A man's serving five years in jail in Queensland for customs duty evasion, a federal offence. Anywhere else in Australia he would be free. Is this a fair go? Here Tim Vines outlines how 'justice' in Australia depends on where you live. And there's also serious questions about whether the government side abided by Model Litigant principles in the case.

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Same crime, same time…but NOT in Queensland

Despite being one of the world’s most multicultural nations, Australians like to think of themselves as equal among themselves. While Victorians prefer AFL and Queenslanders (only Queenslanders?) drink XXXX beer, we still expect similar treatment under the law and before the courts.

Unfortunately this is not the case for individuals charged with federal offences. In March 2006, Jeffery Bryce was sentenced to five years jail by the Queensland Supreme Court for evading just over $1 million in duty under the Customs Act 1901 and Excise Act 1901. Mr Bryce’s company and another company officer were also convicted.

If that were all there was to this case, it would not be worth reporting: a company imports goods into Australia and commits ‘fraud on the revenue’ (ie. evades tax). A trial is held and the individuals and company are found guilty. Punishment is imposed.

But wait. The federal law Mr Bryce was convicted under does not allow a judge to impose a jail sentence. For example, section 234 of the Customs Act 1901:

(1)  A person shall not:
         (a)  Evade payment of any duty which is payable…

(2) A person who contravenes subsection (1) is guilty of an offence punishable upon conviction:
         (a)  in the case of an offence against paragraph (1)(a), by:
 (i)  where the Court can determine the amount of the duty on goods the payment of which would have been evaded by the commission of the offence if the goods had been entered for home consumption on:
(A)  where the date on which the offence was committed is known to the Court--that date; or
(B)  where that date is not known to the Court--the date on which prosecution for the offence was instituted;
a penalty not exceeding 5 times the amount of that duty and not less than 2 times that amount; or
(ii)  where the Court cannot determine the amount of that duty, a penalty not exceeding 500 penalty units; (my emphasis)

f section 234 of the Customs Act, like many laws which deal with fraud on the revenue, is to remove the financial incentive for tax evasion. To do this the law imposes a fine on the offender rather than a jail sentence. The fine imposed on Mr Bryce and his co-defendants was a little over $5 million, using the calculation in section 234 whereby the amount evaded is multiplied by five.

So why is Mr Bryce in jail today?  How did a judge impose a jail term where no such sentencing option was available under the breached legislation? In Queensland – and, it appears, only in Queensland – a sentencing judge can imprison a person if he or she fails to pay a fine immediately or within a given time.

The judge can determine the length of time either by reference to a mathematical formula set out in the State Penalties Enforcement Act 1999 (Qld), or according to the ‘justice of the case’.* In Mr Bryce’s case the judge ordered him to serve one day in jail for every $2800 of his $5 million fine that he could not pay immediately, resulting in a jail sentence of a little under five (5) years.

These Queensland laws, the Penalties and Sentences Act 1992 (especially section 182A) and State Penalties Enforcement Act 1999, are unique in Australia in allowing a sentencing judge to impose both an immediate jail sentence and a sentence of such length. By contrast the NSW Fines Act 1996 requires a court to allow at least 28 days for an individual to pay a fine; requires the court to fix a fine having thought to the ability of the individual to pay the fine; and, in the worst case scenario, a fine defaulter can be sentenced to a maximum of 3 months jail. Likewise, other states and territories have legislation which limits the circumstances in which jail can be imposed on a fine defaulter as well as prescribing the maximum periods of jail – usually less than 6 months.

Queenslanders beware! You live in the only jurisdiction in Australia where evasion of Customs and Excise Duty can result in a jail sentence greater than two (2) years.

How can state and territory laws on fines be applied by a judge sentencing a man for a federal crime? The short answer: a lazy national parliament.

The Australian Parliament has the ability (power) to create laws directing how a judge of a state or territory Supreme Court (exercising ‘federal jurisdiction’) sentences federal offenders (ie. people who breach a national law, as opposed to a law of the state or territory). The Australian Parliament, as well, has the power to amend the Customs and Excise Acts to allow a court to impose a fine or a jail term. The Australian Parliament also has the power to amend section 15A and Part 1B of the Crimes Act 1914(a federal law) to allow for equal treatment of federal offenders – whether that be to permit a court to impose a lengthy jail sentence for a federal fine defaulter or to prohibit future cases such as Mr Bryce’s.

To highlight the absurdity of how state laws pervert the operation of federal laws, one need only consider the case of Ramez Nabhan. Two years after Bryce was convicted in Queensland, Ramez Nabhan was convicted in the NSW Supreme Court for evading duty on shipments of tobacco. It was his second offence under the federal legislation and, at the time of his sentence, he was still paying off a $22,000 fine imposed for the earlier offence. For his second offence, he was fined $11.4 million by the judge, more than double Mr Bryce’s fine.

