Lordianto & Anor v Commissioner of the Australian Federal Police; Kalimuthu & Anor v Commissioner of the Australian Federal Police [2019] HCATrans 54 (22 March 2019)

Last Updated: 26 March 2019

[2019] HCATrans 054

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S266 of 2018

B e t w e e n -

SANKO LORDIANTO

First Applicant

INDRIANA KOERNIA

Second Applicant

and

COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE

Respondent

Office of the Registry
Perth No P58 of 2018

B e t w e e n -

GANESH KALIMUTHU

First Applicant

MACQUELENE PATRICIA MICHAEL DASS

Second Applicant

and

COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE

Respondent

Applications for special leave to appeal

KIEFEL CJ
BELL J

TRANSCRIPT OF PROCEEDINGS

FROM SYDNEY BY VIDEO LINK TO PERTH

ON FRIDAY, 22 MARCH 2019, AT 11.30 AM

Copyright in the High Court of Australia

____________________

MR B.W. WALKER, SC: May it please the Court, I appear with my learned friend, MR T.P. MITCHELL, for the applicants in matter S266 of 2018. (instructed by Lincolns Lawyers & Consultants)

MR S. VANDONGEN, SC: If your Honours please, I appear in Perth with my learned friend, MR E.W.L. GREAVES, in matter P58 of 2018. (instructed by Putt Legal Migration)

MR A.R. MOSES, SC: Your Honour, I appear with my learned friend, MR L.T. LIVINGSTON, for the Commissioner in both matters. (instructed by Commissioner of the Australian Federal Police and Criminal Assets Litigation Australian Federal Police)

KIEFEL CJ: Yes, Mr Walker.

MR WALKER: If it please the Court. Paragraph 330(4)(a) of the Proceeds of Crimes Act is a very important provision in that very important statute. I have repeated “very important” because of the manifest interference with important individual property rights that the whole legislation represents and for a socially beneficial purpose.

It is by means of subsection (4) and in particular paragraph (a), that people who might colloquially be called “innocent persons” involved in transactions falling within the net of the statute may escape the forfeiture of their property. In particular, by way of an example, that is the means by which the person who entirely innocently sells a mansion to a cocaine dealer, will not only thereby – will avoid thereby losing both the mansion and the proceeds in terms of the purchase price.

The decision from which we seek special leave to appeal is in particular characterised by the interaction of those general provisions in the Proceeds of Crimes Act and two provisions enacting what might be called the predicate offences in a way that will recur, indeed, in the nature of things is bound to recur in a way that will enliven anxious consideration of forfeiture. I refer, of course, to the socalled structuring offence that your Honours will be familiar with from section 142 of the AntiMoney Laundering and CounterTerrorism Financing Act.

There is perhaps more importantly, in terms of the net it casts over a lot of frequently committed conduct, there is section 400.4 of the Criminal Code dealing in proceeds of crime. It is, in particular, that last that then, of course, requires application of the general and comprehensive provisions of section 329 and section 330 of the Proceeds of Crimes Act. Very familiar scenarios are caught within the appropriately wide definitions given by Parliament for the socially beneficial purpose of that statute. Property is proceeds of an offence, as your Honours know from section 329(1), if:

(a) it is wholly derived or realised, whether directly or indirectly, from the commission of the offence; or

(b) it is partly derived or realised, whether directly or indirectly, from the commission of the offence –

The breadth could not be more clear. It is an instrument under subsection (2) by similar breadth of comprehension, namely it:

is used in, or in connection with, the commission of an offence -

It is obvious therefore, as Justice McColl pointed out in that part of her reasons which dissented from the majority, though her Honour supported the result, as your Honours know - in that part of her Honour’s reasons where it is pointed out that there is a theoretically indefinite continuation, iteration by iteration, transaction by transaction of property becoming the proceeds of an offence constituted by the offence of dealing in the proceeds of an offence. There is no facetiousness about that. It is an extremely familiar, probably very common, application of these provisions.

That is why it is so important that in paragraph (a), there be a purposive effect given, as Justice McColl, in our case, sought to demonstrate as the Court of Appeal in Western Australia would have held but for, what I will call, extended stare decisis.

KIEFEL CJ: It is that division of opinion between the two intermediate appellate courts that you particularly rely upon, obviously.

