R v Leask
12 March 1999
CITATION: REGINA v LEASK [1999] NSWCCA 33 FILE NUMBER(S): CCA 60257 of 1998 HEARING DATE(S): 11 December 1998 JUDGMENT DATE:
12 March 1999PARTIES :
Appellant: Stephen Arthur LEASK
Respondent: The CrownJUDGMENT OF: McInerney J at 1; Hulme J at 2; Barr J at 71
LOWER COURT JURISDICTION: District Court LOWER COURT FILE NUMBER(S) : 93/11/0185 LOWER COURT JUDICIAL OFFICER: Keleman DJC
COUNSEL: Appellant: P Byrne SC
Respondent: DJ Fagan SC/FA VeltroSOLICITORS: Appellant: G Shelton & Associates
Respondent: Commonwealth DPPCATCHWORDS: Criminal Law; Mens Rea ACTS CITED: Financial Transaction Reports Act S31
Evidence Act S97
98 and 101DECISION: Appeal dismissed.
IN THE COURT OF
CRIMINAL APPEAL
No 60257 of 1998McINERNEY J
Friday, 12 March 1999.
HULME J
BARR J
REGINA -v- Stephen Arthur LEASKJUDGMENTIN THE COURT OF
1 McINERNEY J: I agree with Barr J.
CRIMINAL APPEAL
No 60257 of 1998
McINERNEY J
HULME J
BARR J
Friday, 12 March 1999.REGINA -v- Stephen Arthur LEASK
JUDGMENT
2 HULME J: Stephen Arthur Leask appeals against his conviction, on 20 January 1998, on each of 42 counts alleging an offence against Section 31(1) of the Cash Transaction Reports Act 1988 (Cth). (The Act has since been renamed as The Financial Transaction Reports Act.) On 17 April 1998 the Appellant was fined $765 on the first count and $835 on each other count.
3 To a significant extent the determination of the issues raised in the appeal depends on the proper construction of sub-section 31(1). The sub-section provides:-
31(1) A person commits an offence against this section if:-
(a) the person is a party to 2 or more non-reportable cash transactions; and
(b) having regard to:
(i) the manner and form in which the transactions were conducted, including, without limiting the generality of this, all or any of the following:
(A) the value of the currency involved in each transaction;
(B) the aggregated value of the transactions;
(C) the period of time over which the transactions took place;
(D) the interval of time between any of the transactions;
(E) the locations at which the transactions took place; and
(ii) any explanation made by the person as to the manner or form in which the transactions were conducted;
it would be reasonable to conclude that the person conducted the transactions in that manner or form for the sole or dominant purpose of ensuring, or attempting to ensure, that the currency involved in the transactions was transferred in a manner and form that:
(iii) would not give rise to a significant cash transaction; or
(iv) would give rise to exempt cash transactions.
4 “Non-reportable cash transaction” and a number of other terms are defined in Section 3. So far as is relevant these definitions are:-
“Cash dealer” means:-
(a) a financial institution;
(b) …
“Financial institution” means:
(a) a bank;
(b) …
“Non reportable cash transaction” means a cash transaction:
(a) to which a cash dealer is a party; and
(b) that is not a significant cash transaction or is an exempt cash transaction.
“Significant cash transaction” means a cash transaction involving the transfer of currency of not less than $10,000 in value.
Section 3 contains the usual reservation “unless the contrary intention appears”.
5 It is unnecessary to refer to those provisions of the Act which define or describe an “exempt cash transaction”. It is clear that the transactions with which the Appellant was concerned did not fall within this description. It may however be noted that, by s4, the expressed objects of the Act are to facilitate the administration and enforcement of taxation and other laws of the Commonwealth and other provisions of the Act are directed to ensuring that significant cash transactions are reported by banks and other cash dealers to an officer of the Australian government.
6 The constitutional validity of s31(1) was challenged by the appellant but upheld in Leask v Commonwealth of Australia (1996) 187 CLR 579. In the course of their reasons for the decision made in that case the judges of the High Court made a number of observations relevant to the operation of the sub-section but because these were not definitive, it is necessary to make some observations of my own.
7 On its face, sub-section 31(1) is expressed in restrictive terms. It states that a person commits an offence if two conditions are satisfied. Paragraph (a) stipulates that a person be a party to two or more “non-reportable cash transactions”. When regard is had to the further definition of the expressions used in the definition of “non-reportable cash transaction” the latter expression may be seen to mean:-
“A cash transaction:
(a) to which a cash dealer (a term which includes a bank) is a party; and
(b) that is not a significant cash transaction (i.e. a cash transaction involving the transfer of currency of not less than $10,000 in value) or is an exempt cash transaction.”
8 Whether the requirements of the paragraph are met is a simple factual inquiry although, as the inquiry arises in the context of the criminal law, implicit in it is whether the actions of an accused were voluntary, and whether “he knew of the facts which gave the transactions the character of ‘non-reportable cash transactions’”. In Leask v Commonwealth of Australia (at 592), this was the view of Brennan CJ who took the view that this was the extent of mens rea required.
9 In R v Dinh Hue Tran (1998) 38 ATR 19, Doyle CJ, with whose reasons Cox and Duggan JJ agreed, elaborated on this formulation of the issues which arise under sub-section 31(1), saying:-
“In my opinion proof of guilt of an offence against Section 31(1) requires, at the least, stating that the Section required, at the least, that it be proved:-
· That the accused person knew that he or she was a party to a transaction that involved the physical transfer of currency;
· That the accused person was aware of the facts that made another party to the transaction a cash dealer for the purposes of the Act;
· That the accused person knew that the amount of currency involved in each transaction had a value of less than $10,000.
To require proof of that much is to require proof of knowledge of the facts that make the transactions “non-reportable cash transactions”.”
10 However, disagreeing with Brennan CJ, Doyle CJ, went further, expressing the view that there is another aspect of the mental element that must be proved, viz-
· that the accused person knew that a transaction involving currency of $10,000 or more in value must, by law, be reported to a government agency, and that a transaction involving currency of less than $10,000 in value did not have to be reported to a government agency.
11 His Honour went on to say that he considered guilt would be established only if the accused person has knowledge of the facts that attracted the operation of s 31(1)(a) and knowledge of the circumstances that attended its occurrence and made it criminal. He continued:-
“ … I would expect it to be necessary to prove the further element that the accused person is aware of the difference between a reportable transactions and a non-reportable transaction. …
For these reasons, I am inclined to the view that Parliament intended to punish a person only if that person was aware of the difference between an SCT (a significant cash transaction) and a non-reportable cash transaction.”
12 These remarks were made during the course of His Honour’s deliberations on sub-paragraph (a) and were made subject to his consideration of sub-paragraph (b). However there was nothing in that later consideration to qualify the contents of the passages I have quoted.
13 In substantial measure, His Honour’s views were influenced by what he saw as the rationale in sub-section 31(1) and the importance to that rationale of conscious wrongdoing on the part of an offender. With respect, it seems to me firstly that, on its proper construction, sub-paragraph (b) adequately accommodates these matters and, secondly, even if it does not, there is no justification for importing into sub-paragraph (a) the additional element which found favour with His Honour.
14 That element, properly analysed, is knowledge of the law as it is to be found in some portions of the statute. Yet as His Honour recognised in another portion of his reasons:-
“It is not usually necessary to prove that a person is aware of the illegality of an act before an offence is committed. It usually suffices to prove knowledge of the circumstances which render the relevant event criminal, as distinct from proof of knowledge of the illegality of the act: He Kaw Teh at CLR 572 Brennan J, Leask at CLR 598 … Dawson J.”
15 In He Kaw Teh v R (1984-5) 157 CLR 523, the appellant had been charged under Section 233B(1) of the Customs Act which provides, inter alia, that “any person who imports into Australia any prohibited imports to which this section applies shall be guilty of an offence”. By Section 233B(2) the prohibited imports to which the section applies are prohibited imports that are narcotic goods. There was no suggestion that the appellant had to know what items were prohibited imports or that these included narcotics. For present purposes, what he had to know was that the goods he did import were narcotics - see per Gibbs CJ (with whose reasons Mason J agreed) at p 537, Brennan J at pp 568-572 and 584. Adapting the words of Brennan CJ which I have quoted above, what the appellant in that case had to know were, “the facts which gave the transactions the character of (prohibited imports)”.
