R v RK and LK [2008] NSWCCA 338; 73 NSWLR 80

Court of Criminal Appeal (NSW)|2008-12-22|Before: Spigelman CJ, Grove J, Fullerton J

Baladjam v R [2008] NSWCCA 85

Churchill v Walton [1967] 2 AC 224

Giorgianni v The Queen [1985] HCA 29; (1985) 156 CLR 473

Johnson v Youden [1950] 1 KB 544

Kamara v Director of Public Prosecutions (UK) [1974] AC 104

R v Wyles; Ex parte Attorney-General (Qld) [1977] Qd R 169

Stuart v The Queen [1974] HCA 54; (1974) 134 CLR 426

Sungravure Pty Ltd v Middle East Airlines Airliban SAL [1975] HCA 6; (1975) 134 CLR 1

The Queen v Barlow [1997] HCA 19; (1997) 188 CLR 1

Vallance v The Queen [1961] HCA 42; (1961) 108 CLR 56

Western Australia v Marchesi [2005] WASCA 133; (2005) 30 WAR 359

The respondents allegedly dealt with money which was part of the proceeds of a plan to defraud the Commonwealth Superannuation Scheme of some $150M. They were charged with conspiring to deal with money being reckless as to the fact that the money was proceeds of crime, pursuant to s 11.5(1) and s 400.3(2) of the Commonwealth Criminal Code. The Crown case was not that the respondents had knowledge that the money was the proceeds of crime, only that they were reckless as to this fact.

Following a trial before a jury, the respondents made a no case to answer submission. The trial judge rejected the submission that the evidence could not prove beyond a reasonable doubt the critical elements of the offence charged, but upheld the submission that the indictment, on the case the Crown presented, charged an offence bad at law or unknown to the law. The trial judge directed the jury to return a verdict of not guilty.

The Crown appeals to this Court, pursuant to s 107 of the Crimes (Appeal and Review) Act 2001 which provides for an appeal by the Crown against an acquittal by direction.

Per Spigelman CJ, Grove and Fullerton JJ agreeing

1 It is possible at common law for persons to conspire to commit an offence with respect to which recklessness is the fault element. This is also true of the Commonwealth Criminal Code. [32]-[34], [53], [78], [79]

R v Ansari [2007] NSWCCA 204; (2007) 70 NSWLR 89 applied.

2 It is more appropriate to characterise s 5.4(4) of the Commonwealth Criminal Code, which provides that where recklessness is a fault element it can be established by proof of intention or knowledge, as evidentiary, rather than definitional. [41], [78], [79]

R v Ansari [2007] NSWCCA 204; (2007) 70 NSWLR 89 not applied.

3 Proper approach to interpretation of a Code considered. [44]-[48], [78], [79]

4 The references to "conspiracy" in the Code are of a technical legal character and were intended by the drafters, subject to any express statutory modification, to implement the common law. [46]-[47], [49]-[51], [78], [79]

Stuart v The Queen [1974] HCA 54; (1974) 134 CLR 426 applied; Vallance v The Queen [1961] HCA 42; (1961) 108 CLR 56 referred to.

5 For a person to be guilty of the offence of conspiracy to commit an offence, both at common law and under the Commonwealth Criminal Code, s/he must know the facts that make the act or acts unlawful. [55], [60]-[62], [78], [79]

R v Ansari [2007] NSWCCA 204; (2007) 70 NSWLR 89; Giorgianni v The Queen [1985] HCA 29; (1985) 156 CLR 473 applied.

6 The trial judge properly distinguished Ansari on the basis that, in that case, it was the Crown case that the accused actually did know all of facts that made the conduct criminal. Here only recklessness was alleged. [68]-[70], [78], [79]

R v Ansari [2007] NSWCCA 204; (2007) 70 NSWLR 89 referred to.

7 It was open to her Honour to direct a verdict, rather than to quash the indictment. [75], [78], [79]

1 SPIGELMAN CJ: This is a Crown appeal against the decision of Sweeney DCJ to direct the jury to return a verdict of not guilty with respect to conspiracy offences allegedly committed by each respondent. Provision is made for an appeal by the Crown against a verdict by direction by s 107 of the Crimes (Appeal and Review) Act 2001.

2 At the commencement of the trial Sweeney DCJ had rejected an application on the part of the respondents to quash each indictment on the basis that it did not disclose an indictable offence. At the end of the Crown case her Honour dealt with a no case to answer submission. She rejected the respondents' submission that the evidence in the Crown case could not prove beyond reasonable doubt the critical elements of the offence charged. However, her Honour upheld the submission, modifying her earlier views, that the offence on the indictment was not an offence known to the law.

