Statutory offences - consideration of required mental element for an offence under s31(1) of Financial Transactions Reports Act (Cth) avoiding reportable cash transactions. Financial Transactions Reports Act (1988) (Cth) s31(1), referred to. He Kaw Teh v The Queen [1985] HCA 43; (1985) 157 CLR 523, applied. Leask v The Commonwealth [1996] HCA 29; (1996) 187 CLR 579, considered.

ADELAIDE, 19 March 1998 (hearing) 3 April 1998 (decision)

A judge of the District Court has stated a case, reserving for consideration by this Court four questions of law relevant to a trial that was to be conducted before him. The questions were reserved under s350 and s351 of the Criminal Law Consolidation Act. They were reserved at the request of counsel for the Commonwealth Director of Public Prosecutions and counsel for the accused.

The accused is charged on an information alleging eighteen offences against s31(1) of the Financial Transactions Reports Act (1988) (Cth) ("the Act").

The questions raise the issue of the mental element involved in proof of guilt of an offence against s31(1). The answers to the questions might result in the accused pleading guilty. Accordingly, it seemed convenient to the Judge to reserve the four questions.

In Leask v The Commonwealth [1996] HCA 29; (1996) 187 CLR 579, the High Court held that s31(1) of the Act is a valid law of the Parliament of the Commonwealth. Some members of the Court expressed a view about some of the matters the subject of the questions reserved. I will return to those views in due course. The purposes and the operation of the Act are described in the judgments in that case. I will cover that ground fairly briefly, drawing on the judgment in Leask (supra). I refer, without repeating it, to the history of the legislation, which is set out by Kirby J in Leask (supra) at 628-632.

According to the long title of the Act its purpose is ". . . to provide for the reporting of certain transactions and transfer . . .". The principal object of the Act is "... to facilitate the administration and enforcement of taxation laws": s4(1). The second reading speech states that the Act is intended to deal with "the underground cash economy, tax evasion and money laundering": Parliamentary Debates (Hansard) 25 November 1987, p2413. The Act does this by enabling government agencies to monitor the movement of large amounts of cash. Reports under the Act are made to the Director of AUSTRAC, which is the Australian Transaction Reports and Analysis Centre.

A central concept under the Act is that of a cash transaction. A cash transaction is defined by s3(1) of the Act to mean "a transaction involving the physical transfer of currency from one person to another." For these purposes "currency" is defined to mean "the coin and paper money of Australia or of a foreign country ... ". Hereafter, I will refer only to Australian money.

A central aspect of the scheme of the Act is an obligation, imposed upon a cash dealer who is a party to a significant cash transaction, to report that transaction to the Director: s7(1).

"Cash dealer" is widely defined. It includes all sorts of persons and entities that might be expected to handle significant amounts of cash. In particular, it includes a financial institution, which is in turn defined, and that definition includes a bank.

A significant cash transaction ("an sct") means "a cash transaction involving the transfer of currency of not less than $10 000 in value."

When reporting an sct, the cash dealer must provide the "reportable details" which are prescribed by Schedule 1 of the Act.

Reporting obligations are imposed upon other persons in certain circumstances. An obligation is also imposed upon a cash dealer to report to the Director if the cash dealer is a party to a transaction, and has reasonable grounds to suspect certain things. For example, if information that the cash dealer has concerning the transaction may be relevant to investigation of an evasion of a taxation law, or to investigation of or prosecution of a person for an offence against a law of the Commonwealth or of a Territory: s16(1).

It is an offence for a person to refuse or fail to provide information when required to do so under the Act: s28. This offence is punishable by imprisonment for not more than two years. The Act also provides for a number of offences, the gist of which is knowingly making a statement that is "false or misleading in a material particular" or knowingly omitting something which makes a statement "misleading in a material particular", when communicating information to the Director. These offences are punishable by imprisonment for not more than five years. I emphasise the word "knowingly", because s28 does not include that word or any similar expression. Similarly, s30 makes it an offence to communicate information to the Director that is incomplete, or to keep certain registers incomplete, if that is done knowingly .

