Peters v The Queen (M6-97) [1998] HCA 7 2 February 1998
ORDER
Appeal dismissed.
On appeal from the Supreme Court of Victoria
Representation:
P G Priest for the appellant (instructed by Jonathan Kemp & Associates)
B R Martin QC with N T Robinson for the respondent (instructed by M White, Solicitor to the 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
Peters v The Queen
Criminal law – Conspiracy to defraud – Elements of – Whether dishonesty an essential element – Tests of dishonesty in R v Ghosh and R v Salvo – Actus reus and mens rea – Agreement to use dishonest means – Intention to prejudice or imperil the rights or interest of others – Direction to jury.
TOOHEY AND GAUDRON JJ. The appellant, a solicitor, stood trial in the County Court of Victoria on charges of conspiracy to defraud the Commonwealth pursuant to ss 86(1)(e) and 86A of the Crimes Act1914 (Cth) ("the Act") and a charge of conspiracy to pervert the course of justice. He was acquitted of the latter charge but convicted of conspiracy to defraud. His appeal against conviction was dismissed by the Court of Appeal (Criminal Division) of the Supreme Court of Victoria. The appellant now appeals to this Court.
The facts
In 1983, the appellant was retained by Mr Spong to act in certain transactions involving the purchase of five blocks of land at Essendon in Victoria. One block, which had a substantial residence on it, was purchased in the name of Jetoline Pty Limited ("Jetoline"). The appellant was a director of and a shareholder in Jetoline. The other director was "Freeman", a name which the appellant knew to be an alias for Spong. It is unclear whether the other blocks were also purchased in the name of Jetoline. It is not in issue that Spong was involved in illegal drug trafficking and that he arranged to purchase and, in fact, purchased the Essendon properties with moneys obtained from his drug dealings. This notwithstanding, it follows from the appellant's acquittal on the charge of conspiracy to pervert the course of justice that it must be taken that he was ignorant of the source of those moneys[1].
[1] The prosecution case on the charge of conspiracy to pervert the course of justice was that the appellant was party to a conspiracy to conceal the true source of the moneys used to purchase the various properties the subject of the conveyancing transactions in which the appellant was retained.
Although Spong provided the whole of the purchase moneys for the Essendon properties, that fact was concealed by the execution of two sham mortgage documents. One was a memorandum of mortgage over the block of land on which was…
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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AGLC
Peters v the Queen [1998] HCA 7
Case
[1998] HCA 7
Decision Date
CaseChat Overview and Summary
The appellant, a solicitor, was convicted in the County Court of Victoria of conspiracy to defraud the Commonwealth under the *Crimes Act 1914* (Cth), having been acquitted of conspiracy to pervert the course of justice. The Court of Appeal of Victoria dismissed his appeal against conviction, and he subsequently appealed to the High Court of Australia. The case concerned transactions involving land purchased with moneys derived from illegal drug trafficking, where sham mortgage documents were executed to conceal the source of the funds. The prosecution alleged that the appellant conspired to conceal the true amount of income by these sham transactions, intending to deprive the Commissioner of Taxation of payable tax.
The central legal issue before the High Court was whether dishonesty was an essential element of the offence of conspiracy to defraud the Commonwealth, and if so, what test of dishonesty should be applied. Specifically, the Court had to determine whether the jury should have been directed to consider the objective standards of ordinary, decent people or the subjective appreciation of the accused's own conduct. The appellant maintained he was merely acting as a solicitor and was unaware of the fraudulent intent.
The Court was divided on the applicable test for dishonesty. Some judges considered that dishonesty in this context should be assessed by the standards of ordinary, decent people, drawing parallels with objective elements in other areas of criminal law like provocation. However, other judges maintained that dishonesty inherently involves conscious wrongdoing and should be judged by the accused's personal understanding and appreciation of their actions. Despite this division, the Court ultimately dismissed the appeal.
The High Court held that while the jury had not been properly instructed on the meaning of dishonesty, the appellant's submission that the Court should substitute an acquittal was misconceived, as determining the appellant's subjective state of mind was a matter for the jury. Given the division within the Court and the need for clear guidance for criminal trials, the appeal was dismissed.
Orders
Orders of the court
Appeal dismissed.
