Chen v The Queen [2014] HCATrans 140 (20 June 2014)

Last Updated: 24 June 2014

[2014] HCATrans 140

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S23 of 2014

B e t w e e n -

ZHEN CHI CHEN

Applicant

and

THE QUEEN

Respondent

Application for special leave to appeal

KIEFEL J
BELL J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 20 JUNE 2014, AT 12.02 PM

Copyright in the High Court of Australia

MR J.L. GLISSAN, QC: If the Court please, I appear with my learned friends, MR A.G. JAMIESON and MR D.H. NAGLE, for the applicant. (instructed by Jeffreys & Associates)

MR T. MUIR: May it please the Court, I appear for the respondent. (instructed by the Commonwealth Director of Public Prosecutions)

KIEFEL J: Yes, Mr Glissan.

MR GLISSAN: Your Honours, this is a case which we say satisfies - if you like ticks all the boxes for special leave because it raises an important matter of statutory construction in relation to the operation of the Criminal Code (Cth). It raises matters where there have been continuing and persistent difficulties in the understanding of that section, both judicially and by the prosecutorial authorities and it provides, we would respectfully say, an ideal vehicle for the matter because of the length of the sentence and the nature of the sentence that was imposed on the applicant in relation to a matter which, if properly prosecuted, would have been for a much less serious offence, namely, breach of the reporting legislation, rather than for a criminal offence involving so-called money laundering.

BELL J: Well, you say that it raises an important matter of construction. Am I right in understanding that the justification for this exceedingly belated application is the decision of the Court of Criminal Appeal in the matter of You Quin Chen which, as I understand your submissions, you contend reveals a flaw in the prosecution case on which your client was convicted?

MR GLISSAN: That is precisely right.

BELL J: Now, do you challenge the analysis in Milne v The Queen of the elements of the offence created by section 400.3?

MR GLISSAN: Your Honour, what we say in relation to Milne v The Queen is slightly different to that, certainly not a challenge to it and, indeed, we embrace it but we say it does not go far enough in revealing the difficulties that are faced in relation to this section for two reasons. Milne deals with the construction of the section so far as the present activity and the future intention in relation to a crime is concerned.

What is really involved and what is not addressed in Milne, and this is what we say remains the heresy that needs to be corrected and only this Court can correct, is twofold. The first is there is within the section itself a double tense problem in the second part of the section and I will come to that in a moment and make that clear if I may.

The second is this, that what Milne did not address at all is the operation of section 400.13 of the Act which deals with a somewhat bizarre statutory provision, if I can put it that way, because it says in order to prove an intention to commit a future crime you do not need to establish that there is an intention to commit a future crime of any particular kind and it was that that bedevilled the present case.

BELL J: But that was not really raised, was it? Here, in the way the prosecution was conducted, the prosecutor did take on the task of establishing the crime that was in contemplation at the time of the dealing in money. It was a structuring offence under section 31(1) of the Financial Transaction Reports Act.

MR GLISSAN: No. With respect, your Honour, no, because that brings into existence precisely the problem that bedevilled the court which was addressed in Chen and addressed to a degree in Milne. The problem there was this. There is an elision of two separate elements of the offence. What is required is a dealing with the money, in the first instance.

Now, the dealing with the money in this case, that the prosecution embraced, and which was the way the trial judge left it and left that part of it quite properly to the jury, was that the structuring offence was the dealing with the money and the way it was left was on the basis that, very simply put, the dealing with the money was by the accused through his agent, Huang, but he was a principal in the dealing with the money which was the Financial Transaction Reports Act.

BELL J: Can I take you to application book 51? Starting at the last paragraph and going over the page one sees the instructions to the jury as to the way the prosecution case was put.

MR GLISSAN: Yes, but can I take your Honour back a couple of paragraphs to about line 28 on that page:

What the Crown must prove and prove beyond reasonable doubt are these things: Firstly, that the accused dealt with money. Secondly, that the accused dealt with money with the intention that the money become an instrument of crime, namely an offence against section 31 subsection 1 of the Financial Transaction Reports Act.

