Lee v R

[2007] NSWCCA 71

Reported Decision:	170 A Crim R 287
Appeal Outcome:	Special leave application refused by the High Court - 31 August 2007

New South Wales

Court of Criminal Appeal

CITATION:	Lee v R [2007] NSWCCA 71
HEARING DATE(S):	9 February 2007
JUDGMENT DATE:	21 March 2007
JUDGMENT OF:	Spigelman CJ at 1; Sully J at 31; Bell J at 84; Howie J at 84; Buddin J at 84
DECISION:	Appeal against conviction dismissed
LEGISLATION CITED:	Financial Transaction Reports Act 1988 (C'th) Criminal Code Act 1995 Crimes Act 1914 (C'th)
CASES CITED:	R v Saengsai-Or [(2004) 61 NSWLR 135 R v Cao (2006) 65 NSWLR 552 Leask v The Commonwealth (1996) 187 CLR 579 Question of Law Reserved (No. 2 of 1998) (1998) 70 SASR 502 R v Leask [1999] NSWCCA 33 Hannes v Director of Public Prosecutions (C'th) (No. 2) [2006] NSWCCA 373
PARTIES:	Maria Jung-Hee Lee Regina
FILE NUMBER(S):	CCA 2006/2215
COUNSEL:	W. Abraham QC/C. Dobraszczyk - Crown J. Agius SC/A. Tudehope - Appellant
SOLICITORS:	Commonwealth Director of Public Prosecutions - Crown O'Hara & Company Lawyers - Appellant
LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S):	05/11/0404
LOWER COURT JUDICIAL OFFICER:	Shadbolt DCJ
LOWER COURT DATE OF DECISION:	24 February 2006

2006/2215

SPIGELMAN CJ
SULLY J
BELL J
HOWIE J
BUDDIN J

21 March 2007

Maria Jung-Hee LEE v REGINA

Judgment

1 SPIGELMAN CJ: In this matter I have read the judgment of Mr Justice Sully in draft. Subject to the following observations, I agree with his Honour’s reasons.

2 Sully J identifies, correctly in my opinion, that s31(1) of the Financial Transactions Report Act 1988 (Cth) (“the FTRA”) contains two physical elements.

3 The first physical element is conduct, namely being a party to two or more nonreportable cash transactions. I agree that, by force of s5.6 of the Commonwealth Criminal Code (“the Code”), the fault element attaching to this physical element is intention.

4 The second physical element identified by Sully J is correctly characterised as a “result” within the meaning of s4.1(1)(b) of the Code, relevantly, that the transactions do not give rise to a significant cash transaction, within the meaning of the FTRA.

5 Sully J identifies the fault element for the second physical element as intention, as defined in s5.2(3) of the Code. I do not agree.

6 The words “sole or dominant purpose” are capable of constituting either a fault element or a physical element. If the latter the words could either be an integral part of the second physical element or a “circumstance” within the meaning of s4.1(1)(c) of the Code and, if so, would constitute a third physical element. However, in my opinion these words are not to be understood, in the context, to be a “physical element” within the meaning of the Code.

7 In this Court Ms W Abraham QC, who appeared for the Crown, submitted that the words “sole or dominant purpose” were part of a composite element encompassing the whole of s31(1)(b) of the FTRA. (A similar issue arises in the context of prohibited imports, where the issue is whether or not a phrase such as “importing narcotic goods” consists of a single composite element or whether the reference to the type of goods is a separate element. See R v Saengsai-Or (2004) 61 NSWLR 135; R v Cao (2006) 65 NSWLR 552.)

8 In my opinion, the element of the offence encompassed by the words “sole or dominant purpose” is quite distinct from the “result”, identified above as the second physical element, and is not itself properly characterised as a “physical element” at all.

9 The word “circumstance”, referring to an aspect of either “conduct” or the “result of conduct”, within the meaning of s4.1(1)(c) of the Code, is capable of extending to virtually any word of the English language in which an offence is expressed. Nevertheless, the structure of the Code distinguishes between “physical elements” and “fault elements”. Where a matter clearly involves an aspect of conduct which, in normal parlance, would be understood to involve fault on the part of the alleged perpetrator of an offence then, in my opinion, the matter should be classified as a “fault element”, rather than be swept up within the breadth of the word “circumstance”, as a physical element.

10 The words “sole or dominant purpose” in s31(1)(b) of the FTRA refer, in my opinion, to the actuating purpose of the conduct, rather than to the “result” of the conduct. An actuating purpose would, in ordinary discourse, be regarded as indicating “fault” of itself.

11 Section 5.1(2) of the Code, set out by Sully J, makes it clear that a law may specify a different fault element to those for which the Code itself makes provision, i.e. something other than intention, knowledge, recklessness or negligence. That, in my opinion, is what the legislature has done in s31(1)(b) of the FTRA.

12 By the insertion of the amended s2.2(2) of the Code, the Parliament applied Ch 2 of the Code to pre-existing statutes as and from 15 December 2001. Necessarily, pre-existing offences such as those created by the FTRA are not expressed in the language of the Code.

13 When the Parliament made provision for default fault elements in s5.6 of the Code, set out by Sully J, the reference to the fact that a law creating an offence “does not specify a fault element”, was not a reference to ‘specification’ in the express terms for which s4.1(1) of the Code makes provision, i.e. intention, knowledge, recklessness or negligence. Nor is the reference to ‘specify’ in s5.1(2) of the Code.

14 Sully J is of the opinion that the second physical element is attended by the fault element of intention in the sense defined in s5.2(3) of the Code: namely, meaning to bring about that result or awareness that the result will occur in the ordinary course of events. I accept that the word “purpose” may be used in the sense of “intention” as defined. However, in the present context the word is qualified by “sole or dominant”. These two adjectives are intended to exclude cases in which the relevant purpose was only one of a number of purposes, indeed even where the proscribed purpose was a substantial purpose.

