|
|
Home
| Databases
| WorldLII
| Search
| Feedback
Court of Appeal of New Zealand |
Last Updated: 2 February 2018
|
For a Court ready (fee required) version please
follow this link
|
|
|
IN THE COURT OF APPEAL OF NEW ZEALAND
|
|
|
BETWEEN
|
Appellant |
|
AND
|
Respondent |
|
Hearing: |
16 May 2017 |
|
Court: |
French, Miller and Winkelmann JJ |
|
Counsel: |
A B Goosen and S K Jameson for Appellant
P R McRae for Respondent |
|
Judgment: |
JUDGMENT OF THE COURT
____________________________________________________________________
REASONS OF THE COURT
(Given by Winkelmann J)
Table of Contents
|
|
Para No.
|
|
Factual background
|
|
|
First ground of appeal: A preliminary point — was the appeal to
the High Court time barred?
|
|
|
High Court decision
|
|
|
Argument on appeal
|
|
|
Analysis
|
|
|
Second ground of appeal: Was the Judge wrong in the findings he made as
to the burden of proof in appeals before the Authority?
|
|
|
The statutory framework
|
|
|
The various challenges in this case
|
|
|
Chief Executive’s review
|
|
|
Appeal to the Authority
|
|
|
Decision of Clifford J
|
|
|
Argument
|
|
|
Analysis
|
|
|
The nature of a de novo appeal
|
|
|
Meaning of s 267
|
|
|
Legislative history
|
|
|
Did Clifford J err in setting a standard of proof?
|
|
|
Third ground of appeal: What was the issue for the Authority in
relation to Mr Jury’s intent?
|
|
|
High Court judgment
|
|
|
Analysis
|
|
|
Result
|
[1] The respondent, Mr Jury, grew tobacco on a property in Motueka and sold that tobacco to the public. It was unlawful for the purchasers of that tobacco to manufacture it. The appellant, the Chief Executive of the New Zealand Customs Service (Customs), seized five tonnes of Mr Jury’s tobacco as forfeited to the Crown on the grounds a Customs Officer had reasonable cause to suspect the tobacco was intended for unlawful manufacture. That seizure was made in reliance upon s 225(1)(o) of the Customs and Excise Act 1996 (the Act). Mr Jury applied to the Chief Executive of the New Zealand Customs Service (the Chief Executive) for a review of the seizure of his tobacco and, when that review was declined, he appealed to the Customs Appeal Authority (the Authority).[1] Although that appeal was dismissed, a further appeal by Mr Jury to the High Court was successful before Clifford J.[2] It is Customs which now appeals that decision.[3]
[2] Customs argues that Clifford J was wrong to find that:
- (a) The appeal to the High Court was not time barred because of Mr Jury’s failure to file a case on appeal with the Authority within the time period stipulated in the Act.
- (b) In appeals to the Authority, Customs bears the onus of proving the grounds on which forfeiture has taken place. Clifford J said the Authority erred in proceeding on the basis that Mr Jury bore the onus of proof on his appeal to the standard of “the balance of probabilities”.
- (c) For the ground of forfeiture to be made out, Mr Jury had to have actually intended that the tobacco in question be unlawfully manufactured and that it was not enough that he knew to a “virtually certain” standard that his tobacco would be used for the unlawful manufacture of tobacco.
Factual background
[3] In the past tobacco growers in New Zealand enjoyed subsidies paid by the New Zealand government to enable them to compete, on cost, with imported tobacco. Those subsidies ended many years ago. There is now no commercial market in New Zealand for any significant quantity of locally grown tobacco. Nevertheless, Mr Jury has continued to grow large quantities of tobacco on his farm in Motueka.
[4] Once picked, tobacco leaves must be dried or cured within two days or so in order to avoid deterioration before they are stored or sold. For that reason Mr Jury flue-cured his harvested tobacco to dry it. It is not illegal to grow, dry and store tobacco. But s 68(1) of the Act prohibits the manufacture of certain goods, including tobacco, outside of a licensed manufacturing area. Under s 2, manufacture in relation to tobacco is defined as:
manufacture, in relation to goods specified in the Excise and Exciseequivalent Duties Table, means,—
(a) if the goods are tobacco, the process of cutting, pressing, grinding, crushing, or rubbing raw or leaf tobacco, or otherwise preparing raw or leaf tobacco or manufactured or partially manufactured tobacco, and of making cigarettes whether from duty-paid or from nondutypaid tobacco, and of putting up for use or consumption scraps, waste, chippings, stems, or deposits of tobacco resulting from processing tobacco:
[5] Manufactured tobacco is defined in s 2 as tobacco that has been manufactured or prepared for smoking or any other purpose.
[6] In this case it is not suggested by Mr Jury that the tobacco he sold to members of the public was to be manufactured in a licensed area or that it was able to be manufactured pursuant to the personal use exemption in s 68A. Accordingly, were the tobacco he sold to be manufactured, it would be unlawfully manufactured in contravention of s 68. Under s 225(1)(o), both unlawfully manufactured tobacco and tobacco that is intended to be unlawfully manufactured is forfeited to the Crown. Section 226 allows a Customs officer or constable to seize any forfeited goods or goods that he or she has reasonable cause to suspect are forfeited.
[7] The events which led to the present appeal are summarised by Clifford J, a summary we gratefully adopt:[4]
[6] By 2010 Mr Jury had approximately 4.8 tonnes of dried tobacco leaf stored in a shed on his property. That tobacco represented the product of a number of seasons’ crops.
[7] On or about 26 March 2010 Mr Jury sold one 40kg bale of tobacco leaf to a Mr Ferguson, who came to the property and took the bale away on a trailer. Customs officers observed Mr Jury and Mr Ferguson that day. Mr Ferguson was followed by the authorities as he returned to Auckland. When the police searched Mr Ferguson’s Auckland property they found some 34kg of cured tobacco, 1.76kg of cut or processed tobacco and various equipment used for the production of manufactured tobacco.
[8] On 4 May 2010 Customs and armed police officers executed a search warrant at Mr Jury’s Motueka property. They seized the 4.8 tonnes of stored tobacco leaf. In September that year the Customs Service confirmed that the tobacco was forfeited to the Crown.
[9] Mr Jury applied in October 2010 for a review of the seizure and forfeiture. Mr Jury was subsequently charged, jointly with Mr Ferguson, with the unlawful manufacture of tobacco. Mr Jury’s challenge to the seizure was then put on hold.
[10] Mr Jury and Mr Ferguson were tried by a Judge alone in the North Shore District Court over four days in November 2011. On 16 February 2012 Judge Hinton delivered a reserved decision, in which he convicted Mr Jury and Mr Ferguson of manufacturing tobacco.
[11] On appeal to the High Court, Mr Jury’s conviction was quashed. The High Court found that the Crown had not established beyond reasonable doubt an essential element of that offence: that Mr Jury intended the tobacco to be used for an illegal purpose.
[12] After Mr Jury’s acquittal Customs considered his challenge to the forfeiture of the tobacco. Following that review, the Chief Executive confirmed her decision [that the tobacco was forfeited to the Crown]. Mr Jury appealed that decision to the Customs Appeal Authority (the Authority). The Authority dismissed Mr Jury’s appeal.
[8] The parties accept that if the tobacco that was seized had been manufactured for smoking, it would have attracted excise duty of $3.34 million.
First ground of appeal: A preliminary point — was the appeal to the High Court time barred?
[9] Mr Jury’s second appeal to the High Court from the Authority was by way of case stated. The procedure for such appeals is set out in s 272 of the Act, which provides:
272 Appeals to High Court
(1) Any party who is dissatisfied with a decision of an Authority under this Act as being erroneous in point of law or fact may appeal to the High Court.
