R v Hnoudis No. Sccrm-99-16, Sccrm-99-17 Judgment No. S203

R v HNOUDIS
[1999] SASC 203

Court of Criminal Appeal: Doyle CJ, Prior and Mullighan JJ

DOYLE CJ In my opinion the appeal against conviction should be dismissed. The appeal against sentence should be allowed, and a sentence of 12 months’ imprisonment with an order for release after 4 months should be substituted for the sentence imposed by the District Court Judge. I agree with the reasons given by Prior J, and there is nothing that I wish to add to those reasons.
PRIOR J This is an appeal against conviction and sentence.
The appellant was convicted of a breach of s31(1) of the Financial Transactions Reports Act 1988 (Cth). The offence, as charged before the jury, was that the appellant, being a party to two or more non-reportable cash transactions, conducted himself in such a manner as to prevent them from giving rise to a significant cash transaction. The particulars of the offence made reference to express money orders, redeemed by the appellant to receive cash payments on 10 occasions between 4 February and 4 April 1997. The total amount of cash received was said to be $82,500.00.
The prosecution’s case was that these 10 payments were made from various locations in New South Wales, with money being transferred to the Torrensville Post Office where, on eight occasions, the appellant attended to pick up the money. A person said to be associated with the appellant attended and picked up money on the other two occasions. The evidence implicating the appellant included details of his movements as monitored by police and photographs taken by an Australia Post security camera at the Torrensville Post Office. The appellant did not give evidence at the trial.
The appellant complains that the prosecutor made comments about his failure to give evidence. That having occurred, the trial judge is said to have wrongly given a direction to the jury that it could draw an inference of guilt from the appellant’s failure to give evidence. The direction given was said to have the difficulty of appearing to give some judicial approval of what the prosecutor said in an impermissible way. The appellant says that, absent a direction to the jury that they should ignore the prosecutor’s improper remark, the direction should not have been given by the trial judge.
By the grounds of appeal, the appellant says that the trial judge should have discharged the jury because of the breach of s18(1)II of the Evidence Act 1929. That not happening, the direction given by the trial judge meant that the jury’s verdict was unsafe and unsatisfactory.
In his address to the jury, the prosecutor said that there was no evidence before them as to what all the money was for, but that the jury might think that the appellant “would have some idea, but you and I just don’t know what it was for”. Later in the address to the jury, the prosecutor put to the jury that the only reason a woman was at the post office on a particular occasion and sent money was so that she could collect money for and on behalf of the appellant. It was put that there was no other reasonable explanation than that she was acting as an agent of the appellant. Counsel put to the jury that there was no direct evidence and that the jury should reach the conclusion advanced to it by the prosecution. The prosecutor then said:
“No-one has come along and told you anything about it. What does your commonsense tell you from the facts you have found proved beyond reasonable doubt?”
Section 18(1)II provides that “the failure of any person charged with an offence to give evidence shall not be made the subject of any comment by the prosecution:” The appellant submitted that the prosecutor had breached that provision twice and that any breach could not be cured by any direction from the trial judge.
On the hearing of the appeal, counsel for the respondent submitted that the second passage complained of did not offend s18(1)II at all in that, properly understood, it was referring to a person other than the appellant coming to give evidence against a speculative view of what might be advanced as a possible explanation to the jury for this woman’s behaviour in the course of the address by the appellant’s counsel. I think that is correct. At worst, any reference to the appellant’s failure to give evidence is not specific but included with others. If it be a breach of the provision it was, as the Chief Justice put it in the course of argument, “a glancing sort of breach”.
As soon as the prosecutor completed his address, counsel for the appellant expressed his concern that counsel “may have overstepped the boundaries of comment upon (the appellant’s) failure to give evidence.” However counsel informed the trial judge that his instructions were not to ask for a discharge of the jury as much as “palliate” what was said. The trial judge indicated that it was his view of authority that he could not correct the prosecutor’s error in his summing-up. However, in the exercise of a discretion to proceed, notwithstanding the prosecutor’s breach of s18(1)II, the trial judge said he would proceed with the trial. The appellant’s counsel invited the trial judge to “soften” any comments His Honour might otherwise make about the appellant’s failure to give evidence and any inference that might be drawn from it. To this the trial judge indicated that he would not allude to what the prosecutor said in his address when commenting on submissions to the jury by counsel. However, His Honour said that he was reluctant to be constrained in the way in which he wished to put the matter to the jury because of any breach of section18(1)II by the prosecutor. His Honour expressed the view that there was a breach of s18(1)II by the prosecutor. However, His Honour’s view was that he did not “consider the breach … so great as to inevitably result in a mistrial, particularly in light of the submissions by (counsel for the accused) that his client wishes the trial to proceed.” His Honour therefore exercised his discretion and ordered the trial to proceed.
In the course of his summing-up to the jury, the trial judge properly directed the jury that an accused person was not required to provide an explanation and that, in this case, the appellant exercised his right not to answer questions when police attended at his premises. His Honour continued:
