R v Ferguson

Supreme Court of Victoria|2005-11-17|Before: KAYE J

Criminal law - money laundering - Confiscation Act 1997 s 122 - "Giretti" count - whether invalid for duplicity.

1 In this matter the accused, Ian Ferguson, is charged on the first count on the presentment with the offence of conspiring to traffic heroin between 1 April 1999 and 6 December 2002. The accused, Ian Ferguson and Joanne Ferguson, are jointly charged as follows:

"Count 2: And the Director of Public Prosecutions further presents that Ian Ferguson and Joanne Ferguson at Melbourne in the said State between the first day of April 1999 and the sixth day of December 20002 engaged directly or indirectly in transactions that involved money and other property that is the proceeds of crime and Ian Ferguson and Joanne Ferguson knew or ought to reasonably to have known that the money and other property was derived or realised directly or indirectly from some form of illegal activity."

2 The Crown case is now well advanced. In the course of discussion concerning the manner in which the Crown intends to put its case against Joanne Ferguson in final address, Mr Tovey QC, senior counsel for the Crown, informed me[1] that the Crown recognised that it would not be able to establish beyond reasonable doubt that Joanne Ferguson knew or ought to have known that the money, involved in the transactions in question, was derived from some form of unlawful activity until about late 2000. Thus the Crown intends to submit to the jury that the period of offending by Joanne Ferguson was from approximately November 2000. Mr Gucciardo, who appears as senior counsel for Joanne Ferguson, initially objected to the course proposed to be taken by the Crown. However, after further clarification by Mr Tovey, Mr Gucciardo has informed me that he does not raise any issue with how the Crown is now putting its case against his client.[2]

3 Before the Crown opened the case to the jury, I raised the issue of the validity of Count 2 with counsel.[3] I expressed the preliminary view that Count 2, as formulated, was a valid count. In the course of that discussion Mr O'Doherty,[4] who appears as senior counsel for Ian Ferguson, stated that he accepted that the count as formulated against his client was valid. In particular, Mr O'Doherty accepted that the charge under s 122 of the Confiscation Act containing Count 2 was susceptible of a "between dates" count referring to a number of transactions. Mr Gucciardo did not contend that Count 2 was invalid, but stated nonetheless that that conclusion might depend upon the manner in which the Crown was to put its case. In later submissions during the trial, Mr Gucciardo[5] accepted that a "Giretti" count is open under s 122 of the Confiscation Act.

4 Before raising this matter with counsel I had given some consideration to the question of the validity of Count 2. In my view the concessions made by counsel for the accused are correct. However, and notwithstanding the concessions of counsel, it is appropriate that I briefly set out the reasons for my conclusion that Count 2 is a valid charge, albeit that those conclusions have been reached without argument from counsel from either side.

5 Count 2 alleges an offence under s.122 of the Confiscation Act 1997, as it was then in force at the time of the offences. Section 122(1) provided that:

"A person who engages in money laundering is guilty of an indictable offence..."

"A person engages in money laundering if, and only if -

(a) the person engages, directly or indirectly, in a transaction that involves money, or other property, that is proceeds of crime;

...

and the person knows or ought reasonably to know, that the money or other property is derived or realised, directly or indirectly, from some form of unlawful activity."

7 The issue of the validity of Count 2 raises two related questions, namely:

(a) Does Count 2 charge an offence known to law?

(b) If so, is Count 2 bad in law for duplicity?

8 The first question arises because Count 2 alleges that the accused engaged in transactions (plural), whereas s.122(2)(a) of the Confiscation Act provides that a person engaged in money laundering if the person engages in a (singular) transaction which involves the proceeds of crime.

