R v Zotti

R v ZOTTI
[2002] SASC 164
Court of Criminal Appeal: Prior, Lander and Gray JJ

PRIOR J: I agree that this appeal should be dismissed. I agree with the reasons given by Justice Lander for rejecting the second ground of appeal and refusing to allow further evidence to be admitted.
With respect to the first ground of appeal, I think the direction given by the trial judge was not erroneous.
At the beginning of the summing-up, the trial judge directed the jury that the prosecution had to prove beyond reasonable doubt that the appellant had disposed of money. His Honour described that as the first element that had to be proved. His Honour identified, to the jury, the allegation made by the prosecution that the money was disposed of by sending it overseas by telegraphic transfer. In relation to each count, the trial judge said that that element had to be proved beyond reasonable doubt. His Honour then directed the jury that as a matter of law, that if it had been proved that telegraphic transfers of money were sent by the accused overseas that would amount to a disposal of money. His Honour then said:
“Secondly, the second element is, that the prosecution, if this is proved must show that the money is reasonably suspected of being the proceeds of crime. So you the jury have to have a reasonable suspicion that that money which was sent off in relation to each count was the proceeds of crime. That fact does not have to be proved beyond reasonable doubt, namely, that it was the proceeds of crime. You as a jury merely have to have a reasonable suspicion about it.
I also direct you in relation to that element of the reasonable suspicion that you have to have, the suspicion has to be that it came from the importation of illicit drugs, not just any unlawful activity. You, using objective standards as a jury have to reasonably suspect that that money which was sent overseas in relation to each count is reasonably suspected of having been the proceeds of crime, namely the importation of illicit drugs. ....
If those two elements are shown to exist, one being proved, beyond reasonable doubt, namely the telegraphic transfers, and one by a reasonable suspicion that you hold about that money, then the onus shifts to the accused. The ball passes to him. The accused then has to satisfy you that he did not suspect that this money came from some form of unlawful activity. He has to prove that to you.
Secondly, if he does prove that to you, and convinces you of that fact, bearing in mind the position he was in, he has to prove to you that that belief he held was a reasonable one. That also has to be proved to you. As you can see that’s a very large departure from the general principle that the prosecution have to prove every element of the charge beyond reasonable doubt. He doesn’t have to prove those things beyond reasonable doubt, he only has to prove them to you on what we call the balance of probabilities, that it is more probable than not. So let me go through that again.
In relation to each count it must be proved beyond reasonable doubt that the money was sent overseas by Mr Zotti, for instance in count one $89,000 that has to be proved beyond reasonable doubt. Secondly, if that is proved beyond reasonable doubt, you have to be satisfied that it was reasonably suspected of being the proceeds of crime, namely, the proceeds of an illicit drug importation, as alleged. If those two factors are established then the charge is made out, unless the defendant proves to you as being more probable than not that he genuinely believed that he didn’t suspect that the money that was sent came from some form of unlawful activity.”
Later in the summing-up, when dealing with the facts of the case, the trial judge referred to the prosecution leading evidence “to show that (the jury) should reasonably suspect that money sent overseas was the proceeds of narcotic drug importation”. His Honour correctly described the second aspect of the prosecution case being that the jury “should have a reasonable suspicion that (the) money was the result of a drug importation”. When turning to the defence case, the trial judge reminded the jury “once again” that if the jury found it proved beyond reasonable doubt that the appellant disposed of the money and if the jury had a reasonable suspicion that that money was the proceeds of an illicit drug importation, the appellant had to prove to the jury on the balance of probabilities that he genuinely believed that he did not suspect that the money had come from an illegal source.
Just before inviting the jury to consider its verdict, the trial judge reminded the jury:
“...on each count the prosecution must prove beyond reasonable doubt that the accused disposed of the money, as alleged in the information, to the bank and for the purposes of it being telegraphically sent overseas. Secondly, if that is proved you, as a jury, have to have a reasonable suspicion that the money which was sent off was the proceeds of crime, namely, the illicit drug importation that is alleged. When it comes to that reasonable belief, your reasonable belief has to be as a result of a drug importation. You only have to have a reasonable suspicion about that in relation to each count. Then, if both those things exist, you ask yourselves the question ‘ Has the accused satisfied you on the balance of probabilities that he did not suspect that the money came from some form of unlawful activity, any form of unlawful activity?’ and also ‘Has he convinced you on the balance of probabilities that that was a reasonable belief, that it did not come from some unlawful activity?’”
I am not persuaded that the directions given by the trial judge should have included a direction that proof of a reasonable suspicion that the monies were proceeds of crime had to be proved beyond reasonable doubt. I agree with the Full Court’s affirmation of what Cox J said in Tepper v Kelly[1]. It is not appropriate to speak of the reasonableness of a suspicion being established beyond reasonable doubt. In this case the jury forms a judgment as to whether any suspicion is a reasonable suspicion. The prosecution has to satisfy the jury that the objective facts proved beyond reasonable doubt give rise to a reasonable suspicion that the monies were proceeds of crime. Thus, it is not inappropriate to speak of the prosecution carrying some burden of satisfying the jury of the reasonableness of the suspicion. The jury’s opinion in that respect, as distinct from the proof of the underlying grounds or reasons, cannot be graded by reference to the standards of proof applicable in different jurisdictions to contested facts. A suspicion is either reasonable or unreasonable. To contrast a suspicion that is reasonable on the balance of probabilities and the suspicion that is reasonable beyond reasonable doubt is to misconceive the requirements of s 82[2].
[1] (1988) 47 SASR 271
[2] Tepper v Kelly (1988) 47 SASR 271 at 272 and 273
Like Gray J, I do not think that the remarks of Hunt CJ in R v Buckett[3] are inconsistent with the view of Cox J in Tepper. If, as Lander J thinks, the remarks cannot be construed in that way, then I would decline to follow that case and those reasons, notwithstanding the expectation that State courts should give a consistent meaning to a Commonwealth Statute and treat a decision of the Full Court of another State directly in point, in the same way as it would a decision of its own[4].
[3] (1995) 132 ALR 669; (1995) 79 A Crim R 302
[4] R v Parsons (1983) 2 VR 499 at 506
If the interpretation of Hunt CJ’s remarks made by Lander J is correct, I must say, against the clear statement of Cox J in Tepper, that I am convinced that the decision is plainly wrong[5]. To use the observation made by Justice Lander in his reasons, so construed the decision throws an onus upon the prosecution to establish beyond reasonable doubt that which must be satisfied by the jury’s mind. That cannot be right.
[5] Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485 at 492
Like Gray J, I construe the remarks of Kirby P in Anderson v Judges of the District Court of New South Wales[6] as consistent with the approach of Cox J. If that were incorrect, I would still regard this Court as bound to follow the reasoning of Cox J, endorsed as it is by this Full Court rather than follow the contrary process of reasoning.
[6] (1992) 27 NSWLR 701
LANDER J. This is an appeal against convictions entered in the District Court of South Australia.
The appellant was charged with nine counts of disposal of money suspected of being proceeds of crime contrary to s 82(1) of Proceeds of Crime Act 1987 (Cth) (the Act).
The nine counts were alleged to have occurred between 30 March 1998 and 13 July 1998. All of the counts were alleged to have occurred at Adelaide in circumstances where the appellant deposited an amount of money in cash to a bank account controlled by him and arranged for the transfer of that sum to the overseas bank account of Jose Martinez in Hong Kong. In respect of each count it was alleged that the money had been provided to the appellant by Jose Manuel Campillo in cash and that the cash may reasonably be suspected of being the proceeds of the importation of narcotics contrary to s 233B of the Customs Act1901 (Cth).
The appellant was arraigned, pleaded not guilty and after a trial before a Judge of the District Court sitting with a jury was convicted on each count.
The total of the cash alleged to have been deposited to the account in Hong Kong was $5,395,767.00.
The following two grounds of appeal were argued:
“1That the learned Trial Judge erred in law in directing the jury that proof of a reasonable suspicion that the monies were proceeds of crime need not be proved beyond reasonable doubt.
2That the learned Trial Judge erred in directing the jury that the suspicion about the provenance of the monies was that they were suspected of being the proceeds of ‘illicit drug’ importation rather than the particularised ‘importation of narcotics’.”
An application was also made to adduce fresh evidence.
Section 82 of the Act provides:
“(1)A person who, after the commencement of this Act, receives, possesses, conceals, disposes of or brings into Australia any money, or other property, that may reasonably be suspected of being proceeds of crime is guilty of an offence against this section punishable, upon convictions, by:
(a)if the offender is a natural person - a fine not exceeding $5,000 or imprisonment for a period not exceeding 2 years, or both;
or
(b)if the offender is a body corporate - a fine not exceeding $15,000.
