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Court of Criminal Appeal 15 November 2021

Xue v R

[2021] NSWCCA 270

Fraud & dishonesty
WHETHER VERDICTS UNREASONABLE APPEAL DISMISSED

Citation: Xue v R [2021] NSWCCA 270
Court: Court of Criminal Appeal
Date: 15 November 2021
Judges: Beech-Jones CJ at CL; R A Hulme J; N Adams J

Background

The appellant was convicted after a judge-alone trial in the District Court on five counts of dealing with property in circumstances where there were reasonable grounds to suspect it was proceeds of crime, contrary to s 193C(1) of the Crimes Act 1900 (NSW). He was acquitted on a sixth count. The amounts involved across the five convictions ranged from approximately $158,000 to just under $500,000.

The Crown's case centred on evidence that the appellant, operating largely from the People's Republic of China, arranged for a Sydney-based contact to collect large sums of cash from various individuals, deposit the money into a company bank account, and transfer the funds to the appellant's Chinese bank account. The contact gave evidence under a s 128 certificate, meaning he could not be compelled to incriminate himself. Banking records, WeChat message transcripts, and expert forensic accounting evidence were also before the trial judge.

Following conviction, the appellant was sentenced to an aggregate term of three years' imprisonment, served by way of an intensive correction order. He did not seek leave to appeal against the sentence. His appeal targeted the convictions on four grounds.

  • Whether the prosecution was required to particularise the specific "serious offence" from which the funds were alleged to have been derived
  • Whether the trial judge provided adequate reasons for her verdicts
  • Whether the verdicts were unreasonable or unsupported by the evidence
  • Whether the trial judge erred in finding the statutory defence under s 193C(4) was not made out

Decision

Ground 1: Particularisation of a serious offence. The Court of Criminal Appeal held that the Crown is not required to identify any specific serious offence from which the funds were derived in order to make out an offence under s 193C(1). The court drew on the analogous Commonwealth provision in s 400.9 of the Criminal Code (Cth), noting that the statutory scheme under Part 4AC of the Crimes Act was concerned with the objective circumstances of the dealing, not proof of the predicate crime. The broad definition of "serious offence" in s 193A, which encompasses any indictable offence including offences committed outside Australia, supported this interpretation.

Ground 2: Adequacy of reasons. The Court found that the trial judge's reasons were adequate. Her Honour identified the relevant evidence, set out her conclusions, and explained her reasoning sufficiently to allow the appellant to understand why he had been convicted. No error of law was established on this ground.

Grounds 3 and 4: Unreasonable verdicts and the statutory defence. Leave to appeal was granted on these grounds, but both were dismissed. The Court confirmed that the objective test for "reasonable grounds to suspect" is assessed from the perspective of a reasonable person, not the accused's own state of mind. The statutory defence in s 193C(4), on the other hand, depends on the accused's own mental state, and the onus falls on the accused to establish it on the balance of probabilities. The trial judge correctly applied these tests and was entitled to reject the appellant's account, which contained a number of unsatisfactory elements including his explanation of the WeChat exchanges and the nature of his purported business relationship with the Sydney contact. No error in reasoning was demonstrated.

Orders Made

  • Leave to appeal against conviction is granted.
  • The appeal is dismissed.

Key Takeaways

  • Under s 193C(1) of the Crimes Act 1900 (NSW), the prosecution is not required to identify or particularise any specific serious offence from which the relevant property is alleged to have been derived.
  • The objective test for "reasonable grounds to suspect" property is proceeds of crime is assessed by reference to a reasonable person in the circumstances, not the actual state of mind of the accused.
  • The statutory defence under s 193C(4) is concerned with the accused's own state of mind, and the accused bears the onus of establishing that defence on the balance of probabilities.
  • In dismissing the appeal, the Court of Criminal Appeal confirmed that the approach taken in Yacoub v R [2021] NSWCCA 166 applies to the elements of and the defence to the s 193C(1) offence.
  • A broad definition of "serious offence" under s 193A, encompassing indictable offences committed anywhere including outside Australia, supports construing the money-laundering provisions in Part 4AC without requiring particularisation of any predicate offence.

Legislation and Cases Referenced

Legislation:
- Crimes Act 1900 (NSW), ss 193A, 193B, 193C, 193F
- Criminal Appeal Act 1912 (NSW), ss 5, 6
- Criminal Code (Cth), ss 400.1, 400.9, 400.13
- Criminal Procedure Act 1986 (NSW), ss 132, 133
- Evidence Act 1995 (NSW), ss 65, 128, 177, 191
- Confiscation of Proceeds of Crime Act 1989 (NSW)
- Interpretation Act 1987 (NSW), s 12
- Supreme Court (Criminal Appeal) Rules 2021 (NSW), r 4.15

Cases:
- Yacoub v R [2021] NSWCCA 166
- Obeid v R [2017] NSWCCA 221
- Chen v Director of Public Prosecutions (Cth) (2011) 83 NSWLR 224; [2011] NSWCCA 205
- Director of Public Prosecutions (Cth) v Ngo [2012] NSWSC 1521; (2012) 227 A Crim R 287
- Filippou v The Queen (2015) 256 CLR 47; [2015] HCA 29
- Mahmood v State of Western Australia (2008) 232 CLR 397; [2008] HCA 1
- Murray v The Queen (2002) 211 CLR 193; [2002] HCA 26
- Lin v R [2015] NSWCCA 204; (2015) 253 A Crim R 1
- Ford v R [2020] NSWCCA 99
- George v Rockett (1990) 170 CLR 104; [1990] HCA 26