R v Miller [2007] VSCA 249

Court of Appeal (Vic)|2007-11-15|Before: BUCHANAN and CHERNOV JJA and CURTAIN AJA

Criminal law - Inconsistent verdicts - Merciful verdicts - Money laundering - Acquittals entailed monies were not the proceeds of crime - Majority verdicts - Jury instructed to reach unanimous verdicts if possible - Jury question - Meaning of innocent until proven guilty - Redirection adequate - Convictions quashed - Appellant re-sentenced.

**1 The applicant pleaded not guilty in the County Court to a presentment containing seven counts of obtaining a financial advantage by deception, nine counts of money laundering, two counts of theft and two counts of falsifying documents.

2 The charges arose from transactions involving Eurovox Pty Ltd ('Eurovox'), a company engaged in the business of selling to car manufacturers in Australia audio equipment made overseas. The transactions took place between December 1998 and November 2002. The applicant was the managing director of Eurovox.

3 A great deal of the audio equipment was acquired by Eurovox from Maruwa Electronic and Chemical Company ('Maruwa'), which manufactured the equipment in Japan. Seigo Ito was in charge of the electronics division of Maruwa. Ito was a principal Crown witness at the trial.

4 According to the Crown, the applicant and Ito procured payments from Eurovox to Maruwa or other companies controlled by Ito. The payments did not represent genuine transactions, and were often obtained by the production of false invoices. Ito arranged for sums representing the whole or part of the monies paid by Eurovox to be sent to a bank account in Australia in the name of the applicant.

5 The jury found the applicant guilty on two counts of obtaining a financial advantage by deception, five counts of money laundering, one count of making a false document and one count of using a false document.

6 I turn to the Crown case as to those counts on which the applicant was found guilty or which were relevant to those counts.

7 Pursuant to count 3, the Crown alleged that the applicant arranged for Eurovox to pay an invoice created by Ito at the request of the applicant, apparently for the cost of tooling to manufacture a tuner and control unit. The invoice was false in that the cost of the tooling was paid by amortisation, that is, by adding a percentage of the cost to the price of products sold by Maruwa to Eurovox. The jury found the applicant not guilty. The prosecution case on count 4 was that the applicant received funds that were the proceeds of the crime said to be count 3, when he knew or ought reasonably to have known that the money was derived from some form of unlawful activity. The jury found the applicant guilty on this count.

8 Pursuant to count 5, the Crown alleged that the applicant arranged with Ito for payment of Y13,341,639 to Maruwa, apparently as a productivity discount. Under count 6, a money laundering count, it was alleged that the applicant received the sum as the proceeds of crime. The jury found the applicant not guilty on count 5 but guilty on count 6.

9 The Crown case in respect of count 7 was that the applicant procured a payment of Y35 million by Eurovox to Maruwa by creating a false invoice, apparently for the cost of tooling. The jury found the applicant not guilty. The Crown case in respect of count 9 was that Ito and the applicant arranged for the payment of Y12.5 million to the applicant. The money was part of the Y35 million the subject matter of count 7. The jury found the applicant guilty on this count. Under count 10, it was alleged that the applicant received 100 DVD players, which were part of the proceeds of the Y35 million the subject matter of count 7. The jury found the applicant guilty on this count.

10 Pursuant to count 11, the Crown alleged that the applicant created a false invoice, apparently from Maruwa, in an amount of Y22 million. Under count 12, the Crown alleged that the applicant used the false invoice to induce Eurovox to accept it as genuine. Under count 13, the Crown alleged that the applicant obtained the transfer to a company controlled by Ito of $172,555.77, using the false document the subject matter of counts 11 and 12. The Crown case in respect of count 15 related to the applicant receiving a share of the payment requested by the false invoice the subject matter of count 11. The jury found the applicant guilty on counts 11, 12, 13 and 15.

11 The Crown case in respect of count 16 was that the applicant arranged the inflation of an invoice from Maruwa to Eurovox so that it would cover money owed by the applicant to Maruwa for the purchase of two plasma television sets in Japan. The jury found the applicant guilty.

