Court of Appeal (Qld)|2008-04-11|Before: McMurdo P, Mackenzie AJA and Chesterman J, Separate, reasons for judgment of each member of the Court, each concurring as to the, order made
McMurdo P, Mackenzie AJA and Chesterman J, Separate, reasons for judgment of each member of the Court, each concurring as to the
Catchwords
CRIMINAL LAW – APPEAL AND NEW TRIAL AND INQUIRY AFTER CONVICTION
– APPEAL AND NEW TRIAL – APPEAL AGAINST SENTENCE
– APPEAL BY
ATTORNEY-GENERAL OR OTHER CROWN LAW OFFICER – APPLICATION TO INCREASE
Source
Original judgment source is linked above.
Catchwords
CRIMINAL LAW – APPEAL AND NEW TRIAL AND INQUIRY AFTER CONVICTION– APPEAL AND NEW TRIAL – APPEAL AGAINST SENTENCE– APPEAL BYATTORNEY-GENERAL OR OTHER CROWN LAW OFFICER – APPLICATION TO INCREASESENTENCE – where respondent convictedof offence against s 31(1)Financial Transaction Reports Act 1988 (Cth) – where offenceinvolved conducting cash transactions with the sole or dominant purpose ofensuring that the transferwould not give rise to a “significant cashtransaction” reportable to the Australian Transactions Reports andAnalysisCentre – where offence consisted of 437 transactions aggregatingclose to$3 million – where respondent sentenced to 12 monthsimprisonment with release after four months on a recognisance of $5,000to be ofgood behaviour for a period of three years – whether sentence manifestlyinadequate – whether sentence of sufficientdeterrent effect
Financial Transaction Reports Act 1988 (Cth), s 4, s
31(1)
Criminal Code Act 1899 (Qld), s 669A
Ansari v R (2007) 173 A Crim R 112
[2007] NSWCCA 204,
considered
House v The King (1936) 55 CLR 499
[1936] HCA 40,
cited
R v Bin Huang
R v See Hon Siu [2007] NSWCCA 259,
distinguished
R v Johnson Au [2001] NSWCCA 468, considered
R v
Katia
ex parte A-G (Qld) [2006] QCA
300
CA No 111 of 2006, 22 August 2006, cited
R v Liekefett
ex parte
A-G [1973] Qd R 355, cited
R v Marshall, unreported, Hoath DCJ, DC
No 1183 of 2004, 27 May 2004, considered
R v Melano
ex parte
Attorney-General of Queensland [1995] 2 Qd R 186
[1994] QCA
523 cited
R v Narayanan [2002] NSWCCA 200,
considered
R v Pullicino, unreported, NSW District Court, 21 June
1996, considered
R v Qin, unreported, Robin DCJ, DC No 245 of 2000, 25
August 2000, distinguished
York v The Queen (2005) 225 CLR 466
[2005]
HCA 60, cited
Judgment (55 paragraphs)
[1]
CRIMINAL LAW - APPEAL AND NEW TRIAL AND INQUIRY AFTER CONVICTION - APPEAL AND NEW TRIAL - APPEAL AGAINST SENTENCE - APPEAL BY ATTORNEY-GENERAL OR OTHER CROWN LAW OFFICER - APPLICATION TO INCREASE SENTENCE - where respondent convicted of offence against s 31(1) Financial Transaction Reports Act1988 (Cth) - where offence involved conducting cash transactions with the sole or dominant purpose of ensuring that the transfer would not give rise to a "significant cash transaction" reportable to the Australian Transactions Reports and Analysis Centre - where offence consisted of 437 transactions aggregating close to
[2]
$3 million - where respondent sentenced to 12 months imprisonment with release after four months on a recognisance of $5,000 to be of good behaviour for a period of three years - whether sentence manifestly inadequate - whether sentence of sufficient deterrent effect
Director of Public Prosecutions (Cth) for the appellant
[17]
[1] McMURDO P: The appeal of the Commonwealth Director of Public Prosecutions against sentence should be dismissed for the reasons given by Mackenzie AJA. I add only the following brief observations.
