2.Set aside orders 1 and 3 of the Court of Criminal Appeal of the Supreme Court of New South Wales made on 2 March 2012 with respect to count 1 on the indictment and, in their place, order that:
(a) the appeal against conviction with respect to count 1 to that Court be allowed;
(b) the appellant's conviction with respect to count 1 be quashed and the sentence imposed by the Supreme Court of New South Wales on 17 December 2010 with respect to count 1 be set aside; and
(c) a verdict of acquittal be entered with respect to count 1.
3.The commencement of the sentence imposed on the appellant by the Supreme Court of New South Wales on 17 December 2010 with respect to count 2 on the indictment be amended to 17 December 2010 with the sentence to expire on 16 June 2014.
On appeal from the Supreme Court of New South Wales
Representation
H K Dhanji SC with T F Edwards for the appellant (instructed by Michael Bowe)
T A Game SC with D Jordan SC and A P C McGrath for the respondent (instructed by Commonwealth Director of Public Prosecutions)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
CATCHWORDS
Milne v The Queen
Criminal law – Money laundering – Criminal offence under s 400.3(1) of Criminal Code (Cth) to deal with property intending it will become "instrument of crime" – Appellant dealt with shares intending not to declare resulting capital gain – Whether shares "instrument of crime".
Words and phrases – "instrument of crime", "money laundering", "used in the commission", "used to facilitate".
Criminal Code (Cth), ss 134.2, 400.1(1), 400.2(1), 400.3(1).
FRENCH CJ, HAYNE, BELL, GAGELER AND KEANE JJ.
Introduction
This appeal concerns the construction and application of a provision of Pt 10.2 of the Criminal Code (Cth) ("the Code") which creates one of a number of offences under the general designation "money laundering". That provision, s 400.3(1), makes it an offence for a person to deal with money or other property of a value of or exceeding $1,000,000 if the person intends that the money or property will become an "instrument of crime". Property is an "instrument of crime" if it is used in the commission of, or used to facilitate the commission of, an indictable offence[1].
[1]Code, s 400.1(1).
In February 2005 the appellant effected a disposition of shares the beneficial interest in which was held by a company under his control, Barat Advisory Pty Ltd ("Barat Advisory"). The shares were in a publicly listed company, Admerex Ltd ("Admerex"). They were swapped, at the appellant's direction, for shares in a Swiss software development company, Temenos Group AG ("Temenos"). The appellant…
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
Milne v The Queen [2014] HCA 4
Case
[2014] HCA 4
Decision Date
CaseChat Overview and Summary
The High Court of Australia heard an appeal from the Court of Criminal Appeal of the Supreme Court of New South Wales concerning a conviction for money laundering under s 400.3(1) of the *Criminal Code* (Cth). The appellant, Milne, was accused of dealing with shares with the intention that they would become an "instrument of crime" by not declaring the resulting capital gain. The core of the dispute revolved around whether the shares, in the context of the alleged conduct, could be considered an "instrument of crime" as defined by the *Criminal Code*.
The legal issue before the High Court was whether the Court of Criminal Appeal had erred in its interpretation of the definition of "instrument of crime" within s 400.1 of the *Criminal Code*. Specifically, the Court had to determine if the shares, disposed of by the appellant with the intention of avoiding tax on the capital gain, could be considered property "used to facilitate the commission of, an offence." The Court of Criminal Appeal had adopted a broad interpretation of "facilitate" as "make easier," finding that the shares, even after disposition, remained capable of being used to facilitate a future offence.
The High Court allowed the appeal, quashing the conviction on the first count. The Court rejected the reasoning of the Court of Criminal Appeal that the shares, after their disposition, remained capable of being used for the future commission of an offence, finding this proposition untenable given the factual case presented by the Crown. The Court clarified that while the share swap created the Capital Gains Tax event and provided a basis for a future crime, and may have offered a "cloak" for deception, the shares themselves, in their disposed state, were not intended to be "used to facilitate" the commission of an offence in the way contemplated by the definition of "instrument of crime." The Court found that the trial judge had erred in refusing to direct the jury to acquit the appellant on the first count. Consequently, the High Court quashed the conviction and entered a verdict of acquittal for the first count, while amending the commencement of the sentence for the second count.
