Court of Criminal Appeal Supreme Court New South Wales Medium Neutral Citation: Lin v R [2015] NSWCCA 204 Hearing dates: 21 April 2015 Decision date: 03 August 2015 Before: Simpson J at [1]; R A Hulme J at [30]; Bellew J at [31] Decision: (1) Leave granted to appeal; (2) Appeal dismissed. Catchwords: CRIMINAL LAW - Criminal Code (Cth), s 400.9 - money laundering - notice of motion seeking indictment be stayed or quashed - motion dismissed - application for leave to appeal, Criminal Appeal Act 1912 (NSW), s 5F(3)(a) - dealing with money or other property reasonably suspected to be proceeds of crime - whether indictment defective without identification of class of indictable offences from which money is reasonably suspected of being proceeds - purpose of sub-s (2) - specifies various kinds of conduct proof of which is sufficient to satisfy s 400.9(1), Criminal Code (Cth) - expands operation of sub-s (1) - leave granted - appeal dismissed Legislation Cited: Crimes Act 1914 (Cth), s 4G Criminal Appeal Act 1912 (NSW), s 5F(3)(a) Criminal Code (Cth), s 4.1, s 400.2, s 400.3, s 400.4, s 400.5, s 400.6, s 400.7, s 400.8, s 400.9, s 400.13 Financial Transactions Reports Act 1988 (Cth), s 31 Cases Cited: Ansari v R [2007] NSWCCA 204; 70 NSWLR 89 Chen v Director of Public Prosecutions (Cth) [2011] NSWCCA 205; 83 NSWLR 224 Category: Principal judgment Parties: Heng-Sheng Lin (Applicant) Regina (Respondent) Representation: Counsel: G James QC/P Lange (Applicant) R J Bromwich SC/K Ginges (Respondent) Solicitors: Law Corporation Pty Ltd (Applicant) Commonwealth Director of Public Prosecutions (Respondent) File Number(s): 2013/374156 Decision under appeal Court or tribunal: District Court Date of Decision: 16 October 2014 Before: Hoy DCJ File Number(s): 2013/374156 Judgment 1. SIMPSON J: Pursuant to s 5F(3)(a) of the Criminal Appeal Act 1912 (NSW), the applicant, Heng-Sheng Lin, seeks leave to appeal against an interlocutory decision of Judge Hoy in the District Court of 16 October 2014, dismissing a notice of motion pursuant to which the applicant sought that an indictment presented against him be "stayed or quashed". Background 1. By the indictment, the Director of Public Prosecutions (Cth) ("the Director") charged the applicant with five counts of offences against s 400.9 of the Criminal Code (Cth) ("the Code"). Section 400.9 is set out in full below. Put shortly, sub-s (1) creates an offence of dealing with money or other property which, it was reasonable to suspect, was the proceeds of crime, and was of a value of $100,000 or more. 2. It is unnecessary to go into the facts alleged by the Director in any detail. He alleges that, on five occasions between 16 May 2013 and 12 September 2013, the applicant made arrangements to transfer money from Australia to a Hong Kong bank account. On each occasion, the amount in question exceeded $100,000. The total amount involved in the transactions was $2,845,000. Subsequently, when questioned by Federal Police, the applicant claimed that the money belonged to a person he knew only as "Peter", for whom he did not have any contact details. The Director alleges that the amount involved is grossly out of proportion to the applicant's income and expenditure over the period during which the transactions occurred. (The facts asserted in the preceding two sentences have a significance that will emerge in due course.) 3. The basis for the application for stay of the indictment is what is asserted to be the refusal of the Director to provide certain particulars sought on behalf of the applicant. On 16 September 2014 solicitors acting for the applicant wrote to the Director, seeking identified particulars of the indictment. Specifically, they asked: "1. In respect of each of the counts, what indictable offence(s) against the law of the Commonwealth, a State or a Territory or a foreign country is it alleged from which the money the subject of each of the counts was, in whole or in part, derived or realised?" The solicitors went on to express the view that without the provision of proper particulars, the indictment was defective and the trial would be unable to proceed. 1. By letter dated 29 September, the Director replied: "The Crown alleges that the money the subject of each count is reasonably suspected of being the proceeds of crime. Proceeds of crime is relevantly defined by s 400.1 of the Criminal Code 1995 to mean any money 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 country that may be dealt with as an indictable offence. … It is the Crown position that the physical element of s 400.9(1)(b) does not require particularisation of a predicate offence, rather if any particularisation is required at all it is particularisation as to which deeming provision pursuant to s 400.9(2) is relied upon, noting that they are not exhaustive. For instance, the Crown also relies upon the fact that the accused declared on his incoming passenger card on 9 May 2013, 29 August 2013, 4 September 2013 and 12 September 2013 that he was not carrying in excess of AUD10,000 into the country, in addition to the deeming provisions set out in s 400.9(2)(c) and (e): (c) 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; … (e) the defendant: (i) has stated that the conduct was engaged in on behalf of or at the request of another person; and (ii) has not provided information enabling the other person to be identified and located. In light of the above, it is the Crown view that the indictment is not defective, and the Crown intends to proceed on the filed indictment." Relevant legislation 1. Section 400.9 appears in Ch 10 of the Code, under the general heading "National Infrastructure". Part 10.2 is entitled "Money laundering", as is Div 400. 