cue cae AlZ 88.. CATCHWORODS ADMINISTRATIVE LAW —- judicial review - seizure of documents - Customs Act - validity of notice - principle governing stay - serious question to be tried. CUSTOMS ~ Notice to Produce Documents — information on oath in writing - allegation that goods unlawfully imported, entered or undervalued ~ disjunctive allegation - arguably insufficient. Customs Act 1901 s.214 Administrative Decisions (Judicial Review) Act 1977 s.15 Federal Court of Australia Act 1976 Pearce v Button (1985) 60 ALR 537 Snow v Deputy Commissioner of Taxation (1986) 70 ALR 672 Perkins v Cuthi 9 ALR KELLOGG OVERSEAS CORPORATION, JGC CORPORATION & KAISER ENGINEERS (AUSTRALIA) PTY LTD T/AS KIR v JOHN D LAMBERT, COLLECTOR OF CUSTOMS FOR WESTERN AUSTRALIA, DENIS JOHN LEWIS and COMPTROLLER GENERAL OF CUSTOMS No. WAG ° 8 FRENCH J. PERTH 22 JULY 1988 IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION BETWEEN: JUDGE MAKING ORDER: DATE OF ORDER: WHERE MADE: THE COURT ORDERS THAT: 1. The respondents perusing, documents seized from the PERTH copying No. WAG 107 of 1988 KELLOGG OVERSEAS CORPORATION, JGC CORPORATION & KAISER ENGINEERS (AUSTRALIA) PTY LTD T/AS KJR Applicants and JOHN D LAMBERT, COLLECTOR OF CUSTOMS FOR WESTERN AUSTRALIA First Respondent and DENIS JOHN LEWIS Second Respondent and COMPTROLLER GENERAL OF CUSTOMS Third Respondent MINUTE OF ORDER FRENCH J. 22 JULY 1988 until further order refrain or otherwise dealing with offices of the applicants from the on 20 July 1988 pursuant to the notice dated 13 July 1988 under the hand of the first respondent except in accordance with this order. The respondents do as soon as practicable seal up the documents so seized and any copies or extracts therefrom. There will be liberty to either party to apply on short notice to vary or discharge this order. Costs of the day reserved. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION ~e we Sw No. WAG 107 of 1988 BETWEEN: KELLOGG OVERSEAS CORPORATION, JGC CORPORATION & KAISER ENGINEERS (AUSTRALIA) PTY LTD T/AS KJR Applicants and JOHN D LAMBERT, COLLECTOR OF CUSTOMS FOR WESTERN AUSTRALIA First Respondent and DENIS JOHN LEWIS Second Respondent and COMPTROLLER GENERAL OF CUSTOMS Third Respondent CORAM: FRENCH J. 22 JULY 1988 EX TEMPORE REASONS FOR JUDGMENT ON APPLICATION FOR INTERLOCUTORY INJUNCTION On Wednesday, 20 July 1988 officers of the Australian Customs Service seized a large quantity of documents from the offices of the applicants at 140 St. George's Terrace, Perth. The documents were taken under the authority of a notice to produce documents and a warrant said to have been issued by the Collector of Customs on 13 July. The applicants have today filed an application for an order of review of the following decisions:-— 1. The decision of the first respondent to issue a customs warrant under s.214(2) of the Customs Act 1901. 2. The conduct of the second respondent in taking possession of, removing and impounding books and documents purportedly in pursuance thereof. 3. The decision of the first respondent to issue a notice under s.214(1) of the Customs Act; and 4. The decision of the second respondent to serve the notice and the warrant. The applicants have come to the court on an urgent ex parte claim for interlocutory relief in the form of an order:- "that the respondents do forthwith: (a) desist from dealing with the Documents save in accordance with this order (b) seal up and deliver the Documents to the Registrar of this Court." Counsel for the applicant sought to justify proceeding ex parte by the suggestion that in the absence of an order the respondent would use the weekend to maximise the amount of information and the copies that could be extracted and produced from the' seized documents and that such information and evidence might be available for use in subsequent prosecution proceedings notwithstanding that it was unlawfully obtained. I was not persuaded that the circumstances justified the claim being heard ex parte and directed that contact be made with the respondents. Within the space of half an hour' counsel appeared for the respondents, instructed by the Australian Government Solicitor and opposed the order sought. The factual background to the _ present application appears from the affidavit of Alan Victor Riley, who is the legal officer for the applicants. Mr Riley says in his affidavit that since about March this year, the applicants have made available to the Australian Customs Service voluntarily, access to their books and documents at their offices at 140 St. George's Terrace, Perth, for the purpose of conducting an audit with regard to the importation of goods for the North West Shelf project. on Wednesday, 20 July, he said he was called to the applicants' boardroom where he met Denis John Lewis who introduced himself as a Senior Investigation Officer with the Australian Customs Service and also introduced him to two other customs officers. Riley was then informed that Lewis had produced to the managing director of Kaiser Engineers a notice to produce documents, which notice was exhibited to his affidavit. Some discussion ensued between himself and Lewis. Subsequently the first respondent, with assistance from others, proceeded to seize and remove from the premises a large quantity of documents occupying approximately 80 boxes. These documents evidently refer to various transactions mentioned in a list entitled up "KJR Under Valuation", which had been produced