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Supreme Court 19 June 2026

R v Liu

[2026] NSWSC 706

Fraud & dishonestyPublic order & justice offences

Citation: R v Liu [2026] NSWSC 706
Court: Supreme Court of New South Wales
Date: 19 June 2026
Judge(s): McGuire J

Background

The accused is charged on an indictment containing three counts, with trial listed to commence in August 2026. The Crown alleges the accused acted as the Australian principal of an international money laundering syndicate that processed approximately $370 million in proceeds derived from a large-scale cyber-enabled investment fraud. The fraud involved victims being contacted via social media, drawn into fictitious foreign exchange or cryptocurrency trading schemes, and defrauded of funds that were then routed through Australian shell companies before being remitted to China.

Count 1 charged the accused under s 400.2B(6) of the Criminal Code (Cth) with engaging in conduct on two or more occasions during a period from March 2021 to October 2023, in relation to money or property that was the proceeds of general crime, where the total value was $10,000,000 or more. The Crown particularised that conduct as the accused's general supervision and management of the Australian money laundering scheme, relying on that ongoing supervisory role as a "state of affairs" in force during the charge period rather than as a series of discrete transactional acts.

By Notice of Motion filed 16 March 2026, the accused sought to quash Count 1, arguing that as particularised it did not disclose an offence known to the law. The dispute centred entirely on the proper construction of s 400.2B(6) and whether a continuing state of affairs could satisfy its "engages in conduct" and "2 or more occasions" elements.

  • Whether the "engages in conduct" element in s 400.2B(6) of the Criminal Code (Cth) can be satisfied by the existence of a state of affairs that was brought about by the accused's earlier acts or omissions and remained in force during the charge period.
  • Whether an "occasion" on which conduct is engaged in for the purposes of s 400.2B(6) is a specific event at a specific time that occurred during the charge period when that state of affairs was in force.

Decision

Issue 1: Whether a "state of affairs" can constitute "conduct" for s 400.2B(6)

The Criminal Code (Cth) defines "conduct" in s 4.1 as an act, an omission to perform an act, or a state of affairs. The phrase "engages in conduct" is separately defined in the Dictionary as doing an act or omitting to perform an act. The accused argued these definitions should be read disjunctively, such that "engages in conduct" captured only acts and omissions but not states of affairs. McGuire J rejected this construction, following the High Court's decision in Agius v The Queen (2013) 248 CLR 601, which confirmed that one may engage in conduct that is a state of affairs. Reading the definitions disjunctively would produce the absurd result that a state of affairs is a form of conduct but one that is incapable of being engaged in, thereby rendering that limb of the definition meaningless.

Applying standard principles of statutory construction, including that provisions should not be construed so as to render words surplusage, McGuire J held that "engages in conduct" in s 400.2B(6) encompasses a state of affairs that was brought about by the accused's prior acts or omissions and remained in force during the charge period. The strict construction rule for penal statutes was noted but applied only as a rule of last resort in cases of genuine ambiguity. The court found no relevant ambiguity.

Issue 2: What constitutes an "occasion" under s 400.2B(6)

The court then considered what the statute requires when it refers to "2 or more occasions" on which conduct must be engaged in. McGuire J held that, given their ordinary meaning, the words require the Crown to prove that the accused engaged in the state of affairs on at least two specific events at specific times during the charge period when the state of affairs was in force. The "occasions" are not the original acts that created the state of affairs, but rather discrete instances during the charge period at which the accused's engagement in that ongoing state of affairs can be identified. This reading is consistent with the text of the provision and serves the evident purpose of the "2 or more occasions" requirement.

Consequence for Count 1

The court concluded that Count 1, as particularised in the Crown Case Statement, does not fail to disclose an offence known to the law. The Crown will still be required to prove, for each occasion, that the money or property was the proceeds of general crime, that the accused was reckless in that regard, that the accused's engagement concealed or disguised the relevant matters, and that the aggregate value reached the $10,000,000 threshold. The court also noted that, by operation of s 400.2(2), the accused is deemed to have dealt with money if his conduct caused another person to deal with money, provided he was reckless in that regard, so the Crown need not prove the accused personally handled the funds.

Orders Made

  • The accused's Notice of Motion filed 16 March 2026, seeking an order quashing Count 1 on the indictment, is dismissed.

Key Takeaways

  • Under s 400.2B(6) of the Criminal Code (Cth), a "state of affairs" brought about by an accused's prior acts or omissions and remaining in force during the charge period can satisfy the "engages in conduct" element of the offence, following the High Court's confirmation in Agius v The Queen (2013) 248 CLR 601 that one may engage in conduct that is a state of affairs.
  • Reading the definitions of "conduct" and "engages in conduct" in the Criminal Code disjunctively so as to exclude states of affairs from the latter phrase was rejected as producing an absurd result that would render part of the definition of "conduct" incapable of practical operation.
  • An "occasion" for the purposes of s 400.2B(6) is a specific event at a specific time during the charge period when the state of affairs was in force, not the prior act or omission that originally brought the state of affairs into existence.
  • The strict construction rule for penal statutes operates as a rule of last resort only and does not apply where no genuine ambiguity exists in the statutory text, consistent with the High Court's approach in Palmanova Pty Ltd v Commonwealth (2025) 99 ALJR 1362 and Aubrey v The Queen (2017) 260 CLR 305.
  • Section 400.2(2) of the Criminal Code extends liability to a person whose conduct causes another to deal with money, provided the requisite recklessness is established, meaning direct personal handling of funds is not a necessary element of the offence.

Legislation and Cases Referenced

Legislation
- Criminal Code (Cth), ss 4.1, 4.2, 5.2, 5.6, 400.1, 400.2, 400.2B(6), 400.2B(10), 400.3(2B), 400.10, 400.12, 400.13
- Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth), ss 74(1), (1A), (1B), (1C), (2)
- Acts Interpretation Act 1901 (Cth), s 18A
- Crimes Legislation Amendment (Economic Disruption) Bill 2020 (Cth)
- Criminal Code Amendment (Theft, Fraud, Bribery and Related Offences) Act 2000 (Cth)

Cases
- Agius v The Queen (2013) 248 CLR 601; [2013] HCA 27 (considered and followed)
- Agius v The Queen (2011) 80 NSWLR 486; [2011] NSWCCA 119
- Aubrey v The Queen (2017) 260 CLR 305; [2017] HCA 18
- Palmanova Pty Ltd v Commonwealth of Australia [2025] HCA 35; (2025) 99 ALJR 1362
- Director of Public Prosecutions (Cth) v Keating [2013] HCA 20; (2013) 248 CLR 459
- Director of Public Prosecutions (Cth) v Poniatowska [2011] HCA 43; (2011) 244 CLR 408
- SZTAL v Minister for Immigration and