3 The indictment against each accused relevantly stated:

" ... between about 1 December 2003 and about 1 February 2004 at Sydney in the State of New South Wales and elsewhere did conspire with each other, [RM] and with divers other persons to deal with money to the value of $1,000,000 or more being the proceeds of crime where those persons who were to deal with the money pursuant to the conspiracy were reckless as to the fact that the money was the proceeds of crime."

4 The offence of conspiracy is created by s 11.5 of the Commonwealth Criminal Code which relevantly states:

"11.5(1) A person who conspires with another person to commit an offence punishable by imprisonment for more than 12 months, or by a fine of 200 penalty points or more, is guilty of the offence of conspiracy to commit that offence and is punishable as if the offence to which the conspiracy relates had been committed.

(a) the person must have entered into an agreement with one or more other persons; and

(b) the person and at least one other party to the agreement must have intended that an offence would be committed pursuant to the agreement; and

(c) the person or at least one other party to the agreement must have committed an overt act pursuant to the agreement."

5 The offence which the respondents allegedly conspired to commit was an offence under s 400.3(2) in the Commonwealth Criminal Code which provides:

(a) the person deals with money or other property; and

(ii) there is a risk that the money or property will become an instrument of crime; and

(c) the person is reckless as to the fact that the money or property is proceeds of crime or the fact that there is a risk that it will become an instrument of crime (as the case requires); and

(d) at the time of the dealing, the value of the money and other property is $1,000,000 or more."

6 As can be seen s 400.3(2)(c) creates an offence where a person is reckless as to a relevant fact. Furthermore, it creates two distinct offences where either:

(A) the money or property is proceeds of crime and the person is reckless as to the fact that the money is proceeds of crime (s 400.3(2)(b)(i) and (c)).

(B) there is a risk that the money or property will become an instrument of crime and the person is reckless as to the fact that there is a risk that it will become an instrument of crime (s 400.3(2)(b)(ii) and (c)).

7 It is pertinent to note that s 400.3(1) creates offences in parallel terms to the above but in circumstances in which the person believes the money or property to be proceeds of crime. It, according to the higher level of moral culpability, specifies a higher maximum penalty. Section 400.3(3) provides for parallel offences where a person is negligent as to the requisite fact. It, according to the lower level of moral culpability, imposes a lower maximum penalty.

8 The Criminal Code establishes that each offence must contain one or more physical elements and, subject to provision to the contrary, a fault element must attach to each such physical element. Section 4.1 of the Criminal Code provides that a physical element may be conduct or a result of conduct or a circumstance in which conduct or a result of conduct occurs. The relevant physical element in this case is a "circumstance" ie "the money is proceeds of crime".

"5.1(1) A fault element for a particular physical element may be intention, knowledge, recklessness or negligence.

(2) Subsection (1) does not prevent a law that creates a particular offence from specifying other fault elements for a physical element of that offence.

5.2(1) A person has intention with respect to conduct if he or she means to engage in that conduct.

(2) A person has intention with respect to a circumstance if he or she believes that it exists or will exist.

(3) A person has intention with respect to a result if he or she means to bring it about or is aware that it will occur in the ordinary course of events.

5.3 A person has knowledge of a circumstance or a result if he or she is aware that it exists or will exist in the ordinary course of events.

5.4(1) A person is reckless with respect to a circumstances if:

(a) he or she is aware of a substantial risk that the circumstance exists or will exist; and

(b) having regard to the circumstances known to him or her, it is unjustifiable to take the risk.

(2) A person is reckless with respect to a result if:

(a) he or she is aware of a substantial risk that the result will occur; and

(b) having regard to the circumstances known to him or her, it is unjustifiable to take the risk.

(3) The question whether taking a risk is unjustifiable is one of fact.

(4) If recklessness is a fault element for a physical element of an offence, proof of intention, knowledge or recklessness will satisfy that fault element."

10 The background facts in this case involved a plan to defraud the Commonwealth Superannuation Scheme by forwarding a fax, which appeared to be genuine, to the bank for the Scheme instructing that funds of approximately $150 million be transferred to four designated bank accounts. One of the accounts, to which an amount of approximately $25 million was transferred, was in the name of one of the respondents.

11 The Crown case was that the accused intentionally entered into an agreement to commit an offence with respect to which the fault element attaching to a particular physical element was recklessness.

12 The Crown case did not allege that the respondents were parties to the fraud against the Commonwealth Superannuation Scheme, nor that they were specifically aware of the fraud. The Crown case was that the respondents were reckless as to the fact that the funds transferred into the account were the proceeds of crime. I emphasise this important aspect of the Crown case: it is alleged that the respondents, not a third party, were reckless about this fact.

