R v Kotynia-English - [2014] TASSC 63

[2014] TASSC 63

COURT: SUPREME COURT OF TASMANIA

CITATION: R v Kotynia-English [2014] TASSC 63

PARTIES:  THE QUEEN
  v
  KOTYNIA-ENGLISH, Gregory Patrick

FILE NO:   500/2011
DELIVERED ON:  27 November 2014
DELIVERED AT:  Hobart
HEARING DATES:  27 and 28 October 2014
RULING OF:  Wood J

CATCHWORDS:

Criminal Law – Procedure – Warrants, arrest, search, seizure and incidental powers – Warrants – Search warrants – Execution – Requirement that copy of warrant be made available to occupier – Entitlement of occupier to observe search.

Evidence Act 2001 (Tas), s 138.
Crimes Act 1914 (Cth), ss 3H, 3P.
R v Brown [2014] TASSC 18, applied.
Tasmania v Seabourne [2010] TASSC 35, considered.
Aust Dig Criminal Law [2969]

REPRESENTATION:

Counsel:
             Crown:   I M Arendt
             Accused:   K Cuthbertson
Solicitors:
             Crown:   Acting Director of Public Prosecutions (Cth)
             Accused:   Legal Aid Commission of Tasmania

Judgment Number: [2014] TASSC 63
Number of paragraphs: 41

Serial No 63/2014
File No 500/2011

THE QUEEN v GREGORY PATRICK KOTYNIA-ENGLISH

REASONS FOR RULING WOOD J

27 November 2014

The accused is charged with three counts of dealing in proceeds of crime worth $10,000 or more contrary to s 400.6(1) of the Criminal Code 1995 (Cth), one count of dealing in proceeds of crime worth $1,000 or more contrary to s 400.7(1), and one count of attempting to deal in proceeds of crime worth $1,000 or more contrary to ss 11.1 and 400.7(1) of the Code.
The accused pleaded not guilty and a preliminary hearing was conducted before me on 27 and 28 October 2014, before the trial commenced, to determine whether some evidence that the Crown proposed to tender at trial should be excluded. The evidence was information on a computer hard drive, documents and cash obtained during a search by police officers of the accused's residence. At the conclusion of the preliminary hearing I ruled that, for reasons that I would later give, the evidence of the items seized during the search had been obtained improperly and in contravention of an Australian law. However, I also ruled that the desirability of admitting the evidence outweighed the undesirability of admitting evidence obtained in the way that this evidence had been obtained, and therefore that the evidence was to be admitted. These are my reasons for that ruling.
The Crown case is that the accused received and dealt with money that had been stolen from various bank accounts. The evidence to be led at trial reveals money was stolen by means of internet bank transactions, but by whom and how the accounts were accessed and the funds stolen is not revealed. The allegation is that the defendant communicated with a person by the name of Viktor Lesken from an organisation called Finance International, and entered into an arrangement allowing bank accounts opened in the accused's name to be used for the purpose of depositing stolen funds. There were a number of these deposits; the accused was alerted to pending transfers into his account and given instructions as to what was to be done with the money. He transferred the funds in accordance with those arrangements into the nominated bank account or to an individual using an international money transfer or a Western Union transfer. The destinations of these transfers were to bank accounts or individuals overseas. The Crown case is that the accused withdrew a percentage from the funds by way of a "commission" that had been agreed. The "commission" started off at 5% and over time graduated to 33%.
The offences he is charged with fall under Part 10.2 of the Code, titled "Money laundering". Sections 400.6(1) and 400.7(1) are largely in the same terms except as to the amount, which is $10,000 in the case of s 400.6(1) and $1,000 in the case of s 400.7(1):
"(1) A person is guilty of an offence if:
(a)the person deals with money or other property; and
(b)either:
(i) the money or property is, and the person believes it to be, proceeds of crime; or
(ii) …; and
(c)at the time of the dealing, the value of the money and other property is [$10,000/$1,000] or more."
The Crown contends that when the accused dealt with the money, he knew that the money was stolen, and therefore was the proceeds of crime. The words "deals with money or other property" is defined in s 400.2 to include receiving money, exporting money or engaging in a banking transaction relating to money. The Crown contends he dealt with the funds by: providing his account details, and allowing the money to be deposited into his accounts; withdrawing funds and depositing funds into other bank accounts, and by exporting the money.
The unauthorised withdrawal of funds from bank accounts came to the attention of the account holders' banks, and efforts were made to trace the funds. The accused's bank accounts were discovered by bank fraud investigators to have received stolen funds, and some of the accused's bank accounts were frozen. The matter came to the attention of the police. On 25 February 2009, Detective Sergeant Todd Bain of the Tasmania Police Service went to an address in Primrose Sands. He was in the company of two other police officers of Tasmania Police, Detective Senior Constable David Summers and Constable Mark Brazendale. Detective Sgt Bain had been issued with a search warrant.
