CHIEF EXECUTIVE OF THE NEW ZEALAND CUSTOMS SERVICE v P E G HUTCHINSON AND W N HUTCHINSON TRADING AS P & W HUTCHINSON TRADERS [2019] NZHC 3174

CHIEF EXECUTIVE OF THE NEW ZEALAND CUSTOMS SERVICE v P E G HUTCHINSON AND W NHUTCHINSON TRADING AS P & W HUTCHINSON TRADERS [2019] NZHC 3174 [4 December 2019]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2019-485-179[2019] NZHC 3174UNDER THE Customs and Excise Act 1996 ("the Act")BETWEEN CHIEF EXECUTIVE OF THE NEWZEALAND CUSTOMS SERVICEAppellantAND P E G HUTCHINSON AND W NHUTCHINSON TRADING AS P & WHUTCHINSON TRADERSRespondentHearing: 12 August 2019Appearances: P H Courtney and M Taylor for AppellantRespondent in Person with R L Roff as Counsel to AssistJudgment: 4 December 2019JUDGMENT OF CULL JSolicitors:Gaze Burt, Auckland, for AppellantCrown Law Office, Wellington, for RespondentRachel Roff, Thorndon Chambers, Wellington, as Counsel AssistingTable of ContentsPara No.Background [5]The Customs Appeal Authority Decision [12]Issues on appeal [21]The parties' positions [22]The legislative background [26]Was the Chief Executive's amended assessment invalid? [33]Did the Authority err by exceeding its jurisdiction on appeal? [43]Result [65]Costs [66][1] This case concerns a fraudulent Customs declaration and the scope of the powersof the Chief Executive of the New Zealand Customs Service (Customs) under theCustoms and Excise Act 1996 (the Act) in determining whom to assess for the resultingdeficit in the amount of duties owed to Customs.[2] P & W Hutchison Traders (Hutchison Traders) imported goods into NewZealand. They hired an agent who, without their knowledge, hired a customs broker todeclare the goods through Customs. Hutchison Traders paid the correct amount ofduties to the agent. It transpires the customs broker under-declared the goods by about$45,000, defrauding both Customs and Hutchison Traders.[3] Customs reassessed Hutchison Traders and required it to pay the outstandingamount of duty. Hutchison Traders appealed that decision. The Customs AppealAuthority (the Authority) directed that the Chief Executive reconsider whether to assessHutchison Traders for the outstanding duties owed in light of the fact that it had paid theamount to a fraudulent third party (the Decision).1[4] Customs appeals the Decision. It submits the Decision was in error and seeksan order that it is quashed. Hutchison Traders have not appeared in this proceeding.Counsel to assist the Court has been appointed.1 P & W Hutchison Traders v Chief Executive of the New Zealand Customs Service [2019] NZCA 2.Background[5] An importer is required to declare in its import entry the "customs value" ofgoods it imports into New Zealand, and to pay duty in accordance with the Act.2[6] In October to November 2017, Hutchison Traders imported seven motorhomesinto New Zealand, in four consignments. The declared value of the vehicles was$278,458, and freight of $35,891. The values were underdeclared to the extent that GSTand duty shortfalls amounted to $44,663.27.3 Hutchison Traders agrees that these under-declarations occurred, to that amount.[7] It is common ground that Hutchison Traders itself did not under-declare the valueor that it had any knowledge at the time of the under-declarations. Hutchison Tradershad engaged Seabrook International, as its agent, to arrange shipping and importationof the vehicles. It received GST invoices from Seabrook International, examined theinvoices, found they corresponded with the documents they held, and paid SeabrookInternational the full amount of duty due to Customs, understanding the money wouldbe paid to Customs.[8] Without Hutchison Traders' knowledge, Seabrook International engaged LynDoc Com Ltd, a customs broker, to lodge the required import entries and pay the dutyto Customs. This enabled the vehicles to be released to Hutchison Traders. In lodgingthe import entries, Lyn Doc Com relied on invoices which were not the originals thatHutchinson Traders had received from the United Kingdom supplier of the vehicles,despite Hutchinson Traders having provided those original invoices to SeabrookInternational. It appears Lyn Doc Com used forged invoices to calculate the amount ofGST and duty and paid that money to Customs. Customs approved the entry submittedby Lyn Doc Com, allowed the motorhomes to clear Customs, and Hutchinson Traderstook delivery without knowledge of the deception.