PEARSON and ANOR v THE DISTRICT COURT OF NEW SOUTH WALES and ANOR SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MEAGHER, SHELLER and POWELL JJA 3 May 1996, 12 July 1996 [1996] NSWCA 423 Procedural fairness — Jurisdictional error — Refusal to state a case to the Court of Criminal Appeal on question of fact FACTS: On 11th September 1991, Neil Pearson and Neil Pearson and Co Pty Ltd (the Pearsons) were convicted of offences brought against them under the provisions of the Customs Act, 1991. The Pearsons then appealed to the District Court pursuant to s122 of the Justices Act, 1902. That appeal was heard by his Honour Judge Hosking between August, 1993 and March 1994. On 18th March, 1994, Hosking DCJ held that a prima facie case existed against the appellant. By consent, the matter was stood over until June, 1994 for further submissions on whether the offences were proved beyond reasonable doubt. In June, however, the Pearsons asked that a case be stated to the Court of Criminal Appeal on various matters. Hosking DCJ acceded to that request. Following this first reference to the Court of Criminal Appeal, the matter resumed before Hosking DCJ in February, 1996. On that day, his Honour indicated that he was mindful to find all charges against the Pearsons proved beyond reasonable doubt. The Pearsons then sought to re-open their case and call further evidence. The Pearsons also sought to have another case stated to the Court of Criminal Appeal on five questions dealing, primarily, with questions of fact. His Honour declined to either re-open the case or to state a further case to the Court of Criminal Appeal. The Pearsons now seek prerogative relief, by way of summons, against both of these decisions. The Chief Executive Officer of Customs seeks, by way of Notice of Motion, to strike out the affidavits in support of the Pearsons' summons. HELD: By Meagher, Sheller, Powell JJA (agreeing): (1) The power of a District Court judge to re-open a case is discretionary. In this case, there was no reason for his Honour to grant leave to re-open the case. As such, such a decision was not a denial of procedural fairness, jurisdictional error or error on the face of the record. (2) The function of the Court of Criminal Appeal is to determine questions of law. There is no denial of procedural fairness, jurisdictional error or error on the face of the record where a District Court Judge declines to state a question to that Court on a question of fact. ORDERS: ON THE NOTICE OF MOTION: 1. That the affidavit of Reginald John Benson, sworn on 25 March, 1996, and filed in these proceedings, be removed from the file. 2. That the affidavit of Ray William Henry Katte, sworn on 22 March, 1996 and filed in these proceedings, be removed from the file. 3. That the affidavit of David Melville Clark, sworn on 21 March, 1996, and filed in these proceedings, be removed from the file. 4. That the affidavit of Neil Harold Pearson, sworn on 19 March, 1996, and filed in these proceedings, be removed from the file. 5. That the affidavit of Audrey Pearson sworn on 19 March, 1996, and filed in these proceedings, be removed from the file. 6. That the affidavit of Anthony Douglas Weaver, sworn on 26 March, 1996, and filed in these proceedings, be removed from the file. 2 UNREPORTED JUDGMENTS 7. That para6 of the affidavit of Malcolm Edgar, sworn on 9th February, 1996 be struck out 8. Order that Pearson and Neil Pearson and Co Pty Ltd pay the costs of the Chief Executive Officer of Customs. ON THE SUMMONS: 1. Summons dismissed with costs. Meagher JA The Court has before it two proceedings: (a) a summons, supported by voluminous affidavits, by one Neil Harold Pearson and Neil Pearson and Co Pty Ltd, seeking prerogative relief against decisions made by Hosking DCJ in a prosecution brought against them by the Chief Executive Officer of Customs (formerly the Comptroller-General of Customs), and (b) a notice of motion by the Chief Executive Officer of Customs to strike out those affidavits. Since each party is a claimant in one proceeding and an opponent in another, I shall refer to them as "the Pearsons" and "Chief Executive Officer of Customs". The orders made by Hosking DCJ were made on 2 February 1996. They were, insofar as is relevant, an order refusing leave to the Pearsons to re-open their case, and an order refusing to state and sign a case to the Court of Criminal Appeal. The grounds (or "particulars") of the Pearsons' summons read as follows: "1. Denial of natural justice and procedural fairness, amounting to jurisdictional error. "2. Failure to follow and apply the decision of the Court of Criminal Appeal