They were met by the accused, and Det Sgt Bain showed him the search warrant. He allowed them to enter. The police conducted a search of the house, and in an office found and seized $5,000 in cash, an Antec computer tower and various documents. The documents included international money transfer documents, and correspondence from Aussie Credit Cards and from the ANZ Bank addressed to the accused. Some time later, the computer tower was examined and various documents bearing on this matter, including emails to or from a person by the name of Viktor Lesken, were found on the hard drive.
The defence contends that the evidence ought not be admitted pursuant to s 138 of the Evidence Act 2001, in that:
·it was illegally obtained in contravention of s 3H of the Crimes Act 1914 (Cth) requiring the warrant holder to make available a copy of the warrant;
·it was improperly obtained in that the effect of s 3P of the Crimes Act was undermined, which gave the occupier the right to observe the search.
Section 3H required Det Sgt Bain to make available to the accused a copy of the warrant. The section states:
"3H   Details of warrant to be given to occupier etc
(1)     If a warrant in relation to premises is being executed and the occupier of the premises or another person who apparently represents the occupier is present at the premises, the executing officer or a constable assisting must make available to that person a copy of the warrant.
(2)     If a warrant in relation to a person is being executed, the executing officer or a constable assisting must make available to that person a copy of the warrant.
(3)     If a person is searched under a warrant in relation to premises, the executing officer or a constable assisting must show the person a copy of the warrant.
(4)     The executing officer must identify himself or herself to the person at the premises or the person being searched, as the case may be.
(5)     The copy of the warrant referred to in subsections (1) and (2) need not include the signature of the issuing officer or the seal of the relevant court."
This section was considered by Blow CJ in R v Brown [2014] TASSC 18. It was decided that the section in its terms, "to make available" a copy of the warrant, required the executing officer or his assistant to give a copy of the warrant to the occupier. It was determined that, because that was not done, the execution of the warrant was unlawful and that the evidence obtained during that search was obtained in contravention of an Australian law within the meaning of the Evidence Act, s 138(1). Here, too, the accused was not given a copy of the warrant and there has been a failure to comply with the terms of s 3H.
It is conceded by the prosecution that, in light of the decision in R v Brown, the seizure of documents from the accused's home was unlawful. The Crown seeks to persuade me to exercise my discretion to admit the documents pursuant to s 138 of the Evidence Act.
The parts of s 138 that are relevant are as follows:
"(1)   Evidence that was obtained —
(a) improperly or in contravention of an Australian law; or
(b) ... —
is not to be admitted unless the desirability of admitting the evidence outweighs the undesirability of admitting evidence that has been obtained in the way in which the evidence was obtained.
(2)   ...
(3)   Without limiting the matters that the court may take into account under subsection (1), it is to take into account —
(a)the probative value of the evidence; and
(b)the importance of the evidence in the proceeding; and
(c)the nature of the relevant offence, cause of action or defence and the nature of the subject matter of the proceeding; and
(d)the gravity of the impropriety or contravention; and
(e)whether the impropriety or contravention was deliberate or reckless; and
(f)whether the impropriety or contravention was contrary to or inconsistent with a right of a person recognised by the International Covenant on Civil and Political Rights; and
(g)whether any other proceeding, whether or not in a court, has been or is likely to be taken in relation to the impropriety or contravention; and
(h)the difficulty, if any, of obtaining the evidence without impropriety or contravention of an Australian law."
In assessing the probative value of the evidence, regard is of course had to the facts in issue. To establish guilt, the Crown must prove that the accused dealt with or attempted to deal with money that was the proceeds of crime; and, at the time, he believed the money was proceeds of crime.
