CEO of Customs v Liang

1. [1]

   HIS HONOUR: These proceedings were brought by the Chief Executive Officer of Customs against Jian Wei Liang, also known as Victor Liang, whom I will refer to as Victor Liang or the first defendant, and his de facto wife Elaine Qili Wang, also known as Elaine Wong, whom I will refer to as Elaine Wong or the second defendant. There was originally a third defendant, a company New Century Clothing Co Pty Limited, but this company is no longer registered and the plaintiff discontinued the proceedings as against the third defendant. Wherever in this judgment I refer to "the defendants", I am referring simply to Victor Liang and Elaine Wong.

2. [2]

   The proceedings are a Customs prosecution under Pt XIV of the Customs Act 1901 (Commonwealth) ("the Act") for the recovery of penalties for alleged offences under Pt XI11 of the Act in respect of importations of clothing in 1998.

3. [3]

   In pars 2-10 of the statement of claim by which the proceedings were commenced the plaintiff averred a number of background facts, nearly all of which were admitted by the defendants in their defence. The following background facts were admitted in the defence or otherwise not disputed (apart from admissions in the defence the plaintiff has the benefit of s 255 of the Act, under which an averment in the statement of claim is prima facie evidence of the matter averred).

4. [4]

   In 1995 the name "New Century Clothing Co" was registered as a business name in New South Wales. The defendants were the registered proprietors of the business name and carried on under that name the business of importing clothing.

5. [5]

   The company New Century Clothing Co Pty Limited was incorporated in July 1998. From 10 July 1998 this company owned and controlled the business of importing clothing which had formerly been carried on by the unincorporated business. At all times Victor Liang was the sole director and the sole shareholder of the company. Both of the defendants were involved in the management of the activities of the company.

6. [6]

   Between 2 January 1998 and 9 July 1998 there were twenty-three importations of clothing by the unincorporated business (which were referred to in the proceedings as importations or shipments 1 to 23). The defendants or one of them gave instructions for the compiling and lodgement of an entry for home consumption for each of these importations.

7. [7]

   Between 10 July 1998 and December 1998 there were fifteen importations of clothing by the company (which were referred to in the proceedings as importations or shipments 24 to 38). The defendants or one of them gave instructions on behalf of the company for the compiling and lodgement of an entry for home consumption for each of these importations.

8. [8]

   All of the importations, except importation 15, were importations of clothing from the same overseas supplier Wing Hung Knitwear Garment Factory of Hong Kong ("Wing Hung"). Importation 15 was an importation of clothing from a supplier Li de Jia (Hong Kong) Trading Development Company ("Li de Jia").

9. [9]

   With respect to each importation or shipment, the defendants admitted in their defence that they or the company had ordered the goods from Wing Hung (or in the case of importation 15, Li de Jia); that they or the company had caused the goods ordered to be imported into Australia; and that they or the company had employed Hecny (Australia) Pty Limited ("Hecny"), a freight forwarding company, to arrange the entry of the goods into home consumption and for this purpose had given Hecny a set of shipping documents including a commercial invoice. Although not admitted on the pleadings, it was not contested at the hearing that Hecny had employed a company Gibson Freight International Pty Limited ("Gibson") to make and lodge with Customs an entry for home consumption in respect of the goods. The defendants further admitted in their defence that the defendants or the company had caused the entry which had been made by Gibson to be produced to Customs; that the entry had represented that the value of the goods for the purpose of the calculation of Customs duty was a certain figure; and that Customs duty had been calculated on that figure and paid.

10. [10]

    A critical allegation which was made by the plaintiff but denied by the defendants, was that the amount represented in the entry as the value of the goods, as being the price paid for the goods, was false and that th true value of the goods was a higher amount, being the actual, higher price paid for the goods by the defendants or the company.

The Alleged Offences

1. [11]

   The offences in Pt XIII of the Act which the plaintiff alleged each of the defendants had committed were:-

2. [12]

   In respect of each of importations 1 to 23, an offence under s 233(1)(a) of the Act, which prohibits the smuggling of any goods; an offence under s 234(1)(a) of the Act, which prohibits a person from evading payment of any duty which is payable; and an offence under s 234(1)(d)(i) of the Act, which prohibits a person from intentionally making a statement to a Customs officer, reckless as to the fact that the statement is false in a material particular.

3. [13]

   In respect of each of importations 24 to 38, an offence under s s 236 and s 233(1)(a) of aiding and abetting the smuggling of goods by the company; an offence under s 236 and s 234 (1)(a) of aiding and abetting the evading of payment of duty by the company; and an offence under s 236 and s 234(1)(d)(i) of aiding and abetting an offence by the company of intentionally making a statement to a Customs officer, reckless as to the fact that the statement was false in a material particular.

