Lee v The Queen

[2007] HCATrans 482

[2007] HCATrans 482

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S182 of 2007

B e t w e e n -

MARIA JUNG‑HEE LEE

Applicant

and

THE QUEEN

Respondent

Application for special leave to appeal

GLEESON CJ
GUMMOW J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 31 AUGUST 2007, AT 10.22 AM

Copyright in the High Court of Australia

MR J.V. AGIUS, SC:   May it please the Court, I appear with my learned friend, MR A.J. TUDEHOPE for the applicant.  (instructed by O’Hara & Company)

MS W.J. ABRAHAM, QC:   May it please the Court, I appear with my learned friend, MS C. DOBRASZCZYK for the respondent.  (instructed by Commonwealth Director of Public Prosecutions)

GLEESON CJ:   Yes, Mr Agius.

MR AGIUS:   Your Honours, in our respectful submission, this application raises a question of public importance.  Central to that question is what is the impact of the Criminal Code on section 31 of the Financial Transaction Reports Act and indeed what are the elements of section 31 of the Financial Transaction Reports Act after the Criminal Code (Cth).

Some members of this Court dealt with the question of what was the nature of the mens rea required by section 31(1) of the Act - the FTRA Act as I will refer to it - in Leask and the attitude of various members of this Court is set out in the judgment of Chief Justice Doyle in Question of Law Reserved (No 2 of 1998) (1998) 70 SASR 502.

In substance, Justice Brennan dealt with the issue and defined “mens rea” or the available scope for mens rea as being very confined.  Justice Dawson dealt with it, but was not sure.  Other members of that Court, as your Honour Justice Gummow may recall as your Honour was one of those members, did not feel it necessary to deal with that point.

GLEESON CJ:   Mr Agius, a convenient place to find the provision seems to be on page 62 of the application book. Could you just tell us how you construe section 31(1) by reference to the text on section 31?

MR AGIUS:   Yes.  If it is any assistance to the Court, we have set this out in writing on page 95 of the application book.  We contend for this, that a person commits the offence if, in this case, she was a party to two or more cash transactions.  We say that there is there involved the question of mens rea.  What is the knowledge that is necessary when she is a party to two or more cash transactions, that is, transactions in cash in a sum less than $10,000?

GLEESON CJ:   You mean to satisfy paragraph (a), you have to show that she knew that there was a significant difference between $10,000 and less than $10,000?

MR AGIUS:   But if you deposited $10,000 in cash or above, it would be reported and it would not necessarily be reported if it were under $10,000, if you deposited two amounts under $10,000 which together exceeded $10,000.

GLEESON CJ:   And you get that out of a person being a party to two or more non‑reportable transactions?

MR AGIUS:   We say the Code requires that because the Code says where no specific fault provision is enacted in relation to a physical provision, then the relevant fault provision is intention, and “intention” is defined in the Code as being meaning to engage.

GLEESON CJ:   Engage in a non-reportable transaction?

MR AGIUS:   Yes, meaning to engage in the sense that Chief Justice Doyle envisaged it to mean when he dealt with this provision before the Code.  We say that the Code has not changed that aspect of the Act.

GLEESON CJ:   What role does (b) play in this connection with its “It would be reasonable to conclude that”?

MR AGIUS:   When you get to (b), you will see that particular “manner and form” of the transaction is set out in (b)(i).  We submit that that is the second physical element.

GLEESON CJ:   But could you get an inconsistency between what it would be reasonable to conclude under paragraph (b) and what the evidence showed in relation to intention under paragraph (a)?

MR AGIUS:   No, if you concluded under paragraph (a) that the prosecution had not proved beyond reasonable doubt that the accused had the knowledge, then you would stop there.

GLEESON CJ:   What if you concluded under paragraph (b) that it would be reasonable to conclude, et cetera?

