Harper v Director of Public Prosecutions (Cth)
[2021] VSCA 173
•18 June 2021
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S EAPCR 2021 0045
| FELIX HARPER (a pseudonym)[1] | Applicant |
| v | |
| DIRECTOR OF PUBLIC PROSECUTIONS (CTH) | Respondent |
[1]Because this is an interlocutory proceeding, a pseudonym has been used in place of the name of the applicant and the reasons have been prepared in a form which omits identifying details.
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| JUDGES: | PRIEST and BEACH JJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 11 June 2021 |
| DATE OF JUDGMENT: | 18 June 2021 |
| MEDIUM NEUTRAL CITATION: | [2021] VSCA 173 |
| JUDGMENT APPEALED FROM: | [2021] VCC 415; [2021] VCC 470 (Judge Cahill) |
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CRIMINAL LAW – Appeal – Interlocutory appeal – Certification – Application to review refusal to certify – Dealing with money reasonably being suspected of being proceeds of crime – Whether prosecution must establish indictable offence or class of offences from which money derived – Application to primary judge to stay prosecution on basis that foredoomed to fail because prosecution cannot establish predicate offence – Application refused by primary judge – Lin v The Queen (2015) 297 FLR 457 discussed – Primary judge correct to refuse certification on basis that decision not attended with sufficient doubt – No error in refusing permanent stay – Review application refused – Criminal Code Act 1995 (Cth), ss 400.1 and 400.9.
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| APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr D R Campbell SC with Mr G J Jones | Ellinghaus & Lindner |
| For the Respondent | Mr S Ginsbourg | Ms A Pavleka, Solicitor for Public Prosecutions (Cth) |
PRIEST JA
BEACH JA:
The applicant is facing trial in the County Court on charges of dealing with money, being more than $100,000, reasonably suspected of being the proceeds of crime contrary to s 400.9(1) of the Criminal Code Act 1995 (Cth) (‘the Code’).
Before the commencement of his trial, the applicant applied for a permanent stay on the ground that the prosecution cannot prove that the money the subject of the charges is the proceeds of crime and, accordingly, the prosecution is foredoomed to fail.
The primary judge refused the stay application,[2] the applicant then applied to the judge for a certificate under s 295(3) of the Criminal Procedure Act 2009 (‘the Act’). That application was also refused by the judge.[3]
[2]DPP v [Harper] [2021] VCC 415 (‘Ruling’).
[3]CDPP v [Harper] [2021] VCC 470 (‘Certification Ruling’).
Pursuant to s 296(1) of the Act, the applicant has filed an application in this Court seeking a review of the judge’s refusal to certify. As will appear, we consider that the judge’s ruling on the stay application was correct, as was his refusal to certify. The application for a review of the judge’s refusal to certify will therefore be refused. Our reasons follow.
Prosecution case and relevant background
In short compass, the prosecution case is that between May and July 2017, on nine separate occasions, the applicant collected cash (either on his own, or jointly with a co-accused, or by procuring the co-accused to collect it for him) from parties in Sydney. The amounts collected totalled in excess of $5 million. The applicant then dispersed this cash to other parties in Melbourne. On each occasion, the cash collected exceeded $100,000.
At the time of the alleged offending, the applicant was based in Melbourne. He operated a financial advisory and loan brokerage business. It is alleged that the sums of money collected and dispersed far exceeded the applicant’s income and expenditure at the time.[4]
[4]In oral argument in this Court, the applicant contended that, because the prosecution is not relying on s 400.9(2) of the Code, this fact is irrelevant. The Director contested this proposition, saying that even though s 400.9(2) is not being relied upon, the fact remains relevant in proof of the element contained in s 400.9(1)(b).
The prosecution case is that the applicant was a money remitter, 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. This form of activity has been described as a money transfer without money movement.
The prosecution rely on the applicant’s receipt of considerable sums of cash, and his involvement in the Hawala method of money transfer, to prove it is reasonable to suspect that the money is the proceeds of indictable crime.
The relevant provisions of the Code
At the time of the alleged offending, s 400.9(1) of the Code provided:
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;[5] 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.
[5]The current version of s 400.9(1) refers to ‘the proceeds of indictable crime’, a term also defined in the current version of s 400.1(1) of the Code.
The expression ‘proceeds of crime’ was defined in s 400.1(1) of the Code to mean:
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).
