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National Court of Papua New Guinea |
PAPUA NEW GUINEA
IN THE NATIONAL COURT OF JUSTICE
CRA NO 33 0F 2004
JOHN WAROMI
Appellant
V
DAVID SODE,
COMMISSIONER GENERAL OF INTERNAL REVENUE
Respondent
Madang: Cannings J
2006: 14 November,
2007: 21 February
CUSTOMS – offences – Customs Act, Section 149 (smuggling); Section 150 (use of conveyance for smuggling) – mental element of offences – whether elements established beyond reasonable doubt.
CUSTOMS – prosecutions – acceptance of payment of duty – seizure of boat and motor used to convey dutiable items – whether Commissioner General estopped from prosecuting offences.
The appellant was convicted in the District Court of offences under the Customs Act relating to smuggling of goods into the country. He was fined and the boat and motor he used to bring the goods in were forfeited to the State. He appealed against his conviction on three grounds: (a) there was insufficient evidence to find him guilty of the offences; (b) the magistrate had misinterpreted Section 30 of the Customs Act; and (c) he should not have faced prosecution as he paid duty on the goods soon after bringing them into the country, and some months after that his boat and motor were seized and then he was charged with the offences, thus it was a malicious prosecution.
Held:
(1) There was sufficient evidence before the District Court to conclude that the appellant intended to defraud the revenue and was involved in smuggling.
(2) The District Court correctly interpreted and applied Section 30 of the Customs Act, which obliged the owner or master of a shop to deliver an inward manifest within one day after arrival.
(3) If duty has been paid the Commissioner of Internal Revenue is not prevented from prosecuting a person for breaches of the Customs Act. There was no malicious prosecution.
(4) None of the grounds of appeal was upheld so the appeal was dismissed.
(5) However, the National Court's power to substitute orders for those of the District Court does not depend on an appeal being allowed or a cross-appeal being instituted.
(6) In the circumstances, the appellant had been treated harshly in the sense referred to in Section 41 of the Constitution; and this was an appropriate case in which to make substitute orders under Section 155(4) of the Constitution to do justice. Thus the fine of K1,000.00 on each conviction was reduced to K100.00 each.
Cases cited
No cases are cited in the judgment.
APPEAL
This was an appeal from a decision of the District Court convicting the appellant of offences under the Customs Act.
Counsel
J Apo, for the appellant
M Koimo, for the respondent
21st February, 2007
1. CANNINGS J: This is an appeal against a decision of the District Court at Wewak, constituted by Mr D Susame, convicting the appellant of two offences
under the Customs Act (Chapter 101).
2. The appellant, John Waromi, is a resident of Wewak, East Sepik Province. On 21 July 2003 he went in his 23-foot banana boat, powered by a 40-horsepower outboard motor, to Jayapura, West Papua, Indonesia. He returned on 25 July 2003 and brought with him a number of goods he purchased in Jayapura, which were subject to customs duty under the Customs Act:
3. On arrival in Wewak he failed to declare the goods to Customs officials. Soon afterwards they found out about it and with police assistance, on 29 July 2003, raided his premises and confiscated the goods. On 7 August 2003 the appellant paid customs duty of K1,858.00 and the goods were released back into his custody. Almost eight months later, on 3 April 2004, the respondent, the Commissioner General of Internal Revenue, laid informations before the Wewak District Court, charging the appellant with two offences, under Sections 149(1)(a) and 150(1)(b) of the Customs Act. The first charge was that the appellant had "smuggled" the goods into PNG. The second was that he was the master of a boat who used it in smuggling. On 28 May 2004 the Collector of Customs issued a notice of seizure under Section 126 of the Customs Act and seized the banana boat and outboard motor. On 19 and 20 July 2004 the trial was held. On 13 September 2004 Mr Susame delivered verdict, convicting the appellant of both charges. On 17 September a sentencing hearing was held. On 20 September 2004 the sentence was pronounced:
THE LAW
4. The provisions of the Customs Act at the centre of this case have recently been amended. They are:
5. The events resulting in the appellant being charged and convicted were in July 2003, so it is the law as it existed then that must be referred to when determining this appeal. At that time, the relevant provisions of the Customs Act were in the following terms.