16 The expression “non-reportable cash transaction” clearly includes a deposit into a bank account of cash in an amount of less than $10,000. So far as is relevant here, the operation of paragraph (a) is no different than if it had read, “The person is a party to 2 or more cash deposits, each of not less than $10,000, into a bank” and had that formulation been used, it would be impossible to contend that the knowledge of which Doyle J spoke would be required. The fact that the Act chooses to impose its prohibition on such transactions by reference to the expression “non-reportable cash transactions” and definitions which serve to bring transactions of the nature indicated within the expression “non-reportable cash transactions” does not in my view justify the importation of the further element to which Doyle CJ referred.
17 I turn to paragraph (b). It addresses three matters. One is purpose. In that the paragraph directs attention to the purpose of the person who conducted the transactions referred to, it seems to me that the paragraph requires that consideration be paid to the state of mind of any person accused. The requirement that regard be had to explanation made by that person reinforces this view and leads me to the conclusion that a tribunal faced with the determination of a charge under the section is required to consider whether the particular accused had the sole or dominant purpose referred to. With respect, that requirement makes it difficult to accept that the mental state of an alleged offender is of the limited relevance to which Brennan J referred in Leask (at 592). I would understand Dawson J (at 596-8) and Toohey J (at 611) and by their agreement (at 616-7) Gaudron, McHugh JJ to hold the view I have expressed in this paragraph.
18 In determining what purpose it is of which the provision speaks one is again entitled, indeed required, to substitute for the defined expression used, its defined meaning. (There is nothing to suggest a contrary intention appears in s 31(1).) Thus, so far as is presently relevant, the purpose referred to is “of ensuring or attempting to ensure, that the currency involved in the transactions was transferred in a manner and form that:
(iii) would not give rise to a cash transaction involving the transfer of currency of not less than $10,000 in value”.
This, it seems to me is the extent of the purpose which the Crown must show for the “purpose” element of sub-section 31(1) to be established.
19 Putting this in the context of the balance of the sub-section, a person who is a party to two or more cash transactions with, e.g. a bank, being transactions involving less than $10,000, and the manner and form of those transactions and any explanation given makes it reasonable to conclude that the person conducted the transactions the way he or she did for the sole or dominant purpose of ensuring or attempting to ensure that the currency involved in them was transferred in amounts of less than $10,000 is guilty of an offence.
20 No more than there was in the case of paragraph (a) does there seem to me to be any occasion to regard knowledge of the law, even limited to knowledge of the concepts used in the Act, by an accused as something required to be proved in the course of the determination of a charge under the sub-section. There is nothing in the terms of the sub-section requiring that a person know what a “significant cash transaction” is.
21 However in R v Dinh Hue Tran (at p 25) Doyle CJ said:-
“Like Dawson J in Leask, I have come to the conclusion that sub-para (b) imposes a requirement to prove;
· that the accused person knew that a transaction involving the transfer of currency of $10,000 or more in value must be reported to a government agency and that a transaction involving the transfer of currency of less than $10,000 in value need not be reported to a government agency;
· that it is reasonable to conclude that the accused person in fact had the sole or dominant purpose referred to in sub-para (b).
Approaching sub-para (b) in the fashion accommodates the requirement to prove an awareness of the difference between a SCT and a non-reportable cash transaction, and the presence of sub-para (b), by treating sub-para (b) as dealing with proof of an actual or subjective intention rather than an objective quality of the transactions (sic).
Although I have separated the elements of knowledge and purpose, it seems to me that an element of knowledge is necessarily implicit in proof of the identified purpose.
The purpose that has to be proved need not be proved beyond reasonable doubt. The question for the jury is simply whether it is reasonable to conclude that, in fact, the accused person had the identified sole or dominant purpose. On the other hand, the jury must find it reasonable to conclude that the accused person in fact had the identified purpose.”
22 With respect, it does not seem to me that Dawson J went as far as the passage attributed to him. It seems to me that all His Honour said in this regard was :-
“The Commonwealth submitted that s31(1) does not create an offence of absolute or strict liability. It pointed to the fact that the circumstances to which regard must be had in reaching the required conclusion include “any explanation made by the person as to the manner or form in which the transactions were conducted” (s31(1)(b)(ii)). Moreover, the Commonwealth submitted, the required conclusion is that the person concerned conducted the transactions for a specified purpose, namely, the sole or dominant purpose of ensuring that the transactions would not give rise to a significant cash transaction or would give rise to exempt cash transactions. Upon this basis the Commonwealth argument was that the sub-section requires proof that the person charged with an offence knew of the nature of a significant cash transaction or of exempt cash transactions and intended by structuring his or her transactions in the manner or form alleged to ensure that they would not give rise to a significant cash transaction or exempt cash transactions. The only effect of the words “it would be reasonable to conclude” is, the Commonwealth contended, to lower the standard of proof from that of beyond reasonable doubt to that of a reasonable conclusion.
There is no doubt that the wording of s31(1) leaves it far from clear whether intention, or mens rea (65), is an ingredient of the offence which it creates and, if so, the nature of the intention required. In that situation, it is my view that the Commonwealth submission should be accepted.”
23 It is not clear whether this acceptance of the Commonwealth submission extended to all of the submissions referred to or only that the effect of the words “it would be reasonable to conclude” was to lower the standard of proof. Furthermore, it is a long step from acceptance of the proposition that “the sub-section requires proof that the person charged with an offence knew of the nature of a significant cash transaction” to a conclusion that the person knew when reporting of transactions was required. A little after the passage I have quoted, Dawson J said that “mens rea does not require knowledge of the illegality of the act”.
24 But be that as it may, what Dawson J said was concurred in by only one other judge and, in my view, the effect of the provision in the circumstances of this case is as I have stated it in paragraphs 17 and 18 above.
25 A second topic which paragraph (b) addresses is the standard of proof by which the question of whether an accused had the purpose specified is to be judged.
26 Traditionally the criminal law, even those parts of it which are contained in legislation, requires that any relevant purpose or state of mind be proved beyond reasonable doubt. However, Section 31(1)(b) poses the question whether “it would be reasonable to conclude…” In Leask v The Commonwealth (at 597), Dawson J, with whose reasons on this topic McHugh J agreed, said that the effect of the words is to lower the standard of proof from that of beyond reasonable doubt to that of a reasonable conclusion. At p 611 Toohey J (with whose reasons on this topic Gaudron J agreed) made remarks to similar effect. Brennan CJ (at 592) took a different view and Gummow and Kirby JJ did not commit themselves.
27 In R v Dinh Hue Tran (at 26-7) the Supreme Court of South Australia reached a similar conclusion to that proposed by Dawson J. I share that view.
28 Paragraph (b) also says something concerning the matters to which attention is to be paid in the determination of whether the purpose exists. Sub-section 31(1) is curiously expressed. In its terms, the formulation:-
“A person commits an offence against this section if:
(a)…, and
(b) having regard to:
(i) the manner and form in which the transactions were conducted, including, without limiting the generality of this, all or any of the following: …
(A) …
and
(ii) any explanation made by the person as to the manner or form in which the transactions were conducted;
it would be reasonable to conclude …”
seems to me to indicate that the judgment on whether “it would be reasonable to conclude” is to be made by reference to only the matters specified. This view is reinforced by the fact that the draftsman has specifically provided that the matters listed as (A) to (E) are not to limit the generality of the reference “the manner and form in which the transfers were conducted” but there is nothing to indicate that that manner and form and any explanation relating to it were not to limit the matters from which the purpose of the person conducting the transfers could be inferred.
29 Also tending to reinforce that view is the fact that the matters specifically referred to in sub-paragraphs (i) and (ii) are so obviously relevant that, absent some restriction on the matters to which regard might be had in the drawing of any conclusion as to the purpose of any person charged with an offence under the section, consideration would be had to them by a tribunal charged with the task of drawing that conclusion. Thus it is difficult to regard the mention of these matters as directed either to widening the field of those to which consideration should be given or ensuring that such matters were not overlooked.
30 If the view be taken that the matters referred to in sub-paragraphs (i) and (ii) of paragraph (b) are a non-exhaustive statement of the matters to which regard may be had and any other matter relevant to the issue of purpose can be taken into account, the specification of those matters is entirely otiose and so much waste paper. If it had been intended simply to provide that any person who participated in two or more non-reportable transfers of currency with “the sole or dominant purpose of ensuring, or attempting to ensure, that no significant cash transaction or exempt cash transaction would occur, (or no report in relation to the currency involved in the transfers would be made)” it would have been easy to say so and, if desired, to stipulate that the existence of the purpose was to be determined on the balance of probabilities or whatever other standard of proof was required. Instead a far more detailed and apparently restrictive form of words has been used.