If the Act imposed no controls upon a person engaging in a cash transaction, it would be relatively easy to evade the operation of the Act. All that one would have to do would be to split a transaction up into a number of transactions involving the physical transfer of currency of less than $10 000 in value. It is, no doubt, to deal with such evasion that Parliament enacted s31, which is the provision in question in this case. It is not necessary for present purposes to set out s31(2). Section 31 provides as follows

: "(1) A person commits an offence against this section if: (a) the person is a party to 2 or more non-reportable cash transactions; and (b) having regard to: (i) the manner and form in which the transactions were conducted, including, without limiting the generality of this, all or any of the following: (A) the value of the currency involved in each transaction; (B) the aggregated value of the transactions; (C) the period of time over which the transactions took place: (D) the interval of time between any of the transactions; (E) the locations at which the transactions took place; and ( ii) any explanation made by the person as to the manner or form in which the transactions were conducted; it would be reasonable to conclude that the person conducted the transactions in that manner or form for the sole or dominant purpose of ensuring, or attempting to ensure, that the currency involved in the transactions was transferred in a manner and form that: (iii) would not give rise to a significant cash transaction; or (iv) would give rise to exempt cash transactions. Ö (3) A person who commits an offence against this section is punishable, upon conviction, by imprisonment for not more than 5 years."

The issue that arises is, what has to be proved by way of a mental element on the part of a person charged with an offence under this section?

In He Kaw Teh v The Queen [1985] HCA 43; (1985) 157 CLR 523, all members of the High Court acknowledged that there is a presumption that mens rea or a knowledge of the wrongfulness of an act is an element of an offence created by statute: Gibbs CJ (with whom Mason J agreed) at 528-529, Wilson J at 549, Brennan J at 566 and 582, Dawson J at 591.

However, it is evident that there were differing views as to the strength of the presumption: see He Kaw Teh (supra) at 591 Dawson J; Leask v The Commonwealth (supra) at 598 Dawson J.

Assuming that one recognises the existence of such a presumption, then whatever the strength of the presumption is, the ultimate issue in deciding whether there is a mental element to an offence is one of statutory interpretation. The answers to the questions reserved are to be found in the terms of the Act, construed in light of the presumption. The factors to be considered in deciding whether the presumption is displaced are conveniently summarised by Gibbs CJ in He Kaw Teh (supra) at 529-530.

It must also be borne in mind that, in considering the application of the presumption, the Court is not concerned merely to decide whether a mental element must be established before a finding of guilt can be made. Separate consideration must be given to the nature of the mental element, if there is one. It is often more difficult to identify with precision the mental element required, than it is to decide whether or not a mental element is required: see He Kaw Teh (supra) at 568-571 Brennan J.

In Leask (supra), the validity of s31(1) was attacked on the basis that that provision created an offence of strict or absolute liability. It was submitted that, so understood, there was not a sufficient connection between s31(1) and any available head of power. Accordingly, some members of the High Court in Leask (supra) found it necessary to consider the elements of the offence.

Brennan CJ said (at 592) : "The mens rea required by s31(1) is confined, in my opinion, to the elements of the offence prescribed in par(a). A person who engages in the conduct mentioned in s31(1)(a) is liable to conviction only if he voluntarily conducted the two or more 'non-reportable cash transactions' therein mentioned and knew the facts which gave the transactions the character of 'non-reportable cash transactions'. In my opinion, the mens rea of the offence does not extend to a specific intention to achieve 'the sole or dominant purpose' referred to in par(b) of s31(1). Paragraph (b) requires the relevant transactions to have a particular objective qualityÖBut as to these elements, the mental state of the alleged offender is irrelevant except as a factor in an explanation offered by the alleged offender which precludes (by raising a doubt) a finding that an hypothetical reasonable person would reach the conclusion stated in par(b). It is immaterial whether the offender knew that his conduct was unlawful or that a court might, in the absence of any explanation by the offender, find that it would be reasonable to reach the conclusion stated in par(b). Section 31(1) is not a provision imposing strict liability but the mens rea of the offence is extremely limited."

