watches in question arrived, Sternberg supplied certain information to Preston, which was, on the evidence, untrue to Sternberg’s knowledge, but Preston was in ignorance of the inaccuracy of the invoices and the other infor­ mation given to him by Sternberg'. On that material Preston then prepared the usual documents for presentation to the Customs

(US

HIGH COURT

[1953.

H. 0. UK A. UcpiU'tmont in order to clear the goods, and ultimately approval

was given to their admission into Australia, and duty was paid on

Stkknmuro information furnished by Sternberg to Preston

r.

and then inserted by Preston in the usual customs documents.

1 iih (ji'hhN. ^e|[ furnishing the iiivoices to the Customs Department, and making the necessary entries as to the particulars and value of the goods concerned, Preston made a declaration which was printed on tlic back of what was called the entry form, averring his personal belief in the genuineness of the invoice and the truth of all the other information supplied by him.

Sternberg was convicted and an appeal to the Court of Criminal Appeal was dismissed {Ex parte Sternberg ; Re Maher (1) ).

Sternberg applied to the High Court for special leave to appeal against that decision.

Dr. F. Louat Q.C. (with him M. Boulter), for the applicant. The offences in question were committed, if at all, without any intent to defraud the Customs Department. Preston did not know the full facts and reasonably believed that his declaration was correct, and Falstein was equally innocent. In order to establish the charge of aiding and abetting against the applicant it was necessary for the Crown to prove as against the applicant the commission of the principal offence. The question before the Court below was whether any principal offence had been committed in view of the fact that the entry that had been made was an entry supported by a declaration of the genuine belief of the person entering the goods in the truth of the statements made, and that belief was not shown or suggested not to be held. [He referred to ss. 36, 38, 68, 154-156, 180-183, 234 and 236 of the Customs Act 1901-1947, and also reg. 37.] I t is evident from the nature of “ current domestic value ” as defined in s. 154 (3), that it is something which is only within the practical knowledge, with any exactness, of anyone who lives in the country of origin ; it is not a matter which could ever be known, except by hearsay and relying on another person’s word, by a person in Australia. Sub-section (1) of s. 154 provides that the value for duty is the sum of, inter alia, the actual money price paid or the current domestic value of the goods, whichever is the higher. Therefore there is good reason for having an entry based on opinion and belief because it is evident that the conception of “ value for duty ” involves factors which cannot be, in the ordinary way, exactly known, with direct certainty in Australia. The invoice is

(1) (1952) 53 S.R. (N.S.W.) 199; 70 W.N. 127.

88 C.L.R.] OP AUSTRALIA.

649

required, under s. 156, to show both the actual money price and the

H. C. OF A.

current domestic value, which are components of the value for

1953.

duty, or alternative components of it, and therefore must be known.

St e e n b e r g

The material words in s. 182 have the intention of making the owner

V.

T h e

Qu e e n .

and the agent equally liable, neither one more than the other, for a wrongful act done in the course of carrying out those duties. This is not in any sense a question of mens rea. I t is a pure question of whether the entry was false. As to s. 183, the position is clear that if an agent makes a declaration and he does not know, but his principal who authorizes him to make the declaration does know, then the principal is guilty of an offence notwithstanding that it would be impossible to convict the agent. The majority in the Court below thought the question here was whether the declaration could be said to be technically separate from the entry or separate from the particulars on the other side of the form. That majority held it could be technically separate. Having regard to the declara­ tion in the form of entry, Falstein could not be guilty of an offence unless either he or Preston lacked a genuine belief in the correctness of the information. Under the current regulations the form of entry is the whole of Form 11, of which the declaration part of it is described as “ Back of form ” . The form of entry was altered after R. v. Tarrant (1) was decided, the intention being to alter the form of entry so as to relieve a person making an entry from responsibility for the incorrectness of the information, provided it was correct to the best of his knowledge and belief. The effect of s. 183 is that if a principal allowed an agent to make a declaration without holding the genuine belief himself, he, the principal, would be liable for a false entry if it were found later that there was something wrong in it. The form includes the declaration ; the declaration is part of the entry. I t does not really matter whether the declaration is to be regarded as technically part of the entry or separately as a verification of it. I t accompanies it and it cjualifies it. The intention of the law as it is now is not to leave an agent or his principal exposed to a charge of making a false entrv, which was the charge in R. v. Tarrant (1), if, acting in good faith and as far as he could he put the correct information before the Customs Department. I t is not an argument in favour of mens rea in regard to s. 234 {d) because it is based upon the form ; it is based upon the nature of what a person has to assert. So far as the prescribed form of entry goes, in the history of this form in the 1926 Customs Declarations, the declaration was actually on the front of the form and was set down immediately under the figures,.