31 Furthermore, in its use of the phrase “it would be reasonable to conclude” Parliament has chosen a criteria of guilt different from those traditionally used in the criminal law, “beyond reasonable doubt” and, less commonly, “on the balance of probabilities”. Should one not proceed on the basis that what has been said is definitive?
32 By s 15AA of the Acts Interpretation Act 1901 (Cth), the courts are constrained to prefer a construction of the Cash Transaction Reports Act 1988 (Cth) which will promote the purpose or object underlying the Act. Clearly one of the objects of the Act is to have transactions involving significant amounts of cash reported. But another may be to have guilt determined more simply - by a test lower than usual but in light of a limited range of circumstances.
33 On the other hand, there are difficulties in concluding that the matters stated are exhaustive. The sub-section does not say in terms that regard may be had to only the matters referred to in it. What if an explanation given was false and could be proved to be? Would a tribunal be precluded from considering evidence to that effect? And would that evidence, if admitted, on the issue of falsity of the explanation be available for all purposes, or would the tribunal be required to make its judgment by reference to only the evidence of the manner and form in which the transactions were conducted and a (rejected) explanation?
34 Before I proceed further in respect of this question, it is appropriate to direct attention to the course of the trial and the grounds of appeal. At trial the Crown undertook the obligation of proving, and the matter was put to the jury on the basis that, in respect of each charge, the Crown had to establish three matters:-
(i) that the accused was a party to two or more non-reportable cash transactions;
(ii) that the accused knew that the bank had an obligation to report significant cash transactions involving the transfer of $10,000 or more; and
(iii) that having regard to the manner and form in which the transactions were conducted it would be reasonable to conclude that the accused conducted the transactions in that manner or form for the sole or dominant purpose of ensuring or attempting to ensure that the cash involved in the transactions was transferred in a manner and form that would not give rise to a significant cash transaction.
35 The first element was not in dispute, the Appellant making a number of admissions. As to the second, the jury were directed that they could take into account “not only the transactions that are the subject of the charge … but also the transactions that are the subject of all the other charges”. As to the third, the jury was initially instructed that:-
“in considering this element you can have regard to the two of more non-reportable cash transactions that are the subject of the particular charge you are considering. You cannot have regard for the purposes of this element to any of the other transactions which are the subject of any of the other charges”
36 However later in his summing up the trial judge said:-
“The Crown contends in respect of the third element of each charge that if you are satisfied beyond reasonable doubt of the second element, that is that the accused knew of the bank’s obligation to report cash transactions of $10,000 or more, when you have regard to the manner and form of the transactions which are the subject of the particular charge you are considering, you will be satisfied beyond reasonable doubt that it would be reasonable to conclude that the accused carried out the transactions in that way for the sole or dominant purpose of avoiding making a significant cash transactions…
Mr Byrne (counsel for the Appellant) contends that if you were satisfied beyond reasonable doubt that the accused knew of the bank’s obligations to report, that is, that you are satisfied the Crown had proved the second element of the charge, you would nevertheless still have a reasonable doubt about the third element, based on the accused’s explanation that he carried out the transactions in the way he did for reasons of security and because the accused had no logical reason to avoid the banks’ reporting obligation…
The Crown on the other hand contends that if you were satisfied beyond reasonable doubt that he had knowledge of the bank’s reporting obligation then you will have no difficulty once you consider the way the accused carried out the transactions which are the subject of each charge, that the third element has been established beyond reasonable doubt.”
37 It may be that the Crown sought only to prove the second of their matters as an aid to proof of the third but for present purposes, this is immaterial. The necessity for the Crown to prove the second matter seems to have been at least conceded by counsel for the Appellant, if indeed, it was contended for by him.
38 Three grounds of appeal were argued before this Court:-
(1) His Honour the learned trial judge erred in permitting evidence on one count to be used as evidence in the other counts.
(2) His Honour the learned trial judge erred in not directing the jury at the conclusion of the Crown case to find the Applicant not guilty on all counts on the indictment.
(3) His Honour the learned trial judge erred in his direction to the jury regarding the approach they should take if they were to find that some other conclusion apart from that specified in the legislation establishing the offences, was reasonably open on the evidence.
It was also submitted that His Honour erred in leaving it open to the jury to decide whether the third element existed on an objective basis rather than considering the sole or dominant purpose of the Appellant himself. A fourth ground of appeal, that the recording of a conviction and the decision to impose a financial penalty was excessive, was not pursued.
Ground 1
39 At the trial the objection to the use of the evidence of transactions the subject of one count on other counts seems largely, and perhaps exclusively, to have been based on the terms of ss 97, 98 and particularly s101(2) of the Evidence Act which provides:-
“101(2) Tendency evidence about a defendant, or coincidence evidence about a defendant, that is adduced by the prosecution cannot be used against the defendant unless the probative value of the evidence substantially outweighs any prejudicial effect it may have on the defendant.”
40 However in this Court, the point was taken that, in respect of any charge, the terms of s 31(1) limited the material to which regard in could be had to that relating to the transactions the subject of that charge. Given that during the trial there was objection to the use of the evidence, rule 4 of the Criminal Appeal Rules does not preclude the Appellant relying on the argument. The Crown did not suggest any other reason why the Appellant could take the point and the Court must determine it.
41 It will be apparent from what I have said above that I regard the second of the matters which the jury were asked to consider as not an essential element in proof of the commission of an offence under s 31(1) although obviously, if a tribunal faced with deciding whether an offence under s 31(1) has been committed, comes to a conclusion that an accused was aware of that matter or of the provisions of the Act imposing the obligation, and is entitled to have regard to those facts, the Crown’s chances of satisfying that tribunal of the existence of purpose referred to in paragraph (b) are increased.
42 I have set out above the factors which seem to me to argue for and against the proposition that it is only matters falling within sub-paragraphs (i) and (ii) of paragraph (b) to which regard may be had. Although not with any great confidence, the conclusion at which I have arrived is that on balance these factors lead to the conclusion that the matters set forth in the sub-paragraphs should be regarded as, with one possible exception, definitive. That way, some operation is given to the terms of those sub-paragraphs. (The exception to which I refer is evidence that any explanation offered is false. It is difficult to believe that such evidence is excluded but I do not need to decide this issue. I acknowledge that the recognition of any exception provides grounds for thinking that the conclusion at which I have arrived is wrong but the factors which support it seem to me the more weighty.)
43 The extracts I have set out above from the summing up to the jury indicate that, although not directly, the jury had been invited to take into account indirectly on any charge the evidence of transactions not the subject of that charge. This should not have occurred and, subject to the proviso to Section 6 of the Criminal Appeal Act, the appeal should be allowed.
44 Before turning to the topic of the proviso, it may be convenient to record my views on some of the other matters which were argued.
45 It was submitted that in relation to any individual count, the evidence on the other counts was either “tendency evidence” within Section 97 of the Evidence Act or “coincidence evidence” within Section 98 and that the terms of Section 101(2) precluded its use.
46 So far as is relevant Sections 95, 97, 98 and 101 provide:-
“95(1) Evidence that under this Part is not admissible to prove a particular matter must not be used to prove that matter even if it is relevant for another purpose.
(2) Evidence that under this Part cannot be used against a party to prove a particular matter must not be used against the party to prove that matter even if it is relevant for another purpose.
97(1) Evidence of the character, reputation or conduct of a person, or a tendency that a person has or had, is not admissible to prove that a person has or had a tendency (whether because of the person’s character or otherwise) to act in a particular way, or to have a particular state of mind, if:
(a) the party adducing the evidence has not given reasonable notice in writing to each other party of the party’s intention to adduce the evidence; or
(b) the court thinks that the evidence would not, either by itself or having regard to other evidence adduced or to be adduced by the party seeking to adduce the evidence, has significant probative value.
98(1) Evidence that 2 or more related events occurred is not admissible to prove that, because of the improbability of the events occurring coincidentally, a person did a particular act or had a particular state of mind if:
(a) the party adducing the evidence has not given reasonable notice in writing to each other party of the party’s intention to adduce the evidence; or
(b) the court thinks that the evidence would not, either by itself or having regard to other evidence adduced or to be adduced by the party seeking to adduce the evidence, have significant probative value.
101(2) Tendency evidence about a defendant, or coincidence evidence about a defendant, that is adduced by the prosecution cannot be used against the defendant unless the probative value of the evidence substantially outweighs any prejudicial effect it may have on the defendant.”
There was no issue before this Court arising out of the terms of paragraphs (a) or (b) of Sections 97 and 98.
