Christian v Sawka

[2014] HCATrans 50

[2014] HCATrans 050

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Perth   No P32 of 2012

B e t w e e n -

CRAIG ANTHONY CHRISTIAN

Applicant

and

PAUL WILSON SAWKA

Respondent

Application for special leave to appeal

HAYNE J
BELL J
GAGELER J

TRANSCRIPT OF PROCEEDINGS

FROM CANBERRA BY VIDEO LINK TO PERTH

ON FRIDAY, 14 MARCH 2014, AT 12.31 PM

Copyright in the High Court of Australia

MR D. GRACE, QC:   If the Court pleases, I appear on behalf of the applicant.  (instructed by Holborn Lenhoff Massey)

MS G.A. ARCHER, SC:   May it please, your Honours, with MR A.L. TROY I appear for the respondent.  (instructed by Director of Public Prosecutions (Cth))

HAYNE J:   Yes, Mr Grace.

MR GRACE:   Your Honours, an extension of time is sought by the applicant to make this application for special leave.

HAYNE J:   Is that opposed, Ms Archer?  You have that extension.  Yes, Mr Grace.

MR GRACE:   Your Honours, this application raises some difficult construction issues concerning Division 2 of Part 4 of the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006. The principal error that the Court of Appeal made was to find that the report referred to in section 57(3)(d) was not necessarily the same report referred to in sections 53, 54 and 56 of the Act and could incorporate the concept of an oral report to comply with section 57. That error, it is submitted, was the genesis of the finding that the courts below had not erred in finding the offence proved.

HAYNE J:   Assume that the court below was wrong to conclude that the report could be given orally, assume further that at the time of the events in question no form of report was prescribed.  What then follows, other than a general prohibition on moving a certain quantity of physical currency out of the country?

MR GRACE:   Because the offence was predicated upon an omission to file a report and assuming that that report has to be a written report in approved form, the question that determines the answer to your Honour’s question is whether the combined operation of the sections within this division created a duty on the part of the applicant to file a report.  Now, if the answer to that question ‑ ‑ ‑

HAYNE J:   And it was under no duty to move more than the stated amount of currency outside the country.

MR GRACE:   Yes, but once he did, in the fictional circumstances of reaching the point of embarkation - which is defined as the Customs passports desk - I submit the obligation or the duty arose. Now, if the duty arose and the duty was not possible to be performed because of the absence of an approved form then section 4.3 of the Criminal Code, which has a heading “Omissions”, comes into play.  That, as your Honours would be aware, provides where the duty is not capable of being performed it cannot form the basis of a criminal offence.

BELL J:   But how do you get a duty out of the offence‑creating provision with respect to a report?

MR GRACE:   Unfortunately, the drafting of this particular division presents difficulties.  If we could start with ‑ ‑ ‑

HAYNE J:   For whom, Mr Grace?

MR GRACE:   Well, I think for everyone involved in this case, your Honour.  Can we start with ‑ ‑ ‑

BELL J:   Mr Grace, construing a provision that is imposing criminal liability, how does one get the circumstance that a person commits an offence if the person moves physical currency out of Australia, an element of conduct to which there is a default fault element, the total amount of the currency is not less than $10,000 and a requirement simply that a report in respect of the movement has not been given in accordance with the section.  How does (1)(c) impose a duty on the person?

MR GRACE:   It is not just (1)(c), your Honour.  One of the flaws in the reasoning of the court below was the failure to appreciate that (1)(a)(ii) creates the duty by incorporation of the elements of section 57(3)(d).

BELL J:   But then one comes to Justice Pullin’s point, does one not?  When one goes to section 57 which tells us more about the concept of moving physical currency out of Australia one sees that in 57(3) if a person does various things including failing to give a report:

about the physical currency when at the place in the embarkation area –

and so forth, what is wrong with an analysis that says if a person at the place of embarkation says “By the way, officer, I have got $10,002 in my hand luggage” that the person has not taken themselves outside the provisions of the offence in the sense the person has not moved currency out of Australia by reason the person has given a report about the physical currency at the place in the embarkation area at which customs’ officers examine passports.