12 Pursuant to count 17, the Crown alleged that the applicant obtained a cheque from Eurovox for money to purchase two digital television set-top boxes by falsely claiming that the cheque was for product evaluation. The jury found the applicant not guilty. Under count 19, it was alleged that the applicant received the two set-top boxes, knowing that they were the proceeds of crime. The jury found the applicant guilty.

13 The applicant gave evidence. He said that money he received from Ito took the form of personal loans. According to the applicant, Ito told him that he had money he did not need and that the applicant could repay the loan when Ito retired. The applicant said that the payments by Eurovox to Maruwa were made pursuant to genuine transactions.

14 At the conclusion of the trial and a plea conducted on behalf of the applicant, he was sentenced to be imprisoned for a term of 12 months on each of counts 4, 11 and 12, to a term of 15 months on each of counts 6 and 9, to a term of 6 months on each of counts 10, 16 and 19, and to a term of 24 months on count 13. The applicant had earlier pleaded guilty to a presentment containing four counts of receipt or solicitation of secret commissions. In respect of that presentment, the applicant was sentenced to be imprisoned for a term of 9 months on count 1, a term of 12 months on count 2, a term of 5 months on count 3 and a term of 18 months on count 4. With a measure of cumulation, a total effective sentence of 6 years' imprisonment was produced. The sentencing judge fixed a non-parole period of 4 years.

15 The applicant seeks leave to appeal against the convictions and sentence.

16 The first ground of the application for leave to appeal against conviction alleges that the verdicts of guilty on counts 4, 6, 9 and 10 are inconsistent with the acquittals on counts 3, 5 and 7.

17 In count 3, the Crown alleged that the applicant dishonestly obtained a financial advantage for Maruwa by falsely representing that Maruwa's invoice was genuine, that his authorisation of payment of the invoice was for a genuine trade debt and that Maruwa had performed work pursuant to the invoice. Count 4 alleged that the applicant received money that was the proceeds of crime by the transfer to his bank account of money derived from a payment of the invoice the subject matter of count 3. Counsel for the applicant submitted that the jury could not logically return a verdict of guilty on count 4 unless they were satisfied that the applicant had committed the offence, the subject matter of count 3, for only then were the monies he received the proceeds of crime. As the jury acquitted the applicant on count 3, they must have entertained a reasonable doubt as to the existence of an element of the offence the subject matter of count 4. Like submissions were made with respect to the interaction of the verdicts on counts 5, 6, 7, 8 and 9.

18 The trial judge instructed the jury that they were required to separately consider each count to determine whether the elements of the offence were established by the evidence led in respect of that count. If there was evidence which supported the verdicts said to be inconsistent and there was a basis upon which those verdicts could be reconciled with the verdict or verdicts said to produce the inconsistency, the verdict will stand even though this Court may think the facts should be interpreted in a manner that shows the verdicts are inconsistent. In MacKenzie v R[1] Gaudron, Gummow and Kirby JJ said:**

[T]he respect for the function which the law assigns to juries (and the general satisfaction with their performance) have led courts to express repeatedly, in the context both of criminal and civil trials, reluctance to accept a submission that verdicts are inconsistent in the relevant sense. Thus, if there is a proper way by which the appellate court may reconcile the verdicts, allowing it to conclude that the jury performed their functions as required, that conclusion will generally be accepted. If there is some evidence to support the verdict said to be inconsistent, it is not the role of the appellate court, upon this ground, to substitute its opinion of the facts for one which was open to the jury. In a criminal appeal, the view may be taken that the jury simply followed the judge's instructions to consider separately the case presented by the prosecution in respect of each count and to apply to each count the requirement that all of the ingredients must be proved beyond reasonable doubt. Alternatively, the appellate court may conclude that the jury took a "merciful" view or the facts upon one count: a function which has always been open to, and often exercised by, juries.[2]

19 As to merciful verdicts, their Honours referred to the observations of King CJ in R v Kirkman[3] that:

[J]uries cannot always be expected to act in accordance with strictly logical considerations and in accordance with the strict principles of the law which were explained to them, and courts, I think, must be very cautious about setting aside verdicts which are adequately supported by the evidence simply because a judge might find it difficult to reconcile them with the verdicts which had been reached by the jury with respect to other charges. Sometimes juries apply in favour of an accused what might be described as their innate sense of fairness and justice in place of the strict principles of law. Sometimes it appears to a jury that although a number of counts have been alleged against an accused person, and have been technically proved, justice is sufficiently met by convicting him of less than the full number. This may not be logically justifiable in the eyes of a judge, but I think it would be idle to close our eyes to the fact that it is part and parcel of the system of administration of justice by juries.