(2) Every such appeal shall be made by filing a notice of appeal in the appropriate registry of the High Court within 20 working days after the date of the decision appealed against or within such further time as the High Court may allow.
(3) Where a notice of appeal is filed in accordance with subsection (2), the appellant shall also, within the time specified in that subsection, file with the Authority a notice of appeal specifying the registry of the High Court in which the appellant intends to file the case on appeal, and, except in the case of an appeal by the chief executive, shall give security for the costs of the appeal of such amount and in such form as may be fixed by the Authority.
(4) The appellant shall prepare a case setting forth the facts and the questions of law or fact arising for the determination of the High Court, and shall, within 2 months after the date of the giving by the Authority of his or her decision, submit the case to the Authority.
(5) An Authority may return to an appellant a case submitted to the Authority under subsection (4) or further submitted under this subsection for such amendment as the Authority shall direct, and the appellant shall further submit the case to the Authority within such time as the Authority shall allow.
(6) Where an Authority accepts a case submitted or further submitted to him or her under subsection (4) or subsection (5), the Authority shall sign the case, and shall deliver the case to the appellant.
(7) The appellant shall, within 14 days after the date of receipt of the case delivered by the Authority pursuant to subsection (6), transmit it to the Registrar of the High Court in the registry specified in the notice of appeal, and the Registrar shall thereupon enter the appeal for hearing at the first practicable sitting of the court.
(8) On the hearing of the appeal the High Court may, if it thinks fit, cause the case so stated to be sent back to the Authority for amendment, and subsections (5), (6) and (7) shall, with any necessary modifications, apply as if the case had been submitted to the Authority under subsection (4).
[10] As can be seen, s 272 imposes a number of time requirements on the appellant. For the purposes of this appeal, the relevant time limitation is in s 272(4). It required Mr Jury to submit the initial draft case on appeal to the Authority within two months of the date of the Authority’s decision appealed from. In practice, this means an appellant who has filed his or her notice of appeal by the due date generally has a further month to file a draft case on appeal with the Authority.
[11] In this case Mr Jury’s initial case on appeal was supplied 11 days late. Customs argued before Clifford J that the Authority did not have jurisdiction to accept the case and that Mr Jury’s right of appeal was thereby brought to an end. It said that the time limit under s 272(4) was mandatory. It relied on two decisions of this Court: Hawkes Bay Hide Processors of Hastings v Commissioner of Inland Revenue[5] and Attorney-General v Howard.[6]
High Court decision
[12] Clifford J rejected Customs’ argument. He distinguished the cases relied upon by Customs on the grounds the procedural regime for appeals set out in s 272 of the Act is materially different to those at issue in the two cases.[7] Since s 272(2) confers an unlimited discretion on the High Court to extend the time for filing the notice of appeal, the High Court could extend the period for filing the notice of appeal to a date later than two months from the Authority’s decision (the time limit for filing the case on appeal). Clifford J was satisfied that, given the High Court’s extension power in s 272(2), it was a necessary implication that the High Court could extend the time for submitting the case on appeal to the Authority under s 272(4).[8] He continued:
[38] In these circumstances, it is not necessary for me to determine whether the Authority himself has the power to extend the time limit provided for the submission of the case on appeal to him. However, I prefer the view that this provision is of a different nature to the provisions by which an appeal is initiated. The different nature of that provision is reflected in the considerable flexibility in the process for finalisation of the case on appeal. In that context, and as regards the statutory scheme, in my view there is no jurisprudential reason why the Authority should not, in appropriate circumstances, agree to an extension of time for that step of the process.
Argument on appeal
[13] Customs argues the Judge erred in his interpretation of s 272 because s 272(4) states the relevant timeframe in unambiguous terms and confers no discretion on the Authority, or the High Court, to extend it. On Customs’ argument the immediate legislative context supports giving the plain wording of s 272(4) full effect. It is apparent that Parliament considered and decided which time periods in s 272 are able to be extended and which are not. For example, s 272(2) expressly states that the time for filing a notice of appeal may be extended by the High Court. But there is no provision to similar effect in s 272(4). Customs also notes that provisions subsequent to s 272(4) assume the time period has been complied with. The clear implication, it is argued, is that Parliament intended the two-month limit to be mandatory.
[14] Customs says that Clifford J was wrong to distinguish the two cases referred to in [11] above and that they strongly support its argument regarding s 272(4). The Judge was wrong to conclude that the ability of the High Court to extend the time for the filing of a notice of appeal necessarily implies that the time for filing the case on appeal in the Authority may also be extended. Customs attaches significance to the fact that the time period for filing the case on appeal is set by reference to the date of the Authority’s decision, not the date of the filing of the notice of appeal. On a proper reading of s 272, and in the context of the section as a whole, the ability of the High Court to extend time for filing the notice of appeal under s 272(2) is limited — it can only be extended to the extent that the two-month period in s 272(4) for filing the case on appeal can be complied with.
Analysis
[15] This ground of appeal concerns an issue of statutory interpretation. As the Supreme Court said in Commerce Commission v Fonterra Co-operative Group Ltd:[9]
The meaning of an enactment must be ascertained from its text and in the light of its purpose. Even if the meaning of the text may appear plain in isolation of purpose, that meaning should always be cross-checked against purpose in order to observe the dual requirements of s 5.
[16] The issue can be framed in this way: did Parliament intend that the timeframe prescribed in s 272(4) be mandatory or imperative in the sense that non-compliance with it is fatal to the appeal, or rather that the timeframe should only be directory in nature and capable of extension by the appropriate authority or court. The courts have regularly had to answer such questions, as reflected in this passage from a 19th century decision of the English courts:[10]
Now the distinction between matters that are directory and matters that are imperative is well known to us all in the common language of the courts at Westminster. I am not sure that it is the most fortunate language that could have been adopted to express the idea that it is intended to convey; but still that is the recognised language, and I propose to adhere to it. The real question in all these cases is this: A thing has been ordered by the legislature to be done. What is the consequence if it is not done?
In the case of statutes that are said to be imperative, the Courts have decided that if it is not done the whole thing fails, and the proceedings that follow upon it are all void. On the other hand, when the Courts hold a provision to be mandatory or directory, they say that, although such provision may not have been complied with, the subsequent proceedings do not fail. Still, whatever the language, the idea is a perfectly distinct one.
There may be many provisions in Acts of Parliament which, although they are not strictly obeyed, yet do not appear to the Court to be of that material importance to the subject-matter to which they refer, as that the legislature could have intended that the non-observance of them should be followed by a total failure of the whole proceedings. On the other hand, there are some provisions in respect of which the Court would take an opposite view, and would feel that they are matters which must be strictly obeyed, otherwise the whole proceedings that subsequently follow must come to an end.
[17] We agree that the plain meaning of s 272(4), if read in isolation, is that the time limit applies without prospect of extension — in other words, it is mandatory. But s 272(4) should not be read in isolation from its statutory context or its purpose. We consider the Judge was correct that it is a necessary implication of the power conferred on the High Court to extend the time for filing the notice of appeal that the High Court may also extend the time limit created by s 272(4). If the High Court has an unfettered discretion to extend the time for filing a notice of appeal, then it must also be empowered to extend time for the subsequent administrative (and comparatively less important) steps which follow on from the filing of the notice of appeal. While the time limit for filing the case on appeal is set by reference to the Authority’s decision, and not by reference to the filing of the notice of appeal, we see no particular significance in that. Filing the case on appeal remains a step subsequent to the filing of the notice of appeal in the sense that the preparation of a case flows out of, and is necessitated by, the filing of the notice of appeal.
