Hansen v Comptroller-General of Customs S42/1996 [1996] HCATrans 382 (30 September 1996)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S42 of 1996

B e t w e e n -

KENNETH FREDERICK HANSEN

Applicant

and

THE COMPTROLLER-GENERAL OF CUSTOMS

Respondent

Application for special leave to appeal

BRENNAN CJ

DAWSON J

TOOHEY J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON MONDAY, 30 SEPTEMBER 1996, AT 9.32 AM

Copyright in the High Court of Australia

MR R.V. GYLES, QC: If your Honours please, I appear with my learned friend, MR N.A. COTMAN, for the applicant. (instructed by Carneys)

MR P. ROBERTS: For the respondent, if the Court pleases. (instructed by the Australian Government Solicitor)

HIS HONOUR: Yes, Mr Gyles.

MR GYLES: If your Honours please, this is an application which is based upon the principle the Court will, in an appropriate case in the interests of the administration of justice, step in, it being our contention that here in effect natural justice has been denied the applicant. For this reason, as your Honours will have seen from our outline, the case which was stated, in our submission, should have been answered "yes" and was in fact answered in a different fashion which negated an answer "yes" and in a fashion which did not give our client a proper opportunity of putting all that he wished to put on those issues, and because it is - - -

TOOHEY J: But if it had simply been answered "no", would you have had any complaint on that score?

MR GYLES: We could not have, no. I mean, we may have had a special leave point, your Honour, depending upon the reasons, but procedurally, there would have been no flaw, but if the Court had addressed that issue and the parties had argued it and the reasons had been given, there may well have been a special leave point there, your Honour. We simply do not know. Indeed, we would submit there probably would be for reasons I can mention later but, your Honours, may I take a few minutes to make good our contention that this did go off the rails procedurally in a serious fashion.

I take your Honours to the application book where, at page 4, your Honours will find in paragraph 16 a series of summarised findings of the trial judge. In (d), your Honours, is:

that, by the time the matter came before me, an assessment of duty based on the discovered true purchase prices of the vehicles had been made employing the `fall back' method of assessment of `value for Customs', which method is defined and described in section 161G of the Customs Act;

So that was the foundation upon which the decision was made. Your Honours, could I hand to your Honours a copy of the relevant sections, 161 to 161G of the Act. Your Honours will see from (e) and (f) on page 4 that his Honour finds:

that the duty payable assessed subsequently by employing the `fall back' method was also calculated on a basis that included the purchase price, this time as established by the evidence of the prosecution.

So that your Honours can take it from paragraph 16 that the trial judge, in coming to his conclusions, found, first of all, that the fall-back method had been employed and, secondly, as per (f), that it was calculated on the basis that included the purchase price, that is, the purchase price in a foreign place. His Honour then set out in the case the contentions of the appellants which, as your Honours will see, referred in paragraph 18 at the top of page 5 expressly to 161G, which is the section which deals with the fall-back method, and his Honour concludes his consideration of our points by saying:

That contention gave rise to an issue of construction of section 161G(c).

If I could just take a moment to take your Honours to that section, which is the last of the sections in that bundle I have just handed up, your Honours will see that:

The fall-back value of imported goods is such value as a Collector determines, having regard to the other methods of valuation under this Division in the order in which those methods would ordinarily be considered under section 159 and of such other matters as the Collector considers relevant, but not having regard to any of the following matters:

(c) the price of goods on the domestic market of the country from which the imported goods were exported;

So our argument was relevantly straightforward. None of the other heads of duty, which your Honours will see from 161 through to 161(f), included the price of goods on the domestic market of the country from which the imported goods were exported. None of those methods are applicable. The fall-back method thus came to be applied, and there is no dispute about that from either side, and when you apply that method, no matter how you apply it, our submission was - and upheld by the Court of Criminal Appeal - that you simply could not have regard to the purchase price in the foreign country where it was purchased.

BRENNAN CJ: That is not what it says, is it? It does not say the price that was paid. It says the price of goods.