MR AGIUS:   This is the second problem we have with the Court of Criminal Appeal judgment.  We say that there is still work for intention in that last paragraph of (1)(b).  The Chief Justice determined that the mental element in that paragraph was caught up by the word “purpose” and, in our respectful submission, purpose is different to intention.  We say that if purpose is different to intention – there is authority for that – then there is no fault element associated with the specific conduct as specified in (b).

GLEESON CJ:   It is the purpose of the person.  It is not like section 260 of the Income Tax Assessment Act which referred to the purpose of a transaction.  This said you could conclude that the person conducted the transactions for the purpose.

MR AGIUS:   Yes, but the purpose of “ensuring, or attempting to ensure” and we say that you might have that purpose, but it may not necessarily be your intention at the time that you conduct the transactions.  What we are faced with in the judgment of the Court of Criminal Appeal is that there is no room at all anywhere in the section on their interpretation - regardless of whether it was one of the four Justices or Justice Sully, who delivered a separate judgment – there is no purpose for this concept of knowledge that is as having a criminal purpose.  That can be picked up in (a).  We say it must be picked up in (a), but we also say that there is room to pick it up in (b).  The problem is that it was not picked up anywhere in this trial and it was not picked up by the Court of Criminal Appeal. 

That element of the offence ‑ which had been an element of the offence right up until, in our submission, the Code was introduced, and had been the law right up until this trial ‑ has suddenly disappeared by a Code which does not specifically deal with section 31 of the Financial Transaction Reports Act.  It is a Code of general application dealing with a section which the Full Bench in Question of Law Reserved (No 2) in 1998 three justices, Justices Doyle, Cox and Duggan, found was an ambiguous section. If section 31 is ambiguous - and three senior judges have found that it was and, in our respectful submission, it patently is - then one cannot simply apply the Code without reference to the common law. There is law to that effect.

One must look at the Code against the background of the common law where there is ambiguity. Here there is ambiguity when it comes to apply to section 31(1), and we say that leaves open the issue as to whether or not you should look at the element identified by Justice Doyle. Justice Doyle identified that element for very important reasons. He went back to what this Court has said in He Kaw Teh and, indeed, to what Chief Justice Brennan had said in that case. It is impossible to see, in our respectful submission, anywhere in the Code where there is an intention to change the fundamental nature of a section 31(1) offence. That fundamental nature is this, that you are performing these transactions for the purpose of ensuring that no report is made, because if you put all the money into the bank in cash, a report would be made or liable to be made because it is more $10,000.

The applicant’s case before the jury, which she never had the benefit of obtaining a verdict on, was this, “I was told that regardless of how I deposited this money, whether I deposited it in cash in amounts above $10,000 or whether I deposited it in smaller amounts under $10,000, there would be a report, but there would be a different report in relation to cash over $10,000.  I would have to stand there and be asked a lot of questions and I come from a different culture and I find that embarrassing.  But if I did it in this other way, the report would still be made but the bank would do that report themselves and I would not be detained at the desk and I would not be asked a lot of questions, personal questions about who I am, where I live, and fill out forms.” 

Now, she never got a verdict from the jury on whether or not that could be accepted.  In our respectful submission, in leaving open intention under the Code and the application for intention under the Code, one could read this section as including an intention being a meaning to engage in this conduct, the conduct itself carrying the intention of avoiding a report.  That is the substantial point that we say this appeal raises.  It is not one that has been dealt with to finality by this Court.  It was touched upon, as we have said, in Leask.  It was touched upon in a way which clearly troubled Chief Justice Doyle.  Nevertheless, he found a way, in our respectful submission, a way which we support, to have He Kaw Teh sit together with section 31(1). There does not seem to be any intention in the Code to move from that.

Your Honour, we also submitted before the Court of Criminal Appeal – and although we have not referred to it in written submissions, we have included it in our proposed grounds of appeal – that reasonable to conclude is not a standard of proof, that the standard of proof is still beyond reasonable doubt, that it was reasonable to conclude beyond reasonable doubt and not reasonable to conclude as a separate standard of proof on its own - that is not an argument that found favour with the Chief Justice.  It was a point that we took before the trial judge and it is a point that we would wish to ventilate on the appeal if we were given leave.

