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Supreme Court 18 February 2014

R v McKellar (No 3)

[2014] NSWSC 106

Fraud & dishonesty
CRIMINAL LAW SPECIAL HEARING CRIMES ACT 1900 (NSW) PT 4AC DEALING WITH PROCEEDS OF CRIME SECTION 192F MEANING OF "PARTICULAR OFFENCE"

Citation: R v McKellar (No 3) [2014] NSWSC 106
Court: Supreme Court of New South Wales
Date: 18 February 2014
Judge(s): Button J

Background

The accused was charged with, among other things, knowingly dealing with proceeds of crime under s 193B(2) of the Crimes Act 1900 (NSW), with a statutory alternative of recklessly dealing with proceeds of crime under s 193B(3). The charge arose from the discovery of $6,057.80 in cash found on the accused at the time of his arrest.

At a special hearing, senior counsel for the accused applied for a verdict by direction on count three of the indictment. A verdict by direction is, in effect, a directed acquittal: the tribunal of fact determines that the evidence is legally insufficient to sustain a conviction and returns a not guilty verdict without further deliberation.

  • Whether there was sufficient evidence that the cash represented proceeds of crime within the meaning of s 193A of the Crimes Act 1900 (NSW)
  • Whether there was sufficient evidence of the requisite mental element (knowledge or recklessness) on the part of the accused
  • Whether s 193F of the Crimes Act 1900 (NSW) relieved the Crown of the obligation to prove that the property was derived from a particular type of offence (as distinct from a particular criminal event)

Decision

Button J rejected the first two grounds for a directed verdict. His Honour found there was a strong circumstantial case that the cash was derived from some form of criminality, and that the evidence was not so bare as to warrant a direction on the mental elements of either the primary offence or the alternative.

The third ground, however, succeeded. The central question was the proper construction of s 193F, which provides that the Crown need not prove a particular offence was committed in relation to the property, nor that a particular person committed that offence. His Honour noted there was no directly applicable NSW authority on this provision.

Button J applied, by analogy, the majority reasoning of the Court of Criminal Appeal in Chen v Director of Public Prosecutions (Cth) [2011] NSWCCA 205. In that case, the majority construed a materially identical Commonwealth provision as relieving the Crown only of proving a particular criminal event (such as a specific robbery at a specific place and time), but not of proving a particular offence (such as armed robbery, as distinct from drug supply or receiving stolen goods).

His Honour found that ss 193B and 193F of the Crimes Act 1900 (NSW) operate in the same way. Although the circumstantial evidence suggested the cash came from serious criminality, there was no evidence linking it to a particular category or type of offence. That deficiency was fatal to the count and its alternative, and Button J returned a verdict of not guilty on both.

Orders Made

  • Verdict by direction of not guilty entered on count three (knowingly dealing with proceeds of crime under s 193B(2))
  • Verdict of not guilty also entered on the alternative count (recklessly dealing with proceeds of crime under s 193B(3))

Key Takeaways

  • Under Part 4AC of the Crimes Act 1900 (NSW), the Crown must prove that property alleged to be proceeds of crime was derived from a particular type of offence (for example, drug supply rather than armed robbery), even though it need not prove a particular criminal event or a particular offender.
  • Section 193F does not operate as a blanket exemption from specificity: its facilitative effect is limited to relieving the Crown of identifying a discrete transaction or individual, not of identifying the category of serious offence underlying the alleged proceeds.
  • The majority reasoning in Chen v Director of Public Prosecutions (Cth) [2011] NSWCCA 205, construing the analogous Commonwealth provision, was applied to the NSW money laundering regime for the first time in this decision.
  • Powerful circumstantial evidence of general criminality is insufficient on its own to sustain a dealing-with-proceeds-of-crime charge where no evidence links the property to a particular category of serious offence.
  • Button J distinguished his own earlier decision in Director of Public Prosecutions (Cth) v Ngo [2012] NSWSC 1521, noting that case concerned a separate Commonwealth offence with markedly different characteristics, and was not applicable here.

Legislation and Cases Referenced

Legislation:
- Crimes Act 1900 (NSW), ss 193A, 193B(2), 193B(3), 193F
- Criminal Code Act 1995 (Cth), Part 10.2 (including ss 400.9(1A) and 400.13)

Cases:
- Chen v Director of Public Prosecutions (Cth) [2011] NSWCCA 205; 253 FLR 164
- Director of Public Prosecutions (Cth) v Ngo [2012] NSWSC 1521; 272 FLR 246