Paul John Morris v Liliana Patricia Russell Sca [1990] ACTSC 11; (1990) 100 FLR 386 (30 March 1990)

SUPREME COURT OF THE ACT

PAUL JOHN MORRIS v. LILIANA PATRICIA RUSSELL
S.C.A. No. 42 of 1989
Crimes Act 1900 (NSW) in its application to the Australian Capital Territory,
s.527A(1)(a)
[1990] ACTSC 11; (1990) 100 FLR 386

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Kelly J.(1)

CATCHWORDS

Crimes Act 1900 (NSW) in its application to the Australian Capital Territory, s.527A(1)(a) - having in custody money - whether reasonably suspected of being unlawfully obtained - questions to be asked on consideration of whether a case to answer has been made out - Words and Phrases - "reasonably suspected" - "unlawfully obtained".

Parker v Todhunter (1987) 26 A Crim R 169

Purdon v Dittmar (1972) 1 NSWLR 94

Hussien v Chong Fook Kam (1970) AC 942

Tucs v Manley (1985) 62 ARL 460

May v O'Sullivan [1955] HCA 38; (1955) 92 CLR 654

R v Robinson (1977) Qd R 387

Ex parte Patmoy; re Jack and anor. (1944) 44 SR (NSW) 351

HEARING

CANBERRA
30:3:1990

Counsel for Appellant: Mr G Lalor

Solicitor for Appellant: Director of Public

Prosecutions

Counsel for Respondent: Mr I Byrne

Solicitor for Respondent: Messrs Higgins

ORDER

The appeal be allowed.

The dismissal of the information against the respondent be quashed.

The order that the appellant should pay the respondent's costs fixed in the sum of $2,853.75 be set aside.

DECISION

This is an appeal by way of order to review pursuant to section 219B of the Magistrates Court Ordinance 1930 ("the Ordinance") against a decision of a Magistrate dismissing an information dealt with by him under Part VII. The information alleged that the respondent, Liliana Patricia Russell, had in her custody on 5 September 1988 goods, namely, cash of the value of $11,000.00, reasonably suspected of having been stolen or otherwise unlawfully obtained contrary to the provisions of s.527A(1)(a) of the Crimes Act 1900 of the State of New South Wales in its application to the Territory ("the Act"). That section provides, so far as is relevant, that:-

"(1) a person who,
(a) has any money or goods in his custody...
being money or goods that is or are reasonably
suspected of having been stolen or otherwise
unlawfully obtained, shall be guilty of an
offence punishable, on conviction before a
Magistrate, by a fine not exceeding $1,000 or by
imprisonment for a term not exceeding 6 months.
(2) It is a defence to a prosecution for an
offence against sub-section (1) if the defendant
satisfies the Court that he had no reasonable
grounds for suspecting that the money or goods in
relation to which the offence is alleged to have
been committed was or were stolen or otherwise
unlawfully obtained.
(3) Where -
(a) a person convicted of an offence in respect
of money or goods under sub-section (1) is
the owner of that money or those goods; ...
then -
(c) in the case of money - the money shall be
paid to the Commonwealth;..."

2. The hearing of the information began on 23 June 1989. Counsel for the informant sought to tender documents from a motor car dealer to show that the respondent had had in her possession a short time before 5 September 1988, namely, on 25 August 1988, an additional sum of $4,990.00 in cash which she had used as part of the purchase price of a Subaru station wagon which she had bought on that date. The learned Magistrate rejected the proposed evidence. That rejection did not form one of the grounds in respect of which the order nisi for review was granted. At the hearing before me a further attempt was made to tender that evidence. Perusal of the documents tendered seemed to show that the sum of $4,990.00 was paid by cheque, not by cash. No details concerning that cheque were available. I therefore rejected the evidence also.

3. Giving evidence, Michael Steven Harrison, a bank clerk, produced a Commonwealth Bank of Australia bank statement showing that as at 8 February 1988, Ms Russell had in her account no. 2913 0067 3356 a credit of $227.96. Between that date and 9 September 1988 the only amounts credited to that account were two sums, respectively $270.09 and $235.16, interest on a term deposit and a third of $25.07 noted as being in respect of interest but without any identification of the moneys upon which the interest was earned. Additionally, there was a deposit of $40.00 but that was withdrawn immediately. Mr Harrison also produced a document described as a "term deposit lodgement" showing that Ms Russell had lodged the sum of $6,000.00 on 27 April 1987. That document was dated 27 April 1987 and showed her occupation as home duties. Two other documents showed her to have withdrawn from that term deposit the sum of $1,000.00 on 26 April 1989 and the sum of $2,000.00 on 15 May 1989.

4. Records of the Canberra Building Society showed fortnightly deposits to the credit of the respondent's account with that Society of sums which varied between $300.00 and $308.10 per fortnight and were noted as representing "super/pension" which I take to mean "superannuation payments/pension payments".

5. Constable Errol Richard Raiser gave evidence that he, with other police officers, attended at the respondent's home at 4 Tompsitt Place, Charnwood where a search of the premises was carried out pursuant to a search warrant issued under the provisions of the Poisons and Narcotics Drugs Ordinance (as it then was) 1978.

