R v Chie

NATURE OF A JUDGE ALONE TRIAL

1. Section 133 of the Criminal Procedure Act 1986 NSW requires a judge conducting a judge alone trial to include in a judgment the principles of law to be applied by him or her and the findings of fact upon which the judge relies. Pursuant to subs (3) I am required to take into account any warnings required by any Act or law to be given to a jury in any such case.
2. I will shortly set out the principles of law to which I have had regard. These comprise the normal directions that I would usually give a jury in any such case.
3. I am the tribunal of fact as well as of law. It follows that as the tribunal of law I can direct myself as the tribunal of fact if so required. I am of course required to give myself the directions that would be usually given to a jury. However as there is no jury, there is no necessity for me to give the customary directions about the difference in functions between a tribunal of law and a tribunal of fact.
4. Were this matter to have proceeded to final addresses by the parties, I would in due course have given myself directions concerning the onus and standard of proof, the presumption of innocence, the care to be taken in drawing justifiable inferences, importance not to engage in speculation or suspicion and the relevant directions when an accused, notwithstanding his right to silence, gives and calls evidence at trial.
5. Between 4 and 6 February 2019 and finally on 4 April 2019, I received all the evidence in the case which consisted of a prosecution brief tendered by consent without any requirement that witnesses be available for cross‑examination and then in the defence case oral evidence from the accused, his father David Keat Chie, Glen McCaughey, Justin Camilleri and Robert Lukic. Some documentary evidence was tendered in support of evidence given by the accused David Chie and Robert Lukic. In short the material led in the defence case sought to provide a legitimate provenance for some, if not all of the $128,400 found either in the accused's vehicle or on his person at the time of his arrest on 10 November 2017 and to explain a legitimate purpose to which it would be put.
6. On the event of the defence case closing on 4 April 2019 and there being no case in reply, Ms Rowan of counsel appearing for Mr Chie made an application for a verdict by direction providing written submissions (MFI #1) in support of that application. Having heard short oral submissions in opposition to that course by the Crown, I set a timetable for the provision of further written submissions and adjourned the matter for decision on 14 May 2019. In due course, I received and considered the Crown's written submissions (MFI #2) and Ms Rowan's submissions in reply (MFI #3). On the adjourned date I indicated to the parties that I had determined to, at a future date, acquit the accused by direction but that I needed to access transcript of both the Crown opening of 4 February 2019 and oral argument made on 4 April 2019 to finalise my reasons for adopting that course. These are those reasons.

THE APPLICATION

1. The application contended that the prosecution had demonstrated "no specificity of either the quantum or the connection of that quantum to a particular offence." It was contended that the Crown had referred to the "particular offence" as "criminal offending." It was asserted that consistently with decisions of R v Mackellar (No 3) [2014] NSWSC 106 (18 February 2014), and Chen v Director of Public Prosecutions (Commonwealth) [2011] NSWCCA 205 (both of which are binding on me) the prosecution had insufficiently particularised the "proceeds of crime" and that consistent with those authorities a verdict by direction was the appropriate remedy.
2. As stated above that application was opposed.