MR GYLES: The price of goods on the domestic market, yes.

BRENNAN CJ: That would be the price at the time of the entry for home consumption on a market in the country. This was a purchase anterior to that date and it may have been a special purchase price for all one knows.

MR GYLES: Your Honour, the Court of Criminal Appeal agreed with our submissions. Now, it would be, your Honour, a large step, I would submit, for this Court to say they were wrong at this point. I understand that that may be an issue, but it is not an issue raised by my learned friend.

TOOHEY J: But is not there something in between, Mr Gyles? The fall-back method is a method which Customs applies having looked at all the preceding methods and decided that none of them are applicable. Does that really exclude from consideration, in terms of making a false statement or whatever else the sections may provide, a statement about the purchase price of a vehicle that is clearly false?

MR GYLES: Your Honour, it means that it is irrelevant. If it is a statement about the purchase price of a vehicle purchased overseas, the answer is yes, it is irrelevant.

TOOHEY J: It may prove to be irrelevant having gone through the various alternatives that are available under the Customs Act, but is it excluded from materiality completely?

MR GYLES: Yes, your Honour, because, with respect, it is a relatively straightforward proposition which we put, which is either right or wrong, and that is this. None of the other methods include or incorporate as an integer the purchase price of the goods overseas in these circumstances. It is just not within those sections or provisions, as is shown by the fact that nobody is suggesting any of those provisions are applicable here. So you are limited to the fall-back value method which enables the collector to take into account all sorts of matters which he considers relevant, but not this one, assuming, for a moment, that we are correct in our contention as to its true meaning.

So that, your Honours, this is a situation where the element which is the subject of the findings below against us is truly irrelevant to every head, and the notion that this cannot be right, your Honours, cannot be allowed to detract from a consideration of the statute. As Chief Justice Barwick once said, is not pedantry to make sure that somebody is guilty of the offence with which they are charged, and we submit that it is very appropriate here.

TOOHEY J: But your argument, I take it then, goes beyond saying that the price paid for the vehicles overseas was not relevant to the fall-back method, you say it was not relevant to any method that might have been available for the assessment of duty.

MR GYLES: Yes, absolutely, your Honour. Your Honour, it simply is not caught by the definitions in any of the previous heads.

BRENNAN CJ: Mr Gyles, you put your argument on the basis of natural justice.

MR GYLES: Yes.

BRENNAN CJ: There are two problems, are there? One is whether there was a natural justice denial and the other is the construction of the statute.

MR GYLES: Yes. Your Honour, can I deal with the first one at the moment? We have put it under the natural justice heading which is a convenient way of summarising what happens if a quarter session or a district court judge states a case on a precise question of law and the answer that we respectfully submit should be given to that question.

BRENNAN CJ: The question was, was the purchase price paid immaterial?

MR GYLES: Yes. Your Honour, I think it would be accepted on all hands that the question posed really related to 161G, not that it particularly matters for our purposes, but - - -

BRENNAN CJ: The question posed was whether the purchase price that was paid was immaterial.

MR GYLES: Yes, your Honour, that is correct, but on a proper construction of a particular section.

BRENNAN CJ: Yes.

MR GYLES: Now, as your Honour will see from page 5 of the book, paragraph 23, the District Court judge:

concluded that, on the proper construction of section 161G in the matter before me, the foreign price of the goods imported was a matter which could be considered in assessing value for Customs under the fall back method.

Then, your Honours, if your Honours go to 29 of the book, line 1 - and your Honours understand 161G and paragraph 23 refer to the fall-back method - Mr Justice Smart who gave the decision which was agreed in by the other members of the court says:

I conclude that in determining the fall back value of the two vehicles regard may not be had to the prices paid on the domestic markets in the United States and the United Kingdom for the respective vehicles.

DAWSON J: That is right. He has now given an answer in that form, but he then puts into context, which he is entitled to do, and to say, it is not immaterial to the charges which your client was charged with. In other words, smuggling is an offence which means an attempted importation of goods with intent to defraud the revenue. Your client tried to get the revenue to accept a false invoice price as the basis of their determination and he explains all that.