[18]
[2] Deterrence is an important consideration when sentencing for this offence under s 31(1) Financial Transaction Reports Act 1988 (Cth) ("the Act"). The long title of the Act is "[a]n Act to provide for the reporting of certain transactions and transfers, to establish an Australian Transaction Reports and Analysis Centre and to impose certain obligations in relation to accounts, and for related purposes." The objects of the Act are stated in s 4 and are:
[19]
" (1) The principal object of this Act is to facilitate the administration and enforcement of taxation laws.
[20]
(2) A further object of this Act is to facilitate the administration and enforcement of laws of the Commonwealth and of the Territories (other than taxation laws).
[21]
(3) Without prejudice to the effect of this Act by virtue of subsections (1) and (2), a further object of this Act is to make information collected for the purposes referred to in subsection (1) or (2) available to State authorities to facilitate the administration and enforcement of the laws of the States."
[22]
[3] The Act is principally aimed at limiting tax evasion. It also provides a useful tool against the anti-social practices of organised crime and public corruption. Our federal taxation system substantially funds the public services, facilities and institutions, which are essential to the satisfactory functioning of our civil society. Its efficacy depends in large measure on compliance by ordinary citizens with the statutory requirements of the Act. Non-compliance will not always be easy to detect. There is no suggestion the respondent was involved in personal tax evasion, much less organised crime or public corruption. He made no large profits from his commission of the offence. There is a real possibility, however, that those with whom he was dealing may well have been involved in tax evasion.
[23]
[4] The sentence imposed, 12 months imprisonment with release after serving four months imprisonment upon giving security by recognizance in the sum of $5,000 conditioned that the respondent be of good behaviour for a period of three years, is significant enough to be an effective deterrent in the present circumstances. The maximum penalty was five years imprisonment and/or a fine of $330,000. The respondent was of prior unblemished character. Although he pleaded not guilty, he made real efforts to cooperate with the administration of justice in limiting the issues for determination at trial. The sentence imposed sends the clear message that even in such circumstances, offenders against s 31(1) can ordinarily expect to serve a period of actual imprisonment. It follows the appellant has not demonstrated that the sentence was manifestly inadequate.
[24]
[5] MACKENZIE AJA: The Commonwealth Director of Public Prosecutions appeals against a sentence of 12 months imprisonment, with release after serving
[25]
four months, on a recognisance in the sum of $5,000 to be of good behaviour for a period of three years. The sentence was imposed for an offence against s 31(1) of the Financial Transaction Reports Act 1988 (Cth). The appellant contends that the sentence was manifestly inadequate.
[26]
[6] The elements of the offence with which the respondent was charged and convicted after trial are:
[27]
(a) That he was a party to two or more non-reportable cash transactions; and
[28]
(i) the manner and form in which the transactions were conducted; and
[29]
(ii) any explanation made by the person as to the manner or form in which the transactions were conducted;
[30]
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:
[31]
(iii) would not give rise to a significant cash transaction.
[32]
[7] A "significant cash transaction" is a cash transaction involving the transfer of currency of not less than $10,000 in value. A "cash transaction" is a transaction involving the physical transfer of currency from one person to another. A cash transaction to which a cash dealer (of which a bank would be an example) is a party and which is not a "significant cash transaction" is a "non-reportable cash transaction". Leaving aside some exceptions not relevant to this case, a cash dealer is required to report a significant cash transaction to the Australian Transactions Reports and Analysis Centre (AUSTRAC).
[33]
[8] The factual context, briefly, is that after a lengthy period in the tobacco industry, the respondent set up his own business of supplying tobacco products to retailers. He sourced his supplies from Mr Ngo, a person he had met in Vietnam in 2002. He began buying from Mr Ngo in March 2003. Mr Ngo would deliver the product to the respondent's home and be paid in cash for it. There was a defence admission at trial that the respondent, or his wife at his direction, withdrew cash from a bank account, often by prearrangement, at one of several branches of the bank at which withdrawals were made. Payments by cheques from the respondent's retail customers were paid into the same account.
[34]
[9] There was also an admission by the defence that each of the amounts shown in the schedule which was an exhibit at trial, had been withdrawn on the dates shown in the schedule. It shows that withdrawals were made at a variety of branches of the one bank, for convenience, according to the appellant's evidence, because they were in the same areas as clients. The daily totals recorded in the schedule were also admitted to be correct. It is clear from the schedule that the pattern of transactions would have been apparent to anyone with access to the record of the transactions. While there were other amounts withdrawn occasionally, sums of $6,000, and later $7,000 were by far the most frequent amounts withdrawn.