9 An offence can be validly charged as being constituted by a continuous transaction, or a series of transactions, which occur between nominated dates. Further, such an offence can be validly charged notwithstanding that the offence itself could be committed by one single act out of the series of transactions alleged against the accused. For example, an accused can be validly charged with trafficking a drug of dependence "between dates", notwithstanding that the trafficking can be constituted by a number of separate transactions occurring between those dates. See R v Giretti;[6] R v Lao and Nguyen.[7]

10 If, on the other hand, as a matter of statutory construction the offence necessarily consists of only one transaction, it is impermissible to charge the offence in the plural. To do so is to charge an offence which is not known to law. An instance of such a charge was considered by Gaudron J and Gummow J to have occurred in the charge against the accused in Walsh v Tattersall.[8] The question is essentially one of statutory construction. In Walsh v Tattersall, the important consideration was whether the offence was described in the legislation as being constituted by a single transaction. See also R v Moussad.[9] Nevertheless even in such a case the offence may be charged as consisting of two or more transactions or events, each of which might, individually, constitute an offence under the relevant legislation. See Hyde v Mason.[10]

11 Section 122(2)(a) of the Confiscation Act provides that a person engages in money laundering if that person engages in a (singular) transaction. Thus on the face of it s.122(2)(a) would provide for an offence in respect of each individual transaction which involved the proceeds of crime.

12 However, the analysis of s.122 does not end there. It is s.122(1) which creates the statutory offence. It provides for an offence in respect of "a person who engages in money laundering". Similarly, s.122(2)(a) provides that that person "engages in money laundering" if the person "engages" in a transaction involving money which is the proceeds of crime. It is significant that the section employs the verb "engages". The act of engaging can be, and generally is, a continuous act. Equally, a transaction may, and often does, involve a number of acts which themselves constitute transactions. For example a transaction involving the purchase of an item may involve several constituent transactions, including entry into the contract of purchase, payment of the deposit, payment of a part payment, payment of the balance of a purchase price, and delivery of possession of the item.

13 The next aspect which must be noted about s.122(2) concerns its structure. Section 122(2)(a) provides that a person engages in money laundering "if and only if" the person engages in a transaction involving the proceeds of crime. Thus a person may only engage in money laundering if that person engages in a transaction involving the proceeds of crime. If the person does not engage in a transaction involving money which is the proceeds of crime, the person does not engage in money laundering. However, it does not follow that a person engages in more than one act of money laundering if the person engages in more than one transaction involving the proceeds of crime. As I have stated, a purchase involving the proceeds of crime may itself, strictly speaking, involve a number of transactions. It could not have been intended that the person who made that purchase was, under s.122(2)(a), guilty of some four or five separate offences of money laundering.

14 It is next important to note that s.122(2) may apply to a case where the crime, from which the relevant proceeds are derived, may be a continuing offence. Indeed, in the instant case, the proceeds of crime referred to in Count 2 are alleged to have been derived from the conspiracy (charged in Count 1), which itself is alleged to have occurred over a three and a half year period. In such a case, a large number of interrelated transactions may be effected with the proceeds which were progressively derived from that crime during the period in which it was committed. While one transaction with the proceeds of that crime may well constitute a single act of money laundering under s.122(2), it would produce a strange and indeed absurd result if each individual transaction involving the proceeds of that crime must be considered a discrete and separate offence and charged as such.

15 If s.122(2)(a) was construed so that each individual transaction - each purchase, deposit or transfer - involving the proceeds of a continuing crime was a discrete offence, such a construction would produce a multiplicity of charges which would not only be highly artificial, but could be quite unfair to an accused. Indeed such a result could occur in the present case. If each deposit, transfer, and purchase, was separately charged as a transaction under s.122(2)(a), each accused would stand charged with a multiplicity of interrelated offences which would not only be difficult to disentangle, but which would be well nigh impossible for a jury to consider separately from each other. The legislature could not have intended that s.122 would operate in such an artificial manner.

16 Each of those considerations are relevant to the proper construction of s.122(2)(a). As I have stated, a person is only guilty of money laundering if that person engages in a transaction involving money which is the proceeds of crime. However it does not necessarily follow that each time the person engages in a transaction involving money which is the proceeds of crime, that person commits a discrete offence which must be charged separately. Accordingly, I do consider that, as a matter of statutory construction, an offence may be charged under s 122(2)(a) of the Confiscation Act as constituted by more than one transaction.

