Dept 'obsessed with licence dealings’

Press, 13 February 1982, Page 4

Dept 'obsessed with licence dealings’

Part of the Customs Department's premise in regard to alleged breaches of the Customs Act by a Christchurch exporter had been that where there was smoke there had to be fire, and there was a hint in this investigation of the department's being obsessionally preoccupied with the defendant's licensing dealings, said Mr J. D. Dalgety in the District Court yesterday. He was making submissions that no case had been made out by the department against the defendant. Kevin Francis Meates. aged. 51. a company director, on seven charges of wilfully making false declarations under the Act by declaring the unexpended balances of import licences to be more than the true amounts. : The defendant denied the charges, which alleged that he made overstatements totalling $43,648 in declarations for replacement licences under the export incentive scheme.

Judge Paterson reserved his decision to February 26. a nominal dale, for a decision on whether there w'as a case to answer to the charges. Mr Dalgety indicated that defence evidence would be called if a prima facie case was held to be established.

The case, which opened last Monday, continued all week. Prosecution evidence was completed on Thursday. Mr Dalgety appeared with Mr B. W. Brown for the defendant. Mr G. K. Panckhurst appeared for the Customs Department. The charges related to the period between August, 1977, and June. 1978.

The department contended that the licence declarations were made wilfully and falsely by the defendant, to

obtain extra licence entitlements, which were not otherwise available, to Satin House Cosmetics. Ltd. a company which he operated on the West Coast.

Mr Dalgety, in submissions that there was no case to answer to the charges, said the charges should not have been laid by the department. A searching examination of the department's system of recording accurate information on licensing transactions in the 1976-77 period was disquieting.

A senior officer of the department had frankly and properly conceded that the audit method adopted in the case was worthless. The method had been restricted

to proving debit transactions only. In addition, the defence had established numerous errors in the recording of basic information on transactions on licences. The senior officer had properly conceded that even with the licences before the Court there was no reasonable certainty that ' particulars recorded on the licences in

regard to transactions were correct.

The department's procedures could not be relied on with any certainty to establish falsity. The system left one uneasy about the accuracy of the information which was basic to the falsity allegation made by the department.

Mr Dalgety said the evidence showed that the department has since moved to adopt more efficient procedures.

He submitted that the evidence fell well short of establishing a prima facie case. The defendant had no case to answer, and all seven charges should be dismissed. Referring to the onus of burden of proof on the department to establish the charges, he said it was the defence case that the department had established only that the defendant's signature was on the declarations, and nothing else. Other main ingredients in each charge that the defendant made declarations which fell within the scope of the Act, that he knew them to be false, and that the amounts of unexpended value of the licences referred to in the declarations were false, had not all been made out.

There was no evidence that the defendant knowingly provided the department with false totals of the unex-

pended balances on the licences.

Mr Dalgety said five of the charges had' been based on the investigating officer's reconstruction of debit transactions. and two based on the production of licences. In dealing separately with each charge during submissions that there was no case to answer Mr Dalgety referred to a Collector of Customs' evidence in crossexamination that if the licence was not on hand it was critical to know what the credits, as well as what

the debits to the licence, were.

He said it w T as worthless to rely on a ‘'deductive" process in the investigation, when credits occurred reasonably

frequently in respect of the licences.

The department's audit had not got all the story. It had been conceded that some transactions on the licences had not been recorded by the department, Mr Dalgety’submitted. He submitted there had been no evidence of bad faith on the defendant’s part. There was more than a hint that the department had become obsessionaliy preoccupied with the defendant's licensing matters.

He said it was unusual for the Court to hear a case such as this in which a senior customs officer had conceded

the method used to reconstruct the alleged offences was worthless. Mr Brown made submissions on law in relation to the case, in support of the defence contention that all seven charges were invalid.

Mr Panckhurst made submissions that there was a case to answer tb all charges. He said there had been declarations made which were false as to "fairly significent sums of money."

He contended that the defence claim that the system used in the investigations had flaws and could not be relied upon to prove a prima facie case was misconceived.