47 It is apparent from the terms of Section 95 that evidence, the effect of which is to show a tendency or coincidence, is not inadmissible merely because it fails to comply with the requirements of Sections 97, 98 and 101(2). It merely may not be used in proof of the particular matters to which Sections 97 and 98 refer. In this case the evidence of the totality of the Appellant’s actions may most accurately be described as evidence which showed he had a particular state of mind rather than as evidence which showed he had a tendency to have a particular state of mind and I would not regard it as tendency evidence at all.
48 On the other hand the evidence of the totality of the transactions did constitute coincidence evidence. Its relevance was that because of the improbability of over 100 transactions just under $10,000 occurring coincidentally the Appellant had a particular state of mind. That state of mind extended at least to a recognition of some importance in keeping deposits of cash under about $10,000.
49 Thus it was necessary that the requirements of Section 101(2) be satisfied. The trail judge took the view that they were and, observing that the test set forth in Section 101(2) was the same test as that enunciated in Pfennig v R (1995) 182 CLR 461 - citing R v AH (unreported, CCA, 27 November 1997) in support of that proposition - went on to record that he was satisfied that there was no rational view of the evidence other than that the Appellant knew of the bank’s obligation to report cash transactions of $10,000 or more.
50 If that is the test I am unable to agree. I accept that the fact that banks had an obligation to report deposits of not less than $10,000 makes available the further inference that the Appellant knew of the obligation to report and structured his deposits accordingly but I do not see that as the only rational one. Other inferences open seem to me to include that the Appellant might have thought all, or all large transactions were monitored (without any report by a bank); he may have thought additional documentation was required of him.
51 I accept that there is a deal of authority that the test posed by s 101(2) is as stated by the trail judge. In Pfennig v R (1994-5) 182 CLR at 461 at 481 et seq. Mason CJ and Deane and Dawson JJ referred to the fact that in Hoch v R (1988) 165 CLR 292 at 294 it had been stated that the basis for the admissibility of similar fact evidence lay in its possessing a particular probative value or cogency such that, if accepted, it bore no reasonable explanation other than the inculpation of the Appellant in the offence charged and that those principles correctly stated the law with respect to the admissibility of similar fact evidence. A little later these judges said that the statement that propensity evidence would be admissible only if its probative value exceeds its prejudicial effect was of little assistance unless it was understood that such evidence is circumstantial and as such was admissible only if there was no reasonable view of it consistent with innocence. Having regard to the totality of their Honours’ discussion at pages 481-485 I would understand them to be saying the same approach applied to similar fact evidence also.
52 In Lock (1977) A Crim R 356 at 361 Hunt CJ at CL said that the test posed by s 101(2) was the exercise discussed in Pfennig and “it was said in that case that … the trial judge must apply the same test as the jury does in dealing with circumstantial evidence and ask whether there is available a rational (or reasonable) view of the similar fact evidence which is consistent with the innocence of the accused; it is only if there is no such view available that a conclusion can safely be reached that the probative force of the evidence outweighs its prejudicial effect.” Without discussing the matter, this Court in Foley v R (unreported, CCA, 5 June 1997) accepted this test. It was also accepted by this Court in R v AH.
53 However, it is the text, and not a gloss on the text, of an Act of Parliament to which regard must primarily be had - Kavanagh v The Commonwealth (1959-60) 103 CLR 547 at 578, Ogden Industries Pty Ltd v Lucas (1970 ) AC 113 at 127. Consistently with that proposition it does not seem to me that there should be substituted for the test set out in the clear words of s 101(2) of the Evidence Act, a test expressed quite differently. Pfennig v R was not a decision under the Evidence Act. It was handed down on 17 February 1995, after the Evidence Act (1995) (Cth) had passed through both Houses of the Federal Parliament although it must be recognised that the decision did precede the Evidence Act (NSW), the Bill for which was introduced into Parliament on 24 May 1995, passed on 30 May, and received the Royal Assent on 19 June 1995. However, so far as is presently relevant, both Acts are in the same terms. It may be noted that the ALRC Report 26 into Evidence (volume 2, page 226, text and note 76) describes the approach subsequently adopted in Pfennig as “extreme” although it is also appropriate to record that s 101(2) lays down a test different from those suggested in either ALRC 26 or the later report of the same topic, ALRC 38.
54 There is one further matter I would add though, given the extent of discussion of the admissibility of tendency and coincidence evidence in Pfennig and in the numerous authorities referred to in that case, I do so with great hesitation. The principal that a conviction on circumstantial evidence is only warranted if that evidence permits of no rational explanation consistent with innocence - see e.g Chamberlain v R (No 2) (1984) 153 CLR 521 at 536, 570, 599 - is but a particular application of the rule that guilt must be proved beyond reasonable doubt - Knight v R (1992) 175 CLR 495 at 502. There is something strange in applying it universally to the admissibility of one type of evidence unless, in the circumstances of a particular case, that evidence is essential to conviction - c.f. Chamberlain v R (No 2) 537, 599, 626.
55 Unconstrained by the above authorities I would incline to the view that there is nothing in the Evidence Act which precluded the evidence on all counts being used in proof of the Appellant’s state of knowledge at the time of his commission of the acts relevant to one count. Fortunately I am able to base my decision on other matters.
56 Before I leave this part of my Reasons, there is one further matter arising on the terms of s 31(1) to which I should advert. The question in paragraph (b) is whether it would be reasonable to conclude that the person conducted “the transactions” in the manner and form they took for the purpose specified. It would seem to me that “the transactions” are those referred to in paragraph (a), that is all of them. However it is appropriate to record that whether this is the correct approach to the interpretation of the sub-section was not argued, nor was it suggested that of the transactions referred to in a count, some might have been conducted with the purpose referred to in the sub-section and some not.
Ground 2
57 The application for a verdict by direction was stated to be based on the proposition that there was no evidence of knowledge by the Appellant of the terms of the legislation and “in particular, that he knew that by depositing cash amounts of less than $10,000 he would avoid the requirements of the Cash Transactions Reporting Act”.
58 Given my view that, despite the Crown’s concession at the trial, the Crown carried no obligation to establish such knowledge, any failure to do so did not entitle the Appellant to the direction he sought. This ground fails.Ground 3
59 In my consideration of the proper construction and operation of s 31(1) above, I have expressed my views on a number of matters relevant to the determination of the third ground of appeal and the further submission which I have detailed above. Subject to those comments, I agree with the reasons of Barr J in dealing with the third ground and that further submission.
THE PROVISO TO SECTION 6 OF THE CRIMINAL APPEAL ACT
60 The trial of the Appellant miscarried principally because in respect of each count, at the deliberate instigation of the Crown, the jury was allowed to take into account evidence which was not only inadmissible but, relative to the evidence which was admissible on the issue of purpose, extremely strong. Those remarks are of less weight in the case of counts where more than two transactions alleged but these were in a significant minority.
61 It should also be borne in mind that the selection of the number of transactions to be included in any one count also lay largely within the control of the Crown. If a limited number were insufficient to enable the purpose contended for to be demonstrated, it was open to the Crown to, in effect, combine a number of counts. As it was, the Crown seems to have almost minimised the number of transactions included in each count and maximised the number of counts.
62 Having had to struggle with it myself, I can appreciate that a major cause of the Crown prosecutor taking the stance he did was the terms of the legislation with which he had to deal but, given the authorship of that legislation, the claim by the Appellant that the proviso should not be applied is not lessened.
63 However it seems to me that before any concluded view on the application of the proviso is reached, further attention should be given to the admissible evidence on each count. The counts were all in virtually identical terms apart from their statement of the time of the offences alleged and the number of non-reportable cash transactions referred to. Thirty of the counts alleged 2 non-reportable cash transactions, 1 alleged 3, 7 alleged 4 and 4 alleged 6 such transactions. It is convenient to set out by way of example the first count and parts of the second, eighteenth and twenty-fourth counts.
“1. For that he between about 2 January 1991 and 5 January 1991 at Pennant Hills and elsewhere in the State of New South Wales did commit an offence against section 31 of the Cash Transaction Reports Act 1988 in that he was a party to four non-reportable cash transactions, to wit, the cash purchase of two bank cheques each for an amount of $9,200 each of which was subsequently deposited with the amount of $9,800 in cash to the account of Central Distributors held with the Australia and New Zealand Banking Corporation, and having regard to the manner and form in which the said transactions were conducted it is reasonable to conclude that he conducted the transactions in the manner for the sole or dominant purpose of ensuring that the currency involved in the transactions was transferred in such a manner and form that would not give rise to a significant cash transaction.