13 Numerous communications between the respondents, and between each of them and their alleged co-conspirators, were tendered in evidence and which, her Honour concluded, it was open to the jury to accept. This appeal proceeded on the basis that her Honour was correct to dismiss that aspect of the no case to answer submission to the effect that elements of the offence could not be proved beyond reasonable doubt. There was no challenge to her Honour's ultimate finding in this respect:

"In my view the evidence the Crown relies on and to which it has referred in these submissions is overwhelmingly capable of proving that each accused entered the conspiracy alleged and was reckless as to the money in [RK]'s account being the proceeds of crime." (AB 129)

14 Her Honour further said that there was "sufficient evidence to prove beyond reasonable doubt the essential elements of conspiracy to deal with the proceeds of crime and recklessness that the money was the proceeds of crime" (AB 130).

15 At the heart of the submissions before Sweeney DCJ and in this Court was the judgment of this Court in R v Ansari [2007] NSWCCA 204; (2007) 70 NSWLR 89. Her Honour interpreted that judgment in a particular manner, which the respondents seek to uphold. The Crown submits that her Honour misinterpreted the judgment and that, on a true interpretation, her Honour should not have found that the indictment did not charge an offence known to the law.

16 The principal judgment in Ansari was given by Howie J, which whom Hislop J agreed. Simpson J expressed her agreement with the reasons of Howie J, but added certain observations which, in some respects, approached the matter in a somewhat different manner. Her Honour's expression of agreement must be understood as subject to those observations.

17 In this Court both parties accepted, save in one respect on the part of the respondents, that Ansari was good law and did not ask this Court to reopen it. The issue is for what the judgment stands as authority.

18 The conclusions of Sweeney DCJ with respect to Ansari was:

"The Crown submitted that the Ansari decision is not limited to its facts, did not turn on the Crown relying on intention to prove recklessness and that both Simpson J and Howie J said the Crown can charge a conspiracy to commit an offence the mental element of which is recklessness.

That is not how I read the decision. In my view the Court did not hold that a person can be charged with conspiring to commit an offence the mental element of which is recklessness, simpliciter. The Court held that that may be so when the Crown relies on intention or knowledge to prove the element of recklessness or where a third party is to commit the offence the object of the conspiracy, and neither is alleged here.

In this case the Crown said it had to prove the accused's recklessness as to the money being the proceeds of crime at the time they intentionally entered the agreement and when they committed acts pursuant to the agreement as it continued. That would seem to produce conceptual difficulties of the kind adverted to by Simpson J. Perhaps those conceptual difficulties could be overcome by more reflection.

However, it seems to offend the longstanding principle of criminal liability that an accused must know of all the facts that would make his conduct criminal, to which Howie J referred and which he held had not been displaced by the Code.

Whatever the reasons, I am bound to follow the decision in Ansari and applying it as I understand it, it follows that the offence with which [RK] is charged in this indictment, on the case the Crown has presented, is bad at law or unknown to law.

19 In order to understand the applicability of the judgment in Ansari to the present case it is necessary to note that it was concerned with a conspiracy to commit a different offence. I have set out at [6] above, the two distinct offences as created by s 400.3(2) of the Commonwealth Criminal Code.

20 This case involves an offence A, concerned with money as proceeds of crime. Ansari involved an offence B, concerned with a risk that money would become an instrument of crime. That difference explains some of the language of the judgments in Ansari where the word "risk" is sometimes deployed as a reference to the particular charge, not to the fault element of recklessness.

21 Howie J referred to Churchill v Walton [1967] 2 AC 224; Johnson v Youden [1950] 1 KB 544; Kamara v Director of Public Prosecutions (UK) [1974] AC 104; Giorgianni v The Queen [1985] HCA 29; (1985) 156 CLR 473; Western Australia v Marchesi [2005] WASCA 133; (2005) 30 WAR 359, and concluded:

"[76] The situation at Common Law, therefore, is that there is no impediment to a person being charged with a conspiracy to commit an offence that is one of strict or absolute liability. However, in order to be guilty of the conspiracy to commit such an offence the person must agree to commit an act that is unlawful. The person does not have to know that the act is unlawful but needs to know all the facts that make the act unlawful. If a person can conspire to commit a crime for which no mens rea is necessary, there seems to be no good reason why a person could not conspire to commit a crime of which the mental element is recklessness." (emphasis added)

22 Howie J had earlier identified the relevant offence:

"[63] In my opinion there is only one physical element in the offence as stated in s 11.5(1). The physical element is encompassed in the words 'conspires to commit an offence'. It is impossible to comprehend two people forming an agreement unless the subject matter of the agreement is known. A composite element of an offence has been recognised in offences to which the Code applies: see Lee v R [2007] NSWCCA 71 at [7]. The subject matter of the prohibited agreement under s 11.5(1) is an intention to commit an offence of the kind described in the section. Therefore s 11.5(1) contains a single physical element of conduct being to enter into the proscribed agreement. There is no fault element stated in s 11.5(1), therefore, applying s 5.6(1), the default fault element for a physical element of conduct is intention. Applying the definition of "intention" in s 5.2(1) of the Code, the person must mean to enter into such an agreement."