The expression ‘deals with money or other property’ was defined in s 400.1(1) to have the meaning given to it by s 400.2. For present purposes, it is not necessary to set out or refer further to s 400.2.
The fault elements which attach to the three physical elements set out in s 400.9(1) are intention for the element in paragraph (a)[6] and absolute liability for the elements in paragraphs (b) and (c).[7]
[6]See s 5.6(1) of the Code.
[7]See s 400.9(4).
At the time of the alleged offending, s 400.9(2) relevantly provided that without limiting paragraph (1)(b) of s 400.9(1), that paragraph is taken to be satisfied in a number of specified circumstances, including 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
…
(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; …
The issue
The applicant submitted to the judge, and again in this Court, that in order to establish a charge under s 400.9(1) of the Code, the prosecution must establish that the money the applicant allegedly dealt with was the proceeds of crime as defined in s 400.1(1). That is, the prosecution had to establish that the money was derived from an offence of the kind referred to in the definition of ‘proceeds of crime’.
The respondent accepted before the primary judge, and again in this Court, that the prosecution could not prove that the money the applicant allegedly dealt with was derived from any particular crime. The Director submitted, however, that it was not necessary for her to prove that matter because the prosecution is not required to establish that the money is actually the proceeds of crime: it is only required to establish that it is reasonable to suspect that the money is the proceeds of crime.
Parties’ submissions at first instance
In his submissions to the primary judge, the applicant relied upon the decision of the New South Wales Court of Criminal Appeal in Chen v Director of Public Prosecutions (Cth).[8] Chen is authority for the proposition that, to establish an offence under s 400.5 of the Code, the prosecution must identify the indictable offence relied upon, to prove that the money dealt with was either the proceeds of crime, or was intended to become an instrument of crime. The applicant referred to and relied upon passages in the judgments of Basten JA[9] and Garling J[10] in support of this proposition.
[8](2011) 83 NSWLR 224 (‘Chen’).
[9]Ibid 232 [27].
[10]Ibid 245 [98].
The applicant accepted that the offence created by s 400.5 of the Code (as with the offences created by ss 400.3, 400.4, 400.6, 400.7 and 400.8) required the prosecution to prove that the relevant money ‘is, and the person believes it to be, proceeds of crime’ or that the person charged ‘intends that the money … will become an instrument of crime’, and that neither of these ingredients are elements of the offence under s 400.9 of the Code. He submitted to the judge, however, that as a matter of statutory construction, the definition of ‘proceeds of crime’ in s 400.1(1) applied to all offences under div 400, including s 400.9. He submitted that it followed that the prosecution must identify a relevant indictable offence in order to establish that it is reasonable to suspect that the money the applicant dealt with was the proceeds of crime. In this case, because the prosecution cannot identify such an offence, the prosecution against the applicant must fail.
In response, the prosecutor submitted to the judge that Chen is distinguishable because of the additional elements required to be proved in order to prosecute an offence under s 400.5 (and ss 400.3, 400.4, 400.6, 400.7 and 400.8) of the Code. By their terms, those sections require the prosecution to prove that the relevant money actually is the proceeds of crime, or that the alleged offender intends that the money will become an instrument of crime.
The prosecutor submitted to the judge that the subsequent decision of the New South Wales Court of Appeal in Lin v The Queen[11] is determinative of the present issue. In that case, the Court held that to prove an offence under s 400.9, the prosecution is not required to prove that the relevant money was derived or realised from a particularised indictable offence or class of offences.
[11](2015) 297 FLR 457 (‘Lin’).
Primary judge’s reasons
The judge commenced his reasons for refusing the stay with a description of the background of the case and the issue in dispute. He then analysed the submissions of the parties, and in particular their submissions in relation to Chen[12] and Lin.[13]
[12](2011) 83 NSWLR 224.
[13](2015) 297 FLR 457.
The judge concluded that the reasoning of Simpson J[14] in Lin was determinative of the application against the applicant.[15] The judge relied upon the following passage in her Honour’s judgment:
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.[16]
The ’preceding six sections’ referred to by Simpson J were, of course, ss 400.3 to 400.8, to which we have already referred.
[14]With whom Hulme and Bellow JJ agreed.
[15]Ruling [28]–[29].
[16]Lin (2015) 297 FLR 457, 461 [13] (citations in original).
