R v Zhang [2023] NSWDC 427

District Court New South Wales

Medium Neutral Citation: R v Zhang [2023] NSWDC 427 Hearing dates: 28 September 2023 Date of orders: 28 September 2023 Decision date: 28 September 2023 Jurisdiction: Criminal Before: Montgomery DCJ Decision: See [14] Catchwords: CRIME – s 400.9(1AB) – money laundering – elements of offence – "proceeds of indictable crime" – alternative routes of prosecution Legislation Cited: Crimes Act 1900 (NSW), s 193C(1) Criminal Code Act 1995 (Cth) ss 400.1, 400.9(1), 400.9(1AB), 400.9(2) Cases Cited: Lin v R [2015] NSWCCA 204 Xue v R [2021] NSWCCA 270 Category: Procedural rulings Parties: Rex (Crown) Liang Zhang (Accused) Representation: Counsel: Mr Searson (Crown) Mr Thomas (Accused)

Solicitors: Commonwealth Director of Public Prosecutions (Crown) International Lawyers Co-operative (Accused) File Number(s): 2022/00122559

Judgment EX TEMPORE

Judgment on Voir Dire 5 1. Pursuant to indictment, the Crown proceeds against the accused on the following charge: between 17 January 2022 and 28 April 2022, in Sydney and elsewhere in the State of New South Wales, did deal with money, it being reasonable to suspect the money was proceeds of indictable crime and at the time of dealing, the value of the money was $1,000,000 or more. The provision upon which this charge arises and is prosecuted is s 400.9(1AB) Criminal Code Act 1995 (Cth) ("Criminal Code"). 2. The issue for determination in this voir dire is discrete. It is whether the Crown is required to prove an element of the offence expressed in the terms "proceeds of indictable crime". That question on consideration of the statute arises from the use of reference to "indictable" crime both in the provision prosecuted and in s 400.9(2) of the Criminal Code. s 400.9(1AB) of the Criminal Code provides as follows: "(1AB) A person commits an offence if: (a) the person deals with money or other property; and (b) it is reasonable to suspect that the money or property is proceeds of indictable crime; and (c) at the time of the dealing, the value of the money or other property is $1,000,000 or more." 1. s 400.9(2) of the Criminal Code commences with these words: "For the purposes of this section, it is taken to be reasonable to suspect that money or other property is proceeds of indictable crime if:" 1. Following those words are several sub subsections providing for instances of what I might broadly describe as conduct. In this case, the Crown proceeds under s 400(2)(c) of the Criminal Code. That conduct is in the following terms: "the value of the money and property involved in the conduct is, in the opinion of the trier of fact, grossly out of proportion to the defendant's income and expenditure over a reasonable period within which the conduct occurs." 1. It is common ground that I am bound by two decisions of the Court of Criminal Appeal. Voir Dire 5 arises following my offering of my preliminary views in relation to the import of those two decisions. The two decisions are Lin v R [2015] NSWCCA 204 and Xue v R [2021] NSWCCA 270. I acknowledge that the s 400.9 provision presently prosecuted is not in identical terms to s 400.9 of the Criminal Code at the time of the offence, the subject of the decision in Lin. In my opinion, Lin is nevertheless clearly determinative of the issue in this Voir Dire. Further, in Xue, the Court of Criminal Appeal at [198] determined it was satisfied that the elements of the offence under s 400.9(1) of the Criminal Code are the same as those under s 193C(1) of the Crimes Act 1900 (NSW). It was that latter provision; that is, the State provision, which was for determination of statutory construction in Xue. 2. There is a significant difference in the statutory expression of the two provisions to be contemplated in determination of the present issue. The difference is that whereas in s 193C(1) of the Crimes Act, the element was "there are reasonable grounds to suspect that the property is proceeds of crime", in the subject provision, s 400.9(1AB)(b) of the Criminal Code (as I have read it above), the expression includes "proceeds of indictable crime" and in s 400.9(2) of the Criminal Code, the words "proceeds of indictable crime". Plainly, the word "indictable" as an adjective descriptive of "the crime" does not appear in s 193C(1) of the Crimes Act. 3. In this case, the Crown does rely on s 400.9(2)(c) of the Criminal Code as one route to prosecution of the offence. The Crown also relies on another route in prosecution of the offence; that route is pursuant to s 400.9(1AB)(b) of the Criminal Code. It is in relation to the route to prosecution through s 400.9(1AB)(b) of the Criminal Code that the Crown says it does not have to prove the element of indictable crime. That is the issue for present determination. The Crown proposition is that on the authority of Xue, albeit Xue was dealing with s 193C(1) of the Crimes Act, which expressed only "proceeds of crime", there is not any difference of significance. 4. The Crown position is, as argued this afternoon, principally put on the basis of the decision in Xue; that the word "indictable" in ss 400.9(1AB)(b) and 400.9(2) of the Criminal Code has no work to do. The Crown says that in order to satisfy a prosecution by route of s 400.9(1AB)(b), as an alternative route to prosecution under s 400.9(2) of the Criminal Code, it is entitled to proceed on circumstantial evidence to prove beyond reasonable doubt that the money be suspected of being proceeds of any crime, but not of a type of crime. The defence argument is that to proceed by way of the route s 400.9(1AB)(b) of the Criminal Code, the Crown must prove the offence is of a kind that may be dealt with as an indictable offence, even if the offence of that kind may, in some circumstances, be dealt with as a summary offence. 