It is our respectful submission that this Act does not evince an intention to remove what is in the criminal law a golden thread that the Crown must prove its case beyond reasonable doubt and that to substitute another standard, if that were to be the case, ought to be expressed in clear words.  This section could work if the test was still “beyond reasonable doubt”, in other words, if beyond reasonable doubt it was reasonable to conclude, because there are different standards upon which it might be reasonable to conclude.  It might be reasonable to conclude something on the balance of probabilities.  It might be reasonable to conclude something beyond reasonable doubt.  The words “reasonable to conclude” themselves do not indicate on their face which standard is to apply, and that is a point that we submit, with respect, is raised by this application. 

This is a section which is in a Commonwealth Act.  It is an important piece of weaponry in the armoury of the Commonwealth to protect its fiscal position.  It ought not to be left in an ambiguous situation.  For those reasons, your Honours, with respect, we suggest that this is an appropriate vehicle in which to deal with these issues.  Unless there are any other matters, your Honours, those are our submissions.

GLEESON CJ:   Thank you, Mr Agius.  Yes, Ms Abraham.

MS ABRAHAM:  Your Honour, in my submission, there are four reasons why special leave ought not be granted in this case. The first is that my friend’s argument is based on two fundamentally flawed propositions, and they are (1) that the way to determine the elements of an offence under the Code are to determine what they were under the common law and then apply the Code. In the Crown submission, that is fundamentally wrong and contrary to well-established principle. Second, and as important, is my friend’s argument is based on the fact that he says in relation to the common law interpretation, knowledge was an aspect of section 31(1)(a). He relies for that on Chief Justice’s Doyle’s decision in Question of Law Reserved.  Indeed he says it has been picked up since then. 

In the Crown submission that is not correct.  As a matter of fact, that is not correct.  The decision of his Honour the Chief Justice clearly is prior to the Code and therefore, in the Crown’s submission, is not to be used in the way my friend suggested.  But even leaving that to one side, what the Chief Justice did was look to see what is the purpose of this legislation and try then to determine what the elements of the offence were.  He notes in his judgment that the conclusion he reaches here is not one that he has reached confidently, because there clearly was tension in the few members of this Court that considered the issue in Leask.

In any event, what the Chief Justice decided in Question of Law Reserved does not relate to sub‑placitum (1)(a), but (1)(b), and he explicitly says that in the judgment.  So what my friend is trying to do is to change that and move it up, so to speak, to sub‑placitum (1)(a).  Secondly, my friend has acted on the assumption that that is required and has been accepted thereafter.  The direction my friend now seeks was explicitly rejected in the case of Leask in the New South Wales Court of Criminal Appeal when it went back for further hearing.  The same argument was run in that case as to what was required to be directed about knowledge, and the court rejected it.  So far from that being an established position prior to the Code, it is not.  Quite to the contrary.  So, in my submission, fundamentally flawed both as to approach and as to the substantive law. 

Secondly, my friend makes the point that this is a Commonwealth matter and therefore obviously it is a matter of importance. Your Honours, the section has been amended, the amendment to take effect in December 2008. So it is not a section that is going to stay the same. Can I indicate that it will become section 142 of the Anti-Money Laundering and Counter-Terrorism Financing Act.  In effect, what is now 31(1)(a) and (b) are replicated, albeit the structure is slightly different.  Sub‑placitum (b) where there is (A), (B), (C), (D) and (E) – it appears on page 62 of the application book – have been removed to a separate subsection.  But importantly, there is an additional section in the new legislation which says:

Subsection (1) does not apply if the defendant proves that the first person did not conduct the transactions, or cause the transactions to be conducted, as the case may be, for the sole or dominant purpose of ensuring, or attempting to ensure, that the money or property involved in the transactions was transferred in a manner and form that would not give rise to a threshold transaction that would have been required to have been reported under section 43.