Documents that were located on the accused's computer hard drive are likely to assist the jury in assessing the probability of the existence of facts in issue. In general terms, they would assist in enabling the jury to determine whether the accused dealt with money that was stolen, and also whether he believed that the money was the proceeds of crime. There was a letter attached to an email from the ANZ Bank addressed to the accused, informing him that funds deposited into his account were unauthorised by the account holder and were stolen funds, and documents relating to monies transferred internationally by the accused. Emails were found, many of them between a person who used the name Viktor Lesken and the accused. The emails show:
ithe accused and Lesken entered into an arrangement involving the accused agreeing that monies be deposited into his account;
iiLesken would inform the accused when money had been credited to his account or when to expect that to occur;
iiiLesken gave information to the accused about account details, including account names for the deposits or transfers;
ivthe accused transferred monies overseas to people at the direction of Lesken;
vin return, the accused was to retain a percentage of the monies that were transferred into his account;
viLesken informed the accused of increases in his "commission" (starting at 5% and increasing to 33%);
viithe accused was aware before the alleged offences that the company Lesken was involved in was linked to money laundering scams;
viiimoney stolen from the complainants' accounts was transferred to the accused's account;
ixthe accused was informed by a bank investigator that the amount deposited into his account, the subject of count 1 ($19,610), was stolen funds; and
xthe accused and Lesken shared information about effective ways of avoiding suspicion in transferring the money to the accused and onto the account holder nominated by Lesken. Examples were using Western Union transfer, withdrawing cash and then depositing, splitting amounts, using BPay, and international money transfer.
The evidence found during the search is of high probative value, a consideration weighing in favour of its admission.
The evidence has importance in the proceedings. This is a circumstantial case, and without this evidence, the Crown case would be reliant on drawing inferences from evidence of bank transactions, showing deposits into the accused's account and his activity with regard to the money deposited. While the Crown case would not dissolve without the documents, it would reduce substantially in strength, particularly as to the element of the accused's belief that the money was stolen. The documents under objection are informative about the accused's knowledge that the funds were stolen, and show that his acts with respect to the money were at the direction of Lesken.
If proved, this would be a serious example of the offence of dealing in the proceeds of crime. It concerns dealing in a total amount of nearly $100,000 of stolen money, and involvement in an international criminal enterprise. The offence pursuant to s 400.6(1) attracts a maximum penalty of ten years' imprisonment, and the offence pursuant to s 400.7(1) attracts a maximum penalty of five years' imprisonment. As submitted by counsel for the Crown, Mr Arendt, the object of the section is to deter people from dealing in the proceeds of crime, which, like the conduct of receiving stolen goods, is criminal conduct which promotes the commission of the initial crime.
In terms of the gravity of the contravention of s 3H, the purpose of s 3H should be borne in mind. As stated by Blow CJ in Brown at [17], the occupier "should have been provided with a copy of the warrant so that they could make some assessment as to whether any of the items seized were outside the scope of the warrant". As acknowledged by Mr Arendt in his submissions, s 3H is an important safeguard for the occupier. While the accused was shown a copy of the warrant, that was not sufficient to fulfil the objective of s 3H to a substantial or an effective extent. I further note that there is no suggestion that the contravention by Det Sgt Bain was an instance of a widespread police practice in failing to follow the requirement in s 3H.
There is no suggestion that the contravention was deliberate. The defence submitted it was reckless. The evidence of Det Sgt Bain was to the effect that, while he was aware of the existence of s 3H, it was his understanding that it was sufficient if a copy of the warrant was shown to the occupier. He gave evidence that his belief in this regard was reinforced by the terms of the Search Warrants Act 1997 (Tas), s 8, which stipulates a copy of the warrant is to be shown. He was unaware that pursuant to the Commonwealth legislation it was necessary to give and leave a copy of the warrant with the occupier, until the decision of Brown was delivered earlier this year, some five years after the search involving the accused. In cross-examination he agreed that, at the time of the search, he did not think that there was a difference between the Tasmanian and Commonwealth legislative requirements for warrants, and he did not think to contact the Australian Federal Police to check what was required of a person executing a Commonwealth warrant.