**20 In the present case the verdicts on the money laundering counts, counts 4, 6, 8 and 9 were logically inconsistent with the verdicts on counts 3, 5 and 7.

21 At the time the offences of money laundering were alleged to have been committed, s 122(2) of the Confiscation Act 1997 provided:**

(2) 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; or

(b) the person receives, possesses, conceals, disposes of or brings into Victoria any 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.

22 The expression 'proceeds of crime' was defined in s 121 to mean:

(a) proceeds of a forfeiture offence or an offence against the law of the Commonwealth that may be dealt with as an indictable offence (even if it may, in some circumstances, be dealt with as a summary offence) committed in Victoria; or

(b) any property that is derived or realised, directly or indirectly, by any person from acts or omissions that -

(ii) would, if they had occurred in Victoria, have constituted an offence referred to in paragraph (a).

**23 The indictable offences of obtaining a financial advantage by deception and theft were each a 'forfeiture offence'. See s 3 and clause 1 of Schedule 1.

24 Accordingly, it was an element of the offences the subject matter of counts 4, 6, 9 and 10 that the monies received by the applicant were the proceeds of or derived from the commission of an indictable offence or conduct that would have constituted an indictable offence if it had occurred in Victoria. The only indictable offences that were suggested were obtaining a financial advantage by deception, the subject matter of counts 3 and 7 and theft, the subject matter of count 5. It was not suggested that Eurovox paid money to Maruwa pursuant to genuine transactions and that Ito stole the proceeds of those transactions from his employer and transmitted the proceeds to the applicant or that the money transmitted to the applicant's account represented the proceeds of some other forfeiture offence.

25 Counsel for the respondent suggested that the verdicts could be reconciled if the jury were regarded as not being satisfied with the evidence of Ito, who was an accomplice, but thought that the mysterious arrival of large sums of money in the applicant's bank account warranted verdicts of guilty. Another suggestion was that, as the crimes occurred on different dates and the money laundering counts came second, the jury may have thought the applicant did not have the requisite intent on the first date but had formed it by the second date. The suggestions cannot explain how the jury found that the money paid to the applicant constituted the proceeds of crime when the only possible crimes suggested to them were those the subject matter of counts on which the applicant was charged and acquitted.

26 If the jury were not satisfied that the applicant was guilty on counts 3, 5 and 7, an essential element of the offences, the subject matter of counts 4, 6, 9 and 10 was missing.

27 It might be said that the verdicts of not guilty on counts 3, 5 and 7 were not necessarily the result of the jury not being satisfied that the Crown had proved the elements constituting the offences, but rather represented merciful verdicts. There was an element of doubling up in charging the applicant with crimes that led Eurovox to pay money to Maruwa and also with crimes of receiving the same money or part of that money from Maruwa. Accordingly, it could be argued that the jury's sense of fairness may have led them to think that justice required only conviction of the applicant on the money laundering counts.

28 In my opinion, however, it is apparent that the jury did not arrive at their verdicts by any such a process of reasoning. If they had thought that the applicant should not suffer conviction on a count alleging the commission of a crime that yielded proceeds and also on a count alleging the receipt of some or all of the proceeds of that crime, they would have acquitted the applicant on count 16, which alleged the crime of obtaining a financial advantage by deception, and which produced the proceeds the subject matter of count 19, a money laundering count. Instead, the jury convicted the applicant on both counts. Similarly, the argument cannot explain the verdicts on counts 11, 12, 13 and 15.

29 The second ground of the application for leave to appeal against conviction is that the verdicts on count 16 and 19 are unreasonable and cannot be supported having regard to the evidence.