4. [14]

   As to s 233(1)(a), "smuggling" is defined in s 4 of the Act as meaning, so far as is relevant, "any importation ... of goods with intent to defraud the revenue". It was not in dispute that the elements of the offence created by s 233(1)(a) are:-

5. [15]

   The offence created bys 234(1)(a) of the Act was discussed by the High Court in Wilson v Chambers (1926) 38 CLR 131. At the hearing of these proceedings it was not in dispute that the elements of the offence created bys 234(1)(a) are:-

6. [16]

   It was not in dispute at the hearing of these proceedings that the elements of the offence created bys 234(1)(d)(i) of the Act are:-

7. [17]

   Counsel for the defendants expressly disclaimed any submission that no offence under s 234(1)(d)(i) has been committed, if the person in question had actual knowledge that the statement made to the Customs officer was false in a material particular.

8. [18]

   In the case of each shipment the statement made, which it was alleged had been false, was the statement made in the entry for home consumption stating the value of the goods for the assessment of Customs duty.

9. [19]

   So far as the offence charged in respect of shipments 24 to 38 are concerned, s 236 of the Act provides:-

10. [20]

    As a result of the decision of the High Court in Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Limited (2003) 201 ALR 1, in order to obtain a conviction of either defendant for any of the offences alleged, the onus is on the plaintiff to prove the elements of the offence beyond reasonable doubt.

11. [21]

    I have stated all the elements of all of the offences charged. However, a crucial issue in the prosecution of both defendants is whether the plaintiff has proved beyond reasonable doubt, with respect to each shipment or importation, that the amount stated in each entry for home consumption as being the value of the goods for the assessment of Customs duty was not the true value but an amount less than the true value. As the value of the goods for the assessment of Customs duty was the price paid to the overseas supplier of the goods, this issue can be stated as being whether the plaintiff has proved beyond reasonable doubt, with respect to each shipment or importation, that the amount stated in each entry for home consumption as being the value of the goods for the assessment of Customs duty was not the price which had been paid for the goods to the overseas supplier but an amount which was less than the price which had been paid for the goods to the overseas supplier.

12. [22]

    If, with respect to a particular shipment, the plaintiff succeeds on this issue, the first defendant would be guilty of all the offences charged in respect to that shipment, whether the importation was made by the partnership or by the company, because there would be overwhelming inferences that the first defendant, as a proprietor of the unincorporated business or as the sole director and shareholder of the company, had full knowledge of the price actually paid for the goods to the overseas supplier and full knowledge of what amount had been represented to Customs as being the value of the goods for the assessment of duty and that the first defendant had an intent to defraud the revenue, had intentionally omitted to pay Customs duty and had no reasonable excuse for not paying Customs duty.

13. [23]

    However, in the case of the second defendant, there would be a further issue of whether the plaintiff has proved beyond reasonable doubt that she, as distinct from the first defendant, should be found guilty of the offences charged.

THE EVIDENCE

1. [24]

   The evidence at the hearing consisted of affidavits, oral evidence and a number of documentary exhibits.

The Plaintiff's Evidence

1. [25]

   The principal witness for the plaintiff was Barry Joseph Young, a Customs investigator, who made an affidavit and who gave oral evidence.

2. [26]

   In his affidavit, to which a copy of an earlier statement by him was annexed, Mr Young said that he had been the case officer in the Customs investigation into the importations by the defendants.

3. [27]

   Mr Young said that in the investigation information had been obtained from various sources. Documents had been seized when search warrants were executed on 17 March 1999 at the defendants' residential address 3/3 Reid Avenue, Wentworthville and at the defendants' place of business 83 Kippax Street, Surry Hills. Documents had also been obtained from Government agencies and by executing search warrants on banks.

4. [28]

   Mr Young prepared a brief on evidence comprising nine volumes. The most important documents for each importation were collected in a single volume, which was described at the hearing as the working volume or the master volume and which became document marked for identification 1.

5. [29]

   Using the information which had been obtained, Mr Young created a number of schedules which are reproduced in volume 5 of the brief of evidence.

6. [30]

   Schedule 1 at pp 872-898 of volume 5 of the brief of evidence lists a number of payments made from Australia to Hong Kong between 1 January 1998 and 31 December 1998 of amounts of less than $10,000 but in almost all cases more than $9,000, and totalling $835,050.86, showing, with respect to each payment, the date of the payment, the amount of money transferred, the sender, the receiver and the receiving bank. Documentary evidence of all of the payments in Schedule 1 was found at the defendants' residential premises.

7. [31]

   Schedule 2 at pp 899-908 of volume 5 of the brief of evidence lists a number of payments made from Australia to Hong Kong between 1 January 1998 and 31 December 1998 of amounts of more than $10,000, and totalling $3,230,238.41, showing, with respect to each payment, the date of the payment, the amount of money transferred, the sender, the receiver and the receiving bank.

8. [32]

   Schedule 3 at pp 909-945 of volume 5 of the brief of evidence purports to show the amounts of duty evaded by the defendants. Each amount has been calculated by comparing a figure in a document described as the "stock report" with the figure disclosed to Customs as having been the price paid for the goods.

9. [33]

   In paragraph 20 of his affidavit Mr Young said with respect to schedule 3:-

10. [34]

    The book referred to in par 20 of Mr Young's affidavit became exhibit A in the proceedings. Although the name "stock report" is not particularly apt, it is the name by which the book was usually referred to at the hearing and I will refer to it in this judgment as "the stock report".

