DPP (Commonwealth) v Ronen [2005] NSWSC 990 | Case summary

1 HIS HONOUR: In these proceedings the plaintiff filed a summons seeking an order under s 48 of the Proceeds of Crimes Act 2002 (Commonwealth). The order sought relates to Australian currency in the sum of $209,525.00. This currency was seized at the time search warrants were executed on 7 February 2001. The warrants were executed at Unit 16B, 5-11 Thornton Street Darling Point where the money was found in a safe located in the main bedroom. 2 On the date of the seizure the offender Ida Ronen was arrested and charged with two counts of conspiracy to defraud. She and her two sons Nitzan and Izhar Ronen were tried before a jury during 2004 and the early part of 2005. On Friday 28 January 2005 Mrs Ronen and her two sons were found guilty by a jury in relation to the two counts of conspiracy to defraud charges. The conspiracy related to an agreement in force and operative between about 1991 and the date of arrest 7 February 2001. The agreement was to skim the cash takings of a number of retail outlets managed by Ida Ronen and to conceal those takings from the Income Tax Commissioner. The implementation of the conspiracy required Ida Ronen to physically collect the cash from the retail shops and to sort it, analyse it and keep it, at least on a temporary basis, at her unit at Thornton Street Darling Point. Mrs Ronen kept books in which she analysed the total takings of the business and then calculated the distribution of cash amongst her sons and herself. In relation to the particular parcel of money found in the safe the evidence established that it had been culled from the takings of the retail shops, calculated for distribution purposes and set aside with a cash wrap containing the relevant calculation in the safe. The money was there so that it could be sent out of the country at a later stage to avoid detection by the authorities. There was ample evidence to demonstrate that Mrs Ronen had on earlier occasions sent money available for distribution to her two sons to Israel in this fashion. 3 I am satisfied that the proceedings in this matter commenced by way of summons filed on 21 April 2005 have been brought appropriately within the time permitted by the legislation. Secondly, I am satisfied that notice has been given to all relevant persons who may have an interest in the property. The forfeiture order that has been sought in the present matter is opposed by Mrs Ronen. The Crown has been represented in these proceedings by Mr T. Game SC. Mrs Ronen has been represented by Ms Elizabeth Fullerton SC and Mr Mark Buscombe. 4 There have been but two matters argued against the making of a forfeiture order in the present proceedings. The first relates to the question whether the cash monies in the safe may properly be categorised as "the proceeds of one or more of the offences" as that expression appears in s 48(1)(c) of the Proceeds of Crimes Act 2002. Secondly, while it has been admitted that the currency must, at the very least, fall within the definition of "an instrument" of the offence within the meaning of s 48(2) of the Act, Ms Fullerton SC has submitted that the court should in the exercise of its discretion refuse to make the order. 5 In simple terms, if I am satisfied that the money in the safe may properly be described as "the proceeds" of the offence I must order its forfeiture. On the other hand, if I am not so satisfied, I should accept that the money is properly described as an "instrument" of the offence but nevertheless in the exercise of the discretion I have I should decline to order its forfeiture.

Proceeds of offence 6 The legislation provides that "proceeds" has the meaning given by ss 329 and 330 of the Act. For the present purposes only s 329(1) is relevant. This provides: - "(1) Property is proceeds of an offence if: (a) Is wholly derived or realised, whether directly or indirectly, from the commission of the offence; or it is partly derived or realised, whether directly or indirectly, from the commission of the offence; Whether the property is situated within or outside Australia". 7 The word "derived" is to be interpreted according to its ordinary meaning. It is not defined in the Act. The ordinary meaning of the word is "to show the origin or the source of" the thing said to have been derived: DPP v Jeffrey (1992) 58 A Crim R 310 at 320. 8 In her oral submissions Ms Fullerton SC argued that the money in the safe is simply the money that has come from the sale of clothing. The source of the cash, she urged, was simply the sale of dresses and women's clothing. No offence is committed by the sale of dresses and therefore it could not be said that the cash in the safe represents, in ordinary parlance, the proceeds of the conspiracy offence. 9 On the other hand, Mr Game SC has argued that the money is both the proceeds of the offence and the instrument of the offence (Sunshine Worldwide Holdings v South East Group Limited (2005) NSWSC 117 per Greg James J). Secondly, Mr Game has submitted that, having regard to the elements of the particular conspiracy involving Mrs Ronen and the overt acts done in furtherance of it, that what is derived from the commission of the offence includes, if appropriate, what is derived from the commission of the overt acts which constitute the object of the conspiracy. In advancing this proposition, Mr Game argues that the offence was complete when there was an agreement formed between the parties and one overt act performed. Once the cash was taken out of the general takings of the business; once it was separated out into the form in which it would be undeclared income and then made available for distribution, it may properly to be regarded as derived from the commission of the offence. 10 I agree with this submission. When the money was taken originally from the retail shops to Mrs Ronen's apartment, it might have, at that point of time, been properly categorised as money derived from the sale of clothing. However, the way in which it was then treated so as to implement the objects of the conspiracy changed its character and hence its derivation at that later point in time. 11 If it be asked: What is it that changes the character of the money? The answer is this: the cash is sorted out and 10% is put into a bundle for banking and declaration. That lesser amount of cash remains the proceeds of the sale of clothing. The bulk of the cash however, is sorted according to a formula and placed into bundles for distribution to each of Mrs Ronen's two sons Nitzan and Izhar Ronen. Before this, a smaller proportion of the cash had been physically taken out and kept by Mrs Ronen for herself. This too relates to the implementation of the conspiracy. In the particular circumstances of the cash that was found in the safe on 7 February 2001 it is clear that this was cash that had been earmarked in fact for Nitzan Ronen. This was because Izhar Ronen's bundle had already gone. So far as this parcel of money is concerned the agreement, that is the conspiracy, had by then been fully implemented and brought to fruition. In that real sense, the bundle of money in the safe may properly be said to be derived directly from the commission of the offence. 12 I have also found that the money in the safe was an instrument of the offence. This is not in any event denied by the submissions made on behalf of Mrs Ronen. 13 Because of my finding in relation to proceeds, it is not necessary for me to exercise a discretion. Nevertheless, if I be wrong in relation to the first point I would exercise my discretion under s 48(3) in favour of the plaintiff. 14 I have given consideration to each of the matters specified in s 48(3). I have also taken into account the specific matters that were the subject of oral submissions to me. In particular I have taken into account the fact that this amount of money has been declared to the Income Tax Commissioner and that the Terms of Settlement between the parties - a confidential document executed on 26 September 2005 - make allowance for an adjustment in accounting terms depending on the result of these proceedings. 15 I do not consider that any hardship will be caused to Mrs Ronen if the order is made, that is hardship extending beyond the fact that the money itself will be lost to her. I have taken into account the use that was intended to be made of the cash namely for its distribution to Nitzan Ronen. That factor does not lead me to consider that an order should not be made. Finally I have considered the gravity of the offence and I am satisfied that the criminality involved in the conspiracy represented by the second charge in the indictment reflects criminality of a very high order. 16 In my view there are no other matters that would preclude me from making the orders sought. 17 I order pursuant to s 48 of the Proceeds of Crimes Act 2002, in respect of the conviction of Ida Ronen of the offences set out in para 1 of the Schedule to the plaintiff's summons dated 23 April 2005 that Australian currency in the sum of $209,525.00 being currency seized on 7 February 2001 from Unit 16B, 5-11 Thornton Street Darling Point is forfeited to the Commonwealth. 18 I make no order as to costs.

DPP (Commonwealth) v Ronen

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