MR WALKER: Of course, and your Honour, with great respect, uses the expression “division of opinion”, because the opinion is clear notwithstanding what I will call the federal extended stare decisis produces uniformity of outcome. Yes, very much so. That, in our submission, makes this a paradigm of a case for this Court to take it up in order to settle it on a reasoned basis.

BELL J: Mr Walker, to succeed, you need to succeed on

MR WALKER: All of it, all of it.

BELL J: each of the three grounds.

MR WALKER: Yes.

BELL J: A third ground is, perhaps in that sense for you, the most controversial.

MR WALKER: There is a reason we did not put it first, yes. Can I seek to persuade your Honours of its real virtue, not the standout one, but the real – its nonetheless its real virtue for special leave by first going to what I will call “the ignorance of the law is no defence” proposition which plainly plays a role in the reasoning against us. I do not say it is the entirety of the reasoning, but it is a very important part of the reasoning.

One only has to contemplate the way in which that is rendered in modern legislative English in section 9.3 of the Code to appreciate that the whole of that socially fundamental presumption for the serious operation of a system of criminal law is that it has to do with the existence of criminal responsibility, notwithstanding a blithe ignorance of any aspect of the criminal law.

That is not our clients’ position at all. Their criminal responsibility is simply not in question. So this is a familiar case, we submit, an important one, to return to the question, should the statute when referring to a state of mind, that is in circumstances that would not arouse a reasonable suspicion, is any degree of fiction to be admitted given that there is an express intrusion of the word “reasonable” in a way that, of course, as much protects people in my clients’ position as exposes them to peril of their property.

Let me explain. A reasonable suspicion is, of course, one that would not be excited only in the minds of someone who is paranoid and malicious. That protects, obviously, people in my clients’ position. It also, of course, includes a suspicion which ought to be aroused in the mind of somebody who gives appropriate thought to something. But, in our submission, Parliament cannot possibly have intended, in the face of the long tradition of the acceptance that it is a fiction – well, not a fiction – it is a presumption that ignorance of the law is no defence to criminal liability, one could not possibly, in our submission, interpret these words as suggesting that it is not reasonable not to know all of the law – all of the relevant law. That could not possibly be true.

It is for those reasons that there is a significant matter going above and beyond the particular circumstances of my clients which is available as much for the third issue as it plainly is for the first two issues. As for the actual

KIEFEL CJ: But if we are looking for – if you are right about the division of opinion being a strong indicator towards special leave nevertheless we would be looking for an appropriate vehicle and your matter, because of the problem with (c), might not be it.

MR WALKER: Your Honour, in our submission, it is an appropriate vehicle because there is an argument, and a respectable argument, for success on each of the three components. We have to have success on each of the three components and it becomes an appropriate vehicle if it can be seen, therefore, that the intercourt division of opinion point will be reached in our case as much as in any other case.

KIEFEL CJ: The Court of Appeal pointed to findings that your clients were financially sophisticated international investors, familiar with their bank accounts and said that they need not have known that the conduct constituted an offence. Do you take issue with the latter proposition?

MR WALKER: Your Honour, I think is –

KIEFEL CJ: At paragraphs 161 to 163.

MR WALKER: Yes, at pages 108 to 109. In our submission, it is not possible on the findings to attribute actual knowledge of the offence provision. That is not, in our submission, the position. In paragraph 163, it can be seen that there is, in our submission, what is not truly an inference but rather a speculation concerning the market reason or the economic underlying justification for a difference in rates.

There is absolutely no substance in the proposition that the competitive rate that attracted our clients is one that is permitted to be offered in the market because of an avoidance of what I am going to call regulatory costs. Your Honours can imagine the arithmetic by which one would need to work out exactly how that could have been generated. Paragraph 163, in our submission, is ingenious but a speculation.

It is for those reasons that we respectfully submit that the advantageous rate offered, which is certainly deployed against us in paragraph 163 in the court’s reasons on this point, is one which, at least equally, probably more cogently, explains the choice of the means of remittance.

BELL J: It is not just that aspect. It is the admitted knowledge of the very large number of deposits in cash in an amount under $10,000.