11. [35]

    Schedule 4 at pp 950-976 of volume 5 cross-references the names and addresses of senders of money as set out in schedule 1, with information obtained from the records of Telstra, Integral Energy and Energy Australia.

12. [36]

    At the hearing Mr Young was cross-examined by counsel for the defendants at some length.

13. [37]

    Other witnesses for the plaintiff who made affidavits but who were not required for cross-examination and who did not give oral evidence, were:-

The Defendants' Evidence

1. [38]

   Each of the defendants and the first defendant's father Liang Zhong Quan (Mr Liang senior) made affidavits.

2. [39]

   In his affidavit Victor Liang supplied some non-controversial background information, much of which I have already summarised. Mr Liang said that he had been born in China in 1961 and had become an Australian citizen in 1991. He had been in a de facto relationship with Elaine Wong since 1990.

3. [40]

   In his affidavit Victor Liang described how he said the business had been carried on. Mr Liang annexed to his affidavit a schedule of payments made by telegraphic transfer in 1998 to suppliers of goods to the unincorporated business or the company. He said that the total payments had been $3,230,238.41, of which only $2,300,000 had been payments for goods imported into Australia in 1998.

4. [41]

   In par 21 of his affidavit Mr Liang said:-

5. [42]

   In annexure VL2 Mr Liang said that he had borrowed various amounts of money at interest from a number of lenders, who he named, and that a large number of payments of amounts of less than $10,000 but more than $9,000, which he itemised, were repayments of one or other of those loans.

6. [43]

   In par 25 of his affidavit Mr Liang said:-

7. [44]

   Mr Victor Liang asserted that the invoices which had been supplied to Hecny contained the true prices paid by the unincorporated business or the company for goods imported into Australia in 1998.

8. [45]

   In par 8 of her brief affidavit Elaine Wong said:-

9. [46]

   Liang Zhong Quan made an affidavit verifying a statement he had made. In the statement he said:-

THE PLAINTIFF'S CIRCUMSTANTIAL CASE

1. [47]

   I have identified as being a crucial issue in the proceedings, whether the plaintiff has proved beyond reasonable doubt, in respect of each shipment or importation, that the amount disclosed to Customs as being the value of the goods for the assessment of Customs duty was not the price which had been paid for the goods to the overseas supplier but an amount which was less than the price which had been paid for the goods to the overseas supplier. In the absence of any admission by either defendant that the amount disclosed to Customs was not the true price, the plaintiff sought to discharge the onus of proof on this issue by means of an inference from a combination of pieces of circumstantial evidence and it is necessary to survey the circumstantial evidence sought to be relied on by the plaintiff.

2. [48]

   I have already pointed out that the overseas supplier of the goods in thirty­ seven of the shipments was Wing Hung, whereas the overseas supplier of the goods in shipment 15 was Li de Jia. In counsel for the plaintiff's written submissions counsel dealt first with shipment 15 and there is some convenience in my following counsel's course.

Shipment 15

1. [49]

   The pleading of the alleged offences in respect of the fifteenth shipment at pp 77-81 of the statement of claim is defective. In some places it is alleged that the defendants (that is the first defendant and the second defendant) were the principal offenders. In other places it is alleged that the defendants aided and abetted the company as the principal offender. The goods comprised in shipment 15 were ordered in April 1998 and supplied in May 1998, that is before the company assumed control of the business in July 1998, and the hearing proceeded on the basis that it was alleged by the plaintiff that the defendants, and not the company, had been the principal offenders on shipment 15.

2. [50]

   The commercial invoice for shipment 15 was faxed by the first defendant to Hecny on 4 May 1998. On the commercial invoice were written the handwritten words "To Albert Ho from VICTOR". In the commercial invoice the goods were described as "nylon sports suits 9,468 sets USD3.50/set". The total price was stated in the commercial invoice to be US$33,138.

3. [51]

   In the entry for home consumption prepared on 13 May 1998 the total Customs value was stated to be $A45,933.47, being the equivalent in Australian dollars of $US33,138. Customs duty of $15,617.37 was calculated on the total Customs value of the goods as stated in the entry.

4. [52]

   In seeking to prove that the value disclosed to Customs was not the price which had actually been paid for the goods, the plaintiff relied on documentary evidence of the making of five payments in April 1998 to the supplier Li de Jia.

5. [53]

   Parts of a letter from Zongyuan Li to "Dear Miss Wang" dated 10 April 1998 (the original in Chinese is document 1706 in the brief and the translation is document 1698 in the brief) were in the following terms:-

6. [54]

   On the original letter (document 1706 in the brief of evidence) are the handwritten words and figures:-

7. [55]

   A letter from Zongyuan Li of 20 April 1998 (the original in Chinese is document 1705 in the brief of evidence and the translation is document 1697) was in the following terms:-

8. [56]

   In his evidence Victor Liang asserted that the price shown in the commercial invoice of US$3.50 per set was the true price which had been paid to Li de Jia. Mr Liang explained the payment to Li de Jia of an amount exceeding what would be the total price of 9,468 items at a price per item of US$3.50, by saying that Li de Jia had charged an amount of $1.50 per item for expenses. Elsewhere in his evidence Mr Liang said that the extra amount paid to Li de Jia was payment for the purchase of fabric. In his evidence Mr Liang denied that there had been any "plan" to avoid payment of Customs duty, as might be suggested by paragraph 2 of the letter of 10 April 1998. He denied that the total of the figures handwritten on the letter of 10 April 1998, including the figure 5,302, was the total cost of the goods and he denied that the amount of US$14,670 was a deposit equal to about 30 per cent of the total cost.

