Yu v New Zealand Customs Service
[2015] NZHC 539
•24 March 2015
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CRI-2014-404-000332 [2015] NZHC 539
BETWEEN XIAOSHENG YU
Appellant
AND
NEW ZEALAND CUSTOMS SERVICE Respondent
Hearing: 17 March 2015 Counsel:
D P H Jones QC for the Appellant
L M Mills for the RespondentJudgment:
24 March 2015
INTERIM JUDGMENT OF DUFFY J
[re Appeal Against Conviction and Sentence]
This judgment was delivered by Justice Duffy on 24 March 2015 at 12.00 pm, pursuant to
r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Date:
Counsel: D P H Jones QC, Auckland
Solicitors: Meredith Connell, Auckland
YU v NZ CUSTOMS SERVICE [2015] NZHC 539 [24 March 2015]
[1] After a defended hearing in the District Court, the appellant, Mr Yu, was convicted for failing to report cash moved out of New Zealand. Judge Paul refused to discharge Mr Yu without conviction. He now appeals against his conviction and sentence. The appeal is opposed.
[2] During the course of the appeal hearing, Mr Yu’s counsel sought an adjournment to enable him to apply to adduce fresh evidence relating to the appeal against the refusal to discharge without conviction. An appeal against a refusal to discharge without conviction is actually an appeal against conviction and sentence. So, the request for an adjournment entailed adjourning the conviction appeal part- heard. This was done on the basis that I would deliver an interim judgment on the other aspects of the conviction appeal. I now do so.
[3] The interim judgment determines the conviction appeal insofar as it is based on the grounds that Judge Paul erred in concluding that the charge was valid, and erred in finding that Mr Yu did not have a reasonable excuse for not making a cash report.
Background facts
[4] In the District Court, Mr Yu faced one charge of attempting to move cash out of New Zealand over the applicable threshold without making a cash report, contrary to s 106 of the Anti-Money Laundering and Countering Financing of Terrorism Act
2009 (“the Act”). He was fined $800, plus Court costs.
[5] On 13 November 2012, Mr Yu was stopped at Auckland International Airport. He was due to board a flight to Hong Kong, and was accompanied by two travel companions, one of whom was his wife.
[6] Prior to being stopped, Mr Yu had signed a New Zealand passenger departure card and presented it at passport control. His wife had filled out this form for him, which he signed. After passing through security, Mr Yu and his two companions were stopped after a currency detector dog indicated cash was present in their
baggage. The equivalent of NZ$136,452.24 was located between the three passengers. The cash was in Chinese Yuan.
[7] Mr Yu was interviewed by Customs and confirmed that he was the owner of the cash. He stated in his interview that his wife had filled out the departure card for him before he signed it. He confirmed that he did not know that there was a requirement to record cash over $10,000, if cash is taken out of New Zealand. He said that the cash was brought into New Zealand over a period of years and was taken out by him to make a payment on a property in Hong Kong.
[8] The departure cards have printing on each side. One side of the card has a series of questions, and boxes for answers to be inserted. The other side has printed information. On this side, there is advice on the legal requirement to report if you are carrying cash sums in any currency to the value of NZ$10,000 or more out of New Zealand. The departure cards are in the English language only. However, Judge Paul accepted that their equivalent in Chinese characters, as well as posted signs in Chinese characters advising on reporting requirements, is situated in the border control area of the airport.
[9] Mr Yu has travelled to and from New Zealand on more than 30 occasions. In the past, he was found to be entering New Zealand with undeclared cash in excess of
$10,000. When apprehended for the present offence, he admitted to knowing that he could not enter New Zealand with undeclared cash in excess of $10,000. He also admitted that on occasion, he had entered New Zealand without declaring cash sums in excess of $10,000 because it was more convenient for him, given his lack of English.
District Court decision
[10] At the defended hearing, Mr Yu challenged the validity of the charge laid against him. In a reserved decision dated 30 May 2014, Judge Paul found that all elements of the offence as charged were proved beyond reasonable doubt.