[18] As to the purpose cross-check, we see no purpose to be served by the strict enforcement of this time limit or at least no purpose that cannot be achieved through the High Court’s case management of the appeal. The alternative view is that an administrative task is capable of derailing a validly filed appeal.
[19] In our view, once an appeal has been lodged under s 272(2), the High Court has the power to supervise the conduct of the appeal from that point on and the power to address compliance with subsequent timeframes related to the appeal. As to whether the Authority may extend the time for filing the case, we think the better view is that it is for the High Court and not the Authority to extend time. The High Court is, by that point, seized of the appeal and an extension granted by the Authority would have the potential to undermine the Court’s management of its own processes. This view is supported by the inclusion of an express power for the Authority to extend time in one situation, under s 272(5), but not under s 272(4).
[20] As to Customs’ reliance upon Hawkes Bay Hide Processors and Howard, we consider those cases to be distinguishable. Hawkes Bay Hide Processors involved an appeal to the High Court against a decision of the Taxation Review Authority. Under s 43 of the Inland Revenue Department Act 1974, the prospective appellant had to take a number of steps before a valid appeal would be deemed to have been lodged with the High Court. Until a valid appeal was commenced under that Act, the Court had no jurisdiction in respect of the matter.[11] In this case, a valid notice of appeal was filed and the High Court was seized of the matter. A further point of distinction was that in Hawkes Bay Hide Processors there was no provision in the relevant statutory section granting the High Court a general power to extend time to appeal.
[21] Attorney-General v Howard is also distinguishable.[12] Again, the timeframes in question related to steps which had to be taken before a valid appeal would be deemed to be instituted in the High Court.[13] Secondly, there was no provision in the Human Rights Act 1993 which gave the High Court a general ability to extend time to appeal from the Human Rights Review Tribunal.
[22] To conclude, we are satisfied that the time frame in s 272(4) is directory rather than mandatory. Any issue of default under s 272(4) may be addressed through exercise of the High Court’s discretion unambiguously established in s 272(2).
Second ground of appeal: Was the Judge wrong in findings he made as to the burden of proof in appeals before the Authority?
[23] The issue raised by this ground of appeal concerns the effect of the provision in s 267(1) of the Act that, on appeal to the Authority from a review of the Chief Executive, the burden of proof is on the appellant. Section 267 provides:
267 Grounds of appeal and burden of proof
(1) Subject to subsection (2), in an appeal the appellant is limited to the grounds stated in the appellant’s notice of appeal, and the burden of proof is on the appellant.
(2) The Authority may, either on the application of the appellant or of its own motion, amend the grounds stated in the notice of appeal.
[24] Clifford J held that while the Authority was correct to proceed on the basis that Mr Jury carried the burden on his appeal it erred in determining what that meant.[14] The Authority proceeded on the basis that Mr Jury was not only required to prove the Chief Executive had been wrong to dismiss his application for review of the seizure to succeed in his appeal, but also that there were no reasonable grounds for seizure. The Judge, however, was satisfied that the burden simply meant that it was Mr Jury’s job to satisfy the Authority that the Chief Executive had erred in rejecting the application for review for any reason.[15] Customs, in contrast, had to prove that Mr Jury had the tobacco intending that it be used for unlawful manufacture.
The statutory framework
[25] As noted, s 225(1)(o) of the Act provides that any goods intended for use in contravention of s 68 “shall be forfeited to the Crown”. Section 226 confers the power of seizure of forfeited goods on police and Customs. Section 228 provides that when the goods are seized the forfeiture relates back to the date of the act or event from which the forfeiture arose. However, a party with an interest in the goods has 20 days, after receipt of notice of seizure, to apply to the Chief Executive for a review of the seizure.[16] The application for review may be made on grounds that there was no legal basis for the seizure of goods and/or that the applicant should, in all the circumstances, be granted relief.[17] The focus of Mr Jury’s application for review was the former ground.
[26] Unless the Chief Executive otherwise directs, the review is to be conducted on the papers and the Chief Executive must consider the application and any written submissions filed by the applicant.[18] The Chief Executive may also consider any other document, statement or information that in the Chief Executive’s opinion may assist the Chief Executive in dealing effectively with the review, whether or not that would be admissible in court.[19] She may seek additional information from the applicant.[20]
[27] Section 233 addresses how the application is to be disposed of before the Chief Executive. Of particular relevance are s 233(1) and (5) as follows:
233 Decision on review
(1) The chief executive must dispose of the application for review by making one of the following decisions:
(a) to dismiss the application for review:
(b) if satisfied that there was no legal basis for the seizure of all or any of the goods, to disallow the seizure (in whole or in part) and to direct that the goods be given (in whole or in part) to—
(i) the person from whom the goods were seized; or
(ii) if the goods were not seized from a particular person, the person who, in the opinion of the chief executive, is entitled to possess the goods:
(c) to grant relief by making any of the determinations described in section 235 (either unconditionally or subject to any conditions described in that section), if satisfied that it is equitable to do so, having regard to the matters specified in section 234.
...
(5) If the application for review is dismissed, the written notice must contain the reasons for the decision.
[28] We note that there is no mention of an onus or standard of proof in these provisions, other than in s 232(4) which provides:
(4) The applicant must establish, on the balance of probabilities, that the applicant has an interest in the seized goods and acquired that interest in good faith.
[29] The absence of clear statutory language as to onus of proof on review before the Chief Executive is consistent with the review being an administrative procedure. Nevertheless, the statutory framework does support the conclusion that it is not enough for the applicant to simply protest the forfeiture, requiring Customs to then make out its case. Rather the obligation is on the applicant to present material and argument in support of the ground advanced that there was no legal basis for seizure. The Chief Executive is required to consider the application on the basis of the application and any written submissions filed by the applicant, and other material the Chief Executive calls for. Finally, the Chief Executive grants the review “if satisfied there was no legal basis for seizure”.[21]
[30] The placing of what we think can properly be characterised as a burden on the applicant to present material in support of its application is consistent with the scheme of the Act which provides that goods will be forfeit unless that forfeiture is successfully challenged.[22]
[31] There is an issue, unexplored in argument before us, as to what exactly the expression “no legal basis for seizure” of goods means. The Authority proceeded on the basis that the issue was in substance whether grounds for forfeiture were made out.[23] In terms of the Act the grounds for forfeiture are different to grounds for seizure.[24] Because this issue was not pursued on appeal or argued before us, and because the approach of the Authority was the most favourable to the appellant (by applying the higher threshold of grounds for forfeiture as opposed to seizure), we do not need to decide this issue. We note, however, that it would be unusual if the appellant could show that grounds for forfeiture did not exist but nevertheless fail to obtain a release of the goods if Customs could prove it had reasonable grounds to believe the goods were forfeited.[25] Our view is that this is an unlikely interpretation, so that the Authority’s approach was correct.
[32] If the review is dismissed, the dismissal is deemed to be an order of condemnation of the goods to the Crown, taking effect 20 days after the dismissal (unless there is an appeal to the Authority within that time).[26]
[33] The Act establishes one or more Authorities to hear appeals authorised under it.[27] Section 255 provides that appeals to the Authority are to be by way of a hearing de novo and that, for the purpose of the hearing, the Authority has all the powers, duties, functions and discretions of the Chief Executive in making the decision or determination appealed from. The hearing of the appeal is presumptively oral, unless the Authority directs otherwise and both parties consent.[28] The Authority may receive any document, information, matter and so on, even if that would not be admissible in court.[29] It can take evidence under oath.[30] The Authority can also require production of documents or evidence, and can summons witnesses.[31] Its decisions are to be filed in writing, including a statement of its reasons.[32]
[34] There is a right of appeal on fact or law from a decision of the Authority to the High Court.[33] There is a further right of appeal to the Court of Appeal — however, this is limited to questions of law.[34] There is no statutory provision as to which party carries the burden of proof on those appeals.