“That is his right and the law entitled him to remain silent. Inferences of guilt cannot be drawn against him because he exercised a right not to answer questions or proffer an explanation to the police.
Further, he has chosen not to give evidence or offer an explanation in court about his involvement in these transactions. Again, ladies and gentlemen, that is his right. No-one can require him to give evidence. Here, the accused has offered no explanation, either to the police or to the court. As I have directed, that is his right. He can say ‘The prosecution must prove my guilt beyond reasonable doubt.’ And that, ladies and gentlemen, he has said, and he is entitled to say it. He has said it through his counsel in a very forceful submission to you, and in a very detailed address. He can say ‘The prosecution must prove my guilt beyond reasonable doubt’.
You might think, ladies and gentlemen, that the accused could or might be able to explain the transactions. It is open to you to more readily draw the inferences the prosecution asks you to draw, given the failure of the accused to explain matters which you might consider are within his knowledge. For example, why was he receiving this money? Why was it ten payments over two months? What did the payments relate to and who were those who sent them?
The prosecution asks you to infer, from the circumstances to which the prosecutor points, that the accused was involved in a breach of s31. He asks you to conclude that the accused had the requisite knowledge and purpose. Ladies and gentlemen, what you cannot do is say ‘Because I haven’t heard an explanation from the accused therefore he must be guilty’. That would be clearly wrong. The law entitles the accused to require the prosecution to prove its case beyond reasonable doubt, and no inference can be drawn against him for that failure to explain, because he is entitled to take the action he has taken.
On the other hand, if, when you look at the prosecution evidence, you draw certain inferences and you arrive at certain conclusions, looking at the prosecution evidence alone, and you say ‘I am prepared to draw an inference based on this evidence’, and that inference is an inference against the accused, you may be fortified in drawing that inference by the fact that the accused has not explained the position to you in court. That is the way you can treat his failure, if you so wish.”
The policy of s18(1)II is “to leave the decision as to what, if any, comment is to be made upon a failure to give evidence to the impartial judgment of the trial judge.”.[1] The prosecutor’s breach of s18(1)II could not be cured by the trial judge. It cannot prevent the trial judge considering what comment he might properly and impartially make. Any breach by the prosecutor is “prima facie” a good ground for the quashing of the conviction.[2]    However, the prosecutor’s breach did not constitute such a substantial miscarriage of justice that it could be said there had been no proper trial and that the situation is beyond the reach of the court’s power to dismiss the appeal if it considers that no substantial miscarriage of justice has actually occurred.[3]
[1]      Siebel v R (1992) 57 SASR 558 at 562
[2]      Stuart v R (1959) 101 CLR 1 at 9
[3]      see Wilde v R (1988) 164 CLR 365 at 373
The directions actually given by the trial judge were not comments of the kind made by the prosecutor at all. The trial judge did not “call the attention of the jury to the ability of the accused to give evidence on oath ... and his omission to do so.”.[4] There was, therefore, no judicial approval of the prosecutor’s error. The directions given were consistent with the authority of the High Court in Weissensteiner v R.[5].
[4] Bataillard v R [1907] 4 CLR 1282 at 1288
[5] (1993) 178 CLR 217
The directions were properly confined to telling the jury of the appellant’s right to silence, that he was not bound to give evidence and that the onus remained on the prosecution to prove guilt beyond reasonable doubt.[6] That being done, the direction then correctly told the jury that they could more readily draw inferences the prosecution asked them to draw given the failure of the accused to explain matters which the jury might consider were within his knowledge. Again, that was entirely correct and not a comment at all.[7] It was correct to tell the jury that it could be fortified in drawing an inference against the accused by the fact that he had not explained the position to them in court.
“In the context of the right to silence, it is important to bear in mind that it is the failure to provide an explanation or answer as might be expected if the truth were consistent with innocence which is of evidentiary significance and not the failure to give evidence as such.”[8]
[6]      Weissensteiner (at 235) per Brennan and Toohey JJ
[7]      Weissensteiner (at 264)
[8]      Weissensteiner (at 272) per Gaudron and McHugh JJ
The directions were properly given in terms of the unexplained facts, rather than in terms of the failure to give evidence or to meet the prosecution case generally.[9]
[9] Weissensteiner (at 272)
The directions were appropriate in this case, “entirely lawful” and were made “independently of the comments of the prosecutor”.[10] Any irregular comment by the prosecutor was insignificant. The proviso to s353(1) of the Criminal Law Consolidation Act 1935 should be applied to save the conviction.[11] The prosecutor’s improper comment was insignificant against the course taken by the trial judge. I would dismiss the appeal against conviction.
[10] Stuart v R (at 10)
[11] Seibel v R (at 563)
There remains the appeal against sentence. The sentencing judge described the sum of money involved as not at the large end of the scale for this type of offence but nonetheless not an insignificant amount. His Honour also said that the number of transactions in the period over which they were conducted illustrated that the appellant’s conduct was a planned attempt to avoid the reporting requirements of the Act. His Honour referred to the object of the Act, the principal one being facilitating administration and enforcement of taxation laws.