[9] After delivery, Customs investigated the import entries lodged on behalf ofHutchinson Traders. It transpired that Hutchison Traders had paid the full amount of2 Customs and Excise Act 1996, s 60(1).3 Made up of $15,943.80 duty and $28,719.47 GST.GST and duty to Seabrook International, but Lyn Doc Com had underpaid the duty andGST, using a false declaration to have the goods entered and cleared.[10] On 22 June 2018, Customs amended the assessment of duty lodged on behalf ofHutchinson Traders under s 89(1) of the Act by imposing an additional liability for GSTand duty of $44,663.27. Customs then sought recovery of the unpaid GST and dutyfrom Hutchinson Traders. Neither Seabrook International nor Lyn Doc Com were aparty to the proceeding.[11] In July 2018, Hutchinson Traders paid the $45,000 to Customs to avoid beingpenalised for alleged non-payment of the duty. Hutchinson Traders appealed to theCustoms Appeal Authority to recover the duty shortfall.The Customs Appeal Authority Decision[12] The Authority held the amended assessment under s 89(1) of the Act was notvalid.4 It held that there was no existing assessment made for Hutchinson Traders, sothe amendment procedure could not apply. The statutory power to make an initialassessment is distinct from the power to amend an existing assessment and an initialassessment had to be made.5[13] When determining an appeal, the Authority has the power to make an initialassessment and would usually do so when the wrong statutory provision has beenapplied, as here. However, it considered such an approach was not appropriate in thesecircumstances.6 In so finding, the Authority made five key findings. First, it held thatthere was not a lack of commercial prudence on the part of Hutchinson Traders in itsdealings with Seabrook International.7 There was no evidence to support Customs' viewthat Hutchinson Traders was in any respect responsible for a lack of care contributingto it, and Customs, being defrauded.84 P & W Hutchison Traders v Chief Executive of the New Zealand Customs Service, above n 1, at [12].5 At [12].6 At [13].7 At [17] and [19].8 At [21].[14] Second, the Authority found there was a probable fraud and Hutchinson Tradersand Customs were the innocent victims.9 Hutchinson Traders had paid the full amountof GST and duty to Seabrook International, and somewhere along the line betweenSeabrook International, Lyn Doc Com, and Customs, a dishonest person(s) arranged fora false declaration to be made to Customs and GST and duty was underpaid.10[15] Third, liability for GST and duty is created as a result of importation. However,recovery of GST and duty depends on Customs taking the appropriate administrativesteps.11 As multiple importers are jointly and severally liable under s 86(2) of the Act,the Authority found that Hutchison Traders is liable for the GST and duty, potentiallyjointly and severally with Seabrook International.12[16] Under s 88(1) of the Act, an entry of goods is deemed to be an assessment by theimporter as to the duty payable in respect of those goods. Under s 88(2), if the ChiefExecutive has reasonable cause to suspect that duty is payable on goods by a personwho has not made an entry in respect of the goods, the Chief Executive may assess theduty at such amount as she thinks proper. Section 89 provides for the power to amendan assessment of duty.[17] Although Lyn Doc Com filed false declarations for each of the importations,Hutchinson Traders did not make an entry itself in respect of the goods, nor did it initiateor authorise the actions of Lyn Doc Com in any respect. The Authority found that insuch circumstances, the Chief Executive was required to exercise the power in s 88(2)to make an initial assessment against Hutchinson Traders.13 Instead, the ChiefExecutive purported to exercise the power in s 89. The Authority found that was notpossible as there was no initial assessment made to amend.14[18] Fourth, the Authority found that the structure of the Act is such that it generallycontemplates one of the importers will ultimately make good the liabilities for duty9 At [22].10 At [23].11 At [26].12 At [30].13 At [34].14 At [34].under the Act.15 However, if effective recourse can be had against SeabrookInternational or Lyn Doc Com, that may be the appropriate course. It is not proper forthe Authority to preferentially require the victim of a false declaration to pay inpreference to those responsible for it, without considering the liability of theperpetrator.16 Further, ss 