[35] We also mention s 239 of the Act which creates a number of limited factual presumptions:
239 Burden of proof
(1) In any proceedings under this Act instituted by or on behalf of or against the Crown (other than a prosecution for an offence against section 182(2), 183(2), 205(6), or 209(5)) every allegation made on behalf of the Crown in any statement of claim, statement of defence, plea, or charge, that relates to—
(a) the identity or nature of any goods; or
(b) the value of any goods for duty; or
(c) the country or time of exportation of any goods; or
(d) the fact or time of the importation of any goods; or
(e) the place of manufacture, production, or origin of any goods; or
(f) the payment of any duty on goods,—
shall be presumed to be true unless the contrary is proved.
(2) The presumption in subsection (1) of this section shall not be excluded by the fact that evidence is produced on behalf of the Crown in support of any such allegation.
(3) The provisions of this section shall extend and apply to proceedings in which the existence of an intent to defraud the revenue of the Customs is in issue.
(4) Notwithstanding the foregoing provisions of this section, in any proceedings for an offence against this Act where it is alleged that the defendant intended to commit the offence, the prosecution has the burden of proving that intent beyond reasonable doubt.
[36] It was common ground before us that this provision did not apply to the proceedings in the Authority, as the Crown made no allegation in a statement of claim, statement of defence, plea or charge. However, s 239 featured in argument before us, and in the judgment under appeal, and we therefore include it in our overview of the relevant statutory provisions.
The various challenges in this case
Chief Executive’s review
[37] Mr Jury requested review of the forfeiture on the primary ground that there was no legal basis for the seizure. Ultimately, the Chief Executive dismissed the application for review. She noted in a letter enclosing her decision that “Mr Jury wilfully chose to reoffend despite his full awareness of Customs’ requirements in regards to the growing and selling of unmanufactured tobacco through both advice provided by Customs and his previous conviction”. Mr Jury has one previous conviction for the unlawful manufacture of tobacco.
Appeal to the Authority
[38] Mr Jury appealed that decision to the Authority. The Authority observed that this was a civil proceeding under the Act and accordingly that Mr Jury had to prove his case.[35] The Authority framed the issue for itself in the following way:[36]
The Authority is required to make factual findings before evaluating a key question. That is, whether Mr Jury intended his tobacco to be used in the manufacture of tobacco, which is suitable for smoking or ingesting. If that is so, then it is necessary to determine whether in all the circumstances Mr Jury should have his tobacco returned. ...
[39] Mr Jury did not give evidence and called only one witness, his partner Ms Ward. Ms Ward’s evidence is summarised by the Authority as follows:
[19] Ms Ward suggested various uses for tobacco that did not involve manufacturing tobacco for smoking or the other forms of consumption that triggered excise duty. She referred to wreaths for coffins, fungicide for apple trees, poultices for horses, and as a chemical substitute on organic farms. She did not give evidence of the quantity of sales for such uses, or the prices. Ms Ward said she had never been involved in the sale of any tobacco, but had seen tobacco leaf left for sale at a roadside stall Mr Jury operated.
[40] Customs called two witnesses. Mr Barnes, a Customs officer, described evidence gathered through surveillance and on search of the property. This evidence included records which showed that Mr Jury incurred significant expense in growing and curing tobacco, and also evidence that Mr Jury had admitted to him that he sold small amounts of tobacco to purchasers “in person and at his roadside stall”.
[41] Customs also called an expert witness, Mr Lewin, who had 25 years’ experience in the tobacco industry in a variety of roles. Mr Lewin’s evidence was that there was only one use for commercially grown and cured tobacco of the kind in question — the manufacture of tobacco products. As to Ms Ward’s evidence about alternative uses, he said as follows:
[23] ... [Mr Lewin] said he had heard of people using tobacco dust and waste to soak in water and use as a deterrent against aphids and the like. However, he said tobacco was too expensive to grow commercially and use in that way. He also said viruses such as Tobacco Mosaic were a hazard for other crops, and farmers should not to [sic] handle tobacco and seedlings at the same time. He said there was no legitimate market for New Zealand grown tobacco, as the licenced manufacturers exclusively purchased imported tobacco.
[42] The Authority accepted the evidence from Mr Lewin that there was no legitimate market for New Zealand-grown tobacco leaf.[37] He said that the evidence established that Mr Jury was actively trying to sell tobacco and that Mr Jury had accepted that he had sold tobacco leaf to a person who illegally manufactured tobacco.[38] He had incurred significant expense in cultivating and curing the tobacco, and also the cost of forgoing the use of his land for other crops.[39] The Authority said:
[47] Those facts are sufficient to find, on the balance of probabilities, that Mr Jury had grown and cured the tobacco as he intended to sell the tobacco to persons who would evade duty by unlawfully manufacturing it. He had a commercial crop in storage, and the only apparent purchasers would be persons evading duty.
[48] Accordingly, I am satisfied that Mr Jury is in a position where he had to prove why the clear and obvious implications of those facts do not apply to his situation. If Mr Jury intended to sell the tobacco for use in some way that did not breach section 68, it would be a complete answer. As noted, if he had an export market and was intending to sell into that market, or intended to sell to a local licensed manufacturer or the like, that could explain the tobacco he had on hand.
[43] But, the Authority noted, the only witness called for Mr Jury was Ms Ward, and the Authority preferred Mr Lewin’s evidence that such uses were not commercial.[40] Ms Ward provided no evidence of sales for the uses she described and could not establish that the cost of tobacco production on the farm made such uses reasonable. The Authority concluded:
[50] I am satisfied the evidence establishes, on the balance of probabilities, Mr Jury held the tobacco in issue to sell; and the purchasers, with a high degree of certainty, would manufacture the tobacco, and evade the $3.34M (or thereabouts) of duty through breaching section 68. I am satisfied Mr Jury was probably aware of these clear and obvious circumstances. Accordingly, I am satisfied Mr Jury’s state of mind would have constituted intent for the purposes of s 225(1)(o).
Decision of Clifford J
[44] Clifford J conducted an extensive review of the legislative history of the part of the Act dealing with forfeiture of goods, contrasting the existing provisions with those in the former Customs Act 1996 (the 1966 Act) and in particular ss 299 and 300 of the 1966 Act.[41] The Judge attached significance to the failure to carry s 300 forward into the 1996 Act, and to the more limited nature of the factual presumptions set out in s 239 than was provided for in its statutory antecedent, s 299.[42]
[45] Those provisions from the 1966 Act are set out below:
299 Burden of proof in proceedings under the Customs Acts
(1) In any proceedings under the Customs Acts instituted by or on behalf of the Crown (other than a prosecution for an indictable offence) every allegation made on behalf of the Crown in any statement of claim, statement of defence, plea, or information, and relating to the identity or nature of any goods, or to their value for ad valorem duty, or to the country or time of their exportation, or to the fact or time of their importation, or to their place of manufacture, production, or origin, or to the payment of any duty on them, or to any act done or omitted with respect thereto by any person, shall be presumed to be true unless the contrary is proved.
...
In all proceedings that are instituted against the Crown, or against the Minister or an officer of Customs or member of the Police or any other person, for any seizure, arrest, or other act done in pursuance of the Customs Acts, and in which the existence of reasonable or probable cause or of any other justification for such act is in issue, the burden of proving the want of reasonable or probable cause or the absence of such justification shall be on the plaintiff.