Dawson J applied the presumption already referred to by me, having regard to the fact that the wording of the provision left it "far from clear" whether intention was an ingredient of the offence: at 597-598. It was not necessary for his Honour to spell out in any detail the actual mental element required. He said that he accepted the Commonwealth submission on the matter: at 598. On the preceding page he said that the Commonwealth's submission was that "... the sub-section requires proof that the person charged with an offence knew of the nature of a significant cash transaction or of exempt cash transactions and intended by structuring his or her transactions in the manner or form alleged to ensure that they would not give rise to a significant cash transaction or exempt cash transactions. The only effect of the words 'it would be reasonable to conclude' is, the Commonwealth contended, to lower the standard of proof from that of beyond reasonable doubt to that of a reasonable conclusion."

Toohey J did not have to consider the issue: at 610-611. Nor did Gummow J: at 626. Kirby J said that there were some indications to support the Commonwealth's submission that proof of mens rea was required, but that he did not have to decide the matter: at 638.

I proceed on the basis that there is a presumption that a mental element is an ingredient of the offence created by s31(1). I proceed on the basis that something more must be shown than the bare fact that what the offender did was done voluntarily. That, at least, is consistent with the views of both Brennan CJ and Dawson J.

In my opinion proof of guilt of an offence against s31(1) requires, at the least, that it be proved: - that the accused person knew that he or she was a party to a transaction that involved the physical transfer of currency; - that the accused person was aware of the facts that made another party to the transaction a cash dealer for the purposes of the Act; - that the accused person knew that the amount of currency involved in each transaction had a value of less than $10 000. To require proof of that much is to require proof of knowledge of the facts that make the transactions "non-reportable cash transactions." To require proof of the knowledge of those matters is consistent with principle: He Kaw Teh (supra) at 572 Brennan J. In my opinion, neither the terms of the section, nor the subject matter dealt with, suggest that the presumption in favour of this conclusion does not operate.

I have not overlooked the fact that s28, which deals with refusal or failure to report as required, makes no reference to any mental element. By contrast, s29, which deals with the making of statements that are false or misleading in a material particular, or omissions that cause a statement to be misleading in a material particular, punishes such statements or omissions only if they are made knowingly. The same is true of s30, which deals with the knowing provision of incomplete information. I do not consider that it is safe to infer from this that when there is no specific reference to a mental element, none at all is involved. It is understandable that the draftsman might have thought it prudent to provide, in relation to erroneous material and omissions, that there should be liability only if the relevant person is aware of the mistake or omission. It does not necessarily follow that it was intended to punish conduct referred to in s31 regardless of the knowledge of the person concerned. I do not consider that the pattern of drafting revealed by the enforcement provisions is sufficient to rebut the presumption that a mental element is required.

In Leask (supra), Brennan CJ said (592) that he would stop there. He held that all that had to be proved, in addition to what I have identified, is that the relevant transactions had the objective quality identified in sub-paragraph (b) of s31(1). To so decide is to expose a person to conviction for a serious offence, and to quite heavy punishment, by reason of circumstances of which the person convicted might be unaware. Those circumstances are that if the relevant transactions had included a transfer of currency of $10 000 or more in value, that transaction would have been reportable, and, conversely, that conducting the transactions in a manner that involved transfers of currency having a value of less than $10 000, means that none of the transactions are reportable.

Such a conclusion is certainly open, having regard to the language of s31. But, as Brennan CJ said in He Kaw Teh (supra) at 567: "It requires clear language before it can be said that a statute provides for a person to do or to abstain from doing something at his peril and to make him criminally liable if his conduct turns out to be prohibited because of circumstances that that person did not know or because of results that he could not foresee." In my respectful opinion, the construction of s31(1) favoured by Brennan CJ does not serve a useful purpose. I consider that s31 is intended to prevent evasion of the reporting obligations imposed upon a cash dealer, the evasion being achieved by conducting a transaction with a view to avoiding the occurrence of an sct. That purpose suggests that the section is aimed at persons who are aware of the potential significance of the manner in which a transaction is conducted.

