Director of Public Prosecutions v Pan

[2021] VCC 415

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

CRIMINAL DIVISION

Revised
Not Restricted
Suitable for Publication

Case No. CR-19-00751

THE DIRECTOR OF PUBLIC PROSECUTIONS	Prosecution
v
LINCHONG PAN	Defence

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JUDGE:	Cahill
WHERE HELD:	Melbourne
DATE OF HEARING:	29 March 2021
DATE OF RULING:	16 April 2021
CASE MAY BE CITED AS:	DPP v Pan
MEDIUM NEUTRAL CITATION:	[2021] VCC 415

RULING
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Subject:Application for permanent stay of indictment

Catchwords:              Dealing with property reasonably suspected of being proceeds of crime; application for a permanent stay of indictment

Legislation Cited:      Criminal Code Act 1995 (Cth)

Cases Cited:Chen v DPP (Cth) (2011) 83 NSWLR 224; Lin v The Queen (2015) 297 FLR 457; Harmeet Singh v R [2016] VSCA 163; DPP (Cth) v Ngo (2012) 272 FLR 246

Ruling:  Application dismissed

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APPEARANCES:	Counsel	Solicitors
For the Prosecution	Mr S. Ginsbourg	Ms A. Hogan Solicitor for Public Prosecutions
For the Defence	Mr G. Jones SC	Mr J. Dalziel Law Office of Ellinghaus & Linder

HIS HONOUR:

1Linchong Pan (‘Pan’) and Zhengwei Zhang (‘Zhang’) are to stand trial on charges of dealing with money, more than $100,000, reasonably suspected of being proceeds of crime contrary to s 400.9 (1) of the Criminal Code Act 1995 (Cth) (‘the Code’).

Alleged Circumstances

2The prosecution allege, between 24 May 2017 and 20 July 2017, Pan, on nine separate occasions, collected cash from parties in Sydney totalling $5,164,300, which he disbursed to other parties in Melbourne. Each time, the cash collected exceeded $100,000.

3It is alleged Pan collected the cash, either on his own, or jointly with Zhang or by procuring Zhang to collect it for him.

4He is charged with nine offences; one for each transaction (charges 1, 2, 3, 5, 7, 9, 10, 11 and 12).

5The prosecution allege Zhang was involved in collecting, and distributing, cash in five of the nine transactions, which involved $3,534,300 (Charges 4, 6, 8, 9 and 10).

6The prosecution allege that, at the time of the offending, Pan and Zhang were based in Melbourne. Pan operated a financial advisory and loan brokerage business and Zhang was his employee.

7It is alleged the sums of money they collected and disbursed far exceeded their business and personal income and expenditure at the time.

8The prosecution case is that they were money remitters, in Australia, for an international money laundering syndicate which used the Hawala method to secretly move substantial sums of money internationally, using currency in different countries, without moving currency between countries or making an electronic bank transfer.

9It has been described as a money transfer without money movement.

10The prosecution rely on the accused men’s receipt of considerable sums of cash, and their involvement in the Hawala method of money transfer, to prove it is reasonable to suspect that the money was the proceeds of crime.

Application

11Pan makes an application for a permanent stay of the indictment on the ground that the prosecution cannot prove the second physical element of the offence under s 400.9 of the Code and, accordingly, the proceeding is foredoomed to fail.

Elements of the Offence

12The physical elements of the offence are:

(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.

13Under the Code, the fault elements which attach to the three physical elements are:

(a)   intention;[1]

(b)   absolute liability;[2] and

(c)   absolute liability.[3]

[1] Criminal Code Act 1995 (Cth) s 5.6(1).

[2] Criminal Code Act 1995 (Cth) s 400.9(4).

[3] Criminal Code Act 1995 (Cth) s 400.9(4).

14It follows that the prosecution:

(a)   must prove:

(i)the charged person dealt with the money intentionally, that is, he meant to deal with the money; and

(b)   is not required to prove:

(i)the person believed or suspected the money was proceeds of crime; or

(ii)the person believed or suspected the value of the money was $100,000 or more.

15The term “proceeds of indictable crime” is defined as follows:

any money or other property that is wholly or partly derived or realised, directly or indirectly, by any person from the commission of a particular offence against a law of the Commonwealth, a State, a Territory or a foreign country that may be dealt with as an indictable offence.[4]

[4] Criminal Code Act 1995 (Cth) s 400.1.

Application

16Mr Jones SC, who appeared for Pan, submitted that, in order to prove the second physical element, the prosecution must establish that the money that Pan allegedly dealt with was derived from an offence within the meaning of the definition section. He submitted that a failure to establish that fact brings an end to the charge.