A legal burden is being placed on the – in this instance it would have been the applicant in this case.  That, in the Crown submission, is a substantial difference to what currently exists.  So the legislation my friend is asking your Honours to consider is legislation that will be different.

GLEESON CJ:   But the issue in respect of which the burden will be cast on the applicant is an issue that you say does not arise under the current legislation.

MS ABRAHAM:   Sorry, your Honour?

GLEESON CJ:   The issue of fact upon which you say the burden will be on the applicant, is an issue that does not arise under the present legislation.  Is that right?

MS ABRAHAM:   Yes, that is right.

GUMMOW J:   Now, how do you construe 31(1)(a)?

MS ABRAHAM:   In the Crown submission, the Court of Criminal Appeal correctly construed it.  It consists of two - the way to construe any Commonwealth legislation is to look to the physical elements and the corresponding fault elements.  There are two physical elements.  The first physical element is conduct, that is, being a party to two or more non‑reportable cash transactions.  In other words ‑ ‑ ‑

GUMMOW J:   And that has to be voluntary?

MS ABRAHAM:   Yes.  The fault element is intention because there is no fault element.  So, in other words, that you intend to be party to two or more non‑reportable cash transactions ‑ ‑ ‑

GLEESON CJ:   You intend to be parties to two or more cash transactions which are, as a matter of law, non-reportable cash transactions.

MS ABRAHAM:   Yes.  So you intend to be party to two transactions less than $10,000.  So the section could have said that because that is what the significant cash transaction is.  The second physical element that all members of the court agreed was the second physical element is result, that is, that the transaction did not give rise to a significant cash transaction within the meaning of the Financial Transaction Reports Act.

The difference between the majority and the minority is that the majority judgment, the Chief Justice and the other three judges concurred, concluded that the fault element for that second physical element is sole or dominant purpose.  His Honour Justice Sully considered it to be intention, but the three remaining judges, quite correctly, in my submission, concluded that there was not much – in one sense, it is a matter of technicality.

GLEESON CJ:   It was not actually a majority judgment, was it?

MS ABRAHAM:   No, it is Justice Spigelman ‑ ‑ ‑

GLEESON CJ:   “Plurality,” I think is the word.

MS ABRAHAM:   Yes.  So in the Crown submission, that interpretation is a correct interpretation of the legislation, two physical elements ‑ ‑ ‑

GUMMOW J:   The Code proceeds on the basis that intention is just one species of fault.

MS ABRAHAM:  Yes, that is correct. What my friend wants to do is somehow import into this what he perceives to be the common law interpretation. At one level, my friend wants to have numerous fault elements to one physical element. In my submission, my friend’s interpretation of the legislation just does not fit with the application of Chapter II to the section. It is not an answer, with respect, for my friend to say the Code clearly was not intending to alter what section 31 previously meant. In my submission, that is not the correct approach, quite to the contrary. So, in my submission, the judgment of the court is a correct one.

The final reason, in my submission, why this special leave ought not to be granted, in the Crown submission, on any scenario this was an overwhelming case.  This is a case where the applicant had, prior to the charges, been depositing in accounts sums less than $10,000, generally $9,950 or $9,900.  There was evidence that clearly she had been told about the reporting, the significant cash transaction and a form would need to be filled out.  Shortly before the offences took place, she had been told by the manager of a bank that she was depositing money at that he had observed the transaction and, in effect, it was suspicious and he would have to report it as such to AUSTRAC. 

The transactions stopped at that stage, until the charges.  The charge that arose as a result of a large number of transactions – on I think it is 12 separate occasions – to enable this to happen, the applicant on one occasion took friends into one bank, opened four accounts in their names with her as a signatory solely for her use, took them across the road and opened three more accounts in their names for her use.  A week later she did the same thing with another friend.  So she had access to enormous numbers of accounts of which she was depositing less than 10,000.  Indeed, on many occasions she was depositing those amounts in multiple accounts at multiple banks on the same day. 