Section 8(1) of the Tasmanian Search Warrants Act provides:
"(1) If a warrant is being executed and the occupier of the warrant premises or another person who apparently represents the occupier is present at the warrant premises, the executing officer or a person assisting is to show to that person a copy of the warrant."
A comparison of the sections reveals that the wording of the sections is not the same. Det Sgt Bain proceeded on the assumption that they had the same effect. I consider that this must have been due to Det Sgt Bain's failure to advert to the possibility of a difference in the requirements. A cautious approach would have been to make enquiries, and to check the effect of the Commonwealth provision and the approach of the Australian Federal Police. The evidence before me does not disclose whether, if he had made enquiry, there was at the time a practice followed by Australian Federal Police in executing warrants of giving a copy of the warrant to the occupier. It is worth noting that even if evidence of such a practice had been led, given the other matters I am about to refer to regarding Det Sgt Bain's conduct, it would not be determinative.
The fact that Det Sgt Bain did not follow a cautious approach and make enquiries and, rather, proceeded on an assumption about the meaning of s 3H, does not necessarily amount to a contravention which is reckless. Conduct which falls short of a cautious approach is not the same as recklessness, and does not necessarily reveal a "don't care" attitude.
In Helmhout (2001) 125 A Crim R at [33], Hulme J stated:
"In the context of 'improperly or in contravention of an Australian law' the concept 'reckless' must involve as a minimum some advertence to the possibility of, or breach of, some obligation, duty or standard of propriety, or of some relevant Australian law or obligation and a conscious decision to proceed regardless or alternatively a 'don't care' attitude generally, …".
Detective Sgt Bain's incorrect interpretation of the Crimes Act is, to a degree, understandable given his perspective and familiarity with the State legislation and a similarity in the wording of the provisions. His assumption that the sections had the same effect is not obviously incorrect on a layman's reading. The significance of the requirement in s 3H to "make available", rather than "show", and the contrast with "show" in subs (3), may not be obvious to a non-lawyer. I note that it was not until this year, many years after the contravention, that the issue squarely arose for consideration and the effect of s 3H was put beyond doubt. I can see that, for him, there was no alarm bell that alerted him to the need to explore the meaning of s 3H and what was required to give effect to it.
There was evidence, relied on by the Crown, that Det Sgt Bain had only executed one other search warrant under the Crimes Act. However, that cannot be relied upon to excuse his lack of knowledge. It is necessary that State police officers who take on these responsibilities are adequately trained, and informed: see R v Baladjam [2008] NSWSC 1467 at [260] and [264]. In blunt terms, as a police officer executing a search warrant under the Crimes Act, Det Sgt Bain should have been aware of the procedural requirements arising from that Act. It pays to remember that, as stated by Blow CJ in R v Brown at [23], the courts have "consistently taken the view that a strict approach should be taken to compliance with statutory provisions relating to the issue and execution of search warrants. See, for example, George v Rocket (1990) 170 CLR 104; Hart v Commissioner of Australian Federal Police (2002) 124 FCR 384."
Notwithstanding a level of complacency or incautiousness in Det Sgt Bain's assumption about the meaning of the legislation, I do not find that Det Sgt Bain's conduct was reckless. I characterise his contravention as arising from inadvertence.
I turn to other considerations arising from s 138 of the Evidence Act. The contravention of s 3H was contrary to a right of the accused recognised by Article 17 of Pt 111 of the International Covenant on Civil and Political Rights: Blow CJ in R v Brown at [19]-[20].
In light of the submissions for the Crown, I can proceed on the basis that disciplinary proceedings have not been taken in relation to the contravention and are not likely.
It is relevant to note that this type of contravention of s 3H has now been highlighted: R v Brown. An aspect of the courts' concern is to mark or condemn the contravention and ensure that the courts do not indirectly sanction the illegality. That has occurred already in R v Brown, resulting in the exclusion of evidence in that case. There is less need here to send a message of the Court's disapprobation. Presumably, the first message has now reached those who need to know. It is not a case where that message has been ignored or where it is evident that a further message is required.