[35]
[10] The respondent gave evidence at trial. Aspects of his evidence were probed in cross-examination, but not contradicted by direct evidence. He said that Mr Ngo was selling the tobacco at about a 10 per cent discount from the regular wholesale rate. He said that Mr Ngo had told him that the stock, some at least of which was getting old, was stock being sold off by manufacturers. From the appellant's experience in the industry, he knew such sales sometimes happened. That was also said to be the explanation why some cartons were marked "duty free". According to his understanding, duty free cigarettes could be sold outside the duty free system provided the excise was accounted for. He said that although he repacked the packets from those cartons and disposed of the cartons themselves, it was not because he thought customers might question the source of the cigarettes if they were given to them in the original packaging. It was to sell them as standard quantities used in the wholesale market. All he knew about the source of the cigarettes was that Mr Ngo told him they came from New South Wales. He believed that Mr Ngo might be connected with a New South Wales group which used 888 in its name. (There was an admission by the prosecution at the trial that there were 10 tobacconists' shops operating in New South Wales with 888 in the title).
[36]
[11] He said that he had not received receipts from Mr Ngo for the payments and had not noticed that the tax invoices subsequently received did not contain any contact details. He did not retain any delivery dockets. He did not discuss any means of payment other than payment in cash. He explained that he withdrew sums of less than $10,000 for security reasons; he felt uncomfortable withdrawing larger sums. After he had made withdrawals he would hide them in the boot of his car until he was able to put the money in his safe at home.
[37]
[12] It is apparent from the evidence that the appellant made very limited enquiries despite what might be thought to be circumstances that would ordinarily raise questions in his mind about the business relationship he was engaging in with Mr Ngo. However, there was no specific allegation against the respondent that he was involved in facilitating any wrongdoing apart from operating in a way that avoided AUSTRAC scrutiny, in contravention of the Financial Transaction Reports Act 1988 (Cth). The conduct occurred over a period of almost 18 months. There were 437 transactions with a total of just under $3 million being withdrawn from the accounts. On a significant proportion of the days when transactions occurred there were multiple transactions.
[38]
[13] The only issue in contention at trial was whether having regard to the manner and form in which the transactions were conducted, it would be reasonable to conclude that the respondent conducted the transactions in that manner or form for the sole or dominant purpose of ensuring that the currency involved in the transactions was transferred in a manner and form that would not give rise to a significant cash transaction. The jury, by its verdict, found that it was. Given the matters referred to previously, the finding adverse to the respondent is not surprising. After the verdict was returned, there were submissions as to the basis upon which the respondent should be sentenced. The prosecution contended that the dominant purpose should be found to be that the respondent was seeking to avoid reporting the transactions to protect Mr Ngo from becoming known to the Federal authorities. The defence submitted that his motivation was merely to obtain a ready supply of cheaper tobacco than he could otherwise obtain.
[39]
[14] The learned trial judge sentenced on the basis of a "factual finding that (he) avoided or attempted to avoid reporting to get a ready supply of cheaper tobacco". There was no challenge in this appeal to that finding.
[40]
[15] The appellant's counsel's position was essentially that the respondent had been wilfully blind to the possible implications of supplying Mr Ngo with large quantities of cash. The seriousness of the offence lay in the very large amount of money and the frequency of the transactions. The manner and form of the transactions involved withdrawing, over a period of about 18 months, 437 sums of money which were less than $10,000 each but in aggregate were almost $3 million. Further, while individual sums were less than $10,000, there was an obvious desire on the respondent's part to accumulate sums in excess of $10,000, demonstrated by frequent instances where banks were visited up to five times a day to make withdrawals. It was said that the inadequacy of the sentence was manifest when regard was had to the circumstances of the offending and the relevant comparable cases.
[41]
[16] It was submitted that the absence of subterfuge or of any evidence of tax evasion had been overemphasised in assessing the seriousness of the offending. The critical concern was the respondent's purpose in making the withdrawals, not his purpose in using the money to pay Mr Ngo. Further, in practical terms, openness about the receipt and payment of moneys was necessary if the respondent was to be able to take advantage of the withdrawals and payments for income tax and for input credit purposes in connection with GST. In structuring the transactions as he did, the respondent demonstrated little regard for the "apparent circumstance" that Mr Ngo or his principals were not necessarily honouring their own taxation obligations.