[46] He also attached significance to the new provision in 239(4) that the prosecution bore the onus of proving intent to commit the offence. The Judge said:
[71] ... The Chief Executive is not presumptively correct where, through an officer, she concludes that there are reasonable grounds to seize forfeited goods on the basis they are intended for use in breach of the Act. There are a number of reasons why that is the case:
(a) First, to the extent that s 239 creates a presumption of truth, it does so with respect to allegations in statements of claim, statements of defence, pleas or charges: it does not do so with respect to conclusions the Chief Executive reaches and on which she acts, other than to the extent those conclusions become “allegations” in that defined category of documents.
(b) Secondly, an allegation of an intent does not come within the six categories of allegation found in subss (a) to (f) of s 239(1).
(c) Finally, the express terms of s 239(4) states in any proceedings for an offence against the Act the prosecution must prove intent beyond reasonable doubt. It is not an offence under the Act to intend that goods be unlawfully manufactured. To that extent, s 239(4) does not apply directly where forfeiture, based on such an intent, is challenged. Nevertheless, and given the punitive nature of forfeiture, there is nothing in the Act to suggest that the same approach should not be taken to proof of intent where intent is the cause of forfeiture.
[72] Section 300 of the 1966 Act did contain a far more general reversal of the burden as regards matters of justification. It was, however, repealed and not replaced.
[47] He therefore concluded that Mr Jury only had the burden to satisfy the Authority that the Chief Executive had erred, for example, on a question of law.[43] He also concluded that the Authority’s understanding that the standard of proof was on the balance of probabilities could be seen as inapt, referring to a number of authorities in which the expression “satisfied” was held not to import with it a particular standard of proof.[44]
[48] The Judge said he was fortified in his interpretation by reference to s 22 of the New Zealand Bill of Rights Act 1990.[45] He said that in light of the protections affirmed by the New Zealand Bill of Rights Act against unreasonable search and seizure, very clear statutory language would be required to interpret the scheme of the Act in the way that the Authority did. There was no such language.
Argument
[49] On appeal Customs argues that the Judge was wrong to hold that on this de novo appeal to the Authority, Mr Jury did not bear the onus of proof to the standard of a balance of probability. It argues that in a de novo appeal, it is the duty of the appellate court to reach its own independent findings and decisions on the evidence that it hears or admits.
[50] Customs says that it is in this context that s 267 is to be read; it is the appellant that bears the burden of showing there was no legal basis for seizure. Customs argues that this reading is consistent with the language of the provisions, the statutory scheme and the purpose of the legislation. Mr Jury therefore bore the onus to establish facts to satisfy the Authority that there was no lawful basis for the seizure or that he should get relief against forfeiture. Customs argues that Mr Jury failed to do so, and the Authority was therefore correct to dismiss his appeal.
[51] Mr McRae for Mr Jury supports the reasoning of Clifford J and says that consistent with authority, on appeal there is no presumption in favour of the Customs Service. The only burden that the appellant carries is to show that the Chief Executive was wrong, for example because she erred on a question of law.
Analysis
The nature of a de novo appeal
[52] We start with the words of s 267 of the Act, and in particular with the concept of de novo appeals. All appeal rights are statutory, and the nature of an appeal right will be shaped by any statutory provision that bears upon it. In the absence of clear provision for the scope of the appeal right, the courts will define its nature as an exercise of statutory interpretation. Concepts such as de novo appeal, general rights of appeal and appeals by way of rehearing are concepts of long standing, much discussed in the case law, and could colloquially be called terms of art for the legal profession. Therefore, case law can provide context to statutory provisions creating appeal rights, although always with the caveat that the nature of the appeal right is determined by the statute.
[53] In a general appeal the court begins with a presumption that the decision under appeal is correct and the onus that the appellant bears is to show error in that decision.[46] In a de novo appeal there is no such presumption. Rather, the appeal involves a rehearing of the evidence — it is in essence a new matter. In the usual course, the onus is as it was in the original proceeding.[47] These orthodox principles are explained in a number of cases.
[54] In the 1971 case of Wellington Club Inc v Carson Woodhouse J said as follows:[48]
The jurisdiction of the [Town and Country Planning Appeal] Board on an appeal is outlined in ss 40 and 42 of the Act and they clearly contemplate a hearing de novo. The parties and others have a right to call evidence; and the Board itself has a power to call expert witnesses before it. Moreover, in suitable cases appeals may be heard together. In addition there is now no obligation upon a Council (as there was under earlier regulations) to take a record of the substance of evidence and argument before it or transmit the record to the Appeal Board in anticipation of the hearing on appeal. So the Board must begin anew. And it may be thought that the fact is statutory recognition of the clear need that this should be so.
...
Indeed it needs to be recognised that the first real hearing in any conventional sense is the hearing before the Board. The Board is described as an Appeal Board and there is a widely held misconception by the lay public that the so-called appeal which comes before it is actually a second step in some sort of judicial process; but in truth it is not.
[55] Woodhouse J’s interpretation of those particular appeal rights was confirmed by the Court of Appeal in Ross v Number Two Town and County Planning Appeal Board, which accepted the proposition that in substance a de novo appeal is a new matter:[49]
I find myself in complete agreement with the view ... that a hearing de novo by an appeal board, although described in the Act as the hearing of an appeal (s 42(1)), is in substance an exercise by the board of an original jurisdiction to determine the application or objection completely afresh, on the basis of the evidence before it and in the light of the circumstances prevailing at the time of its decision.
[56] The latest decision we refer to on the point is Shotover Gorge Jet Boats Ltd v Jamieson, in which this Court discussed de novo appeals:[50]
There can be no doubt that the District Court was intended to hear the case de novo, which would include a full hearing of oral evidence if any party so intended. ...
This kind of full appellate jurisdiction is valuable and quite common in New Zealand in planning and licensing fields. ...
In such cases it is the duty of the appellate Court to reach its own independent findings and decision on the evidence which it hears or admits. It is entitled to give weight, if it sees fit, to the opinion of the tribunal appealed from, but is in no way bound thereby. ...
In some of the foregoing authorities it is put that in this type of appeal there is no presumption in favour of the decision under appeal. Clearly that is so in the sense that the appellate Court has to approach the case afresh. The proceeding is an appeal, however, and if in the end the appellate Court could not make up its mind as to what was the right decision, the decision under appeal would, I think, stand. But that equipoise is unlikely if the appellate Judge accepts his or her true responsibility.
[57] We note that in Austin, Nichols & Co Inc v Stichting Lodestar, writing for the Court, Elias CJ said that in both general and de novo appeals the appellant bears the onus of satisfying the court that it should differ from the decision under appeal.[51] However the proper approach on a de novo appeal was not at issue in Austin, Nichols — that case concerned a general appeal by way of rehearing. We therefore proceed on the basis that the long line of authorities as to the proper approach to de novo appeals, which were not discussed in Austin, Nichols, remains undisturbed.
[58] In the absence of statutory provision for an appeal by way of de novo hearing, the courts have implied such an appeal right, often where the decision appealed from did not follow a hearing or if the empowering statute provides the appellate body with power to exercise all the powers of the authority appealed from.[52] But such implication is not necessary in this case as there is express provision for an appeal by way of de novo hearing.
[59] We do, however, observe that the provision for a de novo hearing is consistent with the nature of the appeal right conferred and the overall statutory scheme. The decision of the Chief Executive under appeal was made following a review on the papers and without a hearing. We also see as relevant that the original decision-maker was the Chief Executive of the very Department whose act in seizing the tobacco is, in substance, under review. In this context it is logical and, one might say, just that the appellant should have the opportunity for a fresh hearing before the Authority, without facing a presumption that the Chief Executive’s decision was correct.