15 In my opinion, by reason of these qualificatory adjectives, the reference to “purpose” in s31(1)(b) of the FTRA, should be understood to be a reference to an actuating purpose, rather than to a result which the person “means to bring about”. An actuating purpose is discrete from the result sought to be achieved. In this context, the word is not used as equivalent to intention.

16 In my opinion, actuating purpose is itself a matter indicating fault. The Parliament intended it in that sense in the FTRA. The “sole or dominant purpose” component of the offence is a fault element, specified under s5.1(2), other than the four fault elements expressly identified in the Code.

17 Sully J sets out his Honour’s directions in this respect. On each occasion his Honour directed the jury in terms of the “sole or dominant purpose” formulation and, where it was significant to do so, identified that as the relevant fault element. His Honour was, in this regard, correct.

18 The second matter to which I wish to direct some observations concerns the issue of whether or not the phrase “it would be reasonable to conclude” constitutes a “standard of proof” within the meaning of s13.2(2) of the Code.

19 It is always necessary to approach authorities interpreting legislation based on common law principles with considerable care before applying them to the radically different circumstances of the Code. (See generally Miriam Gani, “Codifying the Criminal Law: Issues of Interpretation” in Suzanne Corcoran and Stephen Bottomley (eds), Interpreting Statutes Federation Press, Sydney, 2005.) Nevertheless, the terminology of s13.2(2), which falls to be interpreted in the present circumstances, is clearly based on terminology long in use at common law. The issue of whether or not an offence “specifies a different standard of proof” is not, in my opinion likely to be determined differently at common law and under the Code.

20 Sully J sets out the whole of s31(1)(b). It is reasonably clear that subpars (i) and (ii) constitute a direction to the tribunal of fact as to how it should proceed. The immediately succeeding words “it would be reasonable to conclude” are either a continuation of that direction to the tribunal of fact or a qualification of an element of the offence; being either the fault element in “the sole or dominant purpose” reference, or of the second physical element of not giving rise to a “significant cash transaction” or giving rise to an “exempt cash transaction”.

21 The latter position is arguable, so that the formulation would make it clear that what is involved is an objective standard namely, that a reasonable bystander would draw the conclusion that the relevant element or elements existed. On that basis the Crown would not have to establish that the person actually had the purpose, but only establish that a reasonable bystander would conclude that that was the purpose.

22 Although arguable, the authorities, admittedly at common law rather than under the Code, conclude that the reference to “it would be reasonable to conclude” constitutes a continuation of the direction to the tribunal of fact set out in subpars (i) and (ii) of s31(1)(b) of the FTRA.

23 This was the view of Dawson J, with whom McHugh J agreed, in Leask v The Commonwealth (1996) 187 CLR 579 at 597 and of the Full Court of the Supreme Court of South Australia in Question of Law Reserved (No 2 of 1998) (1998) 70 SASR 502 at 511 per Doyle CJ, at 512 per Cox J and at 14 per Duggan J. This approach was accepted in this Court in R v Leask [1999] NSWCCA 33 at [123]-[129] and Hannes v Director of Public Prosecutions (Cth) (No 2) [2006] NSWCCA 373 at [725]-[728].

24 In part, the reasoning that led to the conclusion was based on a consideration of the mental element required for an offence at common law. That of course was the relevant approach at the time the FTRA was enacted. These authorities must, accordingly, be approached with caution.

25 However, the present issue does not turn on the regime for criminal responsibility to be found in the Code. This Court is required to construe s13.2(2) of the Code, which employs terminology that is well understood and that has been consistently applied in the context of s31(1)(b) of the FTRA in the manner I have identified.

26 The requirement of consistency in the interpretation of a national regime such as that under the FTRA, suggests that this Court should maintain the interpretation that has hitherto prevailed, including in the context of offences committed after the Code became applicable to the FTRA. The Code makes no relevant difference in this regard.

27 Finally, as Sully J indicates, the Appellant’s submissions in this Court placed emphasis on the failure by Shadbolt DCJ to give directions in accordance with the last bullet point at 511 of Doyle CJ’s judgment in Question of Law Reserved supra, which was identified as (4) in this Court’s judgment in Leask supra at [122].

28 Doyle CJ concluded that, on the basis of common law principles of criminal responsibility, it was necessary for a trial judge to direct a jury that the accused knew, relevantly, that a transaction involving the transfer of currency of less than $10,000 in value need not be reported. I agree with Sully J that no such direction is now required. The common law requirements of a mental element of an offence, which influenced Doyle CJ and determined the conclusion that his Honour reached, are no longer applicable to criminal responsibility under Ch 2 of the Code.

29 Authorities on the mental element of an offence based on common law principles are no longer applicable since Ch 2 of the Code came into effect, relevantly pursuant to s2.2(2) of the Code. It is dangerous to regard them as a point of reference. In substance, from the point of view of determining criminal responsibility, pre-existing legislation like s31 of the FTRA must be treated as if it had been repealed and re-enacted in the same words, but in an entirely different context.

30 I agree with the orders proposed by Sully J.

31 SULLY J:

Introduction

32 In November 2005 Mrs. Maria Jung-Hee Lee, the present appellant, stood trial in the District Court at Sydney. She was tried upon an indictment containing 12 counts. Each count alleged a contravention of section 31(1) of the Financial Transaction Reports Act 1988 (C’th), (hereinafter the FTR Act). Upon her arraignment she pleaded not guilty to each such charge; but the jury returned upon each of the 12 counts a verdict of guilty. She was subsequently formally convicted and she was sentenced to imprisonment for 12 months for each of the 12 offences; but an order was made thereupon releasing her forthwith, and pursuant to section 20(1)(b) of the Crimes Act 1914 (C’th), upon a rocognizance release order that she be of good behaviour for 12 months.