109 and 110 of the Customs and Excise Act 2018 (the 2018Act) reinforce the need to consider whether recourse against Hutchinson Traders is theproper response, or at least the proper response without first considering other optionsfor recovery.17[19] Finally, the Authority held the appropriate course is for the Chief Executive todecide whether to make an initial assessment under s 88(2) against Hutchinson Tradersin preference to other potential forms of recourse.18 The Authority considered it shouldnot make the initial assessment under s 88(2) itself, as it did not have sufficient factsbefore it do so, and remitted the matter to the Chief Executive to consider the position.19[20] The Authority accepted that the Chief Executive had discretion as to whom,among the multiple importers, were pursued for duty, but considered that theChief Executive's discretion had to be exercised consistently with the purposes of theAct, and particularly ss 109 and 110 of the 2018 Act,20 to protect the integrity of thesystem for assessing and collecting duty.Issues on appeal[21] In summary, the legal issues that need to be determined by this Court in thisappeal are:(a) Whether the Authority erred in finding the Chief Executive's decision toassess Hutchinson Traders for an increased amount of duty was invalid,because it was treated as an "amended assessment" made under s 89(1)of the Act, rather than a "fresh assessment" under s 88(2)?15 At [40].16 At [41.1].17 At [41.2].18 At [48].19 At [48].20 At [51]-[52].(b) Whether the Authority erred by exceeding its jurisdiction on appeal in:(i) not limiting its enquiry to the correctness, lawfulness and validityof the increased assessment; and(ii) purporting to be entitled to exercise the discretion provided for inss 109 and 110 of the 2018 Act?The parties' positions[22] Customs' position is that Hutchinson Traders comes within the definition of"importer" in s 2 of the Act and indeed imported seven motorhomes on which duty at10 per cent and GST at 15 per cent was payable. As a result of the import entries lodgedby Lyn Doc Com undervaluing the motorhomes, duty and GST of only $79,000 wasreceived by Customs, compared with the amount accepted to be due of $124,000.[23] Customs correctly quantified the shortfall of $44,663.27 and notified HutchinsonTraders of the amended assessments. It is submitted the amended assessments are valid,being genuine assessments made in accordance with the law. As importers of the goods,Customs submits Hutchinson Traders remain jointly and severally liable for the shortfallof the duty, irrespective of whether any other person might also be liable.[24] In response, assisting counsel submits the Authority acted lawfully and withinits statutory jurisdiction. There was in law no valid entry made for the goods in thiscase, because the entry was made by Lyn Doc Com, who was not acting under authorityfrom Hutchinson Traders as "importers". No self-assessment had therefore been madefor the Chief Executive to amend under s 89(1), and so a new assessment was requiredunder s 88(2) of the Act.[25] The Chief Executive has discretion as to which importer to assess, and it appearslikely that there are multiple importers in this case. Assisting counsel submits the ChiefExecutive's discretion is not unfettered and requires her to exercise her discretion as towhich importer to assess in this case, consistent with the purposes of the 1996 and the2018 Acts.The legislative background[26] While the 2018 Act repeals the Act, various transitional and savings provisionsrelated to the Act apply.21 The provisions related to the assessment, collection andrecovery of duty in the Act continue to apply to the motorhomes imported in thisproceeding.22[27] An "importer" is defined in s 2 of the Act as:a person by or for whom goods are imported; and includes the consignee ofgoods and a person who is or becomes the owner of or entitled to the possessionof or beneficially interested in any goods on or at any time after their importationand before they have ceased to be subject to the control of the Customs[28] Goods that are imported must be entered by the importer in such a form andmanner, and within such a timeframe, as may be prescribed.23 Anyone who importsgoods into New Zealand is required to declare in the entry the "Customs value" of thegoods.24[29] Under s 86(1) of the Act, the duty on all imported goods constitutes a debt dueto the Crown immediately on importation of the goods. Under s 86(2), such debt isowed by the importer of the goods, and if more than one, then jointly and severally byall of them. Under s 86(5), the right to recover duty as a debt due to the Crown is notaffected by the fact that the goods have ceased to be subject to the control of Customs,or that no proper assessment of duty has been made, or that a deficient assessment ofduty has been made.