In relation to the reporting of an sct, my view is that the Act does not deal with an area of activity in which it makes sense to speak of setting a standard of behaviour that must be observed, at their peril, by those who enter a particular field. Nor, I consider, does it make sense in this context to speak of compelling a person to take preventative measures to avoid the possibility of an offence occurring, without any deliberate conduct on the part of the offender. As I have said, I consider that the sort of conduct at which s31 is aimed is evasion rather than carelessness or ignorance. Evasion implies an element of knowledge. I do not see much sense, in this context, in punishing a person who might be unaware of the difference between an sct and a non-reportable cash transaction.

I am aware of the danger of circular reasoning here. The danger is, by an unwarranted assumption about the object of s31, that one assumes the very point at issue. However, I have endeavoured not to make that mistake.

Assuming that the purpose of the section is that identified by me, it would make sense to require a person charged to prove that that person was unaware of the obligation imposed upon a cash dealer to report an sct. It would make sense to provide for a rebuttable presumption that a person charged was aware of the obligation to report an sct. It would make sense to provide for a rebuttable presumption of an intent to conduct transactions so as to prevent an sct occurring. Each of these would be an understandable aid to proof of an element which it might often be difficult to prove. But to punish a person who is, or might be, unaware of the obligation to report an sct, seems odd to me. It likewise seems odd to punish a person who is or might be unaware of the significance of the value of the currency transferred in a cash transaction.

These considerations, coupled with the ambiguous form in which s31(1) is expressed, incline me towards the view that there is a further aspect to the mental element that must be proved. Subject to the impact of sub-paragraph (b), that element would involve proof of the following : - that the accused person knew that a transaction involving currency of $10 000 or more in value must, by law, be reported to a government agency, and that a transaction involving currency of less than $10 000 in value did not have to be reported to a government agency.

I consider that it is consistent with principle to hold that guilt of an offence under s31(1) is established only if the accused person has knowledge of the facts that attract the operation of s31(1)(a), and knowledge of the circumstances that attend its occurrence and make it criminal: cf He Kaw Teh (supra) at 572 Brennan J. For that reason, in my opinion, I would expect it to be necessary to prove the further element that the accused person is aware of the difference between a reportable transaction and a non-reportable transaction. It should not be necessary to prove that the accused person knows just how or why that difference comes about, or what precise obligations to report are imposed upon the relevant cash dealer or some other person. Likewise, as I have earlier said, while it is necessary to prove that the accused person is aware of the facts which have the result that another party is a cash dealer, it is not necessary to prove that the accused person understands the meaning of that term or knows that the other party is in fact a cash dealer under the Act. Thus, in the present case, it is sufficient to prove that the accused was aware that he was dealing with the bank.

I do not consider that requiring proof of the further element identified by me is inconsistent with the terms of the Act. To my mind it is consistent with the scheme and purpose of the Act to penalise a person under s31 only if that person is aware of the fact that the transactions as conducted are non-reportable, and if that person is aware that if any one of them involved currency to the value of $10 000 or more it would be reportable. There is little point in punishing a person who is unaware of the fact that, if the relevant transactions were conducted differently, an stc would occur. It is also relevant that an offence against the section attracts punishment by imprisonment for a maximum of five years. That is a heavy penalty, and one would not lightly conclude that Parliament intended such a punishment for a person who lacked that degree of knowledge.

For these reasons, I am inclined to the view that Parliament intended to punish a person only if that person was aware of the difference between an sct and a non-reportable cash transaction.

That brings me to consideration of sub-paragraph (b) of s31(1). I do not think that it would make much sense to require proof of awareness of the difference between an sct and a non-reportable cash transaction, a truly subjective element, but to add to that a requirement to prove an objective element that is so closely linked to the subjective element, although of course sub-paragraph (b) goes further in requiring consideration of the purpose. The presence and content of sub-paragraph (b) caused Brennan J in Leask (supra) to conclude that the relevant mental element did not extend beyond the facts that made the transactions non-reportable cash transactions.