9. [57]

   In her evidence the second defendant said that she could remember this shipment, because it represented a big investment for the business. She claimed that she knew nothing about any of the five payments which had been made to Li de Jia. She said that she had never seen the letter of 10 April 1998, although it was addressed "Dear Miss Wang". She said that she did not understand what was meant by the expression "your plan" in the letter of 10 April 1998. She denied that she had been the author of the letter to Mr Li referring to the 30 per cent deposit, although the letter stated that it was from "Qili Wang" (her name).

Shipments 1 to 14, 16 to 38

1. [58]

   With respect to each of these thirty-seven shipments the plaintiff in seeking to prove that the value disclosed to Customs was not the price which had actually been paid for the goods, sought to rely on the following items of circumstantial evidence:-

   1. (1)

      Evidence about the stock report (exhibit A).

   2. (2)

      Evidence of carbon copies of certain orders placed by the business and of other documents (parts of exhibits C, D, E and F).

   3. (3)

      Evidence of a document referred to as being a price list.

   4. (4)

      Evidence of possession by the defendants of a Wing Hung invoice book.

   5. (5)

      The evidence about shipment 15 which, it was submitted, was admissible in the prosecution of the defendants for the offences allegedly committed in respect of the other shipments.

   6. (6)

      Evidence of overseas remittances of money by the business.

2. [59]

   I will deal separately with each of these items of circumstantial evidence.

1. The Stock Report

1. [60]

   Earlier in this judgment I quoted par 20 of Mr Young's affidavit in which he gave certain evidence about the stock report, which had been seized during the execution of the search warrant at the defendants' business premises on 17 March 1999. I also quoted the terms of Mr Liang senior's statement in which he referred to the stock report (described by him as the "table of purchase").

2. [61]

   The stock report consists of a number of pages, joined together by a metal binder and with a cardboard front cover and a cardboard back cover. After the stock report was seized, Customs investigators numbered the pages from 1 to 115. Each page contains a number of ruled columns. In the columns handwritten entries have been made in Chinese characters and Arabic numerals.

3. [62]

   The stock book was translated into English by the translator Andi Zhang. An example of a translation by Ms Zhang of part of one of the pages of the stock book is the following (which on the plaintiff's case is the block of entries for the goods in shipment 1):-

4. [63]

   On most of the pages of the stock report there are no headings for the columns. However, on pages 75, 84, 85 and 88 of the stock report there are headings for the columns, which were translated by Ms Zhang as:-

5. [64]

   The meaning of some of these headings would seem quite obvious. It was submitted by counsel for the plaintiff that these headings meant, respectively:-

6. [65]

   The style number of the particular goods; the description of the goods; quantity, that is the number, of the goods; the number of the boxes in which the goods were packed; the total number of boxes in which the goods were packed; the cost of the goods, that is the cost to the New Century business of the goods; the amount, being lower than the cost of the goods, which was stated as being the price of the goods in the commercial invoice produced to Customs; the sizes of the goods, for example small or large; the colours of the goods.

7. [66]

   Counsel for the plaintiff submitted that, although these column headings appeared only on four pages of the stock book, the formatting or layout of the pages of the stock book was so consistent, that it could readily be inferred that these column headings could be applied to all the pages of the stock book. The Crown submitted that the actual information entered in the columns on the various pages of the stock book strongly confirmed the correctness of the Crown's submissions about the nature of the information which had been entered in the various columns.

8. [67]

   Counsel for the defendants did not dispute the correctness of most of Ms Zhang's translations of the column headings on pp 75, 84, 85 and 88 or the correctness of the Crown's submissions about the meaning of most of the column headings. However, Ms Zhang was challenged about her translations of the headings which she had translated as "cost" and "quoted prices".

9. [68]

   These two columns are crucial to the plaintiff's case, the plaintiff contending that the figure in the first of these two columns was the true cost or price paid by the defendants or the company and that the figure in the second of the two columns was the lower amount falsely stated to Customs as being the price.

10. [69]

    Counsel for the plaintiff contended that for all of the goods in all of the thirty-seven shipments entries on a page or pages in the stock report could be correlated with an entry for home consumption made to Customs. With the exception of four shipments only, all of the entries in the stock report for the goods in a shipment were set out in a single block of entries in the stock report. In some cases there were some differences, other than the stated price of the goods, between the particulars of the goods shown in entries in the stock report and the particulars of the goods in the documents produced to Customs with respect to a shipment, but, even in those cases, the similarities between the particulars in the stock report and the particulars in the documents produced to Customs were so striking as not to admit of any explanation that the similarities were coincidental.

