Commonwealth Constitution—Legislative power—Taxation—Currency, coinage, and legal tender—Characterisation—Appropriate and adapted—Proportionality—Whether offence of avoiding reportable cash transactions within legislative power. Money and Currency—Offence to be party to certain non-reportable transactions which avoid obligation to report—Nature of mens rea. Commonwealth Constitution s 51(ii), (xii). Financial Transaction Reports Act 1988 (Cth), ss 3, 4, 7, 9, 10, 16, 24, 27, 31, 34, 35, 38.
Headnote
Hearing
CANBERRA, 8 March 1996 #DATE 5:11:1996
Counsel for the Plaintiff: D.F. Jackson QC, with I. Mescher
Solicitors for the Plaintiff: Farmer Campbell Edmunds
Counsel for the Defendant: G. Griffith QC Solicitor General with M.A. Perry and C.R. Staker
Solicitor for the Defendant: Australian Government Solicitor
Orders
1. Answer the question reserved as follows: Is section 31(1) of the Financial Transaction Reports Act 1988 a valid law of the Parliament of the Commonwealth?
Answer: Yes.
2. The plaintiff pay the defendant's costs of the question reserved. Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
Decisions
BRENNAN CJ. Section 7 of the Financial Transaction Reports Act 1988 (Cth) ("the Act") imposes on a "cash dealer" an obligation to report certain transactions to which the cash dealer is a party. The report is made to the Director of AUSTRAC (a statutory acronym for the Australian Transaction Reports and Analysis Centre (1)). Section 7 reads as follows: "(1) Where a cash dealer is a party to a significant cash transaction, the dealer shall, before the end of the reporting period: (a) prepare a report of the transaction; and (b) communicate the information contained in the report to the Director; unless: (c) the transaction is, at the time when it occurs, an exempt transaction; or (d) the transaction is, at the time when it occurs, eligible for exemption and becomes, before the end of the reporting period, an exempt transaction; or (e) the cash dealer is an approved cash carrier.
(2) The report shall be prepared in the approved form, contain the reportable details of the transaction and be signed by the cash dealer or otherwise authenticated by the cash dealer in a way approved by the Director. (3) The communication shall be made to the Director: (a) by giving the Director a copy of the report; or (b) in such other manner and form as is approved by the Director, in writing, in relation to the cash dealer or to a class of cash dealers that includes the cash dealer. (4) In this section: "reportable details", in relation to a transaction, means the details of the transaction that are referred to in Schedule 1." The definition of "cash dealer" (2) covers financial institutions and a large number of other persons whose business involves or is likely to involve "cash transactions". As counsel described the categories, they extend "from the…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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Details
AGLC
Leask v The Commonwealth [1996] HCA 29
Case
[1996] HCA 29
Decision Date
CaseChat Overview and Summary
In *Leask v The Commonwealth*, the High Court of Australia considered the validity of section 31(1) of the *Financial Transaction Reports Act 1988* (Cth). The plaintiff, Mr Leask, challenged the constitutional validity of this provision, which created an offence for being a party to certain cash transactions designed to avoid the reporting obligations imposed by the Act. The case came before the High Court on a question reserved regarding the validity of the impugned section.
The central legal issue before the Court was whether section 31(1) of the *Financial Transaction Reports Act 1988* was a valid exercise of the Commonwealth Parliament's legislative power, specifically under section 51(ii) (taxation) and section 51(xii) (currency, coinage, and legal tender) of the Constitution. This required the Court to determine if the provision was appropriately adapted to the subject matter of taxation or currency, and if it was proportionate to the legislative purpose it sought to achieve.
The Court held that section 31(1) was a valid law of the Commonwealth Parliament. The majority reasoned that the Act, including section 31(1), was a law with respect to taxation, as it aimed to prevent tax evasion by ensuring that cash transactions were reported, thereby facilitating the collection of revenue. The Court applied the principle that a law will be within the taxation power if it is capable of being characterised as a tax or as a law incidental to the imposition or collection of taxes. The offence created by section 31(1) was found to be a measure appropriate and adapted to the purpose of ensuring the effectiveness of the reporting regime, which in turn supported the Commonwealth's taxation power.
The Court answered the question reserved in the affirmative, finding section 31(1) to be a valid law. Consequently, the plaintiff was ordered to pay the defendant's costs of the question reserved.
Orders
Orders of the court
1. Answer the question reserved as follows:
Is section 31(1) of the Financial Transaction Reports Act 1988 a
valid law of the Parliament of the Commonwealth?
Answer: Yes.
2. The plaintiff pay the defendant's costs of the question reserved.