The judge concluded his reasons on the stay application by saying that to prove an offence under s 400.9, the prosecution is not required to establish that the relevant money is the proceeds of a crime which has been committed: proof that it is reasonable to suspect that the money is proceeds of crime is sufficient.[17] As the judge put it:
The test is an objective one. There is evidence, including the substantial sums of cash involved, the system used for its collection and delivery, and [the applicant’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.[18]
[17]Ruling [30].
[18]Ibid [31].
With respect to certification, the judge accepted that his decision was of sufficient importance to the trial to justify it being determined on an interlocutory appeal.[19] He refused certification, however, because he was not satisfied that his decision to refuse a permanent stay was attended by sufficient doubt to warrant an interlocutory appeal.[20]
[19]Certification Ruling [15].
[20]Ibid [30].
Parties’ submissions in this Court
In this Court, the applicant submitted that, properly construed, s 400.9 required proof that a relevant dealing occurred ‘in the course of conduct that constituted an indictable offence’. The applicant accepted that while a particular criminal act at a particular time and place may not need to be established, ‘at least a particular class of crime need[ed] to be identified’.
The applicant submitted that the necessity for the ‘property’ in question to be identified as proceeds of crime is a cornerstone of the sections within Chapter 10 of the Code, including s 400.9. It was submitted that the essence of breaches of Chapter 10 is the ascertainment of the property as proceeds of crime. Absent such ascertainment or identification, no offence against Chapter 10 can be established. It was submitted that this is why the definition of ‘proceeds of crime’ is of paramount importance, the definition focusing on the derivation or realisation of the property in question.
In this Court, the applicant accepted the possibility that a predicate offence may not need to be identified in circumstances where the prosecution is able to rely on matters provided for in s 400.9(2). It appeared to be accepted by the applicant that Lin might be authority for this more limited proposition. The applicant submitted, however, that in the present case, it is unnecessary to resolve whether that is so because the prosecution has expressly abandoned reliance in this case on s 400.9(2) of the Act.
The applicant submitted that the primary judge’s reliance on Lin was misplaced in light of the fact that the prosecution had abandoned reliance upon s 400.9(2). Moreover, it was submitted that if the primary judge’s construction were to be accepted, then there would be no need for s 400.9(2) to have been enacted.
In response, the Director supported the primary judge’s reasoning. The Director submitted that, contrary to the applicant’s submissions, Lin was not limited to cases where the prosecution relied on s 400.9(2). In support of this submission, the Director pointed to that part of Simpson J’s reasoning dealing with the differences between ss 400.3–400.8 on the one hand, with s 400.9 on the other hand.[21]
[21]Lin (2015) 297 FLR 457, 461 [13].
Additionally, the Director contended that the applicant’s submission, that the primary judge’s construction of s 400.9(1) rendered s 400.9(2) otiose, was not correct. The Director submitted that s 400.9(2) has an operative effect beyond merely dealing with cases where a predicate offence is not (or cannot be) established. It also operates in circumstances where it might otherwise not be reasonable to suspect that the relevant money is the proceeds of crime.
Consideration
The issue between the parties involves the proper construction of s 400.9 of the Code. As the High Court has repeatedly said, in construing a statutory provision, it is necessary to have regard to the text, context and purpose of that provision.[22]
[22]Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503, 519 [39]; [2012] HCA 55 (French CJ, Hayne, Crennan, Bell and Gageler JJ). See also Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) (2009) 239 CLR 27, 46–7 [47]; [2009] HCA 41 (Hayne, Heydon, Crennan and Kiefel JJ), SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362, 368 [14]; [2017] HCA 34 (Kiefel CJ, Nettle and Gordon JJ).
The applicant correctly submitted that Lin was a case where the prosecution relied upon sub-s (2) of s 400.9. He was also correct in submitting that Simpson J concluded 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’.[23] From this, her Honour concluded that the prosecution was not required to identify a ‘predicate’ offence when sub-s (2) is invoked.[24]
[23]Lin (2015) 297 FLR 457, 463 [26].
[24]Ibid.
The applicant’s submission that Lin only applies in cases where s 400.9(2) is invoked must, however, be rejected for at least four reasons.