[11] Judge Paul canvassed the background facts and considered that the evidence established that Mr Yu failed to declare cash to Customs officers when he presented his passport and departure card. The Judge then said that in light of the decision in Huang v New Zealand Customs Service,1 he was satisfied beyond a reasonable doubt that “the defendant attempted to remove cash out of New Zealand after failing to make the required cash report”.2
[12] The Judge considered the evidence of a Customs officer who said that in
2012, there were translations of the departure cards in Chinese characters and also booklets in Chinese characters to help Chinese people who had difficulties with the English language.
[13] The Judge considered that Mr Yu’s wife had no English capacity and could not have alerted him to any requirement to report cash as set out on the back of the departure card. The Judge found that Mr Yu had adopted a course of action of not declaring money “as a matter of convenience” and that his ability to be aware of the reporting requirements must be equally as manifest as in Huang, given the 30 plus trips he had made in and out of New Zealand.
[14] The Judge held that Mr Yu was well aware of the significance of the $10,000 sum and yet he made no inquiry as to what that number referred to on the departure card. He found that, based on the evidence, a Customs officer had explained to Mr Yu his obligations for reporting cash on entering New Zealand, but also on departing.3
[15] Judge Paul considered that there was information available to Mr Yu which he ignored. The Judge held that there was no reasonable excuse for Mr Yu failing to
declare the cash on departure.
1 Huang v New Zealand Customs Service [2013] NZHC 3277.
2 New Zealand Customs Service v Yu DC Manukau CRI-2013-092-4300, 30 May 2014 at [24].
3 At [48].
Appellant’s submissions
[16] Mr Yu submits that the charge as framed is flawed. In the information, the charge is stated in the following way:
… on 13 November 2012 attempted to move cash over $9,999.99 out of
New Zealand without first making a cash report to a Customs Officer.
[17] Mr Yu accepts that the offence is one of strict liability. He argues that the actus reus of the offence is the failure (without reasonable excuse) to make a cash report. He says that the act of moving cash out of the country in excess of the threshold amount is not part of the actus reus, as the taking of cash out of New Zealand is not prohibited per se. Instead, the removal of cash in excess of the threshold amount is merely the trigger that sets in motion the requirement to report. He argues that the charge in the information is flawed as:
(a) The “attempt” as set out in the charge relates to moving cash out of New Zealand, which is not the actus reus of the offence under s 106; and
(b)An “attempt” necessarily means the full offence has not been committed, whereas here, the offence is complete once the passenger passes through Customs control without making a cash report (in the absence of a reasonable excuse). Thus, there can be no “attempt” alleged in the present case.
[18] Mr Yu relies on the decision R v G,4 where the Court of Appeal discussed the concept of attempt liability through omission. At [51] of the judgment, the Court of Appeal acknowledged that there are some offences:
… which cannot by their nature be attempted by omission. Simester and
Brookbanks Principles of Criminal Law summarise the position as follows:
4 R v G [2013] NZCA 146.
[Attempt liability through omission] applies in those rare cases where a result crime may be committed by an omission. However, it will not apply where the offence charged alleges a simple omission that does not require any consequences for its commission. For example, it would not normally be possible to be convicted of the offence of attempting to fail to stop after an accident, or of attempting to fail to permit a blood specimen to be taken. In such cases, D’s omission constitutes not merely an attempt but a successful commission of the full offence. There is no middle ground.
[19] At [52], the Court of Appeal also referred to Adams on Criminal Law and an article cited in Adams by GJ Maloney in which Maloney stated:
In principle, where a result crime can be committed by an omission, then an attempt to commit that crime by failure to act is possible. For example, if D having a duty of care for V, intends to kill V by starvation but the plan is stopped before V dies, D is, and should be, liable for attempted murder. This analysis cannot apply, however to crimes of mere omission not requiring any consequences for their commission … Certain statutory crimes of mere omission also fall into this class.
[20] In R v G, the Court of Appeal approved the distinction between a result crime for which there could be attempt liability through omission, and conduct crimes for which there could be no such liability. In the latter case, a person either does what is required of him or her, or fails to do it. There can be no such thing as an attempt at failing to conduct oneself in the required way. Mr Yu submits that s 106 of the Act is a conduct crime.