MR GYLES: Yes, I understand that, your Honour, with respect, but I am simply pointing out that the Court of Criminal Appeal decided the question posed in our favour in contrary to the view of the District Court judge.

DAWSON J: That is right, but it then went on to put it in context which it was entitled to do.

MR GYLES: Your Honour, with respect, that it is the issue. Were they entitled to do that?

DAWSON J: Why were not they?

MR GYLES: Because, your Honour, they were not asked, not on appeal.

DAWSON J: In other words, the court, when answering a question and giving a judgment, has to confine itself to the precise terms of the question and a one word answer, yes or no, without explaining what relevance it has?

MR GYLES: No, your Honour, that is not my submission. My submission is that where there is a question posed under a stated case procedure, the court should answer that question, particularly when they have decided it.

DAWSON J: They did. The answer is no, but it has to be put in context. It would be simply uninformative if the judge had said no without explaining what was the context in which he gave that answer.

MR GYLES: Your Honours, that I think neatly raises the special leave point. Is what your Honour is putting to me correct or not?

DAWSON J: I would not think there is any doubt about it.

MR GYLES: I submit not, but that where there is a stated case procedure - bear in mind, your Honours, that this was a full appeal, a rehearing in the strict sense before the judge, and he posed for the court a particular question of law. Your Honours, the submissions we made to the Court of Criminal Appeal did not address the very interesting questions which arise which are posed by what his Honour Justice Dawson has put to me. There are authorities as to whether you can defraud somebody when it is really impossible.

The fall-back value did not permit any defrauding on this footing. It was quite irrelevant to it. One can go back to very old cases on the Customs law which suggest that you cannot defraud, or intend to defraud, in those circumstances but, your Honour, we did not come here to argue that issue, nor did we go to the Court of Criminal Appeal and that, your Honour, is the gravamen of our complaint. If the Crown had wished to ask the judge to state another question, he could have or, alternatively, and properly, in my submission, what should have happened was, this should have gone back to the judge for him to consider, because each of the charges, your Honours, is different.

DAWSON J: Why cannot a Court of Appeal say, "Look, the answer to the question is, `no', but you've got to understand that that is not the answer to the question which was before the Court because of these considerations"?

MR GYLES: Yes, but your Honour, if that is all that has happened, that is fine, because then the judge below can then say, "Well, I've now got the Court of Criminal Appeal's decision on the question of law. I will now go to each of these charges, which is separate in its elements, and decide what effect that has upon the case before me", and if as a result of that there is the need for another stated case, so be it, your Honours. That is the result of a stated case procedure. It is not a general appeal, and here we did not go to the Court of Criminal Appeal to argue these points, your Honour.

BRENNAN CJ: Mr Gyles, what would be the end result if your appeal was successful? Could it result in an alteration of the answer to read, "No, but" and then continue?

MR GYLES: With respect, not if we are correct in our submission. The answer would be "no" and it would then be left to the District Court judge to consider how the matter should be dealt with. Alternatively, if your Honours, in granting leave said, "The Court will consider not only the question posed but the question of how it would affect charges", then, your Honour, we could put those arguments to this Court and get the Court's ruling on those issues in a proper manner. Your Honours, we just have not had that opportunity. Our submissions below were not directed to those issues, nor should they have been.

It is all very well to have a throwaway line, your Honours, at the end of a stated case. This is not a general appeal and we never had the opportunity of putting a case and we never will, because the way the answer is given, your Honours, will effectively mean that is the end of the case and we are convicted. That, your Honour, is not a result which, with respect, should follow with a stated case procedure denying us the opportunity of putting our submissions on these points to the trial judge in the light of the questions of law unaffected by a purported answer to the stated case which is not a correct answer.

DAWSON J: Mr Gyles, a court, when it has got a question which is stated for its consideration does not just give a bare answer to the question. It may give its reasons for giving that answer and it may give them in a form which it considers to be helpful when the answer to the question goes back to the court below. No more than that was done here, and if you did not address those questions when you were before the court, well, then, you were not really considering what the likely result was to be.