2. Further for that he on 24 January 1991 at Pennant Hills in the State of New South Wales did commit an offence against section 31 of the Cash Transaction Reports Act 1988 in that he was a party to two non-reportable cash transactions, to wit, the cash purchase of one bank cheque for the amount of $9,400 which was subsequently deposited with an amount of $9,600 in cash to the account of Central Distributors held with …
18. Further for that he on or about 2 April 1991 at Pennant Hills and elsewhere in the State of New South Wales did commit an offence against section 31 of the Cash Transaction Reports Act 1988 in that he was a party to two non-reportable cash transactions, to wit, the separate cash deposits of $9,200 and $9,000 to the account of Central Distributors held with the Australian and New Zealand Banking Corporation, and having regard to the manner and form in which the said transactions were conducted it is reasonable to conclude that he conducted the transactions for the sole or dominant purpose of ensuring that the currency involved in the transactions was transferred in such a manner and form that would not give rise to a significant cash transaction.
24. Further for that he on about 19 April 1991 at Lindfield and elsewhere in the State of New South Wales did commit an offence against section 31 of the Cash Transaction Reports Act 1988 in that he was a party to six non-reportable cash transactions, to wit, the cash purchase of three bank cheques each for the amount of $8,900 each of which was subsequently deposited with separate cash amounts $9,400, $9,400 and $9,600 respectively to the account of Central Distributors held with …”
64 As I have said the Appellant made a number of formal admissions. Those relating to the these four counts, which again I use by way of example, and certain matters associated with the Central Distributors Account were in the following terms:-
“1.1 On 3 January 1991 Stephen Arthur Leask purchased for cash at the 267 Old Northern Road Castle Hill branch of the Commonwealth bank a bank cheque no 029669 for $9,200 payable to Central Distributors.
1.2 On 3 January 1991 Stephen Arthur Leask purchased for cash at the 274 Pennant Hills Road Thornleigh branch of the Commonwealth Bank a bank cheque No 000438 for $9,200 payable to Central Distributors.
1.3 On 4 January 1991 Stephen Arthur Leask deposited at the Turner Road Berowra Heights Branch of the ANZ Bank $9,800 cash and a Commonwealth Bank bank cheque No 029669 for the amount of $9,200 payable to Central Distributors for credit to ANZ account no 4101 34087.
1.4 On 4 January 1991 Stephen Arthur Leask deposited at the 3 Hillcrest Road Pennant Hills branch of ANZ $9,800 in cash and Commonwealth Bank cheque number 009438 for the amount of $9,200 payable to Central Distributors for credit to ANZ account number 4101 34087.
2.1 On 24 January 1991 Stephen Arthur Leask purchased for cash at the 108 Yarra Road Pennant Hills branch of the Commonwealth Bank a Commonwealth Bank bank cheque no 033396 for the amount of $9,400 payable to Central Distributors.
2.2 On 24 January 1991 Stephen Arthur Leask deposited at 3 Hillcrest Road Pennant Hills branch of the ANZ Bank $9,600 cash and a Commonwealth Bank bank cheque no 0033396 for the amount of $9,400 payable to Central Distributors for credit to ANZ account no 4101 34087.
18.1 On 2 April 1991 Stephen Arthur Leask deposited at the 7 Campbell Street Blacktown branch of the ANZ Bank $9,000 cash for credit to ANZ account no 4101 34087.
18.2 On 2 April 1991 Stephen Arthur Leask deposited at the 3 Hillcrest Road Pennant Hills branch of the ANZ Bank $9,200 cash for credit to ANZ account no 4101 34087.
24.1 On 19 April 1991 Stephen Arthur Leask purchased for cash at the 330 Pacific Highway Lindfield branch of the Commonwealth Bank a bank cheque no 019310 for the amount of $8,900 payable to Central Distributors.
24.2 On 19 April 1991 Stephen Arthur Leask deposited at the 306 Pacific Highway Lindfield branch of the ANZ bank $9,400 in cash and a Commonwealth Bank bank cheque no 019310 for the amount of $8,900 payable to Central Distributors for credit to ANZ bank account no 4101 34087.
24.3 On 19 April 1991 Stephen Arthur Leask purchased for cash at the 118 Edinburgh Road Castlecrag branch of the Commonwealth Bank a bank cheque no 011731 for the amount of $8,900 payable to Central Distributors.
24.4 On 19 April 1991 Stephen Arthur Leask deposited at the 147 Victoria Ave North Willoughby branch of the ANZ bank $9,400 in cash and a Commonwealth Bank bank cheque no 011731 for the amount of $8,900 payable to Central Distributors for credit to ANZ bank account no 4101 34087.
24.5 On 19 April 1991 Stephen Arthur Leask purchased for cash at the 466 Victoria Ave Chatswood branch of the State Bank of NSW a bank cheque no 181014 for the amount of $8,900 payable to Central Distributors.
24.6 On 19 April 1991 Stephen Arthur Leask deposited at the 8 Railway Street Chatswood branch of the ANZ bank $9,600 in cash and a State Bank of NSW bank cheque no 181014 for the amount of $8,900 payable to Central Distributors for credit to ANZ bank account no 4101 34087.
43. On about 28 November 1989, Stephen Arthur Leask obtained the registration of Central Distributors as a business name in the Northern Territory.
44. On 28 March 1990 Stephen Arthur Leask trading as Central Distributors opened an account no 4101 34087 at ANZ bank at the Todd and Parsons Street Alice Springs.
45. Throughout 1991 Stephen Arthur Leask was the sole signatory on said account no 410134087 capable of affecting withdrawals from it.”
65 As is apparent from the foregoing, in some cases only cash was involved, in others there was cash and a bank cheque. Maps tendered by the Crown showed that in some cases the bank branches used on the one day were very close. In others they were some, occasionally many, kilometres apart. There was no evidence as to the time of the day at which the various transactions occurred.
66 Other matters given in evidence prior to the close of the Crown case were that the Appellant lived at Berowra Heights, that he was engaged in a business of buying and selling tobacco products and also in selling cane furniture, that people involved in the former business traditionally dealt in large amounts of cash, that persons in possession of large amounts of cash are at risk of having it stolen, that prudence demands that large amounts of cash be banked as soon as possible and that it was undesirable to be known that a person habitually banks a large quantity of cash at one bank (or branch).
67 The Appellant made an unsworn statement. It is sufficient to set out extracts from this:-
“I’ve been a tobacco retailer for 20 years which constituted handling reasonably large amounts of cash. I’ve always been conscious of security and attempted to bank my money in small amounts to avoid routine (sic). I became vaguely aware of restrictions on banking cash in late 1990 just when the Cash Transactions Reports Act I believe came into force and I had a belief that the point of it was to create some restriction on banking over $10,000… At no time did I - was I aware of these restrictions or these - the need to report the banking. There was no - at any time I was never conscious of trying to avoid any restrictions… I seemed to get into a pattern of using this limit of banking $10,000 in cash. I got into a pattern of making sure I was banking only that amount and quite often I only had that amount, but that’s how I understood the law to be.
The reason why I sometimes bought bank cheques instead of going to the bank it was when I acquired the money I might have had the - been near a bank other than an ANZ bank, so that I came across the idea that I could by going in and buying a bank cheque. I could, in fact, bank the money even though it wasn’t my bank by getting rid of the money in that way. Well, for security I had a piece of paper instead of cash and I could at some later stage just put with the cash to an ANZ bank and I seemed to get into the pattern of that over time. …
If I could just emphasise I really had no knowledge of that there was some sort of requirement to notify if a transaction was over $10,000.”
68 The Appellant provided no other explanation why there were a number of visits to different branches in one day nor why, for example, the first deposit on 4 January included only one of the bank cheques purchased on the previous day.
69 The explanation he did give however makes it clear that, considering each count separately, and only the evidence relating to that count, the Appellant offended against s 31(1) on what I regard as its proper construction.
70 The appeal should be dismissed.IN THE COURT OF
CRIMINAL APPEAL60257 of 1998McINERNEY J
Friday, 12 March 1999
HULME J
BARR J
REGINA v Stephen Arthur LEASKJUDGMENT
71 BARR J: The appellant, Stephen Arthur Leask, appeals against convictions and seeks leave to appeal against sentences entered in the District Court. On 20 January 1998 a jury found him guilty of each of 42 counts with which he had been charged under s 31(1) Cash Transaction Reports Act (now Financial Transaction Reports Act) 1988 (“the Act”). On 17 April 1998 his Honour Judge Keleman of Senior Counsel convicted the appellant on each count, imposed a fine of $765 on the first count and $835 on each other count and allowed the appellant 28 days to pay the fines.