"[78] ... the requirement of s 11.5(2)(b) that the accused and at least one other person 'have intended that an offence would be committed pursuant to the agreement'. The accused must intend that conduct will be carried out that amounts to a criminal offence and he cannot have that intention if he does not know all the facts that would make the intended conduct an offence. It is not enough that he intends that conduct will be carried out that it so happens and by reason of facts of which he is unaware is criminal." (emphasis added)

24 In the passage primarily relied upon in the submissions on this appeal his Honour said, (emphasis added):

"[85] Generally speaking the issue that is raised in respect of conspiracy to commit an offence to which recklessness applies is one of proof of the guilty knowledge of the conspirator rather than the validity of the charge. A charge is not bad at common law on its face just because it alleges a conspiracy to commit a strict or absolute liability offence or an offence that could be committed recklessly. It would be rare for the statement of the offence to show on its face that the allegation was one that relied upon the accused's being reckless as to a fact that was an element of the offence to which the conspiracy related. It should become apparent if particulars were required to be given indicating how it was alleged by the prosecution that the accused had agreed to commit the offence that is the subject of the conspiracy. Unless the prosecution was alleging that the accused had sufficient knowledge of the facts making the conduct agreed upon a criminal offence, it could not succeed on the charge of conspiracy.

[86] If at the end of the Crown case there was evidence proving the requisite knowledge then the trial judge would be required to direct the jury that, before they could convict the accused of the conspiracy alleged, they must find beyond reasonable doubt that he had the knowledge of facts that made the intended conduct an offence and hence the conspiracy a criminal one.

[87] In my opinion the conspiracy alleged in each of the charges was not bad at law. There is nothing in the Code that indicates that a person cannot conspire to commit an offence of which the mental element is recklessness and there is no reason otherwise to impose such a restriction on the offence. There are two reasons for reaching that conclusion. Firstly the agreement entered into may be that another person will carry out the conduct. Provided that the conspirators know of all the facts that would make the conduct of the third party criminal, it would not matter that the person carrying out the conduct was committing an offence by acting recklessly.

[88] Secondly recklessness under the Code can be proved by both intention and knowledge. Section 5.4(4) provides:

(4) If recklessness is a fault element for a physical element of an offence, proof of intention, knowledge or recklessness will satisfy that fault element.

Therefore, if the conspirators intended that they would carry out the conduct knowing all the facts that made that conduct criminal it would not matter that the offence arising from that conduct was one for which the fault element was recklessness.

[89] It is the second reason that applies in the present case. Provided that the Crown was intending to prove as against the appellants that they knew that there was a risk that the money they dealt with would become an instrument of crime, that is that they knew of all the facts that made their dealing with the money criminal conduct, there was no impediment to the prosecution proving the offences charged."

25 His Honour reiterated the critical aspect of the Crown case in Ansari:

"[93] ... It is clear ... that the Crown was maintaining in relation to the appellants that it would prove that they were reckless as to the risk of the money being used as an instrument of crime because the appellants intended that it would be used as an instrument of crime. The Crown was alleging that they had knowledge that the money with which they dealt ... was at risk of being used as an instrument of crime because they knew it was money that would be used in the commission of crime or to facilitate crime". (emphasis added)

"[9] Thus, where a person is charged under the Code with conspiracy, the Crown must, by s 11.5(2)(b), prove, inter alia, that the person charged and at least one other party to the agreement alleged intended that an offence (punishable by imprisonment for more than 12 months) would be committed pursuant to the agreement. It is of some significance that s 11.5(2)(b) (in contrast to s 11.5(1)) is framed in the passive voice; it is not necessary that the physical acts that make up the offence are intended to be or will be committed by any particular person. In particular, it is not necessary that they are intended to be, or will be, committed by any of the conspirators. Two people may, for example, agree to arrange the importation of prohibited drugs by using an unwitting agent, who is wholly unaware that he is carrying the drugs ..."

"[19] As set out above, by s 400.3 of the Code, the fault (mental) element of the offence of money laundering may be intention, recklessness, or negligence. That state of mind must be shown to exist at the time of the 'dealing' alleged. An allegation of conspiracy to commit that offence where the fault element alleged is recklessness raises this question: whose state of mind is relevant for the purpose of determining recklessness? I am of the view that that person is the person who performs the physical acts that constitute the crime against s 400.3(2). That is: where A and B agree that an offence will be committed (at their behest) against s 400.3(2) by C, it is C's state of mind that must be shown to be reckless: that is, reckless as to the fact that there is a risk that the money or property will be used in or to facilitate, the commission of a crime. The state of mind of the conspirators must (because of s 11.5(2)(b)), be intention - ie intention to agree that an offence against s 400.3(2) will be committed; and that offence may be constituted by the fault (mental) element of recklessness. But, because in this case it was alleged that the physical acts of the appellants in receiving the money constituted the physical element of the offence of money laundering, it is not necessary to consider the state of mind of any other person.

