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District Court 6 June 2019

R v Chie

[2019] NSWDC 346

Fraud & dishonesty
CRIMINAL LAW JUDGEMENT JUDGE ALONE TRIAL PROCEEDS OF CRIME VERDICT BY DIRECTION PROVENANCE OF MONEY FOUND

Citation: R v Chie [2019] NSWDC 346
Court: District Court of New South Wales
Date: 6 June 2019
Judge: Hunt DCJ

Background

The accused faced a four-count indictment arising from events on and around 10 November 2017 in the Illawarra region. He had already pleaded guilty to three counts: attempting to possess a commercial quantity of cocaine (a border controlled drug), supplying 85 grams of cocaine, and possessing an unregistered prohibited firearm. Sentencing on those matters was stood over pending the resolution of a fourth, contested count.

Count 3 alleged that the accused possessed $128,400 in cash, knowing it to be proceeds of crime, contrary to s 193B(2) of the Crimes Act 1900 (NSW). The indictment was later amended by consent to refer to "a sum of money" rather than a fixed dollar figure. The matter proceeded as a judge-alone trial before Hunt DCJ.

After the close of the defence case, counsel for the accused applied for a verdict by direction on the basis that the prosecution had failed to particularise the criminal offence from which the cash was said to have been derived. The Crown opposed that application.

  • Whether the prosecution had sufficiently particularised the underlying criminal offence to establish that the money constituted "proceeds of crime" within the meaning of s 193A of the Crimes Act 1900 (NSW).
  • Whether a verdict by direction acquitting the accused was the appropriate remedy for any such failure of particularity.

Decision

Section 193A defines "proceeds of crime" as property substantially derived or realised, directly or indirectly, from the commission of a "serious offence." Hunt DCJ applied binding authority from R v Mackellar (No 3) [2014] NSWSC 106 and Chen v Director of Public Prosecutions (Commonwealth) [2011] NSWCCA 205, both of which establish that the prosecution must identify a particular offence, or particular offences, said to underlie that definition. It is not sufficient to gesture at generic criminal activity.

In this case, the Crown's case statement, opening address, and cross-examination of defence witnesses employed varying and imprecise language, including references to "drug supply crime," "drug dealing enterprises," and "drug dealing activities." The prosecution did not consistently and expressly identify a specific offence, such as drug supply or importation, as the source of the cash. The Crown also cross-examined the accused about other criminal conduct beyond the index offences, including possession of testosterone and weapons, which further blurred the picture of what particular offending was said to underpin the proceeds allegation.

Hunt DCJ concluded that the prosecution had relied on a generic category of "drug activities" rather than meeting its obligation to particularise an identified criminal offence or offences. Drawing on the formulation in Chen, his Honour held that the prosecution is obliged to ensure the particulars of a charge describe the conduct constituting the offence in the specific circumstances of the alleged offending. That obligation had not been met, and natural justice had not been provided to the accused. Accordingly, the court directed itself to enter a verdict of not guilty on count 3.

Orders Made

  • The accused was acquitted of count 3 by direction and a verdict of not guilty was recorded.
  • The accused was discharged in relation to count 3 on the amended indictment.

Key Takeaways

  • A conviction under s 193B(2) of the Crimes Act 1900 (NSW) for possessing proceeds of crime requires the prosecution to identify a particular offence, or particular offences, from which the property is alleged to have been derived. Generic references to criminal activity are insufficient.
  • The District Court applied binding Court of Criminal Appeal and Supreme Court authority confirming that this particularity obligation is a high one: the charge must describe the specific conduct said to constitute the underlying serious offence.
  • Where the prosecution's case statement, opening address, and cross-examination use inconsistent or broadly framed language to describe the alleged underlying offending, that inconsistency can itself contribute to a failure of the particularity requirement.
  • A verdict by direction is the appropriate remedy when the prosecution has failed to meet its particularity obligations in a proceeds of crime charge of this kind.
  • The fact that an accused has pleaded guilty to related drug and weapons offences does not, of itself, cure a failure to particularise which offence or offences the disputed cash is said to have been derived from.

Legislation and Cases Referenced

Legislation
- Crimes Act 1900 (NSW), ss 193A, 193B(2), 193F(1)
- Criminal Code (Cth), ss 307.5, 11.1(1)
- Drug Misuse and Trafficking Act 1985 (NSW), ss 25(1), 29
- Firearms Act 1996 (NSW), s 36(1)
- Criminal Procedure Act 1986 (NSW), ss 132, 132A, 133

Cases
- Chen v Director of Public Prosecutions (Commonwealth) [2011] NSWCCA 205
- R v Mackellar (No 3) [2014] NSWSC 106
- Dean v R [2019] NSWCCA 27
- R v Hall [2013] NSWCCA 47
- Sills v R [2011] NSWCCA 271