CEO of the Australian Customs Service v Nabhan [2009] NSWSC 199 (18 March 2009)

Last Updated: 27 March 2009

NEW SOUTH WALES SUPREME COURT

CITATION:
CEO of the Australian Customs Service v Nabhan [2009] NSWSC 199


JURISDICTION:


FILE NUMBER(S):
2008/20163

HEARING DATE(S):
21 August 2008

JUDGMENT DATE:
18 March 2009

PARTIES:
Chief Executive Officer of the Australian Customs Service (Plaintiff)
Ramez Nabhan (Defendant)

JUDGMENT OF:
Fullerton J

LOWER COURT JURISDICTION:
Not Applicable

LOWER COURT FILE NUMBER(S):
Not Applicable

LOWER COURT JUDICIAL OFFICER:
Not Applicable



COUNSEL:
MA Wigney SC (Plaintiff)
W Ball (Solicitor) (Defendant)

SOLICITORS:
Australian Government Solicitor (Plaintiff)
W Ball (Defendant)


CATCHWORDS:
TAXES AND DUTIES
customs and excise
the importation of tobacco
smuggling
evading payment of duty
penalty provisions

LEGISLATION CITED:
Crimes Act (Cth) 1914
Customs Act 1901 (Cth)

CATEGORY:
Principal judgment

CASES CITED:
CEO of Customs v Coulton [2005] NSWSC 869
CEO of Customs v Ozzy Tyre & Tube Pty Ltd & Anor [2005] NSWSC 948
Chief Executive Officer of Customs v Pham [2006] NSWSC 1370
R v Thomson; R v Houlton [2000] NSWCCA 309; 49 NSWLR 383
L Vogel & Son Pty Limited v Anderson [1968] HCA 90; (1968) 120 CLR 157

TEXTS CITED:


DECISION:
See paragraph 65



JUDGMENT:

IN THE SUPREME COURT

OF NEW SOUTH WALES

COMMON LAW DIVISION

FULLERTON J

18 MARCH 2009

2008/20163 CEO OF THE AUSTRALIAN CUSTOMS

SERVICE v RAMEZ NABHAN

JUDGMENT

1 HER HONOUR: By a statement of claim filed 5 May 2008 the plaintiff, the Chief Executive Officer of the Australian Customs Service, instituted proceedings pursuant to s 245 of the Customs Act 1901 (Cth) (“the Act”) against the defendant, Ramez Nabhan, seeking convictions in respect of four offences of smuggling contrary to s 233(1)(a) of the Act and the imposition of penalties by reference to s 233AB(1), and convictions in respect of four offences of evading the payment of duty contrary to s 234(1)(a) of the Act and the imposition of penalties by reference to s 234(2).

2 The plaintiff also seeks a costs order in accordance with s 263 of the Act and an order in accordance with s 21B(1)(c) of the Crimes Act (Cth) 1914 that the defendant pay the Commonwealth reparation in the sum of $3,395,709.92.

3 The charges relate to four separate importations of tobacco in the form of both cigarettes and loose-leaf tobacco between 12 November 2006 and 10 January 2007. Each importation was by sea. The statement of claim alleges that each of the offences was committed by the defendant as principal. Alternatively, it is alleged that the defendant aided, abetted, counselled or procured the commission of the offences by another person or persons, or by his acts or omissions was directly or indirectly concerned in the commission of the offences so as to be deemed to have committed the offences by the operation of s 236 of the Act.

4 The defendant did not file a defence to the statement of claim. On 31 July 2008 he pleaded guilty to all charges.

The agreed facts

Shipment 1

5 Between April 2006 and October 2006 the defendant corresponded via the internet with a person in China concerning the importation of Marlboro brand cigarettes, a quantity of soap and mineral water. On 3 October 2006 the defendant transferred the sum of $5183.64 to a bank account located in China. He subsequently travelled to China for the purposes of arranging the purchase of the abovementioned goods.

