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Court of Criminal Appeal 3 August 2015

Lin v R

[2015] NSWCCA 204

Fraud & dishonesty
CRIMINAL LAW CRIMINAL CODE (CTH), S 400.9 MONEY LAUNDERING MOTION DISMISSED PURPOSE OF SUB S (2)

Citation: Lin v R [2015] NSWCCA 204
Court: Court of Criminal Appeal, New South Wales
Date: 3 August 2015
Judge(s): Simpson J (leading judgment); R A Hulme J; Bellew J

Background

The appellant was charged on five counts under s 400.9 of the Criminal Code (Cth), which makes it an offence to deal with money or property where it is reasonable to suspect that money or property is proceeds of crime, and the value is $100,000 or more. The charges arose from five separate transfers of money from Australia to a Hong Kong bank account between May and September 2013, totalling approximately $2.845 million.

Before trial, the appellant's solicitors sought particulars from the Director of Public Prosecutions (Cth), specifically asking the prosecution to identify which indictable offence or offences the money was allegedly derived from. The Director declined, maintaining that s 400.9 did not require identification of any such "predicate" offence, and instead indicated reliance on provisions within s 400.9(2) of the Code.

The appellant brought a notice of motion in the District Court seeking that the indictment be stayed or quashed on the basis that it was defective without those particulars. Judge Hoy dismissed the motion. The appellant then sought leave to appeal that interlocutory decision to the Court of Criminal Appeal under s 5F(3)(a) of the Criminal Appeal Act 1912 (NSW).

  • Whether an indictment charging an offence under s 400.9(1) of the Criminal Code (Cth) is defective if it does not identify the class of indictable offences from which the money is alleged to have been derived (that is, the so-called "predicate" offence).
  • What is the purpose and legal effect of s 400.9(2), particularly whether it operates to expand s 400.9(1)(b) or merely addresses the reasonableness of the required suspicion.
  • Whether leave to appeal the interlocutory decision should be granted, and if so, whether the appeal should succeed.

Decision

Simpson J (with whom R A Hulme J and Bellew J agreed) granted leave to appeal but dismissed the appeal, upholding Judge Hoy's dismissal of the motion.

The Court drew a clear distinction between s 400.9 and the preceding money laundering offences in ss 400.3 to 400.8. Those earlier sections create offences involving money that actually is proceeds of crime or will become an instrument of crime. For those offences, the prosecution must identify the class of indictable offences from which the money is derived, even if it need not identify a specific offence or offender. Section 400.9 is different in character: its physical element is dealing with money where it is reasonable to suspect the money is proceeds of crime, an objectively assessed element that does not require proof of an actual predicate offence.

The Court then examined s 400.9(2), which sets out a series of circumstances that, if established, are "taken to satisfy" the element in s 400.9(1)(b). The Court rejected the appellant's contention that sub-s (2) is directed only at the reasonableness of the suspicion required under sub-s (1)(b). Instead, the Court found that sub-s (2) expands the operation of sub-s (1)(b) to encompass conduct that would not otherwise fall within the definition of "proceeds of crime." This means that proof of any one or more of the circumstances in sub-s (2) is sufficient to satisfy the relevant element of the offence, without any need to identify a predicate offence at all.

Applied to the facts, the Director had identified reliance on s 400.9(2)(c) (the value of the money being grossly disproportionate to the appellant's income and expenditure) and s 400.9(2)(e) (the appellant stating the dealings were on behalf of another person but failing to provide details to identify that person). The Court found that particularisation of those sub-section (2) circumstances, rather than identification of a predicate offence, was what the Director was obliged to provide. The indictment was not defective.

Orders Made

  • Leave granted to appeal.
  • Appeal dismissed.

Key Takeaways

  • Section 400.9 of the Criminal Code (Cth) creates a money laundering offence of a different character from ss 400.3 to 400.8: it requires only that it be reasonable to suspect money is proceeds of crime, not proof that the money actually is proceeds of crime.

  • Where a charge is brought under s 400.9, the prosecution is not required to identify the class of indictable offences from which the money is suspected of being derived. That requirement applies to the higher-tier offences under ss 400.3 to 400.8, not to s 400.9.

  • Section 400.9(2) expands the operation of s 400.9(1)(b) by specifying circumstances that are deemed to satisfy it. Proof of any one of those circumstances is sufficient to establish that element of the offence without any reference to a predicate offence.

  • In dismissing the appeal, the Court of Criminal Appeal confirmed that the prosecution's obligation under s 400.9 is to particularise the sub-section (2) circumstances relied upon, not to identify an underlying criminal offence from which the money was derived.

  • An indictment under s 400.9 is not defective merely because it omits any identification of a predicate offence, provided the prosecution identifies the basis upon which the "reasonable suspicion" element is to be satisfied.

Legislation and Cases Referenced

Legislation
- Criminal Code (Cth): ss 4.1, 400.1, 400.2, 400.3, 400.4, 400.5, 400.6, 400.7, 400.8, 400.9, 400.13
- Criminal Appeal Act 1912 (NSW): s 5F(3)(a)
- Crimes Act 1914 (Cth): s 4G
- Financial Transactions Reports Act 1988 (Cth): s 31

Cases
- Ansari v R [2007] NSWCCA 204; 70 NSWLR 89
- Chen v Director of Public Prosecutions (Cth) [2011] NSWCCA 205; 83 NSWLR 224