I have explained why I do not, with respect, agree that that is what Parliament intended. But I agree that it would be odd to require proof of the further subjective element, tentatively identified by me, and proof of an objective element in the terms expressed by sub-paragraph (b).

Although at first I thought otherwise, on reflection I have come to the conclusion that Parliament must have intended, by sub-paragraph (b), to deal with the knowledge of the accused of the difference between an sct and a non-reportable cash transaction. I think that in this sub-paragraph Parliament has dealt with that, and has gone further and imposed a requirement to prove an actual purpose.

Like Dawson J in Leask (supra), I have come to the conclusion that sub-paragraph (b) imposes a requirement to prove - that the accused person knew that a transaction involving the transfer of currency of $10 000 or more in value must be reported to a government agency and that a transaction involving the transfer of currency of less than $10 000 in value need not be reported to a government agency; - that it is reasonable to conclude that the accused person in fact had the sole or dominant purpose referred to in sub-paragraph (b).

Approaching sub-paragraph (b) in that fashion accommodates the requirement to prove an awareness of the difference between an sct and a non-reportable cash transaction, and the presence of sub-paragraph (b), by treating sub-paragraph (b) as dealing with proof of an actual or subjective intention rather than an objective quality of the transactions.

Although I have separated the elements of knowledge and purpose, it seems to me that an element of knowledge is necessarily implicit in proof of the identified purpose.

The purpose that has to be proved need not be proved beyond reasonable doubt. The question for the jury is simply whether it is reasonable to conclude that, in fact, the accused person had the identified sole or dominant purpose. On the other hand, the jury must find it reasonable to conclude that the accused person in fact had the identified purpose.

I do not pretend to have reached this conclusion confidently. But, given the choice between an approach that would punish those who are or might be unaware of the obligation to report an sct, and the above approach, I prefer the above approach. It is consistent with the principles expounded in He Kaw Teh (supra). It is able to be accommodated by the language of s31(1).

There is one other point that I should mention. I would expect a person to be found guilty only if the person could have conducted the relevant transactions in such a way that an sct occurred. For example, assume that I am owed $6 000, that on Monday morning that money is repaid to me, and I take the money to the bank and deposit it. Assume that on Tuesday morning, for some reason unexpected by me, I am paid a further $6 000, and that I bank that amount that day. Once the first transaction has taken place, I do not have the ability to conduct the transactions in a form that would give rise to an sct. On the other hand, I have been a party to two non-reportable cash transactions. I assume that factors like this, and the actual purpose of the accused person, are to be dealt with under s31(1)(b)(ii).

I turn then to the question of whether it is necessary also to prove that the accused person knew that what he or she was doing was illegal.

In my opinion it is not necessary to prove that. It is not usually necessary to prove that a person is aware of the illegality of an act before an offence is committed. It usually suffices to prove knowledge of the circumstances which render the relevant event criminal, as distinct from proof of knowledge of the illegality of the act: He Kaw Teh (supra) at 572 Brennan J, Leask (supra) at 598 Dawson J.

Question 1 is as follows : Is it a necessary component of the offence constituted by Section 31(1) of the Financial Transactions Reports Act 1988 (Cth) ("the Act") that the accused should know his act of avoiding the generation of a significant cash transaction is illegal and if so in what terms should a direction be given to a jury under the section?

No. It is sufficient to prove that the accused person knows: - the facts that give another party to the transaction the character of a cash dealer for the purposes of the Act; - that he or she was a party to a transaction that involved the physical transfer of currency; - that the amount of currency involved in each transaction had a value of less than $10 000; - that a transaction involving the transfer of currency of $10 000 or more in value must be reported to a government agency and that a transaction involving the transfer of currency of less than $10 000 in value need not be reported to a government agency.

The jury should be directed that they must be satisfied of these matters beyond reasonable doubt.