MR GRACE:   The answer to your Honour’s question is yes, the person takes himself out of the operation of the section but could I develop the argument by taking your Honours to a number of the sections in this division?  If we could start with your Honour Justice Bell’s comments in relation to section 57(3)(d):

does not give a report about the physical currency –

What does the word “about” mean in this context?  It means more than disclosing the existence of the currency, in my submission.  It has the meaning described in section 53(8), so we need to go back to that.  That provides:

A report under this section must:

(a)      be in the approved form; and

(b)     contain such information relating to the matter being reported as is specified in the AML/CTF Rules; and ‑

is given to the various persons there cited.

BELL J:   This is an argument that criminal liability would attach for the offence in section 53 in circumstances in which a person makes a full disclosure of the physical currency that they are on the point of taking out of Australia.

MR GRACE:   Yes, but if the person does not give a report about the currency, and if you look at the form that was tendered in the court below, you will see various questions that are asked that are required to be answered because it is simply insufficient to say, “I have got $10,002”.  You have to give an explanation where you got the money from and so on.  That is set out in the form. 

So, if your Honour’s comments to me are accepted and, in effect, that adopts what the respondent has to say about this, section 53 does not create an obligation or a duty to provide a report.  Nor does section 57(3), it might be said.  One would be left to section 54 to uplift a duty via section 53(8).  So if you go to section 54, it talks about the timing of a report under section 53.  Subsection (1)(b) provides:

if the movement of the physical currency is to be effected by a person taking the physical currency into Australia with the person- -at the time worked out under subsection (3). 

Subsection 1(d) provides:

in any other case- -at any time before the movement of the physical currency takes place.  

If you go to subsection (3), which talks about “Outwards movements”, that talks about:

For the purposes of paragraph (1)(b), the applicable time is:

(a)      if:

(i)the movement of the physical currency is to be effected on an aircraft or ship; and

(ii)the person, before embarking, goes to the place at which customs officers examine passports;

as soon as the person reaches that place.

So when you look at that provision and then go to 57(3)(d), you will see the same reference to the place in the embarkation area at which customs officers examine passports.  So what is the report that is being talked about in 54?  It is the report in 53 and the report, in my submission, in 57.  Then, if you go further, if you go to section 55, and you will see there reference to receipts of physical currency from outside Australia and again you see a reference in subsection (1) – and it does not apply to this factual situation we are considering today – but, nevertheless, it gives some support to the submissions I am making because it is talking about a report in respect of movement has not been made under section 53.

Then, when you go to section 56, you see there, if a report under section 53 of 55 is given to a Customs officer or a police officer, the officer must, within five business days after the day of receipt of the report forward the report.  So that must mean a written document.

BELL J:   But section 57(3)(d), unlike other sections in this division, does not refer to a report within the meaning of section 53(8) or otherwise describe a report meeting the Austrac CEO – I am sorry, the AML/CTF rules or anything of that nature.  It is simply a report about the physical currency. 

MR GRACE:   Yes, but could I develop that argument further by referring your Honour to section 5, which has a definition of the phrase “move physical currency out of Australia”?  That is exactly the phrase that is used in section 53(1).

BELL J:   I am sorry, this is section 5?

MR GRACE:   Of the Act.

BELL J:   I am sorry, can you just point us to where in the application book we will find section 5?

MR GRACE:   You will not, your Honour.

BELL J:   Well, in the materials?

MR GRACE:   In the materials, it is in the materials.

HAYNE J:   Well, 5 says:

“move physical currency out of Australia” has the meaning given by section 57.

MR GRACE:   Yes.  That effectively is a deeming provision.  It creates a fiction as to what is meant by moving the money out of Australia.  But then if you go back to section 53, section 53 requires proof that the person has moved physical currency out of Australia and it thereby incorporates a reference to the report that is failed to be given under section 57(3)(d).  So, to accept the respondent’s interpretation would require a different consideration in certain circumstances of what is meant by the word “report” under section 53(1)(a)(ii) as compared to what is meant by “report” under section 53(1)(c).