Background
Background to the litigation
The appellant, a solicitor, stood trial in the County Court of Victoria on charges of conspiracy to defraud the Commonwealth pursuant to ss 86(1)(e) and 86A of the Crimes Act 1914 (Cth) ("the Act") and a charge of conspiracy to pervert the course of justice. He was acquitted of the latter charge but convicted of conspiracy to defraud. His appeal against conviction was dismissed by the Court of Appeal (Criminal Division) of the Supreme Court of Victoria. The appellant now appeals to this Court.The facts In 1983, the appellant was retained by Mr Spong to act in certain transactions involving the purchase of five blocks of land at Essendon in Victoria. One block, which had a substantial residence on it, was purchased in the name of Jetoline Pty Limited ("Jetoline"). The appellant was a director of and a shareholder in Jetoline. The other director was "Freeman", a name which the appellant knew to be an alias for Spong. It is unclear whether the other blocks were also purchased in the name of Jetoline. It is not in issue that Spong was involved in illegal drug trafficking and that he arranged to purchase and, in fact, purchased the Essendon properties with moneys obtained from his drug dealings. This notwithstanding, it follows from the appellant's acquittal on the charge of conspiracy to pervert the course of justice that it must be taken that he was ignorant of the source of those moneys[1].[1] The prosecution case on the charge of conspiracy to pervert the course of justice was that the appellant was party to a conspiracy to conceal the true source of the moneys used to purchase the various properties the subject of the conveyancing transactions in which the appellant was retained. Although Spong provided the whole of the purchase moneys for the Essendon properties, that fact was concealed by the execution of two sham mortgage documents. One was a memorandum of mortgage over the block of land on which was erected the residence earlier referred to. That "mortgage" was in favour of a person named Rosenberg - another alias used by Spong. The other was a "mortgage" over all five blocks of land in favour of Dial Financial Services Pty Ltd ("Dial"). The appellant acted for the purchaser/mortgagor in relation to that "mortgage" and another solicitor acted for Dial. No money was advanced under either "mortgage". The solicitor acting for Dial was unable to register the "mortgage" to that company and a caveat was lodged to protect its interests. Later, the blocks of land other than that on which the residence was erected were sold to genuine purchasers. On settlement, part or all of the proceeds of each sale were paid to Dial, with Dial executing a withdrawal of caveat to enable the registration of a transfer to the purchaser concerned. The moneys paid to Dial were then paid back to Spong. The issues at trial So far as concerns the charge of conspiracy to defraud the Commonwealth, the prosecution case was that the appellant was party to an agreement to conceal the true amount of Spong's income by sham mortgage transactions and that he and his fellow conspirators intended thereby to deprive the Commissioner of Taxation ("the Commissioner") of tax payable on that income. The appellant gave evidence admitting that, at some stage, he was informed by Spong that no moneys had been advanced by Dial under the mortgage, and that the moneys paid to Dial, apparently in partial discharge of its mortgage, were in fact returned to Spong. However, he said he was not party to any agreement to conceal Spong's income by sham mortgage transactions or to deprive the Commissioner of tax payable on that income. He was, he said, merely acting as Spong's solicitor.
Evidence
Evidence Before The Court
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Decision
Reasons for decision
TOOHEY AND GAUDRON JJ
HUGH J
The Crown argued that the introduction of objective considerations was not unknown in particular contexts of the criminal law. Thus, on the issue of provocation the question is not resolved by reference only to the subjective beliefs of the accused. Consideration is given to the response of an ordinary person or "an ordinary person in the position of the accused"[255]. It was argued that juries are accustomed to receiving and acting upon judicial instructions addressed to such considerations. All of this is true. However, the position in such cases is distinguishable on a number of grounds. First, the introduction of an objective element in provocation can be traced to very old principles of the common law, elaborated, historically, before the universal importance of the subjective intention of the accused was accepted as a general rule. As well, in Australia, the objective criterion is now commonly so stated in the applicable Crimes Act or Code. Furthermore, in a case such as provocation, what is in issue is an amelioration of the charge of criminal conduct. Here, the issue is the definition of one of the elements of the offence itself. Now confronted by the problem, the Court is obliged to solve it by resort to fundamental principle. Dishonesty of its essential nature connotes conscious wrongdoing. It is not dishonesty by the standards of other persons but by the appreciation and understanding of the accused personally.[255] See for example Crimes Act 1900 (NSW), s 23(2)(b); cf Green v The Queen (1997) 72 ALJR 19; 148 ALR 659.Conclusion and orders At one stage the appellant argued that this Court should substitute a verdict of acquittal on the first count for the verdict which the jury returned. That submission was entirely misconceived. This Court, which has neither seen nor heard the witnesses, could not properly reach any conclusion on the appellant's protestations that he had only acted in his capacity as the client's solicitor and had not been dishonest. Such matters would have to be passed upon by a jury. However, it should be a jury properly instructed as to what dishonesty means in this context, as an element of the offence charged. This is what was missing from the first trial. The jury were deprived of the instructions which the law required. For all this Court knows, if the jury had been properly directed, they might have concluded that the appellant was naive, even stupid perhaps, but not dishonest and thus not a party to the conspiracy to defraud the Tax Commissioner. It would follow that the appeal should be allowed, the conviction quashed and a new trial ordered. I have already indicated my disagreement with the conclusions of McHugh J (with whom Gummow J concurs). From the foregoing it will be plain that I also cannot agree with the opinion of Toohey and Gaudron JJ that the question whether the means used to effect the conspiracy are to be characterised as dishonest is to be answered by the application of the standards of ordinary, decent people. However, clearly, the opinions of Toohey and Gaudron JJ are much closer to my own, in that their Honours accept that the offence of conspiracy to defraud the Commonwealth, properly analysed, involves dishonesty at two levels and a jury must be so satisfied. As this Court is evenly divided on the applicable legal test, as there is a clear majority for dismissing the appeal which my opinion cannot affect and as it is essential that the Court should provide clear instruction to those who have the responsibility of conducting criminal trials, whilst preferring my own opinions I withdraw them. For the purposes of procuring a holding on the issues argued in this appeal, I concur in the opinions expressed by Toohey and Gaudron JJ on the point of difference between them and McHugh J and Gummow J.