33 The appellant now challenges each of her 12 convictions. She does not seek leave to appeal against her sentences.

34 The following grounds of appeal were originally notified:

“1. His Honour erred in directing the Jury that the standard of proof with respect to Section 31(1)(a) of the Financial Transactions Reports Act 1988 (hereinafter FTRA) is “reasonable to conclude”.
2. His Honour erred in failing to direct the Jury that standard of proof with respect to Section 31(1)(a) of the FTRA is beyond reasonable doubt.
3. His Honour erred in directing the Jury that the standard of proof with respect to intention, being the fault element for the physical element in Section 31(1) FTRA, is “reasonable to conclude”.
4. His Honour erred in failing to direct the Jury that the standard of proof with respect to intention being the fault element for the physical element in Section 31(1)FTRA, is beyond reasonable doubt.
5. His Honour erred when directing the Jury concerning the fault element for the physical element in Section 31(1)FTRA, that “it is sufficient that a person knows that if a transaction is made for over $10,000 there will in all probability be a report”.
6. His Honour erred in failing to direct the Jury concerning the fault element for the physical element in Section 31(1) FTRA 1988 that “the accused knew that a transaction involving the transfer of currency of $10,000 or more in value must be reported to a Government Agency and that a transaction involving the transfer of currency of less than $10,000 in value need not be reported to a Government Agency.” “

35 At the hearing of the appeal leave was granted to the appellant to add an additional ground as follows:

“2A His Honour erred in failing to direct the jury that the standard of proof with respect to s 31(1)(b) FTRA is proof beyond reasonable doubt. Namely that the jury had to be satisfied beyond reasonable doubt that it was reasonable to conclude that the Applicant (sic) conducted the transactions in the manner in which she did for the sole or dominant purpose described in s 31(1)(b).”

The Relevant Facts

36 The written submissions lodged by the Crown in connection with the present appeal contain the following succinct and helpful overview of the factual background:

“5. The Appellant was, during the period of the offences, a director of Australia New College Pty Ltd CAN 002 536 932 which trades as Pre-Uni New College. The main business premises were located at 5 The Crescent, Strathfield NSW where the Appellant worked.
6. On each of the dates specified in the 12 counts, the Appellant attended either the Bendigo Bank, Strathfield or the Westpac Bank, Strathfield (or both) and made numerous cash deposits into various accounts, in amounts just under $10,000. To enable her to do this, in January 2004 the Appellant, with a number of friends, attended each of those banks, opened accounts in their names and made herself a signatory on each account. Those accounts were opened for the Appellant’s use.”

37 The written submissions of the Crown summarise, count by count, the factual details of the various deposits, the making of which was the foundation for, respectively, each of the 12 counts in the indictment. It is not necessary to repeat the entirety of that material. It is, however, useful to reproduce paragraphs 15, 16 and 17 of the written submissions of the Crown. They are as follows:

“15. Between 23 January 2004 and 13 May 2004 the Appellant deposited just over $510,000 in cash into various accounts each deposit being less than $10,000.
16. Prior to January 2004, the Appellant was making similar cash deposits namely amounts under $10,000. These deposits were into accounts in her own name.
17. Prior to January 2004 the Appellant was informed of the obligation on the bank to report “significant cash transactions”. The evidence in relation to this included:
(a) On 11 June 2002, the Appellant deposited $20,000 in cash at a Bendigo bank. She was informed by the customer service officer that the deposit was a significant cash transaction and accordingly a form was required to be completed for any amounts of $10,000 or more. This was done. The form has in bold print in the top corner the words “significant cash transaction”.
(b) Some time in 2002 when the Appellant was to deposit over $10,000 in cash she was told by a customer service officer that the transaction would have to be reported as it was over $10,000. As a result the Appellant took money out of the bundle to reduce the deposit to under $10,000.
(c) In late 2003, the Appellant was advised by Mr. Choi (Lending and Service manage at the Bendigo Bank), after he had observed her making a transaction just under $10,000, that her deposits of just under $10,000 were suspicious. The was informed that the transactions would be reported to AUSTRAC.
The Crown alleged that as a result of the conversation with Mr. Choi, the Appellant stopped depositing amounts of just under $10,000 cash at the Bendigo Bank. The Appellant recommenced this practice after her friends had opened accounts in their names with her as a signatory. It was the Crown case that this was specifically done to enable her to continue to deposit cash of less than $10,000 and that she was doing so to avoid the transactions being reported as significant cash transactions.”

38 The facts as thus far summarised constituted, essentially, the Crown case at trial.

39 The appellant’s case at trial was, essentially, two-fold. Her case was, first, that she believed that the relevant deposits would be reported whether or not the individual amounts of the deposit exceeded $10,000. Her evidence at trial was that this belief was based upon something that had been told to her by a bank teller. She was unable, however, to say when, where or by whom in particular she had been given this information. She was unable even to name the bank at which, according to her, she had been given this information.

40 Her case was, secondly, that there was a number of exculpatory explanations for the making of the deposits. Those explanations, as nominated by the appellant at trial, included:

· She had security concerns about carrying around large amounts of money in cash.

· She thought that it was safer for her to make deposits not exceeding in any individual case $10,000.

· She had found that other customers who were waiting for teller service tended to complain about delay whenever she was involved in processing transactions of large amounts of money.

· She tried to avoid delay when depositing money by dividing the money which she wished to deposit into several smaller deposits because it took less time to count several smaller deposits than it did to count one large deposit.

· She was merely following a habit which had no sinister connotations.

· She made the relevant deposits without having thought through any legal implications of what she was doing.