(2)Where a person is charged with an offence against this section, it is a defence to the charge if the person satisfies the court that he or she had no reasonable grounds for suspecting that the property referred to in the charge was derived or realised, directly or indirectly, from some form of unlawful activity.”
These transactions occurred after the commencement of the Act. In those circumstances the prosecution needed to prove two matters. First, that the appellant had disposed of money and secondly, that that money may reasonably be suspected of being proceeds of crime.
It was accepted during the trial that the prosecution had the obligation to prove the first element beyond reasonable doubt. Moreover, it was accepted by the appellant that the prosecution had discharged that burden.
The prosecution case was that the money which had been disposed of reflected the proceeds of the importation of cocaine and it was cocaine which was implicitly referred to in the particulars where the particulars spoke about “the proceeds of the importation of narcotics”.
It was accepted by the appellant that the suspicion which was referred to in s 82(1) had to be that of the jury. The second element was therefore fulfilled if the jury was satisfied that it may reasonably be suspected that the money disposed of was the proceeds of crime and, in this case, the proceeds of the importation of cocaine: Anderson v The Judges of the District Court of New South Wales (1992) 27 NSWLR 701 at 714 per Kirby P; Ex parte Patmoy; Re Jack and Another (1944) SR (NSW) 351 at 356 per Jordan CJ; R v Bucket (1995) 132 ALR 669.
It was further accepted by both the prosecution and the defence that if the prosecution established the two elements to which I have referred, the onus fell upon the appellant to satisfy the Court that he had no reasonable grounds for suspecting that the money referred to was derived from some form of unlawful activity pursuant to s 82(2) of the Act. It was agreed that the standard of proof in that regard was proof on the balance of probabilities.
The two matters of complaint on this appeal relate to the trial judge’s directions on the second element of the offence.
The second ground of appeal can be disposed of more quickly than the first. In his address to the jury the trial judge referred to an illicit drug importation and not the words used in the particulars on the information ‘importation of narcotics’.
On a reading of the whole of his summing up it is clear that the jury could only have understood the trial judge to be referring to the importation of cocaine which was the subject of the particulars on the information.
It would have been better if the trial judge had referred to the importation of narcotics or cocaine rather than used the shorthand expression ‘illicit drug importation’. However, there can be no misunderstanding, in my opinion, that His Honour was referring to the crime referred to in the particulars and the jury would have understood him to be. I do not think that His Honour’s shorthand description has in any way led to a miscarriage of justice.
In regard to the first ground of appeal the trial judge directed the jury in the following terms:
“Secondly, the second element is, that the Prosecution, if this is proved must show that the money is reasonably suspected of being the proceeds of crime. So you the jury have to have a reasonable suspicion that that money which was sent off in relation to each count was the proceeds of crime. That fact does not have to be proved beyond reasonable doubt, namely, that it was the proceeds of crime. You as a jury merely have to have a reasonable suspicion about it.”
The first two sentences are not the subject of complaint. However, the third and fourth are. It was the appellant’s argument on appeal, as the first ground of appeal shows, that that direction was a misdirection in law. It was submitted that the standard of proof in that second element, like the first element, was proof beyond reasonable doubt.
The respondent argued that once it is accepted that the reasonable suspicion that s 82(1) of the Act addresses is that of the fact finder, in this case the jury, the section could not be requiring proof beyond reasonable doubt of that reasonable suspicion. The respondent relied upon the decision of Tepperv Kelly (1987) 45 SASR 340 and the statement made by Cox J at first instance has to be correct. His Honour said:
“However, it is not appropriate, in my view, to speak of the reasonableness of the suspicion being established beyond reasonable doubt.” [343]
Mr Barrett QC, who appeared for the appellant seemed to agree with that proposition. However, he suggested that what was required to be proved was proof beyond reasonable doubt that the money was the proceeds of crime and in this case the importation of narcotics namely cocaine.
He submitted the two elements of the offence were (a) a disposal of money and (b) money that is the proceeds of crime, both of which must be proved beyond reasonable doubt. He said that if both of those matters were proved beyond reasonable doubt it was a question for the jury whether or not they might reasonably suspect that money to be the proceeds of crime.
In my opinion, that submission cannot be right. I have no trouble, of course, with the proposition that the first element must be proved beyond reasonable doubt. That, in my opinion cannot be doubted. However, I cannot agree with the proposition that the jury should be told that they might reasonably suspect that the money is the proceeds of crime only if they are satisfied beyond reasonable doubt that the money is the proceeds of crime. If they were so satisfied then, of course, they would have to suspect that the money was the proceeds of crime. In those circumstances it would be unreasonable not to suspect that the money was the proceeds of crime.
In my opinion, s 82(1) of the Act could not require the prosecution to prove beyond reasonable doubt that the monies were the proceeds of crime, to do so would be to require too heavy a burden be placed upon the prosecution.
If the appellant’s proposition was correct s 82(1) of the Act would be read to provide that a person who disposes of money, being the proceeds of crime, is guilty of an offence.
That would mean that the section is in no different terms to s 81 of the Act. Section 81(3) of the Act provides:
“A person shall be taken to engage in money laundering if, and only if:
(a)the person engages, directly or indirectly, in a transaction that involves money or other property, that is the proceeds of crime;
or
(b)the person receives, possesses, conceals, disposes of or brings into Australia any money, or other property, that is proceeds of crime;
and the person knows, or ought reasonably to know, that the money or other property is derived or realised, directly or indirectly from some form of unlawful activity.”
Such a construction would leave s 82(2) with no work to do. The reversal of the onus of proof which s 82(2) contemplates would be frustrated.
The purpose of sections like s 82 is to reverse the onus of proof. Such a regime has been adopted in the case of the offence of unlawful possession of personal property: s 41 Summary Offences Act1953 (SA). Although in that case the reasonable suspicion must be formed prior to the laying of the complaint. The purpose of the legislation is to reverse the onus of proof where otherwise it would be difficult for the prosecution to establish that the personal property has been stolen or obtained by unlawful means. In that case if the circumstances give rise to a reasonable suspicion prior to the bringing of the complaint the onus devolves upon the accused to prove that he or she obtained possession of the property honestly.
It was s 41 of the Summary Offences Act which was the subject of comment by Cox J in Tepper v Kelly (supra).
In the case of a prosecution under s 41 of the Summary of Offences Act the prosecution has to prove three matters. First that the person charged has possession of the personal property, secondly that it was suspected of having been stolen or obtained by unlawful means and thirdly that that suspicion was reasonable. The prosecutor has to prove that someone actually entertained at a relevant time a suspicion that the property had been stolen or unlawfully obtained. The first two matters, the question of possession and the existence of the suspicion, are factual and must be proved beyond reasonable doubt; Tepper v Kelly (supra) at 343. The third matter is a question for the court to decide upon having regard to the evidence upon which the suspicion was based. In the case of a prosecution under s 41 of the Summary Offences Act it is not necessary to prove the reasonableness of the suspicion beyond reasonable doubt as Cox J said in that case:
“It is for the court to form a judgment as to whether any suspicion, duly proved, should properly be characterised as a reasonable suspicion.” [343]
The important distinction between that section and s 82 of the Act is that in a prosecution under s 82 the reasonable suspicion must be formed by the fact finder in this case the jury at the time of the prosecution.

A similar provision to s 82 exists in New South Wales in s 527C of the Crimes Act1900 (NSW). A history of that section is contained in the judgment of Gleeson CJ in English v R (1989) 17 NSWLR 149. Section 527C of the New South Wales Crimes Act, like s 82 of the Act, requires the fact finder to entertain the reasonable suspicion that the thing has been stolen or unlawfully obtained: English v R (supra) 17 NSWLR 149; Anderson v The Judges of District Court of New South Wales (supra); R v Chan (1992) 28 NSWLR 421.
The jury must therefore be satisfied beyond reasonable doubt that it may reasonably be suspected that the monies are the proceeds of crime.
In Anderson v The Judges of the District Court of New South Wales (supra) Kirby P said at 714:
“Attention must be drawn to the qualified mental element which must be established in order to attract the operation of the section. It is enough that it is shown that the thing in custody “may be reasonably suspected of being … unlawfully obtained”. The word “may” fall short of “is”. The word “suspected” falls short of “known” or even “convinced” or “shown”. In another context, it has been said that “suspicion” is a state of conjecture of surmise when proof is lacking: see George v Rockett (1990) 170 CLR 104 at 115f. The suspicion must, it is true, be “reasonably” held. It must be determined not according to the subjective beliefs of the police at the time but according to an objective criterion determined by the court before whom the accused stands charged: see R v English (at 153); Ex Parte Patmoy; Re Jack (1944) 44 SR (NSW) 351 at 356; 61 WN (NSW) 228 at 230.”