30 Count 16 alleged that the applicant obtained a financial advantage by deception by authorising a payment of Y12,500,000 by Eurovox to Maruwa by falsely representing that an invoice for this amount for tooling was genuine. At trial the Crown case was that the amount of the invoice was inflated by Y2,500,000 and that the added amount was used to purchase two plasma television sets for the applicant. Count 9 alleged that the applicant received the television sets.

31 It appears from the evidence that Eurovox knew that the invoice contained an amount in excess of the price of the tooling. One Heymanson, the applicant's predecessor as the managing director of Eurovox, gave evidence that the purchase of the television sets was brought to the attention of the board and that reimbursement of the additional amount was being sought from the applicant. Heymanson said that it was acceptable for the applicant to buy the television sets and have them charged to Eurovox, provided that he reimbursed the company later.

32 The evidence relied upon by the applicant reveals only that Eurovox discovered the facts relating to the invoice and the purchase of the television sets. Earlier evidence established that the applicant procured the inflation of the invoice and that the amount of the invoice was paid by Eurovox after it was approved for payment by the applicant. In my opinion the jury was entitled to find that the offence was proven notwithstanding Eurovox's later discovery of the truth. Counsel for the applicant accepted that the verdict on count 19 stood or fell with the verdict on count 16. In my view the verdicts were not unsafe or unsatisfactory.

33 Ground 3 of the application for leave to appeal against conviction is as follows:**

The learned trial judge erred by directing the jury as to an alternative basis of proof on the money laundering counts which had not been relied on by the Crown at trial, namely, that the applicant could be convicted if he ought reasonably to have known that the money was derived or realised directly or indirectly from some form of illegal activity.

34 In the course of his charge to the jury, the trial judge gave the following directions as to the mental element relating to the money laundering counts. He said:

If you are satisfied, for example, that Miller has acted by the use of a deception and removed money from one source, that is, by the use of the deception in the form of using a false invoice, and he took money from Eurovox, transferred it to Japan or some other place and then returned it back into his own bank account, knowing that it was the proceeds of a crime, then he commits the crime. So it is the fact that he has obtained funds which he knows are the proceeds of a crime, and that includes his own crime. And, secondly - and that is in the alternative, of course - that he knew, or ought reasonably should have known, that the money was derived or realised directly or indirectly from some form of a legal activity.

**35 Counsel for the applicant at trial objected to the alternative basis advanced by the trial judge saying that it was the Crown case that the applicant knew that the money he received was the proceeds of crime. The trial judge declined to re-charge the jury.

36 It is evident that the Crown case at trial was that the applicant certainly knew the money received from Maruwa represented the proceeds of crime because the applicant was responsible for the commission of the crimes. The trial judge's excursus may have produced the inconsistent verdicts, for the jury may have thought that the crimes alleged to have been committed by the applicant had not been proven but speculated that Ito had committed other crimes of which the applicant ought to have been aware. If the verdicts on counts 4, 6, 9 and 10 are set aside, no injustice will have been caused by the trial judge's charge, for the only money laundering count remaining is count 15, and the jury found the applicant guilty of the crime that produced the proceeds he laundered.

37 Ground 4 of the application for leave to appeal against conviction is that the trial judge erred in directing the jury that majority verdicts would be accepted, for the jury had not had a reasonable time for deliberation and had been placed under undue pressure to return verdicts.

38 The jury retired late on Thursday. They deliberated all day Friday and Monday but late in the morning on Tuesday the jury sent a note to the trial judge, stating:**

The jury has determined three counts, another three are close to resolution but the jury is seriously divided on the remaining 13 counts at this stage. A verdict is a long way away. The position seems to have become entrenched. Do we need some direction as to how to resolve this situation? There are also some questions of definition. What is the meaning of innocent until proven guilty? What is the meaning of prejudice in counts 11 and 12? Is the need for a unanimous decision absolutely essential?

39 The trial judge read the note to counsel and said:

There is a combined perseverance direction, but also allowing a majority verdict, and I would think that I would at this stage, given what is said here, I would do that. No objection by counsel?