[20] But the manner in which the offences (of conspiracy) were pleaded and particularised produces this somewhat odd result: the appellants were charged with (intentionally) agreeing to commit an offence the fault element of which was recklessness - ie they agreed to deal in money, reckless as to whether the money would be used in, or to facilitate, the commission of a crime.

[21] Such a proposition is conceptually difficult to grasp. Logic, or a rational use of English language, would suggest that that cannot be done. But such resistance to the proposition fades when regard is had to the definition in the Code of 'recklessness', which gives the word an extended meaning."

28 Her Honour's reference to "an extended meaning" was a reference to s 5.4 which I have set out at [9] above and which her Honour said 'defined' the word "recklessness".

"[23] Recklessness, as I have already mentioned, was the state of mind necessary for the commission of the offence the object of the conspiracy - what I might call the subsidiary offence. The recklessness to which the indictment adverted was recklessness as to a circumstance in which conduct that constituted the s 400.3(2) offence was said to have occurred - the circumstance being the existence of a risk that the money would be used in, or to facilitate, the commission of a crime ... To prove the conspiracy the Crown had to prove that the appellants agreed to commit an offence aware of the relevant circumstance. Where (as here) the circumstance is, itself, the existence of a risk, putting the language of s 400.3(2)(c) together with that of s 5.4(2)(a) produces a result that, at first glance, might appear odd, but which is not in reality, (for reasons which will appear) untoward. The result is this: the Crown had to prove that the appellants intentionally agreed that each would deal with money in the future, and that, at that future time each appellant would be aware that there then would be a substantial risk that there was a risk that the money would become an instrument of crime (ie would be used in, or to facilitate, the commission of an indictable offence), and (by sub-para (b)) that, having regard to the circumstances known to him, it was unjustifiable to take that risk. That is conceptually unacceptable. But it emerges only from the unextended meaning of 'recklessness'. To prove recklessness, by reason of s 5.4(4) the Crown could also prove either that the appellants intended or knew that the money would become an instrument of crime. That is, in fact, what the Crown here set out to do." (emphasis added)

30 Simpson J referred to the Crown case under consideration:

"[28] ... It is inherent in the manner in which the charges were framed, and the sub-section under which they were brought, that the Crown was alleging that the appellants were reckless as to the fact that there was a risk that the money deposited would be used in the commission of, or to facilitate, the commission of that crime or in the commission of a tax evasion offence. Bearing in mind the provisions of sub-ss 5.4(2) and (4), it was open to the Crown to prove recklessness either by proving that the appellants were aware that there was a substantial risk that the money would be used in that way, and that, having regard to the circumstances known to them, it was unjustifiable to take that risk OR that they either intended or knew that the money would be used in that way. Although it was not necessary that the Crown prove that the appellants (or either of them) themselves physically dealt with the money, it was admitted by them that, in receiving the money from Z, they did so. (As indicated above, the Crown case was, in fact, that the appellants both knew and intended that the money would be used in that way.)" (emphasis added)

31 Her Honour referred to the necessity to prove an intention to enter into the agreement and added:

"[32] ... On behalf of the appellants heavy reliance was placed upon the provisions of s 11.5(2)(b), requiring, for proof of the offence of conspiracy, proof that at least two individuals intended that an offence would be committed pursuant to their agreement. That is a different intention. There is no reason why that intention does not extend to an intention that an offence against s 400.3(2) would be committed - that is, an offence constituted by dealing in money/property where there existed a risk that the money/property would become an instrument of crime, and where the person who committed that crime would be reckless as to the fact of that risk - that is, would be aware of a substantial risk that the money would be used in structured transactions, avoiding the provisions of the FTR Act (or tax evasion), and that, having regard to the circumstances known, it is unjustifiable to take that risk; or knew or intended that it would be so used.

[33] The argument advanced on behalf of the appellants wholly fails to take into account the extended definition of 'recklessness' contained in s 5.4(4). Where recklessness may be proved by intention or knowledge, any colour of validity that might otherwise be given to the argument disappears altogether. And both knowledge and intention were what the Crown here set out to prove.

[34] The flaw in the appellants' argument is in failing to identify who the Crown alleged was (or would have been) 'reckless' and to what aspect of the facts alleged the recklessness attaches. The appellants' argument attributes recklessness to themselves, in the formation of, or entry into, the criminal agreement. I accept that recklessness is insufficient for that. But that is not the correct analysis. It is not recklessness as to the agreement that is in question; it is agreement (intentionally entered into) that an offence will be committed that might, inter alia, be done with a reckless state of mind. The recklessness attaches, not to the formation of, or the entry into, the agreement, but to the offence that is to be committed pursuant to the agreement." (emphasis added)

32 The judgments in Ansari provide one example of a factual situation in which persons can conspire to commit an offence with respect to which recklessness is the fault element attached to a physical element of the offence. I refer to a situation in which the physical element is to be carried out by a person who is not party to the agreement.