MR GYLES: I submit, your Honour, that - I think I am repeating myself - - -

DAWSON J: And was there argument about these questions?

MR GYLES: Your Honour, I was not there, and I am told not, your Honour.

DAWSON J: I would think it odd if there were not.

MR GYLES: Your Honours, could I just make one other submission, because - - -

BRENNAN CJ: Who applied for the special case in the form in which it was prepared?

MR GYLES: Yes, correct.

BRENNAN CJ: Your client?

MR GYLES: Yes, it was our request.

BRENNAN CJ: It was a question which, if their Honours in the Court of Criminal Appeal are correct, was a misposed case, was it not?

MR GYLES: Your Honour, if they are, but their determination about that, if they are correct - - -

BRENNAN CJ: Yes. Let us assume for the moment that they are correct and it was a misposed case. Why then should this Court give special leave to appeal?

MR GYLES: Because, your Honour, the result of it is natural justice. We have not had the opportunity of addressing - your Honour said, "assume they are correct". We have never really addressed with that Court that conclusion. I can tell your Honours that there are three charges different in terms and with different elements, and each of them require separate argument. If we are correct - the answers I gave to his Honour Justice Toohey earlier would indicate - if I am correct about this, in our submissions, then there simply never was any materiality. May I just put this, your Honours? The decision of the Court of Criminal Appeal on the real issue of law argued took account not only of the words of the statute but the GATT treaty which lies behind it and so on, and they came to a view consistent with our position, your Honours.

DAWSON J: Can I ask you this, Mr Gyles? If in fact contrary to your submission the false statement as to the invoice value was material to the charges, do you say that, nevertheless, the Court of Criminal Appeal is precluded from saying so?

MR GYLES: Your Honour, provided we were given a proper chance of addressing it - - -

DAWSON J: We do not know whether you addressed it or not.

MR GYLES: Your Honour, my first answer is no, they should have with a stated case procedure stuck to the procedure and not endeavoured to act as a general Court of Appeal giving advice to the judge below, but if that were wrong - - -

DAWSON J: But had they done so, the answer "no" may have been entirely misleading.

MR GYLES: To whom, your Honour?

DAWSON J: To the trial judge.

MR GYLES: But why? Why could it be, your Honour, with respect? I mean, it is a question of law which was highly - - -

DAWSON J: Because the question of law was posed in that way upon the assumption that it answered the final question. At least that is one view of looking at it.

MR GYLES: Your Honour, with three different charges, it would be posed on the basis that it would have relevance to each of the answers and we would submit decisive in our favour, of course, in relation to each of them. Your Honours, if I cannot persuade your Honours of the procedural injustice which has been done, then I have difficulties, your Honours. We have never had a chance, and we certainly cannot in 20 minutes here persuade your Honours that the Court of Appeal were barking up the wrong tree entirely in their view of materiality.

BRENNAN CJ: One question, Mr Gyles. Is it right to say that the only relevance of the question posed was to materiality?

MR GYLES: Yes, your Honour.

BRENNAN CJ: Then if that was understood, at least in the court of first instance, then the question must have been posed on the basis that it was answering the issue of materiality.

MR GYLES: Yes, quite.

BRENNAN CJ: And the Full Court answered the question on the footing of materiality.

MR GYLES: Your Honour, yes, but not in answer to this question.

TOOHEY J: I take it your complaint really is that the answer shuts you out from arguing any question of materiality, not only in relation to section 161, but to any aspect of the Act.

MR GYLES: Yes, your Honour, absolutely, and in a way which never gave us the chance of putting the argument fully and properly and squarely. So, your Honour, that is the gravamen of our complaint.

BRENNAN CJ: Yes, Mr Roberts.

MR ROBERTS: I hand to your Honours section 5B of the Criminal Appeal Act . Your Honours will see that that provides that:

the Court of Criminal Appeal may make any such order or give any such direction to the District Court as it thinks fit.