6 On 6 November 2006 a customs broker, Mr Van An Lai (“Van Lai”), was presented with a Bill of Lading and other shipping documents in respect of container CBHU3881464. The person who approached Van Lai provided him with a telephone number 0421924143. The Bill of Lading nominated the consignee for the container as Aspen Pharmacare Australia (“Aspen”), an Australian Registered Company, and described its contents as “soap” and “mineral water”. Upon issuing Aspen with a pre-arrival notice, Van Lai was informed that they had no knowledge of the container and would not accept delivery.

7 Van Lai telephoned the mobile phone number left with him on 6 November 2006 and informed a man who represented himself as “John” that Aspen denied consignment of container CBHU3881464. “John” requested that Van Lai return all copies of the documents relating to the container. Later that day Van Lai was instructed, via facsimile service 0297094182, to change the consignee details to AH Electrical Services and the contact number to 0415098843. Shortly after receiving these instructions Van Lai contacted the Australian Customs Service (“Customs”) and informed them that he had concerns about container CBHU3881464 and its contents.

8 Subsequent investigations indicated that the subscriber to number 0415098843 was fictitious. However the subscriber to the facsimile service 0297094182 was the Classic Group of Unit 21, 18-22 Mavis Street, Revesby, the principal of which was Abdul Sarakabi.

9 Container CBHU3881464 arrived in Australia on 12 November 2006. Upon inspection by Customs the container was found to contain 14,400 cakes of Lux brand soap, approximately 17,100 bottles of mineral water and 204 boxes of Marlboro brand cigarettes. Each box contained 25 cartons and each carton contained 20 cigarettes making a total of 1,020,000 cigarettes, each containing tobacco in a quantity not exceeding 0.8 grams per cigarette. The cigarette boxes were packed in such a way as to conceal their detection. The Bill of Lading did not disclose the presence of the boxes of tobacco.

10 On 15 November 2006 Van Lai met with “John” who instructed him to deliver the container CBHU3881464 to Unit 21, 18-22 Mavis Street, Revesby (the premises of the Classic Group). Van Lai’s business premises were under observation. After meeting with Van Lai, Customs officers identified the defendant in a motor vehicle bearing registration number ZDS624. Subsequent investigations revealed that the motor vehicle was registered to the defendant’s son.

11 On 14 December 2006 Customs executed a search at the defendant’s residence at 20 Onslow Street, Canterbury. During the search Customs officers located the Bill of Lading for container CBHU3881464, two business cards in the name of Abdul Karim Sarakabi of the Classic Group, one of which had the shipping container numbers CBHU3881464 written on the reverse side. The Customs officers also located a piece of paper upon which was written the telephone number 0421924123. This was the number provided to Van Lai by “John” in respect of container CBHU3881464.

12 Forensic analysis of the defendant’s computers disclosed chat logs revealing his involvement in arranging for the importation of the Marlboro cigarettes (together with the balance of the contents of container CBHU3881464), and searches of the Australian Securities and Investments Commission’s (“ASIC”) database for the companies Aspen Pharmacare Australia and AH Electrical Services. Scanned shipping documents for container CBHU3881464 were also located.

13 The total amount of duty evaded for shipment 1 was $243,168.00 payable on the importation of tobacco.

Shipment 2

14 Between October 2006 and December 2006, the defendant was involved in the importation of 4348 kilograms of loose-leaf tobacco which he failed to declare and upon which he paid no duty.

15 On this occasion, the defendant engaged in a series of communications via email with a person in Indonesia named Moh Harris, in relation to a container numbered TRLU2845982. This container arrived in Australia on 26 December 2006, containing 100 boxes of Cussons Imperial Leather brand soap, approximately 200 boxes of Danone Biskuat Energi brand biscuits and 508 unmarked boxes that were found to contain 4348 kilograms of loose-leaf tobacco, packed in such a way so as to conceal their presence. The Bill of Lading failed to disclose the presence of the boxes of tobacco.

16 The Bill of Lading identified the consignee of goods as Australian Food Wholesale Pty Ltd, 187 Canterbury Road, Canterbury and nominated the contact person as “Omar” with a telephone contact number 0402191751. The documentation relating to container TRLU2845982 stated its contents as plain biscuits and soap. The documentation made no mention of tobacco.

