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Court of Criminal Appeal 21 March 2007

Lee v R

[2007] NSWCCA 71

Also reported as 170 A Crim R 287
Fraud & dishonesty

Citation: Lee v R [2007] NSWCCA 71
Court: New South Wales Court of Criminal Appeal
Date: 21 March 2007
Judge(s): Spigelman CJ; Sully J; Bell J; Howie J; Buddin J

Background

The appellant was convicted in the District Court of offences under s 31(1) of the Financial Transaction Reports Act 1988 (Cth) ("the FTRA"). That provision targets "structuring" conduct, where a person is party to two or more non-reportable cash transactions arranged so that they do not collectively give rise to a reportable "significant cash transaction." The trial was presided over by Shadbolt DCJ.

On appeal, the appellant challenged her conviction on three grounds, broadly concerned with how the offence under s 31(1)(b) of the FTRA interacts with the fault element and proof provisions of the Criminal Code Act 1995 (Cth). The Commonwealth Director of Public Prosecutions appeared for the Crown.

The appeal was argued on 9 February 2007, and special leave to appeal to the High Court was subsequently refused on 31 August 2007.

  • Whether s 31(1)(b) of the FTRA contains one or more physical elements, and how those elements should be classified under the Commonwealth Criminal Code
  • What fault element attaches to the "sole or dominant purpose" component of s 31(1)(b), whether that of intention under s 5.2(3) of the Code, or a separately specified fault element under s 5.1(2)
  • Whether the phrase "it would be reasonable to conclude" in s 31(1)(b) constitutes a different standard of proof under s 13.2(2) of the Code, departing from the ordinary criminal standard

Decision

Physical elements and the "result": The court agreed that s 31(1)(b) contains two physical elements. The first is the conduct of being party to two or more non-reportable cash transactions. The second is the result that those transactions do not give rise to a significant cash transaction within the meaning of the FTRA. This analysis drew on ss 4.1(1)(a) and 4.1(1)(b) of the Code.

The "sole or dominant purpose" component: Spigelman CJ and Sully J differed on how to classify this element, though the practical effect for jury direction was the same. Sully J treated the fault element for the second physical element as intention under s 5.2(3) of the Code. Spigelman CJ disagreed, concluding that "sole or dominant purpose" constitutes a separately specified fault element under s 5.1(2), reflecting an "actuating purpose" rather than a result the accused meant to bring about. Bell, Howie and Buddin JJ sided with the Chief Justice on this point, though they described the difference as more theoretical than practically significant. All members of the court agreed that Judge Shadbolt's direction to the jury, framed in terms of whether the accused's sole or dominant purpose was that described in the section, was correct.

Standard of proof: Sully J concluded that the phrase "it would be reasonable to conclude" in s 31(1)(b) prescribes a different standard of proof, as permitted by s 13.2(2) of the Code. The majority did not need to resolve this issue in detail, and Sully J's reasons on this point stood.

Overall outcome: The court found that none of the appellant's grounds had been made out. Applying its analysis of the fault element and standard of proof provisions, the court dismissed the appeal against conviction.

Orders Made

  • Appeal against conviction dismissed.

Key Takeaways

  • The Court of Criminal Appeal confirmed that s 31(1)(b) of the FTRA contains two distinct physical elements: the conduct of participating in non-reportable transactions, and the result that no significant cash transaction arises.
  • A majority of the court held that "sole or dominant purpose" in s 31(1)(b) is best understood as a fault element separately specified under s 5.1(2) of the Commonwealth Criminal Code, rather than being confined to the general intention concept in s 5.2(3).
  • In dismissing the appeal, the court noted that the difference between Spigelman CJ's and Sully J's approaches carried more theoretical weight than practical significance for directing a jury.
  • Bell, Howie and Buddin JJ indicated that a trial judge directing a jury on s 31(1)(b) need not elaborate extensively on "sole or dominant purpose" beyond its ordinary meaning, provided the direction tracks the language of the section itself.
  • Under s 13.2(2) of the Commonwealth Criminal Code, a statute may prescribe a non-standard proof formulation; Sully J found that "it would be reasonable to conclude" in s 31(1)(b) does exactly this, displacing the usual criminal standard in that specific context.

Legislation and Cases Referenced

Legislation:
- Financial Transaction Reports Act 1988 (Cth), s 31(1)
- Criminal Code Act 1995 (Cth), ss 2.2(2), 4.1(1), 5.1(2), 5.2(3), 5.6, 13.2(2)
- Crimes Act 1914 (Cth)

Cases:
- R v Saengsai-Or (2004) 61 NSWLR 135
- R v Cao (2006) 65 NSWLR 552
- Leask v The Commonwealth (1996) 187 CLR 579
- Question of Law Reserved (No. 2 of 1998) (1998) 70 SASR 502
- R v Leask [1999] NSWCCA 33
- Hannes v Director of Public Prosecutions (Cth) (No. 2) [2006] NSWCCA 373