[30] Under s 88(1), an entry for goods "is deemed to be an assessment by theimporter as to the duty payable in respect of those goods". Such an entry is in thenature of a self-assessment of duty and GST. Under s 88(2), if the Chief Executive hasreasonable cause to suspect the duty is payable on goods by a person who has not madean entry in respect of the goods, she may assess the duty at such amount she thinksproper. Section 89(1) then authorises the Chief Executive to make such amendments to21 Customs and Excise Act 2018, sch 1, cls 1(3), 1(9), and 9.22 Clause 1(3) and (9).23 Customs and Excise Act 1996, s 39(1).24 Section 60(1).an assessment of the duty as she thinks necessary in order to ensure the correctness ofthe assessment.[31] In addition and of relevance to this appeal, cl 1(9) of sch 1 of the 2018 Actprovides that ss 109 and 110 of the 2018 Act apply in relation to the continuing functionsof the Chief Executive under the 1996 Act. Section 109(1) requires that the ChiefExecutive and Customs, in carrying out their functions, must use their best endeavoursto protect the integrity of the system for assessing and collecting duty, which includes:25(a) duty payers' perceptions of that integrity;(b) duty payers' rights to have their liabilities for duty determined fairly,impartially, and according to law;(c) duty payers' rights to have their individual affairs kept confidential andtreated with no greater or lesser favour than the affairs of other dutypayers;(d) duty payers' responsibilities to comply with the law;(e) the responsibilities of those administering the law to maintain theconfidentiality of the affairs of duty payers; and(f) the responsibilities of those administering the law to do so fairly,impartially, and according to law.[32] Section 110(1) of the 2018 Act provides that the Chief Executive must securethe collection of the highest net revenue from duty that is practicable within the law,having regard to:(a) the resources available to the Chief Executive;25 Customs and Excise Act 2018, s 109(2).(b) the importance of promoting compliance, especially voluntarycompliance, by all duty payers with this Act and any other enactmentrelating to any duty;(c) the compliance costs incurred by duty payers;(d) the objectives of imposing any duty; and(e) Customs' other responsibilities and the resources needed to fulfil thoseother responsibilities.Was the Chief Executive's amended assessment invalid?[33] Customs submits the Authority erred in holding that the amended assessmentwas invalid because the Chief Executive was required to make an initial assessmentunder s 88(2), and not an amended assessment under s 89(1).[34] It is not in dispute that the goods that Hutchinson Traders imported were enteredwith Customs under the Act, and that part of the duty and GST owing by HutchisonTraders as importers was paid on those goods. That enabled Hutchinson Traders toremove their imported goods from the Customs Controlled Area. Customs submits thatthe fact the goods were entered by Lyn Doc Com, as an agent of Hutchinson Traders'agent Seabrook International and without the express authority of Hutchinson Traders,does not change the fact that an entry for the goods was required to be made and wasmade under the Act. An entry of the goods, it is submitted, is all that is required totrigger the deeming provision in s 88(1).[35] Customs submits further that Hutchinson Traders was the importer andaccordingly a deemed assessment occurred after the goods were entered. It says thequantum of that deemed assessment was wrong and was corrected by the ChiefExecutive's amended assessment. It submits the Authority erred by implying arequirement into s 88(1) that the entry of the goods had to be made by the importerbecause once an entry for the goods has been made, it is deemed to be an assessment bythe importer.[36] It is plain that s 88(1) deems an entry of goods made under the Act to be anassessment by an importer. In the normal run of events, an entry of goods by an agentwould therefore be deemed to be an assessment by the importer of the goods.