BELL J:   The distinction that Justice Pullin considered of no small significance is that the circumstance required by 53(1)(c) is that a report has not been given, whereas 57(3)(d) is concerned with the person, relevantly, the accused, giving a report.

MR GRACE:   Yes.

BELL J:   Well, the ‑ ‑ ‑

MR GRACE:   Well, there is an artificiality, your Honour, in the circumstances portrayed by this case which seeks to make a distinction between the possibility of a person other than the applicant failing to make a report or not failing to make a report under section 53.  If we deal with the circumstances of this case acceptance of the respondent’s submissions requires an acceptance that the report referred to in 53(1)(a)(ii) is a different type of report referred to in 53(1)(c) because there is no doubt that 53(1)(c) requires a report in accordance with the section, and that can only mean a section 53(8) report. 

So, whichever way you look at the problem, your Honour, whether you confine it to a 53(1)(a)(ii) report issue, and that incorporates into the physical element all the elements of 57(3)(d), or you just look at it solely as a 53(1)(c) issue, the absence of the approved form, in my submission, is fatal.

BELL J:   You spoke of a problem in relation to the construction of the provisions of this division.  That problem has been somewhat resolved, has it not?  There is now an approved form, so the point might be thought to have less than wide‑ranging significance.

MR GRACE:   Well, one can see – and the case of Knaggs is an example, the New South Wales decision that dealt with the Income Tax Assessment Act – that the problem is not necessarily confined to this piece of legislation.  It prevails in other pieces of Commonwealth legislation.  But more importantly, in the circumstances of this case, it has given rise to a miscarriage of justice because if one of the elements of the offence was incapable of being proved due to the absence of the approved form ‑ ‑ ‑

HAYNE J:   But that is essential to your submission, is it not, that an element of the offence could not be proved, and could not be proved for want of prescribed form?

MR GRACE:   Yes.

HAYNE J:   It is the latter step which I do not understand.  The relevant element of the offence is that a report has not been given.  You say there was no form of report that could have been given.  In those events, assuming the accuracy of all of the rest of your argument, is not the consequence that a person commits an offence if he or she takes more than the stipulated amount of physical currency out of the country?  End of question.  It has become an absolute prohibition on removing that amount of physical currency from the country.  End of game.

MR GRACE:   Your Honour, this is not a common law offence.  It is obviously a statutory offence ‑ ‑ ‑

HAYNE J:   Yes, it is.

MR GRACE:   ‑ ‑ ‑ and it has elements that are proscribed by law, and one of the elements, as affected by the operation of the Criminal Code, and if one accepts that there was a duty to file the report – that is an antecedent issue ‑ ‑ ‑

HAYNE J:   That is the point perhaps at which I anticipate some difficulty.

MR GRACE:   Yes.

GAGELER J:   Is that critical to your argument, the existence of a duty?

MR GRACE:   Yes.  It is crucial to my argument that there is a duty to file the report, and that is the flavour, if I could use that word, that this division of the Act implies.

BELL J:   Critical to your argument is that it is a duty to file a report, being the report referred to in 53(1)(c) ‑ ‑ ‑

MR GRACE:   Or (1)(a), because I say that it is the same report.

BELL J:   Well, you say it is the same report, but there are, for the reasons Justice Pullin teased out, some difficulties in the way of making good that submission.

MR GRACE:   Yes.  If I am allowed, I will of course adumbrate upon that in due course, but I say that there are some flaws in the reasoning process adopted by Justice Pullin in that regard, and that the whole consideration of this division of the Act does firstly create a duty and does not differentiate between the practical content of the word “report”, regardless of where it appears.  This is further emphasised if you go to section 199 of the Act, which is one of the sections in the materials towards the rear.  That allows an officer to question a person about to leave Australia, or is in the embarkation area, as to whether that person has declared a report.  You will see that in section 199(1)(e).

BELL J:   If one could find it.  Where did you say it is?