17 Australian Food Wholesale Pty Ltd is a registered Australian company operating from Unit 1, 26 Union Street, Lakemba. The registered director of the company is recorded as Mr Umar Umar.

18 A person identifying himself as Mr Umar contacted customs brokers, CT Freight, to facilitate Customs clearance of container TRLU2845982. He claimed that the contents of the container were plain biscuits and soap.

19 On 28 December 2006 Noureddine Ghazli paid $5010.29 to CT Freight for costs and charges in relation to the clearance of the container. A few days later a transport company was engaged to transport the container to the premises of Storage King at 24A Anzac Street, Greenacre. This unit was rented by Mr Ghazli.

20 The same day the container was moved by the same transport company to its holding yards in Homebush Bay where it remained until the company was contacted by a “Mr Umar” who requested that the container be transported to storage facilities at 444 Punchbowl Road, Lakemba. These premises were rented by a person named Azaid Chaib.

21 The container was delivered to the storage facility. On 4 January 2007 it was unloaded by Mr Ghazli, Mohamad Alturman, Azhoon Magaref, Ashraf Alzaemey and Azaid Chaib. These men were arrested by Customs officers during the course of unloading.

22 On 24 January 2007 Customs officers executed another search warrant at the defendant’s place of residence. The forensic analysis of the defendant’s computers at this time uncovered a series of emails between the defendant and Moh Harris. One of the emails supplied Moh Harris with a telephone contact number 0402191751. This was the number left by Mr Umar with the customs brokers. The analysis of the computer indicated that the defendant tracked the progress of the container from Indonesia to Australia.

23 Customs officers also located a document listing numbers for various shipping containers, including container TRLU2845982. The document listed another two container numbers, namely GATU0343863 and IPXU3060493 which relate to later shipments. In relation to these two containers the document stated:

“Paperwork not paid yet”.

The document also noted:

“Please prepare to pay all paperwork for containers NO 4 and 5 [respectively GATU0343863 and IPXU3060493], totally RP 18,000,000 on Dec 13 2006”.

24 Finally, Customs officers uncovered a receipt in the name of Mr Umar for storage facilities located at 187 Canterbury Road, Canterbury. This was the address provided on the Bill of Lading.

25 The total amount of duty evaded for shipment 2 was $1,295,747.48 payable on the importation of tobacco.

Shipment 3

26 Between October 2006 and January 2007 the defendant was in contact with Moh Harris in relation to container IPXU3060493, which arrived in Sydney on 31 December 2006. It contained biscuits, soap, mineral water and 534 cartons of loose-leaf tobacco weighing 4539 kilograms in total. The tobacco was packed in such a way as to conceal its presence. The Bill of Lading also failed to disclose the presence of the tobacco.

27 The Bill of Lading was supplied to customs brokers by Noureddine Ghazli and identified Accurate Food and Supply Packaging Wholesale Pty Ltd as the consignee of the goods. The Bill of Lading stated that the only contents of the container IPXU3060493 were soap and biscuits.

28 On 2 January 2007 John Sores, the transport manager of Crown Transport Solutions, contacted mobile telephone number 0431128140 in relation to the transportation of the container. He spoke to a person named “John” who instructed him to deliver the container to Metro Self Storage located at 256 Canterbury Road, Canterbury.

29 On 5 January 2007 a person using the name of “Ahmad” contacted both the customs brokers and John Sores and requested that the container be released from Customs control and delivered to the address earlier supplied by “John”. Ahmad also informed Mr Sores that “John” was in a car accident and that he was the contact person in relation to the container. He provided Mr Sores with a different mobile telephone number.

30 On 6 January 2007 the container was delivered to Metro Self Storage, where it was unloaded by Arkan Abdul Rahim Sharrouf and Yunus Ikan. They were arrested by Customs officers. Customs officers also identified the defendant in the vicinity of Metro Self Storage at the time of delivery.

31 During the forensic analysis of the defendant’s computers following the execution of the search at the defendant’s home premises on 24 January 2007, Customs officers located a large number of emails to and from Moh Harris in relation to container IPXU3060493, some of which identified Accurate Food and Supply Packaging Wholesale Pty Ltd as the consignee of the goods. Customs officers also located paperwork in relation to mobile telephone number 0415520105 which was included on the Bill of Lading. Finally, computer analysis also disclosed that the defendant made a number of inquiries regarding the arrival of the container IPXU3060493 in Australia.