Kirby P said at 715:
“The pre-conditions must, as in any other criminal offence, be established beyond reasonable doubt. How a level of thought which is qualified by what “may” be (and does not need to reach beyond what is “suspected”) can be established beyond reasonable doubt is not entirely clear. But the section exists and has survived for more than a century in substantially the same form. It can apply to bank notes. It must therefore be given meaning. Presumably the criminal onus and the words of the section must be reconciled by saying that the court before which the person is charged must be satisfied beyond reasonable doubt that the circumstances are such that the thing in question may reasonably be suspected of being stolen or otherwise unlawfully obtained.”
It was submitted by the respondent that it was incongruous to speak of a satisfaction beyond reasonable doubt of a reasonable suspicion. It was submitted that a suspicion, albeit reasonable, was something less than satisfaction beyond reasonable doubt.
I have difficulty with the proposition that the prosecutor must establish a suspicion beyond reasonable doubt. A suspicion is something less than proof of a fact whether to the standard of the civil or criminal law.
In Shaaban Bin Hussien & Others v Chong Fook Kam & Another (1969) 3 All ER 1626 at 1630 Lord Devlin speaking on behalf of the Privy Council said:
“Suspicion in its ordinary meaning is a state of conjecture or summise where proof is lacking; ‘I suspect but I cannot prove’.”
If this matter were not subject to authority I would consider that the prosecutor did not have to establish beyond reasonable doubt that the jury might reasonably suspect the money of being proceeds of crime. I would decide that the prosecution had to prove beyond reasonable doubt only the matters upon which the jury were asked to raise a suspicion. Thereafter the jury could convict if they had a reasonable suspicion that the moneys were the proceeds of crime.
In R v Tween [1965] V.R. 687 the Full Court of the Supreme Court of Victoria had to consider s 317(4) of the Crimes Act 1958 (Vic). That subsection provided:
“Any person who … knowingly has in his possession … any explosive substance, under such circumstances as to give rise to a reasonable suspicion that he … does not have it in his possession … for a lawful object shall, unless he can show that he … had it in his possession for a lawful object, be guilty of a felony … ”
Sholl J said at 693/694:
“It should not be forgotten that s 317 contains a series of provisions, originally enacted in England in the Explosive Substances Act 1883, and designed to protect the public by stringent preventive measures capable of being put into effect before crimes involving the use of explosives can take place. One should not, therefore, be surprised if they go beyond what courts are accustomed to find in provisions creating other specific offences against the criminal law, or if they appear to derogate in a particular field from safeguards ordinarily provided by the general criminal law in favour of alleged offenders against its provisions. Sub-section (4) is rendered operative by suspicion alone. It does not require the Crown to prove, still less to prove beyond reasonable doubt, that the accused has possession or control of explosive substances for an unlawful purpose. I agree that the Crown must prove beyond reasonable doubt that he has possession or control of them and that he has it knowingly, in the sense that he knows he has them, and that they are explosive substances, though this knowledge the prosecution can prove by inference from possession or control in circumstances giving rise to a reasonable suspicion that he has them for an unlawful purpose. R v Hallam, [1957] 1 Q.B. 569; [1957] 3 All E.R. 566. It follows, I think, from that decision that the Crown must prove beyond reasonable doubt, as facts, the circumstances relied upon as giving rise to that suspicion. But it cannot be right to say that the Crown must prove beyond reasonable doubt the existence of the suspicion itself or its reasonableness, though I know that, as in the present case, juries are often so directed. The Crown does not have to prove that the suspicion is well founded - otherwise the reversal of onus contained in the second part of the sub-section would be ineffective and useless. The suspicion need not be proved to be correct; it need only be reasonable. It need not be such a “strong or probable presumption of guilt” as would, under s 47 of the Justices Act 1958, warrant the committal of an accused person for trial. It need only be a reasonable hypothesis in all the circumstances - it may be one of a number, and the others may be consistent with innocence. It does not have to be the only reasonable hypothesis, for so to hold would require the Crown to prove the unlawful object beyond reasonable doubt, whereas the sub-section requires the accused to negative it, and to do so, I think, on the balance of probabilities: see Taylor v Ellis, [1956] V.L.R. 457; [1956] A.L.R. 1092; Taylor v Armour & Co Pty Ltd., [1962] V.R. 346.
I do not find it easy to comprehend the notion involved in a direction that the Crown must prove beyond reasonable doubt that the circumstances give rise to a reasonable suspicion of guilt. If a given set of facts gives rise to a reasonable suspicion of guilty possession, it is because guilty possession is one hypothesis open to reasonable minds upon those facts. It may, as I have said, be one of a number, the others being consistent with innocence. To say that the prosecution must establish beyond reasonable doubt that the circumstances proved give rise to a reasonable suspicion of guilt seems to me to involve the highly complex and confusing proposition that it must prove that there is no hypothesis reasonably open from the facts proved except the hypothesis that one possible hypothesis is that of suspicion. True, this is at one remove, so to speak, from proof of actual guilt, and is not, in strict logic, the same thing as proving that there is no hypothesis really open except one of confusion into the subject to speak of proving beyond reasonable doubt that to reasonable persons one hypothesis open is that of guilt. It is true that the jury must form an opinion, according to some standard, that the circumstances proved give rise to such reasonable suspicion, but, in my opinion, the standard is merely that of reasonable opinion, and the proper question which they should ask themselves is, if they are satisfied beyond reasonable doubt of the circumstances relied on by the prosecution, - “Do we as reasonable men all think that on those facts one hypothesis open is that of guilty possession?” I think juries should be so directed. For, if I may respectfully say so, it is inappropriate to introduce at that point the notion of proving beyond reasonable doubt merely that there is room for a particular hypothetical opinion. It involves, I think, too literal an application of the principle that the Crown must prove beyond reasonable doubt the elements of a criminal charge.”
I agree with those reasons. However, on this point Scholl J was in the minority. Pape J said at 701:
It is to be observed that that s 317(4) of the Crimes Act 1958 places the onus of showing possession of explosive substances for a lawful object upon the accused. He is, however, not called upon to discharge this onus (which he must do on a balance of probabilities only: Sodeman v R (1936), 55 C.L.R 192, per Dixon, J., at p 216; [1936] A.L.R. 156), unless the Crown first proves beyond reasonable doubt his possession of the explosive substances, and that he knew that they were explosive substances: R v Hallam, [1957] 1 Q.B. 569; [1957] 3 All E.R. 566. Furthermore, the Crown must also prove beyond reasonable doubt the existence of circumstances which are capable of raising a reasonable suspicion that the possession of such explosive substances was not, for a lawful object, and the connexion of the accused with such circumstances. But it is not necessary for the Crown to prove that the circumstances are consistent only with suspicion, for once the Crown has laid the appropriate foundation the section casts on the accused the burden of proving that his possession was for a lawful object.
It is for the jury to say, once circumstances capable of arousing a reasonable suspicion are proved, whether such a suspicion arises and (if they are satisfied that it does) whether that suspicion has been dissipated by the explanation given by the accused for his possession. Since the existence of a reasonable suspicion from the circumstances is an ingredient of the offence charged, it follows that this must be proved by the Crown beyond reasonable doubt. If the jury are left in doubt as to whether they have such a reasonable suspicion, the accused is entitled to the benefit of that doubt, and they need not then consider whether he has satisfied them on a balance of probabilities that his possession was for a lawful object. To place the burden on the Crown of proving beyond reasonable doubt the existence of a reasonable suspicion is not equivalent to saying that the Crown must prove beyond reasonable doubt that the suspicion is well founded, for at this stage of the jury’s inquiry they should be directed to consider the matter without reference to the accused’s explanation. Unless reasonable suspicion is established there is no need for explanation.”
Although Winneke CJ agreed with Sholl J as to part of his reasons I think it is clear enough that he did not agree on this point. He said at 689:
“In my opinion, the sub-section, upon its proper interpretation requires proof by the Crown, first, that the accused was knowingly in possession of the explosive substance charged and, secondly, that the possession was under such circumstances as to give rise to a reasonable suspicion that he did not have it in his possession for a lawful object: see R v Hallam, [1957] 1 Q.B. 569; [1957] 3 All E.R. 566, and Archbold, 35^th ed., p. 920. The second requirement, in my view, is descriptive of an incident of the possession necessary to give rise to the offence. It must, I think, be a possession in circumstances which are capable of giving rise to the suspicion specified in the section. In other words any circumstance relied upon by the prosecution must be related to or connected with the possession charged in such a way as to leave it open to a jury to find that such circumstances, either by itself or in conjunction with other relevant in circumstances, gives rise to the suspicion specified. In my opinion, proof by the Crown of both the above-mentioned requirements is necessary before the onus placed on the accused by the sub-section arises.”