delivered on 1 December 1995. "3. Failure to State and sign a case to the Court of Criminal Appeal when reported to do so pursuant to s5B of the Criminal Appeal Act, 1912. "4. Perceived bias." Grounds numbered 2 and 4 were abandoned fairly early. In order to understand the remaining grounds, it is necessary to recount some of the history of this prolonged litigation. The Pearsons imported into Australia, between 30 July 1986 and 31 January 1987, seven separate importations of Maytag A512 washing machines. In their importation papers the Pearsons claimed - and paid - custom tariff duties at the rate of 2%. The whole litigation concerns the question of whether this is, or is not, the correct rate. The relevant tariff items are 84.40.1, 84.40.2 and (perhaps) 84.40.9. Item 84.40.1 deals with washing machines for domestic use, and imposes a duty of 30%. Item 84.40.2 deals with washing machines for commercial use, and imposes a duty of 15%. Item 84.40.9, if it is of any importance (and I do not believe it is), deals with any machine not already described; in this case, the rate is 2%. If goods fall within 84.40.2, a further problem arises: are the goods such as are described by Tariff Concession Order No. 8530085? If so, the duty is 2%. Tariff items 84.40.1 and 84.40.2 are mutually exclusive. The Tariff Concession Order does not apply to goods which come within item 84.40.1. The construction of the Tariff Concession Order is not without its problems. It applies to all goods being either "washing machines" or "washing extractors" which have a "dry linen capacity not less than 10kg/batch". "Dry linen capacity" is determined "by the application of a division of 10 to volumetric cylinder capacity in L". In the present case there was a dispute as to whether, in computing UREARSON and ANOR v THE DISTRICT COURT OF NEW SOUTH WALES and ANOB (Meagher JA) the "volumetric cylinder capacity" of the machines, one took the inner or the outer of two parts of the machine either of which could attain the dignity of being described as a "cylinder". The Chief Executive Officer of Customs entered into a dispute with the Pearsons, claimed that they had evaded payment of proper customs duties, claimed that the machines came within item 84.40.1, and sought to recover the extra duty which would have been payable. That dispute, in the fullness of time, ended up before the Administrative Appeal Tribunal, where Deputy President CJ Bannon QC (as his Honour then was), on 1 August 1989 found for the Chief Executive Officer of Customs: item 84.40.1 applied and the question of whether the goods came within the Tariff Concession Order never arose. That decision was the subject of an appeal to the Federal Court of Australia. Wilcox J heard the case at first instance on 27 June 1990. He found for the Pearsons on one major issue, viz that 84.40.2 was the relevant item not 84 40.1, and held that Mr Bannon QC was wrong in coming to the opposite conclusion. However, he also held that the machines did not come within the Tariff Concession Order because they had a "dry linen capacity" of "less than 10kg per batch". In order to come to that conclusion his Honour treated the inner cylinder as the "cylinder" referred to in the Tariff Concession Order. Thus, in his Honour's view duty was neither 2% nor 30% but 15%. A further appeal was taken to the Full Court of the Federal Court (Morling, Einfield and Foster JJ), which dismissed the appeal with costs. For present purposes, the only additional feature of the Full Court Appeal which deserved attention is a long discussion about whether the machines were properly described as "washing machines" or "washing extractors", a discussion which as far as I can see is pointless. Item 84.40.2 in its terms covers both, as does the Tariff Concession Order. The litigation next erupted in the Local Court, where the Chief Executive Officer of Customs prosecuted the Pearsons for criminal offences arising out of the importation of the machines. Each of the Pearsons was convicted by the Magistrate on 11 September 1991 in respect of fourteen charges brought against them under the provisions of the Customs Act, 1991. The Pearsons brought appeals against those convictions to the District Court pursuant to s122 of the Justices Act, 1902. The appeals were heard by his Honour Judge Hosking. The hearing before his Honour took a number of days. Exactly how long I cannot ascertain; nor does it matter. Mr Swinton, in an affidavit, says it was heard on 23, 24, and 25 August 1993, and on 14, 15, 16, 17 and 18 March 1994. On the other hand, Hosking DCJ in his judgement of 18 March 1994, refers to the hearing