32 The total amount of duty evaded for shipment 3 was $1,352,667.39 payable on the importation of tobacco.

Shipment 4

33 Between October 2006 and December 2006 the defendant corresponded with Moh Harris in relation to container GATU0343863 which arrived in Sydney on 31 December 2006, containing a number of boxes of loose-leaf tea sealed in plastic bags, bottles of mineral water and 494 cartons of manufactured tobacco, weighing 3705 kilograms in total. The tobacco was packaged in such a way as to conceal its presence.

34 The Bill of Lading identified the consignee as Muhannad Al Khattab. The Bill of Lading also contained Mr Al Khattab’s ABN number, place of business, namely 8/107 Old Town Plaza Bankstown, and mobile telephone number 0413955401. The only goods declared on the Bill of Lading were tea and mineral water.

35 According to the plaintiff, Mr Al Khattab was an employee of Abdul Karim Sarakabi, the principal of the Classic Group. The defendant and Mr Sarakabi paid Mr Al Khattab to import each container using his name. The defendant also oversaw Mr Al Khattab taking out a lease over premises at 8/107 Old Town Plaza, Bankstown, and organised him to sign various importation documents.

36 Forensic analysis of the defendant’s computers revealed a number of emails sent to and from Moh Harris in relation to container GATU0343863. In one of the emails the defendant provided Moh Harris with the details of the consignee, and also requested that all documentation relating to container GATU0343863 be sent to him. Customs officers also retrieved an email from Moh Harris confirming that all paperwork was to be sent to:

“Mr Ron. 20 Onslow Street Canterbury Sydney Australia NSW 2193. Phone [phone]”.

37 Computer analysis also revealed that the defendant retained electronic copies of shipping and other documentation relating to container GATU0343863.

38 Customs officers also uncovered a Chinese visa application in the name of the defendant, bearing his photograph, signature and telephone number 0413955401, the number which was provided on all the documentation relating to the shipment of container GATU0343863.

39 The total amount of duty evaded for shipment 4 was $1,104,127.05 payable on the importation of tobacco.

Penalties

40 Section 233AB(1) of the Act sets out the penalties for smuggling offences. According to subsection (1)(a), where a court is in a position to determine the amount of duty that would have been payable on the smuggled goods, the penalty must not exceed 5 times the amount of that duty.

41 I am satisfied that the amount of duty that would have been payable in respect of each offence is ascertainable. It is not disputed. Accordingly, the penalties payable in relation to each smuggling offence range between:

Shipment 1: $243,168.00 – $1,215,840.00
Shipment 2: $1,295,747.48 – $6,478,737.40
Shipment 3: $1,352,667.39 – $6,763,336.95
Shipment 4: $1,104,127.05 – $5,520,635.25

42 So far as the offence of evading duty is concerned, s 234(2)(a) of the Act provides that where a court can ascertain the amount of duty evaded, the penalty is a penalty not exceeding 5 times the amount of that duty and not less than twice that amount.

43 Accordingly in relation to each of the offences of evading duty the penalties fall in the following range:

Shipment 1: $486,336.00 - $1,215,840.00
Shipment 2: $2,591,494.96 - $6,478,737.40
Shipment 3: $2,705,334.78 - $6,763,336.95
Shipment 4: $2,208,254.10 - $5,520,635.25

44 Since the penalties the plaintiff seeks attach by way of the linked offences of smuggling and evasion of duty, the total penalties applicable to the defendant’s offending range between:

	Duty payable $	Max. Penalty $
Shipment 1	729,504.00	2,431,680.00
Shipment 2	3,887,242.44	12,957,474.80
Shipment 3	4,058,002.17	13,526,673.90
Shipment 4	3,312,381.15	11,041,270.05
TOTAL	11,987,129.76	39,957,098.75

Legal principles

45 Each of the offences committed by the defendant is a federal offence within the meaning of s 16 of the Crimes Act 1914 (Cth). Upon conviction the defendant becomes a federal offender. The penalties to be imposed fall to be determined in accordance with Part IB of the Crimes Act.