[42]
[17] Counsel for the appellant relied on several cases as being comparable; but in my view, each has significant features that are unlike those in the present case and limit their use to being examples of how the sentencing process operated in particular factual situations and as the source of observations made about aspects of the process. R v Marshall (unreported, Hoath DCJ, DC No 1183 of 2004, 27 May 2004) was a case where the offender was the instigator of two separate kinds of offending, one involving family members, the purpose of which was to convert his own undisclosed taxable income into bank cheques and foreign currency. He was sentenced to 12 months imprisonment with release on recognisance after four months. The learned judge in the present matter adopted Hoath DCJ's comments to the effect that given the purpose of the legislation, general deterrence, even when dealing with persons of previous good character, was a very important consideration. In similar vein, in R v Johnson Au [2001] NSWCCA 468, Sully J endorsed a District Court Judge's remarks on sentence in the following passage:
[43]
"It is necessary not only to deter individuals from undermining the laws relating to tax avoidance and money laundering, but to publish the message that anyone, however naive they may be, is likewise susceptible to punishment for taking part in such attempts to avoid financial scrutiny."
[44]
[18] Au had transferred sums of money totalling about $50,000 to China over a period of about a month and a half. He had recently been released on parole and had been influenced by a fellow prisoner to make the remittances on his behalf. The fact that he was on parole was considered to be an aggravating circumstance. He received a 12 months sentence with release on recognisance after seven months.
[45]
[19] R v Pullicino (unreported, NSW District Court, 21 June 1996) and R v Narayanan [2002] NSWCCA 200 involved offenders employed in financial institutions. Both had been of good character prior to the offending. Pullicino had assisted or counselled customers to transfer amounts totalling about $1,500,000 offshore, knowing that in some cases it was intended to avoid tax. He was initially fined by a Magistrate whose jurisdiction extended to imposing 12 months imprisonment. This sentence was set aside and 12 months imprisonment with release on recognisance after four months imposed on appeal. The fact that Pullicino had given considerable assistance to the authorities prior to sentence was said to be a "great consideration".
[46]
[20] Narayanan was the CEO of a currency exchange business. He was actively involved in colluding with purchasers of traveller's cheques to conceal that significant cash transactions had occurred. He was sentenced to 10 months imprisonment with release on recognisance after six months. Cases such as R v Qin (unreported, Robin DCJ, DC No 245 of 2000, 25 August 2000) and R v Bin Huang; R v See Hon Siu [2007] NSWCCA 259 to which passing references were made are concerned with different, and in the case of Huang and Siu much more serious, offences.
[47]
[21] In Huang and Siu, there is an observation that where offences under s 400.3 and s 400.4 of the Criminal Code Act 1995 (Cth) were involved, sentences imposed for offences in breach of s 31(1) of the Financial Transaction Reports Act 1988 (Cth) were not a helpful guide to the sentence to be imposed for the more serious offences. Their offences involved either knowledge that the money being dealt with was proceeds of crime or that there was dealing in money intending it to become an instrument of crime. In Huang's case, the category of intending it to become an instrument of crime was the highest and most serious of mental states in the hierarchy of offences under s 400.4 under which he was charged.
[48]
[22] The reasons of the court in Huang and Siu also refer to a passage from Ansari v R (2007) 173 A Crim R 112; [2007] NSWCCA 204. That was also concerned with Division 400 of the Criminal Code but there is a passage that is apposite to the general approach towards sentencing in paragraphs 123 and 124. Relevantly for the present purposes, the concept is that the most important consideration in sentencing an offender is to consider what the offender did. According to normal sentencing principles, if the prosecution wants to submit that the particular offences are aggravated by a circumstance that makes it more serious than objectively it would appear to be from the conduct of the offender, then the prosecution is obliged to prove that fact. Equally if the offender seeks to mitigate the seriousness of the apparent conduct, then it would fall to the offender to prove that fact on the balance of probabilities. Where, however, there is an absence of evidence as to, for example, the ultimate destination of funds, the court must simply deal with the matter on the objective facts as proved by the evidence.