First, that is not what the court in Lin said. As Simpson J observed, s 400.9(1) differs from ss 400.3–400.8 in that, unlike in those sections, there is no express requirement in s 400.9(1) for the relevant money to be the proceeds of crime. Construing s 400.9(1) in the context of ss 400.3 to 400.8, the failure of the legislature to expressly provide for this to be the case in s 400.9, while providing for it in the preceding six sections, tells against the applicant’s construction.
While Simpson J concluded her reasoning in Lin by saying that when s 400.9(2) is invoked, a predicate offence is not required,[25] the court in Lin was of course dealing with a case where sub-s (2) was being invoked. Merely because her Honour limited the court’s conclusion to a case of the kind that was before it, however, does not mean that the court intended to convey that the opposite conclusion would be reached in a case where sub-s (2) was not invoked.
[25]Ibid 463 [26].
Secondly, if the applicant’s submissions about the definition of ‘proceeds of crime’ being paramount were to be accepted, then the words ‘the money or property is’ in paragraphs (b)(i) in each of ss 400.3(1)–400.8(1) would not be necessary. It would have been sufficient for the legislature to have provided in those paragraphs that the person believed that the money or property was the proceeds of crime, without saying that the money is the proceeds of crime. Thus, the applicant’s submissions would give no work to the word ‘is’ in the phrase ‘the money or property is’ in the six sections of the Code to which we have referred. A construction which gives meaning to all of the words of a statutory provision is, of course, to be preferred.[26]
[26]See Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, 382 [71]; [1998] HCA 28 (McHugh, Gummow, Kirby and Hayne JJ).
Thirdly, while it may be accepted the purpose of s 400.9(2) is to expand the operation of s 400.(1)(b),[27] s 400.9(2) commences with the words ‘without limiting paragraph (1)(b) …, that paragraph is taken to be satisfied … ‘, suggesting that, properly construed, sub-s (2) might otherwise be capable of some operation limiting paragraph (1)(b). Such a construction would not be possible, however, if paragraph (1)(b) of s 400.9 required the prosecution to establish that the relevant money was derived from an offence of the kind referred to in the definition of ‘proceeds of crime’. Limiting the operation of s 400.9(1)(b) in this way would not give any room for any of the paragraphs of sub-s (2) to further limit the operation of paragraph (1)(b).
[27]Lin (2015) 297 FLR 457, 463 [26].
Fourthly, as we have already observed, s 400.9(2) commences with the words ‘without limiting paragraph (1)(b) …, that paragraph is taken to be satisfied if … ‘. Thus, by its very terms, the existence of sub-s (2) cannot limit the operation of paragraph (1)(b). Nor can it alter the proper construction of the paragraph viewed in the context of the other provisions in Chapter 10.
In oral argument, the applicant advanced (for the first time) two alternative submissions. First, the applicant submitted that, even if the prosecution was not required to establish that the relevant money was actually ‘proceeds of crime’ as defined in s 400.1(1), the prosecution must identify an offence of the kind referred to in the definition of ‘proceeds of crime’ which it is reasonably suspected has been committed from which the relevant money was derived.
Secondly, the applicant submitted that, at a bare minimum, the prosecution must establish the basis upon which it is reasonably suspected that the relevant money was derived from any offence of the kind referred to in the definition of ‘proceeds of crime’, as distinct from some other enterprise (for example, from activity such as gambling or prostitution which was not unlawful).
These alternative submissions were not the subject of any argument before the primary judge, and were not the subject of full argument before us. More importantly, no decision in respect of these alternative arguments has been made at first instance. This Court’s jurisdiction under div 4 of pt 6.3 of the Criminal Procedure Act 2009, on an application to review a judge’s refusal to certify, does not include the power to embark on and decide some different question from that argued at first instance.[28] Accordingly, we say nothing further about the applicant’s new arguments.
[28]See s 300 of the Criminal Procedure Act 2009.
It follows from what we have said above that, on the issue argued before him, there was no error in the judge concluding that Lin was determinative of the applicant’s stay application.[29]
[29]Ruling [29].
It also follows that the judge was correct when he concluded that the prosecution does not have to establish that the money the applicant is alleged to have dealt with was derived from an offence of the kind referred to in the definition of ‘proceeds of crime’. His Honour was accordingly correct when he concluded that the prosecution of the applicant is not foredoomed to fail, and he therefore refused the applicant’s application for a permanent stay. He was also correct when he refused to certify on the basis that his decision was not attended with sufficient doubt.
Conclusion
The application to review the judge’s refusal to certify must be refused.
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