I believe that Sholl J’s opinion was not the opinion of the majority.
The section under consideration by the Court in Anderson v The Judges of the District Court of New South Wales (supra) cannot be distinguished, in my opinion, from the section under consideration on this appeal.
In R v Bucket (supra) s 82 of the Act itself was under consideration by the Court of Criminal Appeal in New South Wales.
Hunt CJ at 675 said:
“It is agreed by the parties to this appeal that the origin of s 82 is to be found in the old offence of goods and custody (now described as things in custody) (Act 19 Victoria No. 24 1855 s 1; Police Offences Act 1901 (NSW), s 27; Summary of Offences Act 1970 (NSW), s 40; Crimes Act 1900 (NSW), s 527C; there are similar legislative provisions in other States, and that it should be interpreted in accordance with the decisions relating to that offence. In my view, that approach is correct. The phrase “may reasonably be suspected of being stolen or unlawfully obtained” in the various statutory formulations of the offences of goods in custody is now interpreted as being attached in an objective sense to the goods (or things) in custody themselves, and not as requiring proof by the prosecution that either the arresting officer or the person whose custody they are had such a suspicion; whether or not the goods are such that they may reasonably be suspected of being stolen or unlawfully obtained is determined by the court upon the state of the evidence available at the time of the trial rather than that which was available to the arresting officer: …”
He said further at 676:
“As with the offence created by s 82, the offence of things in custody as it is presently formulated in s 527C of the Crimes Act provides a defence to the person charged if he satisfies the court that he had no reasonable grounds for suspecting that the things in his custody were stolen or otherwise unlawfully obtained. The effect of this statutory framework is thus that the state of knowledge of the person charged as to the provenance of the things in his custody is irrelevant to the prosecution case; but if the court is satisfied beyond reasonable doubt upon the state of the evidence before it that those things may be reasonable suspected of being stolen or otherwise being unlawfully obtained, the person charged must, in order to escape conviction, discharge the lesser civil onus upon him of satisfying the court that he had no reasonable grounds for suspecting that they were stolen or unlawfully obtained: …”
In my opinion that case has authoritatively determined that the onus upon the prosecution is to establish, to the satisfaction of the jury beyond reasonable doubt, the money may reasonably be suspected of being the proceeds of crime.
The interpretation which the Court of Criminal Appeal in New South Wales has given to s 82 of the Act in R v Bucket (supra) is consistent with a number of previous decisions of that Court in relation to s 527C of the Crimes Act 1900 (NSW) which cannot be relevantly distinguished.
I have some doubt as to whether that decision is correct because it seems to throw the onus upon the prosecution to establish beyond reasonable doubt that which must be satisfied by the jury’s state of mind.
I can understand in a section such as s 41 of the Summary of Offences Act that the onus must be upon the prosecution to establish beyond reasonable doubt that a third party held a suspicion and then that the suspicion was reasonable. It is not so obvious to me, however, that the prosecution should have to establish beyond reasonable doubt the very thing that the jury must reasonably suspect.
However, the section is contained in a Commonwealth Act which has application throughout the country.
In R v Abbrederis (1981) 1 NSWLR 530 Street CJ said at 542 in a decision concerned with the interpretation of s 233B of the Customs Act (supra):
“Having reached the conclusion that the Full Court of Victoria in R v Vanswol [1975] VR 61, does not correctly state the construction of par (ca), a question arises as to what course should be followed. It is of significance to recognise that the decision was reached by the ultimate State appellate court and unless and until such time as this decision is departed from by the Full Court of Victoria or the High Court, it will bind absolutely all single judges and inferior courts in Victoria. Despite the forebodings of the profits of doom to the effect that the existing State courts system is less than appropriate to furnish the forum for construing Commonwealth legislation, the suggestion being that inconsistent views between the States will lead to inconsistencies in the administration of law, I have no difficulty whatever in perceiving that the doctrine of precedent is fully adequate to cope with these risks. As a matter of precedence of this Court is not, of course, bound by the decision of the Full Court of Victoria. But I have not the slightest doubt that, where a Commonwealth statute has been construed by the ultimate appellate Court within any State or Territory, that construction should, as a matter of ordinary practice, be accepted and applied by the courts of other States and Territories so long as it is permitted to stand unchanged either by the court of origin or by the High Court. The risk of differing interpretations amongst the States is thus negated and, in practical terms, the uniform application of Commonwealth laws throughout Australia is assured.”
There is no doubt that it is important, wherever possible, that there is no divergence between the State Courts on the construction of Commonwealth Legislation: Wescombe v R [1987] VR 1012 at 1015.
It seems to me that this Court should follow the decision of the Court of Criminal Appeal of New South Wales in R v Bucket (supra) unless this Court is of the view that the decision is plainly wrong: Australian Securities Commission v Marlborough Gold Mines Limited (1993) 177 CLR 485 at 492.
In my opinion it would be appropriate to follow the decision of the Court of Criminal Appeal in New South Wales in R v Bucket (supra).
It follows that this Court should, in my opinion, conclude that the direction given by the trial judge was wrong in law.
That leaves for consideration whether or not in the circumstances of this case it would be appropriate to apply the proviso.
It was submitted by the respondent that the case against the appellant was overwhelming and that in those circumstances, even if the jury had been correctly directed that the second element must be proved beyond reasonable doubt, inevitably the jury would have arrived at the same conclusion which they did on the direction before them.
It is fundamental to a fair trial that the jury be instructed appropriately as to the standard of proof.
The respondent urged this Court, notwithstanding that it was of the opinion that the direction was wrong in law, to dismiss the appeal because no substantial miscarriage of justice has actually occurred.
The respondent argued that the case against the appellant was overwhelming.
The appellant did not dispute that he had obtained each of the amounts contained in each of the charges from Mr Campillo and that he had arranged to transfer that sum to the overseas bank account of Jose Martinez in Hong Kong. Nor did the appellant dispute that it may reasonably be suspected that the money received and transposed of and transferred may reasonably be suspected of being the proceeds of crime.
The prosecution called a prisoner whom I shall call GM, who is a professional captain of sailing vessels. It was his evidence that he sailed a boat “the Maeve” from Cuba to Australia into Coffs Harbor where he met three persons; a man by the name of Flavel, Mr Campillo and Ms Gonzalez. He arrived on 5 December 1998. On 7 December 1998 GM and Mr Flavel prepared to take a Boston Whaler, which is a boat or a dinghy from “the Maeve” to shore. He was to meet Mr Campillo and Ms Gonzalez. The Boston Whaler was brought to shore. It was placed upon a trailer which was attached to a Range Rover and shortly thereafter all of those persons were intercepted by the Federal Police.

225 blocks of cocaine powder weighing 224.84 kilograms were found in the Boston Whaler dinghy. It was 76.2 per cent pure so that there was 171.2 kilograms of pure cocaine in that dinghy.
Further investigations were carried out by Federal Police. They attended at premises at 9B Mackay Street in Taree a town near Coffs Harbour where they found another Boston Whaler which had been cut up and vacuumed in the same way as the Boston Whaler on “the Maeve”.
It was established that on 17 January 1998 a vessel “the Tvareg” arrived at Lord Howe Island and that Mr Flavel to whom reference has been made in relation to “the Maeve” was on board.
The boat sailed from Lord Howe Island into Forster on 28 January 1998 and the boat remained at the mooring until 7 December 1998.
It was established that Mr Campillo rented the property at Mackay Street two weeks after the arrival of “the Tvareg”. At about the same time he purchased a boat trailer which is the boat trailer which was later used for the transportation of the Boston Whaler from “the Maeve”. That boat trailer remained stored in a shed which he also rented in Taree until December 1998.
Evidence was led to show that Mr Campillo drove a motor vehicle with a trailer and a boat attached in February 1998. The witness was not able to identify the boat as a Boston Whaler but it was the prosecution case that such could be inferred.
Articles were found at Mackay Street that were consistent with articles removed from a Boston Whaler.
It was the Crown case that Mr Campillo, Mr Flavel and Ms Gonzalez were involved in two importations of cocaine. The first was on “the Tvareg” in early 1998 and the second on “the Maeve” in late 1998.