46 Division 2 of Part IB of the Crimes Act deals with general sentencing principles. Section 16A lists the matters to which a court is to have regard when passing a sentence or making an order.

47 So far as this case is concerned, the plaintiff submitted the relevant parts of s 16A are as follows:

(1) In determining the sentence to be passed, or the order to be made, in respect of any person for a federal offence, a court must impose a sentence or make an order that is of a severity appropriate in all the circumstances of the offence.

(2) In addition to any other matters, the court must take into account such of the following matters as are relevant and known to the court:

(a) the nature and circumstances of the offence; ...

(c) if the offence forms part of a course of conduct consisting of a series of criminal acts of the same or a similar character—that course of conduct; ...

(g) if the person has pleaded guilty to the charge in respect of the offence—that fact; ...

(k) the need to ensure that the person is adequately punished for the offence; ...

(m) the character, antecedents, age, means and physical or mental condition of the person.

48 The list of matters to which I am to have regard as provided in s16A is not exhaustive. Other factors may also be relevant in sentencing a federal offender. The plaintiff submitted that general deterrence in cases of this nature is of primary importance.

49 In that connection the plaintiff relied upon the remarks of Kitto J in L Vogel & Son Pty Limited v Anderson [1968] HCA 90; (1968) 120 CLR 157 at 164, where his Honour stated:

“The duty evaded has now been paid, and I understand that when the evasions were discovered the defendants gave the Customs every assistance in their investigations. But when all the considerations relied upon by the defendants have been given due attention the case still cannot be regarded as other than a serious one. Not only are the defendants guilty of a sustained course of conscious wrongdoing, but the offences are in a field in which punishments for deliberate offences must be severe. The Customs laws represent the judgment of Parliament upon an important aspect of the economic organization of the community, and the object of the penal provisions is to make that judgment as effective as possible. It is important to remember that Customs officers have of practical necessity to rely extensively upon the information supplied to them by importers, for the flow of commerce could not be maintained if every importation had to be fully investigated. Moreover, detection of frauds is not always easy. No doubt ordinary conceptions of honesty and of civic responsibility suffice to ensure a great deal of fair dealing with the Customs, but for some people little seems to matter but fear of the consequences of discovery. The Customs Act makes those consequences potentially drastic. It is for the courts to make them, in suitable cases, drastic in fact, for otherwise traders who are not saved by qualms of conscience from willingness to defraud their fellow citizens may weigh the profits they hope for against the penalties they have cause to fear and find the gamble worthwhile.”

50 His Honour’s remarks were referred to by Simpson J in CEO of Customs v Coulton [2005] NSWSC 869. At [32] her Honour said:

“Quite obviously, the legislature has determined that, in sentencing for customs offences, deterrence, both general and individual, is a factor of very considerable weight. Penalties imposed are required to reflect the serious inroads made on the revenue by customs offenders, and to render customs offending a very unattractive proposition.”

51 I am persuaded that the penalty imposed upon the defendant must reflect these principles. However, in circumstances where the plaintiff frankly acknowledges the defendant’s impecuniosity and has elected not to prosecute him under the Act where penal options are available, options which might otherwise have more appropriately addressed the objectives of both general and specific deterrence given that the plaintiff was well aware that the defendant was prosecuted criminally in the Local Court for precisely the same conduct in January 2006, the penalties available to be imposed in this case have a decidedly artificial complexion. In that connection I endorse the views expressed by Rothman J in CEO of Customs v Ozzy Tyre & Tube Pty Ltd & Anor [2005] NSWSC 948 where, in considering an agreement reached between Customs and the defendants that the penalties to be imposed were not to be enforced, penalties which I note exceeded $3 M in total, at [112] his Honour said:

“I make it clear that the above is not a criticism of the agreement as reached, nor is it intended to be a criticism of the need of Customs to take into account impecuniosity in determining its future conduct. Ultimately every order for a penalty can be enforced or not enforced as the party capable of enforcing it determines. The agreement allows the Court to disregard questions of impecuniosity in determining the penalty. However, the agreement has the effect that there is no penalty, as a matter of practice, imposed upon either the corporate or the personal defendant. In this day and age when corporate entities are capable of being conducted in a way which ensures their impecuniosity and personal defendants are capable of obtaining benefits to which they are not legally entitled, there are significant policy issues associated with an agreement of this kind. I am not here suggesting that the circumstances of this case in any way mirror such a situation. But it is possible, at least hypothetically, for a commercial entity to embark upon the kind of conduct described in these offences and to do so in a way which would ensure the corporate entity would be impecunious and unable to pay any subsequent penalty imposed by the Court. Similarly, it is not beyond the realms of imagination, to extrapolate from current circumstances, for a family member entrusted to run that business to be wholly impecunious yet the entirety of the family may have benefited from the criminal conduct. I repeat, there is nothing in the factual material before this Court in these cases, which would suggest such a situation here. These comments are intended to be far more general. The difficulty with which Customs is faced is that by their very nature, a penalty which is confined to a pecuniary penalty will, in the case of impecuniosity, be problematic. It may be that the legislature needs to consider seriously the capacity, in the case of impecuniosity or inappropriateness of pecuniary penalty, for other penalties to apply. I do not here suggest that full time imprisonment would be appropriate, but some form of community service either with or without supervision and/or restrictions on movement, or other kind of penalty, should be included in the range of penalties available so that persons who perpetrate criminal offences of this kind can be the subject of a practical punishment which, in turn, would have the added benefit of repaying society with the assets of intelligence and hard work which, for example, the personal defendant in this matter, clearly has.”

52 The plaintiff submitted that the agreed statement of facts indicates that the offences committed by the defendant are well above the mid-range of seriousness and towards the more serious end of the spectrum of cases involving smuggling and evasion on the following basis:

“The defendant was the principal behind the smuggling operation. His actions were sophisticated, premeditated, highly planned and involved dishonesty and deceit. His fraudulent scheme to smuggle tobacco into Australia without paying duty involved the use of false names, fictitious business names, the improper use of genuine business names without the consent of the proprietors of the business, false telephone numbers and addresses and the making of false statements. He duped a number of innocent persons and businesses into being the unwitting agents of his fraud, and involved a number of other persons in his unlawful smuggling enterprise. The quantity of tobacco and amounts of money involved in each shipment were very large.”

53 The plaintiff’s submission is borne out by the evidence. The defendant did not seek to persuade me otherwise. It would be cynical to think he need not make any effort in that regard in the given circumstances. It does not necessarily follow however that this case falls into the most serious category of smuggling offences. As Simpson J pointed out in CEO of Customs v Coulton at [24]:

“...this court does not have the benefit of accumulated familiarity with offences against these statutory provisions, giving a sense of the relativity of the objective gravity of one offence against the pattern of offences with which the court commonly deals. Such accumulated familiarity is available to the court in more commonly prosecuted offences, even under the Customs Act, where, for example, drugs are involved. The amounts of duty evaded are indeed very large, but where the defendant’s offences fall in relation to other offences of their kind is not at all clear to me and I am not able to use that as a criterion for coming to the conclusion urged upon me.”

54 While there have been other not dissimilar cases prosecuted since her Honour made these observations, it remains the case that any positioning of the objective criminality disclosed by this course of offending relative to other cases involving large-scale smuggling and duty evasion is not a straightforward exercise.

55 That said, I am satisfied that save only in one respect, the facts and circumstances of the present case are not relevantly distinguishable from CEO of Customs v Coulton and that the sentencing approach adopted by Simpson J should be followed. Coulton also concerned large-scale smuggling and evasion of duty offences in relation to three shipments of tobacco. In sentencing the offender her Honour imposed progressively heavier penalties for the second and third shipments because they were repeat offences. Although the facts in Coulton are set out only briefly, it would appear that there is some distinction between Coulton and the present case. In Coulton while all offences were committed in 1999, with each shipment arriving two months apart, no mention is made as to when each importation was planned. On the assumption that each shipment was planned separately, a course of repeat offending is indicated. In the present case however, the importation of shipments 2, 3 and 4 appear to have been planned contemporaneously, with the shipments arriving in Australia within days of each other. In these circumstances the characterisation of the defendant as a “repeat offender” warranting the imposition of progressively heavier penalties for each of the four shipments is not appropriate. I am satisfied however that a differentiation between the penalties attaching to the first shipment and shipments 2, 3 and 4 is warranted.