[49]
[23] The sentencing remarks in the present application show that the learned trial judge took into account a variety of factors in imposing the sentence. There was the finding that the respondent had avoided or attempted to avoid the restrictions in order to get a ready supply of cigarettes. She acted on the basis that the sum involved was more than $3 million and that the sole or dominant purpose was ensuring that the transactions were not reportable under the Act. She accepted that persons who structured transactions to avoid reporting conditions in the Act ought to be dealt with with some severity. She also found that, while the respondent's profit could not properly be quantified, it would not have been substantial.
[50]
[24] As against that, she referred to a number of factors which she considered to be mitigating factors. They included that there was no deliberate cover up; no false names were used and no people other than his wife were involved. He had approached the bank himself. The accounts were in his name and there was only one bank involved. The transactions involved cheques from his customers and he took cash out of the bank in which they were deposited. There was no question of his avoiding income tax or GST. She also took into account that the trial was conducted more expeditiously because of the substantial number of admissions made by the defence on his instructions. She also took into account that he was a man of 50 years of age with no previous convictions and who had a good employment history. The offence was also one where the standard of proof of the only matter in issue was accepted by the parties to be proof on the balance of probabilities. It was an offence for which the maximum penalty was only five years. A sentence of 12 months in the abstract is not therefore a token one.
[51]
[25] On the other hand, as the appellant points out, the sums of cash given to Mr Ngo were large and numerous. However, there was no attempt to establish what was subsequently done with the money. It is not a case where any inference can be safely drawn concerning the precise, or for that matter, the kind of consequences of the respondent's conduct in respect of the objectives of the Act. What the truth is lies in the realm of speculation only. The sentencing judge expressly adverted to the need for a deterrent sentence. The comparative sentences relied on are not of particular assistance but some of them have aspects which might be considered to be worse than those in the present case. On the other hand the sheer size of the contravention in this case is an aggravating feature.
[52]
[26] It is a well established principle that appeals against sentence by a prosecuting authority are to be approached with some moderation (R v Melano; ex parte A-G (Qld) [1995] 2 Qd R 186; [1994] QCA 523). The principle that has been consistently applied is that to succeed in an appeal under s 669A, error must ordinarily be demonstrated in accordance with the principles in House v The King (1936) 55 CLR 499; [1936] HCA 40 (R v Liekefett; ex parte A-G [1973] Qd R 355; Melano; and, post York v The King (2005) 225 CLR 466; [2005] HCA 60, in R v Katia; ex parte A-G (Qld) [2006] QCA 300; CA No 111 of 2006, 22 August 2006). Having regard to the evidence before the learned sentencing judge and the general level of sentencing demonstrated by the cases to which reference was made, I am not persuaded that a head sentence of 12 months demonstrates appellable error. The period before release on recognisance after four months appears to reflect the factors in his favour, particularly his co-operation with the administration of justice in the sense that, although he wished to contest the issue of whether it was reasonable to believe that he had structured the payments to avoid the obligations of the Act, he did not put the prosecution to a long and inconvenient task of proving the individual transactions.
[53]
[27] The imposition of a 12 months head sentence, in my view, demonstrates to people who might be like-minded that even a person who has lived a conventional life without incurring any convictions until middle age must expect to face a term of imprisonment if he or she engages in significant contraventions of the Act. The only issue remaining is whether the order for release on recognisance after four months has the effect of demonstrating appellable error and rendering the sentence, overall, inappropriate. I have come to the conclusion that, although the non-release period may be thought to be at the lowest permissible end of the range having regard to the conduct engaged in, it does not fall into a category where it is appropriate to intervene on an appeal by the prosecuting authority. There is the unusual factor in this particular case, that notwithstanding the matter going to trial, at least some allowance for facilitating the administration of justice by narrowing the issues and making admissions which considerably reduced the length and expense of the trial was justifiable.
[54]
[28] The sentence overall requires the respondent to serve a period of actual imprisonment of four months. The release date in this case may be considered to be at the low end of the range for an offence involving protracted conduct and a large amount of money. But the fact that an order requiring actual imprisonment to be served was made where a person was otherwise of good character into middle age and had a conventional background, and there was also the unusual factor that there was no allegation of any identified detrimental consequence to the Commonwealth of his engaging in that kind of conduct, in my view tends to bring home to other potential offenders what the consequences of contravention of s 31(1) are likely to be.
[55]
[30] CHESTERMAN J: I agree that the appeal should be dismissed for the reasons given by Mackenzie AJA.