It was the prosecution case that the modus operandi was the same in both cases.
The prosecution case was that the cocaine imported on “the Tvareg” was sold and that Mr Campillo received the proceeds of that importation. It was those monies that were the monies involved in the transactions on the nine counts with which Mr Zotti was charged.
It was the prosecution case that some short time after the first vessel landed Mr Campillo entered into the transactions with the appellant which moved the money from Mr Campillo to Hong Kong.
The Crown case was not challenged by the appellant. The principle witness GM was not cross examined. Of all the prosecution witnesses, and there were more than 40, only two civilian witnesses and two police officers were cross examined. One civilian witness was cross examined as to Mr Campillo’s appearance and another as to a car Mr Zotti drove. The object of the first cross examination was to establish that Mr Campillo was a respectable man. The object of the second cross examination was to show that Mr Zotti drove a very old car and therefore, presumably it might be inferred, was not a man of means. The two police officers were cross examined to show that Mr Zotti fully co-operated.
It was no part of the prosecution case that the appellant had in any way been involved in the importation of the cocaine on either occasion.
The appellant did not seek to challenge the prosecution case in relation to either importation.
The whole case revolved around the appellant’s defence under s 82(2) of the Act. The appellant has accepted, as I have said, the money transactions. He also accepted, in the course of the trial, the prosecution case that that money was the proceeds of crime. He sought to mount his defence upon the statutory defence in s 82(2) of the Act.
It is in those circumstances the question of miscarriage of justice has to be considered.
The respondent submitted that the Trial Judge’s misdirection on the standard of proof could not have been material because the prosecution case was not challenged. The issue in the case was whether or not the appellant had made out his statutory defence under s 82(2) of the Act.
Ordinarily a misdirection on the standard of proof would lead to a miscarriage of justice. An accused can expect that the Judge will properly direct the jury on the elements of the offence and on the standard of proof and if there was a failure, in any respect, the accused could claim a miscarriage of justice.
However, this case is somewhat different. I do not think that the failure to properly direct the jury on the standard of proof has led to a substantial miscarriage of justice. I do not think that the jury, if properly instructed, would have arrived at any different conclusion than that which they did.
The jury was bound to conclude, whatever the standard of proof, that these transactions involved the disposal of money which may reasonably be suspected of being the proceeds of the importation of narcotics. The prosecution case was overwhelming and even more so because the appellant did not seek to contradict it in any way.
There was no misdirection on the issues upon which the case was fought namely whether the appellant had no reasonable grounds for suspecting the money was derived directly or indirectly from some form of unlawful activity.
The appellant did not lose the chance of an acquittal: Wilde v The Queen (1988) 164 CLR 365 or 372; Glennon v The Queen (1994) 179 CLR 1 at 13. His conviction was, if he could not discharge the onus thrown upon him by the section, inevitable: Mraz v The Queen (1955) 93 CLR 493 at 514.
In these circumstances it has been shown that the appellant has not suffered a miscarriage of justice.
There is one further matter that needs to be mentioned before I announce the order that I believe should be made.
The appellant sought leave to adduce fresh evidence.
As I have said, at trial the appellant sought to prove, pursuant to s 82(2) of the Act, that he had no reasonable grounds for suspecting that the monies referred to in the charge were derived directly or indirectly from some form of unlawful activity.
He claimed that he believed the person referred to in the particulars, Mr Campillo, when he told him that the large amounts of money that he asked the appellant to bank for him came from the proceeds of “dance shows” or “rave parties”. The appellant gave evidence of that belief and was cross examined as to it. In his address to the jury the counsel for the Director of Public Prosecutions asked the jury to accept that the belief was untrue or unlikely.
After the appellant was convicted the appellant was interviewed by a psychologist for the purpose of providing the Court with a psychological report upon which submissions could be made as to sentencing.
The psychologist, Mr Hare, reported in the following terms:
“On the interpersonal scales the results suggested an individual who was warm, sympathetic and supportive of others, who found it hard to criticise others, and whose trusting nature and readiness to forgive may place him at risk of being taken advantage of in personal relationships. The overall profile of results suggested a general picture of satisfactory functioning and personal comfort. I note that this profile is sometimes seen in individuals with features of anti social, narcissistic, or paranoid personality disorders.”
He said later:
“The results of the PAI indicate that he is a warm, sympathetic person who is supportive to others. His scores were in the range seen in individuals who are generally eager to be liked by others, and he found it hard to be critical of others even when such criticism is merited. Their trusting nature and readiness to forgive the faults of others place them at risk of being taken advantage of by others. Mr Zotti would expect that others would treat him well just as he treats others well. Others may see him as being too trusting and supportive for his own good. In my view these are the salient features in the commission of the offences.”
This evidence was sought to be advanced as expert evidence.
The appellant claimed that if Mr Hare had given evidence in accordance with his report the jury would have been more inclined to accept the appellant’s evidence about his belief in the lawful source of the money that he banked and therefore a verdict of acquittal would have been more likely to have been brought in.
It seems to me that the appellant must establish that this evidence could not have been obtained by reasonable diligence prior to trial. No evidence was adduced that the evidence in question was not available at the trial and could not have been obtained by the exercise of reasonable diligence.
The appellant must also satisfy this Court that the evidence would, if tendered, have been admissible.
If these matters are established this Court must be satisfied that there is a significant possibility that a jury acting reasonably would have, if this evidence had been before it, acquitted the accused: Gallagher v The Queen (1986) 160 CLR 392; R v Reci (1997) 70 SASR 78 at 92.
This evidence is not inadmissible simply because it would support the credibility of the appellant or be helpful to the jury in assessing that credibility.
There is no reason why evidence which tends to support the credibility of a witness cannot be in the form of expert evidence: R v C (1993) 60 SASR 467 at 473.
However, expert evidence is only admissible if it is given on a topic which is a fit subject for expert evidence.
In R v Bonython (1984) 38 SASR 45 at 46 King CJ said:
“Before admitting the opinion of a witness into evidence as expert testimony, the judge must consider and decide two questions. The first is whether the subject matter falls within the class of subjects upon which expert testimony is permissible. This first question may be divided into two parts: (a) whether the subject matter of the opinion is such that a person without instruction or experience in the area of knowledge will assume an experience would be able to form a sound judgment on the matter without the assistance of witnesses possessing special knowledge or experience in the area, and (b) whether the subject matter of the opinion forms part of a body of knowledge or experience which is sufficiently organised or recognized to be accepted as a reliable body of knowledge or experience, a special acquaintance with which by the witness would render his opinion of assistance to the Court. The second question is whether the witness has acquired by study or experience sufficient knowledge of the subject to render his opinion of value in resolving the issues before the court.”
The questions which have to be considered before deciding upon the admissibility of this evidence are these. First whether the jury could, without instruction or experience, form a sound judgment on the question of the appellant’s trusting nature without the assistance of a witness, namely Mr Hare. Secondly whether the subject matter of the opinion namely the sympathetic and trusting nature of a person forms part of a body of knowledge or experience which is sufficiently organised or recognised to be accepted as a reliable body of knowledge or experience. Thirdly, whether this witness, Mr Hare, has acquired by study or experience, sufficient knowledge to render his opinion of value in resolving the issues before the Court.
The first question, it seems to me, is to be answered by way of ordinary common sense judgment. In my opinion, a jury could make that assessment without the necessity of obtaining expert evidence from someone possessing special knowledge or experience in the area. This evidence is different from that considered by the High Court in Murphy v The Queen (1989) 167 CLR 94. There the psychologists evidence related to the ability of the accused to use the expressions attributed to him by the police in an interview. That was a matter, as the majority decided, which admitted of expert evidence. In that case the expert evidence could build on lay observations [112].
This evidence was more like that rejected by the Court of Criminal Appeal in New South Wales in R v Edith Quesada (2001) 122 A Crim R 218. In that case the Court rejected evidence sought to be adduced from a psychologist that “somebody who has the background and who goes through what Ms Quesada says she went through on that day (would) be likely to have a different reaction to questioning than might somebody who was well versed with Australian culture and who was entirely familiar with the English language” at 233. In that case the prosecution case was that the accused had lied to the police.
Jurors do not need to be told by psychologists that trusting people may become the victims of manipulative people. Jurors know that. It was a question for the jury to determine whether the appellant was a warm sympathetic person and whether as a result he had more easily been manipulated by Mr Campillo or others.
The second question can only be answered upon an assessment of evidence. In this case no attempt was made to lead evidence to establish that there was a body of knowledge or experience of the kind which would allow an opinion to be offered. Nor was any evidence led as to the third question that Mr Hare has acquired by study or experience, sufficient knowledge of the subject matter to render his opinion of value.