MR WALKER: The “in cash” is neither here nor there, in our submission, bearing in mind the cultural milieu of the - I will call it industry, that connects not only Australia with other western banking cultures, with southeast Asian and south Asian financial cultures. The use of cash at some point in that resort to banks and the like, in our submission, is of no moment one way or the other and to be fair, their Honours do not actually say that they apply some localised view of large sums of cash as being, in itself, enough to invoke a reasonable suspicion.

BELL J: I think it is the feature of the very large number of transactions.

MR WALKER: I do understand that, your Honour, yes.

BELL J: And for a person who is accustomed to dealing with large banking institutions and other financial dealers.

MR WALKER: Yes, and that is made quite plain and it is referred to in the conclusion at the top of page 109 in paragraph 163 and the facts are undeniable and not denied. However, in our submission, that is not in the absence of knowledge of the existence of, what I call a structuring offence. A structuring offence is ancillary to the reporting obligation itself relevantly a civil obligation on institutions. A structuring offence, as your Honours know, is expressed in a way that is really quite delicately poised in terms of the criminal risk it imposes on persons. In our submission, it is not surprising that people in my clients’ position would be unaware either of the existence of, let alone the subtleties of, that offence.

It is for those reasons that there is, in itself, no sinister matter engendered by resort to these financial intermediaries for the remittances being composed of the strikingly numerous smaller transactions. Your Honours, I do not think I need labour any point about what I will call the first of the matters which is the division of opinion matter

KIEFEL CJ: No.

MR WALKER: The second is the full consideration point. In our submission, the error that is worthy of this Court’s attention involves the notion that with dealings which, as we all know, and as in this case, is illustrated, might be international and between quite different social and commercial cultures. One thing is for sure, that for consideration would not, as it were, be construed with an Ansonian strictness confirming our system of contract law, privity and the like.

Indeed, even within our own system examples can be generated suggesting that the approach taken by the Court of Appeal, which is to point to a failure to prove what I will call the internal aspects of dealings between others entirely separate from us, cannot possibly be an appropriate approach to interpreting that expression. For example, how is any vendor to be in a position to know what the arrangements are between members of a corporate group, members of a family, and their respective financiers concerning the source of the bundle of cheques by which settlement moneys are made available in an ordinary real estate transaction?

The notion that you need to show some kind of relation to which an AngloAustralian concept of contract law might attach the word “consideration” for receiving a cheque from a building society in the country from a bank in the city and from somebody’s aunt is, in our submission, absurd.

Rather, consideration is used by Parliament in the same way as it has been used in our system for a longer period than when Professor Anson did his work. Lord Mansfield’s use of the word “consideration” to describe a reason to support something well and truly describes as a matter of ordinary English inner statute the reason why the money was put by us into the Indonesian accounts, because that was the quid pro quo, the reason for the basis upon which we were, in turn, to receive the commensurate amount.

BELL J: The provision is

MR WALKER: So sufficiency is not a problem. I am sorry, your Honour.

BELL J: The provision is concerned with property that is acquired by a third party for sufficient consideration.

MR WALKER: Yes.

BELL J: Your contention is that the property here, in the way the matter was analysed by the Court of Appeal, the interest in relation to the additional credit standing in the account

MR WALKER: Yes. The deposit which increased credit

BELL J: Yes.

MR WALKER: Or avoiding overdraft problems in this case.

BELL J: That was acquired for sufficient consideration because but for the dealings between your client and the Indonesian remitter

MR WALKER: There would have been no receipt.

BELL J: Yes. It would not have occurred.

MR WALKER: That is right, and, in our submission, that is entirely what one might expect, construing purposively a provision designed to protect innocent persons. Most of us do not have the capacity to, as it were, interrogate the financing arrangements of those who are paying us money, say, in a contract.

So, in our submission, it is fairly plain that from whomever the money may come, if it comes to us because we hand over a transfer and it comes as purchase price, it is plainly our handing over of the transfer, is plainly for consideration. That is why, in our submission, rather neatly, in these international remittance cases from Asia the fact that the deposits have to mirror each other allowing for exchange differences and the like and margins, that is well and truly a demonstration of at least two of the components.

Sufficiency - that is we know that it can only be commercial considerations for sufficient consideration by reason of the definition and also consideration in the sense that it is the reason why and the conduct in response to which there has been the receipt in question. That receipt is, in the case of a bank deposit at least to a credit account, obviously the
acquisition of an improved or new chose in action, an improved one probably, enhanced one. It is for those reasons, in our submission, that the second of the points, what might be called the consideration point, is certainly, by reason of its application to many, many common dealings apt for special leave.