33 As Howie J said at [87], set out at [24] being the first of two examples his Honour gave, to repeat:

"Provided that the conspirators know of all the facts that would make the conduct of the third party criminal, it would not matter that the person carrying out the conduct was committing an offence by acting recklessly."

34 This reasoning is to the same effect as the observations of Simpson J at [19], set out at [27] above, that the relevant state of mind of recklessness is the state of mind of "the person who performs the physical acts that constitute the crime against s 400.3(2)".

35 In Ansari this example did not apply because, as in the present case, it was the accused who, it was alleged, dealt with the money.

36 The judgments in Ansari focused on s 5.4(4), which I have set out at [9], to the effect that where recklessness is a fault element it can be established by proof of intention or knowledge as well as by proof of recklessness.

37 Section 5.4(4) is based on the reasonable proposition that a lower level of culpability can be made out by proving a higher level of culpability.

38 As the Final Report of the Model Criminal Code Officers' Committee entitled Model Criminal Code Chapter 2: General Principles of Criminal Responsibility (1992) ("the MCCOC Report") made clear at [203.3], the authors of what became s 5.4 of the Commonwealth Criminal Code relied on the US Model Penal Code. That Code relevantly provides:

"2.02(5) When the law provides that negligence suffices to establish an element of an offense, such element also is established if a person acts purposely, knowingly or recklessly. When acting recklessness suffices to establish an element, such element is established if a person acts purposely or knowingly. When acting knowingly suffices to establish an element, such element also is established if a person acts purposely."

39 As the Explanatory Note to this provision states:

"Subsection (5) makes it unnecessary to state in the definition of an offense that the defendant can be convicted if it is proved that he was more culpable than the definition of the offense requires. Thus, if the crime can be committed recklessly, it is no less committed if the actor acted purposely." (See Uniform Laws Annotated - Volume 10A: Model Penal Code, West Group, 2001 p96.)

40 Similarly, s 5.4 of the Commonwealth Criminal Code makes it unnecessary to state on each occasion that a person may be convicted of an offence containing a physical element for which the fault element is recklessness if s/he is more culpable than that ie, because s/he intended or knew of that element.

41 In Ansari, Simpson J referred to s 5.4(4) as definitional. (See eg her Honour's reference to "definition" and "extended meaning" at [21] and [23] set out at [27] and [29] above.) In my opinion it is more appropriate to characterise the section as evidentiary, rather than definitional.

42 As I have indicated at [21] above, in Ansari Howie J referred to common law cases on conspiracy for guidance with respect to the offence under s 11.5 of the Commonwealth Criminal Code.

43 I repeat my observations on the law in Baladjam v R [2008] NSWCCA 85 in this respect, because that judgment will not be publicly available until the conclusion of that lengthy trial.

44 The general approach to interpretation of a Code is well established. As Windeyer J put it in Vallance v The Queen [1961] HCA 42; (1961) 108 CLR 56 at 75:

"The Code is to be read without any preconception that any particular provision has or has not altered the law."

45 Nevertheless, there are circumstances in which the interpretation of a Code which, like any other statute, must involve reference to the full context of the specific provision that falls to be interpreted. This extends to the legal history of the particular provision and of the terminology in which it has been expressed.

46 In Stuart v The Queen [1974] HCA 54; (1974) 134 CLR 426 at 437, Gibbs J rejected the proposition that "it is never necessary to resort to the common law for the purpose of aiding in the construction of a Code" and added:

"it may be justifiable to turn back to the common law where the Code contains provisions of doubtful import, or uses language which had previously acquired a technical meaning, or on some such special ground."

(See also Bank of England v Vagliano Brothers [1891] AC 107 at 145; The Queen v Barlow [1997] HCA 18; (1997) 188 CLR 1 at 19; and Sungravure Pty Ltd v Middle East Airlines Airliban SAL [1975] HCA 6; (1975) 134 CLR 1 at 22.)

47 In my opinion, the references to "conspiracy" in the Code are of a technical legal character for purposes of the application of these principles. The terminology which the drafters of the code used were words and phrases which had well established legal meanings. Generally, the legal meanings did not differ from dictionary meanings. As Windeyer J put it in Vallance at 75:

"Law may define the forbidden conduct more fully and more precisely than in common speech is ordinarily necessary; but it does not define it differently."