2. Carbon Copies of Order Forms and Other Documents

1. [70]

   In executing one of the search warrants Customs seized four exercise books containing carbon copies of orders placed by the New Century business. Apart from containing carbon copies of orders placed by the business, the exercise books also contained at least one original, unsent letter. These four exercise books became exhibits C, D, E and F.

2. [71]

   Counsel for the plaintiff submitted that I should find that the prices stated in the carbon copies of the orders had been the true prices of the goods being ordered. Counsel did not contend that any carbon copy of an order in any of the books could be directly linked to any of the goods in any of the thirty-seven shipments. However, it was contended that, where there was a carbon copy of an order in one of exhibits C, D, E and F, which had been placed at about the same time as goods of the same description had been imported in one of the thirty-seven shipments, then the price shown in the carbon copy of the order was at least some evidence of what would have been the true price paid by the New Century business for goods of the same description in the shipment. It was submitted that in a number of cases, where an order had been placed at about the same time as goods of the same description had been imported in one of the shipments, the price shown in the carbon copy of the order was the same as the "cost" figure shown in the stock report or at least much closer to the "cost" figure than to the "quoted prices" figure.

3. [72]

   Counsel for the plaintiff relied on certain specific examples.

3. The document referred to as a Price List

1. [73]

   The original document is on the letterhead of Chin Hung Knitwear Wholesales Limited and the body of the document is in Chinese characters. The first defendant gave evidence that the document had been faxed to himself and the second defendant from somebody who worked at Wing Hung. The document was dated 23 July.

2. [74]

   The original document was numbered document 1708 by Customs. A translation of the document by Andi Zhang was numbered document 1700 by Customs. The translation is as follows:-

3. [75]

   This translation was corrected by Ms Zhang in her affidavit of 9 January 2004, in which she said that she had mistranslated the currency symbols as dollar signs, whereas they should have been Chinese yuan signs.

4. [76]

   One item in the list is "98/116: Small plum blossom pattern lace fabric mid­ sleeve jewel-neck top 23"

5. [77]

   On p 50 of the stock report in a block of entries for shipment 29, which was air freighted on 15 August 1998, there is a line of entries for style 98/116, "lace fabric jewel-neck mid-sleeve tops" with a "cost" figure of 24 and a "quoted prices" figure of 12.

6. [78]

   Accordingly, the figure in the price list (23) was almost the same as the "cost" figure in the stock report (24) and much higher than the "quoted prices" figure in the stock report (12).

7. [79]

   Another item in the price list is "98/129 Elastic knitted sun-top 12".

8. [80]

   On p 45 of the stock report in the block of entries for shipment 31, which was air freighted on 30 August 1998, there is a line of entries for style 98/129, "knitted stretch fabric embroidered singlets", with a "cost" figure of 12 and a "quoted prices" figure of 6.

9. [81]

   Accordingly, the figure in the price list (12) was the same as the "cost" figure in the stock report (12) and much higher than the "quoted prices" figure in the stock report (6).

4. Possession by the Defendants of a Wing Hung Invoice Book

1. [82]

   A Wing Hung invoice book was found at the New Century business premises at Surry Hills and became exhibit F.

2. [83]

   In the invoice book there are multiple copies of each invoice form. Most of the invoice forms in the book had not been used and remained blank. Carbon copies remaining in the invoice book of the few invoices which had been used show that the invoices had been addressed to New Century Clothing.

3. [84]

   Counsel for the plaintiff did not suggest that any of the completed invoices could be linked to any of the goods in any of the thirty-seven shipments. However, it was submitted that the pqssession by the New Century business of an invoice book of its supplier Wing Hung was a piece of circumstantial evidence strengthening an inference that the New Century business could influence the content of invoices to it from Wing Hung.

5. Evidence about Shipment 15

1. [85]

   It was submitted by counsel for the plaintiff that, although the supplier of the goods in shipment 15 was a different supplier (Li de Jia and not Wing Hung) and although there were no entries for shipment 15 in the stock report, nevertheless shipment 15 and the shipments of goods from Wing Hung were otherwise so similar, that evidence about shipment 15 was admissible in the prosecution of the defendants for the offences allegedly committed by them in respect to the shipments from Wing Hung.

6. Overseas Remittances of Money

1. [86]

   Earlier in this judgment in summarising the evidence of Mr Young I described the four schedules prepared by him, including schedule 1 in which were listed particulars of a number of payments made from Australia to Hong Kong between 1 January 1998 and 31 December 1998 of amounts of less than $10,000, but in almost all cases of more than $9,000, and totalling $835,050.86. Documentary evidence of all of the payments listed in schedule 1 had been found at the residential premises of the defendants.

2. [87]

   Many of the names and addresses of the senders of the remittances, as recorded in the documents, although not identical with the name and address of either of the defendants, had some similarity to the name or address of one or both of the defendants. For example, the name and address of the sender of the very first payment in the schedule on 6 January 1998 was "Wang Ji X 25/3 Reid Avenue, Wentworthville NSW". The name "Wang Ji X is similar to the name of the second defendant. The address is similar to the residential address of the defendants 3/3 Reid Avenue, Wentworthville.