Your Honours, by answering your questions earlier about what I will call the vehicle problems I have said also what I want to say about the other matters. Otherwise for the reasons we have as well expressed in our writing, particularly in our reply, calling in aid the West Australian case this, in our submission, is a case apt for special leave because the prospects of all the points in question, needing to be reached in order to decide our case, are sufficiently high to justify.

KIEFEL CJ: Thank you. The Court may hear from Mr Vandongen now.

MR VANDONGEN: Thank you, your Honours. Given the submissions that were made by Mr Walker, I will not be very long. We gratefully adopt and rely upon the oral submissions that were made by Mr Walker a few moments ago. Given the exchange between Mr Walker and your Honours in relation to the question of whether or not these two cases demonstrate that there are differences of opinion between

KIEFEL CJ: On the third party question in particular.

MR VANDONGEN: On the – yes, I will not dwell on that either.

KIEFEL CJ: No.

MR VANDONGEN: However, I will note in relation to our case, the Kalimuthu Case, that there was a difference of opinion within the Court of Appeal about whether or not there was sufficient consideration that was provided by both of the applicants in this case. So, his Honour the President would have been in dissent on that question had it not been for his decision to apply Lordianto and so whilst I appreciate that there is not exhibited a difference of opinion between intermediate courts of appeal, at least there is a dissenting judgment, a reasoned dissenting judgment of his Honour the President, which sets out, in our submission, quite detailed reasons as to why he found in our case that there was sufficient consideration provided.

Having made those submissions, can I go directly to the issue of whether or not our case represents a suitable vehicle, and in that regard make submissions about what is in our application book ground 3. You will have noted from the application book that the Commissioner in ground 4 in the court below argued that, in relation to both of the applicants, they had failed to establish that there were circumstances that would not have aroused a reasonable suspicion and in relation to the second applicant, that argument failed.

So, in order for this to be regarded as well, in our submission, at least in relation to the second applicant, there is no issue about whether or not she ought to have held a reasonable suspicion about whether or not the proceeds, the rights in the bank account had been obtained as proceeds of crime. That still remains the question as to whether or not the first applicant represents as a vehicle, an appropriate vehicle for dealing with the matter.

In relation to the first applicant, our submissions differ in some respects from the submissions made on behalf of Lordianto. In the submissions, as I apprehended in Lordianto, focus there is upon knowledge of the commission of an offence. In our submissions, we do not make that submission. We submit that the appropriate focus is on the elements of the offence and we have made a submission in writing that the Court of Appeal unanimously failed to take into account the elements of the offence.

Upon reflection, if your Honours look at the application book at page 193 - and if I could direct your Honours’ attention to paragraph 502 which is in the majority decision of their Honours Justice Murphy and Beech. It is in that paragraph that their Honours reached conclusions based on some findings that were made by the primary judge with the ultimate conclusion that the first applicant had failed to establish what he was required to establish in terms of circumstances that would not arouse a reasonable suspicion. If you look at the secondlast sentence in paragraph 502, it does appear as though the majority directed their minds to the elements of the offence and that is by reference to the words:

involving an attempt to avoid the reporting of the deposit of large sums -

The point that we want to make, however, is that the majority did not make any findings about whether or not Mr Ganesh, the first applicant, had any knowledge that were reporting requirements in Australia. In distinction to the case in Lordianto, there was no finding made that either Mr Ganesh or Mrs Ganesh were sophisticated investors. There was no finding of that nature at all here. The only findings that were relied upon to reach the conclusion that their Honours did in that paragraph are those contained within that paragraph. Amongst that paragraph, one stands out as being perhaps an important one. About halfway through that paragraph, their Honours say:

He did not establish a cogent explanation for why this might be so.

They do not say expressly in that paragraph what that finding relates to. It possibly relates to what was said in paragraph 500. Paragraph 500 refers to a conflict of evidence between what was in the mind of Mr Ganesh as having been told to him by Mr Zamri, and what Mr Zamri’s evidence was about what he told Mr Ganesh. The particular evidence, because it was not actually set out in that paragraph, can be found at application book 15 in the primary judgment of his Honour Justice Allanson, and at paragraph 41, in the quote from Mr Ganesh’s affidavit at paragraph 113.