His Honour said it was relevant to know why it was that a person would seek to avoid the provisions of the Act. A submission by way of explanation put by the appellant’s counsel was not accepted by the trial judge. Counsel received instructions to say no more about the circumstances of the offence. No credible explanation was offered. His Honour then said that the sentence he imposed would be imposed on the basis that the appellant breached the Act and that there were no mitigating circumstances in respect of the offence, with no contrition on the appellant’s part. However, His Honour said he wished to make it clear that the appellant’s failure to give a credible explanation was not an aggravating factor, “but rather, there (was) no mitigating factor upon which (the appellant was) entitled to credit and a reduction of the sentence”.
The sentencing judge described the offending as a serious breach of the law. He observed that the offence was hard to detect, the Act being designed to protect the revenue and to enable authorities to track large cash transactions. Having regard to the appellant’s personal circumstances and to observations made by another judge when sentencing the appellant last year in respect of drug offences, His Honour said that the offence was serious and “must result in a term of imprisonment”. His Honour said that he did not consider that the appellant should be released forthwith. He saw the offending as continuous over a period of two months. He ordered that the appellant be imprisoned for 18 months. His Honour made a recognisance release order under s19AC(1) and s20(1)(b) of the Crimes Act 1914 (Cth), releasing the appellant after serving six months of the sentence.
The sentence was said to be manifestly excessive. The trial judge should have suspended the sentence. The trial judge is said to have erred in placing undue weight on the seriousness of the offence, failed to put sufficient weight on the appellant’s personal circumstances and the principle that imprisonment is a penalty as a last resort. Insufficient weight was also said not to be have been placed upon the rehabilitative aspects of the sentencing process and the particular importance of the suspended sentence in respect to that. The fact that the appellant had no relevant previous convictions was not given any or sufficient weight in the imposition of the sentence complained of.
The respondent maintained that the sentence was not manifestly excessive. It was put that the degree to which the appellant’s personal circumstances could properly mitigate his sentence was greatly restricted by the appellant’s failure to offer any explanation for the offending and his lack of contrition. There being no explanation for structuring the transactions, the sentencing judge was entitled to sentence the appellant on the basis that he was seeking to frustrate the purpose of the Act, which is to facilitate the investigation of taxation offences, money laundering and other criminal offences. It was also submitted that general deterrence required a period of imprisonment to be imposed, with some time to serve in the absence of any significant mitigating factor.
This Court was assisted with a schedule of penalties actually imposed by other courts for offences against the same provision between 1994 and 1999. The sentence actually imposed upon the appellant was the third highest sentence imposed at the time it was imposed. A subsequent penalty imposed in the District Court in Queensland, carried a sentence of two years with release after four months.
A sentence of imprisonment was appropriate for this offence given the circumstances and the continuing absence of an explanation. Accepting that the appellant was a person with a good working record and no relevant previous convictions, I am not persuaded that there was any error in the refusal of the sentencing judge to suspend a sentence of imprisonment.
Counsel for the respondent informed the court that, where sentences of imprisonment had been imposed in other cases, the amounts of money involved have been larger than that before the court in this case. The court was told of one case involving serious tax evasion of something like half a million dollars. It was conceded that the material did not give much assistance to the court with respect to a tariff. In this case the appellant had to be sentenced upon the basis that the monies were not shown to have been involved in drug trading notwithstanding the matter dealt with in the same court late last year.
The sentencing judge was not directed to the provisions of s16G of the Crimes Act 1914 (Cth). That section requires a court imposing a federal sentence to be served in a prison of a State where state sentences are not subject to remission or reduction to take that fact into account in determining the length of the sentence and to adjust the sentence accordingly. I think that the failure of counsel to refer the judge to that section and its application in this case may have resulted in a longer sentence than would otherwise have been imposed. I am fortified in that view by the material tendered with respect to sentences for other breaches of the same provision. Taking both of these matters into account, I would intervene to set aside the sentence imposed and substitute a sentence of 12 months imprisonment with an order for the appellant’s release after four months.
As was observed in the course of argument, courts can reasonably expect counsel to draw to the attention of the court particular relevant provisions of the Crimes Act given that that Act is less frequently invoked in the courts of this State than State sentencing laws are. Section 16F and s16G impose obligations upon courts that must not be overlooked. They need to be acknowledged in some way in those cases where those provisions are relevant.
I would therefore dismiss the appeal against conviction but allow the appeal against sentence, substituting a sentence of 12 months imprisonment and ordering the appellant’s release after four months.
MULLIGHAN J. I agree with the orders proposed and I agree substantially with the reasons given by Prior J.

[1999] SASC 203

1 June 1999