Biketi v Republic [2003] KICA 3; Criminal Appeal 06 of 2002 (16 August 2003)

IN THE KIRIBATI COURT OF APPEAL
CRIMINAL JURISDICTION
HELD AT BETIO
REPUBLIC OF KIRIBATI

Criminal Appeal No. 6 of 2002

BETWEEN:

TEBUANGUI BIKETI
Appellant

AND:

THE REPUBLIC
Respondent

Coram: Hardie Boys JA
Tompkins JA
Penlington JA

Counsel: Jacqueline Huston for Appellant
Melissa Kent for Respondent

Date of hearing: 12 August 2003
Date of judgment: 16 August 2003

JUDGMENT OF THE COURT

On 10 December 2002 the appellant, Tebuangui Biketi, was sentenced to two years' imprisonment, and was in addition fined $54,000, payable within three months, with a cumulative term of one year's imprisonment were the fine not paid within that time. He now appeals against that sentence, on the grounds that it was manifestly excessive.

The appellant, who was at the relevant time the General Manager of the Tarawa Fishermen's Cooperative, had pleaded guilty to one count of fraudulent evasion of customs duty. He had originally been charged with nine such counts, and also one of attempted evasion. The Republic chose to proceed with only the one count, but through his counsel the appellant admitted the other nine, and asked the Chief Justice to take them into account in fixing penalty on the one count on which he was to be sentenced.

The 10 counts covered a course of conduct between April 1999 and September 2000. It was the appellant's responsibility to arrange payment of customs duty on goods which the Cooperative imported to Kiribati. This offending related to ten consignments of second hand motorcycles, purchased by the Cooperative from a supplier in Brisbane, at a cost of $900 each. There were 115 motorcycles in all. They each had a capacity of 110 cc, and so attracted a higher rate of duty than if their capacity had been less than 100 cc. To evade this higher rate, the appellant made an arrangement with the supplier that in respect of each consignment two invoices would be issued, one showing the correct purchase price of $900, and one prices varying between $250 to $350. It was the latter that the appellant produced to Customs along with a declaration that the motorcycles were under 100 cc capacity. As a result, duty evaded amounted to some $44,000, while the Cooperative was enabled to undercut its competitors selling similar motorcycles by $100 each, yet still make a good profit.

The Chief Justice rightly described this conduct as seriously dishonest, not only cheating the revenue but also giving a very unfair advantage over honest competitors. Having regard to the totality of the offending, he considered this a proper case for imposition of the maximum penalty prescribed by s.134(10) of the Customs Act 1993, which is imprisonment for a term of two years and a fine equal to three times the value of the goods, which in the case of the particular count before him was $54,000.

In her submissions on sentence, counsel then representing the appellant had urged upon the Chief Justice several mitigating factors: the appellant had made no direct personal gain from the transactions; he was 43 years of age, married with three school age children, and had not been in trouble before. He had worked in cooperatives since leaving secondary school, the previous three years with the Fishermen's Cooperative, but of course had lost that job when the offending was discovered two years before the hearing. By that time, he was helping a friend run a small family business, and with his family was living with his wife's relatives in Bairiki. We would add the significant factor that he had pleaded guilty to the charges.

On the other hand, as the Chief Justice pointed out, there were no doubt indirect benefits to the appellant, arising from the increased profitability the Cooperative was able to achieve as a result of his fraud.

The Chief Justice did not have before him any further information as to the appellant's current financial circumstances. At our request Ms Huston made inquiries, and with Ms Kent's consent, informed us that the appellant's current income (he has recently been released on bail pending this appeal) is $36 a week, or $1872 a year, as compared with $150 a week, or $7800 a year, when he was with the Cooperative. He has no assets to speak of, and although there is a substantial credit in his Provident Fund account he cannot yet draw on it and it cannot be attached in any way to meet his fine. His oldest child is at secondary school with fees of $65 a term, and his other two children will be attending secondary school in due course.

It is therefore apparent that the appellant could not possibly have paid the fine within three months, or perhaps even within his lifetime. That means that he was effectively sentenced to three years' imprisonment, with the added element, we were told, that he could not be eligible for remission in respect of the third year.

As mentioned, the fine was imposed in accordance with s.134(10) of the Customs Act 1993. This subsection, which applies to these offences, states that "a fine not exceeding three times the value of any goods involved in the offence shall apply where that amount is higher than the amount referred to in subsection (8)".