6. After some preliminary discussion the respondent was shown the search warrant which she read. She was subsequently searched by two police women. Between 8.36 pm and 9.10 pm five persons, a woman and four men, attended at the premises and, all having apparently been searched, were allowed to go. Apparently at 10.06 pm a fifth man attended, was searched and also allowed to go.

7. In the main bedroom of the house the searching officers found a clutch purse which contained, the respondent said, her money. Asked how much was in the purse she said "$11,000.00". Asked where she had got that money she was alleged to have said that she had won it at the races about three weeks before on several horses. Asked to give their names she said,

"I refuse to answer any more questions at this
point until I have seen a solicitor."

The money was counted in front of the respondent. It consisted of sixty $100.00 notes, sixty-four $50.00 notes and ninety $20.00 notes.

8. During the search a smoking implement with a black substance, subsequently found to be cannabis, was found as well. Searching officers also located a set of brass scales and a small wooden box containing weights. These were subsequently found to have cannabis adhering to them. All told, 29.5 grams of cannabis were found in various places in the house. A plastic bag containing cannabis was found in a vent in the kitchen ceiling while a white plastic jar containing 14.4 grams was found in a cosmetic case which was also located in the ceiling.

9. The evidence established prima facie that the fortnightly payments, to which I have made reference above, were Department of Social Security benefits.

10. The learned Magistrate declined to find the offence alleged in the information proven. I summarise his findings as follows:-

(a) there was no evidence of her occupation as
at 5 September 1988;
(b) there was no evidence that she lived at
4 Tompsitt Place, Charnwood before
5 September 1988;
(c) there was evidence of some financial
transactions she had in respect of money in
a bank account and in a credit union (sic) account;
(d) there was some evidence of a pension, the
precise nature of which was not disclosed;
(e) there was evidence of a term account opened
with the sum of $6,000.00 in April 1987 but
no evidence of the balance in that account
at 5 September 1988;
(f) there was evidence that the defendant when
asked where she got the $11,000.00 said that
she had won it at the races about three
weeks before on several horses, the names of
which she declined to provide;
(g) although this circumstance was something
which could raise suspicion in the mind of a
police officer, the explanation was not an
incredible one;
(h) there was no evidence of any surveillance of
the premises on or before 5 September 1988;
(i) there was no evidence that the respondent or
anyone ordinarily residing on the premises
was a user of cannabis;
(j) there was evidence of cannabis adhering to
the scales and weights said to have been
found at the premises;
(k) the value of the cannabis found was not
given but one policeman agreed that it was
valued at less than $200.00;
(l) there was evidence of a number of persons
visiting the premises, each of whom was
searched and none of whom was found to have
any association with drugs or their distribution.
Each had sums of money on them.

11. The learned Magistrate completed his reasons for decision by saying:-

"I have no doubt that the police at the premises
there that night believed that the defendant was
engaged in the distribution of drugs, but that
belief was almost certainly based on knowledge,
including information from an informant, which
was not part of the evidence before me. But even
if it were proper to accept that one could draw
an inference beyond reasonable doubt that the
defendant was engaged on 5 September 1988 in the
selling of cannabis, that is, to treat all the
people who were trekking up to the place as
people who were purchasers or prospective
purchasers of the drug, cannabis, given the lack
of evidence about the defendant generally as to
any means that she may have had of support, what
income she may have had, what assets she may have
had, the - in effect, almost a total blackout
about the defendant prior thereto, and to the
evidence that we do have that back at least in
1987 she was a person who had a term deposit of
$6,000.00 and a person who has a car, there is
some evidence that that was something that was
purchased for about $6,990.00, even though I did
not admit the actual purchase document in as
evidence, the evidence, in my opinion, does not
provide a basis upon which I would be entitled to
be satisfied beyond reasonable doubt that the
$11,000.00 was the proceeds of illegal drug sales.
The evidence certainly would permit one to
suspect, as a matter of possibility, that it
might be, but that is as far as it goes. In my
view, as I have said just now, the evidence does
not permit a court to be satisfied beyond
reasonable doubt, and for those reasons there is,
in my opinion, no case for the defendant to answer."

12. The documents produced from the Commonwealth Bank of Australia, Exhibit "A", show Mrs L.P. Russell of 4 Tompsitt Court, Charnwood, 2615 as the holder of account no. 2913 0067 3356. The first entry in the statements of account tendered in respect of that account was dated 8 February 1988. The term deposit lodgement in respect of the $6,000.00, dated 27 April 1987, shows the respondent's name as Mrs L.P. Russell, her address as 4 Tompsitt Court, Charnwood and her occupation as home duties. The documents produced from the Canberra Building Society show that the name and address of the account holder were Liliana Russell of 4 Tompsitt Court, Charnwood 2615.

13. Perusal of the transcript shows that Counsel for the respondent did not make a submission to the learned Magistrate that no prima facie case under s.527A had been established. The learned Magistrate said at the close of the Prosecution's case,

"...I am going to reverse the order of addresses,
for present purposes, with giving you a right of
reply, because I would like to hear how it is
that you suggest that there is a basis for
inferring that this money is either stolen or
unlawfully obtained upon the evidence that is
before me."