THE LAW

1. Section 193B(2) provides: "That a person who deals with the proceeds of crime knowing that it is the proceeds of crime is guilty of an offence."
2. "Deal with" is defined in s 193A to include "possess". It is accepted by both parties by implication that the accused possessed $128,400 on 10 November 2017 and that the Crown relied on that possession as dealing with "a sum of money" for the purposes of s 193B(2).
3. "Proceeds of crime" is defined in s 193A in the following way: "Proceeds of crime means any property that is substantially derived or realised directly or indirectly, by any person from the commission of a serious offence."
4. In R v Mackellar (No 3) the Supreme Court of New South Wales had occasion to consider the requirements of s 193B(2).
5. In Mackellar, a trial had been conducted before the Supreme Court involving a three count indictment. Senior counsel made an application for a verdict by direction with regard to the count on the indictment comprising a s 193B(2) offence. In that case (unlike the present one) the Crown had opened on the basis that the judge, as tribunal of fact, might need to consider a statutory alternative contained at s 193B(3).
6. It was submitted for the accused that there was no evidence of a number of essential elements of the offence, those being: that there is a high mental element attaching to s 193B(2); that there had been nothing placed before the court to disprove what that accused had said in his record of interview with regard to the cash found on his person and that there was no evidence that the cash itself was proceeds of crime as defined by s 193A of the Act.
7. Button J dismissed the application made on the basis set out above. However, when dealing with a further submission, his Honour concluded that s 193B(2) offence requires a degree of particularity with which the Crown must point to a particular offence that is said to underlie the definition of the phrase "proceeds of crime." In this regard s 193F(1) provides: "To avoid doubt, it is not necessary, in order to prove that the purposes of an offence under this Part that property is proceeds of crime, to establish that: (a) a particular offence was committed in relation to the property; or (b) a particular person committed an offence in relation to the property."
8. Button J observed s 193B(2) is "very similar" to Part 10.2 of the Criminal Code Act 1995 (Cth) which had been previously considered by the Court of Criminal Appeal in New South Wales in Chen v Director of Public Prosecutions Commonwealth. His Honour observed that: "By majority that court held that s 400.13 of the Commonwealth Criminal Code a provision that if not identical it is at least highly analogous to s 193F of the Crimes Act New South Wales does not relieve the Crown of the burden of proving that the subject matter of the charge is derived from a particular offence (such as armed robbery as opposed to dealing in prohibited drugs or receiving stolen vehicles). It merely relieves the Crown of the burden of proving that the alleged proceeds of crime were derived from a particular event (such as an armed robbery committed on a particular bank branch, at a particular time by a particular person). See the judgment of Basten JA at 27-33 and the judgment of Garling J at 94-100."
9. In Chen the Court (by majority) found that unless the prosecution identifies the relevant indictable offence, then it is not open to a jury to conclude that the money or other property constituted an instrument of crime at para [99].
10. It is instructive to consider the following extended passage from the judgment of Garling J at [99] and following in Chen. "The effect of s 400.13 of the Criminal Code is only to excuse the prosecution from proving a particular offence, that is an offence particularised by reference to a person, date, time, place and any other specific fact, matter or circumstance which would need to be particularised either in the indictment or else to enable an accused to prepare a defence to a specific charge." The prosecution of Chen, made no attempt to identify an indictable taxation offence which could have made the appellant's conduct come within the relevant definition. On the contrary, the vague assertions of the prosecutor, together with the generality of the submissions to the jury by the prosecutor, and the consequent summing-up by the trial judge of that part of the prosecution's case, were cast in such a way it was not open to the jury to convict the appellant on that alternate basis. The prosecution in this case made no attempt to identify an indictable taxation offence which could have made the appellant's conduct come within the relevant definition. Had careful attention been paid to the terms of the more serious charge and the elements required to be proved, then either the particulars of the money laundering charge may have been different, or else only the structuring offence would have been proceeded with. It is the prosecution's failure to address these matters which means that the appeal must be upheld and the orders proposed by Basten JA made.
11. In Mackellar Button J at [14] determined that: "I consider that the principle enunciated by the majority in Chen v Director of Public Prosecutions (Cth) applies by analogy to offences under Pt 4AC of the Crimes Act (NSW)and, in particular, to the facilitative provision contained at s 193F."
12. His Honour further observed at [15] that in respect of an offence alleged in breach of s 193B(2) and its alternative at s 193B(3) (as arose in that case if not here) it is necessary that the prosecution prove beyond reasonable doubt that " the cash in the possession of the accused on arrest was derived from both a particular offence which was italicised" (his Honour's emphasis)."
13. While Button J held at [16] while there is a "powerful circumstantial" case that the cash was derived from some form of serious criminality (as might be available here as to at least some of "the sum of money" averred) there was no evidence that "demonstrates that it derived from or even linked to a particular offence." It necessarily followed that there must be a verdict by direction on the s 193B(2) count and also with regard to the alternative count that suffered from the same deficiencies (see [17]).
14. In Dean v R [2019] NSWCCA 27 Fullerton J observed at 22 the following: "It is fundamental to the Crown's obligation of fairness which underpins its role as the prosecutor of indictable offences pursuant to s 8 of the Criminal Procedure Act that the particulars of a charge contain in the description of the conduct said to constitute the commission of the offence in the particular circumstances of the alleged offending. So much is necessary to ensure that the accused is informed of the case he or she has to meet to ensure that an accused is afforded natural justice."