[37] However, in these circumstances, the entry for the goods was made by anunauthorised party, Lyn Doc Com. The Act contemplates in s 60(2) that valid entriescan only be made by an importer, or an agent of an importer. This is reinforced by thefact that importers are liable for false or misleading entries, and face penalties if theymake such entries. Accordingly, Counsel Assisting submits the entry by Lyn Doc Comcould only be valid if Lyn Doc Com was an "importer", and there is insufficient evidenceof that, or an authorised agent of the importer. Hutchinson Traders did not know of LynDoc Com's involvement and did not authorise his or her actions.[38] As the Authority held, the lack of a valid entry under the Act means that therewas no existing assessment for the Chief Executive to amend, and so she must insteadconsider afresh whom to assess under s 88(2), as she has reasonable grounds forbelieving no entry has been made.[39] I do not consider there has been any error in the Authority's approach. I acceptthat a valid entry of goods is deemed to be an assessment by the importer under s 88(1).However, in these circumstances, there was no valid entry. It is common groundbetween the parties that the entry contained false declarations as to the value of theimports. Effectively, both parties accept that the entry is invalid, being fraudulent andwithout authority. The question is which provision then applies.[40] Section 89(1) contemplates amending an entry to ensure the correctness of theamount of the assessment. It does not contemplate amending an entry that, by reasonof forgery or fraud, is invalid. Because the entry was fraudulent, there was no "entry"for the purposes of that section, and the "deeming" provision in s 88(1) has noapplication. It follows that there has been no assessment, and an initial assessment unders 88(2) was required.[41] I therefore consider the Authority did not err in finding, that because the entryitself was falsified and not authorised by Hutchinson Traders, there was no "assessment"by Hutchinson Traders as to the duty payable in respect of the goods. As a result, theChief Executive needed to assess the duty afresh under s 88(2).[42] This ground of appeal fails.Did the Authority err by exceeding its jurisdiction on appeal?[43] Section 88(2) provides that if the Chief Executive has reasonable cause tosuspect the duty is payable on goods by a person who has not made an entry in respectof the goods, she may assess the duty at such amount she thinks proper. Section 89(1)authorises the Chief Executive to make such amendments to an assessment of the dutyas she thinks necessary in order to ensure the correctness of the assessment.[44] The appeal provisions in ss 88(4) and 89(3) of the Act permit anyone who isdissatisfied with a decision of the Chief Executive made under s 88(2) or s 89(1)respectively to appeal to the Authority against that decision.[45] Customs submits that the jurisdiction of the Authority on appeal is narrow. Itsubmits that the only decision that can be made under either s 88(2) or 89(1) is thedecision to assess the correct amount of duty payable. Therefore, the only decision thatcan be appealed is whether the Chief Executive has assessed an "importer" with thecorrect amount of duty. Customs submits the Authority has no power to considerwhether the Chief Executive acted reasonably or appropriately, nor is it permitted toreview the Chief Executive's decision as to whom to assess for liability.26[46] Further, Customs submits that the Authority misconstrued the effect of ss 109and 110 of the 2018 Act in its appeal jurisdiction. It is submitted that theChief Executive's discretion as to which importer she pursues for unpaid duty is a"managerial" one that cannot be fettered or reviewed. Customs says the Chief Executivehas an obligation to collect unpaid duty and GST as debts due to the Crown and thefraud committed on Hutchinson Traders is irrelevant: it does not prevent the ChiefExecutive from assessing Hutchinson Traders and requiring it to pay.26 Daily Freightways Ltd v Collector of Customs [1974] 2 NZLR 704 (CA) at 708.[47] Counsel Assisting disagrees with the above propositions. She submits that aproper reading of both the 1996 and 2018 Acts and the legislative history suggests theAuthority's role is not narrow, because of the legislative provisions governing theAuthority and the scheme of the legislation. I accept this submission for two reasons.