2. Section 400.1 contains a series of definitions, of which those relevant to the present proceeding are: "proceeds of crime means any 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 country that may be dealt with as an indictable offence (even if it may, in some circumstances, be dealt with as a summary offence)"; and "instrument of crime: money or other property is an instrument of crime if it is used in the commission of, or used to facilitate the commission of, an offence 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 it may, in some circumstances, be dealt with as a summary offence)." 1. By s 4G of the Crimes Act 1914 (Cth) offences against laws of the Commonwealth punishable by imprisonment for 12 months or more are indictable offences. (The states, territories, and foreign countries make their own provisions concerning offences that are indictable.) 2. Section 400.2 of the Code defines "deals with money or other property" in the following way: "A person deals with money or other property if the person does any of the following: (a) receives, possesses, conceals or disposes of money or other property; (b) imports money or other property into Australia; (c) exports money or other property from Australia; (d) engages in a banking transaction relating to money or other property." 1. Sections 400.3 to 400.8 create offences of dealing in money or other property that is the proceeds of crime or that will become an instrument of crime. Penalties for the various offences vary according to the threshold value of the money or property specified in the provisions (ranging from $1,000,000 in s 400.3 to any value in s 400.8). They also vary according to the mental element (ranging from belief to recklessness to negligence). A more complete analysis of the offences created by these sections may be found in Ansari v R [2007] NSWCCA 204; 70 NSWLR 89 at [11]-[15] and [55]. In each case, identification of the class of indictable offences from which the money or property is alleged to have been derived or realised (proceeds of crime) or as to which it is intended, or is alleged to be at risk of, being used in the commission or facilitation of (instrument of crime) is necessary: see Chen v Director of Public Prosecutions (Cth) [2011] NSWCCA 205; 83 NSWLR 224 at [28]. It is not necessary that the Crown identify a particular offence, or the commission of an offence by a particular person: s 400.13. 2. Section 400.9 creates an offence of a different character from those created by the preceding sections. Section 400.9 is as follows: "400.9 Dealing with property reasonably suspected of being proceeds of crime etc. (1) 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 crime; and (c) at the time of the dealing, the value of the money and other property is $100,000 or more. Penalty: Imprisonment for 3 years, or 180 penalty units, or both. (1A) 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 crime; and (c) at the time of the dealing, the value of the money and other property is less than $100,000. Penalty: Imprisonment for 2 years, or 120 penalty units, or both. (2) Without limiting paragraph (1)(b) or (1A)(b), that paragraph is taken to be satisfied if: (a) the conduct referred to in paragraph (1)(a) involves a number of transactions that are structured or arranged to avoid the reporting requirements of the Financial Transaction Reports Act 1988 that would otherwise apply to the transactions; or (aa) the conduct involves a number of transactions that are structured or arranged to avoid the reporting requirements of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 that would otherwise apply to the transactions; or (b) the conduct involves using one or more accounts held with ADIs in false names; or (ba) the conduct amounts to an offence against section 139, 140 or 141 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006; or (c) 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; or (d) the conduct involves a significant cash transaction within the meaning of the Financial Transaction Reports Act 1988, and the defendant: (i) has contravened his or her obligations under that Act relating to reporting the transaction; or (ii) has given false or misleading information in purported compliance with those obligations; or (da) the conduct involves a threshold transaction (within the meaning of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006) and the defendant: (i) has contravened the defendant's obligations under that Act relating to reporting the transaction; or (ii) has given false or misleading information in purported compliance with those obligations; or (e) the defendant: (i) has stated that the conduct was engaged in on behalf of or at the request of another person; and (ii) has not provided information enabling the other person to be identified and located. (4) Absolute liability applies to paragraphs (1)(b) and (c) and (1A)(b) and (c). (5) This section does not apply if the defendant proves that he or she had no reasonable grounds for suspecting that the money or property was derived or realised, directly or indirectly, from some form of unlawful activity. Note: A defendant bears a legal burden in relation to the matter in subsection (5) (see section 13.4)." 