40 When the jury returned to the Court, the trial judge told them that they could return a majority verdict if they could not reach a unanimous verdict. His Honour said that it was preferable that they attempt to reach a unanimous verdict and should keep trying to do so. He said:

What I urge you to do is to return to the jury room, or when you return to the jury room, to try and resolve your differences. Experience has shown that juries can often agree if they are given more time to think about the issues that are involved.

41 His Honour went on to warn the jurors of their duty to give a true verdict after listening carefully to the evidence and taking into account the views of other jurors. After more in a similar vein, his Honour said:

If it becomes clear that you are never going to reach a unanimous verdict, then you can instead, as I have indicated, decide to return a majority verdict.

**42 Counsel for the applicant made a great deal of the fact that the trial judge referred first to the ability of the jury to return a majority verdict before directing them to persevere to attempt to reach the unanimous verdict.[4] Counsel submitted that by referring to their ability to return a majority verdict prior to a perseverance direction, the jury may have thought that unanimity was not ideal and thereby may have deprived the applicant of his right to a unanimous verdict.

43 In my opinion there is nothing in this ground. Looking at the directions given by the trial judge to the jury as a whole, it is apparent that the virtue of unanimity was stressed, and the jury was clearly told that it was only in the event that unanimity was not possible, after making all reasonable attempts to achieve it, that they could return a majority verdict. The lack of objection by counsel supports the conclusion that the trial judge's instructions to the jury were appropriate.

44 The last ground of the application was that the trial judge erred in failing to give adequate directions to the jury in answer to their question, 'What is the meaning of innocent until proven guilty?'

45 The trial judge told the jury that the concept of innocent until proven guilty meant:**

that every individual in this society is presumed to be innocent of any crime, and that applies until the Crown has satisfied you beyond reasonable doubt about the guilt of that person.

In other words, they have satisfied you on the evidence that that individual has committed a criminal offence. Then and only then does the position change. Ok? So the person is innocent until proven guilty, and that's a fundamental principle of the criminal law system. That that person is innocent unless the evidence established by the Crown proves beyond reasonable doubt that there is some other position ...

**46 Counsel for the applicant submitted that the phrasing of the jury's question suggested that they thought that in order to find the applicant not guilty, they were required to make a positive finding of innocence. Accordingly, so it was said, the trial judge should have explained to the jury that there was no onus upon the applicant to prove his innocence. The only onus lay upon the prosecution to prove his guilt beyond reasonable doubt.

47 In my view the jury's question did not suggest that they had inverted the burden of proof. The jury's question required no more than a statement that the presumption of innocence could only be displaced by the Crown satisfying the jury beyond reasonable doubt that the applicant was guilty. The trial judge gave that explanation. It was necessarily implicit in the explanation that the applicant bore no onus.

48 Counsel for the applicant sought to make a further point. He construed the jury's question as an enquiry as to the nature of the burden of proof that lay upon the Crown. He submitted that the trial judge was required to elaborate the concept, telling the jury that it was the highest standard known to the law and comparing it with the civil burden of proof.

49 On occasion juries seek further guidance as to the meaning of the phrase 'beyond reasonable doubt'. A reasonable doubt is one entertained by the jury in the circumstances of the case. Theirs is the task of determining what is reasonable doubt and what is a reasonable doubt must be left to the jury to be determined according to the standard which the juries themselves adopt. Further analysis generally is to be eschewed.[5] In a particular case a trial judge may go further if it appears necessary, for example by cautioning the jury against regarding possibilities which are fantastic or unreal as affording a reason for doubt reminding the jury of the capacity of the human mind to conjure up fanciful or unreasonable misgivings about matters which are not in reality in doubt.[6] In the present case I do not think that the jury's question or any other circumstances attending this trial indicated that anything more than his Honour's redirection was required. This jury does not appear to have been labouring under any misconception which needed to be dealt with by further instructions.[7]

50 For the foregoing reasons I am of the opinion that the application for leave to appeal against conviction should be granted, the appeal instituted, heard instanter and allowed, the convictions on counts 4, 6, 9 and 10 should be quashed and verdicts of acquittal entered on those counts.