Subsection (8) provides:

"In respect of each offence under this section any person convicted shall be liable to a fine not exceeding $5,000 or to imprisonment for a term not exceeding 24 months or to both such fine and imprisonment."

But regard must also be had to s.133(3) which states:

"Where by reason of the commission of an offence under this Act the payment of any customs duty has been evaded, any fine imposed by the court upon the conviction of any person for that offence shall be not less than treble the amount of duty payable unless the court for special reasons thinks fit to order otherwise."

Thus a fine mayor may not be imposed. If one is, it must be at least treble the amount of duty payable unless the Court for special reasons orders otherwise. Subject to that, it may be of an amount up to three times the value of the goods or $5000, whichever is the greater.

These provisions tend to indicate that a fine, whether coupled with imprisonment or not, is particularly appropriate when the offender has substantially profited from the offence. Conversely, where he has not, a fine may not be called for.

There will be cases where a fine is sufficient punishment on its own, and cases where both a fine and imprisonment are appropriate. It is a general principle that a fine should not be of an amount which it is beyond the capacity of the offender to pay, even by instalments over a reasonable period of time. And only in the exceptional case is it appropriate to impose such a fine in conjunction with a custodial sentence and an order for further imprisonment in default of payment of the fine; for that is tantamount to simply increasing the prison sentence. These principles are usefully set out in Thomas, Current Sentencing Practice.

It is this that has happened in the present case. The maximum prison term for this offence is two years. The appellant has no hope of paying anything while he is in prison. He has effectively been sentenced to three years' imprisonment.

In these circumstances, and with respect to the Chief Justice, we consider that the imposition of a fine was inappropriate.

As to the prison sentence, Ms Huston submitted that the Chief Justice had not made sufficient allowance for the mitigating factors already mentioned, and in particular for the appellant's guilty plea. She went so far as to suggest that a suspended sentence would be appropriate. We cannot accept that. This was serious offending, committed on 20 different occasions, resulting in a very substantial loss of customs revenue. There can be no doubt that a prison sentence was called for. But should it have been the maximum?

It is often said that a maximum sentence should be reserved for the worst cases. That is something of an overstatement. But certainly the offending must be very serious indeed to attract the maximum penalty. This was indeed very serious offending, but not in our view so serious as to warrant the maximum term of imprisonment; the more so when one considers the sentences imposed in some other cases to which we were referred. Two are Kiribati cases, and so are especially pertinent. In the first of these, Totene Anterea (1999, High Court 13/1998) the appellant, an examining officer with Kiribati Customs, failed to state duty amounting to $720 thereby committing a breach of trust on his employer and profiting by it. After a full trial he was convicted and sentenced to six months' imprisonment.

The second case was Johnny Mosi Kum Kee (1999) Criminal Appeal Case 1/1999. The appellant had had a recent prior conviction for fraudulent evasion of customs duty, but had not been sentenced to imprisonment. On this second occasion, he was found guilty after a defended hearing of two counts of fraudulently evading import duties in excess of $50,000, and two charges of bribery of a customs officer. He had profited substantially from his conduct.

On one of the evasion charges he was fined $68,105, to be paid forthwith, in default one year's imprisonment. On the other, he was fined $75,000, this sum also to be paid forthwith, in default another one year's imprisonment. (His means are not discussed in the judgment). On each of the bribery charges he was sentenced to one year's imprisonment. All four terms of imprisonment were to be served cumulatively, so that if the fines were not paid the effective sentence was one of four years. The sentences were upheld on appeal, the Court treating the bribery charges as distinct from the evasion charges.

That case was even more serious than the present, yet the sentence on the evasion charges was considerably less.

Counsel also referred us to several English cases in which relatively modest terms of imprisonment were imposed, but in the absence of information as to what was involved, they are of little assistance. In any event, circumstances vary from case to case, and although consistency of sentencing within a particular jurisdiction is desirable, it is often difficult to secure it.

Nonetheless, having regard to all the factors we have mentioned, we are satisfied that a sentence of two years' imprisonment was manifestly excessive for this man, in the circumstances of this case, particularly when credit is given, as it must be, for his guilty plea.

The result therefore is that the fine imposed in the High Court is quashed, and the prison term of two years is varied to one of 18 months.

Hardie Boys JA
Tompkins JA
Penlington JA