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Tropical Marketing Agency Pty Ltd v Attorney General [2023] SBHC 46; HCSI-CC 280 of 2022 (28 July 2023)

HIGH COURT OF SOLOMON ISLANDS


Case name:
Tropical Marketing Agency PTY Ltd v Attorney General


Citation:


Date of decision:
28 July 2023


Parties:
Tropical Marketing Agency Proprietary Limited, Douglas Wate and Myva Hoahania v Attorney General


Date of hearing:
On papers


Court file number(s):
280 of 2022


Jurisdiction:
Civil


Place of delivery:



Judge(s):
Lawry; PJ


On appeal from:


Order:
1. On the information placed before the Court the search warrant issued was in contravention of section 101 of the Criminal Procedure Code.
2. On the information placed before the Court the detention of the consignment was neither unlawful nor biased towards the Claimant in contravention of Section 212 and 213(e) of the Customs and Excise Act.


Representation:
Mr P Teddy and Mr M Hauirae for the First and Second Defendant
Mr H Lapo for the Defendant


Catchwords:



Words and phrases:


Legislation cited:


Cases cited:
Bintan Mining SI Ltd v Attorney General [2019] SBHC 23,

IN THE HIGH COURT OF SOLOMON ISLANDS
CIVIL JURISDICTION


Civil Case No. 280 of 2022


BETWEEN


TROPICAL MARKETING AGENCY PROPRIETARY LIMITED
First Claimant


AND:


DOUGLAS WATE AND MYVA HOAHANIA
(Director of the Tropical Marketing Agency PTY Limited and Partners)


AND:


ATTORNEY GENERAL
(Representing Customs Excise Division, Customs and Excise Immigration Department)


Date of Hearing: On the Papers
Date of Ruling: 28 July 2023


Mr P Teddy and M Hauirae for the First and Second Claimants
Mr H Lapo for the Defendant


Lawry; PJ

RULING

Introduction

  1. Jacquelyn Takubala is a customs officer. On 23 June 2022 she provided a sworn statement on Oath in support of a search warrant. The application for a search warrant was granted by a Principal Magistrate also on 23 June 2022. The Claimant has raised to issues for determination as follows:
    1. Whether or not the search warrant issued was in contravention of section 101 of the Criminal Procedure Code.
    2. Whether or not the detainment of the consignment was unlawful and biased towards the Claimant in contravention of Section 212 and 213(e) of the Customs and Excise Act.