The appellant needed to establish, in my opinion, that a psychologist can give evidence that a person’s trusting nature and readiness to forgive may place him at risk of being taken advantage of in personal relationships. In my opinion, the appellant has failed to establish that matter.
This evidence should not be admitted because no evidence was led by the appellant to explain why this evidence had not been previously obtained. It also should not be admitted because, in my opinion, it does not qualify as expert evidence.
In those circumstances, this appeal should be determined in accordance with the evidence presented at trial.
For the reasons I have already given, in my opinion, the appeal should be dismissed.
GRAY J Mr Zotti was convicted following a jury trial on nine counts of disposing of money suspected of being proceeds of crime contrary to section 82 of the Proceeds of Crime Act 1987 (Cth). Mr Zotti has appealed from his convictions.
Section 82 of the Proceeds of Crimes Act provides:
“(1)A person who, after the commencement of this Act, receives, possesses, conceals, disposes of or brings into Australia any money, or other property, that may reasonably be suspected of being proceeds of crime is guilty of an offence against this section punishable, upon conviction, by:
(a)if the offender is a natural person - a fine not exceeding $5,000 or imprisonment for a period not exceeding 2 years, or both;
or
(b)if the offender is a body corporate - a fine not exceeding $15,000.
(2)Where a person is charged with an offence against this section, it is a defence to the charge if the person satisfies the court that he or she had no reasonable grounds for suspecting that the property referred to in the charge was derived or realised, directly or indirectly, from some form of unlawful activity.”
During the course of summing up the trial judge addressed the elements of the alleged offences and the burden of proof:
“Secondly, the second element is, that the prosecution, if this is proved must show that the money is reasonably suspected of being the proceeds of crime. So you the jury have to have a reasonable suspicion that that money which was sent off in relation to each count was the proceeds of crime. That fact does not have to be proved beyond reasonable doubt, namely, that it was the proceeds of crime. You as a jury merely have to have a reasonable suspicion about it.
I also direct you in relation to that element of the reasonable suspicion that you have to have, the suspicion has to be that it came from the importation of illicit drugs, not just any unlawful activity. You, using objective standards as a jury have to reasonably suspect that that money which was sent overseas in relation to each count is reasonably suspected of having been the proceeds of crime, namely the importation of illicit drugs. ....
If those two elements are shown to exist, one being proved, beyond reasonable doubt, namely the telegraphic transfers, and one by a reasonable suspicion that you hold about that money, then the onus shifts to the accused. The ball passes to him. The accused then has to satisfy you that he did not suspect that this money came from some form of unlawful activity. He has to prove that to you.”
Mr Zotti complained that the trial judge incorrectly directed the jury that the existence of a reasonable suspicion that the monies were proceeds of crime need not be proved beyond reasonable doubt. It was submitted that the reasonable suspicion must be proved beyond reasonable doubt.
It was accepted on appeal that it was for the jury to determine whether the money found in the possession of Mr Zotti may have reasonably been suspected to be the proceeds of crime. The reasonable suspicion must be determined by an objective criterion.
In Brown[7] Olsson J summarised the scheme of the legislation as follows:
“In my view the scheme of the Act is clear. Subsection (1) [of section 82 of the Proceeds of Crimes Act] undoubtedly erects a purely objective test. Once it is shown that there has been a relevant receiving, possession, concealment or disposal of property that may reasonably be suspected of being proceeds of crime, then an offence has, prima facie, been committed. The Act clearly follows the same scheme as that found in s 527c of the Crimes Act 1900 (NSW); and the reasoning enunciated in authorities such as Ex parte Patmoy; Re Jack (1944) 44 SR (NSW) 351, English (1989) 17 NSWLR 149; 44 A Crim R 273 and Anderson v Judges of District Court (NSW) (1992) 27 NSWLR 701; 62 A Crim R 277 (Anderson) is clearly applicable. The existence of the requisite suspicion is, of course, determined not by reference to the subjective beliefs of the police at the time, but according to an objective criterion of reasonableness applied by the court before whom the accused stands charged, in light of the proven facts and circumstances.”
[7] (1994) 72 A Crim R 527 at 538
The origins of section 82 of the Proceeds of Crime Act were recounted by Hunt CJ in R v Buckett[8]:
“It is agreed by the parties to this appeal that the origin of s 82 is to be found in the old offence of goods in custody (now described as things in custody); (Act 19 Victoria No 24 1855 s 1; Police Offences Act 1901 (NSW) s 27; Summary Offences Act 1970 (NSW) s 40; Crimes Act 1900 (NSW) s 527C; there are similar legislative provisions in other States), and that it should be interpreted in accordance with the decisions relating to that offence. In my view, that approach is correct. The phrase ‘may reasonably be suspected of being stolen or unlawfully obtained’ in the various statutory formulations of the offence of goods in custody is now interpreted as being attached in an objective sense to the goods (or things) in custody themselves, and not as requiring proof by the prosecution that either the arresting officer or the person in whose custody they are had such a suspicion; whether or not the goods are such that they may reasonably be suspected of being stolen or unlawfully obtained is determined by the court upon the state of the evidence available at the time of the trial rather than that which was available to the arresting officer: Ex parte Patmoy; re Jack (1944) 44 SR(NSW) 351 at 356; Cleary v Hammond [1976] 1 NSWLR 111 at 116-117; R v Abbrederis [1981] 1 NSWLR 530 at 539-41; R v English (1989) 17 NSWLR 149 at 153; 156; Anderson v Judges of the District Court of New South Wales (1992) 27 NSWLR 701 at 714-15; R v Chan (1992) 28 NSWLR 421 at 425, 433, 435-6.”[9]
[8] (1995) 132 ALR 669 at 675
[9] It has been noted that the decisions in Tween and Tepper did not appear to have been referred to the courts in Anderson and Buckett.
The words of section 82 of the Proceeds of Crimes Act include the phrase “reasonably be suspected” preceded by the word “may”. The concept of suspicion has been the subject of considerable judicial comment. It has been said to mean or to refer to “a state of conjecture”, “surmise where proof is lacking”, “suspect but cannot prove”, “a slight opinion but without sufficient evidence”, “a positive feeling of actual apprehension”, and “something short of a belief”.

In Homes v Thorpe[10] Angas Parsons J said:
“According to the plain meaning of the words there is therefore a clear distinction between things that are ‘suspected’ of having a certain quality or characteristic, namely, in this case, of having been stolen or unlawfully obtained, and things which are believed to have this peculiarity. The gradation in mental assent is ‘suspicion’ which falls short of belief, ‘belief’ which approaches to conviction, and knowledge which excludes doubt.”
[10] [1925] SASR 286 at 291
In George v Rocket[11] Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ considered the state of mind of suspicion: albeit in a different context:
“In considering the sufficiency of a sworn complaint to show reasonable grounds for the suspicion and belief to which s 679 [of the Criminal Code Qld] refers, it is necessary to bear in mind that suspicion and belief are different states of mind (Homes v Thorpe; Seven Seas Publishing Pty Ltd v Sullivan) and the section prescribes distinct subject matters of suspicion on the one hand and belief on the other.
...
Suspicion, as Lord Devlin said in Hussien v Chong Fook Kam, ‘in its ordinary meaning is a state of conjecture or surmise where proof is lacking: ‘I suspect but I cannot prove.’ The facts which can reasonably ground a suspicion may be quite insufficient reasonably to ground a belief, yet some factual basis for the suspicion must be shown. In Queensland Bacon Pty Ltd v Rees, a question was raised as to whether a payee had reason to suspect that the payer, a debtor, ‘was unable to pay [its] debts as they became due’ as that phrase was used in s 95(4) of the Bankruptcy Act 1924 (Cth). Kitto J said :
‘A suspicion that something exists is more than a mere ideal wondering whether it exists or not; it is a positive feeling of actual apprehension or mistrust, amounting to ‘a slight opinion, but without sufficient evidence’, as Chambers’s Dictionary expresses it. Consequently, a reason to suspect that a fact exists is more than a reason to consider or look into the possibility of its existence. The notion which ‘reason to suspect’ expresses in sub-s (4) is, I think, of something which in all the circumstances would create in the mind of a reasonable person in the position of the payee an actual apprehension or fear that the situation of the payer is in actual fact that which the subsection describes - a mistrust of the payer’s ability to pay his debts as they become due and of the effect which acceptance of the payment would have as between the payee and the other creditors.’