So the evidence was, albeit that there was a conflict and the primary judge did not resolve that conflict but did not find positively that Mr Ganesh’s evidence about this was untrue or ought not be accepted, was that in his mind the reason why the money had been deposited in the way in which it had been deposited was because this is the way in which you transfer money in Australia.

So, in our submission, it was not open to the majority to conclude that that was not a cogent explanation. It was not open in circumstances in which their Honours did not consider, it seems in 502, the importance of understanding what was the knowledge of Mr Ganesh at the time in determining what were the circumstances in which it was said that reasonable suspicion ought to have been aroused.

So, that the short point is that in terms of an appropriate vehicle, this case is an appropriate vehicle certainly in relation to the second applicant because the ground of appeal in relation to her was dismissed. In relation to the first applicant, there are still arguments that can be put, in our submission, which have some prospect of success in convincing this Court that notwithstanding the findings that were made by the majority below that he nevertheless – there were not circumstances that ought to have roused reasonable suspicion in his mind. Those are our submissions.

KIEFEL CJ: Thank you, Mr Vandongen. Yes, Mr Moses.

MR MOSES: Your Honours, the applicants’ contentions in both matters divert attention from the text of section 330(4)(a) and are an invitation for this Court to construe it in a matter that trumps the text of the provision. In any event, as your Honour Justice Bell in exchange with my learned friend, Mr Walker, observed in Lordianto, there is still the third question that needs to be dealt with, whether this is an appropriate vehicle for the Court to consider the issues raised.

We say it is not because of the hopeless nature of the evidence from each of the applicants, apart from the second applicant in the Kalimuthu matter, because they were put on notice in circumstances that should have aroused a reasonable suspicion that the property was the proceeds of an offence or the instrument of an offence. Your Honours, can I go to the – if I can call it, the third question first.

BELL J: Can I just inquire, is it your submission – we were just – I will withdraw that. We were just taken to paragraph 502 in the reasons of the Court of Appeal and to the conclusion that the first applicant had failed to establish the third condition. By reference to the court’s view that the circumstances – that he failed to establish that the circumstances would not:

arouse a reasonable suspicion that the deposits were the proceeds of an offence, involving an attempt to avoid the reporting of the deposit of large sums of cash into accounts.

Taking us to the text of the provision, is it your contention that the Full Court was right to consider that the objective test does look to the proceeds of an offence involving an attempt to avoid the deposits of large sums of cash into accounts?

MR MOSES: I think the best way to answer that, your Honour, is to take you directly to the passage in the judgment of his Honour Justice Buss which appears at 134 to 135 of the Kalimuthu application book at paragraph 289. His Honour there made three important points concerning this issue. First, the language of section 330(4)(a) which imports an objective test:

is not apt to include in the ‘circumstances’ or the statutory test the subjective ignorance of the third party that the relevant actions or omissions were an offence. Secondly, the purpose or object of the POC Act, as revealed by s 5(a) read with s 330(4)(a), would be impeded if ignorance of the legal consequences that flow from actions or omissions constituting an offence were to allow a third party to rely upon the exception provided for by s 330(4)(a).

Thirdly, the principle that ignorance of the law:

is not ordinarily a defence or an excuse to legal liability is a fundamental tenet of the common law. It is embodied in s 9.3 of the Criminal Code . . . and is not confined to legal liability under the criminal law.

That is, we say, your Honours, the correct approach. It was supported by Justice Murphy and Justice Beech at paragraphs 497 through to 504 and, of course, aligns with the approach taken by the Court of Appeal in paragraph 154 in Lordianto.

So the question, your Honours, of whether an applicant for exclusion has discharged the burden of establishing that property was acquired in circumstances that would not arouse a reasonable suspicion must be answered by reference to all the factual circumstances arising in a particular case, not just cherrypicking parts of the evidence as, with respect, my learned friends in the Kalimuthu matter do in relation to just honing in on that provision because this person, being the first applicant, saw multiple deposits going into his account under $10,000. They say it is sufficient for him to have asked this remitter, who was not called to give evidence, and we do not know what he did with their money that he gave them to come along and provide his version or his explanation in relation to these matters.