5. s 400.1 of the Criminal Code does provide separate definitions of "proceeds of general crime" and "proceeds of indictable crime". "[P]roceeds of general crime" is defined to mean "money or other property that is wholly or partly derived or realised, directly or indirectly, by any person from the commission of an offence against a law of the Commonwealth, a State, a territory, or a foreign offence." It also provides a definition of "proceeds of general crime offence provision" to mean "an offence against any of the following provisions". s 400.9 of the Criminal Code does not appear in that list. It occurs to me that it would be superfluous and indeed futile for the legislature to have provided the separate definitions of "proceeds of general crime" and "proceeds of indictable crime" if they were, as the Crown submits, indistinguishable, and more so that the legislature would provide the list of provisions to which the definition "proceeds of general crime offence" applies. 6. The crux of the Crown case as opened is that it does rely on s 400.9(2)(c) of the Criminal Code. The Crown does not dispute that, in order to succeed under that route of prosecution, it must prove the conduct described in s 400.9(2)(c) of the Criminal Code beyond reasonable doubt. In my opinion, and as I have on more than one occasion offered as a preliminary view preceding today's debate in this Voir Dire, and also during today's debate in this Voir Dire, in Lin, the Court of Criminal Appeal was deliberate in identifying as separate the two alternative routes of prosecution I have identified (see in particular [23]). One must not elide the, for want of a better expression, "deeming" provisions under s 400.9(2) with the alternative route of prosecution under s 400.9(1AB)(b) of the Criminal Code. 7. s 400.13 of the Criminal Code is also deliberate in separate expression as it provides for proof of offences concerning "proceeds of general crime" and offences concerning "proceeds of indictable crime". In particular, s 400.13(1B) of the Criminal Code provides: "To avoid doubt, it is not necessary, in order to prove for the purposes of this Division that money or property is proceeds of indictable crime covered by paragraph (b) of the definition of proceeds of indictable crime in subsection 400.1(1), to establish that: (a) a particular offence was committed in relation to the money or property; or (b) a particular person committed an offence in relation to the money or property." 1. My understanding of those statutory definitions in the Criminal Code and of the Court of Criminal Appeal's decision in Lin is that it remains an element for the route of prosecution under s 400.9(1AB)(b) of the Criminal Code that the Crown prove that the crime be an offence of a kind that may be dealt with as an indictable offence. By way of illustration, in the present case, should the Crown fail to satisfy the jury beyond reasonable doubt of the conduct in s 400.9(2)(c), then the Crown may prosecute under the alternative route s 400.9(1AB)(b) of the Criminal Code and that in doing so, it must satisfy as an element of the offence, the words "proceeds of indictable crime". 2. I make the further observation, which I understand to be consistent with the statutory interpretation of s 400.9 of the Criminal Code that I have, as said to this point, found on the bases of the Court of Criminal Appeal decisions in Lin and in Xue. My observation is that were it not the statutory interpretation that s 400.9(2)(c) be a complete alternative route of prosecution to that available under s 400.9(1AB)(b), the words of s 400.9(2) would not have contained the whole of the expression of that element in s 400.9(1AB)(b) of the Criminal Code; that is, for each of the alternative types of conduct available for prosecution, the words "reasonable to suspect that money or other property is proceeds of indictable crime" appear. If the Crown argument were correct, then the word "indictable" in s 400.9(2) of the Criminal Code would be superfluous. In other words, the Crown argument, if it were correct, would be to the effect that in both of those provisions within the section making the offence, the word "indictable" has no work to do. 3. I have considered carefully the whole of each of those Court of Criminal Appeal decisions and, in particular, in the case of Xue, [131], [169], [181], [187], [198] and [207] upon which the Crown principally relied. In conclusion, I reject the Crown's submission that the words "indictable crime", as appear in s 400.9(1AB)(b) of the Criminal Code, are to be interpreted to mean "crime" such that "proceeds of indictable crime" is to be read "proceeds of a crime". This means that it remains an element of prosecution by route of s 400.9(1AB)(b) of the Criminal Code (alternate to prosecution by route of s 400.9(2)) that the Crown prove beyond reasonable doubt that it is reasonable to suspect that the money or property is proceeds of an offence of a particular kind against a law of the Commonwealth, a State, a territory, or a foreign country that may be dealt with as an indictable offence, even if an offence of that kind may, in some circumstances, be dealt with as a summary offence.