41 The appellant gave evidence at trial. She did so with the assistance of an interpreter. She gave, in particular, the following evidence:

“Q. Mrs. Lee, you know don’t you, or you did in January 2004 that if you deposited $10,000 or more in cash the bank would refer to it as a significant cash transaction?
A. Yes.
Q. And a certain form or particular type of report needed to be made if it was $10,000 or more?
A. Yes.
Q. So the magical figure so to speak was $10,000?
A. Above $1,000?
Q. Sorry?
A. Above $10,000?
Q. Above yes. When you banked just below $10,000 like $9,950, that was so the form didn’t have to be filled out because it was a significant cash transaction of $10,000?
A. No I was told that that, even transaction would be reported. (sic)
Q. Mrs. Lee that wasn’t my question. The reason you banked for example $9,950 was so that it wouldn’t be $10,000. That’s correct $10,000. That’s correct isn’t it?
A. Yes.
Q. Because if it was above $10,000, it was regarded as a significant cash transaction and a particular report had to be made?
A. Yeah in front of me.
Q. So there was something significant about the $10,000, that’s correct?
A. What I knew at the time was that if the cash deposit is above $10,000 then the report will be made in front of me.
Q. You knew that that was because the bank told you it’s called a significant cash transaction?
A. I do not know about the significant, that word, but with the reports, all I knew over $10,000 there will be a report that should be made.” [T 323, 324]

42 In that latter connection, learned Senior Counsel for the appellant put, towards the conclusion of his oral submissions, the following:

“It was never an issue of fact that she wasn’t a party to the transactions. She was a party to the transactions and she said so. That was never an issue, …………….” [T 34, 9/2/2007]

The Relevant Legislation

43 As earlier herein noted, each count in the indictment alleged a contravention of section 31(1) of the FTR Act. That enactment provides, relevantly:

“(1) A person commits an offence against this section if:
(a) the person is a party to 2 or more non-reportable cash transactions; and
(b) having regard to:
(i) the manner and form in which the transactions were conducted, including, without limiting the generality of this, all or any of the following:
(A) the value of the currency involved in each transaction;
(B) the aggregated value of the transactions;
(C) the period of time over which the transactions took place;
(D) the interval of time between any of the transactions;
(E) The locations at which the transactions took place; and
(ii) any explanation made by the person as to the manner or form in which the transactions were conducted;
it would be reasonable to conclude that the person conducted the transactions in that manner or form for the sole or dominant purpose of ensuring, or attempting to ensure, that the currency involved in the transactions was transferred in a manner and form that:
(iii) would not give rise to a significant cash transaction; or
(iv) would give rise to exempt cash transactions.”

44 Various of the terms which are contained within section 31(1) are specifically defined in section 3 of the FTR Act. Thus:

· non-reportable cash transaction means a cash transaction:

(a) to which a cash dealer is a party; and
(b) that is not a significant cash transaction or is an exempt cash transaction.

· cash dealer means:

(a) a financial institution;
[note: the balance of this definition is not relevant in the present case and is not reproduced. The banks of which mention will be made presently, were financial institutions in this statutory sense]

· significant cash transaction means:

a cash transaction involving the transfer of currency of not less than $10,000 in value.

45 Exempt cash transactions are significant cash transactions which are, put simply, exempt from the statutory reporting scheme provided that there is compliance with the requirements laid down by section 9 of the FTR Act. It is unnecessary for the proper disposition of the present appeal to examine the details of section 9.

46 The appellant’s trial and the alleged offences for which she was tried were governed by various provisions of the Commonwealth Criminal Code, a sweeping codification of the criminal law applicable to offences against Commonwealth laws. The actual Code is a Schedule to the Criminal Code Act 1995 (C’th). That Act came into operation on 1 January 1997.

47 Chapter 2 of the Code deals with the topic: “General Principles of Criminal Responsibility”. The provisions of the Chapter apply to all offences against the Code; and apply on and after 15 December 2001 to all other offences, subject to an exception not now relevant. The purpose of the Chapter is stated in section 2.1 as follows, all emphasised material being reproduced and not added:

“ The purpose of this Chapter is to codify the general principles of criminal responsibility under laws of the Commonwealth. It contains all the general principles of criminal responsibility that apply to any offence, irrespective of how the offence is created.”

48 Part 2.2 of Chapter 2 deals with the topic:

“The elements of an offence.”

49 Division 3 of Part 2.2 contains two general, and a basal, provisions:

“ 3.1 Elements
(1) An offence consists of physical elements and fault elements.
(2) However, the law that creates the offence may provide that there is no fault element for one or more physical elements.
(3) The law that creates the offence may provide different fault elements for different physical elements.
3.2 Establishing guilt in respect of offences
In order for a person to be found guilty of committing an offence the following must be proved:
(a) the existence of such physical elements as are, under the law creating the offence, relevant to establishing guilt;
(b) in respect of each such physical element for which a fault element is required, one of the fault elements for the physical element.”

50 Division 4 of Part 2.2 deals in detail with the codified requirements respecting the physical elements of an offence. The provisions now relevant are:

“ 4.1 Physical elements
(1) A physical element of an offence may be:
(a) conduct; or
(b) a result of conduct; or
(c) a circumstance in which conduct, or a result of conduct, occurs.
(2) In this Code:
conduct means an act, an omission to perform an act or a state of affairs.
e ngage in conduct means:
(a) do an act; or
(b) omit to perform an act.
4.2 Voluntariness
(1) Conduct can only be a physical element if it is voluntary.
(2) Conduct is only voluntary if it is a product of the will of the person whose conduct it is.
[ (3) - (7) not reproduced ]

51 Division 5 of Part 2.2 deals in detail with the codified requirements respect the fault elements of an offence. The provisions now relevant are:

“ 5.1 Fault Elements
(1) A fault element for a particular physical element may be intention, knowledge, recklessness or negligence.
(2) Subsection (1) does not prevent a law that creates a particular offence from specifying other fault elements for a physical element of that offence.
5.2 Intention
(1) A person has intention with respect to conduct if he or she means to engage in that conduct.
(2) A person has intention with respect to a circumstance if he or she believes that it exists or will exist.
(3) A person has intention with respect to a result if he or she means to bring it about or is aware that it will occur in the ordinary course of events.
5.3 Knowledge
A person has knowledge of a circumstances or a result if he or she is aware that it exists or will exist in the ordinary course of events.
5.4 Recklessness
(1) A person is reckless with respect to a circumstance if:
(a) he or she is aware of a substantial risk that the circumstance exists or will exist; and
(b) having regard to the circumstances known to him or her, it is unjustifiable to take the risk.
(2) A person is reckless with respect to a result if:
(a) he or she is aware of a substantial risk that the result will occur, and;
(b) having regard to the circumstances known to him or her, it is unjustifiable to take the risk.
(3) The question whether taking a risk is unjustifiable is one of fact.
(4) If recklessness is a fault element for a physical element of an offence, proof of intention, knowledge or recklessness will satisfy that fault element.
5.6 Offences that do not specify fault elements
(1) If the law creating the offence does not specify a fault element for a physical element that consists only of conduct, intention is the fault element for that physical element.
(2) If the law creating the offence does not specify a fault element for a physical element that consists of a circumstance or a result, recklessness is the fault element for that physical element.”

52 Part 2.6 of Chapter 2 deals with the topic: “Proof of criminal responsibility”.

53 Part 2.6 has only one Division: Division 13. Of its provisions, the following are relevant, all emphasised material being reproduced and not added:

“ 13.1 Legal burden of proof - prosecution
(1) The prosecution bears a legal burden of proving every element of an offence relevant to the guilt of the person charged.
(2) The prosecution also bears a legal burden of disproving any matter in relation to which the defendant has discharged an evidential burden of proof on the defendant.
(3) [not reproduced]
13.2 Standard of proof - prosecution
(1) A legal burden of proof on the prosecution must be discharged beyond reasonable doubt.
(2) Subsection (1) does not apply if the law creating the offence specifies a different standard of proof.”

The Trial Judge’s Summing-up

54 Each of the particular grounds of appeal upon which the appellant now relies challenges either some particular direction given to the jury during the course of the summing-up; or a failure to give, during the course of the summing-up, some particular direction of which it is said that it was required to be given to the jury.

55 That being so, it will be convenient to collate at this point the relevant portions of the summing-up.

56 At a very early stage during the summing-up his Honour gave the jury this direction:

“What you are required to do today is to determine the facts, fit those facts to the law as I give it to you and decide whether or not you are satisfied on the Crown case that it is reasonable to conclude that which the Crown alleges.” [SU 4]

57 Almost immediately, his Honour gave the jury a more discursive direction about the standard of proof relevant to the particular case. His Honour said:

“The standard of proof in this case is not proof beyond reasonable doubt. The standard is that it would be reasonable to conclude. That is a lesser standard than proof beyond reasonable doubt. The standard is that it would be reasonable to conclude. That is a lesser standard than proof beyond reasonable doubt but it is not mere guesswork, it is not to hazard a guess. The word ‘reasonable’, although it has many meanings in the English language, in this case means as a result of logical analysis. There must be a process in which logic demands that the conclusion should be drawn. It is necessary for you to have regard to six matters under the statute itself which I shall refer to later but what I say at this stage is that it would be reasonable to conclude that these transactions were so constructed for the sole or dominant purpose of ensuring that they did not give rise to a significant cash transaction, if when you look at the Crown case you could be satisfied that the sole or dominant purpose was to circumvent the requirements of the statute and then looking to the defence case and giving that equal consideration and then returning and looking at all the evidence together you are still so satisfied, then it would be a conclusion reasonably arrived at.” [SU 5, 6]

58 A little later, and having examined with the jury various aspects of the provisions of section 31(1) of the FTR Act, his Honour took up with the jury the effect upon their deliberations of the relevant provisions of the Commonwealth Criminal Code. His Honour gave the jury in that connection the following instructions:

“In the criminal code all criminal offences have what is described as a physical element and a fault element. The physical element in each of the matters charged is in this case the conducting of the two transactions in the manner alleged and the fault element lies in the mental state of the person so conducting those transactions. It is necessary for the Crown to satisfy you that in respect of the physical element that the transactions were intentionally conducted in that fashion insofar that the accused meant to engage in conduct of which complaint was made and meant to bring about the results in this case to make a transfer which would not trigger the reporting condition. As far as the fault element is concerned the Crown must also prove that the accused had knowledge so that she made the transactions with the sole or dominant purpose of ensuring that each transaction would not give rise to a significant cash transaction and thereby trigger the reporting condition.
It will readily be recognised that a person can make two or more transactions oblivious of the terms of the Act and in consequence without any intentions whatsoever to get around it or subvert it. For a person to have a sole or a dominant purpose of ensuring that the transaction did not trigger the reporting requirements knowledge in a common form of what constituted a significant cash transaction would be required. It is not required that a person knows the details of the actual Act itself, it is sufficient that a person knows that if a transaction is made in cash for over $10,000 there will in all probability be a report. It is therefore necessary for the Crown to demonstrate to your satisfaction that the accused had both the knowledge and the intention, that is knowledge of the requirements of the Act and intention to subvert it.” [SU 7, 8 and 9]

59 Shortly thereafter his Honour turned to the topic of the essential elements of the offence charged, in similar terms, against the appellant in each of the 12 counts of the indictment. His Honour directed the jury that there were three such essential elements: first, “that the accused was intentionally party to two or more transactions which were non-reportable”; secondly, “it is reasonable to conclude that the two transactions were conducted in that matter for the purpose of ensuring that the transactions did not give rise to a significant cash transaction”; and thirdly, “that purpose was the sole or dominant one and as I told you the standard of that proof is that it is reasonable to conclude”. [SU 10]

60 A little later his Honour touched again upon the topic of the relevant standard of proof. His Honour instructed the jury:

“As I have said to you now on three occasions the standard of proof is it is reasonable to conclude. As I told you that requires a logical analysis of the facts before you. It is not mere supposition but reasonable to conclude and whilst I cannot direct the method that you use in the jury room to come to your conclusion for that is entirely your prerogative, I strongly suggest that you carefully examine the Crown case in isolation, that is the evidence given by the Crown witnesses and including the cross-examination and if on that evidence, as it were standing alone, you would reasonably conclude that these transactions were conducted in the manner in which they were conducted for the sole or dominant purpose of ensuring the transaction would not give rise to a significant cash transaction, then you would turn to the defence case and consider that with equal care and if at the conclusion you are still satisfied on the Crown case, then it would be reasonable to conclude that the transactions were made in that manner, so as not to trigger the reporting conditions.” [SU 10, 11]

61 In his concluding directions to the jury, his Honour gave these instructions:

“………………. (I)f at the end of your deliberations you do not consider that it is reasonable to conclude that these transactions were so conducted for the sole or dominant purpose of ensuring they did not give rise to significant cash transactions, if you are not so persuaded on one or any of the counts or all of them then you must acquit. If, however, you are of a view that it is reasonable to conclude that she made these transactions for the sole or dominant purpose of ensuring that they did not give rise to significant cash transactions, then by the oath that you have taken as a jury you must convict.” [SU 30]

62 His Honour then heard submissions from counsel in connection with any desired re-directions. Having done that his Honour gave the jury the following re-directions:

“………… I have one re-direction which I seek to make at this stage. When I explained to you or attempted to explain to you what the term reasonable to conclude means, I said that it was not mere guess-work but that it was a process of reasoning and logic that would bring you to a conclusion that it was reasonable to conclude. ………. If I put forward a method by which you should consider it, it was only ever a suggestion and it was only ever to underline the word ‘reasonable’ meaning that you should think the matter out. Neither counsel is happy with that I might say and what they have both asked me to do is to say to you that you are to look toward the evidence very carefully and the matters that the statute require (sic) you to look to, including what the accused has said before you determine whether or not it is reasonable to conclude that these transactions were conducted so as to make it appear that they were not significant cash transactions.” [SU 31]

Discussion

63 When learned Senior Counsel for the appellant opened his oral submissions, he summarised helpfully and as follows the nub of the arguments upon which the appeal rests:

“The first complaint is that his Honour neglected to put before the jury an element of the offence. The second complaint is that that was an element of the offence upon which the Crown bore the onus of proof beyond reasonable doubt. The third complaint ……… deals with a matter which has been the subject of two prior decisions of this court on the question of whether or not the jury had to be satisfied reasonable doubt of the final element of the offence and that is that it was reasonable to conclude that the appellant had conducted the transactions for the particular sole or dominant purpose set out in s 31.”

64 In connection with the first of those three nominated complaints, learned Senior Counsel articulated it as follows:

“………… (I)t has been held that it is an element of the offence under s 31 that the Crown needs to prove that the accused knew that a transaction involving currency of $10,000 or more in value must by law be reported to a government agency and that a transaction involving currency of less than $10,000 in value did not need to be reported to a government agency. The importance in this case is that our defence was that we did not know that a transaction involving currency of less than $10,000 in value did not have to be reported to a government agency. Our defence was we believed that all transactions if they were in cash, whether they were above or below $10,000, had to be reported to a government agency. ………………”

65 It is convenient to begin the discussion of those complaints by adverting to the provisions, previously herein quoted, of Division 3 of Part 2.2 of the Code.

66 Section 3.2(a) seems to me to contemplate clearly that a particular offence might well be constituted, as to the relevant physical elements, either by one physical element, or by a number of physical elements.

67 Section 3.2(b) requires that any physical element of a particular offence must be matched by “one of the fault elements” as subsequently defined in Division 5 Part 2.2. (I leave aside for the purposes of present discussion the exceptional class of offence having some physical element(s) without a matching fault element: see s 3.1(2) quoted at paragraph 18 hereof.) It is, I think, of significance that section 3.2(b) does not speak of “one, or more than one, fault element” for a particular physical element. It seems to me to follow, therefore, that after the relevant physical elements of a particular offence have been correctly identified, each of those physical elements must be matched with one of the fault elements chosen from among the four fault elements for which provision is made in Division 5 of Part 2.2. From that basic perception I would reason in the present matter as follows:

[1] The offence which is established by section 31(1) of the FTR Act has two physical elements, namely:

1.1 a physical element constituted by the conduct of being a party to two or more cash transactions, each of which is non-reportable; and
1.2 a physical element constituted by the result of such conduct, namely the result that the two or more cash transactions, by reason of either or both of the manner and form of their transactions, do not give rise to a significant cash transaction or to exempt cash transactions.


[2] The fault element for the physical element 1.1 is intention: that is to say, a meaning to engage in the conduct constituting that physical element.

[3] The fault element for the physical element 1.2 is intention: that is to say, a meaning to bring about that result or an awareness that the result will occur in the ordinary course of events.

[4] The Crown bears, in a trial upon indictment of an alleged offence against section 31(1), the burden of proving both of the aforesaid physical elements and both of the aforesaid fault elements.

[5] The requisite standard of proof for each such element, whether physical or fault, is proof beyond reasonable doubt unless some other standard can be seen, upon the correct construction of section 31, to have been prescribed by that section in respect of some one or more of those elements, both physical and fault.

[6] Another standard of proof, that of “reasonable to conclude”, is in fact prescribed by section 31(1)(b), but it is prescribed only in respect of the fault element of intention to which reference is made in [3] above.

[7] Knowledge as such is not a fault element for the physical element 1.2 above. In a case of the present character the relevance of knowledge is that knowledge may itself provide evidence of the intention which is the fault element matching the physical element 1.2 above. Cf Cao v Reg (2006) 65 NSWLR 552.

