Citation: Bazzi v R [2024] NSWDC 491
Court: District Court of New South Wales
Date: 18 October 2024
Judge(s): Scotting DCJ
Background
The appellant was convicted in the Sydney Downing Centre Local Court of dealing with property suspected of being proceeds of crime, specifically $41,840 in cash found in a hotel safe, contrary to s 193C(2) of the Crimes Act 1900. He was arrested in March 2022 after supplying methylamphetamine to an associate outside a Sydney hotel. The cash and a small quantity of drugs were located in the hotel room he was sharing with his partner.
The appellant's defence was that the cash had a legitimate origin. He gave evidence that he received $125,000 in settlement funds from his father following his mother's death in around 1999 or 2000, that he had withdrawn and stored money in cash due to distrust of banks and debt recovery concerns, and that the AFP had seized and later returned approximately $39,700 to him in 2014. His father and his partner also gave evidence supporting aspects of this account.
The magistrate convicted the appellant, expressing concern about inconsistencies in the evidence, but did not expressly reject the evidence of the appellant's father, which he described positively. The appellant appealed the conviction as of right to the District Court.
Legal Issues
- Whether the magistrate erred in finding the cash was proceeds of crime.
- Whether there was sufficient evidence establishing a legitimate source for the money.
- Whether the magistrate applied the correct legal test and onus of proof when assessing the defence case.
Decision
The District Court conducted an independent review of the evidence, as required on a rehearing under s 18 of the Crimes (Appeal and Review) Act 2001. Such an appeal proceeds on the certified transcripts and exhibits from the Local Court; it is not a fresh hearing where new evidence is called.
Scotting DCJ found that the magistrate had failed to apply the correct test or the correct onus of proof. In particular, the magistrate did not properly account for the corroborating effect of evidence that was accepted. Although the magistrate noted some inconsistencies between the appellant's evidence and his father's evidence, he did not reject the father's account. On the contrary, the magistrate described that evidence in glowing terms. Scotting DCJ held that where the critical factual foundation of the defence was accepted, any remaining inconsistencies fell away and could not sustain the conviction.
Several further factors supported the conclusion that the money was not proceeds of crime. The partner's evidence about gambling winnings, accepted by the magistrate, provided an explanation for how the hotel room was funded. Contemporaneous bank records were consistent with drug payments in small quantities of two to three grams, making it unlikely the cash reflected the scale of drug dealing. The relatively small quantities of drugs involved did not support an inference that the $41,840 was generated from those transactions.
On an independent review of all the evidence, Scotting DCJ was satisfied on the balance of probabilities that the appellant had established the money came from a legitimate source. The conviction was set aside.
Orders Made
- Appeal against conviction allowed.
- Conviction and penalty for sequence 006 set aside.
- Forfeiture order relating to sequence 006 set aside.
- Aggregate term of imprisonment varied to 18 months, commencing 15 September 2023 and concluding 14 March 2025.
- Magistrate's order confirmed that the aggregate term is to be served by way of an Intensive Correction Order (ICO), with the conditions imposed by the magistrate.
(Note: The judgment was amended on 29 October 2024 to correct the term of imprisonment in Order 4.)
Key Takeaways
- Under s 193C(2) of the Crimes Act 1900, a prosecution must establish that property was reasonably suspected of being proceeds of crime, but a defendant who raises a legitimate source for that property bears an evidential burden assessed on the balance of probabilities.
- Where a magistrate accepts the critical factual foundation of a defence case, including corroborating evidence from a witness whose account was positively received, inconsistencies in peripheral details between witnesses cannot sustain a conviction.
- A rehearing under s 18 of the Crimes (Appeal and Review) Act 2001 requires the appellate court to conduct an independent review of the evidence on the transcript and exhibits, not merely to assess whether the magistrate's findings were open.
- The District Court found that small transaction volumes and bank records consistent with minor drug purchases can be relevant to whether a larger sum of cash was plausibly derived from the same dealing activity.
- Accepted evidence going to matters such as a defendant's distrust of banks, prior AFP seizure and return of funds, and a specific reason for carrying cash away from home can collectively support a finding of legitimate provenance, even where the defendant is also convicted of related supply offences.
Legislation and Cases Referenced
Legislation
- Crimes Act 1900 (NSW), s 193C(2)
- Crimes (Appeal and Review) Act 2001 (NSW), s 18
- Crimes (Sentencing Procedure) Act 1999 (NSW), s 7(1)
Cases
- AG v Director of Public Prosecutions [2015] NSWCA 218
- Charara v R [2006] NSWCCA 244
- Fox v Percy (2003) 214 CLR 118
- Gianoutsas v Glykis [2006] NSWCCA 137
- Lumney v Director of Public Prosecutions [2021] NSWCA 186
- McNab v Director of Public Prosecutions [2021] NSWCA 298