Due to the laws in force in NSW and the wording of the Customs and Excise Acts, the NSW judge in Mr Nabhan’s case could not impose a jail sentence, either for the breach of the federal law or for defaulting on the $11.4 million fine. As such, the court entered into a fine repayment arrangement with Mr Nabhan which, if it is on similar terms to his earlier fine ($220 per fortnight), will take almost 2000 years to pay off. Mr Nabhan is a free man, out of jail, while Mr Byrce languishes in jail for a first offence, his fine half of Mr Nabhan’s.

While state and territory laws vary between jurisdictions – such are the joys of federalism – it is only fair to expect that national laws, passed by the national parliament, will be applied equally to all Australians, regardless of the state they live in. Indeed our Constitution, anaemic of human rights, contains one standout clause which, on its face, suggests we should all be treated equally by the federal government, whether we live in the tropics or Tasmania, the Kimberley or Kirribilli.

Section 117 states:

A subject of the Queen, resident in any State, shall not be subject in any other State to any disability or discrimination which would not be equally applicable to him if he were a subject of the Queen resident in such other State.

While this clause has been used successfully by barristers wishing to practice in multiple jurisdictions, it has been unsuccessfully invoked by federal prisoners who have argued that, by not creating a consistent federal sentencing regime, the federal parliament allows unconstitutional discrimination on the basis of where a federal offender committed their crime.**

The lead authority – Leeth v the Commonwealth – makes for sombre reading, but the message is clear. It is up to the Australian Parliament and it alone to rectify this practice of discriminatory sentencing.

It’s not just CLA and federal prisoners who are arguing for change. The Australian Law Reform Commission recommended a radical overhaul of federal sentencing in its report Same Crime, Same Time handed down in 2006. In the report the ALRC recommended:

[That] the Australian Parliament should enact a separate federal sentencing Act that incorporates those provisions of the Crimes Act 1914 (Cth) that deal with the sentencing, administration and release of federal offenders.

It also called for:

“broad inter-jurisdictional equality and adherence to federal minimum standards in relation to the sentencing, administration and release of federal offenders in different states and territories”.

“That’s all well and good, but 2006 wasn’t that long ago…” I hear you say. The wheels of bureaucracy turn slowly (except when new motorcycle club or anti-terrorism laws are required). However, this issue isn’t new. One of the very first reports handed down by the ALRC (in 1980!) dealt with sentencing federal offenders. Unsurprisingly, it recommended that:

Commonwealth laws should implement the principle that offenders against the laws of the Commonwealth should be treated as uniformly as possible throughout Australia. Commonwealth laws and procedures which hinder the achievement of uniformity should be changed to bring them into accord with this principle even if doing so results, for a time, in differences in the way in which Commonwealth and local offenders are treated within a State or Territory jurisdiction.

action on this issue is long overdue…about 30 years overdue. The Government needs to reform the Crimes Act 1914 to ensure federal offenders are treated equally throughout Australia. In the interim the Commonwealth Attorney-General should release Mr Bryce on parole. He has served over three years of his sentence, a sentence impossible in any state or territory other than Queensland.

To be treated equally before the law is a fundamental right of Australians. The current arrangements are not only an abuse of that right but (from a law and order perspective) make a mockery of the deterrence effect of sentences handed down in duty evasion cases.

Under the current arrangements the Australian Government is really saying “if you steal from us we’ll come down on you like a tonne of bricks…if you live in Queensland.”

* There are some limits on the length of a sentence, even if it is to ‘satisfy the justice of the case’.

** Under section 80 of the Constitution a federal offender is to be tried and sentenced in the state or territory where the offence took place.

NB:  Tim Vines is a Director of CLA and national media spokesperson. He holds Bachelor of Arts and Bachelor of Laws (Honours) degrees from ANU.

See SIDEBAR STORY, below:

SIDEBAR STORY:     Crown fails to respond to High Court Judge’s question

In CLA’s opinion, Model Litigant Principles (under the Legal Services Directions) which bind the Crown would oblige the legal representatives of the Australian Government to make any judges dealing with cases such as Mr Bryce’s aware of the discrepancy in potential sentencing across jurisdictions.  Mysteriously, the Office of Legal Services Coordination in the Attorney-General’s Department disagrees.

However, regardless of that argument, it is astonishing that the legal representative of the Crown did not respond with detailed information to a direct request from a judge on this very issue. Here is the exchange, from Mr Bryce’s case in the High Court:

Minor update 20 Mar 10