[21] Mr Yu submits that Judge Paul’s reliance on Huang v New Zealand Customs Service in deciding that there was a charge available as framed was wrong as that case did not address the relevant provisions of ss 68 and 70 in the Act.
[22] Mr Yu contends that the offence should have been framed as:
… having moved cash exceeding $10,000 out of New Zealand, failed to file
a report.
[23] Mr Yu argues that the Court must consider the wording of the charge as framed, in which case, as no offence is disclosed at law on the current wording of the charge, it is a nullity and incapable of amendment. Here, he relies on Muirson v
Collector of Customs,5 and Beckhouse v Police.6 He asks this Court to set aside the conviction and to quash the information.
[24] Under the second ground of appeal, Mr Yu submits that the Court was wrong to conclude that the prosecution had proved beyond reasonable doubt that he did not have a reasonable excuse for failing to make a cash report. He contends that he was entitled to rely on his wife to fill out the departure card, as she had a better grasp of English than he, and this was reasonable in the circumstances. He submits further that Judge Paul erred in making a number of findings as to Mr Yu’s knowledge of the reporting obligations.
Respondent’s submissions
[25] The respondent submits that the ordinary meaning of cash being moved out of New Zealand should be adopted and that Parliament did not intend for there to be a special meaning. He argues that the commission of the offence is not complete when a passenger who is moving cash in excess of $10,000 out of New Zealand fails to make a border cash report. This is because at the point of border control at the airport, a passenger will not have left New Zealand and so the cash he is carrying will not have moved out of the country. So, until the cash has been moved out of New Zealand, the offence can only be charged as an attempt. Here, the respondent contends that cash cannot be regarding as having been moved out of New Zealand until it is beyond New Zealand’s territorial borders.
[26] The respondent argues that the actus reus of the offending is the taking of the cash out of New Zealand, in circumstances where the cash report has not been completed. He draws an analogy with sexual violation, where the act of sexual intercourse is not prohibited per se but is an element of the offending.
[27] The respondent submits that there was no reasonable excuse not to report the cash as Mr Yu cannot rely on his wife to fill out his departure card, there were
translations of the departure card available and that passengers are expected to read
5 Muirson v Collector of Customs, [1982] 2 NZLR 506 (HC).
6 Beckhouse v Police HC Auckland A110/03, 28 November 2003.
the front and back of the departure card in full. Further, ignorance of the law can never constitute a reasonable excuse under s 106 of the Act. This is what lies at the core of Mr Yu’s defence, as he contends that neither he nor his wife were properly informed of the legal requirement to report the cash that he was moving out of New Zealand. However, there is no legal requirement that persons must be informed of the legal obligations before they can be found to have breached them.
Appeal against conviction
Approach on appeal
[28] Section 229 of the Criminal Procedure Act 2011 sets out a person’s right to appeal against conviction. Under s 230 of that Act, this is a first appeal from a Judge alone trial.
[29] Under s 232, the High Court can only allow an appeal from a Judge alone trial if it is satisfied that the District Court Judge “erred in his or her assessment of the evidence to such an extent that a miscarriage of justice has occurred”, or that “a miscarriage of justice has occurred for any reason”:
232 First appeal court to determine appeal
(1) A first appeal court must determine a first appeal under this subpart in accordance with this section.
(2) The first appeal court must allow a first appeal under this subpart if satisfied that,—
(a) in the case of a jury trial, having regard to the evidence, the jury's verdict was unreasonable; or
(b) in the case of a Judge-alone trial, the Judge erred in his or her assessment of the evidence to such an extent that a miscarriage of justice has occurred; or
(c) in any case, a miscarriage of justice has occurred for any reason.
(3) The first appeal court must dismiss a first appeal under this subpart in any other case.
(4) In subsection (2), miscarriage of justice means any error, irregularity, or occurrence in or in relation to or affecting the trial that—
(a) has created a real risk that the outcome of the trial was affected; or
(b) has resulted in an unfair trial or a trial that was a nullity.