(1) (1912) 15 C.L.R. 172.

650 HIGH COURT

[1953.

K. 0. OF A.

SO it was in no sense separate from it. The object of the Executive in

l!)53.

creating an anieiuled fhrin was to exonerate an agent from the im­

Stehniuoko

possible burtlen tliat it was found was to be laid upon him. The

V.customs autliorities ask for absolute facts that are not within the

T he

Q u e e n .

knowledge of the person making the entry.

Here the only concern is

whether a false entry has been made. The legislature has not made clear an intention on its part that notwithstanding that a person is protected as regards his entry and allowed to say he or she does not know whether the figures are true, he or she is to be convicted of a false entry if they are not true. The remarks of Owen J. in the Court below (1), are, with respect, adopted on behalf of the applicant. The real question here is : what entry was actually made ? I t is clear on the simple facts that no offence was committed. If it cannot be said to be clear that no offence was committed, at least it is not so clear against the applicant, on the form in which the entry was made and was permitted to be made by the form of the regulations, that an offence was committed that the conviction should stand. The documents are not suffi­ ciently clear to justify a statement that they are isl&e {Remmington V. Larcliin (2) ; Dyke v. Elliott: {The Gauntlet) (3) ). Recently there has been a change away from the tendency to treat a state of mind as irrelevant to wide classes of offences {Thomas v. The King (4) ). The extent to which a state of mind was available as a defence even though mens rea was not an ingredient of the offence charged was discussed in Proudman v. Dayman (5). I t has been shown, at least prima facie, that as a ground of exculpation the reasonable belief existed. If there be a general provision that reasonable belief in what was done shall be a defence unless there is some exclusion in the particular enactment {Thomas v. The King (4) ) then the document throws light on the meaning of an entry in this form and indicates that the information would not be within the accurate knowledge of the person entering the goods.

[D ixon C.J. referred to Maher v. Musson (6).]

That was a case in which it was held that knowledge was an essential ingredient for the Crown to prove in the keeping of illicit

spirits.

,

W. J. F. Windeyer Q.C. and //. J. H. Henchman, for the Crown, were not called upon.

(1) (1952) 53 S.R.(N.S.W.) 199, at

(3) (1872) 4 P.C. 184, at p. 191.

pp. 206, 207.

(4) (1937) 59 C.L.R. 279, at p. 305.

(2) (1921) 3 K.B.404, at pp. 408,

(5) (1941) 67 C.L.R. 536, at p. 540.

409, 411.

(6) (1934) 52 C.L.R. 100.

88 C.L.R.] OF AUSTRALIA.

651

The following judgments were delivered by :—

D ix o n C.J. This case arises out of a peculiar situation. I shall not go into the facts, which have been clearly stated by Dr.

Ster n b er g

V.

Louat. I t is enough to say that charges were made against Falstein

false entry. He made an entry by a customs agent named Preston.

imder s. 234 {d) of the Customs Act 1901-1947 for that he made a T h e Qu e e n . Sternberg. The charges against Falstein were that he made entries which were false in a particular ; the particular related to the value or value for duty of the goods. Of that offence Falstein was in fact convicted ; whether rightly or not is not material a t the moment. Sternberg was proceeded against on informations in relation to these charges under s. 236, the charge against him being that he was concerned in the commission of the offence or

offences by Falstein.

■

The fact was that Preston was unaware that the value or value for duty was incorrectly stated. The fact is stated to be that Falstein was also unaware that the value or value for duty was incorrectly stated. Sternberg must be taken to be aware that the value or value for duty was incorrectly stated.

In those circumstances it was argued that on the form of entry, which is in the form prescribed by the Customs Regulations and is to be found in Form 11 of those regulations, the person making the entry—that is Falstein or his agent Preston—did not commit himself to the absolute tru th of the particulars stated but only to his belief that the particulars stated were correct.

That argument depends primarily on the prescribed form. Under the prescribed form, on the face of the document there are columns and blanks in which all the particulars relating to an import must be stated, the name of the ship, particulars concerning the ship, owners (which I take to be the owners of the goods although that is not clear) and the port of entry, dates, and then in relation to the goods, the number on the manifest of the ship, marks and numbers, number of packages, statistical items, descrip­ tion of packages and goods, tariff item, country of origin, quantity or weight, value or value for duty, gross duty, duty payable and primage if any. That entry must be presented. Upon the back of the form is a declaration and that declaration may be made by the owner of the goods or the agent. If it is made by the agent there is a space in which he is to state by whom he is duly authorized. The form says “ As to the goods mentioned in this entry and herein entered, I declare ; 1. That I am the owner of the goods or the agent authorised by the owner. 2. That to the best of my knowledge

652 HIGH COURT

[1953.