But the fact was that was the dealing.

BELL J: Mr Glissan, can we go back to how it was put on the following page?

MR GLISSAN: Yes, your Honour.

BELL J: In the concluding paragraph on that page, consistently with the definition of “dealing with”, the trial judge explained that:

A person deals with money if the person disposes of money -

and his Honour went on to note –

“Disposes of” does not need any particular explanation -

and so forth. This was a case in which it was left on the basis that the dealing in money was the disposing of the money to Mr Huang on the understanding that Mr Huang would engage in the banking transactions that constituted the structuring offence.

MR GLISSAN: Well, your Honour, we would respectfully suggest that does not do justice to the way the case of the accused was put and if I could take your Honour to page 97 of the application book where his Honour again deals with the matter. Judge Nield deals with it at paragraph 39 - - -

BELL J: Sorry, what page is this?

MR GLISSAN: Page 97, I am sorry, your Honour.

BELL J: Yes.

MR GLISSAN: At paragraph numbered 39, at about line 40 on that page, the submissions were dealt with and you will see his Honour’s agreement - - -

BELL J: This is in the sentence hearing?

MR GLISSAN: Yes.

BELL J: Yes.

MR GLISSAN: Senior counsel submitted:

that the evidence does not allow me to find that the offender was “the mastermind of the operation”. The Crown Prosecutor did not submit that the offender was the mastermind of the operation, only that he was the principal towards Mr Huang in relation to the transactions conducted by Mr Huang for the offender. I agree with –

that. His Honour was right in relation to that but that belies the necessity that is imposed by the section, that the dealing with the money, which is Mr Huang committing the offence under the Financial Transaction Reports Act requires a future intention - - -

KIEFEL J: A temporal separation. Is that what you are - - -

MR GLISSAN: A temporal separation as it is put in Chen.

KIEFEL J: But the applicant here had possession of the money. He concealed it and then he disposed of it to Mr Huang before the offence was committed under the Financial Transaction Reports Act, did he not?

MR GLISSAN: We would respectfully say not so because there was simply no evidence about what was done with the money or suggestion of concealment of it before it came to Mr Huang. Indeed, his Honour was at pains to point out the fact that he had no evidence before him at all of the provenance of the money, merely that it was provided to Mr Huang.

KIEFEL J: You might be right there, but as Justice Bell has pointed out, the disposition of the money to Mr Huang provides the temporal separation in any event.

MR GLISSAN: Well, your Honour, we would respectfully submit that that is a false termination.

KIEFEL J: That is what distinguishes this case from the earlier Chen Case. There is no elision here.

MR GLISSAN: Your Honour, the submission we make is as we have put it in the submissions. If your Honours are of that view I do not know that I can say very much more about it. The point we say is clear but can I move to this because I understand the factual issue but that is something that may need to be agitated at length and agitated before a Full Court at length, in our submission, because it is an important matter.

The real difficulty that is thrown up by this section is that issue of temporal separation and the operation of section 400.13 which was engaged here, we would say, which is that the Crown makes no attempt in these cases to establish any future offence and, indeed, his Honour again in the remarks on sentence in particular is at pains to point that out, as your Honours will have seen.

BELL J: The Crown here particularised in the indictment the offence that it relied on as that which was in contemplation at the time of the dealing in money and that was the structuring offence. Now, that is in the indictment. Your real complaint, Mr Glissan, is that it might have been open to the prosecution to simply charge the structuring offence and your complaint is with, as it were, the heavy hand in charging not the lesser offence under the structuring Act, but the greater offence under the Criminal Code, but insofar as - - -

MR GLISSAN: That is certainly a complaint, your Honour.