(5) In subsection (4), trial includes a proceeding in which the appellant pleaded guilty.
[30] As s 232(4) makes clear, not every “error or irregularity” causes a miscarriage of justice.7 The error or irregularity must lead to either of the consequences listed in s 232(4)(a) or (b).
[31] A “real risk” that the outcome was affected exists when “there is a reasonable possibility that a not guilty (or more favourable) verdict might have been delivered if nothing had gone wrong”.8 This standard means that “an appellant does not have to establish a miscarriage in the sense that the verdict actually is unsafe” but that there is a real possibility the verdict would be unsafe.9
[32] In Condon v R, the Supreme Court stated that “it is not every departure from good practice which renders a trial unfair”.10 Unfairness does not necessarily give rise to a nullity;11 there has to be some fundamental procedural error. Examples of such a fundamental error include: a conviction where a court lacks jurisdiction,12 or the charge fails to disclose a criminal offence.13
Law
[33] The relevant sections of the Act provide:
106Failure to report cash over applicable threshold value moved into or out of New Zealand
A person commits an offence if the person fails, without reasonable excuse, to make or cause to be made a cash report, in accordance with subpart 6 of
7 “A miscarriage is more than an inconsequential or immaterial mistake or irregularity”: Matenga v R [2009] NZSC 18 at [30].
8 R v Sungsuwan [2006] 1 NZLR 730 (SC) at [110] per Tipping J.
9 At [110].
10 Condon v R [2006] NZSC 62 at [78].
11 Jago v The District Court of New South Wales (1989) 168 CLR 23 (HCA) at 57 per Deane J, cited by the Supreme Court in Condon v R, above n 10, at [77].
12 R v O (No 2) [1999] 1 NZLR 326 (CA).
13 R v Fonotia [2007] NZCA 188.
Part 2, concerning cash over the applicable threshold value that the person has moved into or out of New Zealand.
[34] Huang v New Zealand Customs Service involved a similar factual scenario. In that case, Mr Huang’s hand luggage was found to contain approximately NZ$420,000. He had failed to report this fact when he dealt with Customs officers in the check-in area and at passport control.
[35] Lang J held that the offence created by s 106 of the Act is one of strict liability and that the prosecution is not required to prove that the defendant intended to commit the offence.14 He noted that that a substantive charge under s 106 requires the prosecution to prove the following elements:15
(a) the defendant has moved cash over the applicable threshold value into or out of New Zealand; and
(b) in doing so the defendant failed to make a cash report in accordance with Sub-Part 6 of Part 2 of the Act; and
(c) the defendant failed to make that cash report without reasonable cause.
[36] As Mr Huang was also charged with attempting to commit an offence under s 106, Lang J had to consider whether it was legally possible to attempt to commit an offence under that section. The Judge held that:16
The omission to make the cash report is a necessary element of the charge, but it does not form the entire basis of the charge. The positive act that leads to the commission of the offence, or the actus reus, is the movement of money into or out of New Zealand. That act may logically amount to an attempt if a defendant takes steps to move money into or out of New Zealand, but for whatever reason is unable to do so.
[37] Further:17
In the present case, however, Mr Huang had taken the cash as far as the departure lounge from which he was to board his aircraft. He was therefore just one step away from moving the cash out of New Zealand. That act must, in my view, be sufficiently proximate to constitute an attempt to move the cash out of New Zealand.
14 Huang, above n 1, at [18].
15 At [20].
16 At [22].
17 At [24]-[25].
If correct, the argument for Mr Huang would lead to startling and absurd results. Two of the stated purposes of the Act are to detect and deter the laundering of money and the financing of terrorism. One of the means by which money may be laundered is by physically moving it out of the country. … Section 106 seeks to promote these purposes by making it an offence to move money into and out of New Zealand without reporting it at the border. If a person attempts to remove money from New Zealand but is intercepted before being able to do so, it makes perfect sense that he or she should be charged with attempting to commit an offence against s 106. It would make no sense, and would defeat the purposes of the Act, if a charge of attempting to commit that offence could not be laid in those circumstances.