3. [88]

   In the fourth schedule prepared by him Mr Young compared the names and addresses of the senders, according to the documents found at the defendants' premises, of the payments in Schedule 1, with information supplied from their records by the utility companies Telstra, Energy Australia and Integral Energy, about occupants of those premises. According to information supplied by one or more of the utility companies, the occupants of many of the addresses were persons having quite different names from the names of the senders of the payments. In some cases none of the utility companies had any record of an address or of an occupier of an address.

4. [89]

   It was submitted by counsel for the plaintiff that I should infer that all the payments listed in schedule 1 had been made by the defendants and that the payments had been made in amounts of less than $10,000 and with false sender details, in order to conceal that the defendants were making the payments and in order to avoid the reporting requirements and other provisions of the Financial Transaction Reporls Act (Commonwealth).

5. [90]

   It was further submitted by counsel for the plaintiff that I should find that the payments listed in schedule 1 were payments of the difference between the true price and the disclosed price of goods imported by the New Century business from Wing Hung.

6. [91]

   In schedule 1 prepared by Mr Young there are a number of payments totalling $56,800 to an individual named Wong Hung Ping. In an exercise book which became exhibit R there are records of further payments to Wong Hung Ping in 1998 of amounts of less than $10,000 each, totalling about $200,000. Accordingly the total amount paid to Wong Hung Ping in 1998 in amounts of less than $10,000 was more than a million dollars.

7. [92]

   Wong Hung Ping was a principal of Wing Hung. In the execution of one of the search warrants an address book was found, which became exhibit G. Stapled to one of the pages of the address book was a business card reading "Wing Hung Knitwear Garment FTY -Wong Hung Ping director".

8. [93]

   It was submitted by counsel for the plaintiff that I should find that the payments to Wong Hung Ping were payments of the difference between the true price and the disclosed price of goods imported by the New Century business from Wing Hung.

9. [94]

   It was generally submitted by counsel for the plaintiff that I should find that the total amount of payments made by the defendants in 1998, whether in amounts of less than $10,000 or amounts of more than $10,000, far exceeded the total amount of the disclosed prices of goods imported from Wing Hung.

The Plaintiff

1. [95]

   Very extensive and detailed written submissions were lodged by counsel for the plaintiff. In summarising the plaintiff's circumstantial case I have already referred to a number of submissions made by counsel for the plaintiff. Some of the principal ·submissions made by counsel for the plaintiff can, very broadly, be summarised as follows.

2. [96]

   The plaintiff. accepted that it bore the criminal onus of proof beyond reasonable doubt and that, as the plaintiff's case on the critical issue was a circumstantial case, I could find for the plaintiff on that issue, only if such a finding was the only reasonable inference which could be drawn. Counsel for the plaintiff submitted that the plaintiff had succeeded in discharging the onus it bore.

3. [97]

   Counsel for the plaintiff submitted that evidence about shipment 15 was admissible in the prosecution of the defendants for the offences allegedly committed in respect of the Wing Hung shipments and that evidence about each Wing Hung shipment was admissible in the prosecution of the defendants for offences allegedly comm'itted in respect of all of the Wing Hung shipments.

4. [98]

   With regard to shipment 15, it was submitted that I should find that the five payments alleged by the plaintiff had been made and that the only reasonable inference which could be drawn from the making of the payments and the terms of the letters between Li de Jia and the New Century business was that the true price paid for the goods was the total of the five payments, that is $US49,740, and not the amount of $US33,138, which was disclosed to Customs, and hence the statement in the entry about the value of the goods for duty was false.

5. [99]

   With regard to the thirty-seven shipments from Wing Hung, it was submitted that I should reject Mr Liang senior's evidence concerning the stock report; that I should accept Andi Zhang's preferred translations of the headings in the stock report as "cost" and "quoted prices"; that I should find that the circumstances relied on by the plaintiff had been established; and that I should conclude that the only reasonable inference which could be drawn was that the figures in the "cost" column in the stock report were the true prices paid for the goods and that the lower figures in the "quoted prices" column in the stock report were the amounts which had been disclosed to Customs as being the prices of the goods and, accordingly, false statements had been made to Customs about the value of the goods in all thirty-seven shipments.

6. [100]

   As the first defendant was a person either in sole or joint control of the New Century business, both before and after the incorporation of the company, if an untrue statement had been made to Customs, then I should infer, as the only reasonable inference that could be drawn, that the first defendant was well aware of the making of the untrue statement and all the other elements of the various offences charged against the first defendant could readily be inferred.

7. [101]

   As regards the second defendant, despite her attempts to distance herself from being a joint controller of the business, the many references to her in the documents of the business and the many documents sent by her or addressed to her in the operations of the business gave rise to an inference, as being the only inference which could reasonably be drawn, that she was in joint control of the business with the first defendant and that, if an untrue statement had been made to Customs, I should infer as the only reasonable inference that could be drawn, that the second defendant was well aware of the making of the untrue statement and all the other elements of the various offences charged against the second defendant could readily be inferred.

