Re Harry Lahood v Commissioner of the Australian Federal Police [1989] FCA 209 (9 June 1989)

FEDERAL COURT OF AUSTRALIA

Re: HARRY LAHOOD
And: COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE
No. G1004 of 1988
FED No. 277
Customs and Excise

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Morling(1), Burchett(1) and Gummow(1) JJ.

CATCHWORDS

Customs and Excise - penal provisions - pecuniary penalty for dealing in narcotic goods - assessment of penalty - sale of narcotic goods - proceeds of sale - payment to police officer - whether amount of such payment should be deducted in assessing benefit - whether payment in nature of outgoings

Customs Act 1901, ss. 243B, 243C

HEARING

SYDNEY
9:6:1989

Counsel for applicant: Dr G. Woods Q.C.
instructed by: Horowitz & Bilinsky

Counsel for respondent: N. Cowdrey Q.C. with J.V. Agius

instructed by: Commonwealth Director of Public Prosecutions

ORDER

Appeal dismissed.

Appellant to pay respondent's costs.

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

DECISION

This is an appeal from a decision of a judge of the Court (Sweeney J.) in proceedings brought against the appellant for an order that he pay a pecuniary penalty to the Commonwealth pursuant to s.243B of the Customs Act 1901 ("the Act"). That section makes provision for the institution of a proceeding in the Court, on behalf of the Commonwealth, for an order that a person pay a pecuniary penalty to the Commonwealth in respect of, inter alia, a prescribed narcotics dealing engaged in by him. The section requires the Court, if it is satisfied that the person in relation to whom the order is sought has engaged in the particular narcotics dealing, to assess the value of the benefits derived by the person by reason of his having engaged in that dealing.

2. There was no dispute before the trial judge that the appellant was liable to pay a pecuniary penalty to the Commonwealth. The issue at the trial was as to the quantum of the penalty which should be imposed. The trial judge fixed the penalty in the sum of $180,400. The appellant submits that this penalty was too high and should be reduced by the sum of $130,000.

3. The Act does not leave at large the determination of a pecuniary penalty. On the contrary, the Court is required by s.243B(2) to "assess in accordance with section 243C the value of the benefits derived by the person by reason of his having engaged in (the narcotics) dealing." The most relevant provisions, for present purposes, of s.243 are as follows:

"243C. (2) In a proceeding under section 243B,
the value of the benefits derived by the defendant
by reason of his having engaged in a particular
prescribed narcotics dealing, or in prescribed
narcotics dealings during a particular period shall
be assessed by the Court having regard to the
evidence before the Court concerning all or any of
the following matters:
(a) the moneys, or the value of the property
other than moneys, that came into the
possession or under the control of -
(i) the defendant; or
(ii) another person at the request or by
the direction of the defendant,
by reason of the defendant's having engaged
in that dealing or in prescribed narcotics
dealings during that period;"
"(6) In calculating, for the purposes of
a proceeding under section 243B, the value of
benefits derived by the defendant by reason of his
having engaged in a particular prescribed narcotics
dealing, or in prescribed narcotics dealings during
a particular period, any expenses or outgoings of
the defendant in connection with that dealing, or
those dealings, shall be disregarded."

4. The trial judge found that the appellant received the sum of $180,400 from the sale of cannabis resin which he and others had conspired to import into Australia. He also found that the appellant agreed to pay a New South Wales policeman $130,000 so that the latter would ensure that when the cannabis resin was imported it would be passed through Customs unchecked. A further finding was made that, after the importation was carried out, the appellant paid sums totalling $130,000 to that policeman. These findings were not challenged on appeal and, indeed, there seems to have been little dispute as to the facts at the trial.

5. Senior counsel for the appellant submitted that, on the facts found by the trial judge, it could not be said that the whole of the $180,400 received by the appellant could properly be characterized as a benefit derived by him by reason of his having engaged in the relevant narcotics dealing. He argued that the "benefits" referred to in s.243B(2) are what he described as "ultimate benefits". In his submission, the appellant did not become beneficially or ultimately entitled to the $130,000 paid to the policeman, since that sum was received by his client subject to an obligation to pay it to the policeman.

6. In our opinion, this submission cannot succeed. The evidence does not establish that the arrangement between the appellant and the policeman was anything other than an arrangement that the appellant would pay the policeman $130,000 for performing a service, i.e. arranging for the cannabis resin to pass through Customs undetected. In no sense was any part of the $180,400 received by the appellant on trust for the policeman, or subject to any other obligation in respect of that money. We agree with the trial judge that the payment to the policeman was an expense or outgoing in connection with the importation and therefore was required to be disregarded in accordance with s.243C(6).

7. Senior counsel for the appellant sought to derive some assistance for his argument from Foster v The Queen [1967] HCA 8; (1967) 118 CLR 117 and Kirk v Commissioner of Australian Federal Police (1988) 81 ALR 321. We do not think that anything said in those cases assists the appellant's argument. In Foster, the question was whether the facts established that the appellant had appropriated property to his own use as distinct from merely assuming temporary possession of it. In the present case, the money received by the appellant for the sale of the cannabis resin became his property. He did not merely assume temporary possession of it. The fact that, some time after he received the money, he chose to pay a large part of it to the policeman in discharge of an illicit obligation, did not alter the fact that when he received it he became the absolute owner of it. In Kirk, the question was whether money paid to solicitors to provide in advance for legal fees gave the solicitors any beneficial interest in those moneys. It was held, by majority, that it did not. We do not think the decision is of any relevance for present purposes.

8. In the result the appeal should be dismissed with costs.