The jury should further be directed that they can convict only if: - it is reasonable to conclude that the accused, having regard to the matters referred to in sub-paragraph (b) of s31(1), in fact had the sole or dominant purpose referred to in sub-paragraph (b).

The jury should be directed that that does not require a conclusion reached beyond reasonable doubt. It is a matter of what the jury finds it reasonable to conclude. The jury should be told that their finding must relate to the actual knowledge and purpose of the accused person.

Question 2 is as follows : Is it sufficient in order to find the accused guilty of an offence under s31(1) of the Act that the accused should have known that he or she was wrongfully avoiding the consequences of the Act?

It is neither necessary nor sufficient for a finding of guilt to prove that the accused should have known that he or she was wrongfully avoiding the consequences of the Act. See the answer to Question 1.

Question 3 is as follows : In the light of the directions given in Leask (above) and in light of the observations of Dawson J in Leask v The Commonwealth (supra) at 597, what is the proper direction that should be given to the jury in a charge under the section? The case stated includes a short extract from the direction given by the trial Judge to the jury in the matter of Leask (supra). I would answer this question as follows :

In relation to the mental element, see the answer to Question 1.

Question 4 is as follows : Should I direct the jury in the same terms as in the passage from Leask (supra) quoted above, and if not what modification or modifications should be made to that passage for the purpose of formulating a correct direction to the jury?

It is appropriate to direct the jury that they must be satisfied beyond reasonable doubt that the accused knew that there was an obligation to report cash transactions of $10 000 or more, because unless the jury is satisfied about that it would not be reasonable to conclude that the accused person in fact had the necessary purpose. It is appropriate to direct the jury that it does not matter how the accused might have acquired that knowledge. It is sufficient that the accused had the knowledge. There are other aspects of the mental element upon which the jury must be directed, as to which see the answer to Question 1 above.

In framing the answers to these questions it is important to understand that my attention has been concentrated on the requirements of s31(1)(a), and that, in the circumstances, I have had to deal with this matter rather generally. Any direction to a jury must, of course, be accommodated to the facts of the particular case and would have to deal in particular with proof of the non-reportable cash transactions, particularly if they were in any respect in dispute, and with the matters arising under s31(1((b).

The real difficulty in this case lies in interpreting the "reasonable to conclude" component of par(b) of subs(1) of s31 of the Financial Transactions Reports Act . It is regrettable that the draftsman has defined a serious criminal offence in subs(1) in a way that leaves the mental elements of the crime unclear. Simply construing the bare words of par(b), disengaged from their social impact, it would be possible to give them a purely objective application so that a person could be in breach of the subsection even though the court were of the opinion that he did not, in fact, conduct the transactions for the prohibited purpose. That would be quite unjust, particularly in the case of an offence that carries a penalty of five years' imprisonment. It is better, therefore, and fortunately possible, to interpret the "reasonable to conclude" formula as simply stating the standard of proof of a purpose that the defendant actually had. I agree with the reasons of the Chief Justice and I would answer the questions in the way he proposes.

I agree with the answers proposed by the Chief Justice and I am in general agreement with the reasons which he has given for reaching his conclusions. I propose to add some comments of my own.

There are sound reasons for concluding that the offence created by s31 of the Financial Transactions Reports Act 1988 (the Act) does not create an offence of strict liability. The presumption of mens rea in statutory offences, reaffirmed in He Kaw Teh v The Queen [1985] HCA 43; (1985) 157 CLR 523, has not been displaced in this case by necessary implication from the wording of the section or the nature of the offence which it creates. However the more difficult task is to decide the content of the necessary intention and the effect of s31(1)(b).