and given to other representatives of the applicant companies present in the boardroom prior to Riley's arrival. A copy of that document is exhibited to his affidavit. It lists a number of purchases of equipment and the alleged under~-valuation of each of the items of equipment together with a column setting out what is said to be duty short paid. There are a considerable number of those transactions relating to importation of goods from France, Italy, Japan, the United States, the United Kingdom and the Netherlands. The documents are presently believed to be held by the respondents, who are presumably in the process of examining and taking copies or extracts from them in accordance with the powers conferred by s.214 of the Customs Act. The notice to produce documents which was relied upon by the respondents as grounding their power to seize the documents in question, exhibited to Mr Riley's affidavit, was addressed to the applicants and began with the following recital:- "Whereas information in writing has been given on oath that certain goods to wit 6 Capstans F68.11V complete with Footswitch and Junction Box; imported at the port of Fremantle on or about 13 January, 1988 per the vessel "DELORIS" and entered per Customs Entry No. 5F.8007.0213P and invoiced as 6 Capstans F68.11V complete with Footswitch and Junction Box have been unlawfully imported, entered or undervalued." The recital was followed by a demand by the Collector of Customs that the applicants produce and hand over to Denis John Lewis, a duly authorised officer of customs, "to receive the same, all books and documents relating to such goods and relating to all other goods imported by you at any time within the period of five years immediately preceding this request". The document further requires the applicants to produce for the inspection of the said Denis John Lewis, and to allow him to make copies of or extracts from, all books or documents of any kind whatsoever wherein any entry or memorandum appears in any way relating to any such goods. The notice is issued under the hand of the Collector of Customs pursuant to the provisions of s.214 of the Customs Act 1901 which in the relevant parts in sub-s.(1) provides:- "Whenever information in writing has been given on oath to the Collector that goods have been unlawfully imported exported undervalued or entered or illegally dealt with... the owner shall immediately upon being required so to do by the Collector produce and hand over to him all books and documents relating to the goods. so imported exported entered seized or detained undervalued or illegally dealt with, and of all other goods imported or exported by him at any time within the period of 5 years immediately preceding such request seizure or detention, and shall also produce for the inspection of the Collector or such other officer as he may authorize for that purpose and allow such Collector or officer to make copies of or extracts from all books or documents of any kind whatsoever wherein any entry or memorandum appears in any way relating to any such goods." The short point on the law made by the applicant is that the description of the content of the information in writing referred to in the notice to produce, indicates that it asserts that the goods in question, that is the six capstans, have been unlawfully imported, entered or undervalued, that is to say, it makes disjunctive allegations and does not assert positively that one or the other or all the alleged offences or contraventions have been committed. Although the disjuntive use of "or" appears in s.214 it is contended that the intention and proper construction of the section requires a commitment by the person swearing out the information to one or more of the unlawful acts there set out. That is to say, this complaint could not have been made of the notice and its backing information if the word "and" had appeared before "undervalued" instead of the word "or". In support of the general submissions reference was made to the judgment of Pincus J. in Pearce v Button (1985) 60 ALR 537 at 545 where, referring to s.214, his Honour said:- "I think Mr Joyner was acting under the misapprehension that he was entitled to swear out an information if he merely had reasonable cause to believe the matters mentioned. That is not what the section says. The informant must commit himself to swearing that goods have been unlawfully imported, or whatever the allegation is. The difference is not, at least in this case, merely a matter of the mode of expression. I think Mr Joyner would not have been able to swear that any goods had been unlawfully imported by the applicants, as a matter of positive allegation, For this reason, the information was void; that is, it was necessary that the Collector be given information on oath by a person able to swear simply that goods had been unlawfully imported, entered or illegally dealt with: Mr Joyner was not such a person, nor did he swear to precisely what s.214 requires." And his appeal in Honour's view appears not to have been disapproved on that case which is reported at 65 ALR 83 and was expressly approved in the judgment of Spender J. at 99 where his Honour said:-— "The learned primary judge held that the information sworn by Mr Joyner was void because it did not state that the cars had been unlawfully imported, as required by s.214. The respondents filed a notice of contention under 0.52, r.22(3) challenging this