1. Sections 400.10 to 400.12, and 400.14 to 400.16 contain provisions not material to the present application. Section 400.13 provides as follows: "400.13 Proof of other offences is not required (1) To avoid doubt, it is not necessary, in order to prove for the purposes of this Division that money or property is proceeds of crime, to establish: (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. (2) To avoid doubt, it is not necessary, in order to prove for the purposes of this Division an intention or risk that money or property will be an instrument of crime, to establish that: (a) an intention or risk that a particular offence will be committed in relation to the money or property; or (b) an intention or risk that a particular person will commit an offence in relation to the money or property." 1. Section 400.9(1) differs from the preceding six sections in two material respects. The first is that it does not contemplate proof of the actual commission of an indictable offence; to prove the offence it is sufficient that the prosecution prove a dealing with money or property which it is reasonable to suspect is the proceeds of an indictable offence that has been committed. The second distinguishing feature is that s 400.9 contains no equivalent of an offence constituted by dealing in money or property that is intended to be, or is at risk of being, an instrument of crime - that is, an indictable offence that it is intended will be committed, or as to which there is a risk that it will be committed, in the future. 2. On its own, therefore, s 400.9(1) would create an offence only of dealing with money or property which it is reasonable to suspect is "wholly or partly derived or realised directly or indirectly" by the past or completed commission of an indictable offence and which is to the value of $100,000 or more. It is important to note the words "derived or realised". 3. There are three elements (see the Code, s 4.1) of an offence against s 400.9: (i) dealing in money or other property; (ii) which it is reasonable to suspect is the proceeds of crime; and (iii) the money or property is to the value of $100,000 or more. For a conviction under the section, each must be proved to the criminal standard. 1. For present purposes, it may be assumed that the Director can prove that, on the five occasions the subject of the charges, the applicant dealt with money to the value of more than $100,000. What is in issue is what he has to prove in order to prove the element contained in s 400.9(1)(b): that it is reasonable to suspect that that money was the "proceeds of crime". More precisely, what is presently in issue is what the Director is obliged to particularise as to his case in respect of that element. The contentions of the parties 1. The argument advanced on behalf of the applicant was the argument that had been advanced in the correspondence seeking particulars and before Hoy DCJ. The underlying proposition is that, in order to prove a charge under s 400.9(1), the Director must identify the indictable offence of which he asserts it is reasonable to suspect that the money was the proceeds. The argument was that, when charging under s 400.9, the Director is under an obligation to particularise the indictable offence(s) of which he alleges the money or property could reasonably be suspected of being the proceeds. The argument depended upon the definition of "proceeds of crime", and the use of that term in s 400.9(1)(b). On the hearing, this submission was modified to assert that what was essential was identification of a class of indictable offences of which the Director alleged that the money or property could reasonably be suspecting of being the proceeds. Senior counsel, however, maintained a submission, by reference to the definition, that money or property "can constitute 'proceeds of crime' only where it is derived [or realised] from an indictable offence". Further, he submitted that the words "taken to be satisfied" in sub-s (2) "relate only to the reasonableness of the suspicion required by sub-s (1)(b)". 2. The Director's contention, also as outlined in the correspondence, was that, by reason of s 400.9(2), he was not obliged to particularise an indictable offence. 3. Sub-section (2) spells out a number of circumstances that, if proved, will be taken to satisfy the requirements of sub-s (1)(b) - that it is reasonable to suspect that the money or property is the proceeds of crime. I take the Director's argument to be that sub-s (2) specifies circumstances that are deemed to be indictable offences, and that the circumstances spelled out in pars (c) and (e) of sub-s (2) are the "deemed indictable offences" from which he alleges the money the subject of the five charges on the indictment was derived or realised. 