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Court of Criminal Appeal 26 June 2003

REGINA v O'DRISCOLL [2003] NSWCCA 166 revised - 8

[2003] NSWCCA 166

Also reported as (2003) 57 NSWLR 416
Fraud & dishonesty
CRIMINAL LAW APPEAL AGAINST CONVICTION STRUCTURING CASH TRANSACTIONS MEANING OF "TRANSACTION" WHETHER TWO OR MORE NON REPORTABLE CASH TRANSACTIONS

Citation: Regina v O'Driscoll [2003] NSWCCA 166
Court: NSW Court of Criminal Appeal
Date: 26 June 2003
Judge(s): Spigelman CJ, Hulme J, Carruthers AJ

Background

The appellant was convicted in the District Court on two counts of defrauding the Commonwealth and sixteen counts of "structuring" cash transactions under s 31(1) of the Financial Transaction Reports Act 1988 (Cth). The fraud convictions related to his operation of two sham labour hire companies that paid construction workers in cash without deducting tax, retaining a commission of approximately seven percent. The jury accepted that the appellant had been the controller of this scheme over a number of years.

The structuring convictions arose from the appellant's practice of presenting multiple cheques, each for less than $10,000, at the same bank on the same day. The Commonwealth alleged this conduct was designed to evade the reporting obligations that cash dealers are required to fulfil when handling transactions of $10,000 or more.

The appellant appealed against both the structuring convictions and the fraud convictions, raising grounds related to the meaning of "transaction" under the FTR Act, the admissibility of unexplained wealth evidence, and the Crown's entitlement to call evidence in reply.

  • Whether the simultaneous presentation of multiple cheques, each below the $10,000 threshold, at the same bank on the same day constituted "two or more non-reportable cash transactions" under s 31 of the Financial Transaction Reports Act 1988 (Cth).
  • Whether the Crown impermissibly split its case by eliciting evidence of unexplained wealth through cross-examination of the appellant.
  • Whether the trial judge erred in permitting the Crown to call a case in reply.

Decision

The structuring counts (Counts 7 to 22)

The Court of Criminal Appeal held unanimously that the structuring convictions could not stand. Section 31 requires proof of two or more non-reportable "cash transactions," a term defined in the Act as involving "the physical transfer of currency from one person to another." To establish a plurality of transactions, there must be an intention on the part of the relevant person to engage in separate cash transactions, each below the reportable threshold.

Hulme J, with whom Spigelman CJ and Carruthers AJ agreed, reasoned that presenting multiple cheques at a single bank visit did not produce multiple cash transactions. The denomination breakdowns and sub-bundles requested by the appellant bore no relationship to the amounts of individual cheques, making it impossible to attribute to either the appellant or the bank tellers an intention to engage in a separate transaction for each cheque. The overall exchange on each visit was characterised as a single physical transfer of currency. This reasoning distinguished the earlier Court of Criminal Appeal decision in R v Narayanan, where the factual circumstances permitted a different characterisation.

Unexplained wealth evidence and Crown case splitting

The Court dismissed the appeal on this ground, though the judges' reasoning differed. Spigelman CJ and Carruthers AJ held that evidence of unexplained wealth was properly admissible in the Crown case in chief on the issue of whether the appellant controlled the scheme. Even accepting that the cross-examination on this topic was conducted at a questionable stage of the trial, the evidence was of low prominence, and the appellant had been given the opportunity to reopen his evidence in chief but declined. No error of law or miscarriage of justice was established.

Hulme J agreed the evidence was admissible in chief but took the view that the Crown case splitting principles had been breached. He applied the proviso nonetheless, finding the Crown case was overwhelming: the appellant's account that he had merely acted at another's direction, signing documents and cheques in that person's name, was described as "laughable."

Crown case in reply

The Court unanimously dismissed this ground. The evidence led in reply was comparatively insignificant, no objection had been raised before or at the time it was led, and the trial judge's refusal to direct the jury to disregard it was not an error. Even if error were established, the proviso would have been applied given the strength of the Crown case.

Orders Made

  • Appeal on Counts 7 to 22 allowed, convictions quashed, and a verdict of acquittal entered on those counts.
  • Appeal otherwise dismissed.
  • Time for lodging a notice of intention to apply for leave to appeal against sentence extended by 14 days from the date of the orders.
  • Crown directed to file written submissions within 14 days of service of the appellant's written submissions in support of the sentence appeal.
  • Appellant directed to file submissions in reply within 14 days of being served with the Crown's submissions.

Key Takeaways

  • Under s 31 of the Financial Transaction Reports Act 1988 (Cth), a finding of "two or more non-reportable cash transactions" requires proof of an intention to engage in separate transactions, each below the reportable threshold. The mere fact that multiple cheques are presented simultaneously does not, without more, establish that plurality.
  • A single bank visit during which multiple cheques are cashed at the same time constitutes one physical transfer of currency for the purposes of the FTR Act, not a series of discrete transactions corresponding to the number of cheques presented.
  • The same series of events can theoretically give rise to both a single reportable transaction and multiple non-reportable transactions, depending on the manner and intention with which they are conducted. The characterisation turns on the facts.
  • Evidence of unexplained wealth is capable of being admissible in the Crown case in chief where it goes to a live issue such as whether the accused was the controller of an alleged scheme. The Court of Criminal Appeal confirmed this position, following the Victorian Court of Appeal in R v Edwards [1998] 2 VR 354.
  • Where Crown evidence that arguably should not have been admitted was of minimal prominence in the trial and the Crown case was otherwise overwhelming, the proviso under the Criminal Appeal Act 1912 (NSW) may be applied to avoid a miscarriage of justice finding.

Legislation and Cases Referenced

Legislation
- Financial Transaction Reports Act 1988 (Cth), ss 3, 4, 7, 31
- Crimes Act 1914 (Cth), s 29D
- Criminal Appeal Act 1912 (NSW), ss 6, 6AA
- Income Tax Assessment Act 1936 (Cth)

Cases
- R v Narayanan [2002] NSWCCA 200
- R v Ditfort (1987) 28 A Crim R 392
- R v Edwards [1998] 2 VR 354
- R v Soma (2003) 77 ALJR 849
- Killick v The Queen (1981) 147 CLR 565
- R v Chin (1984) 157 CLR 671
- Pearce v R (1978) 194 CLR 610
- Chamberlain v R (No 2) (1984) 153 CLR 521
- Shepherd v R (1990) 70 CLR 573
- R v Campbell & Greig (1999) 109 A Crim R 174
- R v McMahon (NSWCCA, 23 June 1978, unreported)
- Question of Law Reserved (No 2 of 1998) (1998) 101 A Crim R 317
- Shaw v The Queen (1952) 85 CLR 365
- Palmer v Commissioner of Taxation [1976] WAR 37
- Palmer v Commissioner of State Taxation (WA) (1976) 136 CLR 406
- Bendir v Anson [1936] 3 All ER 326
- R v Simpson (2001) 53 NSWLR 704