Lawfulness of Search Warrant

  1. Section 101 of the Criminal Procedure Code provides:
  2. The application for the search warrant is in the form of a sworn statement. It reads follows:
    1. That the Applicant is a division under the Ministry of Finance and Treasury, a Solomon Islands Government Ministry.
    2. That I am the Senior Team Leader of Enforcement Section within Customs and Excise Division, and am responsible for investigations of customs matters or matters relating to Customs. I represent the Applicant in this matter.
    3. The Respondents business enterprise involves importations and marketing of computers, computers related items and other electronic accessories. It normally imports most of its supplies from CBD Systems Pty in Queensland, Australia.
    4. That I have been tasked to investigate a matter of False declaration contrary to section 212 of the Customs and Excise Act Cap 121, allegedly against the Tropical marketing Agency Ltd.
    5. That the Respondent, Tropical Marketing Agency Pty Ltd on 12 May 2022, made an importation from CBD Systems in Australia, and declared it to Customs as Importation Entry 1702 in Form C99. Hereto marked and annexed as CE1.
    6. Customs Audit has identifies that the importation Entry 1702 was entered on a false commercial invoice totaling to an amount of AUD $1,622.00, undervaluing the price of the goods being imported. Hereto marked and annexed as CE2
    7. On 17th May 2022, Customs Audit team visited the Respondent’s business premise at Ranadi area, and was able to extract the true invoice of the amount AUD $14, 904.22 of the Importation Entry 1702 and the purchase Order which was attached from an email sent by the supplier, CBD Systems in Australia. Hereto marked and annexed as: True Invoice-CE3, Purchase Order-CE4 and Copy of Email-CES)
    8. Comparison of the two invoices identified that the undervaluation of the imported goods was estimated to be 80% of the duty payable based on the true invoice of the goods. (Refer Annexed CE2 & CE3 highlighted are the discrepancies of the prices for the same items).
    9. On 18th May 2022 approximately in the afternoon, Customs officer of the Audit Team made a call to the Respondent to follow up on an email sent on the morning of that day regarding the requests for invoices and purchase order from 2021-2022. The Respondent unwillingly responded by stating they are busy and unable to attend to Customs requests for the said documents. To date the Respondent did not reply or provide us with the requested documents.
    10. That the above mention company is believed to be making false declarations to Customs by falsifying invoices for its importations and undervaluing the Customs value of the goods.
    11. It is calculated that approximately four million dollars in revenue may have been lost due to this false invoicing practice since 2021 to-date.
    12. The owner of the Respondent is aware of our interest and Customs is concerned that he may destroy any evidence to avoid penalty.
    13. For the purpose of this investigation, there are certain documents needed from the above premises to prove the nature of the offence as part of evidence. Documents needed are made mentioned in accompanying search warrant attached.
    14. According to the collective information and records gathered, there is evidence of false declaration of invoices contrary to section 212 of the Customs and Excise Act Cap 121 which carries a Penalty of SBD $10,000.00 for each entry.
    15. That I sincerely declare that all matters deposed to herein be true and correct to the best of my recollection, knowledge and belief.
    16. I acknowledge and understand this sworn statement is to be used in Court proceedings and that if I make a false statement in it, I may commit perjury and be liable to a substantial penalty.”
  3. This Application for a Search Warrant is referred to in this decision as ‘the Application’. There has been no evidence put before this Court as to what was proved on oath before the Principal Magistrate. Ordinarily if further information was to be put before the Magistrate, the deponent of the sworn statement would again be sworn before answering any questions from the Principal Magistrate. It must be recorded that none of the annexures attached to the Application were placed before the Court.
  4. The investigator has provided second document dated 23 June 2022 that is headed ‘Information to Ground Search Warrant’. That document records information apparently given on oath signed on 23 June 2022. It is not clear how it was on oath as the signature does not appear to be witnessed by anyone. The document records what is expected to found in the search. It identifies where those items are expected to be found. It identifies the company that was suspected of making false declarations. The allegation was that goods were imported but the value of the goods was declared at only 20 percent of their true value. There had been previous declarations by the company that appeared to have also undervalued goods imported but a comparison was required from documents believed to be at the premises of Tropical Marketing Agency Pty Ltd. That document is set out below and is referred to in this decision as ‘the Information’:
    1. Importations of computers, computer related goods and other goods from CBD Systems in Queensland, Australia.
    2. Importation of computer goods, PC’s and toners
    3. Unaccustomed goods in relation to false declaration
    4. Log book/Book record
    5. Soft copy Invoices/Personal Computers Copies of all importations of IT items from CBD Systems or other suppliers.
    6. TT (Telegraphic Transfers)
    7. Any other documents that might relate into the investigation of this matter.
    1. That I am a Customs Investigator currently working in the office of the customs and Excise Division, Investigation department at the head office in Honiara.
    2. That I have been tasked to investigate a matter of False declaration contrary to section 212 of the Customs and Excise Act Cap 121, allegedly against the Tropical Market Agency Ltd.
    3. That the complainant of this matter is the Solomon Islands Government (SIG) Customs and Excise Division.
    4. That Tropical Marketing Agency Pty Ltd is an importer who has falsely declared an invoice, entry 1702 to Customs on 12 May 2022.
    5. That a Customs Compliance Audit conducted on the 17 May 2022 identified that the above entry was created and lodged with Customs using a false invoice. The estimated undervaluation of the goods has been identified as 80%.
    6. That approximately 80 Customs entries have been lodged since 1 January 2020 and that the potential loss to revenue could be in excess of Four Million Dollars during this time.
    7. That the above mention company is believed to be making false declaration based on invoices prepared by the owner. This company came to notice of Customs as invoices submitted to Customs have very low values compared to other computer goods importers to the Solomon Islands. (Hereto marked and annexed as CE6 spreadsheet ‘Tropical Marketing Agency Pty Ltd prices vs others).
    8. For the purpose of this investigation, there are certain documents needed from the above premises to prove the nature of the offence as part of evidence. Documents needed are made mentioned in accompanying search warrant attached.
  5. The document is dated 23 June 2022 and is signed by an unnamed person but given the first line of the Information and the similarity of the signature to that shown as belonging to Jacquelyn Takubala, the Court accepts the Information was signed by her. At paragraph 7 in the Information reference is made to an annexure marked as CE6. That is the only annexure referred to in the Information so it is unclear why it is labelled as if it were the sixth annexure. Counsel has chosen to not include the annexure in the material placed before this Court.
  6. Based on the above information the Principal Magistrate granted a warrant to search three premises. The warrant reads as follows:
    1. Importations of computers, computer related goods and other goods from CBD Systems in Queensland, Australia.
    2. Importation of Computer goods, PC’s and toners
    3. Unaccustomed goods in relation to false declaration
    4. Log book/Book record
    5. Soft copy Invoices/Personal Computers Copies of all importations of IT items from CBD Systems or other suppliers.
    6. Internal Telegraphic Transfers Statements
    7. Any other Customs & Excise related documents that might relate into the investigation of this matter.
The document is dated 23 June 2022 and bears the stamp of the Central Magistrates’ Court and on its face has been signed by a Magistrate.
  1. The grounds for the challenge the issuing of the search warrant is set out in paragraph 13 of Counsel’s submissions. The first ground is that the warrant authorises the search of a company named Tropical Marketing Agency Limited rather that Tropical Marketing Agency Pty Limited.