4. Senior counsel for the applicant sought to draw support for his argument by pointing to those pars of sub-s (2) that identify, as sufficient to be taken to satisfy par (1)(b), conduct that would itself constitute an indictable offence - for example, the conduct specified in par 2(a), constitutes a structuring offence under the Financial Transactions Reports Act 1988 (Cth). The Director's construction would, he contended, lead to absurdity, because a person dealing in money or property could be guilty of two offences (with different penalties) arising out of the same conduct. Resolution 1. The appellant's arguments cannot be accepted. 2. What sub-s (2) does is expand the ambit of sub-s (1)(b) by providing that the physical element provided by that paragraph - that is, that it is reasonable to suspect that the money or property is the proceeds of crime - is satisfied by proof of conduct of the various kinds specified. In other words, par (1)(b) is satisfied if the Director proves any of the kinds of conduct specified in the various paragraphs of sub-s (2). 3. That conduct is additional to conduct constituting an indictable offence from which the money (or property) is derived or realised. That is sub-s (2) provides an alternative route to proof of the "reasonable to suspect" element of the offence. By reason of sub-s (2), the Director is not obliged to prove that the money or property is derived or realised from an indictable offence; it is sufficient if he proves that it involves conduct of the kind specified. For example, sub-s (2)(a) provides that sub-s (1)(b) is taken to be satisfied if the dealing involves a number of transactions that amount to an offence of "structuring" within the meaning of the Financial Transactions Reports Act. Structuring offences are, by s 31 of that Act, indictable offences; but they are not offences from which money or property is derived or realised. Without the provisions of s 400.9(2)(a), it could not be said that money used in a structuring offence was derived or realised from the commission of an indictable offence and thus was the "proceeds of crime". Such conduct would not come within s 400.9(1). 4. Section 400.9(2)(a) thus expands the operation of s 400.9(1). The same reasoning applies to pars (aa), (b), (ba), (d) and (da): in each case, the conduct referred to is conduct that does, or might, in conjunction with other conduct, amount to an indictable offence; but it is not an indictable offence from which the money or property the subject of the asserted dealing could be said to have been derived or realised. Accordingly, those paragraphs also expand the operation of s 400.9(1)(b). 5. Similarly, the two paragraphs to which specific reference was made in response to the request for particulars, par (2)(c), and par (2)(e) (which do not, of themselves or in conjunction with other conduct, constitute indictable offences), expand the operation of s 400.9(1)(b) to encompass dealing in money or property grossly disproportionate to the defendant's income and expenditure over a reasonable period within which the conduct occurs (par (c)), and dealing in property in circumstances where the defendant has stated that the dealings were engaged in on behalf of or at the request of another person, and has failed to provide relevant information concerning that person (par (e)). 6. This reasoning demonstrates that the purpose of s 400.9(2) is to expand the operation of s 400.9(1)(b) in order to encompass conduct that does not fall within the definition of "proceeds of crime". It is therefore inappropriate to require the Director to identify a "predicate" indictable offence the subject of the charge. When sub-s (2) is invoked, a "predicate" offence is not required. Any one or more of the circumstances specified in sub-s (2) is sufficient to prove the element of a s 400.9 offence required by sub-s (1)(b). That is what the Director is obliged to particularise. And it is simply incorrect to characterise the words "taken to be satisfied" in sub-s (2) as directed to the reasonableness of the suspicion required by sub-s (1)(b); the language is inapt to convey such a meaning. 7. Further, I have no difficulty with the proposition that the same conduct might amount to offences against two different statutory provisions. The criminal law is well able to deal with any unfairness that might result, by requiring the prosecution to elect as to the offence to be prosecuted or, in the event of conviction, in sentencing (the totality principle being well established). 8. The applicant's argument must therefore fail. 9. Since the question raised by the application has been determined on its merits, leave should be granted to the applicant to appeal under s 5F(3)(a); however, the appeal should be dismissed. I propose the following orders: (1) Leave granted to appeal; (2) Appeal dismissed. 1. R A HULME J: I agree with Simpson J. 2. BELLEW J: I agree with Simpson J. ********** Amendments 03 August 2015 - Representatives corrected DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 03 August 2015