"[The Code] does not define 'maim', but that word is used in it. In ordinary speech it means a crippling injury, such as the loss of a limb. The meaning is the same for law, but the specific test by which early law distinguished [maim] from lesser injuries was by asking whether the harm would make a man less able for fighting. The test produced some strange decisions. That is an illustration of the meaning of a word in the Code being fixed by the common law."

49 In my opinion, the references to "conspiracy" in the Code were also intended by the drafters of the Code to be "fixed by the common law", subject to any express statutory modification (cf R v Wyles; Ex parte Attorney-General (Qld) [1977] Qd R 169 at 177-182). The authors of the offence creating provision in s 11.5(1) adopted the terminology of the pre-existing Commonwealth offence in s 86 of the Crimes Act. That section was itself clearly derived from the common law and was not subject to the special rules for interpreting a code.

50 Furthermore, it is clear from the full text of s 11.5 that the authors of the conspiracy provisions of the Code paid careful attention to the pre-existing common law and to debates about the appropriateness of laying a charge of conspiracy, in lieu of substantive offences. That appears most clearly from the identification of the particular requirements of a finding of guilt of a charge of conspiracy set out in subss 11.5(2), (3), (4) and (5). Like the general discretion introduced in subs (6), these matters reflect decisions and debates that have occurred about the application of the crime of conspiracy at common law.

51 I am reinforced in this conclusion by the MCCOC Report, on which s 11.5 is clearly based. That Report identifies the need for such an offence and its detail by reference to the case law and debate about the crime of conspiracy at common law. (See MCCOC Report at [405] pp96ff.) It indicates that the offence of conspiracy under the Code was intended to implement the common law, save in identified respects. (See Ansari at [64]-[66].)

52 This conclusion is quite unsurprising. Conspiracy offences in those States with a criminal Code have frequently been interpreted by reference to common law principles. Accordingly, the texts on the Queensland and Western Australian Codes frequently invoke common law cases to explain the code provisions. (See eg LexisNexis Butterworths, Carter's Criminal Law of Queensland, vol 1 (at Services 75 and 64) at [s 541.20]-[s 541.55]; LexisNexis Butterworths, Criminal Law Western Australia, vol 1 (at Services 102 and 96) at [s 558.5]-[s 558.35].) In this respect the texts reflect the case law in the Code States.

53 I agree with Howie J at [76], set out at [21] above, that it is possible at common law for persons to conspire to commit a crime of which the mental element is recklessness. I also agree that there is no reason why that cannot be true under the Commonwealth Criminal Code. Such an offence will, however, be rare.

"It is unsurprising that conspiring to commit an offence of recklessness has not been considered by the courts. For one thing, there are relatively few offences of recklessness (including offences of intention which can in the alternative be committed recklessly, such as murder and rape). Secondly, given its nature - a premeditated agreement to commit a crime - it is unlikely in practice that two persons would conspire to commit an offence of recklessness, let alone a series of them. However, the distant possibility should not be precluded, or at least the possibility of incriminating in conspiracy persons who agree to commit an act which is criminal and is of a risk-producing character should not be precluded. As a minimum these persons should not be incriminated unless they agree to commit, and thus have the intent to commit the conduct creating the risk of harm, with the same degree of knowledge of risk as would be required of the perpetrator of it by the mens rea element of the substantive crime of recklessness represented by it, as a basis for incriminating the latter in the substantive crime." (Peter Gillies, The Law of Criminal Conspiracy (2nd ed) Federation Press, Sydney (1990) at 101.)

55 The critical aspect of the common law offence of conspiracy to commit an offence, that is picked up by the Commonwealth Criminal Code, is that an accused must know the facts that make the act or acts unlawful. This was Howie J's conclusion at [76] and was based on the authorities to which his Honour referred. The emphasised passages in the Ansari judgments, which I have set out at [21], [23], [24], [25], [29], [30] and [31], all indicate the basic significance of this requirement in the reasoning of that case.

56 The reason why this must be so is that the mere intention to enter into an agreement is an intention without a moral component of any character. It is the subject matter of the agreement where the moral culpability required for a criminal offence must be identified. In the case of the crime of conspiracy to commit an offence, the requisite moral culpability cannot exist unless the accused knows the facts that make the conduct unlawful.

57 Amongst the authorities to which Howie J referred, it is sufficient to quote the joint judgement of Wilson, Deane and Dawson JJ in Giorgianni, a case concerned with a charge of aiding and abetting. However, their Honours referred to conspiracy as being equivalent in the relevant respect. Their Honours had said with respect to aiding and abetting at 505:

"The necessary intent is absent if the person alleged to be a secondary participant lacks knowledge that the principal offender is doing something or is about to do something which amounts to an offence."