Orders
Orders of the court
1. Appeal allowed.
2. Set aside orders 1 and 3 of the Court of Criminal Appeal of the Supreme Court of New South Wales made on 2 March 2012 with respect to count 1 on the indictment and, in their place, order that:
(a) the appeal against conviction with respect to count 1 to that Court be allowed;
(b) the appellant's conviction with respect to count 1 be quashed and the sentence imposed by the Supreme Court of New South Wales on 17 December 2010 with respect to count 1 be set aside; and
(c) a verdict of acquittal be entered with respect to count 1.
3. The commencement of the sentence imposed on the appellant by the Supreme Court of New South Wales on 17 December 2010 with respect to count 2 on the indictment be amended to 17 December 2010 with the sentence to expire on 16 June 2014.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
FRENCH CJ, HAYNE, BELL, GAGELER AND KEANE JJ
In the event, the outcome of this appeal turns on whether the relevant provisions of the Code apply to the conduct alleged in the Crown case. The critical physical element of the offence, the alleged dealing with the Admerex shares, was their disposal to Mr Goodall. The element defined by s 400.3(1)(b)(ii) required proof of an intention relating to the use of those shares after their disposal. The decision of the Court of Criminal Appeal The Court of Criminal Appeal gave a wide interpretation to the term "used to facilitate the commission of, an offence" in the definition of "instrument of crime". Their Honours adopted, as had the trial judge in his direction to the jury, the ordinary English meaning of "facilitate" as "make easier"[22]. The shares, which were "instrumental in the commission of an offence" as opposed to "incidental in its commission", could be said to have facilitated the commission of the offence[23]. They were "plainly capable of being used" and, on the Crown case, were intended to be used after their disposition to facilitate the commission of a s 134.2 offence[24]. The Court's reasoning appears to have rested in part upon a proposition that the continuing existence of the shares "hidden behind the additional curtain of the Temenos shares" after the disposal by the appellant meant that they "remained capable of use for the future commission of an offence."[25] That proposition should be rejected as untenable given the factual case presented by the Crown.[22]Milne v The Queen (2012) 259 FLR 42 at 71 [145].[23]Milne v The Queen (2012) 259 FLR 42 at 71 [145].[24]Milne v The Queen (2012) 259 FLR 42 at 71 [146].[25]Milne v The Queen (2012) 259 FLR 42 at 70 [140]. The Court rejected an argument that the Crown case involved an erroneous proposition that the share swap itself facilitated the commission of the subject offence. The Crown's contentions on the swap went to the appellant's intention. The swap created the CGT event which provided the basis for the commission of the future crime. It also provided "a further cloak or curtain behind which the act of ultimate deception (the lodgement of a [false] return) would be more likely to succeed."[26] The disposition of the shares also provided "a further facilitating measure for the offence itself."[27][26]Milne v The Queen (2012) 259 FLR 42 at 72 [150].[27]Milne v The Queen (2012) 259 FLR 42 at 72 [150]. The Court held that the trial judge did not err in refusing to direct the jury to acquit the appellant on the first count[28].[28]Milne v The Queen (2012) 259 FLR 42 at 72 [151].Ground of appeal The single ground of appeal is that:"The Court of Criminal Appeal erred in its interpretation of the definition 'instrument of crime' in s 400.1 of the Criminal Code, Criminal Code Act 1995 (Cth) and as a result erred in finding that the property referred to in count 1 of the indictment was capable of falling within that definition in the circumstances alleged against the appellant at trial."Instrument of crime – the constructional question
Ratio Decidendi
Legal Principle Established
Established by:
FRENCH CJ, HAYNE, BELL, GAGELER AND KEANE JJ