finding. I agree with the conclusion of the learned trial judge for the reasons he gave and, in addition, in my opinion the information did not identify the goods and so did not entitle the Collector of Customs, acting under s.214, to deduce that the goods referred to in the information referred to, or included, goods imported by Mister Cars, Gold Coast." The claim for interlocutory relief appears to be made under s.15 of the Administrative Decisions (Judicial Review) Act 1977 which provides:- "(1) The making of an application to the Court under section 5 in relation to a decision does not affect the operation of the decision or prevent the taking of action to implement the decision but - (a) the Court or a Judge may, by order, on such conditions if any as it or he thinks fit, suspend the operation of the decision; and (b) the Court or a Judge may order, on such conditions (if any) as it or he thinks fit, a stay of all Or any proceedings under the decision. (2) The Court or a Judge may make an order under sub-section (1) of its or his own motion or on_ the application of the person who made the application under section 5." There is also, of course, the power of the Court under s.23 of the Federal Court of Australia Act 1976, which is not excluded by the special power under s.15. I have previously had occasion to consider the principles governing the discretion conferred by s.15 in Snow v Deputy Commissioner of Taxation (1986) 70 ALR 672. As indicated there, the test which I think is to be preferred is that enunciated by Keely J. in Perkins v Cuthill (1981) 34 ALR 669, that while s.15(1)(a) requires an applicant to satisfy the court that reasons or circumstances exist which make it just that the court should make the orders sought, it 1s not necessary to show that those reasons are special or exceptional. It may be that in some cases the test satisfying that criterion will be that traditionally applied to the grant of interlocutory relief, namely, the demonstration of a serious question to be tried and a balance of convenience favouring the applicants. In this case, on the face of the notice to produce documents, it is at least arguable that the backing information has not made that commitment to the allegation of a particular offence or offences which is required by s.214 as a condition of the power to require the handing over of books and documents to the Collector of Customs or his authorised officer. I do not, at this stage, comment on the probability that that argument will ultimately succeed. There has been too little opportunity for either party to make properly considered submissions on _ the question. All I say for the moment is that the argument is at least open andin that sense raises a serious question to be tried. As to the balance of convenience, the applicant contends that continued inspection, perusal and copying of the documents, on the part of the officers of the Australian Customs Service, will give them access to information which it may turn out has been unlawfully obtained but which may on established rules nevertheless be admissible in subsequent prosecution proceedings. On the other hand the respondents have not been able to indicate at this stage that they have planned any intensive programme of inspection of the documents over the weekend. In the circumstances, the appropriate course of action is to maintain the position at least for the next 48 hours or so that the respondents take no further action in relation to the documents. That is to say, they will not be permitted to peruse or take extracts or copies from the documents until further order of this Court and I anticipate that an application for variation or discharge of this order will be brought urgently, or at least on short notice early next week. The second limb of the relief that the applicant seeks I think is at this stage simply impracticable. It is unreasonable, in my opinion, to require the respondents to seal up the documents and deliver them to the Registrar over the weekend or indeed to deliver them as was the alternative suggestion, to the solicitors for the respondents. If I make the order that is proposed some degree of trust will have to be placed in the respondents and their officers that they will comply with that order until the court has had an opportunity to hear further argument on the matter on Monday if that is suitable to all parties. The order then that I would propose to make would be in the following terms:- 1. The respondents do until further order refrain from perusing, copying or otherwise dealing with the documents seized from the offices of the applicants on 20 July 1988 pursuant to the notice dated 13 July 1988 under the hand of the first respondent except in accordance with this order. 2. The respondents do as soon as-' practicable seal up the documents so seized and any copies or extracts therefrom. " 3. There will be liberty to either party to apply on short notice to vary or discharge this order. 4. Costs of the day reserved. I certify that this and the preceding nine (9) pages are a true copy of the Ex tempore Reasons for Judgment of his Honour Justice French. Associate: Debrecaly Wet Date: 2 SS \A&& Counsel for the Applicant: Mr P. Foss Solicitors for the Applicant: Mallesons Stephen Jaques Counsel for the Respondent: Mr P. MacLiver Solicitors for the Respondent: The Australian Government Solicitor Date of Hearing: 22 July 1988 Date of Judgment: 22 July 1988