51 Section 569(1) of the Crimes Act 1958, provides, so far as is relevant:**

If it appears to the Court of Appeal that an appellant, though not properly convicted on some count or part of the indictment ... has been properly convicted on some other count or part of the indictment ... the Court may either affirm the sentence passed on the appellant at the trial or pass such sentence in substitution therefore as it thinks proper and as may be warranted in law by the verdict on the count or part of the indictment ... on which the Court considers that the appellant has been properly convicted.

**52 The manner in which this Court exercises its powers depends upon the circumstances attending the commission of the offences, which I have recounted, and also the circumstances attending the offences of receipt or solicitation of secret commissions, to which the appellant pleaded guilty, and his personal circumstances.

53 The secret commission offences arose from purchases of goods by Eurovox from a Taiwanese company. The appellant entered into a secret agreement with an employee of the vendor to pay the appellant a commission on the sales. In the period from 9 December 2002 to 5 March 2003 the appellant received $156,374.12 by way of secret commissions.

54 The appellant is now aged 54 years. He has no prior convictions. He was born in Wales and came to Australia with his parents when he was 16 years' old. Eurovox was the appellant's principal employer. He worked for the company for 32 years, beginning on the factory floor fitting car radios and eventually becoming the managing director. The appellant is married. He and his wife have six children, all of whom are independent. The appellant suffers from high blood pressure. He also suffers from gout, which causes him considerable pain. Eurovox sued the appellant in respect of the events that constitute the offences. As a result, the appellant lost his residence and holiday house. He also lost his employment.

55 The appellant could rely upon mitigating factors of some weight. He pleaded guilty to the secret commission counts; the sentencing judge accepted that he was remorseful in respect of those offences; he was previously of good character; is in poor health; there was significant delay between the commission of the offences and their ultimate determination; he will be separated from his wife and six children who formed a close family unit; and, as the sentencing judge found, he is unlikely to re-offend.

56 Nonetheless, the offences were serious. The maximum penalty for obtaining property by deception, making a false document and receiving a secret commission is ten years' imprisonment and for money laundering is 20 years' imprisonment. The appellant's offending persisted over some three years and involved significant sums of money. General deterrence is an important sentencing consideration in respect of crimes such as these.

57 As a consequence of the setting aside of the verdicts on counts 4, 6, 9 and 10, the sentences passed below are to be set aside and the appellant is to be re-sentenced.**

In my opinion it is appropriate to impose individual sentences in conformity with those passed below, but modify concurrence and cumulation to reflect the convictions which I consider should be quashed.

**58 On presentment No S02050209 ('the first presentment'), I would sentence the appellant to be imprisoned for a term of six months on counts 16 and 19, a term of 12 months on counts 11 and 12 and a term of 24 months on count 13. On presentment No S02050209.1 ('the second presentment'), I would sentence the appellant to be imprisoned for a term of five months on count 3, a term of nine months on count 1, a term of 12 months on count 2 and a term of 18 months on count 4. I would order that four months of the sentence on count 16 and nine months of the sentence on count 11 in the first presentment and five months of the sentence on count 4, three months of the sentence on count 2, two months of the sentence on count 1 and one month of the sentence on count 3 in the second presentment be served cumulatively on each other and on the sentence on count 13 in the first presentment. The total effective sentence is four years' imprisonment. I would fix a minimum term of two years and six months' imprisonment.

59 I have had the advantage of reading the draft reasons for judgment of Buchanan JA and agree that, for the reasons given by his Honour, the application should be disposed of as he proposes.**

**60 I also agree with the orders and sentences proposed by the learned presiding judge, for the reasons he has stated.

[2] Above at 367. See also R v Wilkinson [1970] Crim LR 176.

[4] See R v Muto and Eastey [1996] VicRp 21; [1996] 1 VR 336, 342-3 (Winneke P, Callaway JA and Southwell AJA).

[5] Green v R [1971] HCA 55; (1971) 126 CLR 28 at 32-3 (Barwick CJ, McTiernan and Owen JJ).

[6] See R v Wilson (1986) 42 SASR 203 at 206-7 (King CJ).

[7] Cf R v Collins [1999] QCA 27.

At a glance

Court

Decision date

Before

Source

Judgment (86 paragraphs)

Parties

Cases Cited (4)