The objective circumstances sufficient to show a reason to believe something need to point more clearly to the subject matter of the belief, but that is not to say that the objective circumstances must establish on the balance of probabilities that the subject matter in fact occurred or exists: the assent of belief is given on more slender evidence than proof. Belief is an inclination of the mind towards assenting to, rather than rejecting, a proposition and the grounds which can reasonably induce that inclination of the mind may, depending on the circumstances, leave something to surmise or conjecture.”
[11] (1990) 170 CLR 104 at 115
The use of the word “may” as opposed to “is” supports the view that the legislature intended that the ordinary meaning of suspect or suspicion, namely conjecture, surmise, or something less than proof be utilised. The concepts of beyond reasonable doubt and a reasonable suspicion are inconsistent. A reasonable suspicion is something less than a belief, and a belief is something less than satisfaction beyond reasonable doubt. This construction necessarily leads to the conclusion that it would be incongruous to speak of a jury being satisfied beyond reasonable doubt of a reasonable suspicion. This incongruity was identified by the Victorian Full Court in R v Tween[12], and in the South Australian Full Court in Tepper v Kelly[13].
[12] [1965] VR 687
[13] (1988) 47 SASR 271
In Tween, the Court was concerned with the construction of section 317(4) of the Crimes Act 1958 (Vic). The subsection relevantly provided:
“Any person who makes or knowingly has in his possession or under his control any explosive substance, under such circumstances as to give rise to a reasonable suspicion that he is not making it or does not have it in his possession or under his control for a lawful object shall, unless he can show that he made it or had it in his possession or under his control for a lawful object, be guilty of an indictable offence, ...”
Sholl J considered that in addressing reasonable suspicion the proper question for the jury, if satisfied beyond reasonable doubt of the circumstance relied on by the prosecution was - Do we as reasonable men all think that on those facts, one hypothesis open is that of guilty possession? Sholl J considered that reasonable suspicion did not have to be proved beyond reasonable doubt. He took the view that such a proposition was highly complex and confusing. He considered that the requisite standard was simply that of reasonable opinion. His Honour reasoned[14]:
“I do not find it easy to comprehend the notion involved in a direction that the Crown must prove beyond reasonable doubt that the circumstances give rise to a reasonable suspicion of guilt. If a given set of facts gives rise to a reasonable suspicion of guilty possession, it is because guilty possession is one hypothesis open to reasonable minds upon those facts. It may, as I have said, be one of a number, the others being consistent with innocence. To say that the prosecution must establish beyond reasonable doubt that the circumstances proved give rise to a suspicion of guilt seems to me to involve the highly complex and confusing proposition that it must prove that there is no hypothesis reasonably open from the facts proved except the hypothesis that one possible hypothesis is that of suspicion. True, this is at one remove, so to speak, from proof of actual guilt, and is not, in strict logic, the same thing as proving that there is no hypothesis really open except one of guilt. But in my opinion, it introduces unwarranted and unnecessary confusion into the subject to speak of proving beyond reasonable doubt that to reasonable persons one hypothesis open is that of guilt. It is true that the jury must form an opinion, according to some standard, but the circumstances proved give rise to such reasonable suspicion, but, in my opinion, the standard is merely that of reasonable opinion, and the proper question which they should ask themselves is, if they are satisfied beyond reasonable doubt of the circumstances relied on by the prosecution, ‘Do we as reasonable men all think that on those facts one hypothesis open is that of guilty possession?’ I think juries should be so directed. For, if I may respectfully say so, it is inappropriate to introduce at that point the notion of proving beyond reasonable doubt merely that there is room for a particular hypothetical opinion. It involves, I think, too literal an application of the principle that the Crown must prove beyond reasonable doubt the elements of a criminal charge.”
[14] [1965] VR 687 at 693
Winneke CJ did not expressly address the issue[15]:
“In my opinion, the sub-section upon its proper interpretation requires proof by the Crown, first, that the accused was knowingly in possession of the explosive substance charged and, secondly, that the possession was under such circumstances as to give rise to a reasonable suspicion that he did not have it in his possession for a lawful object: see R v Hallam, [1957] 1 QB 569; [1957] 3 All ER 566, and Archbold, 35th ed, p 920. The second requirement , in my view, is descriptive of an incident of the possession necessary to give rise to the offence. It must, I think, be a possession in circumstances which are capable of giving rise to the suspicion specified in the section. In other words, any circumstance relied upon by the prosecution must be related to or connected with the possession charged in such a way as to leave it open to a jury to find that such circumstance, either by itself or in conjunction with other relevant circumstances, gives rise to the suspicion specified. In my opinion, proof by the Crown of both the above mentioned requirements is necessary before the onus placed on the accused by the sub-section arises.”
[15] [1965] VR 687 at 689
The reference to “both the above mentioned requirements” appears to be to the accused being knowingly “in possession” and to the “circumstances” that are said to give rise to a reasonable suspicion. The remarks do not suggest that the reasonable suspicion must be proved beyond reasonable doubt.
Pape J spoke of the Crown having to prove beyond reasonable doubt the existence of circumstances which are capable of raising a reasonable suspicion[16]:
“It is to be observed that s 317 (4) of the Crimes Act 1958 places the onus of showing possession of explosive substances for a lawful object upon the accused. He is, however, not called upon to discharge this onus (which he must do on a balance of probabilities only: Sodeman v R (1936), 55 CLR 192, per Dixon J, at p 216; [1936] ALR 156), unless the Crown first proves beyond reasonable doubt his possession of the explosive substances, and that he knew that they were explosive substances: R v Hallam, [1957] 1 QB 569; [1957] 3 All ER 566. Furthermore, the Crown must also prove beyond reasonable doubt the existence of circumstances which are capable of raising a reasonable suspicion that the possession of such explosive substances was not for a lawful object, and the connexion of the accused with such circumstances. But it is not necessary for the Crown to prove that the circumstances are consistent only with suspicion, for once the Crown has laid the appropriate foundation the section casts on the accused the burden of proving that his possession was for a lawful object.
It is for the jury to say, once circumstances capable of arousing a reasonable suspicion are proved, whether such a suspicion arises and (if they are satisfied that it does) whether that suspicion has been dissipated by the explanation given by the accused for his possession. Since the existence of a reasonable suspicion from the circumstances is an ingredient of the offence charged, it follows that this must be proved by the Crown beyond reasonable doubt. If the jury are left in doubt as to whether they have such a reasonable suspicion, the accused is entitled to the benefit of that doubt, and they need not then consider whether he has satisfied them on a balance of probabilities that his possession was for a lawful object. To place the burden on the Crown of proving beyond reasonable doubt the existence of a reasonable suspicion is not equivalent to saying that the Crown must prove beyond reasonable doubt that the suspicion is well founded, for at this stage of the jury’s inquiry they should be directed to consider the matter without reference to the accused’s explanation. Unless reasonable suspicion is established there is no need for explanation.”
[16] [1965] VR 687 at 701
Pape J was of the view that the circumstances which are capable of arousing a reasonable suspicion must be proved but that the Crown do not have to prove that the circumstances are consistent only with suspicion. His Honour concluded that it is for a jury to say whether a reasonable suspicion arises. The suspicion either arises or it does not.
In Tepper v Kelly[17] at first instance Cox J considered the construction of section 41 of the Summary Offences Act 1953 (SA). Section 41 provides:
“(1)Any person who has in his possession any personal property which either at the time of such possession, or at any subsequent time before the making of a complaint under this section in respect of such possession, is reasonably suspected of having been stolen or unlawfully obtained shall be guilty of an offence.
...
(2)It shall be a defence to a charge of an offence under this section to prove that the defendant obtained possession of the property honestly ...”.
[17] (1987) 45 SASR 340
Cox J stressed that the underlying grounds or reasons founding the suspicion must be proved beyond reasonable doubt.
“Because of the special nature of s 41 the courts have properly required strict proof of the ingredients of the charge and have examined with care the basis for the suspicion alleged by the prosecutor. Factual elements - most important, the possession and the suspicion - have to be established beyond reasonable doubt. However, it is not appropriate, in my view, to speak of the reasonableness of the suspicion being established beyond reasonable doubt. It is for the court to form a judgement as to whether any suspicion, duly proved, should properly be characterised as a reasonable suspicion. Unless the complainant satisfies the court that the suspicion was reasonable the charge will not have been made out, so in that sense it is apt to speak of the complainant carrying the burden of satisfying the court of the reasonableness of the suspicion. But the court’s judgment or opinion in that respect, as distinct from the proof of the underlying grounds or reasons, cannot be graded by reference to the standards of proof applicable in different jurisdictions to contested facts. A suspicion is either reasonable or not reasonable. To contrast (as the learned magistrate did here) a suspicion that is reasonable on the balance of probabilities and a suspicion that is reasonable beyond reasonable doubt is to misconceive the requirements of the section.”[18]
[18] (1987) 45 SASR 340 at 343
The Full Court upheld Cox J’s decision and gave support to his analysis. White J with the agreement of von Doussa J said[19]:
“[Cox J] then proceeded to analyse certain cases which distinguished between the satisfaction by proof beyond reasonable doubt of the court as to the facts upon which the suspicion was said to be based and the formation of a judgment or opinion by the court as to the reasonableness of that suspicion. His Honour concluded:
‘It was enough for him to find, as indeed he expressly did, that it was reasonable for Marks to be suspicious. The test that he went on to apply, whatever precisely it meant, obviously led him in some way to a different result. The error, then, was decisive.’