56 Section 4K of the Crimes Act provides:

“(3) Charges against the same person for any number of offences against the same provision of a law of the Commonwealth may be joined in the same information, complaint or summons if those charges are founded on the same facts, or form, or are part of, a series of offences of the same or a similar character.

(4) If a person is convicted of 2 or more offences referred to in subsection (3), the court may impose one penalty in respect of both or all of those offences, but that penalty shall not exceed the sum of the maximum penalties that could be imposed if a separate penalty were imposed in respect of each offence.”

57 The plaintiff submitted that it would be inappropriate in the circumstances for the Court to apply s 4K(4) as each of the shipments, although apparently planned simultaneously, involved a discrete episode of offending with the use of different people and premises implicated in each shipment. The plaintiff drew support for this argument from the decision of Bell J in Chief Executive Officer of Customs v Pham [2006] NSWSC 1370 where her Honour held that although two offences of smuggling cigarettes occurred within a short timeframe, namely five days, they were discrete episodes of offending and warranted the imposition of separate penalties.

58 In this case, by parity of reasoning, although offences relating to shipments 2, 3 and 4 occurred within a very short time of each other and were planned simultaneously, the evidence compels a finding that they were dealt with in Australia quite separately, and in this way involved a discrete episode of offending so as to displace the application of s 4K(4). In any event, since the offences arising out of shipments 2, 3 and 4 form part of a co-ordinated course of conduct, that is a matter that will be taken into account in the imposition of penalties as provided for in s 16A(2)(c). I also intend to take account of the total criminality involved and the fact that these three shipments and the first shipment contain overlapping elements of the same criminal conduct when imposing penalties.

59 In accordance with s 16A(2)(g) of the Crimes Act it is also relevant to have regard to the defendant’s plea of guilty. The plaintiff submitted that the defendant’s early plea of guilty indicated a willingness on his part to facilitate the course of justice deserving of a reduction in the penalty that would otherwise be imposed having regard to the objective seriousness and the need for the sentence to reflect the importance of general deterrence.

60 The plaintiff submitted that in line with Coulton, a reduction of 10 per cent was appropriate in the circumstances. It is important to note that Simpson J acknowledged that R v Thomson; R v Houlton [2000] NSWCCA 309; 49 NSWLR 383 provided that a discount of up to 25 per cent was available, but granted a discount of only 10 per cent in circumstances where the defendant was fully prepared to present his case, witnesses were arranged and five days of court time were set aside (at [36]). None of the considerations bearing upon her Honour’s decision to limit the discount to 10 per cent were present in this case. So far as the utilitarian value of the plea is concerned I propose to allow a discount of 25 per cent. I note in that connection that the proceedings were commenced in April 2008 and the plea was entered on 31 July 2008.

Before allowing for a reduction of 25 per cent the range of available penalties is as follows:

	Duty Payable $	Minimum Penalty $	Maximum Penalty $
Shipment 1
Smuggling	243,168.00	NA	1,215,840.00
Evasion	243,168.00	486,336.00	1,215,840.00
Shipment 2
Smuggling	1,295,747.48	NA	6,478,737.40
Evasion	1,295,747.48	2,591,494.96	6,478,737.40
Shipment 3
Smuggling	1,352,667.39	NA	6,763,336.95
Evasion	1,352,667.39	2,705,334.78	6,763,336.95
Shipment 4
Smuggling	1,104,127.05	NA	5,520,635.25
Evasion	1,104,127.05	2,208,254.10	5,520,635.25

61 In so far as the defendant’s subjective circumstances are concerned there is little to be gleaned from the evidence in the plaintiff’s case. The defendant did not call any evidence and there is no evidence otherwise reflecting any contrition, his attitude to the offending or any other factor mitigating the objective seriousness of his offending. It was asserted from the bar table that the defendant was in receipt of social security payments and was generally in ill health and that that should operate in mitigation of sentence. Quite apart from the defendant bearing the onus of proving mitigating matters, an onus he has not sought to discharge, I am persuaded they should operate in reduction of penalty in this case.