as occupying five days before 18 March, although in another place he refers to ten days of hearing. On any version, there was, one would have thought, plenty of time for the Pearsons to lead any evidence they thought fit. Indeed, (apart from the hearing before Hosking DCJ) they had already had one opportunity to do so before Mr Bannon QC; and another before the Local Court. This is of some importance, as it must have led Hosking DCJ to look at the Pearsons' subsequent effort to re-open the case with a jaundiced eye. On 18 March Hosking DCJ held that the Chief Executive Officer of Customs had made out a prima facie case on all twenty eight charges. By consent he stood the matters over until 14 June 1994 in order to hear submissions on whether the offences had been proved beyond reasonable doubt. On that day, instead of considering the intended submissions, he was met with a request by the Pearsons to state a case to the Court of Criminal Appeal. He acceded to that request. He asked four question of that Court. They were: 4 UNREPORTED JUDGMENTS "(a) I erred in holding that Tariff Concession Order No 8530085 did not apply to the subject washing machine; "(b) I erred in following the decisions of Wilcox J and the Full Federal Court of Australia in Neil Pearson and Co v Collector of Customs; "(c) I erred in holding that the subject washing machines were properly classified to item 80.40.2 of the Schedule 3 to the Customs Tariff Act 1982; and "(d) I erred in holding that s234(1)(d) of the Customs Act 1901 created an absolute offence". The case was heard by the Court of Criminal Appeal on 24 July 1995, and judgement was given on 1 December 1995. The four questions were answered: (a) The Court declines to answer, (b) No, (c) the Court declines to answer, (d) No. It was remitted to the District Court. Hosking DCJ resumed his labours on 2 February 1996. On that day the Chief Executive Officer of Customs sought leave to amend the averment of which the Court of Criminal Appeal had been critical. Leave was granted, and an amendment duly made, with the consent of the Pearsons. His Honour indicated that he was minded to find all charges proved beyond reasonable doubt. The Pearsons then sought leave to re-open their case and to call further evidence. What further evidence was intended to be called is a little obscure. The Pearsons had neither the common sense nor the courtesy to reduce the further evidence to any written form. In any event his Honour declined to grant leave to re-open the case. I can only say that if the voluminous affidavit material filed in support of the Pearsons' case was the so-called fresh evidence sought to be adduced, it is no wonder the application was refused. Reading through the transcript of the proceedings before Hosking DCJ on 2 February 1996, there is no doubt that in his Honour's mind the consideration which prevailed was the number of opportunities the Pearsons had had but not taken to call all the evidence they wished. Counsel for the Pearsons expressly agreed that the decision was a discretionary one for his Honour, and Hosking DCJ exercised that discretion adversely to the Pearsons. It has not been shown that his Honour's exercise of discretion miscarried. Counsel for the Pearsons were unable to point to any mis-statement of the law or any wrongful finding of fact on his Honour's part. Nor can the decision be seen as manifestly unreasonable. Indeed it would seem to me to have been inevitable. But that was not the only application the Pearsons made. They also made another request to have a case stated to the Court of Criminal Appeal. This also was refused. It also was a discretionary matter. The actual form of the requested case stated proffered five questions. They were as follows: "1. Did I err in law in holding as a fact that the inner cylinder of the Maytag A512 is the cylinder referred to in Tariff Concession Order Number 85-30085, when coming to my reasons that the Prosecution had proven its case beyond reasonable doubt in all matters on appeal?" "2. Did I err in law in refusing, as a matter of law, an application made by the appellants for me to abandon my final view that all of the matters brought upon appeal had been proven beyond reasonable doubt, thereby precluding the appellants from calling evidence on matters of fact relative to my previous final view?" "3. Did I err at law in holding the view that the Prosecution had proven beyond reasonable doubt the necessary mental element required to be proven before holding that offences under $234(1)(a) of the Customs Act had been proven?" UREARSON and ANOR v THE DISTRICT COURT OF NEW SOUTH WALES and