H. 0. OF A.

belief tlie description and particulars of the goods as stated in this entry are true and correct in every respect. 3. That to the SternnKRo knowledge and belief no goods are contained in any

r.

])ack'a.ge specified in this entry other than as appears in the entry.

I HE Qi EEN. ̂ Xluit nothing on my part or to my knowledge on the part of any

Dixon C.J.

person has been done, concealed or suppressed whereby His Majesty

the King may be defrauded of any duty due.”

I t will be observed that the second, third and fourth statements are made to the knowledge and belief of the declarant. The next statement is “ That I enter the goods as of the value and of the description and quantities stated in this entry, and for home con­ sumption ” . That paragraph of the declaration is not qualified by reference to knowledge and belief. However the argument is that when you read the whole document, the front—which describes itself as “ Import entry ”—and the back—which des­ cribes itself as a “ Declaration ”—and it is reasonably plain that the intention is to require the person making the entry (who makes the declaration) to state in the entry no fact as an absolute objective fact, but to state it only as something which is true according to the best of his knowledge or his belief.

If that were the correct view of the document the consequences which would follow are these. On the hypothesis which has been made, the agent, Preston, would have made the declaration to the best of his belief; the principal, Falstein, on whose behalf he made it—is assumed not to have been aware it was false. There could therefore be no principal offence and it is the fact that s. 236 requires a principal offence. That being so, Sternberg, in spite of his knowledge, could not have been concerned in the commission of the offence.

The primary question is whether that understanding of the customs entry is correct. I may say for myself that I would feel some degree of surprise if, inadvertently or intentionally the customs authorities had deprived themselves of the right, which has generally been assumed to be theirs, to have an entry which is correct in its particulars and objectively correct. I t is stated, however, that the history of the matter shows that in all probability, in mercy to people making declarations on the entry, such a course was taken after the judgment of Mr. Justice Isaacs in the case of R. v. Tarrant (1). There he imposed penalties. His Honour made observations as to the impropriety of persons who did not know the facts making declarations in the then positive form which was reqiiired.

(1) (1912) L5 C.L.R. 172.

88 C.L.R.] OF AUSTRALIA.

653

H. C. OF A.

AVheii, however, the declaration is compared with the front of the entry proper, it appears to me to be reasonably clear that all

1953.

that was desired was to enable the declarant to declare according

Ster n b er g

to the best of his information and belief as to the matters stated in

V.

T h e

Q u e e n .

pars. 2, 3 and 4. The qualification is not thought desirable in

the case of par. 5 and the reason is, as it appears to me, that the

Dixon C.J.

whole customs duty depends upon the correctness of the entry in that particular. In a matter of this description, where knowledge belongs to the importer and the authorities have none, it has been traditional to require a positive statement on which the assessment of duty may proceed.

I t is true, as Dr. Louat has observed, that now difficulties exist in ascertaining the value of goods imported from abroad with precision and correctness and, indeed, it is true that the application of some of the provisions of the Customs Act in obtaining the domestic value in the country of origin may not at any time have been easy. But that, to my mind, does not militate against the policy of insisting that those who import shall be in a position to state the facts upon which duty depends.

Section 234 (d) is really the only provision of the Act which is in question. I t appears to me to be a clear provision making it an offence to enter goods by an entry which in any particular is contrary to fact. If the view contended for were correct, the only fact which could be wrong would be the belief of the person concerned ; the belief would extend over the whole entry and there is only one belief in which he could be wrong and that is the belief in the correctness of entry.

The document on which the argument must depend is the form of entry itself. I myself prefer the view that the entry consists of two parts ; (1) the entry containing the particulars, and (2) the declaration which verifies the entry. I think that you cannot carry from the document which verifies the entry into the entry itself any qualifications as to the facts stated in the entry. But I desire to add that cases of this description are not of a kind in which I should be prepared to grant special leave. Even if I had some doubt as to the correctness of the conviction, I should not think that it was for this Court to intervene simply because it is a prosecution in which points of law may be raised. This is particidarly so after the very long course of the proceedings extending through three courts. I am not referring to the misadventures which the case seems to have encountered at some stage of these proceedings, but merely to the fact that it has been already considered by three courts.

654 HIGH COURT

[1953.

H. C. oxf A.

In these circumstances I think special leave to appeal should be

1053.         refused.

Steknm erg

i \

Webb J.

I agree.

T h e

Qu e e n .

K itto J. I agree.

Special leave to appeal refused.

Solicitors for the applicant, B. M. Kenny & Co.

Solicitor for the respondent, D. D. Bell, Crown Solicitor for the

Commonwealth.

J. B.