MR GRACE:   The relevant subsections of section 199 include 199(1)(e), (2)(c), (4)(b) and (d), (8) and (9).  All of them are predicated upon the existence of an obligation or a duty to provide a report.  All those questioning powers because if there was no such duty there would be no basis upon which a Customs officer could ask the questions.  Those are the submissions.

HAYNE J:   Thank you, Mr Grace.  Yes, Ms Archer.  What do you say about the proposition of duty?

MS ARCHER:   Two things, your Honour.  Firstly, the duty is said to arise under section 57(3)(d).  We say that proposition is incorrect because section 57 is not the law that creates the offence.  It is simply a mechanism by which a person may be deemed to have moved money.  So it is not creating a duty to report.  It is simply one of the matters that must exist before the deeming mechanism will operate. 

In relation to section 53(1)(c), we say that also does not create a duty for one of the reasons articulated and referred to, I think, by Justice Bell on the other issue about whether the reports are different things and that is that a report under section 53(1)(c) does not have to be given by the person moving the money.  That can be demonstrated by comparing section 53 to other provisions within the Act that indicate that the proper construction of section 53(1)(c) is that it does not require the mover to give a report.  Now, the first of those sections is section 55.

GAGELER J:   Does it require the mover to ensure that a report has been given?

MS ARCHER:   May I answer that question in this way?  It imposes criminal liability on the mover if a report is not given.  So the answer is probably yes but I would qualify it by saying that the structure of the offence‑creating provision is to say if you move this amount of money and a report is not given, you have committed an offence. 

One of the provisions that Mr Grace took the Court to was section 199 of the Act which talks about the power of a Customs official to ask someone questions.  The interesting thing about that section that is relevant to this matter is the way that section 199(1)(e) is drafted.  It says the person must:

declare . . . to the best of the person’s knowledge and belief –

Now, if the person themselves was the one that was required to give the report there would be no basis upon which the legislature would put in “best of your knowledge and belief” because if you have done it, you know whether or not you have done it.  So that is an indicator that suggests that the report under 53, that requirement can be met by anybody doing it.  Another potential section that illustrates that is section 55.

Now, section 55 deals with reports regarding receipt of money, and the Court will see in subsection (1)(c) one of the elements is a report in respect of the movement has not been made, and then the next element is a report in respect of the receipt is not given.  So, if we start from the premise, which we reject, that section 53 requires the person moving to give the report then what section 55 is making an element of the offence relates to somebody else’s obligation to give a report, and that simply cannot be right. 

What we say is the better construction is that when a section talks in terms of a report not having been given it is not imposing a duty on the person, the subject of the offence or the potential subject of the offence.  Instead, it is identifying a circumstance, the fact that a report has not been

given.  So, that is the respondent’s response in relation to the duty point.  I do have some brief submissions in further support of the Court of Appeal’s construction about the reports being different things and the possible ‑ ‑ ‑

BELL J:   Can I just clarify that?

MS ARCHER:   Certainly.

BELL J:   Do you accept that the prosecution would not prove the physical element in 53(1)(a)(ii) if the evidence were that the person accused of the offence had, at the place in the embarkation area at which Customs officers examine passports, disclosed orally or in writing the fact that the person had an amount of currency in excess of the sum?

MS ARCHER:   Yes, I would, your Honour, until the person got on the plane and took the money with them.  If that happened, if that theoretically could possibly happen, because then there would be no need to rely on the deeming mechanism in (3).

BELL J:   Yes, I understand.

MS ARCHER:   If I may make some brief remarks about the construction of the Court of Appeal about the two reports being different.

HAYNE J:   I do not think we need trouble you on that aspect of the matter, Ms Archer.

MS ARCHER:   Thank you then.  Unless the Court has any questions we would rely on our written submissions.

HAYNE J:   Thank you.  Yes, Mr Grace.

MR GRACE:   I can add nothing more to the submissions I have made.

HAYNE J:   We are of opinion that the applicant enjoys insufficient prospects of disturbing the conclusions reached in the Court of Appeal to warrant a grant of special leave to appeal in this matter.  Special leave is refused.

The Court will adjourn to reconstitute.

AT 12.59 PM THE MATTER WAS CONCLUDED