[48] First, the legislation suggests the Authority has a broader role than Customssubmits. Section 255 of the Act states that appeals are "de novo". There is nopresumption in favour of the Chief Executive's decision and the Authority is bound toreach its own independent findings and decision on the evidence which it hears oradmits.27 The Authority then has broad powers on appeal to amend an appellant'sgrounds of appeal, and to exercise any of the powers available to the Chief Executive.28A narrow technical role which limits the Authority's consideration on appeal to whetheran assessment is correct or valid only, is inconsistent with the legislative provisionsgiving the Authority such broad powers.[49] Second, I accept that the Chief Executive's discretion in relation to theassessment of the amount of duty under ss 88 and 89 is narrow.29 The Court of Appealhas held that the discretion is "narrowly confined and that an assessment made underthis provision is much closer to a mandatory obligation in the circumstances in which itapplies rather than to a discretionary power."30[50] However, there is another discretion implicit in any decision to be made under s88(2) of the Act, and that is the election by the Chief Executive as to which importer ispursued for the outstanding liability. In this regard, the Chief Executive's discretionmust be guided by public law principles and must be exercised for the purposes of theAct.[51] A critical purpose of the Act is the Chief Executive's statutory duty to recoverunpaid duties as a debt due to the Crown.31 Liability is imposed on importers throughthe legislation, and the Chief Executive cannot voluntarily refuse to impose liability.27 Chief Executive of the New Zealand Customs Service v Jury [2017] NZCA 356, [2017] 3 NZLR 745at [52]-[57].28 Customs and Excise Act 1996, ss 267(2), and 255(2).29 Comptroller of Customs v Terminals (NZ) Ltd [2012] NZCA 598, [2014] 2 NZLR 137 at [152].30 Comptroller of Customs v Terminals (NZ) Ltd n 29, at [151]-[152].31 Section 86.Where there is joint and several liability, the Chief Executive can choose whom toassess.32[52] Section 110 of the 2018 Act emphasises that the Chief Executive must recoverthose debts having regard to the resources available to her.33 The Chief Executive is notprevented from assessing someone for payment of duties and GST because they were avictim of fraud. As Counsel Assisting submits, it is appropriate for the Chief Executiveto consider, when choosing whom to assess for liability, the likelihood of recovery andthe cost of recovering unpaid duties from each importer.[53] However, that is not the only consideration. Balanced against this are the broadersystemic concerns of making the innocent party pay twice, because of another's fraud.Section 109 of the 2018 Act emphasises that the Chief Executive and Customs must "atall times use their best endeavours to protect the integrity of the system for assessingand collecting duty."34 As outlined above,35 this includes ensuring duty payers perceivethe system to have integrity and that duty payers' liabilities are determined "fairly,impartially and according to law".36 Section 110 also requires the Chief Executive tohave regard to the importance of promoting voluntary compliance by duty payers andthe compliance costs incurred by duty payers.37[54] Here, by virtue of a fraudulent declaration, innocent owners of goods have beensubject to additional cost, which they have already paid to their customs agent. TheAuthority reasoned that a decision-maker, acting in accordance with the principles in ss109 and 110 of the 2018 Act, should consider recovering against the fraudulentwrongdoers before turning to the innocent party.38 The Authority found that notattempting to recover from the fraudulent wrongdoers undermines public confidence inthe exercise of powers under the Act and fails to effectively discourage fraudulentpractices.3932 Daily Freightways, above n 26.33 Customs and Excise Act 2018, s 110(1)(a).34 Section 109(1).35 See [31] of this judgment.36 Section 109(2)(a) and (b).37 Section 110(b) and (c).38 P & W Hutchison Traders v Chief Executive of the New Zealand Customs Service, above n 1, at [41].39 At [41].