A common feature of these cases is they say they give millions of dollars in cash in an overseas country to a person and that they trust that that person will provide the money into a designated bank account in Australia. All of a sudden, mysteriously, on the same day in Australia deposits of under $10,000 are made sometimes totalling millions of dollars and that somehow that does not raise a question in their mind as to what is going on.

Now, that is fantasyland, your Honours, with all due respect. That case is no vehicle, certainly Lordianto, as my learned friend, Mr Walker, I think, with all due respect to him, fairly put the submission, as best he could in respect of the evidence that he has in Lordianto, that is not an appropriate vehicle but in Kalimuthu, the only vehicle would be the second applicant who, my learned friend correctly pointed out, was not the subject of a finding by the Western Australian Court of Appeal. But her case fails because of the second question, quite apart from the third party point. I will come to that directly if I can now.

But if it assists your Honours on the facts, we have provided our friends with this – we have just done, as it were, the concessions in both Kalimuthu and Lordianto and I just wanted to draw your Honours’ attention to – and we have crossreferenced it back to the judgments in both matters – just the two passages that your Honours might want to have regard to because it sets it out in a nutshell.

Your Honours, in the Lordianto document that I have provided to the Court it is 1H and 1J at page 2 that we have asked that the Court have regard to in relation to the second applicant and in relation to the first applicant Mr Lordianto it is 2H but that is the nature of the evidence that was before Justice Simpson. Then, in the Kalimuthu matter, if your Honours look to paragraph 9 which is the evidence concerning Mr Kalimuthu which we draw the Court’s attention to in relation to that issue.

Your Honours, can I deal, if it is convenient, with the second question which is the sufficient consideration point and, your Honours, in relation to this issue if I ask that your Honours go to the Kalimuthu reply submissions at paragraph 15 I think it is at page 266 of the application book. They take as their starting point a false dichotomy between two alternatives. Neither alternative is expressed in the language of section 330(4)(a) and they impose a significant impermissible gloss upon the statutory language.

The question under the provision is not whether there was an indirect connection or no connection whatsoever between, on the one hand, the payment of moneys made by the applicants to money remitters and, on the other hand, the money deposited in the applicants’ accounts in Australia. The question is whether the applicants’ acquisition of property was for sufficient consideration and that must direct attention to the acquisition and in the case

BELL J: That itself gives rise to an issue of no small controversy, although I understand it is not the subject of either application, but a purposive interpretation of the broad definition of “property” under the Proceeds of Crime Act was given in order to explain how one could conceivably characterise an acquisition of property in these circumstances. So, one gets the difficulty on one view of speaking of the acquisition of property for sufficient consideration in circumstances where the acquisition itself presents some conceptual difficulties.

MR MOSES: It is not inconsistent, your Honours, with the approach that this Court took in Hart when dealing with the provisions of the Act that were there under consideration because this instrument, as made clear by the objects of the Act, is meant to be a blunt instrument in relation to this area in order to prevent organised crime in this country and its reach.

In effect, your Honours, the question is a factual one. Did the applicants provide sufficient consideration for the acquisition? Essentially, it is to the effect the property consisting of the applicants’ rights to their bank accounts was not acquired for sufficient consideration because the absence of authorisation from each of the applicants because they all had to say it in relation to the structured deposits that were made in contravention of the Anti-Money Laundering Act precludes any conclusion that those deposits represented the quid pro quo for the applicants’ payments in Indonesia or Malaysia.

Can I just remind your Honours, because it is the most convenient way to deal with it, if you go to the majority in Kalimuthu, Justice Murphy and Justice Beech at pages 182 to 183 of the application book in Kalimuthu, it is paragraphs 469 to 473, their Honours consistently with the approach of the whole court in Lordianto at paragraphs 136 to 140 and 166 to 167 answered that question no and their Honours were correct to do so for the reasons set out in our response at paragraphs 32 to 33 of the Kalimuthu matter at pages 255 to 256 of the application book.

In any event, your Honours, the question turns on the correct inference to be drawn from the facts of the particular case and no principle of general importance sufficient to justify special leave arises in relation to the second question

BELL J: The second question is the one in respect of which in Kalimuthu President Buss took a different view.