Meaning of s 267
[60] We therefore proceed to consider the meaning of s 267 of the Act against this background, and in particular what it means that the burden of proof is on the appellant. As noted, absent statutory provision as to which party bears the onus, in a de novo appeal the burden of proof lies where it did in the original proceeding.
[61] Here, s 267 expressly provides that the burden of proof is on the appellant. In the context of a fresh hearing, where the issue for the Authority is not whether the Chief Executive was wrong, this provision can only mean that it is for the appellant to show that there was no legal basis for the seizure of the goods. We cannot reconcile the interpretation that Clifford J applied on appeal with this concept of a de novo appeal. How would it avail the appellant to show an error in the decision of the Chief Executive when the Authority has to consider the issues afresh on the basis of the hearing it conducts and the evidence it hears and collects? The decision under appeal is not the focus of a de novo appeal. And nor, we add, is there any record of a hearing against which the correctness or otherwise of that decision can be properly assessed.
[62] This interpretation also gains support from consideration of the broader statutory context. As noted, there is no provision as to where the burden of proof lies for the next two levels of appeal — those to the High Court and to the Court of Appeal. We accept Mr Goosen’s submission for Customs that, because these are not appeals by way of de novo hearing, the usual rule applies and it is for the appellant to show the decision appealed from is wrong. The express provision in s 267, in contrast, is a good indication that what is referred to is the burden to make out the ground of challenge to seizure.
[63] We accept Mr McRae’s submission that at first blush it seems an unusual thing for the owner of seized goods to show that there is no legal basis for that seizure. But in the context of legislation which provides for forfeiture if there is no challenge, it is perhaps not so unusual. We also note that it is not the only provision which places the burden upon the non-Customs party. The provisions of s 239 give the Crown the benefit of various rebuttable evidential presumptions in any proceedings commenced by it or against it under the Act, short of proceedings for an indictable offence.
[64] Does the New Zealand Bill of Rights Act require a different interpretation? As mentioned, Clifford J found that in light of the protection which s 21 of the New Zealand Bill of Rights Act provides against unreasonable seizure of property, very clear words would be required to interpret the scheme of the Act in the way the Authority did. No such language was used by Parliament.[53]
[65] We note that Clifford J did not find the interpretation advanced by Customs, and which we prefer, to be inconsistent with the rights set out in s 21 of the New Zealand Bill of Rights Act. Inconsistency is necessary before the interpretation principle in s 6 of the New Zealand Bill of Rights Act comes into play. As this Court said recently in Terranova Homes & Care Ltd v Service and Food Workers Union Nga Ringa Tota Inc:[54]
[212] Section 6 requires the court to prefer a meaning that is consistent with the rights and freedoms contained in the Bill of Rights over “any other meaning”. In this context, the phrase “any other meaning” can only refer to a meaning that is inconsistent with the rights and freedoms contained in the Bill of Rights. Section 6 thus only applies where on one interpretation of a provision, the provision is inconsistent with a protected right or freedom.
[66] We do not see that placing the burden of proof on the claimant is inconsistent with the s 21 right so as to engage the interpretation principle set out in s 6 of the New Zealand Bill of Rights Act. The Act provides authority for the seizure of the property. The grounds for seizure are not arbitrary. In this case, the substance of the ground was that there are reasonable grounds to believe the property is intended to be used for illicit purposes. This is a legitimate law-enforcement purpose. Although seizure is not judicially authorised before forfeiture, it is authorised by statute. Moreover, there is a procedure created for challenge to the seizure so that the Courts may check whether proper legal grounds for the seizure did exist or if the applicant should, in all the circumstances, be granted relief.[55]
[67] We have therefore reached a conclusion that very plain words were used as to where the burden of proof lies in an appeal to the Authority. The New Zealand Bill of Rights Act is not relevant to the interpretation of those words.
Legislative history
[68] We propose to deal only briefly with Clifford J’s analysis of the legislative history of the provisions, as we do not think that the legislative history assists with the interpretation task in this case.
[69] It is true that s 300 of the 1966 Act was not carried forward into the 1996 Act and s 239, the replacement of s 299, did not extend the presumption of truth to allegations made on behalf of the Crown as to “any act done or omitted with respect” to goods. But that history has to be placed within the context of a significant change to the forfeiture scheme. Under the 1966 Act, following seizure, condemnation would occur automatically unless, within one month after the day of seizure, notice disputing the forfeiture was given to Customs.[56] If such a notice was filed, Customs was required to proceed by action in rem in the then Supreme Court.[57] Customs was the applicant in those proceedings and therefore notionally bore the burden of proving all facts necessary to show that reasonable grounds for seizure existed. But, ss 299 and 300 qualified or shifted that burden onto the applicant as follows: s 299 gave Customs the benefit of wide-ranging statutory presumptions of fact, and s 300 provided that the burden of proving reasonable cause for seizure lay with the person disputing the seizure.
[70] The current Act effected several changes to the forfeiture regime. Customs was no longer required to bring actions for condemnation when a notice disputing forfeiture was filed. Initially the current Act provided for application by the claimant for an order disallowing seizure — to the District or High Court (depending on value). In 2008 the procedure was further amended with the introduction into the process of the de novo appeal to the Authority, with which this appeal is concerned.[58]
[71] It is therefore, at each step, for the applicant to make out its case against forfeiture. This is made explicit at the stage at issue in these proceedings — the appeal to the Authority. The provision of the de novo appeal process and the inclusion of s 267 explicitly place the burden upon the applicant to show that the grounds for seizure are not made out. It follows from the scheme of the 1996 Act that “the burden of proving the want of reasonable or probable cause or the absence of such justification” is on the claimant.[59]
[72] As to the provision in s 239(4) that the burden of proving intent in a criminal proceeding lay with the Crown, that simply preserves the position which existed under s 299 of the 1966 Act. There is nothing in this point.
[73] To conclude on this point, we see nothing in this legislative scheme which is inconsistent with the interpretation of s 267 we have preferred. The legislative scheme of the 1966 and 1996 Acts are very different. Not much can be made of sections carried forward or not carried forward. On our interpretation of the Acts, a very similar outcome is achieved under the 1996 Act to that applying under the 1966 Act in terms of the burden of proof.
Did Clifford J err in setting a standard of proof?
[74] We understand Clifford J to have held two things in relation to the standard of proof. The first was that although Mr Jury did have to show error on the part of the Chief Executive, he did not have to show that to any particular standard.[60] We do not need to address this issue, in light of our finding that the burden upon Mr Jury was to prove that there was no legal basis for the seizure of the goods.
[75] Customs also argues that Clifford J found that Customs had to prove the intent element of the grounds for forfeiture beyond reasonable doubt. Again, on our finding that it was Mr Jury and not Customs who bore the onus of proof, this is not an argument we need to address. To make clear, Customs did not need to prove that Mr Jury possessed the tobacco with the relevant intent (that it be intended for unlawful manufacture). However, given the extent of discussion as to the standard of proof Mr Jury had to meet, we think it helpful if we state that it was the civil standard, on the balance of probabilities, Mr Jury had to meet. As the Supreme Court held in Z v Dental Complaints Assessment Committee, the civil standard of proof generally applies in civil proceedings.[61]
Third ground of appeal: What was the issue for the Authority in relation to Mr Jury’s intent?
[76] The last issue is whether the Judge erred in analysing the intention requirement of the ground for forfeiture set out in s 225(1)(o) of the Act. The ground for forfeiture reads as follows:
225 Goods forfeited
(1) The following goods shall be forfeited to the Crown:
...
