Lewis v R [1912] HCA 44; (1912) 14 CLR 183 (20 June 1912)

HIGH COURT OF AUSTRALIA

Lewis Defendant, Appellant; and The King and Another Plaintiffs. Respondents.

H C of A

20 June 1912

Griffith C.J., Barton and O'Connor JJ.

Starke, for the appellant.

Arthur, for the respondents.

C.J. Griffith delivered the judgment of the Court:—

Griffith C.J.

This is an appeal from a sentence passed by our brother Higgins on a prosecution for evasion of customs duties with intent to defraud the revenue, in which he imposed the maximum penalties. There were in form three charges, but they were all in respect of what was in substance one transaction. The defendant, by his defence, admitted the charge, including the intent to defraud the revenue. As soon, indeed, as he was charged he admitted everything, and put every facility in the way of the Crown to bring the case on for hearing. The goods in question were furniture, which the defendant had bought at auction in England, at the price of £189. He carries on a small business of a hat and cap manufacturer in Melbourne, and has been importing goods for his business for several years. He desired to import this furniture for his own use and to evade payment of duty upon it. For that purpose he had the goods consigned to two of his employés in three separate parcels, and he induced those employés, when the goods arrived in Australia, to make statutory declarations that the goods were their own, and had been in their use for some years. The value of each parcel was also understated, but, except in one case, the understatement was not material. The learned Judge imposed the maximum penalty in each case, amounting in all to £1,211 12s., to which must be added the forfeiture of the goods, the payment of the duty, and the costs of the action.

The defendant appeals to this Court, as he is entitled to do under the Judiciary Act, and asks this Court to exercise its independent judgment, as we are bound to do. The learned Judge assessed the damages in this way:—In respect of two of the charges he took six times the value of the goods, and in respect of the third charge, as three times the value of the goods was less than £200, he imposed £200. So that the amount is absolutely the maximum.

Mr. Starke contends that the maximum penalty in a case where an intent to defraud the revenue is charged is only three times the value of the goods. Sec. 234 provides that:—

No person shall—

(a)

Evade payment of any duty which is payable;

..................

"Penalty: One hundred pounds."—That by sec. 5 means the maximum penalty.

Sec. 240 provides that:—

If any penalty hereby provided shall be less than three times the value of any goods in respect of which the offence has been committed the maximum penalty shall be thrice the value of the goods.

Sec. 241 provides that:—

Any person may at the same time be charged with an offence against this Act and with an intent to defraud the revenue and if in addition to such offence he is convicted of such intent the maximum penalty shall be double that otherwise provided.

Mr. Starke contends that the word "hereby" in sec. 240 includes the penalty provided by sec. 241. But sec. 241, when it says that, if an offence is committed with intent to defraud the revenue, the maximum penalty shall be double that which is "otherwise provided," plainly means the penalty provided in the absence of such intent, and as that maximum is three times the value of the goods, it follows that the maximum in the case of an intent to defraud the revenue is six times the value of the goods. So that point fails.

As to the amount of the penalty in this case we have had information before us which apparently was not before the learned Judge. Such evidence is admissible on an appeal from a Justice of this Court, though not on appeal from a State Court.

The legislature has allowed a very large discretion as to the amount of penalties. In the case of an offence committed with intent to defraud the revenue, the range of punishment is from £10 as a minimum to six times the value of the goods as a maximum, unless, indeed, six times the value of the goods is less than £200 when that sum is the maximum. When the legislature allows such a large range of punishment, I read it as an instruction to the Court to consider in each case the particular circumstances under which the offence was committed. If it is a very bad offence indeed, committed with deliberation and part of a system of fraud, the Court may well impose the maximum penalty. If it is an isolated offence and not likely to be repeated, the Court may apply a different rule. It is impossible to classify frauds into distinct categories. All the circumstances must be taken into consideration.

I referred during argument to a form of evasion of customs duties which is not uncommon, that is, where one friend asks another to bring for him into Australia some small articles to be given as a present. Of course that is contrary to the law, but people might be surprised if such a violation of law were punished by a fine of six times the value of the goods besides their forfeiture. This case is very much like that, although it is worse. Under all the circumstances we think that the penalty should be reduced, and that a penalty of £100 in respect of each offence will be sufficient punishment, it being understood that in each case the £100 is made up of £50 for the offence regarded without intent to defraud the revenue, and a further £50 in respect of such intent. The judgment, then, will be reduced to a penalty of £300. The result will be that the defendant will lose his goods, pay £300 and all costs, and besides that pay the duty on the goods. Such a result will not, at any rate, encourage others to commit a like offence.

Penalty reduced to £300. Defendant to be entitled to reduction in amount of security already given.

Solicitor, for the appellant, Arthur Phillips.

Solicitor, for the respondents, C. Powers, Crown Solicitor for the Commonwealth.