[8] In the particular trial of the present appellant there was no dispute about the making of the cash deposits that constituted the cash transactions upon which the Crown relied. Neither was it disputed that in fact each such cash transaction was one to which the appellant was an intentional party; and that the effect in fact of the transactions was that no significant cash transaction, in the relevant statutory sense, was raised. The significance for the purposes of this appeal of that state of affairs is expressed succinctly in the following submission put by learned Senior Counsel for the appellant during the course of his oral submissions:

“She was a party to the transactions and she said so. That was never an issue, so we’re not complaining that there was no – I don’t think we would succeed if we tried to complain that there was no direction that that finding should have been made beyond reasonable doubt given her concession.” [T 34, 9/2/2007]


[9] That left in issue, in any real sense, only the fault element of proscribed purpose. It was incumbent upon the trial Judge to instruct the jury that the Crown had to establish facts and circumstances about the manner and form of the relevant cash transactions, including those prescribed by section 31(1)(b)(i); and had then to persuade the jury to find that the combined effect of those facts and circumstances, considered in conjunction with any explanation from the appellant, made it, in the perception of the jury, reasonable to suppose that the appellant’s true purpose had been the proscribed one.

[10] Insofar as the trial Judge gave to the jury instructions apt to suggest that there had been, so to speak, an across-the-board substitution of the “reasonable to conclude” standard of proof for the conventional “beyond reasonable doubt” standard of proof, then in my opinion the directions were wrong in law. I do not see that any real miscarriage of justice resulted, because the essential facts and circumstances, other than the element of intention as relevant to the physical element 1.2 above, were not in dispute at the trial.

[11] So far as concerns the directions which were given to the jury in connection with the topic of intention as the fault element relevant to the physical element 1.2 above, I am of the opinion that the substance of what was put to the jury was sufficient to avoid a miscarriage of justice.

68 The structure of the foregoing reasoning needs to be supplemented by some discussion of three decisions to which reference was made during the course of the hearing of the present appeal. I shall deal separately with each.

Question of Law Reserved (No. 2) (1998) 70 SASR 502

69 This matter came before the Court of Criminal Appeal of South Australia, (Doyle CJ, Cox and Duggan JJ), upon questions reserved by a trial Judge who had before him a prosecution based upon section 31(1) of the FTR Act. The questions reserved raised for consideration by the Court of Criminal Appeal the mental element to be proved beyond reasonable doubt in establishing the offence contained in section 31(1). The principal judgment was delivered by Doyle CJ and it will be necessary to refer, presently, to various particular aspects of that judgment.

70 Before doing so, it is appropriate to note that the High Court of Australia, in a previous decision: Leask v The Commonwealth of Australia (1996) 187 CLR 579, had unanimously held that section 31(1) is a Constitutionally valid exercise of Commonwealth legislative power. Brennan CJ, in reasoning to that conclusion, made some observations which were in point for the purposes of the South Australian Court of Criminal Appeal. His Honour said:

“The term ‘mens rea’ may be used to connote not only the voluntary doing of an offender’s act but his concurrent knowledge of the circumstances in which it is done, his appreciation of the nature and quality of his act done in those circumstances and a specific intention that any result of his conduct prescribed as an element of the offence should be achieved. But the mens rea required for criminal responsibility for the commission of a statutory offence has to be ascertained by reference to the text which creates the offence. The mens rea required by section 31(1) is confined, in my opinion, to the elements of the offence prescribed in paragraph (a). A person who engages in the conduct mentioned in section 31(1)(a) is liable to conviction only if he voluntarily conducted the two or more ‘non-reportable cash transactions’ therein mentioned and knew the facts which gave the transactions the character of ‘non-reportable cash transactions’. In my opinion, the mens rea of the offence does not extend to a specific intention to achieve ‘the sole or dominant purpose’ referred to in par (b) of section 31(1). Paragraph (b) requires the relevant transactions to have a particular objective quality, that is, they must exhibit such of the features mentioned in sub-par (b)(i) as would lead a reasonable person to conclude that the offender’s sole or dominant purpose in conducting the transactions was one of those specified in par (b). But as to these elements, the mental state of the alleged offender is irrelevant except as a factor in an explanation offered by the alleged offender which precludes (by raising a doubt) a finding that an hypothetical reasonable person would reach the conclusions stated in par (b). It is immaterial whether the offender knew that his conduct was unlawful or that a court might, in the absence of any explanation by the offender, find that it would be reasonable to reach the conclusion stated in par (b). Section 31(1) is not a provision imposing strict liability but the mean rea of the offence is extremely limited.” (at 592, 593)

71 Doyle CJ considered this paragraph in the judgment of Brennan CJ. Doyle CJ conceded that the conclusions to which Brennan CJ had come were reasonably open; but his Honour was of the opinion that the construction of section 31(1) which Brennan CJ favoured “…….. does not serve a useful purpose”. Doyle CJ continued: “……. (T)he sort of conduct at which section 31 is aimed is evasion rather than carelessness or ignorance. Evasion implies an element of knowledge. I do not see much sense, in this context, in punishing a person who might be unaware of the difference between an SCT and a non-reportable cash transaction”.

72 Proceeding from what is thus propounded, Doyle CJ expresses as follows his Honour’s reasoning as relevant to the present appeal:

“Assuming that the purpose of the section is that identified by me, it would make sense to require a person charged to prove that that person was unaware of the obligation imposed upon a cash dealer to report an SCT. It would make sense to provide for a rebuttable presumption that a person charged was aware of the obligation to report an SCT. It would make sense to provide for a rebuttable presumption of an intent to conduct transactions so as to prevent an SCT occurring. Each of these would be an understandable aid to proof of an element which it might often be difficult to prove. But to punish a person who is, or might be, unaware of the obligation to report an SCT, seems odd to me. It likewise seems odd to punish a person who is or might be unaware of the significance of the value of the currency transferred in a cash transaction.
These considerations, coupled with the ambiguous form in which s 31(1) is expressed, incline me towards the view that there is a further aspect to the mental element that must be proved. Subject to the impact of sub-par (b), that element would involve proof of the following: that the accused person knew that a transaction involving currency of $10,000 or more in value must, by law, be reported to a government agency, and that a transaction involving currency of less than $10,000 in value did not have to be reported to a government agency .” [at 508, 509] [emphasis added]

73 What is proposed by Doyle CJ in the high-lighted portion of the foregoing extracts from his Honour’s judgment is the essential foundation of the first and second of the three complaints upon which the present appeal is based.