(o) any goods, equipment, or apparatus used or intended for use in contravention of section 68 and any goods manufactured wholly or partly using such goods, equipment, or apparatus.
[77] Mr Jury argues that Customs needed to prove he had “direct” intention under s 225(1)(o); Customs says an “indirect” or “oblique” (we use the word “oblique” for the purposes of this discussion) intention will suffice. The difference between direct and oblique intention is as follows.[62] Direct intention refers to intention where the defendant directly seeks an outcome (because he or she wants it for its own sake or as a means to something else). So in this case, Mr Jury would directly intend for the tobacco to be unlawfully manufactured if he desired that it be unlawfully manufactured. Oblique intention is said to exist where outcomes are so closely bound to actions that they are virtually certain to occur alongside them. Again, to apply that concept to this case, Mr Jury would obliquely intend that the tobacco be unlawfully manufactured if he was virtually certain it was to be unlawfully manufactured.
[78] In New Zealand, oblique intention is regarded as sufficient mens rea for most crimes. As Fisher J explained in R v Wentworth:[63]
In a legal context “intention” is normally taken to embrace both ultimate (desired) consequences and incidental (undesired but foreseen) consequences so long as the latter are foreseen with sufficient certainty when the course of action is deliberately embarked upon. “Direct intention” may be used to refer to the former and “oblique intention” the latter. There is room for argument as to the degree of certainty with which the accused must predict the incidental consequence (Orchard, “Criminal Intention” [1986] NZLJ 208: “virtual” or “moral” certainty is sufficient; query anything less) but in principle both types of intention qualify. Contract killers usually want money, not the death of their victims per se. Receipt of money is the ultimate, desired consequence. Death of the victim is the incidental, perhaps regretted, consequence. If it is clear that the intended course of action will result in both, both are said to be intended.
[79] In Police v K (CA320/11) this Court accepted and referred to the approach described in Wentworth as the traditional approach.[64]
High Court judgment
[80] Clifford J drew upon the criminal law concept of intent to determine what the required mental element was for the purposes of s 225(1)(o) — what did it mean that tobacco was intended to be unlawfully manufactured? He acknowledged the existence of authority relied upon by Customs in support of its submission that with certain crimes it is unnecessary to show that the defendant wanted or desired the prohibited outcome (direct intention), it is sufficient that the outcome was a virtual or moral certainty (oblique intention).[65] But the Judge considered those authorities did not apply in a case such as this, where the actus reus (the possession of tobacco) is itself lawful and it is the presence of the intention which renders that possession subject to the punitive response of forfeiture.[66]
[81] The Judge referred to the following passage from Simester and Brookbanks’ text Principles of Criminal Law as a helpful starting point:[67]
“With intent” or “ulterior intent” crimes
Sometimes the intentional doing of an actus reus is not itself an offence and becomes criminal only when done for some further purpose. For example, if D carries a crowbar in his bag he does nothing wrong, but if he carries the crowbar with intent to use it in a burglary, he is guilty of an offence. Crimes of this sort require what is often called an “ulterior intent”. The main feature of such crimes is that they specify, as part of the mens rea, an intent to do something that is not part of the actus reus. In the example above, the actus reus is simple possession of the crowbar – it does not matter whether the crowbar is actually used in a burglary. This is why such crimes are said to involve “ulterior” intent: because the eventual intention is ulterior to the actus reus.
In other respects, however, these crimes are no different from crimes of ordinary intent. In particular, the ulterior intent must exist at the time when the actus reus is performed. ...
Where a crime specifies an ulterior intent as part of the mens rea, it seems clear that mere foresight of the further consequences will not do.
[82] The Judge said that because growing, drying and possessing tobacco is not unlawful he tended to the view that what was required was direct intent.[68] Mr Jury had to intend, in the sense of desire, that the tobacco in question be manufactured unlawfully. Knowledge that unlawful manufacture was the use to which it would be put, even to a virtually certain standard, was not enough.
[83] But he said, even if he were wrong in that, the Authority had still erred:
[90] ... [T]he Authority reasoned [that Mr Jury] probably held the tobacco to sell. Mr Jury was also probably aware of “clear and obvious circumstances, namely that the purchasers with a high degree of certainty would unlawful manufacture”.
[91] “Probably” and with “a high degree of certainty” are not in my view enough.
(Original emphasis.)
Analysis
[84] We consider that the Judge erred in treating as settled law the proposition that, for crimes of ulterior intent, proof of oblique intent is not enough. We understand the Judge to have treated the quoted passage from Principles of Criminal Law as containing a statement that oblique intention is not sufficient for crimes of ulterior intent. But the passage set out is a difficult passage and appears to conclude (in a sentence not set out in the quoted part) with a statement to the effect that while recklessness will not be sufficient mens rea for crimes of ulterior intent, oblique intent will be.
[85] The issue of whether proof of oblique intent will suffice for crimes of ulterior intent has divided academic opinion[69] and many of the leading criminal law texts do not offer an opinion on what the answer should be.[70] Police v K (CA320/11) is authority in New Zealand for the proposition that oblique intent will suffice in some cases.[71] The offence in that case was one of ulterior intent. This Court found that oblique intent was enough.[72]
[86] This is not the case to revisit this difficult issue, especially as it arises here in a civil setting and is not, in our view, dispositive of the appeal. That is because the foresight of virtually certain consequences can itself be evidence of direct intention. By this we mean that evidence the defendant foresaw an outcome to some high level of certainty is evidence from which it can be inferred that the person directly intended that outcome. As the Textbook of Criminal Law says:[73]
The grey area is where it can be shown that the defendant at the very least foresaw the consequence as a virtual certainty; but it is not clear whether she directly intended the consequence. In this situation, the jury can use the evidence that [the defendant] foresaw the consequence as virtually certain to infer either direct or indirect intention.
[87] We are satisfied that such an inference is appropriate in this case. Mr Jury’s knowledge that the tobacco would be used for manufacture, even if that was not an objective Mr Jury wanted or desired for its own sake, is evidence available to support an inference that this consequence was directly intended by him.
[88] In this case, the evidence before the Authority was that Mr Jury had a commercial venture (growing tobacco for sale) and that there was no commercial market for that tobacco other than the market which would use it in unlawful manufacture. It has been argued that Mr Jury was indifferent as to what purchasers subsequently did with his tobacco. There is a flaw in that argument. It can be safely inferred that Mr Jury would only continue to have a market for his tobacco if those who bought it unlawfully manufactured it. There was no other large-scale use to which it could be put by purchasers. These facts, we consider, provide an adequate evidential basis for the inference that Mr Jury was in possession of the tobacco with the direct intention that it be manufactured.
[89] Our reasoning is as follows. Mr Jury grew and stored the tobacco for sale, investing considerable efforts, resource and expense in that venture. He wanted to sell the tobacco. He knew the only market for the tobacco was those who would unlawfully manufacture it. In order to sell the tobacco, he needed it to be manufactured. Therefore he directly intended that it be bought and used in manufacture.
[90] The second issue is whether the Authority applied the wrong test to intention. The Judge said the Authority erred as it only found that Mr Jury probably held the tobacco to sell and that he was only probably aware of the fact the purchasers were virtually certain to manufacture it.[74]
[91] In the relevant passage the Authority referred to R v Wentworth and Police v K as authorities relied upon by Customs.[75] But the Authority declined to engage in a “close examination of the meaning of intention” because:
[41] ...For reasons I discuss below, I am satisfied Mr Jury intended to sell the tobacco in question to persons, with a high level of certainty the tobacco would be manufactured in breach of section 68. He depended on that to achieve sales of the tobacco. In this case, the words intended for use unambiguously describe the status of the tobacco.