72 By s 4, the Act’s principal object is to facilitate the administration and enforcement of taxation laws. A further object is to facilitate the administration and enforcement of laws of the Commonwealth and of the Territories other than taxation laws. By s 7, a cash dealer who is party to a significant cash transaction is obliged to prepare a report of the transaction and send it to the Director of the Australian Transaction Reports and Analysis Centre within a time limited by the section. By s 3, a cash dealer includes a bank. A significant cash transaction means a cash transaction involving the transfer of currency of not less than $10,000 in value. Cash transactions which are not significant, and therefore not reportable, are called non-reportable transactions.
73 S 31 concerns itself with the arrangement of transactions so as to avoid reporting requirements. It was considered in Leask v Commonwealth of Australia (1996) 187 CLR 579 and held to be a valid law of the Commonwealth. Subs (1) is in the following terms -
(1) A person commits an offence against this section if:
(a) the person is a party to 2 or more non-reportable cash transactions; and
(b) having regard to:
(i) the manner and form in which the transactions were conducted, including, without limiting the generality of this, all or any of the following:
(A) the value of the currency involved in each transaction;
(B) the aggregated value of the transactions;
(C) the period of time over which the transactions took place;
(D) the interval of time between any of the transactions;
(E) the locations at which the transactions took place; and
(ii) any explanation made by the person as to the manner or form in which the transactions were conducted;
it would be reasonable to conclude that the person conducted the transactions in that manner or form for the sole or dominant purpose of ensuring, or attempting to ensure, that the currency involved in the transactions was transferred in a manner and form that:
(iii) would not give rise to a significant cash transaction; or
(iv) …
74 The facts giving rise to the first count are as follows. The appellant had an account at the Alice Springs branch of the Australia and New Zealand Banking Corporation (“the ANZ Bank”) in the name of himself trading as Central Distributors. On 4 January 1991 he deposited at the Berowra Heights branch of the ANZ Bank $9,800 in cash and a Commonwealth Bank of Australia bank cheque in the sum of $9,200 payable to Central Distributors. The deposits were made for transmission to the credit of the Central Distributors Account at the Alice Springs branch of the ANZ Bank. The Commonwealth Bank cheque had been purchased by the appellant on the day before at the Castle Hill branch of the Commonwealth Bank.
75 Also on 4 January 1991 the appellant deposited at the Pennant Hills branch of the ANZ Bank for transmission to the Alice Springs account $9,800 in cash and a Commonwealth Bank bank cheque for $9,200 payable to Central Distributors. That cheque had been purchased the day before from the Thornleigh branch of the Commonwealth Bank.
76 The facts were quite similar in four other counts in that there were two deposits of cash, each in an amount a little under $10,000, and two deposits of bank cheques, each also in an amount a little short of $10,000. Two branches of the ANZ Bank were used, and at each branch there was a deposit of one amount of cash and one cheque.
77 The facts of the second count were that on 24 January 1991 the appellant deposited at the Pennant Hills branch of the ANZ Bank $9,600 in cash and a bank cheque in the sum of $9,400 that he had obtained earlier on the same day from the Pennant Hills branch of the Commonwealth Bank. The deposits were for transmission to the Alice Springs account.
78 There were 21 other counts in which the facts were quite similar, although in one count the amount of cash involved was only $1,800 and in another it was only $5,000. Generally, however, the deposits of cash varied between $7,000 and $9,800.
79 Nine of the remaining counts concerned deposits only of cash. On five occasions two deposits were made in a day, always using two different branches of the ANZ Bank. On one occasion three deposits were made in a day, on another occasion four and on two other occasions six deposits in the one day. Except on one occasion, when one of the Chatswood branches of the ANZ Bank was used twice in a day on which six deposits of cash were made, no branch was used more than once on any day for the deposit of cash.
80 The deposits were spread over the period from 4 January to 9 July 1991. Four counts concerned deposits made in January, seven concerned February, six concerned March, nine concerned April, eight concerned May, six concerned June and two counts were concerned with deposits made in July 1991. Altogether there were 114 transactions at the ANZ Bank.
81 The appellant always purchased his bank cheques from either the Commonwealth Bank, the State Bank or the National Australia Bank.
82 His Honour instructed the jury that in each count the Crown had to prove each of the following matters beyond reasonable doubt -
1. that the appellant was a party to two or more non-reportable cash transactions;
2. that he knew that that bank had an obligation to report significant cash transactions; and
3. that having regard to the manner and form in which the transactions were conducted, it would be reasonable to conclude that the appellant conducted the transactions in that manner or form for the sole or dominant purpose of ensuring or attempting to ensure that the cash involved in the transaction was transferred in a manner and form that would not give rise to a significant cash transaction.
83 The Crown was relieved of the burden of proving the facts constituting the first element of each count because the appellant made formal admissions to the appropriate effect.
84 Although at first glance it might not appear necessary for the Crown, in prosecuting an offence under s 31(1) to prove that the accused knew that the relevant cash dealer had an obligation to report significant transactions, the Crown took it upon itself to do so because of remarks made in the High Court of Australia in Leask v The Commonwealth. Some members of the Court considered whether mens rea was an ingredient of the offence created by the subsection. See the judgments of Brennan CJ at 591-593, Dawson J at 597-599 and Kirby J at 638-639. At 638 Kirby J said -
Conformably with its concession in this case, it may be expected that the prosecutor for the Commonwealth will accept the obligation to establish mens rea in the prosecution of Mr Leask.
85 The prosecutor acted accordingly and relied, in proof of the requisite knowledge for the purposes of any count, upon every transaction that took place between January and July 1991.
86 The first ground of appeal asserts that his Honour erred in admitting evidence of all transactions in proof of the requisite knowledge for any transaction. It is convenient to consider with it the second ground of appeal, which asserts that his honour erred in not directing the jury at the conclusion of the Crown case to find the appellant not guilty on all counts.
87 It was submitted for the appellant on appeal that evidence on any count of the circumstances on which any other count was based was admissible only as tendency or coincidence evidence. So it had to pass the tests contained in Part 3.6 of the Evidence Act 1995, including that provided by s 101. Subs(2) provides that such evidence cannot be used unless its probative value substantially outweighs any prejudicial effect it may have on a defendant. Since such evidence cannot directly prove guilt, that means that it must be rejected if it bears any inference consistent with innocence. Pfennig v The Queen (1995) 182 CLR 461; R v Lock (1997) 91 A Crim R 356 per Hunt CJ at CL at 363. The evidence did not pass that test.
88 The Crown submission on appeal was that the evidence did not fall within the provisions of Part 3.6 of the Evidence Act and that the test in s 101 did not apply. The only tests that did apply, therefore, were the general ones requiring a comparison of the probative value of the evidence with the danger of unfair prejudice. There could be no unfair prejudice in the present case because the material relied on by the Crown was all admitted by the defence.
89 The alternative submission was that, if Part 3.6 applied, his Honour was correct in concluding, in applying the test under s 101(2), that there was no inference reasonably open other than that the appellant had the knowledge contended for.
90 To come within the contemplation of s 97 the evidence had to be that two or more related events occurred which was tendered to prove that, because of the improbability of the events occurring coincidentally, the appellant did a particular act or had a particular state of mind. See subs (1).
91 The Crown submitted that the evidence did not come within s 97 because -
(a) By adducing it, the Crown was not trying to prove that the appellant had a tendency to have a particular state of mind, but that he knew something. The words of the section were not apt to embrace proof of that fact.
(b) If s 97 applied, the Act would have unintentionally effected a fundamental change in the common process of proving a person’s knowledge by inference from surrounding objective facts. The common law never required proof of such matters beyond reasonable doubt, and nothing in the ALRC reports which preceded the passing of the Evidence Act suggested any need or intent to make such a change to the law.
(c) Ss 97 and 101(2) in combination set up a requirement to balance the probative value and prejudicial effect of evidence. If the conduct relied on was not part of the criminal conduct under consideration in any count it was not itself criminal. The conduct was all admitted by the appellant. There could therefore be no prejudice.
92 S 98 concerned itself with evidence that two or more related events occurred which was tendered to prove that, because of the improbability of the events occurring coincidentally, the appellant did a particular act or had a particular state of mind. See subs (1).
93 The Crown submitted that the section had no application because -
(a) The Crown did not rely on the improbability of events occurring coincidentally. There was no coincidence. By common consent, all the acts relied on were done by the appellant. As ALRC report 26 shows, the expression “improbability of the events occurring coincidentally” is directed to cases where the question is whether or not the accused was the perpetrator of the acts charged.