The subsection could easily have been complied with by giving a copy of the warrant to the accused, and so there was no difficulty of obtaining the evidence without contravention of s 3H.
Weighing these considerations, they favour admitting the evidence.
It is submitted that there was further impropriety in relation to the search in that a conversation was held with the accused away from the search whilst the search was in progress, which undermined the accused's ability to observe the search being conducted.   Detective Sgt Bain and Det Snr Const David Summers gave evidence of the search. The accused did not give evidence. I find the following sequence of events occurred after Det Sgt Bain and Det Snr Const Summers and Const Brazendale arrived at the house and the accused answered the door:
·     The accused was shown the warrant; he appeared to read it and returned it to Det Sgt Bain.
·     The accused was asked about his computer, and showed the police officers to his computer room.
·     At an early stage, soon after the accused was shown the warrant, Det Sgt Bain informed the accused that he would like to interview him and the accused informed him that he would rather seek legal advice prior to any interview. Notwithstanding that response, a conversation took place, which was described by Det Sgt Bain as not being an "official interview", and notes were made. It may be noted that Crown counsel gave an indication that the evidence of the conversation was not going to be relied on and admitted at the trial.
·     The accused and Det Sgt Bain went to the porch where the accused was questioned for at least 10–15 minutes. The notes from that conversation were signed by the accused on the porch.
·     Meanwhile, during the conversation on the porch, the search was being conducted inside the house.
·     After the conversation, Det Sgt Bain and the accused walked around the house. They remained in each other's company and discussed general matters. During this stage, after the questioning on the porch, the accused went into the computer room a few times where Det Snr Const Summers was searching and the area of the home where Const Brazendale was searching and wandered around in the company of Det Sgt Bain.
·     Detective Snr Const Summers located $5,000 cash in the computer room and informed Det Sgt Bain; the cash was taken into a bedroom and was counted and photographed, with the accused present.
·     Further notes were written in relation to the cash, and these were signed by Det Sgt Bain, the accused and Det Snr Const Summers. Shortly after they were signed, the officers left with the seized items. The police officers were at the premises for approximately one hour.
Detective Snr Const Summers gave evidence that after the police officers walked into the premises, Det Sgt Bain informed the accused that he had the right to watch the search take place. I found that evidence unconvincing. Detective Sgt Bain did not give evidence that he informed the accused he could observe the search, and I find that was not said. Conversely, as a point for the Crown, I note that the accused was not informed that he could not watch the search or that he should remain with Det Sgt Bain away from the search.
Section 3P of the Crimes Act is as follows:
"Occupier entitled to be present during search
(1) If a warrant in relation to premises is being executed and the occupier of the premises or another person who apparently represents the occupier is present at the premises, the person is, subject to Part IC, entitled to observe the search being conducted.
(2) The right to observe the search being conducted ceases if the person impedes the search.
(3) This section does not prevent 2 or more areas of the premises being searched at the same time."
Counsel for the defence relies on a decision of Tasmania v Seabourne [2010] TASSC 35. In that case, the accused was interviewed at his house during a search. The accused was questioned in the kitchen and a written record of interview undertaken. Meanwhile, the various rooms in the house were searched for drugs. The questioning took place on a voluntary basis and the accused was issued with a caution regarding his right to silence. The accused was not informed that he was entitled to observe the search. However, there was no statutory requirement that the police do so or facilitate the accused's presence during the search. The police did not stop the accused from leaving the interview and watching the search. Section 13(1) of the Search Warrants Act is in the same terms as s 3P of the Crimes Act.
In Seabourne, I gave consideration to that provision at [24]–[25] and stated that:
"I note that a person in the accused's position was free to decline the interview or refuse to participate in an interview on the basis that they wished to observe the search.
On the other hand, I can see that the practice of conducting an interview at the same time as the search can create an impression, and in fact did create the impression in the accused's mind, that he ought to remain with the police during the questioning process. For this reason it is undesirable that an interview take place at the same time as the search away from the place where the search is being conducted. I do not consider the conduct of police amounts to a breach of the Search Warrants Act, s13, but it had the practical effect of undermining the accused's entitlement provided for in that section. There were steps that could have been taken to offset these consequences. Detective Orme could have informed the accused of his entitlement under s13 and offered to delay the interview until after the search."
I note that, in this case, it is not clear what impression was created in the accused's mind because he did not give evidence. However, conduct may be improper even if it is not established that a false impression was actually created. It was submitted that while he was issued with a caution and told he was not obliged to answer questions, and he declined, the police pressed on with questions that were recorded and handed to him to sign. It was contended that this had the potential to undermine the caution. There is force in that, and the corollary that it may have reinforced to the accused that he ought to remain with Det Sgt Bain and answer his questions.
In Seabourne I concluded that there had been impropriety, and at [28] stated:
"I consider that it is at odds with the role of law enforcement officers to impede the occupier's entitlement to observe a search being conducted. Section 13 of the Search Warrants Act is an important safeguard for citizens. The reality is that many people, like the accused, would not be aware that they had the right to observe the search, and it is important that the police, by their conduct and engagement with occupiers, should not discourage searches being observed. Otherwise the entitlement is negated. I conclude that there has been impropriety."
I reach the same conclusion here.
In undertaking the evaluation under s 138 and assessing whether the desirability of admitting the evidence is outweighed by the desirability of not admitting it, I note the considerations already referred to, such as the high probative value of the evidence, the importance of the evidence, and the nature of the criminal conduct alleged. In assessing the gravity of the impropriety, I note that s 3P provides an important safeguard similar to the objective that underpins s 3H: Zhang v Commissioner, Australian Federal Police (2009) 260 ALR 580 at [25]. The impropriety was not deliberate or in order to achieve an improper purpose. There was no criticism of the search, the provenance of items located or the seizure. As an impropriety, it offended the spirit of the section, and was less patently wrong than a breach of its terms would have been. The impropriety was seemingly driven by efficiency considerations in the carrying out of the search and gathering information from the accused, enabling two tasks to be undertaken at the same time. It is not a grave instance of improper conduct and not a case where the impropriety involved in the approach taken had been brought to the attention of the authorities before. In conclusion, I am satisfied that the desirability of admitting the evidence outweighs the undesirability of admitting it. I reach this conclusion having regard to the combined effect of the breach of s 3H and the impropriety with regard to s 3P.
For these reasons I ruled that the evidence should be admitted.