The explanations that she gave were inherently incredible and indeed the Crown says she actually admitted the offence because she admitted that she knew that there was a consequence of the $10,000 limit.  In the Crown’s submission, on any scenario the applicant would be guilty of this particular offence.  There is no appropriate explanation as to her conduct in relation to going into a bank, for example, count one, having people open accounts, depositing less than 10,000 into each of those accounts, depositing money into her own account – same amount, less than 10,000 - and, I might add, on that occasion, into the bank manager’s account a certain amount, less than 10,000, and into a friend of the bank manager’s account, again less than 10,000, going across the road, opening three more accounts and doing exactly the same thing.

GLEESON CJ:   Is this why, although there was a difference between Justice Sully and the other members of the court on the construction of the section, they all agreed in the result?

MS ABRAHAM:   Yes.  With respect, the difference in construction is minor in the sense - technical as the remaining three judges had observed it because of the circumstances of this case, with respect.  So, in my submission, that is a very powerful reason in addition to all the others that this is not an appropriate case where special leave ought to be granted, because in the end result, the case indeed was overwhelming, and, in the Crown’s submission, as I have said, the Crown says that she actually admitted the offence.  Those are my submissions.

GLEESON CJ:   Thank you, Ms Abraham.  Yes, Mr Agius.

MR AGIUS:   Your Honours, it is true that Chief Justice Doyle had difficulty in determining whether or not knowledge as part of the intention of the accused was caught by (1)(a) or (1)(b).  In the end, he opted for (1)(a).  In our respectful submission, that is irrelevant to our argument.  The Code itself by clause 5.6 requires that where there is no fault element specified, intention is the fault element.  So regardless of Justice Doyle’s decision in that regard, 31(1)(a) would be read as though it carried with it an intention.

The question ‑which my friend has not addressed and which, with great respect, is begged by her submissions ‑ is what does that intention mean?  The point of this appeal would be, in our respectful submission, to clarify what that intention means.  Justice Doyle was of the view that intention carried with it some knowledge.  Otherwise, he said, you simply avoid the presumption of mens rea in He Kaw Teh.  Both Justice Brennan and Justice Dawson agreed in Leask that there was a role for that presumption in the interpretation of section 31 and it is that role that his Honour Chief Justice Doyle gave life to when he said that it requires, quoting from Chief Justice Brennan:

“It requires clear language before it can be said that a statute provides for a person to do or to abstain from doing something at his peril and to make him criminally liable if his conduct turns out to be prohibited because of circumstances that that person did not know or because of results that he could not foresee.”

Here the applicant’s case was that she was not attempting to avoid a report.  She knew that the matters would be reported.  That is the intention, in our respectful submission, that this section addresses, and that intention has not changed because of the implication of the Code.

In terms of the strength of the Crown case, we still submit – indeed, my learned friend’s submissions do not deal with this aspect – if there was a failure to put a significant element of the offence to the jury, then regardless of what is said to be the factual strength of the Crown case, this verdict cannot stand.  That element of the offence, that is, her knowledge and her intention if they be elements, need to be the subject of the verdict.  At the moment they are not.

There are a number of other factual matters that my friend touched upon for which there are answers and for which there were answers in the applicant’s case at trial.  I do not think this is the appropriate time to go through them.  They are our submissions.

GLEESON CJ:   Thank you.

Although there was some difference in the reasoning of the members of the Court of Criminal Appeal on a question of construction of the relevant legislation, they all agreed in the result.  We do not think there are sufficient prospects of success of an appeal to warrant a grant of special leave and the application is dismissed.

We are going to adjourn for a short time to reconstitute.

AT 10.49 THE MATTER WAS CONCLUDED