ANOB (Meagher JA) "4. Did I err at law in holding that the Prosecution had led sufficient evidence, satisfying me beyond reasonable doubt that the subject goods did not fall within sub-item 84:40.9 in Schedule (iii) of the Customs Tariff Act which at the material times attracted duty at the rate of 2 percent." "5. Did I err at law in my findings beyond reasonable doubt in respect of offences brought by the s234(1)(d) of the Customs Act that the false particulars referred to in that subsection must refer to material particulars." Merely to peruse the questions indicates that his Honour was within his rights in refusing to state a case. The substance of his Honour's reasons was as follows: "As I understand its function, that Court does not exist to re-run factual disputes, but to determine questions of law, and where necessary give instruction to those judicial officers below it. "T repeat, it seems to me that this draft stated case involves a misconception; it involves questions which are really matters of fact, which I repeat, have already been rightly or wrongly determined. I believe that these proposed questions of this proposed stated case is vexatious and an abuse of process, and I decline to state the case on the five bases which have been sought." I can see no legal error of any kind in that reasoning. It is, then, these two decisions of Hosking DCJ on which this whole case basically turns. Were they within or without power? Did they or did they not amount to a denial of natural justice? Did they or did they not amount to a denial of procedural fairness? Were they tainted by jurisdictional error? Is there error on the face of the record? In dealing with these matters, the Court first gave its attention to the supporting affidavits. These were the documents on which the Pearsons relied in support of their summons, and the documents which the Chief Executive Officer of Customs wished to strike out. Without much difficulty the Court indicated its readiness to strike them out. To begin with, many of them were obviously irregular as to form. What credence could anyone place on the following statement by a Mr Clark, a customs agent: "Having now spoken to various experts and heard evidence by Mr Dracopolous in the failed prosecution of Tavemar Pty Ltd, I am of the firm opinion that Deputy President Bannon was wrong."? Again, how could this statement by Mr Pearson be admissible: "An enormous amount of evidence was gathered for the Tribunal and many witnesses were called. The position became more and more difficult as Customs kept adding new grounds for rejecting the rate of 2%'? Or again, a third example, this time by a customs agent called Katte: "Tt is my clear opinion that these machines were always intended to be dutiable at 2% but poor drafting of TC 8530085 caused its replacement". But more important than mere form is the substance of the matter. Bearing in mind that the two decisions under challenge (and the only two decisions under challenge) were the refusal to permit a re-opening and the refusal to state a second case, one can see that all the material proffered, even if admissible in form, was wholly irrelevant. We were therefore in a position to conclude that it should be struck out, without having to consider whether it was vexatious or scandalous as well. We communicated our intelligence on this matter to the parties. Surprisingly, counsel for the Pearsons met this news with equanimity. I say "surprisingly" because it must have taken much time, trouble and money to assemble. The best he could do was refer us to the decision of Re: Wernazza (1959) 2 All ER 200, 6 UNREPORTED JUDGMENTS particularly at 201-2. That was a case dealing with the question whether certain proceedings were vexatious. It was decided that in such a case one is not restricted merely to an examination of the pleadings in order to see if a cause of action existed, one must go to the "whole history of the matter". That is a particular case, far removed from the present case. It is but an illustration of the principle that in every case the Court may, and should, examine all relevant background material. But it is not authority that a Court should be flooded with irrelevant material. The Court then considered the Summons filed by the Pearsons. In considering the summons, it had regard to the various judgements of the Court and Tribunals which had participated in the struggle between the parties. It also had regard to such large portions of the transcript of the proceedings before Hosking DCJ as either party wished to put before the Court. The hearing of the case was a nightmare. At no point was it