The second ground was that there was nothing to provide a reasonable suspicion that an offence had been committed. The third ground put forward is not a challenge to the issuing of the warrant but a complaint about what happened to the goods that had been seized. This ground is not is not relevant to the first question before the Court that is whether the warrant was issued in contravention of section 101 of the Criminal Procedure Code. It deals with the second question asked.

  1. No issue has been raised concerning whether or not the Application or the Information was on oath. The Court therefore proceeds on the basis that both were sworn on oath.
  2. Both the Application and the Information provide evidence on which the investigator bases the belief that an offence had been committed or was being investigated. That was the evidence of the declaration was only 20% of the amount paid to the supplier. The investigation was clearly looking for supporting documentation and set out the nature of that documentation.
  3. What then are the requirements of section 101 of the Criminal Procedure Code? The proof must be on oath to a Magistrate or a justice of the peace. The material was on oath before a Principal Magistrate. Secondly there must be a suspicion, that is reasonable, that something either in respect of which an offence has been committed or which is necessary to the conduct into an offence. The material provided proof that what was sought was necessary to the conduct of an investigation, to determine the scope of the false declarations or to confirm from the identified source that the suspected offence had occurred. On the evidence provided the Magistrate was entitled to conclude that such a belief was reasonable, given the conflict between the duty declaration and the actual value of the items imported.
  4. The next issue is that the material is suspected to be in a building (in this case). The warrant then must authorise the person named in the warrant to search the building, vehicle, box receptacle or place (which shall be named or described in the warrant). In this case the buildings to be searched are identified as Home Finance Building, SST Building at Ranadi and Naha 3 Residential House.
  5. In the Information, there are three locations the investigator suspects that the “document and items” are placed. The first is Tropical Marketing Agency Pty Ltd at Point Cruz but there is nothing to identify where the offices of that company are at Point Cruz. The second is SST Building at Ranadi but there is nothing to shown in what way that building may have anything to do with Tropical Marketing Agency Pty Ltd. The third location is residence at Naha 3. It does not identify which residence now how any residence at Naha 3 may be connected to Tropical Marketing Agency Pty Ltd.
  6. The Application correctly referred to the importation by Tropical Marketing Agency Pty Ltd on 12 May 2022 and that it declared it to Customs as Importation Entry 1702 in form C99. The Application stated that it had recovered the true invoice amount on 17 May 2022 on a visit to the “Respondent’s business premises at Ranadi area. It may be that those premises were in the SST Building but there is nothing in the Application nor the Information asserting that to be the case. The warrant authorised the search of SST Building at Ranadi.
  7. It may be that the investigator provided that information on oath to the Principal Magistrate but the Defendant has not put any evidence of any further information given on oath to the Magistrate. Dealing with the locations in reverse order, there could be no valid search of the property at Naha 3. On its face the warrant authorises the search of all the houses at Naha 3. As set out above there is no identification of any house at Naha 3 that is connected to Tropical Marketing Agency Pty Ltd. Anything seized from a house at Naha 3 during would therefore have been obtained unlawfully.
  8. The remaining issues relate to the first two buildings mentioned in the search warrant. The application clearly identifies Tropical Marketing Agency Pty Limited as the business suspected to have committed the offence. It identifies the building to be searched as Tropical Marketing Agency Pty Ltd office at Point Cruz. It makes no mention of Home Finance Building. In the warrant the place to be search is identified as Tropical Marketing Agency Ltd head office Point Cruz Home Finance Building.
  9. There is no reference in the Application to the SST Building at Ranadi. However at paragraph 7 reference is made to Respondent’s business premise at Ranadi area. No building in Ranadi has been identified as where the Respondent’s business premises are located. The investigator does not provide any basis on which she suspects that the items may be at SST Building in Ranadi. In subsequent documents there is evidence from a director of the Respondent that the Respondent has business premises at Ranadi in the SST Building but there is no evidence to show that such information was before the Principal Magistrate. If the investigator provided further information on oath before the Principal Magistrate, the Defendant has elected to not put such evidence before this Court
  10. It follows that the warrant to search SST Building in Ranadi does not comply with section 101 of the Criminal Procedure Code as there was no evidence to base a suspicion that the items set out in the Information and in the Search Warrant may be found at that address.
  11. Counsel correctly notes that the business is Tropical Marketing Agency Pty Limited and not Tropical Marketing Agency Ltd. Counsel correctly records that in the warrant Tropical Marketing Agency Pty Limited is not mentioned. However in the warrant there are three references to Tropical Marketing Agency Ltd. In the information in the opening paragraph the investigator refers to Tropical Marketing Agency Ltd. Just below listing the seven items sought the reference is to Tropical Marketing Agency Pty Ltd. At paragraph 4 reference is made to Tropical Marketing Agency Pty Ltd.