(b) Arguments similar to those in (b) and (c) under s 97 above were advanced.
94 The true position may be that neither of the sections applied to this case, with the result that the stringent Pfennig test was not imported by s 101(2), but the determination of this appeal does not require an answer to the question.
95 The appellant had the advantage at the trial of his Honour’s application of the test.
96 In his judgment dated 23 January 1998 his Honour said this -
In R v Beserick (1990) 30 NSWLR 510 knowledge was regarded as a state of mind (at 521). The same arguments that are before me as to whether s.97 (or s.98) applies were before the Court of Criminal Appeal in R v Fordham (CCA, NSW, unreported, 2/12/97 at 13-14). The issue there was whether the use of other conduct between the parties to infer knowledge of lack of consent on a particular occasion involved the use of tendency evidence or was merely evidence proving a state of mind. The Court found it unnecessary to resolve that question in that case for on either basis the court held the evidence was admissible. In my view the same situation applies here.
97 There were some remarkable features of the transactions relied on by the Crown. Every one was for an amount of some round hundreds of dollars. It would have been surprising if every receipt of cash by the appellant had been in round hundreds of dollars. This implies that the selection of the amounts to be deposited had more to do with what the appellant found it convenient to deposit than with any amount he had received. Only three amounts of cash ($1,800, $2,000 and $5,000) were in amounts less than $7,000. Only seven amounts were less than $8,500. 78 of the 114 amounts involved sums of $9,000 or more, yet none exceeded $9,800.
98 On several occasions the appellant went to a shopping centre or district where there was a branch of the ANZ Bank, only to take his cash to the branch of another bank to buy a cheque.
99 There was no apparent commercial reason for the appellant to manage his banking in this peculiar way.
100 It was submitted by counsel for the appellant that the tribunal of fact could not infer the requisite knowledge beyond reasonable doubt from the fact that a person makes two separate deposits of cash on a single day. In the absence of evidence as to the time at which each deposit was made, one could not exclude the reasonable possibility that the appellant received the second amount of cash after he had banked the first. So the tribunal of fact would be bound to entertain a reasonable doubt whether the person concerned had had all the money and split it into separate amounts, each smaller than the critical amount for reporting purposes.
101 I think that this reasoning may be sound when applied to two or a handful of transactions, but it fails when applied to the large number of transactions which occurred in the present case.
102 The appellant then pointed to a number of deficiencies in the Crown case tending against an inference beyond reasonable doubt of the requisite knowledge. They were that there was no evidence that the 114 transactions the subject of the 42 counts were the appellant’s only transactions or, if they were not, of what other transactions the appellant might have made, including deposits of cash of a value of $10,000 or more, that there was no evidence of his practice prior to the introduction of the Act, that there was no evidence that he had ever possessed more than $10,000 in cash at any one time, that there was no evidence of the timing of the individual transactions on any one day, that there was no evidence of any apparent effort by the appellant to conceal the deposits made and that there was no evidence that there was any campaign by the relevant authorities to alert people to the provisions of the legislation.
103 The final submission was that there was evidence which suggested that there was a reasonable explanation for the appellant’s conduct which was not consistent with his knowledge of the bank’s obligation to report significant cash deposits. It was agreed that the appellant traded in the tobacco industry, where it is customary to pay accounts in cash. Reference was made to answers given in cross-examination by Sergeant Dent, and it was submitted that a reasonable inference arose that the appellant had arranged his affairs in the manner he had in order to avoid being held up and robbed. The evidence was as follows -
Q. I suppose it’s within your knowledge that people who are in possession of relatively large amounts of money are at risk at having it stolen from them?
A. Yes.
Q. And it’s a prudent thing to do if you run a business which involves large amounts of cash to put it in the bank?
A. Yes, put it in the bank quickly, I would suggest.
Q. It’s also probably a prudent thing to do if you run a business like that not to become too well known at any particular single bank as a person who habitually turns up there with large quantities of cash?
A. Yes.
Q. See, it would be very unwise for a person who is habitually dealing in large quantities of cash to become well known as a person who conducts a particular routine, goes to the same bank at a particular time every day, always with large quantities of cash that would be unwise?
A. Exactly. If I had a large amount of cash, I would want to get rid of it as quickly as possible at the nearest bank.
…
Q. If a person who did have $50,000 cash took it into a bank, that would be noticed perhaps by some people, wouldn’t it, that he was depositing a large amount of cash?
A. It could be noticed. It would be noticed by the bank.
Q. It might be noticed by the people who are present in the bank as a customer, a great big pile of money put on the counter to be counted?
A. Yes.
Q. It might be prudent to put the cash into the bank in relatively small amounts to avoid the spread of knowledge that you were in possession of large quantities, couldn’t it?
A. That could be one course of action.
104 I do not think that the inference contended for is reasonably open in all the circumstances of the case. The suggested motive is no explanation for the appellant’s purchasing bank cheques when he could have deposited cash and it does not explain the concentration of the deposited amounts within a very narrow band of values, all short of the critical $10,000 figure.
105 His Honour expressed himself satisfied that there was no rational view of the evidence other than that the appellant knew of the bank’s obligation to report cash transactions of $10,000 or more. I think, with respect, that that was the only available conclusion on the evidence.
106 Counsel for the appellant was at pains to restrict the grounds of appeal so as to limit this Court’s consideration to the admissibility of evidence at the time of tender and to the evidentiary position at the close of the Crown case. I have dealt with the first two grounds of appeal on those restricted bases and I think that they should fail.
107 It should be pointed out, however, that in his unsworn statement the appellant told the jury a number of things about his understanding of the Act and about why he acted as he did. He denied knowledge of the bank’s obligation to report, but also said this -
I became vaguely aware of restrictions on banking cash in late 1990 just when the Cash Transactions Reports Act I believe came into force and I had a belief that the point of it was to create some restriction on banking over $10,000. I think at the time I believed it was for reasons to stop drug dealers to tax avoiders banking large amounts of cash. At no time did I - was I aware of these restrictions or these - the need to report the banking. There was no - at any time I was never conscious of trying to avoid any restrictions. I had no reason to. Couldn’t have cared less whether they reported it a hundred times. It was - I seemed to get into a pattern of using this limit of banking $10,000 in cash. I got into a pattern of making sure I was banking only that amount and quite often I only had that amount, but that’s how I understood the law to be.
108 I think that the proper inference to draw from that passage is that the appellant was referring to the amounts about which the Crown had adduced evidence. The appellant never claimed that he had banked an amount as high as $10,000. The “pattern” that he referred to was the pattern of transactions about which evidence had been adduced in the Crown case. By his statement, the appellant implied that the transactions evidenced in the Crown case were his only transactions for the relevant period. That goes some way towards explaining why the appellant did not give evidence on the objection to the admission of the evidence.
109 The third ground of appeal complains about his Honour’s directions to the jury on the third element of the offences.
110 His honour twice directed the jury that the third element of each count, which had to be proved beyond reasonable doubt, was -
that having regard to the manner and form in which the transactions were conducted it would be reasonable to conclude that the accused conducted the transactions in that manner or form for the sole or dominant purpose of ensuring or attempting to ensure that the cash involved in the transactions was transferred in a manner and form that would not give rise to a significant cash transaction.
111 After reviewing the evidence, his Honour continued as follows -
Returning now to other aspects of the third element. Once you have had regard to the manner and form of the non-reportable cash transactions in the way in which I have directed you must then determine whether you are satisfied beyond reasonable doubt that it would be reasonable to conclude that the accused conducted the transactions which are the subject of the charge you are considering in that manner and form for the sole or dominant purpose, I will repeat that, for the sole and dominant purpose of ensuring or attempting to ensure that the cash involved in the transactions was transferred in a manner or form that would not give rise to a significant cash transaction.
To put this another way which I hope may be more meaningful to you, you must determine having regard to the manner and form of the transactions whether you are satisfied beyond reasonable doubt that it would be reasonable to conclude that the accused carried out the transactions in that way for the sole or dominant purpose of avoiding the making of a significant cash transaction.
If you are satisfied beyond reasonable doubt that it would be reasonable to so conclude then the Crown would have established the third element.
You must only consider in respect of each charge the two or more non-reportable cash transactions upon which that charge is based when looking at this third element.
112 His Honour then reviewed the Crown and defence arguments and in the course of doing so said this -
Even if you were to arrive at another or other reasonable conclusions so long as you are satisfied beyond reasonable doubt that it would be reasonable to conclude that the accused carried out the transactions for the sole or dominant purpose of avoiding the making of a significant cash transaction then the Crown would have established the third element of the charge. However, if you have a reasonable doubt that it would be reasonable to so conclude then you must find the accused not guilty.