[92] The Authority continued:
[45] The evidence established that Mr Jury was actively trying to sell the tobacco. Mr Jury accepted that he had sold tobacco leaf and he had earlier sold tobacco to a person who illegally manufactured the tobacco. He was selling the tobacco at his roadside stall and had financial records relating to the sale of tobacco.
[46] The evidence also established Mr Jury incurred significant expense to cultivate and cure the tobacco. There were both direct costs and the cost of forgoing using his land for other crops.
[47] Those facts are sufficient to find, on the balance of probabilities, that Mr Jury had grown and cured the tobacco as he intended to sell the tobacco to persons who would evade duty by unlawfully manufacturing it. He had a commercial crop in storage, and the only apparent purchasers would be persons evading duty.
[93] In our view the Authority was not then applying the standard of indirect or oblique intention but rather taking the approach we have described. The Authority found sufficient evidence to conclude that Mr Jury held the tobacco intending it be manufactured, a finding which amounted to a finding of direct intent.
[94] As we have set out above, having ourselves assessed the evidence, we consider there was ample evidence before the Authority from which direct intention could be inferred in the absence of any other explanation from Mr Jury.
[95] To conclude, the issue for the Authority was whether Mr Jury had proved on the balance of probabilities that he did not intend the tobacco which was forfeited to be used in unlawful manufacture. Whatever meaning we ascribe to the word “intend” in this context, on the evidential material before the Authority it was open to the Authority to conclude he had not established this. Having assessed the evidence ourselves, we are satisfied there was ample evidence from which the Authority conclude that this was indeed Mr Jury’s intention.
Result
[96] The appeal is allowed.
[97] The order made in the High Court that the tobacco seized in May 2010 should be returned to Mr Jury is quashed.
[98] The decision of the Authority is reinstated.
[99] The tobacco is therefore forfeit to the Crown.
[100] We see no reason why costs should not follow the event in the usual way. The respondent must pay the appellant costs for a standard appeal on a band A basis and usual disbursements.
Solicitors:
Crown Law
Office, Wellington for Appellant
C & F Legal Ltd, Nelson for
Respondent
[1] Jury v Chief Executive of the New Zealand Customs Service NZCAA Nelson 2014 NZCAA 003/13, 19 August 2014 [Authority decision].
[2] Jury v Chief Executive of the New Zealand Customs Service [2016] NZHC 2868 [HC decision].
[3] The current appeal is taken under s 273 of the Customs and Excise Act 1996 and is limited to questions of law. Although the Chief Executive was the first decision-maker in this chain, the Chief Executive is also the named appellant in this appeal. She is only named in her capacity as Chief Executive of the New Zealand Customs Service.
[4] HC decision, above n 2 (footnotes omitted).
[5] Hawkes Bay Hide Processors of Hastings v Commissioner of Inland Revenue [1990] 3 NZLR 313 (CA).
[6] Attorney-General v Howard [2010] NZCA 58, [2011] 1 NZLR 58.
[7] HC decision, above n 2, at [37].
[8] At [37].
[9] Commerce Commission v Fonterra Co-operative Group Ltd [2007] NZSC 36, [2007] 3 NZLR 767 at [22] (footnote omitted).
[10] Howard v Bodington (1877) 2 PD 203 (Court of Arches) at 210 per Lord Penzance.
[11] Hawkes Bay Hide Processors of Hastings v Commissioner of Inland Revenue, above n 5, at 320–321 per Richardson J.
[12] Attorney-General v Howard, above n 6.
[13] At [105]: the administrative step in issue was the giving of a copy of the notice of appeal to the Human Rights Review Tribunal, the body whose decision was sought to be appealed.
[14] HC decision, above n 2, at [69].
[15] At [73].
[16] Customs and Excise Act 1996, s 231(1) and (2). The time for filing the application can be extended by the Chief Executive in certain circumstances.
[17] Section 231(3).
[18] Section 232(1) and (2)(a).
[19] Section 232(2)(b).
[20] Section 232(3).
[21] Section 233(b).
[22] See ss 235 and 235A.
[23] Authority decision, above n 1, at [50].
[24] Compare Customs and Excise Act, ss 225 and 226.
[25] The applicable test for seizure under s 226(1).
[26] Section 235A(1) and (2).
[27] Sections 244 and 253.
[28] Sections 257 and 258.
[29] Section 260(1).
[30] Section 260(2).
[31] Sections 261(1)(b) and 262.
[32] Section 270(1).
[33] Section 272.
[34] Section 273.
[35] Authority decision, above n 1, at [7].
[36] At [8].
[37] At [43].
[38] At [45].
[39] At [46].
[40] At [49].
[41] HC decision, above n 2, at [42]–[68].
[42] At [59].
[43] At [73].
[44] At [73].
[45] At [76].
[46] See Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [4].
[47] KJ Keith “Appeals from Administrative Tribunals: The Existing Judicial Experience” (1969) 5 VUWLR 123 at 161.
[48] Wellington Club Inc v Carson [1972] NZLR 698 (SC) at 701–702.
[49] Ross v Number Two Town and County Planning Appeal Board [1976] 2 NZLR 206 (CA) at 217 per Richmond J.
[50] Shotover Gorge Jet Boats Ltd v Jamieson [1987] 1 NZLR 437 (CA) at 440.
[51] Austin, Nichols & Co Inc v Stichting Lodestar, above n 46, at [4].
[52] See for example Wellington Club Inc v Carson, above n 48.
[53] HC decision, above n 2, at [74] and [76].
[54] Terranova Homes & Care Ltd v Service and Food Workers Union Nga Ringa Tota Inc [2014] NZCA 516, [2015] 2 NZLR 437.
[55] See s 231(3)(b).
[56] Customs Act 1966, s 279.
[57] Section 280.
[58] Customs and Excise Act 1996, s 235B.
[59] The wording of s 300 of the Customs Act 1966.
[60] HC decision, above n 2, at [73].
[61] Z v Dental Complaints Assessment Committee [2008] NZSC 55, [2009] 1 NZLR 1 at [97].
[62] See AP Simester, WJ Brookbanks and Neil Boister Principles of Criminal Law (4th ed, Thomson Reuters, Wellington, 2012) at 108.
[63] R v Wentworth [1993] 2 NZLR 450 (HC) at 456.
[64] Police v K (CA320/11) [2011] NZCA 533, (2011) 28 FRNZ 835 at [33].
[65] HC decision, above n 2, at [82].
[66] At [84].
[67] At [84] citing Simester, Brookbanks and Boister, above n 62, at [4.2.7] (footnotes omitted).
[68] At [87].
[69] See Glanville Williams “Oblique Intention’ (1986) 46 CLJ 417 at 427; and RA Duff “Intention, Mens Rea and the Law Commission Report” [1980] Crim LR 147 at 159.
[70] See Jeremy Horder Ashworth’s Principles of Criminal Law (8th ed, Oxford University Press, Oxford, 2016) at 193–195; David Ormerod and Karl Laird Smith and Hogan’s Criminal Law (14th ed, Oxford University Press, Oxford, 2015) at 149–150; and Gary L Turkington and Ian Murray Garrow and Turkington’s Criminal Law in New Zealand (looseleaf ed, LexisNexis) at [APPV.5].
[71] Police v K (CA320/11), above n 64.
[72] At [35].
[73] Dennis J Baker Textbook of Criminal Law (4th ed, Sweet & Maxwell, London, 2015) at [4–025].
[74] HC decision, above n 2, at [90].
[75] Authority decision, above n 1, at [39]–[41].
NZLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.nzlii.org/nz/cases/NZCA/2017/356.html