58 After referring to the equivalence between conspiracy and aiding and abetting, their Honours added at 506-507:

"The necessary intent is absent if the person alleged to be a secondary participant does not know or believe that what he is assisting or encouraging is something which goes to make up the facts which constitute the commission of the relevant criminal offence. He need not recognise the criminal offence as such, but his participation must be intentionally aimed at the commission of the acts which constitute it ... Intent is required and it is an intent which must be based upon knowledge or belief of the necessary facts."

59 I agree with Howie J that this reasoning is applicable to s 11.5(1) of the Commonwealth Criminal Code.

60 The words "to commit an offence" in s 11.5(1) and the words "intended that an offence would be committed" in s 11.5(2)(b) should be interpreted in accordance with the common law position discussed above. A person cannot be found guilty of an offence under s 11.5(1) unless s/he knows the facts that make the act or acts unlawful.

61 The observations of Howie J at [78], set out at [23] above, apply to an offence against s 11.5(1):

"The accused must intend that conduct will be carried out that amounts to a criminal offence and he cannot have that intention if he does not know all the facts that would make the intended conduct an offence."

62 His Honour's observations at [85], set out at [24] above, also apply:

"Unless the prosecution was alleging that the accused had sufficient knowledge of the facts making the conduct agreed upon a criminal offence, it could not succeed on the charge of conspiracy."

63 In the passages at [88], [89] and [93] in the judgment of Howie J, which I have set out at [24] and [25] above, his Honour emphasised that the Crown case in Ansari was that the accused actually did know all of the facts that made the conduct criminal.

64 To the same effect are the observations of Simpson J who concluded at [23], set out at [29], that:

"To prove recklessness, by reason of s 5.4(4) the Crown could also prove either that the appellants intended or knew that the money would become an instrument of crime. That is, in fact, what the Crown here set out to do."

See also her Honour's observations at [33] set out at [31] above.

65 It is of significance that in Ansari the Court was concerned with the second of the two kinds of money laundering offences ie whether there was "a risk that money or property will become an instrument of crime", to which I have referred at [13] above as an offence B. The present case involves an offence A: namely that the money or property is proceeds of crime. By reason of the inclusion of the word "risk" in an offence B it is necessary to adapt the language of the judgments in Ansari for present purposes.

66 To adapt the language of [89] from the judgment of Howie J, set out at [24] above, to the present case, it would read:

"Provided the Crown was intending to prove as against the appellants that they knew that the money is proceeds of crime that is that they knew all of the facts that made their dealing with the money criminal conduct, there was no impediment to the prosecution proving the offence as charged."

67 Similarly the reasons of Simpson J at [28], set out at [30] above, would read:

" ... It was open to the Crown to prove recklessness either by proving that the appellants were aware that there was a substantial risk that the money was proceeds of crime ... OR that they either intended or knew that the money was proceeds of crime."

68 So understood the reasoning in Ansari is not applicable to the present case for the reasons identified by Sweeney DCJ. (See [18] above.)

69 It is not the Crown case that either of the accused knew that the money was proceeds of crime. As the Crown emphasised in its submissions in this Court the Crown case was that the appellants were reckless as to the fact whether the money was proceeds of crime. That allegation may have supported a substantive offence under s 400.3(2). It cannot support a charge of conspiracy where, in order to satisfy the test of intention with respect to the entry into an agreement to commit an offence, the accused must know the facts that constitute the offence.

70 Sweeney DCJ correctly distinguished Ansari. Her Honour correctly concluded that the Crown case disclosed no offence known to the law.

71 The appellant Crown also submitted that her Honour erred in making an order directing a verdict of acquittal. It was submitted that the outcome of her Honour's conclusion should have been an order to quash the indictment. The Crown submitted that it was not the evidence that was found wanting, but rather the charge itself that was deemed bad.

72 I have set out at [24] par [85] of the judgment of Howie J which states that the charge would not itself be bad merely because it alleges a conspiracy to commit an offence that could be committed recklessly. Indeed, in the present case there is nothing on the face of the indictment that states that it was the accused who were reckless as to the fact that the money was the proceeds of crime. However, the particulars provided, the evidence adduced and the submissions made did identify the case as being of that character.

73 On the above analysis it was not the indictment that was bad but the particulars provided and evidence adduced that indicated that the Crown case could not succeed.

74 I have set out at [18] above, Sweeney DCJ's conclusion which, to repeat, was that "the offence ... charged in this indictment, on the case the Crown has presented, is bad at law or unknown to the law". (emphasis added)

75 In these circumstances it was open to her Honour to direct a verdict of acquittal rather than to quash the indictment.

76 It is unnecessary to deal with the respondents' contentions which challenged the applicability and validity of s 107 of the Crimes (Appeal and Review) Act 2001.

Criminal Code Act 1995(Cth)

(Appeal and Review) Act 2001

Criminal Code Act 1995(Cth)

(Appeal and Review) Act 2001

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