74 There is, to say the least, a conceptual tension between the views of, respectively, Brennan CJ and Doyle CJ. It is, in my opinion, fortunately not necessary to attempt a definitive resolution of that tension. That is so because, in my opinion, the South Australian decision is, in any event, distinguishable for the purposes of the present appeal. It is so distinguishable because the South Australian matter was not governed, as the present appellant’s case is plainly governed, by the relevant provisions of the Commonwealth Criminal Code. If the analysis of that Code, in its application to the facts of the appellant’s particular case, is correctly analysed in what I have previously herein written, then the relevant fault element in connection with both sub-paragraph (1)(a) and (1)(b) is the fault element of intention. In my opinion, and as I have earlier explained, knowledge is not irrelevant; but its relevance is not that of a fault element. Its relevance is, rather, as a consideration to be placed into the relevant forensic balance when judging whether or not the true fault element, that of intention, has been established by the Crown in accordance with any relevant standard of proof that is prescribed by section 31(1) itself when considered in the light of any relevant provision of the Commonwealth Criminal Code.

Reg v Leask [1999] NSWCCA 33

75 This matter was an appeal to this Court, (McInerney, Hulme and Barr JJ), challenging 42 convictions, each of which was for an offence against section 31(1) of the FTR Act.

76 Hulme J did not accept the conclusion reached by Doyle CJ that it was necessary for the Crown to prove not only the alleged offender’s knowledge that a cash deposit of more than $10,000 was reportable; but also that a cash deposit of less than $10,000 was not reportable. It is not necessary for present purposes to canvass the details of his Honour’s reasoning because, as with the South Australian matter previously discussed, the Commonwealth Criminal Code did not apply to the proceedings with which this Court was concerned in Mr. Leask’s appeal. McInerney and Barr JJ did not discuss in any particular way the reasoning of Doyle CJ in the South Australian matter.

77 At Mr. Leask’s trial the trial Judge directed the jury, in connection with the standard of the proof of the requirements of section 31(1)(b), that the Crown, in order to establish that element, had to satisfy the jury “…….. beyond reasonable doubt that it would be reasonable to …….. conclude ……..” that the sole or dominant purpose of the impugned transactions had been the purpose proscribed by sub-section (1)(b).

78 Barr J, McInerney and Hulme JJ concurring on this point, held that this direction

“………. went further than necessary in that it required proof beyond reasonable doubt that it was reasonable to come to the relevant conclusion. I think that the jury would have taken that formulation as meaning that they had to be satisfied beyond reasonable doubt that the appellant had the relevant sole or dominant purpose. The direction was favourable to the appellant.
Given that proof is not required beyond reasonable doubt, an accused person may be convicted if the jury think it reasonable to conclude that the accused’s sole or dominant purpose was the purpose proscribed by the sub-section. The existence of a dominant purpose, which is sufficient for a conviction, requires the concurrent existence of another purpose or other purposes. It follows that the jury may well think that other conclusions are reasonably open and still convict. …….” [at pars 128, 129]

Hannes v The Director of Public Prosecutions (C’th) (No. 2) [2006] NSWCCA 373

79 This is a decision of this Court constituted by Basten JA, Barr and Hall JJ. The importance of the decision, from the present appellant’s point of view, is put with complete clarity in two paragraphs of the written submissions in support of the additional ground of appeal 2A:

“1. In Hannes v DPP (Commonwealth) (No. 2) [2006] NSWCCA 373 the court held that the standard of proof required for the second element of the reporting charge is contained in s 31(1)(b) of the FTR Act is “reasonable to conclude” rather than “beyond reasonable doubt”. However in so deciding the Court did not deal with the submissions of law upon which it is proposed to advance this ground of appeal. It appears that the appellant (Hannes) argued the matter in person. There has as yet been no special leave application lodged in that matter.
2. The submission put on behalf of this appellant is a simple one. The words “reasonable to conclude” and the words following them in s 31(1)(b) do not describe a standard of proof but rather a test that has to be satisfied before a finding of guilty can be made.”

80 I have previously explained that, in my opinion, these submissions are misconceived. What is in issue is, essentially and simply, the proper construction of a statute. A factor in that construction is the operation of any relevant provision of the Commonwealth Criminal Code. I have previously set out the relevant provisions and need not now repeat them.

81 I cannot put my position any more plainly than by saying that it seems to me that a simple reading of the actual words of sub-section (1)(b) is sufficient to establish quite clearly that, whether for good or ill, the Commonwealth Parliament has chosen to prescribe in this one particular context a standard of proof that departs from the traditional standard of proof in criminal cases.

Conclusions and Orders

82 For the whole of the foregoing reasons I have come to the conclusion that no one of the three complaints which were put forward by learned Senior Counsel for the appellant in his oral submissions and by way of summary of the grounds upon which the appeal rests, has been made good.

83 In my opinion the appeal against conviction should be dismissed.

84 BELL J, HOWIE J and BUDDIN J: We have received the benefit of reading the judgments in draft of the Chief Justice and Sully J. We agree with the orders proposed by Sully J substantially for the reasons given by the Chief Justice. In our opinion the difference of opinion between the Chief Justice and Sully J as to the fault element applicable to s 31(1)(b) is one of more theoretical significance than practical importance for directing a jury. However, we agree with the Chief Justice that it is preferable that the applicable fault element be described in the terms used in the section rather than by confining that description to one of the general fault elements used by the Criminal Code. In our opinion it would be sufficient for a trial judge to direct the jury, as Judge Shadbolt did, that the fault element under s 31(1)(b) is whether the sole or dominant purpose of the accused was that described in the section without undue elaboration as to the meaning of those words, which seem to us to have the same meaning under the section as they do in common parlance.

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