  12. In the Application the Informant correctly identifies the Respondent as Tropical Marketing Agency Pty Ltd and in paragraph 5 used the expression.
  13. The Respondent, Tropical Marketing Agency Pty Ltd” yet in the line immediately before paragraph 5 used the name Tropical Marketing Agency Ltd.
  14. There is no evidence that there is such a company as Tropical Marketing Agency Ltd. When there is proposed to be such an intrusion into the privacy of a company it is important to be accurate and the Application, Information and Warrant all show a remarkable lack of care in recording the name of the company concerned. This cannot be a simple omission because it occurs in all three documents.
  15. The warrant authorised the search Tropical Marketing Agency Ltd head office Point Cruz. Home Finance Building. The Information does not refer to the Home Finance Building at all but uses the Respondent’s correct name and refers to its offices at Point Cruz. Why the Search Warrant, clearly prepared by the Informant, does not correctly name the Respondent has not been addressed by counsel for the Defendant. Nor has counsel addressed what the effect of such an omission may be.
  16. Counsel for the Claimant referred the Court to the decision of this Court in Bintan Mining SI Limited v Attorney General [2019] SBHC 23, where the search warrant authorised the search of a rival company named ‘Bintan Borneo’. The Court found that as the search warrant was addressed to the wrong party it was invalid. The effect of the decision is that even if the intention is clear the warrant to authorise the intrusion into private premises must be stated accurately. In this case it is inexplicable how the preparation of the Information and Warrant could have been so careless. The error could not have been corrected on oath before the Magistrate because if it had been corrected the Magistrate would have corrected the Warrant and certified the correction. Neither the Application nor the Information sets out where the head office of Tropical Marketing Agency Pty Ltd is located.
  17. Counsel for the Defendant has not addressed the effect of incorrectly identifying the name of the premises to be searched. The warrant does not authorise the search of Tropical Marketing Agency Pty Ltd. Had the Application or the Information addressed the relevance of the Home Finance Building, there may have been an argument that it was clear what was intended.
  18. There is a further issue that has not been addressed. The informant has sought to have permission to search three premises. Those persons searching would be required to produce the original search warrant. It has not been explained how that could be done at three separate premises. Nor has it been explained how the timing of the execution of the warrant would be recorded if three premises were to be searched. Counsel has not addressed the effect of having multiple addresses included in the single search warrant.
  19. This Court must make its decision on the material placed before it. As set out above the Defendant has not placed the complete sworn statement before this Court of either the Application or the Information, as the annexures were not included. The Defendant has not placed any evidence before this Court to show what may have been proved on oath before the Magistrate other than the incomplete Application, together with the incomplete Information.
  20. In the circumstances it is not necessary to determine whether a search for documents on the basis of a comparison with pricing of electronic equipment in other retail premises coupled with the assertion of a false declaration by the First Claimant in May 2022 would simply be a fishing exercise. It is clear that the answer to the first question is that the search warrant was issued in contravention of section 101 of the Criminal Procedure Code. Although counsel complains that the warrant did not outline the offences alleged to have been committed by the First Claimant, section 101 does not require such precision. What is required is an investigation into any offence and the Application and the Information sufficiently identify the nature of the offence suspected.
  21. The second question is straight forward. Section 101 of the Criminal Procedure Code concludes with the following:
  22. The Warrant was in the same terms. The penultimate paragraph provides:
  23. Counsel argues that because section 101 of the Criminal Procedure Act requires items seized during the execution of a search warrant should be taken before the Court that the detention of a consignment in May 2022 was unlawful.
  24. The question asked of the Court is whether the detention of the consignment was unlawful and biased towards the Claimant in contravention of section 212 and 213(e) of the Custom and Excise Act. Section 212 and 213(e) provide as follows:
  25. Both those sections are concerned with penalty provisions. Neither has a provision that would make the detention of the consignment in May 2022, unlawful. Neither section is concerned with bias. There has been nothing put before this Court to support the proposition that the detention of the consignment was either unlawful or biased. In fact if Customs had elected to charge the First Claimant and the First Claimant had been convicted under section 213(e) the First Defendant would be liable to fine three times the value of the consignment as well as having the consignment forfeited. To give effect to such a provision it is understandable why the consignment was retained. It is not apparent why the question was asked then not addressed by either counsel.

Orders

  1. On the information placed before the Court the search warrant issued was in contravention of section 101 of the Criminal Procedure Code.
  2. On the information placed before the Court the detention of the consignment was neither unlawful nor biased towards the Claimant in contravention of Section 212 and 213(e) of the Customs and Excise Act.

By the Court
Hon. Justice Howard Lawry
Puisne Judge

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