17Mr Ginsbourg, who appeared for the Crown, accepted that the prosecution cannot prove that the money was derived from a particular crime. He submitted it is not a necessary proof because the prosecution is not required to establish that the money is actually the proceeds of crime, but only that it is reasonable to suspect the money is the proceeds of crime.

Defence Submissions

18In written and oral submissions, Mr Jones relied on the New South Wales Court of Criminal Appeal decision in Chen v DPP (Cth) (2011) 83 NSWLR 224 (‘Chen’). It is authority for the proposition that, to prove an offence under s 400.5 of the Code, the prosecution must identify the indictable offence relied on to prove that money was either of the proceeds of crime or was intended to become an instrument of crime.

19Basten JA said “the jury needed to know what precisely the prosecution identified as the relevant indictable offence”.[5]

[5] Chen v DPP (Cth) (2011) 83 NSWLR 224 [27].

20Garling J said, “[u]nless the prosecution identifies the relevant indictable offence, then it is not open to a jury to conclude that the money or other property constituted an instrument of crime.”[6]

[6] Chen v DPP (Cth) (2011) 83 NSWLR 224 [98].

21Their Honours decided the prosecution had failed to identify a relevant indictable offence and directed the appellant’s acquittal. Simpson J, dissenting, was satisfied that the prosecution had identified a relevant indictable offence.

22An offence charged under sections 400.3 to 400.8 of the Code specifically requires the prosecution to prove either:

(a)   the money or property is, and the person believes it to be, proceeds of crime; or

(b)   the person intends that the money or property will become an instrument of crime.

23Neither ingredient is an element of the offence under s 400.9 of the Code.

24Mr Jones submitted, nevertheless, as a matter of statutory construction, the proceeds of crime definition applies to all offences under Division 400 including section 400.9 of the Code.

25In his submission, it follows, the prosecution must identify a relevant indictable offence to establish it is reasonable to suspect that the money Pan dealt with was proceeds of crime. And, because it cannot, the charges brought against Pan must fail.

Prosecution Submissions

26Mr Ginsbourg submitted that the reasoning in Chen is distinguishable from the present case because an offence under s 400.5 of the Code, and ss 400.3 and 400.4, 400.6, 400.7 and 400.8, requires proof the money actually is the proceeds of crime or would constitute an instrument of crime whereas proof of the second physical element under s 400.9 of the Code does not require proof the money was proceeds of crime, but only proof that it is reasonable to suspect that the money is the proceeds of crime.

27He referred to Lin v The Queen (2015) 297 FLR 457, another decision of the New South Wales Court of Criminal Appeal. In that case, Simpson J, Hulme and Bellew JJ agreeing, held that, to prove an offence under s 400.9, the prosecution is not required to prove a “predicate offence” to prove the physical element that it is reasonable to suspect that the money is proceeds of crime.[7]

[7] Criminal Code Act 1995 (Cth), s 400.9(1)(b).

28Simpson J, said:

Section 400.9 (1) differs from the preceding 6 sections [in division 400] 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.[8]

[8] Lin v The Queen (2015) 297 FLR 457 [13] (Simpson J).

29In my view, Her Honour’s reasoning is determinative of the current application.

30To prove an offence under s 400.9 the prosecution is not required to establish the money is proceeds of a crime which has been committed; proof that it is reasonable to suspect that the money is proceeds of crime is sufficient.

31The test is an objective one. There is evidence, including the substantial sums of cash involved, the system used for its collection and delivery, and Pan’s admissions about the unlawful nature of the cash, which could satisfy the jury it is reasonable to suspect the money was proceeds of crime.

32As the Victorian Court of Appeal said has previously stated:

s 400.9(1)(b) of the Code sets out an objective or impersonal physical element which depends on objective facts rather than the subjective knowledge of an accused.[9]

[9] Harmeet Singh v R [2016] VSCA 163 [47].

33The Court continued:

whether the prosecution has established the element is to be determined by the jury on the basis of all the evidence that is available and admissible at trial, irrespective of whether the evidence existed or was known at the time of the dealing with the money or came to light after that time.[10]

[10] Harmeet Singh v R [2016] VSCA 163 [52].

34Accordingly, the application to permanently stay the indictment against Pan is dismissed.

35In reaching this decision I have also had regard to obiter dicta of Button J in DPP (Cth) v Ngo (2012) 272 FLR 246, a decision to which Mr Jones properly and fairly referred. In response to the Director’s submission the magistrate had erred in applying the reasoning in Chen to an offence under s 400.9 of the Code, His Honour said the construction of the provision “would seem to permit the offence in s 400.9(1A) to be made out without the identification of any particular criminal act, or indeed particular offence.”[11]

[11] DPP (Cth) v Ngo (2012) 272 FLR 246 [40] (Button J).