6. Section 1(1) (interpretation) stated:
In this Act, unless the contrary intention appears—
"smuggling" means any importation, introduction or exportation, or attempted importation, introduction or exportation of goods with intent to defraud the revenue.
7. Section 30 (report of cargo) stated:
If the master, owner or pilot of a ship or aircraft arriving from a place outside the country fails—
(a) to report, within one day after the arrival at a port or airport, the ship or aircraft and her cargo by delivering to the Collector an inward manifest, in duplicate, of goods for the port or airport; or
(b) to answer questions relating to the ship or aircraft and her cargo, crew, passengers, stores and voyage; or
(c) to produce documents relating to the ship or aircraft and her cargo,
is guilty of an offence.
Penalty: Subject to Sections 163, 164 and 165, a fine not exceeding K3,000.00.
8. Section 125 (seizure of goods) stated:
(1) An officer or member of the Police Force may seize—
(a) any forfeited ship, aircraft or goods on land or water; or
(b) any ship, aircraft or goods that he has reasonable cause to believe are forfeit.
(2) All seized goods shall be taken to the nearest Government warehouse or to such other place of security as the Collector directs.
9. Section 126 (notice of seizure) stated:
(1) Where any ship, boat, aircraft or goods have been seized as forfeited, the seizing officer shall give written notice of the seizure and of the cause of it to the master, pilot or owner of the ship, boat, aircraft or goods (unless the master, pilot or owner is present at the seizure, in which case no notice is necessary), by delivering the notice to him—
(a) personally; or
(b) by letter addressed to him and transmitted by post to or delivered at his last-known place of abode or business.
(2) The ship, boat, aircraft or goods seized—
(a) shall be deemed to be condemned; and
(b) may be sold by the Collector, unless the person from whom it or they were seized, or the owner, gives, within one month after the date of the seizure, written notice to the Collector at the nearest port that he claims it or them.
(3) If any goods seized are of a perishable nature or are live animals, they may be sold by the Collector without delay.
10. Section 149 (smuggling and unlawful importing and exporting) stated:
(1) A person who—
(a) smuggles any goods; or
(b) imports any prohibited imports; or
(c) exports any prohibited exports; or
(d) unlawfully conveys or has in his possession any smuggled goods, prohibited imports or prohibited exports,
is guilty of an offence.
Penalty: If the offence is committed in relation to goods other than narcotic drugs—subject to Sections 163, 164 and 165, a fine not exceeding K5,000.00. If the offence is committed in relation to goods that are narcotic drugs—as provided by Section 160.
(2) For the purposes of Subsection (1)(d), a person who conveys or has in his possession—
(a) any smuggled goods or prohibited imports without reasonable excuse (proof of which is on him); or
(b) any prohibited exports with intent to export them, or knowing that they are intended to be unlawfully exported,
shall be deemed to convey them, or to have them in his possession, as the case may be, unlawfully.
(3) Merchandise on board a ship or aircraft calling at any port or airport in the country but intended for, and consigned to, a port, airport or place outside the country shall not be deemed to be unlawfully imported into the country if the goods—
(a) are specified on the ship's or aircraft's manifest; and
(b) are not transhipped or landed in the country, or are transhipped or landed by authority.
11. Section 150 (use of ship, etc, for smuggling) stated:
The master of a ship or boat, or the pilot of an aircraft who uses it or knowingly permits it to be used—
(a) in smuggling; or
(b) in the importation, exportation or conveyance of any goods in contravention of this Act,
is guilty of an offence.
Penalty: If the offence is committed in relation to goods other than narcotic drugs—subject to Sections 163, 164 and 165, a fine not exceeding K5,000.00. If the offence is committed in relation to goods that are narcotic drugs—as provided by Section 160.
DISTRICT COURT PROCEEDINGS
12. Two witnesses gave evidence for the prosecution: Jeffery Tambutai, a customs enforcement officer, and Gune Yonge, supervisor of imports and exports. Mr Tambutai was the officer who, acting on information received, went with the police to the appellant's premises on 29 July 2003 and confiscated the goods. He later interviewed the appellant. The appellant gave sworn evidence and was the only defence witness.
13. His Worship delivered an eight-page judgment on verdict, dealing first with a number of jurisdictional issues, one of which forms a ground of appeal in the current proceedings. The appellant's counsel, Mr Apo, argued that by accepting payment of duty on the goods and later seizing them the respondent waived his right to prosecute the appellant for offences under the Act. Put another way, the argument was that the respondent by virtue of the IRC's handling of the case was estopped from prosecuting the appellant.