The Defendants

1. [102]

   In his submissions counsel for the defendants stressed the criminal onus of proof resting on the plaintiff, which meant that in a case based on circumstantial evidence an inference adverse to the defendants could be drawn, only if it was the only reasonable inference which could be drawn and that it was necessary for the plaintiff to negative that there was any other reasonably open inference, consistent with the innocence of the defendants.

2. [103]

   Counsel submitted that, in order to prove the commission of an offence in respect of a particular shipment, the plaintiff could rely only on evidence relating specifically to that particular shipment or, if the plaintiff sought to rely on evidence relating to other shipments, that other evidence would have to satisfy the requirements under Pt 3.6 of the Evidence Act for the admissibility of tendency evidence or coincidence evidence in criminal proceedings.

3. [104]

   It was submitted that the plaintiff had alleged that offences had been committed in relation to only thirty-seven importations from Wing Hung, all of them in 1998. There had been many other importations by the New Century business from Wing Hung both in 1998 and in the previous year 1997 and in the following year 1999 but the plaintiff had not alleged that any offences had been committed in relation to those other shipments. No document corresponding to exhibit A had been found by Customs for the year 1997 or the year 1999. It was submitted that I should proceed on the basis that the other importations were "bona fide", that is that the defendants had not committed any offence in relation to those other shipments.

4. [105]

   No submissions or virtually no submissions were made by counsel for the defendants in relation to shipment 15.

5. [106]

   As regards the stock report, it was submitted inter alia that Mr Young had admitted in his evidence that he did not know who had prepared the stock report.

6. [107]

   Mr Liang senior had given evidence in his affidavit or during cross­ examination that he had prepared the stock report, that he had made all of the entries personally, that he had not shown the document to either of the defendants, that he had not discussed any of the entries in the document with either of the defendants or obtained the information for any of the entries from either of the defendants, that he had not remitted money overseas, that he had not worked in the business in 1998, that he had had access to packing lists and invoices faxed to the residential premises at Wentworthville, that he had derived the higher figure in the "cost" column in the document by increasing the invoice price by a factor to cover local costs such as rent and wages, so as to arrive at what Mr Liang senior thought would be a minimum local selling price.

7. [108]

   Mr Liang senior's evidence was the only direct evidence about the stock report. There was no forensic evidence, such as fingerprint evidence, DNA evidence or expert handwriting evidence, rebutting Mr Liang senior's evidence. In the circumstances I should accept his evidence about the stock report as being at least reasonably possibly true.

8. [109]

   It was submitted that I could reject Mr Liang senior's evidence, only if I was prepared to find that he was lying in his evidence and that the overseas supplier of the goods had created false invoices or had at least colluded in the making of false invoices.

9. [110]

   It was submitted that Andi Zhang's translations of the column headings, which she had translated as "cost" and "quoted prices", were mistranslations. Counsel referred to evidence by Ms Zhang in cross­ examination, in which she conceded that possible translations of the two column headings were "manufacturers costs" and "asking price" respectively.

10. [111]

    Counsel also point to respects in which Ms Zhang conceded that earlier translations made by her had been defective, in that in translations made earlier by her she had included column headings which were inferred by her, even where there were no column headings on the document being translated, and that in some places she had inserted a dollar symbol, where in the original there had been a yuan symbol or where in the original there had been no currency symbol at all.

11. [112]

    No enquiries by or on behalf of Customs had been made of Wing Hung concerning the prices at which goods had been supplied by Wing Hung to the New Century business.

12. [113]

    As regards the remittances overseas, Mr Young admitted in cross­ examination that he did not know the terms of trade between the New Century business and Wing Hung and that he did not know the status or capacity of individual payees, for example whether they were suppliers to the business, lenders or relatives and he did not know the purpose of individual payments.

13. [114]

    It was submitted that I should accept as a reasonably possible explanation of many of the payments that they were payments of interest or principal on loans or were made to reimburse the payee for expenses which had been incurred by the payee.

14. [115]

    Another reasonably possible explanation of the payments for less than $10,000 in which false particulars of the name and address of the sender had been supplied, was that the defendants wished to conceal remittances overseas of cash receipts of the New Century business on which Australian income tax had not been paid. The defendants might have contravened Australian revenue law but it was Australian income tax law, and not Australian Customs law, which they have contravened.

15. [116]

    As regards the second defendant, I should accept as at least reasonably possibly true her evidence in her affidavit and in her oral evidence that she had played a very limited role in the New Century business. She had not been a director or shareholder in the company. According to the records of the New Century business she had been an employee for the whole of 1998. In oral evidence she said that she had been ill in 1996 and had been admitted to hospital and that she had given birth to a child in January 1997. It was submitted that I should not find that the second defendant had committed any of the offences with which she had been charged.

DECISION

1. [117]

   I have already held that the criminal standard of proof applies and that the critical issue on all charges is whether the Crown has proved beyond reasonable doubt, with respect to each shipment or importation, that the amount stated in the entry for home consumption as being the value of the goods for the assessment of Customs duty was not the price which had been paid for the goods to the overseas supplier, but an amount which was less than the price which had been paid for the goods to the overseas supplier.

