Facing a seven million dollar penalty for GST and unpaid duty following a customs fraud, Auckland-based vehicle importer Acacia Motorhomes sued customs agent Lyn Doc Com Ltd claiming it should bear the cost. Lyn Doc says it is an innocent victim of a double-invoicing fraud and cannot be required to check the accuracy of all documents submitted to Customs for import clearance. The case should go to trial, the High Court ruled.
The High Court was told a company called Seabrook International Ltd defrauded customs with a double invoicing scam. Seabrook was briefly registered on the New Zealand companies register: from June 2013 to December 2014. Director and shareholder, Cosette Mirela Bekkers, variously filed contact addresses for Auckland and London. The company’s only annual companies office return ever filed was submitted from an address in Belgium. Evidence was given that Seabrook acted as shipping agent for Acacia Motorhomes Ltd. Seabrook invoiced Acacia Motorhomes for GST and customs duty calculated on the invoice price paid by Acacia for its off-shore purchase of vehicles. It is alleged Seabrook then sent false documents to Lyn Doc, stating a lower purchase price which was then used for calculating GST and duty payable. Lyn Doc, based in Tauranga, was processing paperwork for vehicles unloaded in Auckland. Lyn Doc charged fees of $100 for each customs clearance, plus $35 for biosecurity clearance. Seabrook is alleged to have pocketed the difference between payment received from Acacia for import duties and the duties actually paid.
Lyn Doc said it owed no duty of care to Acacia Motorhomes. It had no dealings with company; it merely acted on instructions from Seabrook, Acacia’s agent. Associate judge Andrew ruled a full trial is required. Allegations that Seabrook payments were made in cash, bypassing Lyn Doc’s usual deferred payment arrangements with Customs could raise suggestions not all was above board, Judge Andrew ruled. Questions of whether a duty was owed and if owed, breached, should go to a full trial, he said. Lynne Panettiere, controlling shareholder of Lyn Doc, is also facing allegations she personally is liable for negligence and is in breach of the Fair Trading Act. She denies all claims. Holding customs agents liable for double-invoicing scams perpetrated by others would impose an intolerable burden on the industry, she said. They cannot be expected to cross-check the accuracy of all documents processed as part of import clearances.
Acacia Motorhomes Ltd v. Lyn Doc Com Ltd – High Court (26.03.19)
19.066