[55] It is, in essence, a balancing exercise, to be carried out consistently with thepurposes of both the 1996 and 2018 Acts. The Chief Executive must weigh thesimplicity of recovering unpaid duties from the innocent owner of goods against thebroader systemic concerns that arise when innocent parties are paying for the fraud ofsomeone else. In short, the Chief Executive should consider whether to pursue the other,blameworthy parties before pursuing the victims of their fraud.[56] There is one other matter arising in this case, which has a bearing on protectingthe integrity of the system. The Chief Executive approves persons to be customsbrokers, who are then registered to operate a deferred payments system. The Authority,in making its finding under ss 109 and 110, had particular regard to this aspect of thesystem. It noted that an essential point of the deception of Hutchinson Traders was theuse of the deferred payment system by the customs broker employed in this case.40[57] The Authority, in wishing to ascertain whether the Chief Executive can haverecourse against the customs broker, accessed the Customs' website to confirm that anoption of recourse against a customs broker is available to the Chief Executive. Thesearch confirmed that before registering a customs broker to enable access to the system,the Chief Executive requires a declaration from the broker agreeing to acceptresponsibility as principal for the payment of all duty or GST from the importer toCustoms.[58] The declaration relevantly states: I/We acknowledge that Customs has the right to seek payment from me/usfor any duty owing to Customs from the importer without first seeking paymentfrom the importer.[59] The Chief Executive does not appear to have considered such recourse to thecustoms broker here. The balancing exercise therefore was not carried out by the ChiefExecutive in this instance. As a result, there has been a failure to exercise the discretionavailable to the Chief Executive in ss 88 and 89 in a fair manner and in accordance withthe principles of the Act. For these reasons, I uphold the Authority's findings.40 At [45].[60] In so concluding, I find it appropriate to repeat the cautionary remarks of theAuthority:41[52] Nothing I have said should be seen as undermining the joint and severalliability imposed on all importers, generally or in a situation involving dishonestrepresentations to Customs. The extent of this decision in that respect is toconclude ss 109 and 110 of the 2018 Act exclude an unfettered election topreferentially recover from a particular person, when recovery may andpotentially should be sought from others to best protect the integrity of thesystem for assessing and collecting duty.[61] It follows from this conclusion that I am unable to uphold Customs' submission,that if the Chief Executive did indeed use the wrong section, the Authority fell into errorby not correcting the invalid assessment or making an assessment itself under s 86(5) ofthe Act.[62] The Authority considered that a reasonable decision-maker should considerassessing Seabrook International or Lyn Doc Com before assessing Hutchison Traders.I have upheld the Authority's finding that it would not be proper for the Chief Executiveto preferentially require Hutchison Traders, as victims of a fraud, to pay in preferenceto those responsible for the fraud, without first considering the liability of theperpetrators. The Authority explicitly held that it lacked sufficient evidence to rule onthose potential assessments, and I consider the case was remitted to the Chief Executivecorrectly on that basis.[63] Finally, I record that Customs also challenges the Authority's use of its inquirypowers under sch 8 cl 21 of the 2018 Act. As I have already canvassed, the Authoritydid so to ascertain whether the Chief Executive could have recourse against the custombroker. In my view, this was both appropriate and relevant to a consideration of ss 109and 110 of the 2018 Act and the integrity of the system for assessment and collection ofduty and GST. Such powers were available to the Authority and I consider this was aproper use of the Authority's powers in these circumstances.[64] I consider the Authority's approach was principled and I find no error in itsapproach. This ground of appeal also fails.41 P & W Hutchison Traders v Chief Executive of the New Zealand Customs Service, above n 1.Result[65] The appeal is dismissed.Costs[66] If it is of assistance to Counsel, I am minded to award 2B costs for payment bythe appellant towards the costs of assisting Counsel. If there is opposition to this course,Counsel may file memoranda.Cull J