exactly clear what submission counsel for the Pearsons was pressing on the Court. Positions were taken and then deserted, lines of argument were seized and then abandoned. Authorities were cited and then denounced as irrelevant. Although the case (which I might add had been expedited, though one can only wonder why) should have taken no more than a couple of hours, it took all day. The Court had frequently to enquire of counsel for the Pearsons what his submissions were, a question which invariably met a kaleidoscopic response. Indeed, the confusion was such that even after some hours of debate it was unclear whether the Court was dealing with the Chief Executive Officer of Custom's motion only, or that motion together with the Pearsons' summons. The confusion was not minimised by such incidents as counsel for the Chief Executive Officer of Customs seeking to rely on some of the affidavits which had been struck out at his invitation. I am reminded of that sentence in Samuel Beckett's "For to end yet again": "They carry face to face and relay each other often so that turn about they backward lead the way." To make things worse, since the hearing of the case, the Pearsons have brought a further motion which was heard by Sheller JA in which they sought leave to file yet further written submissions. Sheller JA refused leave. In the course of the hearing of the motion, his Honour's attention was drawn to an interchange between Powell JA and counsel for the Pearsons during the course of the hearing of the summons. Powell JA said: "Now, here there is no question of jurisdictional error, no question of error on the face of the record - solely denial of procedural fairness, and it really comes down to this, his Honour having a discretion, exercised it upon grounds which you say demonstrate an error of principle. Is that the sole basis upon which you say there was a denial of procedural fairness? So that if we were to conclude there was no evidence in your case, your case falls to the ground." Counsel for the Pearsons replied: "I think that would be so"; to which Powell JA said: "That puts it fairly". The transcript of the motion before Sheller JA, together with his Honour's judgement of that motion have been made available to both Powell JA and myself. I note, and act upon, Sheller JA's ruling that a submission of error on the face of the record was not abandoned. However, I must also state that I think Powell JA's analysis was correct, the case was one of procedural fairness or nothing. UAEARSON and ANOR v THE DISTRICT COURT OF NEW SOUTH WALES and ANOR (Powell JA) I have already indicated why, in my opinion, any attack on Hosking DCJ's decisions must fail: there is absent any error of fact or law, and there is no hint of manifest unreasonableness. Moreover, it follows from this opinion that there can be no denial of natural justice, and no procedural unfairness. Nor can there be jurisdictional error. Nor, whatever is the current meaning of "record", can there by any question of error on the face of the record. I am unable to detect error on or off the record. In my view the following orders should be made: ON THE NOTICE OF MOTION: 1. O.1 to O.7 as asked. 2. Order that Pearson and Neil Pearson and Co Pty Ltd pay the costs of the Chief Executive Officer of Customs. ON THE SUMMONS: Summons dismissed with costs. Sheller JA I agree with Meagher JA. Powell JA I agree with Meagher JA. ON THE NOTICE OF MOTION: 1. That the affidavit of Reginald John Benson, sworn on 25 March, 1996, and filed in these proceedings, be removed from the file. 2. That the affidavit of Ray William Henry Katte, sworn on 22 March, 1996 and filed in these proceedings, be removed from the file. 3. That the affidavit of David Melville Clark, sworn on 21 March, 1996, and filed in these proceedings, be removed from the file. 4. That the affidavit of Neil Harold Pearson, sworn on 19 March, 1996, and filed in these proceedings, be removed from the file. 5. That the affidavit of Audrey Pearson sworn on 19 March, 1996, and filed in these proceedings, be removed from the file. 6. That the affidavit of Anthony Douglas Weaver, sworn on 26 March, 1996, and filed in these proceedings, be removed from the file. 7. That para6 of the affidavit of Malcolm Edgar, sworn on 9th February, 1996 be struck out. 8. Order that Pearson and Neil Pearson and Co Pty Ltd pay the costs of the Chief Executive Officer of Customs. On the Summons: 1. Summons dismissed with costs. Counsel for the appellant: P Roberts Solicitors for the appellant: Martin Churchill Counsel for the respondent: TM Healey; AG Moyzo Solicitors for the respondent: Ian V Knight