In my respectful opinion the required intention is not to be confined to the extent indicated by Brennan CJ in Leask v The Commonwealth [1996] HCA 29; (1996) 187 CLR 579. His Honour expressed the view that the mental element would be satisfied if a person voluntarily conducts two or more non-reportable transactions with knowledge of the facts which gave the transactions the character of non-reportable cash transactions. As Doyle CJ has pointed out this would involve knowledge that the person was involved in the physical transfer of currency, awareness of the facts that made another party to the transaction a cash dealer for the purposes of the Act and knowledge that the amount of currency involved in each transaction was less than $10,000. Brennan CJ concluded that s31(1)(b) raises an objective element and that this would be the only further matter to be proved.

It goes without saying that dealings coming within the definition of non-reportable transactions in the Act are a common feature of everyday life. It is my view that if the legislature is to put persons at risk of committing serious offences by being involved in transactions of this nature it is inappropriate to limit the mental element to this extent except by clear and unambiguous language.

Mens rea is undoubtedly a vague expression but, leaving recklessness aside and assuming voluntariness, it usually requires that a person knew all the facts constituting the ingredients necessary to make the act criminal. ( R v Turnbull [1943] NSWStRp 56; (1943) 44 SR (NSW) 108 at 109 referred to in He Kaw Teh (supra)). Brennan CJ in He Kaw Teh (at 570) expresses the view that for practical purposes "knowledge of the circumstances which give the act its character when an act is voluntarily done is the ordinary form of an intent to do it". His Honour's view of the content of mens rea for the purposes of an offence against s31 would limit this aspect of knowledge to the facts which give the transactions their character as non-reportable transactions. However it is my view that neither the purpose of the legislation nor its wording require the mental element to be so confined. At the very least there is ambiguity in the section which should be resolved in favour of persons charged with a breach. The further element suggested by Doyle CJ, namely, that the accused knew that a transaction involving currency of $10,000 or more in value must, by law, be reported to a government agency, and that a transaction involving currency of less than $10,000 in value did not have to be reported to a government agency seems to be an appropriate component to add to the circumstances which make the act criminal.

The wording of s31(1)(b) adds to the ambiguity of the section. It creates a further element of the offence which requires an assessment of the manner and form in which the transactions were conducted in order to determine whether "it would be reasonable to conclude that the person conducted the transactions in that manner or form for the sole or dominant purpose" which is identified in the section. It may be, as the Chief Justice has said in his judgment, that there would be some incongruity in concluding that this was an objective element if the subjective element which he earlier identified was required to be proved under sub-paragraph (a). However this is a curious piece of legislation on any view and it is not inconceivable that the legislature might have intended to isolate the issue of purpose and enable proof by reference to purely objective factors.

Nevertheless, it is my view that the content of sub-paragraph (b) supports the conclusion reached by the Chief Justice in that it focuses on the actual purpose of the accused. In arriving at a conclusion under sub-paragraph (b) the court is entitled to take into account all aspects of the manner and form of the transactions including those matters enumerated in sub-paragraph (b)(i). In addition, regard is to be had to "any explanation made by the person as to the manner or form in which the transfers were conducted". Presumably such an explanation could be used either to support a finding that it was reasonable to conclude the existence of the sole or dominant purpose referred to or to render that conclusion inappropriate. The wide ranging enquiry into the manner and form of the transactions which is required by sub-paragraph (b) and the requirement to take into account any explanation by the accused person reflects the familiar method by which courts ascertain the intention and purpose with which acts are done. Leaving aside the words "it would be reasonable to conclude" there is no suggestion of an objective element which might produce a result which did not coincide with the actual state of mind of the accused.

The next step is to determine the effect of the phrase "it would be reasonable to conclude". Section 31(1)(b) directs attention to the accused's purpose in conducting the transactions. This part of the Act is concerned with persons who actions could defeat one of the purposes of the legislation. However, for reasons of policy, it does not require proof of the accused's state of mind in this respect beyond reasonable doubt. Instead the court's opinion or judgment, expressed in the form of what would be reasonable to conclude as to the accused's purpose is substituted for the usual standard of proof. The effect of this is not to impute to the accused a purpose irrespective of his or her actual purpose. Actual purpose is the subject of the enquiry, but the assessment is to be conducted by reference to what the court considers to be a reasonable conclusion.