14. His Worship rejected the argument on the ground that the IRC had two separate and distinct functions under the Customs Act: revenue collection and enforcement. Exercise of powers for the purposes of one of the functions did not prevent or stop the IRC from exercising powers for the purposes of the other function. His Worship made findings of fact that the appellant had gone on 21 July 2003 to Jayapura, the purpose being to bring back personnel to teach shark-catching methods to fishermen in the Ward 6 area. He did not go through immigration or customs procedures at Vanimo or Wutung on either the outward or return journey. He did not declare the goods on his arrival at Wewak.
15. His Worship examined the definition of "smuggling" in Section 1 of the Act. He observed that the appellant's failure to go through immigration and customs procedures on both legs of his journey obviously created a lot of suspicion. He had no good reason to avoid those procedures, as they are requirements of the law. He had made the journey before and should have been aware of the legal requirements. The reasons he gave for not meeting the legal requirements were not persuasive. In particular, the claim he made when he was interviewed by Customs officials – that he was sick with diarrhoea – was not supported by the evidence. There was no evidence he made any real effort to report to Customs. He was obliged by Section 30 of the Act, being the owner of a ship, to report to Customs within one day after arrival in port, but failed to do so. The inference to be drawn from the evidence is that the appellant intended to defraud the State of its revenue. Therefore he smuggled goods into the country and was found guilty of both counts.
16. On the sentence, his Worship noted that it was the appellant's first offence, he earns his living through fishing, and he has a wife and two children and other dependants to care for.
APPEAL TO NATIONAL COURT
17. Six grounds are set out in the notice of appeal but one was abandoned and the remaining ones overlap. They boil down to three. It was argued that the learned Magistrate erred in law in three respects:
THE ISSUES
18. They flow from the three grounds of appeal. I will list them in this way:
APPELLANT'S SUBMISSIONS
19. First, Mr Apo argued that there was no direct evidence that the appellant intended to smuggle goods into PNG on his boat. The main prosecution witness was Jeffery Tambutai but he gave no direct evidence of why, when and how any goods were brought into the country. The evidence of Gunu Yonge was of little or no value as she just explained what her duties were as supervisor of imports and exports and how duty is calculated. She gave no evidence of why, when and how the appellant smuggled any goods. Mr Apo submitted that the conviction was improperly based on the appellant's own evidence. The appellant gave details of his trip to and from Jayapura and explained why he did not clear customs on the return journey. His evidence was that he intended to clear customs at Wewak but at the time he arrived – 6.30 pm on a Friday – nobody was at the customs office and he felt sick so he went straight to the house. He was still sick when his house was raided a few days later. The prosecution bore the onus of proof beyond reasonable doubt but the evidence was insufficient for the District Court to be satisfied that that onus was discharged.
20. Secondly, Mr Apo submitted that Section 30 was irrelevant as it only applies to established shipping agents and freight agencies. It does not oblige the owner of a banana boat to deliver an inward manifest to anyone. The magistrate erred by saying that the appellant breached Section 30 by not delivering a manifest to Customs within a day after his arrival from Jayapura.
21. Thirdly on the question of whether the respondent should have been allowed to launch the prosecution Mr Apo argued that it was a malicious prosecution as duty was, in fact, paid on the goods shortly after the date of arrival. The respondent waited many months after payment of duty to commence the prosecution; and then slapped a seizure notice on the boat and motor. The Customs Act has two main objects: revenue raising and law enforcement. The respondent should not be allowed to have it both ways. The respondent elected to raise revenue in this case by collecting duty from the appellant. Then, having collected the duty, he decided to prosecute. He cannot have it both ways, Mr Apo argued. Recent amendments to the Act, with the inclusion of new Sections 147A to 147H, show that this is how the Act is required to be interpreted and applied.
RESPONDENT'S SUBMISSIONS
22. Mr Koimo began by submitting that whatever happened with the grounds of appeal the appellant could not get his boat and motor back as under Section 126 of the Act they were condemned and could be sold by the respondent. The appellant had one month after the date of seizure to lay claim to them. He failed to do that. It is too late now and the court would be exceeding its appellate jurisdiction if it were to order their return to the appellant.