[38] With regards to Mr Huang’s state of mind, Lang J said:18
… the prosecution in the present case was required to prove that Mr Huang intended to move the cash out of New Zealand. It was also required to prove that he knew, as a matter of fact, that he had not completed a cash report in respect of the money. It was not necessary for the prosecution to prove that Mr Huang knew that he was required to make a cash report, or that he had even turned his mind to that issue.
[39] I have considered the arguments raised by Mr Yu regarding Lang J’s decision in Huang. Despite the judgment not making any reference to ss 68 and 70 of the Act, I concur with Lang J’s reasoning.
[40] Contrary to Mr Yu’s submission, I consider that the act of moving cash into or out of New Zealand is part of the actus reus of the offence, despite the fact that it is not a prohibited act in itself.
[41] Section 70 provides that the obligation to report cash arises at the same time as when a departure card is presented to a Customs officer. This section does not say that cash is moved out of New Zealand when the obligation to report arises. Indeed, at the point where a departing passenger encounters a Customs officer at Auckland Airport, which was the port of departure for Mr Yu, the passenger has not left New Zealand territory. From that point, the passenger clears security and enters the airport transit lounge, which is still New Zealand territory.
[42] Section s 68(3) of the Act states:
For the purposes of this Act, a person moves cash out of New Zealand if the person takes or sends the cash out of New Zealand.
This definition supports the ordinary meaning of “moves cash out of New Zealand” being adopted. On this view, cash would not be “moved out of New Zealand” until it was taken beyond the territorial limits of New Zealand.
[43] I disagree with Mr Jones’ submission that “the offence under s 106 of failing to report is therefore complete once the passenger has passed through Customs”. The wording of the offence and the subheading before s 106 that states “offences relating to cross-border transportation of cash” make it clear that the section envisages a failure to report the actual transportation of cash out of New Zealand. It is the failure to report, coupled with the movement of the cash abroad that constitutes the actus reus of this offence. It follows that anyone who has carried cash in excess of $10,000 beyond the Customs officer at border control and has failed to make a cash report, but who has not yet reached the point of moving the cash beyond New Zealand’s territorial limits will necessarily have gone far enough to commit an attempt under s 106.
[44] It follows that I would adopt Lang J’s conclusion that there can be an attempt to commit an offence under s 106. Therefore, the charge laid was valid. In my view, the first ground of appeal fails.
[45] Turning to the issue of whether there was a reasonable excuse, I first note that ignorance of the law does not provide an excuse or a defence.19 “Reasonable excuse” does not extend to whether there was a reasonable excuse to be ignorant of law.
[46] I accept that the departure form that the appellant filled out stated “please read the privacy statement on the other side before signing” and did not refer to the obligation to report cash, which was also printed on the other side. Other iterations of the form are more appropriate in that it is worded “please read the reverse of this
card before signing”, or “please tick if you have read and understood the statements
on the back of this card”.
[47] Lang J in Huang, in relation to the reasonable excuse element of the offence, said:20
My earlier conclusions mean, however, that the prosecution only needed to prove that Mr Huang intended to move more that NZ$9,999 out of New Zealand. It could do that regardless of any mistake Mr Huang may have made regarding the advice given on the departure card.
[48] Following this reasoning, whilst the departure card could have been better worded, it does not provide a reasonable excuse to fail to report the movement of cash. The departure card provides advice on the legal requirements for cash reporting. However, ignorance of these requirements cannot provide a reasonable excuse. Thus, any flaws that may have existed as regards the advice on the departure cards cannot provide Mr Yu with a reasonable excuse.
Result
[49] The appeal is unsuccessful as regards proof of the charge.
[50] There remains to be determined the balance of the appeal, which is in relation
to the District Court Judge’s refusal to discharge Mr Yu without conviction.
[51] The appeal is to be reconvened before me for determination of this issue. The Registry is directed to the Minute that I issued on 17 March 2015 setting out procedural directions, should a resumption of the appeal hearing be required.
Duffy J
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