CONTENTIONS OF PARTIES AND FACTUAL MATTERS

1. The accused's principal contention was that the Crown had failed to enunciate with any particularity the nature of the criminal offence of which the sum of money averred in the amended count 3 related to. It was accepted within those submissions that the Crown was not obliged to particularise a particular event, that is a specified actual offence but rather a precise type of criminal offence.
2. The principal contentions of the Crown were that the trial had been prosecuted on the basis of suggesting that an accumulation of $128,400 or some lesser amount was not consistent with the accused's legitimate sources of income and that "the Crown was entirely centred around the money being the proceeds of the accused's 'drug supply activities'" (my emphasis).
3. The Crown case statement provided as to the allegation: "having regard to the abovementioned evidence [a reference to material available in the prosecution brief] the Crown alleges that the items located in the accused's car, home and workplace and photograph located on his phone demonstrate that he was involved in drug supply for financial gain. In addition the money, the subject of the charge, is substantially greater than the accused's taxable income."
4. The Crown alleges that in combination the evidence proves that the accused knew the money, the subject of the charge, was the proceeds of crime.
5. The Crown Prosecutor in opening the case before me on 4 February 2019 said... "...The accused is charged with one count of dealing with the proceeds of crime pursuant to s 193B(2) of the Crimes Act 1900." The case against the accused concerns cash found primarily in his vehicle but also on his person on 10 November 2017, when he was arrested at work in connection with the importation of a large commercial quantity of cocaine. I anticipate that the accused will admit, for the purposes of this trial, that he has entered a plea of guilty to a charge of attempting to possess a large commercial quantity of cocaine and to supplying a prohibited drug, namely 85 grams of cocaine and they are counts 1 and 2."
6. And later "...The matters in issue are whether the Crown can prove beyond reasonable doubt' that the cash found at the time of the accused's arrest are the proceeds of crime and whether the accused knew this."
7. In summarising the evidence to be led the Crown adverted to inter alia "A tile consistent with the tiles used to import the cocaine," "the cocaine that is the subject of count 2 on the indictment," "a number of testosterone vials" and a reference to a firearm and ammunition.
8. Relevantly the final part of the Crown opening was: "Accordingly, the Crown case will be that when your Honour considers the evidence as a whole that your Honour can infer that the money found in the accused's car was the proceeds of crime, his drug offending and to be clear, the Crown does not allege that it is necessarily the proceeds of count 1 or 2, just that the money was the proceeds of crime, his drug offending and so deal with it knowing it was the proceeds of his drug crime." (My emphasis).
9. The Crown certainly cross-examined the accused on him having, among other things, an extensive cocaine addiction at relevant times and insufficient legitimate sources of income to service it, being involved in drug supply, including from his work premises and with having apparatus consistent with drug supply including drug ledgers. He was cross‑examined about the deemed supply charge to which he had pleaded guilty (which seems to invoke the potential relevance of count 2). He was also cross-examined about "drug supply crime" and "drug crime", which are more generic terms than drug supply. He was also cross-examined about fingerprints of his co-offender in relation to the importing matter being present on items found at his residential premises and the circumstance of the accused's involvement in count 1 (which seems to invoke the potential relevance of count 1). It was further put to him that a significant portion of the $128,400 found in his car and on his person on 10 November 2017 was to be used to "pay a drug supplier that day." It was further put that $6,500 was his "cut from the money that [he] had from [his] drug dealing enterprises."

CONSIDERATION

1. As to the issue of quantum, the failure of the Crown to specify a particular amount of money does not give rise to any basis on which to direct a verdict. As to the issue of quantum, there is no necessity for the Crown to specify quantum of money in the charge; (see R v Hall 2013 NSWCCA 47, Sills v R 2011 NSWCCA 271). Although the Crown contended that the trier of fact could be satisfied of an amount up to the maximum of $128,400 in possession of the accused on 10 November 2017 could be found to be the proceeds of crime, it was also open for the court to be satisfied of some lesser sum depending on what view was taken of the evidence at trial.
2. As to the Crown contention at the outset of the trial, it can be seen from both the Crown case statement and the extracts from the opening, that notwithstanding that drug supply was a term used in both those statements, the principal contention in the opening was that it was the accused's drug activities that the Crown contended would establish the relevant monies were proceeds of crime.
3. The term drug activities is a generic one that could, for instance, include specific offences such as, for example, supply prohibited drug, being cocaine in breach of s 25(1) of the Drug Misuse and Trafficking Act or attempting to possess a prohibited import being a large commercial quantity of a border controlled drug in breach of the Commonwealth Criminal Code. Neither or both of those offences were particularised as being the fount of the proceeds of crime as alleged, as they might have been. The position was made more complex by the Crown indicating that the money was not necessarily (but by implication might also have been) the proceeds of neither or either count 1 or 2 or both (or by implication other offences of the same respective character, although not those index offences).
4. It can be seen that the propositions put to explore in cross-examination both the provenance of the money found and the purpose to which it might be put vary as to language used; drug supply crime, drug dealing enterprises and drug dealing activities.
5. It may well be that if the language employed in the Crown case statement, the opening and the cross-examination was confined to "drug supply" and reliance on count 1 was expressly disavowed that the court could infer that sufficient particularity in terms of the offence relied on to establish "proceeds of crime". Hypothetically the Crown might alternatively have uniformly identified "drug supply" and/or "importation offences" which might have sufficiently particularised the offences relied on by the prosecution to establish "proceeds of crime." Neither of those things occurred in this case.
6. I am persuaded that given the Crown has failed to particularise an identified criminal offence or a number of identified criminal offences but relied on the generic term drug activities in disclosing the case on which it relied. In so doing and in the particular circumstances of this particular case (given for example if the accused had pleaded guilty to counts 1 and 2 and was cross-examined as to other criminal activities such as possession of testosterone and weaponry), the prosecution has failed in the obligations of particularity as required by Chen and Mackellar number 3 and accordingly natural justice has not been provided to the accused. As Basten JA put it in Chen the prosecution is obliged to ensure "the particulars of a charge contain the description of the conduct said to constitute the commission of the offence in the particular circumstances of the alleged offending." That is a high obligation that has not been met in this matter. Based on the binding rationale of those decisions and to borrow the language of Garling J in Chen "it is the prosecution's failure to address these matters that means that" I am obliged to direct myself to acquit the accused as to count 3.

FORMAL ORDERS

1. Accordingly I direct myself to acquit Zachary Adam Chie of count 3 for the reasons articulated above. I record a verdict of not guilty in relation to that matter and Zachary Adam Chie is discharged in relation to count 3 on the amended indictment on which he was arraigned on 4 February 2019 at Wollongong District Court.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 24 July 2019