23. As to the first ground of appeal Mr Koimo argued that the inference to be drawn from all the evidence is that the appellant knew of the legal requirements to declare imported goods and pay duty on them but intentionally avoided the requirements. The fact that no Customs officer saw him arrive and nobody could give direct or eyewitness evidence of that event is irrelevant. The court was entitled to draw inferences about the appellant's intention from all the evidence, including his own evidence. The District Court properly rejected the defence that the appellant intended to declare the goods to Customs but failed to do so because he was sick.
24. On the second ground of appeal Mr Koimo argued that Section 30 applied to the facts of this case as it imposed a duty on the owner of a "ship", and that includes a banana boat.
25. As to the final ground of appeal Mr Koimo submitted that the Customs Act did not require the respondent to elect to either collect duty or prosecute. The respondent was entitled to do both. The respondent's officers did not by their words or action indicate to the appellant that if he paid duty he would not be prosecuted. No estoppel arose. Mr Apo was correct in saying that the Customs Act has two main objects, revenue raising and law enforcement. However, he was incorrect to assert that both objects cannot be pursued at the same time.
FIRST ISSUE: WAS THERE INSUFFICIENT EVIDENCE TO FIND THE APPELLANT GUILTY OF ANY OFFENCE?
26. No. The key element is to smuggle and to smuggle a person has to have intent to defraud the revenue. Put another way there must be an intention to evade duty. I agree with Mr Koimo that the fact there was no direct, eyewitness evidence is irrelevant. There was sufficient evidence before the District Court to conclude that the appellant intended to defraud the revenue and was involved in smuggling.
SECOND ISSUE: WAS AN ERROR MADE IN INTERPRETATION OF SECTION 30 OF THE CUSTOMS ACT?
27. No. The District Court correctly interpreted and applied Section 30 of the Customs Act, which obliged the owner or master of a shop to deliver an inward manifest within one day after arrival.
THIRD ISSUE: WAS THE RESPONDENT PREVENTED FROM PROSECUTING THE APPELLANT, AS DUTY HAD BEEN PAID?
28. No. If duty has been paid the Commissioner of Internal Revenue is nonetheless not prevented from prosecuting a person for breaches of the Customs Act. There was no malicious prosecution.
FOURTH ISSUE: SHOULD THE APPEAL BE ALLOWED?
29. No. None of the three main grounds of appeal has been sustained.
FIFTH ISSUE: IF THE APPEAL IS DISMISSED, CAN THE NATIONAL COURT CHANGE THE DISTRICT COURT'S ORDERS?
30. Yes. Section 230(1) (power of National Court on appeal) of the District Courts Act states:
On the hearing of an appeal, the National Court shall inquire into the matter, and may—
(a) adjourn the hearing from time to time; and
(b) mitigate or increase a penalty or fine; and
(c) affirm, quash or vary the conviction, order or adjudication appealed from, or substitute or make a conviction, order or adjudication which ought, on the evidence before the National Court, to have been made by a District Court; and
(d) remit the case for hearing or for further hearing before the Court which made the conviction, order or adjudication or any other competent court; and
(e) exercise a power that the Court that made the conviction, order or adjudication might have exercised; and
(f) make such further or other order as to costs or otherwise as the case requires. [Emphasis added.]
31. The National Court's power to substitute orders for those of the District Court does not depend on an appeal being allowed or a cross-appeal being instituted.
SIXTH ISSUE: SHOULD THE DISTRICT COURT'S ORDERS BE CHANGED?
32. Yes. I think in all the circumstances the appellant has been dealt with harshly, bearing in mind that:
33. None of the action taken against the appellant has been unlawful. None of it considered alone has been wrong in law. But the combined effect of what has happened is that the appellant has been treated harshly – in the sense referred to in Section 41 of the Constitution. I also have power under Section 155(4) of the Constitution to make an order as is necessary to do justice. I have therefore decided that I will reduce the fine imposed on the appellant from K1,000.00 for each offence to K100.00 each.
COSTS
34. The parties will bear their own costs.
ORDER
35. I will direct entry of judgment in the following terms:
Appeal against conviction dismissed; substituted sentence imposed..
_________________________________________
Apo & Co Lawyers: Lawyers for the appellant
Michael Koimo: Lawyer for the respondent
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