MR MOSES: That is correct and that was at paragraphs 195 to 241 in relation to that matter. Your Honours will note that his Honour expressed views as to the meaning of “sufficient consideration” which differed from those of Justice Beazley – President Beazley and Justice Payne in Lordianto in paragraphs 220 to 223.

I do not need to canvas those differences now but the most important point is the conclusion at which his Honour arrived at paragraph 234 that, in the circumstances, he was not persuaded that the approach in Lordianto was “plainly wrong”. But it does not really matter, because there is not what can be said a divergence of views from the majority in Kalimuthu and the majority in Lordianto. So, we do not have that division of opinion my learned friends have sought to embrace this morning.

Your Honours, just if I can deal finally with the first question. I will just touch very briefly on it. It is correct to say that there were two different views that each court arrived at in relation to the matter but can we just make these points in relation to how this matter came to land? In Lordianto in their application which is at page 136, they advanced the construction of third party preferred by Justice McColl in dissent at paragraph 227 of her Honour’s judgment, namely, that a third party is a person who is not “intentionally complicity” in the criminal conduct and who “stands at arms’ length to the transaction”.

In Kalimuthu, our friends at paragraph 22, page 199 of the application book, they appear to advance the construction of third party for which Justice Murphy and Justice Beech expressed a preference at paragraphs 363 and 461 of the Kalimuthu judgment, application book 152 and 181, namely, the construction contended for by the applicants below as summarised at paragraph 357, that the:

‘third party’ refers to any person who is not a party to, and criminally responsible for, the criminal offence or offences in question and who satisfies the other requirements of s 330(4)(a).

In their reply at paragraph 10, the applicants deny that their construction can be equated with that adopted by her Honour Justice McColl in Lordianto. But in both cases, your Honours, we say the applicants’ construction wrongly imports a mental element into the concept of third party, that is, that he or she not be intentionally complicit in or not be criminally responsible for the criminal conduct and we say it should not be accepted by reason of the following matters and we really rely in large measure on what Justice Buss has had to say about this, your Honours, in Kalimuthu.

If your Honours turn to his Honour’s judgment at paragraphs 174 through to 192, I will just make these observations. His Honour notes the “ordinary and natural meaning” of the text of section 330(3) and (4)(a) at paragraphs 174 to 178. His Honour refers to the specific statutory scheme which is embodied in the legislation as described at paragraph 179. That is a nonfault based scheme which focuses on transactions rather than the involvement with particular individuals and criminal conduct.

Thirdly, his Honour’s observation at paragraph 179, the distinction in the statutory text between the term “third party” within section 330(4)(a) and the term “person” within other provisions of the Act, sections 17, 18, 19 and section 49(2). Fourthly, at paragraph 180, the use of the expression “an offence” in section 330(4)(a) refers to any offence as distinct from a particular offence. Of course, his Honour sets out the four reasons which we embrace at paragraph 184 to 188 as to why the dissenting analysis of Justice McColl was not correct in Lordianto. Then, at paragraph 192:

the legislative history and extrinsic materials relied on by counsel for the respondents cannot displace the meaning of the statutory text –

which must prevail, which, of course, is what this High Court has said in Singh and other cases on numerous occasions. What we say in the end result and I have only got, your Honours, just two minutes to go, I hope, the correct construction of “third party” is that identified in slightly different terms but to substantially similar effect by Justice Buss in Kalimuthu at paragraph 189:

a person will not be a ‘third party’ with s 330(4)(a) unless the person establishes on the balance of probabilities . . . that:

(a) he or she ‘acquired’ the property after the commission of the offence that resulted in the property being or becoming proceeds of an offence or an instrument of an offence . . . ; and

(b) he or she was not involved with or connected to the transaction by virtue of which the property was or became proceeds of an offence or an instrument of an offence.

Your Honours, what the President and Justice Payne said in Lordianto at paragraph 115:

a “third party” in s 330(4)(a) is a person who is “wholly removed from the property constituting the proceeds or instrument”, by which we mean a person with no involvement in the transaction by which property first becomes proceeds of an offence or an instrument of an offence.

That gives, of course, work for the objects of the Act to do. I apologise for going longer than I expected.

BELL J: Mr Moses, one further matter.

MR MOSES: Yes, your Honour.

BELL J: I understand that section 330 of the Proceeds of Crime Act has been amended.