Clearly, there is a statutory imprimatur in relation to the way that the Court of Criminal Appeal answered the question. Your Honours, we submit that there was no denial of natural justice here because Customs put its case in the alternative: firstly, that the purchase price was material, or could be material, in relation to working out duty, and even if it was not, it can be indirectly relevant. An easy example is in this case in point. Here, the applicant told a series of lies about both of the vehicles. Taking the Rolls Royce, for example, he said that the vehicle was a 1976 vehicle which was severely damaged "for which I paid $10,000".

It is then submitted in the Court of Criminal Appeal that what should have happened in relation to duty is the fall-back method should be used and a similar vehicle should be picked in Australia. So what you are looking for is a vehicle that did not cost much money because it was severely damaged and is an old vehicle. Obviously, it is the mixture of lies here that, in any event, are material to duty in one way or another. So it really is a case where, obviously, the Court of Criminal Appeal had to answer the question, "No, it was material".

Whatever way you look at working out duty, price is either directly relevant or indirectly relevant or can have some relevance, and that is all we needed to show. The alternative argument that was put was: even if purchase price is excluded by reason of section 161G(c), it is still relevant and, therefore, the judge was correct in saying it was material and, therefore, the answer had to be no, and that is precisely what the Court of Criminal Appeal put. Both of our arguments are referred to in the judgment.

In relation to the claim that the applicant did not get a chance to address the various charges, well, that is, with respect, the fault of those who ran the case if that be so. They obviously had the chance to do it. At page 31 of the appeal book, at the bottom of the page, Justice Smart said this:

These observations indicate an approach to the charges of smuggling and evasion which may not correspond completely with that to the charges of knowingly making a statement that was false in a material particular. However, counsel did not approach them separately.

To some extent, we approach them separately. If the applicant did not, that is his choice. He cannot say then he was denied the opportunity of making particular statements about particular charges when he chose not to do so, which is what happened here. So, your Honours, we submit, firstly, there was no procedural unfairness. They had the perfect opportunity of making whatever arguments they chose in relation to the two separate arguments that were put by Customs and, secondly, we say as a matter of law, clearly the purchase price was material to Customs duty in one of the ways that I have submitted, and that is what the Court has said, even though it cannot be used, so they said, in the direct fashion that we primarily contended for. Those are the submissions of the respondent, if the Court pleases.

BRENNAN CJ: Yes. Mr Gyles.

MR GYLES: I think I have put all I can put, your Honour.

BRENNAN CJ: Do you wish to say anything as to whether or not the issue which the Court gave an answer to was in fact canvassed?

MR GYLES: Your Honour, as I say, I was not there. I have looked at the submissions we put before the Court and they did not address the issue.

BRENNAN CJ: Did you look at the submissions both parties put before the Court?

MR GYLES: Your Honour, I have briefly looked at those. I am not conscious of any significant argument about it. Your Honour, I am told that at the hearing the argument dealt with section 161, and how that was to be applied. In the submissions of the respondent, there was a submission that the purchase price is relevant even if not determinative under the heading, "Indirect Relevance". Your Honour, it is our submission that the question posed and, indeed, all of the questions relate to section 161 and that one has relevance or one does not have relevance. There is no such thing as indirect relevance, your Honour, it is either one or the other, and that was, with respect, an irrelevant submission. Our argument is firmly based, your Honours, upon the procedure laid down in the Act.

BRENNAN CJ: Thank you. As the argument based on want of natural justice depends solely on the course of the argument before the Court of Criminal Appeal, reference to the reasons for judgment of the Court of Criminal Appeal shows that this is not a suitable case for the grant of special leave. Accordingly, special leave is refused.

MR ROBERTS: Costs please, your Honour.

BRENNAN CJ: Is there anything you can say about that?

MR GYLES: No, your Honour.

BRENNAN CJ: Refused with costs.

AT 10.01 AM THE MATTER WAS CONCLUDED