BELL J: Insofar as the difficulty that was identified in the Court of Criminal Appeal in the other case of Chen and which comes out very clearly in the dissenting reasons of Justice Simpson is that the Crown tied itself to the banking transaction as the dealing in money for the purposes of the substantive offence and it was the banking transaction that constituted the offence under the Reporting Act.

MR GLISSAN: That is quite so and I am glad your Honour directs me to the dissenting judgment of Justice Simpson in that case because there is another issue that arises, or another problem that is revealed by her Honour in that dissenting judgment and I did not intend to take your Honours to any of the cases in any length at this stage of the application in any event but her Honour did say in the course of that dissenting judgment between paragraphs 67 and 69 that there was a third alternative to the alternatives that had been contemplated by the court and that which she had determined in the earlier case of Ansari and that was in relation to where money was intended to be an instrument in an offence of a continuing, accumulating or incremental kind.

Now, whatever might be said about that and whether or not that is an accurate way of dealing with the elements of section 400.3 or 400.5, whichever it is that is under consideration, it was not the way the Crown put the case here so that they could not satisfy the temporal separation by saying here there were a number of financial transactions, some of which therefore inform the others later and provided the temporal separation that was required by the section.

We say, for that reason again, there is a real public interest, a real importance in this Court finally placing its imprimatur on the proper construction of this section because it is one which, as your Honours will see, even just from the five cases that have been listed as the authorities that are referred to from Milne back to Ansari, as one of the earliest cases on it, one which has occasioned a great deal of judicial uncertainty and it is something that needs to be resolved and needs to be determined and it can only be determined by this Court in the way the authorities stand at the moment.

It is on that basis that we say this case does provide an appropriate vehicle, that a proper revision of the way the Crown actually presented the case meant that it did rely in fact on the Financial Transaction Reports Act as informing the first part but not the second part. That can be seen again from what his Honour had to say, Judge Nield in the remarks on sentence, where he made the observation that the evidence did not allow him to find that the offender’s purpose in doing what he did was to evade the payment of income tax or it was put no more than the evidence allowed it to find that his general purpose, and this was put in the context of dealing with the second of the temporal elements, was to avoid detection of the moneys by the relevant authorities or that he did it to avoid the reporting conditions of the Financial Transaction Reports Act but that, we say, is the impermissible elision.

BELL J: The impermissible elision, if one accepts that there was at the time of disposing of the money to Mr Huang, an intention that Mr Huang would commit the offence under the Reporting Act.

MR GLISSAN: Yes. I cannot put it any other way. If your Honour pleases, those are the submissions.

KIEFEL J: We will not need to trouble you. I will ask Justice Bell to give the reasons of the Court.

BELL J: The premise for the applicant’s argument is misconceived. In Y.Q. Chen v Director of Public Prosecutions[1] the dealing in money that was relied upon as the physical element of the money-laundering offence was the banking transactions constituting the structuring offence[2]. At the applicant’s trial the prosecution particularised the applicant’s possession and disposal of the money to Huang as the relevant dealing in money. The case was left to the jury on the basis that at the time the applicant disposed of the money to Huang it was his intention that Huang would engage in the banking transactions which constituted the structuring offence. The temporal difficulty identified in Y.Q. Chen did not attend the prosecution of the applicant.

The elements of the offence created by section 400.3 of the Criminal Code Act 1995 (Cth) were recently considered by this Court in Milne v The Queen[3]. In light of the analysis in that case, which is not the subject of challenge on this application, there is no reason to consider that if special leave were granted the appeal would succeed. Special leave is refused.

MR GLISSAN: If the Court pleases.

MR MUIR: If the Court pleases.

AT 12.19 PM THE MATTER WAS CONCLUDED

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[1] [2011] NSWCCA 205.
[2] Chen v Director of Public Prosecutions (Cth) [2011] NSWCCA 205 at [13] and [20] per Basten JA; [56] per Simpson J; [86] per Garling J.
[3] (2014) 88 ALJR 395; [2014] HCA 4.