62 In accordance with s 16A(2)(m) of the Crimes Act, in fixing the penalties to be imposed I also take into account that on 10 January 2006, the defendant pleaded guilty to one charge of smuggle goods, namely 500,000 cigarettes contrary to s 233(1)(a) of the Act, and one charge of evade payment of duty, namely $113,105 contrary to s 234(1)(a) of the Act. In relation to these offences, the Local Court ordered the defendant to enter into a $5000 bond to be of good behaviour for a period of 3 years, and imposed a fine of $22,000. The defendant entered into an agreement with the Court to pay the fine via monthly instalments of $200. The defendant committed the present offences while on a good behaviour bond for a prior offence of an identical nature. This is an aggravating feature and amply demonstrates that the defendant paid no heed to the leniency extended to him on that occasion and should not be afforded any indulgence a second time. As I have already noted I have no confidence at all that the penalties I will impose will have any deterrent effect on the defendant at all. That said, the enforcement of the penalties will be an avid waste of time.

63 Having regard to the principle of totality and expressly adopting the approach to the calculation of penalties articulated by Simpson J in Coulton at [51]-[56], the penalties I impose in this case follow.

64 After taking into account the admission of guilt and with the intention of imposing heavier penalties across each of the shipments 2, 3 and 4 (subject to rounding off) the penalties I impose are as follows:

	Penalty $	Less 25% $
Shipment 1
Smuggling	400,000.00	300,000.00
Evasion	400,000.00	300,000.00
TOTAL	800,000.00	600,000.00
Shipment 2
Smuggling	2,000,000.00	1,500,000.00
Evasion	2,000,000.00	1,500,000.00
TOTAL	4,000,000.00	3,000,000.00
Shipment 3
Smuggling	1,500,000.00	1,125,000.00
Evasion	1,500,000.00	1,125,000.00
TOTAL	3,000,000.00	2,250,000.00
Shipment 4
Smuggling	1,500,000.00	1,125,000.00
Evasion	1,500,000.00	1,125,000.00
TOTAL	3,000,000.00	2,250,000.00
Shipments 1 – 4
TOTAL	10,800,000.00	8,100,000.00

Orders

65 The orders I make are:

(1) In respect of the first importation:

(a) the defendant is convicted of the offence of smuggling pursuant to s 233(1)(a) of the Customs Act. I order that he pay a penalty of $300,000.00;

(b) the defendant is convicted of the offence of evading payment of duty pursuant to s 234(1)(a) of the Customs Act. I order that he pay a penalty of $300,000.00.

(2) In respect of the second importation:

(a) the defendant is convicted of the offence of smuggling pursuant to s 233(1)(a) of the Customs Act. I order that he pay a penalty of $1,500,000.00;

(b) the defendant is convicted of the offence of evading payment of duty pursuant to s 234(1)(a) of the Customs Act. I order that he pay a penalty of $1,500,000.00.

(3) In respect of the third importation:

(a) the defendant is convicted of the offence of smuggling pursuant to s 233(1)(a) of the Customs Act. I order that he pay a penalty of $1,125,000.00;

(b) the defendant is convicted of the offence of evading payment of duty pursuant to s 234(1)(a) of the Customs Act. I order that he pay a penalty of $1,125,000.00.

(4) In respect of the fourth importation:

(a) the defendant is convicted of the offence of smuggling pursuant to s 233(1)(a) of the Customs Act. I order that he pay a penalty of $1,125,000.00;

(b) the defendant is convicted of the offence of evading payment of duty pursuant to s 234(1)(a) of the Customs Act. I order that he pay a penalty of $1,125,000.00.

(5) I order that the defendant pay to the plaintiff reparation of $3,395,709.92 pursuant to s 21B of the Crimes Act.

(6) I order that the defendant pay the plaintiff’s costs of the proceedings pursuant to s 263 of the Customs Act.

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LAST UPDATED:
26 March 2009