Duplicity

17 The second question is whether Count 2 is bad in law for duplicity.

18 A count is duplicitous if it charges the accused with two or more separate offences.[11] If I am correct in concluding that, as a matter of construction, an offence under s.122(2)(a) of the Confiscation Act may be committed by two or more related transactions involving the proceeds of crime, then it must follow that Count 2 is not patently duplicitous. The question nonetheless arises whether Count 2 contains a latent duplicity. The answer to the question depends on the manner in which the Crown makes its case in respect of Count 2.

19 Where an offence may consist of two or more acts or transactions, each of which themselves may individually also constitute the commission of the offence, it is not duplicitous to charge the offence as one offence occurring between dates, if the various transactions constituting the charge essentially involved the one continuing transaction or enterprise.

20 Thus, in Director of Public Prosecutions v Merriman[12] Lord Diplock stated:

"Where a number of acts of a similar nature committed by one or more defendants were connected with one another, in the time and place of their commission or by their common purpose, in such a way that they could fairly be regarded as forming part of the same transaction or criminal enterprise, it was the practice, as early as the eighteenth century, to charge them in a single count of an indictment."

21 That passage was quoted with approval by Dawson and Toohey JJ in Walsh v Tattersall.[13] It was also referred to in the same case by Kirby J.[14] Without expressly approving that passage, Kirby J nonetheless stated:[15]

"Ultimately, what is presented is a question of fact and degree for decision in each case. Various indicia are proposed to sustain a single count against the charge of duplicity, notwithstanding that it may permit evidence to be adduced of events which, taken individually, could constitute separate counts. The indicia include: (a) the connection of the events in point of time; (b) the similarity of the acts; (c) the physical proximity of the place where the events happened; and (d) the intention of the accused throughout the conduct."

22 See also R v Lao and Nguyen (above ) at [101] per Eames JA.

23 In practice, the concept of a continuing enterprise or offence has permitted charges to be laid in respect of ongoing social security and workers' compensation frauds which have consisted in a series of periodic payments made to the accused. Thus, in Weinel v Fedcheshen[16] the accused was alleged to have dishonestly appropriated payments and benefits under the Workers Rehabilitation and Compensation Act 1986 (SA) by dishonest pretences on 59 specified occasions. Charge one contained a "compendious" charge alleging the obtaining of benefits totalling $12,000 over a period of 10 months during which the 59 specified occasions occurred. Alternatively, the summons contained 59 separate charges in respect of each occasion. The accused was convicted by the Magistrates' Court on the first charge. He appealed on a number of grounds, including the ground that Count 1 was bad for duplicity. Perry J of the South Australia Supreme Court rejected that submission, holding that the count was not bad for duplicity. His Honour stated:[17]

"Although the learned special Magistrate did by implication find all of the counts alleged proved, it was not necessary for him to do so in order to found a conviction on Count 1. All that was necessary to found a conviction on Count 1 was that the Magistrate satisfied himself that there was a course of conduct involving an obtaining by dishonest means, contrary to the section, the course of conduct being of such a continuous and ongoing nature that the defendant must be taken to have been implementing a scheme or system of dishonest dealing of which each of the individual counts as to which the Magistrate was satisfied, was part."

24 A similar conclusion was reached by the New South Wales Court of Appeal in R v Moussad.[18] In that case the accused was charged with defrauding the Commonwealth under s 29D of the Commonwealth Crimes Act. The charge covered monies received by the accused pursuant to nine quarterly claims submitted by her to the Department of Health and Family Services between 1991 and 1993. The appellant submitted that the trial judge erred in permitting the Crown to lead evidence of multiple acts of dishonesty having regard to the indictment. On the other hand, the Crown contended that the appellant was involved in a single criminal enterprise which occurred between the specified dates and accordingly the charge was not invalid for duplicity. The trial judge held[19] that although the acts against the accused were not connected with each other by the time and place of their commission, nonetheless they were linked by a common purpose in such a way that they could be fairly regarded as forming part of the same transaction or criminal enterprise. That conclusion was upheld by the New South Wales Court of Criminal Appeal. The leading judgment of the Court was delivered by Smart AJ, with whom Wood CJ and Bell J concurred. In the course of his judgment his Honour stated:

"54. The Courts in this State have found that "enterprise" counts have their place in drug supply and fraud cases where it is important to stress the overall criminality. Some large scale heroin and cocaine operators supply relatively small amounts at a time so that if caught, they cannot be charged with supplying a commercial quantity or a large commercial quantity. In order to bring home the full extent of their criminality and ensure appropriate punishment, the quantities from a number of acts and supply have to be aggregated. The enterprise is to supply large commercial quantities of heroin, cocaine or other harmful drugs.

55. In some of the fraud cases, as part of a systematic and long term defrauding, small sums are taken by overclaims and other dishonest means. Each instance may well involve a small sum which can be dealt with a Magistrate. Often the frauds continue for some years. The smaller the sum taken, the less likely it is to be investigated and discovered. Despite the arguments to the contrary, if there had been a series of separate counts, whether nine based on the false quarterly fee claim or 46 based on the false statements, I would not have regarded separate counts as appropriate."[20]

25 In the present case the proceeds of crime which are the subject of Count 2 are alleged to have been derived from a continuing conspiracy. If the Crown sought to rely on specific individual transactions as constituting the acts of money laundering under Count 2, then the Crown might be required to separately charge each of those transactions, rather than include them in a compendious single count. However, here the Crown relies on a large number of ongoing transactions involving the accounts and funds of the two accused. In particular it relies on a number of deposits into the accounts of the two accused, withdrawals from those accounts, and cash purchases made by one or other or both of the accused which it is alleged were sourced from the proceeds of the conspiracy. The prosecution does not allege that each individual deposit, withdrawal or cash payment constituted an act of money laundering under Count 2. Rather the Crown alleges that, taking into account the amount of the deposits and payments, the amounts involved, their timing, the pattern of them, and related matters, between the dates specified in Count 2, the accused engaged in an ongoing scheme or enterprise consisting of transactions involving the proceeds of the crime charged in Count 1 of the presentment.

26 In my view, the manner in which the Crown has thus made its case under Count 2 does not, therefore, render Count 2 bad in law for latent duplicity. Nor has it been contended on behalf of either of the accused that such a case involves any element of duplicity. Nonetheless it is important that the Crown bear steadily in mind the manner in which it is intending to make its case against the accused under Count 2. If in final address the Crown sought to divert from that course, and to allege that any specific transaction constituted, of itself, an act of money laundering, then that may result in the conclusion that Count 2 is bad for intent duplicity, as well as involving unfair embarrassment to the accused in their defence of the charge. However, and in light of the manner in which the Crown has thus far sought to make out the charge under Count 2, I do not consider that that charge is bad in law for duplicity.

[1] T1332-4 (21 October 2005)

[2] T2486 (11 November 2005)

[3] T225ff (3 October 2005)

[4] T229

[5] T 1744 (28 October 2005).

[6] (1986) 24 A Crim R 112.

[7] [2002] VSCA 157; (2002) 5 VR 129.

[8] (1996) 188 CLR 77 at 87, 91 (per Gaudron, Gummow JJ).

[9] [1999] NSWCCA 337 at paras 25, 62.

[10] (2005) QCA 79.

[11] See Walsh v Tattersall (above at 84) per Dawson and Toohey JJ; Woods v Legal Ombudsman [2004] VSCA 247 at [39] (Chernov JA).

[12] [1973] AC 584 at 607; see also Rubiretti (above) at 129, per Ormiston JA.

[13] (Above) at p.84

[14] At p.107.

[15] At p.108.

[16] (1995) SASR 156.

[17] P.171

[18] [1999] NSWCCA 337.

[19] Para 19.

[20] See also Hyde v Mason [2005] QCA 79.

At a glance

Court

Decision date

Before

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Judgment (20 paragraphs)

Parties

Cases Cited (2)