2. [118]

   As the plaintiff's case on this critical issue is a circumstantial case, I have to determine which of the circumstances sought to be relied on by the plaintiff have been proved and whether the only reasonable inference that could be drawn from the circumstances I find proved, in the context of all of the evidence in the case, is that the amount disclosed to Customs was not the true price of the goods but an amount less than the true price. If there is any other inference reasonably open which would be consistent with the innocence of the defendants, then I could not find either defendant guilty of any of the charges.

3. [119]

   In my opinion, evidence tending to show in respect of any of the thirty­ seven shipments from Wing Hung that the true price paid by the New Century business for any of the goods in the shipment was the amount shown in the "cost" column in the stock report and not the amount shown in the "quoted prices" column of the stock report, which was the amount disclosed to Customs as being the price, is admissible to show that the true price of other goods in the same shipment and of goods in other shipments was the amount shown in the "cost" column in the stock report and not the amount shown in the "quoted prices" column in the stock report. In forming this opinion I have taken into account that all the goods in the thirty-seven shipments were importations of clothing in the same year from the same overseas supplier, that the same procedure was used by the New Century business for clearing the goods through Customs and that, notwithstanding the evidence of Mr Liang senior, the entries in the stock report were, quite patently, made methodically and according to a regular pattern and not in the manner alleged by Mr Liang senior in his affidavit and his oral evidence.

4. [120]

   If such a use of the evidence in respect of one shipment is properly to be regarded as using the evidence as "tendency" evidence or "coincidence" evidence within Pt 3.6 of the Evidence Act, then I find that the conditions for the use of the evidence as "tendency" or "coincidence" evidence are satisfied. Inter alia the evidence is relevant, it has significant probative value, notices under Pt 3.6 were given, and, having assessed the probative value of the evidence and any prejudicial effect it might have on the defendants, I am satisfied that the probative value of the evidence substantially outweighs any prejudicial effect it might have on the defendants.

5. [121]

   I do not consider that I could draw any inferences or that I should make any assumptions about any of the other importations by the New Century business in 1998 or in 1997 or 1999, about which there was little, if any, evidence.

6. [122]

   In regard to shipment 15, I am satisfied beyond reasonable doubt that the price of US$3.50 per set stated in the commercial invoice, on which the total value for duty of US$33,138 stated in the entry was based, was not the true price paid for the goods to the overseas supplier Li de Jia and that the true total price paid for the goods was US$49,740. I am satisfied beyond reasonable doubt that a false invoice was issued in which the total price was stated to be US$33,138, that the amount of the invoice was paid by the two payments of US$18,468 and US$14,670 and that the balance of the true price was paid by the three payments of US$5,300, US$6,000 and US$5,302, so that the true total price of US$49,740 was paid in full.

7. [123]

   Among the circumstances on the basis of which I have reached these conclusions as the only conclusions which could reasonably be drawn are:-

8. [124]

   I reject Mr Liang senior's evidence about the stock report. His evidence about how he said the stock report was brought into existence and how he said he had made entries in the stock report is utterly inconsistent with the objective characteristics of the stock report and the entries in the stock report. Mr Liang senior could not provide any explanation which might reasonably possibly be true of how he could have acquired the information which he said he had used in making the entries in the stock report. There were many internal inconsistencies in his evidence. I have no hesitation in finding that Mr Liang senior was a thoroughly dishonest witness.

9. [125]

   I find that in much of their evidence both of the defendants were dishonest witnesses.

10. [126]

    I accept the evidence of the translator Andi Zhang, including her evidence that her preferred translations of the two important column headings in the stock report were "cost" and "quoted prices". The errors which it was submitted she had committed were very minor and not really errors of translation, and were very few, having regard to the volume of the documents she translated.

11. [127]

    With respect to all thirty-seven shipments from Wing Hung I find that the circumstances relied on by the plaintiff in the plaintiff's circumstantial case have been proved and that the only reasonable inference which could be drawn is that the figures shown in the "costs" column of the stock report, and not the figures shown in the "quoted prices" column of the stock report, were the true prices paid by the New Century business for all of the goods. In reaching this conclusion I have taken into account the evidence about shipment 15. However, even if I had not taken this evidence into account, I would have reached the same conclusion. I reject as not even reasonably possibly true such explanations of parts of the plaintiff's circumstantial case as the defendants attempted to give.

12. [128]

    As regards the second defendant, I am satisfied beyond reasonable doubt that, as was submitted by the plaintiff, I should find that, notwithstanding her attempts to distance herself from being a joint controller of the business, the many references to her in the documents of the business and the many documents sent by her or addressed to her in the operations of the business and the admissions by her in her evidence that she received a share of the profits of the business both before and after the incorporation of the company give rise to an inference, as being the only inference which could reasonably be drawn, that she was in joint control of the business with the first defendant and was well aware of the making of the untrue statements about the prices of the goods.

13. [129]

    I find both defendants guilty of all the offences charged.