With respect, I agree that the court’s judgment or opinion as to the reasonableness of the suspicion ‘cannot be graded by reference to the standards of proof applicable ... to contested facts. A suspicion is either reasonable or not reasonable.’ To state these propositions is to state the obvious. It is incongruous, even tautologous, in my opinion, to speak of ‘proof’ beyond reasonable doubt of the reasonableness of a suspicion because reasonableness is a matter of opinion or judgment, not proof. That disposes of the onus of proof point.”
[19] (1988) 47 SASR 271 at 273
In Anderson v Judges of the District Court of New South Wales[20] the Court of Appeal considered the interpretation of section 527c (1) of the Crimes Act1900 (NSW). Section 527c(1) provides:
“(1) Any person who;
(a) has anything in his custody; ...
which thing may be reasonably suspected of being stolen or otherwise unlawfully obtained, shall be liable on conviction before a stipendiary magistrate to imprisonment for 6 months, or to a fine of $500.
(2)It is a sufficient defence to a prosecution for an offence under subsection (1) if the defendant satisfies the court that he had no reasonable grounds for suspecting that the thing referred to in the charge was stolen or otherwise unlawfully obtained.”
[20] (1992) 27 NSWLR 701 at 714-15
Kirby P (with whom the other members of the Court agreed) reasoned[21]:
“... the section under which the claimant was charged is an exceptional one. It has stood in our law, in varying forms, for a very long time. Attention must be drawn to the qualified mental element which must be established in order to attract the operation of the section. It is enough that it is shown that the thing in custody ‘may be reasonably suspected of being ... unlawfully obtained’. The word ‘may’ falls short of ‘is’. The word ‘suspected’ falls short of ‘known’ or even ‘convinced’ or ‘shown’. In another context it has been said that ‘suspicion’ is a state of conjecture or surmise when proof is lacking: see George v Rockett (1990) 170 CLR 104 at 115f. The suspicion must, it is true, be ‘reasonably’ held. It must be determined not according to the subjective beliefs of the police at the time but according to an objective criterion determined by the Court before whom the accused stands charged: see R v English (at 153); Ex parte Patmoy; Re Jack (1944) 44 SR (NSW) 351 at 356.
...
As was observed during argument, there is an ambivalence in the section. The preconditions must, as in any other criminal offence, be established beyond reasonable doubt. How a level of thought which is qualified by what ‘may’ be (and does not need to reach beyond what is ‘suspected’) can be established beyond reasonable doubt is not entirely clear. But the section exists and has survived for more than a century in substantially the same form. It can apply to banknotes. It must therefore be given meaning. Presumably the criminal onus and the words of the section must be reconciled by saying that the court before which the person is charged must be satisfied beyond reasonable doubt that the circumstances are such that the thing in question may reasonably be suspected of being stolen or otherwise unlawfully obtained.”
[21] (1992) 27 NSWLR 701 at 714
Kirby P identified the difficulty raised by the section. He recognised the importance of reconciling the criminal onus with the words of the section. Reconciliation was achieved by requiring satisfaction beyond reasonable doubt “that the circumstances are such” that the reasonable suspicion may arise. The circumstances must be proved. The jury then either has the requisite state of mind or it does not.
In Buckett, Hunt CJ (with the agreement of McInerney and Bruce JJ) considered section 82 of the Proceeds of Crimes Act:
“As with the offence created by s 82, the offence of things in custody as it is presently formulated in s 527C of the Crimes Act provides a defence to the person charged if he satisfies the court that he had no reasonable grounds for suspecting that the things in his custody were stolen or otherwise unlawfully obtained. The effect of this statutory framework is thus that the state of knowledge of the person charged as to the provenance of the things in his custody is irrelevant to the prosecution case; but if the court is satisfied beyond reasonable doubt upon the state of the evidence before it that those things may reasonably be suspected of being stolen or otherwise unlawfully obtained, the person charged must, in order to escape conviction, discharge the lesser civil onus upon him of satisfying the court that he had no reasonable grounds for suspecting that they were stolen or unlawfully obtained: Ex parte Patmoy; Re Jack (at 356); Tegge v Caldwell (1988) 15 NSWLR 226 at 227-8; Anderson v Judges of the District Court of New South Wales at 716-17.”[22]
[22] (1995) 132 ALR 669 at 675
I do not understand Hunt CJ to be departing from the reasoning advanced in Anderson which for all relevant purposes accords with the reasoning of Cox J and the Full Court in Tepper and the Victorian Court in Tween.
More recently in Gazepis v Police[23] the question of burden of proof under s 41 of the Summary Offences Act was considered. Doyle CJ (with whom Lander and Bleby JJ agreed) said:
“It was not necessary for [the detective’s] suspicion to be entertained or to be established beyond reasonable doubt. All that was required was that, under the circumstances, the suspicion be a reasonable one: Tepper v Kelly (1988) 47 SASR 271. The suspicion that he entertained need not be the only suspicion that might be entertained under the circumstances: R v Chan (1992) 28 NSWLR 421 at 424E, per Mahoney JA, (at 426F) Hunt CJ at CL and (at 440C) Abadee J.”
[23] (1997) 70 SASR 121

Chan concerned an offence against s 527C of the Crimes Act (NSW). The Court in Chan applied Anderson. Doyle CJ saw no tension between Chan and the reasoning in Tepper.
It is to be recalled that in Brown Olsson J referred to the reasoning in Anderson and spoke of the objective criterion of reasonableness being applied by the Court, “in light of the proven facts and circumstances.”
This analysis of the authorities identifies a consistent approach to the interpretation of section 82 of the Proceeds of Crimes Act and comparable State statutes. Such consistency is unsurprising in view of the history of section 82. Although the holder of the suspicion differs between the legislation this is not a persuasive ground for distinguishing the reasoning in Tepper. The critical issue is the relationship between proof beyond reasonable doubt and the holding of a reasonable suspicion.
If there is tension between the reasoning in Tepper and that in Buckett or Anderson, I consider that the reasoning in Tepper is to be preferred. The reasonableness of a suspicion is a matter of judgment or opinion. As White J said:
“It is incongruous, ... to speak of ‘proof’ beyond reasonable doubt of the reasonableness of a suspicion because reasonableness is a matter of opinion or judgment, not proof.”
It does not appear that the New South Wales courts were referred to the decisions in Tween and Tepper.
The Crown carries the burden of proving the circumstances that may give rise to a reasonable suspicion beyond reasonable doubt. The ultimate conclusion whether “any property may reasonably be suspected of being proceeds of crime” is to be determined by the jury. The jury either has the requisite opinion or it does not. By this process the provisions of the statutes are reconciled with the criminal burden of proof. The trial judge did not misdirect the jury with respect to the onus of proof in Mr Zotti’s trial.
Otherwise I agree with the reasons of Lander J for rejecting the submissions advanced by the appellant.
LIST OF CITATIONS AS THEY APPEAR IN THE JUDGMENT
1 (1994) 72 A Crim R 527 at 538
2 (1995) 132 ALR 669 at 675
3It has been noted that the decisions in Tween and Tepper did not appear to have been referred to the courts in Anderson and Buckett.
4 [1925] SASR 286 at 291
5 (1990) 170 CLR 104 at 115
6 [1965] VR 687
7 (1988) 47 SASR 271
8 [1965] VR 687 at 693
9 [1965] VR 687 at 689
10[1965] VR 687 at 701
11 (1987) 45 SASR 340
12 (1987) 45 SASR 340 at 343
13 (1988) 47 SASR 271 at 273
14 (1992) 27 NSWLR 701 at 714-15
15 (1992) 27 NSWLR 701 at 714
16 (1995) 132 ALR 669 at 675
17 (1997) 70 SASR 121

[2002] SASC 164

24 May 2002