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Thursday, 18 October 1984
Page: 2030

Senator PETER RAE(10.34) —I rise, as I did last night, to raise the Syntex International Pty Ltd Customs problem in Melbourne which involves some 27 or 28 other companies which purchased a quota for the import of textiles through a company which was operated, as I understand it, by a Mr Sinclair who has recently left Australia for Germany having charged the people who purchased from him the full price for the goods, the commission which is normal in relation to the use of the quota and the amount of duty which is properly payable in respect of the types of textiles which were being imported, which was a duty of 40 per cent. Mr Sinclair paid to the Australian Customs Service a duty of 2 per cent, declaring that the various items which were being imported were embroidery items , which were able to be imported at the 2 per cent rate.

It is alleged that this very wide cross-section of very well known, many of them old and established and highly reputable, businesses were involved unwittingly in a situation where they paid out the appropriate amount for the goods they purchased, but the person through whom they purchased, who was enjoying the benefits of a quota granted by the government system operating at the time, did not pay to Customs the appropriate amount. In fact, it is suggested that he defrauded the Customs of very significant amounts of money. It is suggested that this had been going on for a period of several years-possibly up to five years-over a period when it must have been obvious to the Australian Customs Service, if it was paying attention to what was happening, that an amount of textiles for embroidery was being imported which was far in excess of the total possible requirements of the Australian industry and that some action should be taken.

The gentleman concerned-I wish to emphasise this because I understand there was some confusion-had carried on business at an address at 58 Flinders Lane, Melbourne. His name was Sinclair and his company was called Syntex International Pty Ltd. He left the country with, it is alleged, the benefits of his activities amounting to somewhere between $2m and $3m. He has left behind a number of people who paid fully for what they obtained and who fulfilled their obligations as they saw them. They were left in a situation where a subsequent Customs investigation has meant that they are being subjected to a recovery action for the duty which was avoided, not by them but by a person who could be regarded by the law-I emphasise the word 'could'-as their agent. It may or may not be that that is the appropriate way to look at it.

The way in which the law in relation to this has been put to the Australian Customs Service is perhaps best described in the words of a letter written by Abbott, Stillman and Wilson, signed by Mr Phillip Sheezel of that firm, dated 18 July 1984, in which he refers to a decision of Mr Justice Windeyer in the High Court of Australia case of Scott v. James Patrick & Co. Pty Ltd, reported in 117 Commonwealth Law Reports at page 242. At page 249 it is stated:

It is one thing to say that an act done by a man may be an offence against the law although he had no guilty knowledge. It is quite another thing to say that a man can be guilty of offence because of some act which he did not do, in which he had no part, and which was not done on his behalf, or because of some event over which he had no control and of which he had no knowledge.

That is a summary of the case which is put by the 25 to 28 innocent business people who are now concerned that they may be put through the process of extremely expensive litigation by being subjected to an action which could bankrupt many of them for what they believe to have been a totally innocent act so far as they are concerned. It was an act in which they paid fully what ought to have been paid and in which they see that the principal obligation of government, particularly when it is some considerable number of years-anything up to five years-after the event, is to pursue the person who it appears from investigations may have been the principal involved if there was a defrauding of the Australian Customs.

The allegation is that the importation was at 2 per cent duty rather than the 40 per cent duty which was payable. The 40 per cent duty was in fact paid by the importers who are now being pursued not only to recover the duty they have already paid once to the person who held the quota but also being pursued for the penalty as well. Their concern has caused them to ask me to raise the matter in this chamber. I raised the matter last night-I gave the Minister for Industry and Commerce (Senator Button) notice-but something must have prevented the Minister from being here or from instructing the Ministers on duty here how to deal with the matter. I have again given the Minister notice and I am glad he is in the chamber tonight. The matter is of concern to these people. They face the cost of litigation. This small to medium business is subject to the possibility of considerable loss on a significantly disputed point. The legal advice as to what action should be taken has varied quite substantially.

These people would like to have the opportunity to discuss with the Minister the problem and the position in which they find themselves. They would like to discuss their position as completely honest and good citizens of Australia-I have no doubt that the largest percentage of them are-subjected to what might be regarded as an extremely unfair risk as a result of the default of another person. This is at a time when, I am told, there is no evidence or assurance that any action is being taken by the Government to endeavour to recover from the person who it is alleged was responsible for the fraud, if a fraud did take place.

I do not want to go into any more detail. I am sure the Minister will recognise the sensitivity in the way I have tried to state the case without making allegations which would affect litigation. I have raised the matter because I have been asked by people whether the Minister would kindly give consideration to making time available for them to discuss the future conduct of the problems that have arisen over a period in relation to the events to which I have referred. There has been an attempt to involve the Attorney-General (Senator Gareth Evans) by requesting his intervention. As I understand it, the attitude adopted-I would be interested to hear what the Minister has to say in relation to this-is that this is a matter totally for the Customs Service. On looking at the legislation, I am not quite sure that that is the case. I believe it would be most helpful to this wide cross-section of businesses in Melbourne to be informed of the Minister's attitude. I add that within the matters of complaint there is a tone-as in numerous other cases brought to my attention-of difference in attitude in the operation of the Australian Customs Service in Melbourne and the operation of the Service in other parts of Australia. That is a matter to which I draw the Minister's attention rather than make any further suggestions. If one talks about Hong Kong car imports, Italian fabric imports, this instance or a number of other matters, they all seem to come down to the same thing-that it may be that there is some difference in the degree of sensitivity and the degree of accuracy with which the operation of the law, the carrying out of which I totally support, is in fact carried out. I look forward to hearing from the Minister in relation to this matter.