MR MOSES: Yes.

BELL J: Am I right in understanding those amendments are not suggested to have any impact on the issue raised by the applications?

MR MOSES: They do not, your Honour. Those are our submissions, if it please the Court.

KIEFEL CJ: Thank you, Mr Moses. Mr Walker, do you have anything in reply?

MR WALKER: Your Honours, I just want to add one thing in relation to what I will call the vehicle question and it is to remind your Honours of the difference between reasonable suspicion and there being reason to raise a query. The suspicion has to be sufficiently the “actual apprehension or fear” to adapt Justice Kitto’s words, of the relevant situation existing as opposed to being, as we note in paragraph 36, simply put on inquiry.

As Justice Bell raised with me and I accept, with great respect, the force of the inquiry, why so many of these amounts in order to produce the consideration for the overall sum sought to be transferred? I would be hard put and will not try to suggest that that does not, as it were, raise a query.
But the notion that it ought, for the purposes of this protective provision, be regarded as engendering in itself a reasonable suspicion is going several steps too far in our submission.

That is why it allies with the point that we say does go above and beyond the particular facts of our case, namely, the “ignorance of the law” point, so as to justify not only special leave for that point but also a sufficient assurance to your Honours that all the important points would be reached in our case. May it please your Honours.

KIEFEL CJ: Mr Vandongen, do you have anything in reply?

MR VANDONGEN: Two matters, your Honour. One is a factual matter. Mr Moses said to your Honours in submissions that the remitter in the Kalimuthu case was not called to give evidence. In fact, he was called to give evidence. He was the man called “Zamri” who is referred to in the judgment below.

The second matter is in response to a question from your Honour Justice Bell about the effect of what I took you to in paragraph 502 which is at page 193 of the application book, Mr Moses took you back to the judgment of the learned President and took you to passages in which he said that knowledge of an offence is not required.

If I could ask your Honours to look at paragraph 498 of the judgment at page 192 - this is in the majority judgment and if I could direct your Honours’ attention to the last sentence in that paragraph. So, the majority agreed with his Honour the President about that fact and it was in that context in which they came to reach the conclusion that they did that I draw your Honour’s attention to the conclusion at paragraph 502. Those are my submissions in reply.

KIEFEL CJ: Yes, thank you, Mr Vandongen.

MR MOSES: Your Honours, can I just point out one issue. Paragraph 5 of the document I gave you in Kalimuthu, we stand by our submission. Mr Zamri was not the remitter. If your Honours look to paragraph 5 he gave the cash to an associate called Hamid who was the person who undertook, it would appear, the transactions. That person was not called.

KIEFEL CJ: Thank you. There will be grants of special leave in both of these matters. Could I have time estimates please?

MR VANDONGEN: I would have thought one day, your Honours.

KIEFEL CJ: For all matters or just for your matter?

MR VANDONGEN: No, for all matters, your Honours.

KIEFEL CJ: Do you agree with that, Mr Walker?

MR WALKER: Yes, encouragement from the Bench is sufficiently administered by your Honours

KIEFEL CJ: I am not putting any pressure on anyone. Is it a realistic estimate?

MR WALKER: Yes.

MR MOSES: I do not agree, your Honour. I think this would be a day plus because if our friends are going to have to invite you to go through the evidence, which you will have to go through, it may take a bit longer than that. So I would think just to be safe a day plus.

KIEFEL CJ: It might go over into a second day.

MR MOSES: I think so, your Honour, just to be safe.

KIEFEL CJ: But certainly we are not talking about anything more than a day and a half.

MR MOSES: No, your Honour. I would not try your Honour’s patience with that.

KIEFEL CJ: All right, thank you. Would counsel please ensure that their instructing solicitors obtain a copy of the directions and timetable which will apply in relation to these matters. The Court will now adjourn until 10.15am

MR VANDONGEN: Your Honours, can I make a submission about costs?

KIEFEL CJ: I think we will deal with those at the appeal – at the following appeal. Was there anything apart from that that you were raising about costs?

MR VANDONGEN: No, your Honours, just that I thought – no, your Honours.

KIEFEL CJ: The Court will adjourn until 10.15 am on 9 April in Brisbane.

AT 12.19 AM THE MATTER WAS CONCLUDED