113 It was this part of the summing-up that came under attack. Counsel for the appellant submitted that his Honour should have directed the jury in the following terms -
If there is a conclusion reasonably open regarding the sole or dominant purpose for which the transactions were conducted in the manner and form they were, and that conclusion is inconsistent with the conclusion required, then the Crown would not have established the third element of the offence to the necessary standard of proof.
114 Both sides maintained on appeal the position they had taken before his Honour, the appellant contending for proof beyond reasonable doubt and the Crown for a direction that the jury should be satisfied that it would be reasonable to conclude that the appellant had the relevant purpose.
115 It was put on behalf of the appellant that if there were a reasonable doubt about whether the required conclusion was reasonable, then the appellant should be acquitted. There would be a doubt about the reasonableness of the conclusion if there were another conclusion reasonably open and inconsistent with the required conclusion. His Honour failed to direct the jury as proposed and there were inferences available from the evidence, including that the appellant at no time possessed $10,000 or more in cash and that he acted as he did to protect himself from robbery, so the Court should quash the convictions and order a new trial.
116 In Leask v The Commonwealth the High Court of Australia was concerned with the question whether by its operation and effect subs 31(1) revealed a sufficient connection with the taxation or the currency, coinage and legal tender heads of power to be declared a valid law of the Commonwealth. One of the arguments put against the sufficiency of connection with the currency power incorporated a submission that the subsection imposed a strict or absolute liability, because a person might be found guilty on the basis that it would be reasonable to conclude that the person conducted the cash transactions in question for the prohibited purpose.
117 Brennan CJ took the view that although the offence created by the subsection is not one of strict liability its mens rea is extremely limited. It is confined to the elements of para (a) and the Crown does not have to prove a specific intent in an accused person to achieve the sole or dominant purpose of para (b).
118 Dawson J said this at 597 -
The Commonwealth submitted that s 31(1) does not create an offence of absolute or strict liability. It pointed to the fact that the circumstances to which regard must be had in reaching the required conclusion include “any explanation made by the person as to the manner or form in which the transactions were conducted” (s 31(1)(b)(ii)). Moreover, the Commonwealth submitted, the required conclusion is that the person concerned conducted the transactions for a specific purpose, namely, the sole or dominant purpose of ensuring that the transactions would not give rise to a significant cash transaction or would give rise to exempt cash transactions. Upon this basis the Commonwealth argument was that the sub-section requires proof that the person charged with an offence knew of the nature of a significant cash transaction or of exempt cash transactions and intended by structuring his or her transactions in the manner or form alleged to ensure that they would not give rise to a significant cash transaction or exempt cash transactions. The only effect of the words “it would be reasonable to conclude” is, the Commonwealth contended, to lower the standard of proof from that of beyond reasonable doubt to that of a reasonable conclusion.
There is no doubt that the wording of s 31(1) leaves it far from clear whether intention, or mens rea … is an ingredient of the offence which it creates and, if so, the nature of the intention required. In that situation, it is my view that the Commonwealth submission should be accepted.
119 His Honour then referred to a number of cases and the presumption that a knowledge of the wrongfulness of the act constituting it is an essential ingredient in every offence unless displaced by the words of the statute creating the offence or by the subject matter with which it deals, and continued -
I would apply the presumption in the case of the offence created by s 31(1) of the Act and would do so with increased confidence because of the ambiguity inherent in the wording of the sub-section. Even if with some statutory offences the nature of the offence may indicate that the presumption operates weakly, if at all, the nature of the offence created by s 31(1), gleaned from the way in which it is worded, indicates that it is not an offence of that kind. That means that I adopt the submission made by the Commonwealth that the words “It would be reasonable to conclude” go to the standard of proof to be applied and do not rebut a presumed requirement of mens rea as an ingredient of the offence.
120 Neither Toohey J nor Gummow J found it necessary to consider the matter. Kirby J said that there were some indications that supported the Commonwealth’s contention for mens rea, but found it unnecessary to decide the matter.
121 This Court has an advantage that was not available to the trial judge. After the case concluded before his Honour the Full Court of the Supreme Court of South Australia considered the subsection in R v Dinh Hue Tran (1998) 38 ATR 19. Unlike Leask v The Commonwealth, that case directly raised the issue of the mental element required for proof of guilt of an offence under the subsection.
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122 The principal judgment was delivered by Doyle CJ. His Honour began with the position, extracted from the judgments in Leask v The Commonwealth, that an offence against the subsection required proof at least that -
(i) the accused person knew that he or she was a party to a transaction that involved the physical transfer of currency;
(ii) the accused person was aware of the facts that made another party to the transaction a cash dealer for the purposes of the Act; and
(iii) the accused person knew that the amount of currency involved in each transaction had a value of less than $10,000.
His Honour considered that the subsection was directed at evasion rather than at carelessness or ignorance and that evasion implied knowledge. That necessitated proof in addition that
(iv) the accused person knew that a transaction involving currency of $10,000 or more in value must, by law, be reported to a government agency, and that a transaction involving currency of less than $10,000 in value did not have to be reported to a government agency.
123 His Honour went on to consider para (b) and concluded that in it the Parliament must have intended to deal with the knowledge of the accused and the difference between a significant cash transaction and a non-reportable cash transaction and must have imposed a requirement to prove an actual purpose. Consistently with the judgment of Dawson J in Leask v The Commonwealth, his Honour concluded that para (b) imposed a requirement to prove -
(i) that the accused person knew that a transaction involving the transfer of currency of $10,000 or more in value must be reported to a government agency and that a transaction involving the transfer of currency of less than $10,000 in value need not be reported to a government agency; and
(ii) that it is reasonable to conclude that the accused person in fact had the sole or dominant purpose referred to in the paragraph.
His Honour concluded at 26 -
The purpose that has to be proved need not be proved beyond reasonable doubt. The question for the jury is simply whether it is reasonable to conclude that, in fact, the accused person had the identified sole or dominant purpose. On the other hand, the jury must find it reasonable to conclude that the accused person in fact had the identified purpose.
124 Cox J agreed with the Chief Justice, observing that it was better to construe the subsection as requiring proof of an actual intention on the part of the accused and better to interpret the “reasonable to conclude” formula as simply stating the standard of proof of a purpose that the accused actually had.
125 Duggan J agreed about the need to prove the intention or purpose of the accused, leaving the words “it would be reasonable to conclude” as going only to the standard of proof.
126 With respect, the judgment of their Honours accords with principle in requiring the Crown to prove mens rea. See He Kaw Teh v The Queen (1985) 157 CLR 523 at 569-582.
127 The construction preferred by their Honours, which confines the application of the words “reasonable to conclude” to the standard of proof, also removes the problem that would otherwise exist of giving meaning to a form of words which requires a jury to be satisfied beyond reasonable doubt that it is reasonable to reach the relevant conclusion.
128 I think that this Court should apply the reasoning in the judgments of Dawson J in Leask v The Commonwealth and of the Court in R v Dinh Hue Tran. By that reasoning it appears that the direction given by his Honour went further than necessary in that it required proof beyond reasonable doubt that it was reasonable to come to the relevant conclusion. I think that the jury would have taken that formulation as meaning that they had to be satisfied beyond reasonable doubt that the appellant had the relevant sole or dominant purpose. The direction was favourable to the appellant.
129 Given that proof is not required beyond reasonable doubt, an accused person may be convicted if the jury think it reasonable to conclude that the accused’s sole or dominant purpose was the purpose proscribed by the subsection. The existence of a dominant purpose, which is sufficient for a conviction, requires the concurrent existence of another purpose or other purposes. It follows that the jury may well think that other conclusions are reasonably open and still convict. That is what his Honour told the jury.
130 The appellant’s argument fails.
131 Counsel for the appellant made a further submission, based on R v Dinh Hue Tran, that his Honour erred in leaving it open for the jury to decide the third element on an objective view and never invited them to consider the sole or dominant purpose of the appellant himself. I disagree. I think that the directions that -
… you must then determine whether … the accused conducted the transactions … for the sole or dominant purpose …
and
… you must determine … whether … the accused carried out the transactions in that way for the sole or dominant purpose …
made clear to the jury that it was for them to determine whether in carrying out the transactions the appellant himself had the relevant purpose as his sole or dominant purpose.
132 I would dismiss the appeal against convictions.
133 No submissions were made in support of the application for leave to appeal against the sentences. They were well within the proper range of his Honour’s sentencing discretion. I would refuse leave to appeal.
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