In Parker v Todhunter (1987), 26 A Crim R 169 Yeldham J. said at p 170, when referring to s.527C of the Crimes Act 1900 of the State of New South Wales, a section which is for all practical purposes the same as s.527A of the Act,

"In Cleary v Hammond, ((1976) 1 NSW LR 111) Lee J.
was concerned with s.40 of the Summary Offences
Act 1970. That, as I have said, is in precisely
the same terms as s.527C of the Crimes Act 1900
(NSW) which replaced it. After a careful
examination of the history of the legislation,
relating back as it did to the Police Offences
Act 1901 (NSW), and to the authorities upon the
section as it stood from time to time,
particularly Ex parte Patmoy; Re Jack (1944) 44
SR (NSW) 351 and Purdon v Dittmar (1972) 1 NSWLR
94, his Honour (at 118) concluded:
"In the result then, it appears to me that
s.40, in referring to a thing which 'may be
reasonably suspected of being stolen or
otherwise unlawfully obtained...' is
referring to a conclusion arrived at
objectively by a magistrate when all the
evidence pointing to the thing being stolen
or otherwise unlawfully obtained is before
him. It must be proved that, on the date
charged, the facts bring the person charged
within the particular category
s.40(1)(a)-(d) charged against him, and then
it must be proved that it is open on all the
evidence to conclude the goods 'may be
reasonably suspected of being stolen...'.
The fact that the whole of the evidence
relied on at the hearing as showing that the
goods 'may be reasonably suspected of being
stolen...' is not available to the police at
the time they take possession of the goods
(as in this case) or at the time of arrest
or charge in no way affects the
admissibility of evidence obtained
thereafter, if that evidence in fact tends
to show that the goods 'may be reasonably
suspected of being stolen...'."

14. The learned Magistrate was therefore concerned to ask himself whether, on the material before him, he might reasonably suspect that the money in question was unlawfully obtained. Undoubtedly money obtained as a result of the sale of prohibited substances of which cannabis is one (Poisons and Narcotic Drugs Act 1978, s.4 and Schedule 12) would be unlawfully obtained. Purdon v Dittmar (1972) 1 NSWLR 94 at p 99.

15. Reasonable suspicion is not prima facie proof. Hussien v Chong Fook Kam (1970) AC 942 at p 948. At pages 948 and 949 Lord Devlin, giving the advice of the Board, said,

"The test of reasonable suspicion prescribed by
the Code is one that has existed in the common
law for many years. The law is thus stated in
Bullen and Leake, 3rd ed. (1868), p 795, the
"golden" edition of (1868):
"A 'constable' is justified in arresting a
person without a warrant, upon a reasonable
suspicion of a 'felony' having been committed
and of the person being guilty of it."
Their Lordships have not found any English
authority in which reasonable suspicion has been
equated with prima facie proof. In Dumbell v
Roberts (1944) 1 All ER 326, Scott L.J. said,
at p 329:
"The protection of the public is safeguarded
by the requirement, alike of the common law
and, so far as I know, of all statutes, that
the constable shall before arresting satisfy
himself that there do in fact exist
reasonable grounds for suspicion of guilt.
That requirement is very limited. The
police are not called upon before acting to
have anything like a prima facie case for
conviction;..."
There is another distinction between reasonable
suspicion and prima facie proof. Prima facie
proof consists of admissible evidence. Suspicion
can take into account matters that could not be
put in evidence at all."

16. In Tucs v Manley (1985) 62 ALR 460 the Full Court of the Supreme Court of South Australia, dealing with the expression "reasonably suspected of having been imported", held that the reasonable suspicion to be established by the prosecution is a suspicion based on facts which would create a reasonable suspicion in the mind of a reasonable man.

17. Counsel for the appellant submitted that upon a "no case to answer" submission the question to be decided is not whether on the evidence as it stands a defendant ought to be convicted, but whether on the evidence as it stands he could lawfully be convicted. This, he said, was a question of law, not a question of fact. I do not think this proposition can be doubted. May v O'Sullivan [1955] HCA 38; (1955) 92 CLR 654 at p 658.

18. There was material before the learned Magistrate to show that the respondent's occupation was home duties and that the address at which the money was seized had been her address for a considerable period. There were present in the premises scales and weights to which cannabis was adhering and hidden cannabis and a significant number of persons attended at the premises over a quite short period. Additionally, the respondent by her counsel, during the course of cross-examination, challenged the allegation by the police that the respondent had said that she had won the money at the races. This challenge could have been taken into account to indicate that it was part of her instructions to her counsel. R v Robinson (1977) Qd R 387. Additionally, there was not insubstantial evidence that the only source of income which the respondent had was from a pension from the Department of Social Security.

19. When all these matters were taken into account, taking the prosecution evidence at its highest, it seems to me that there was a prima facie case which would have enabled the learned Magistrate to conclude, as a matter of law, that the money could reasonably be suspected of having been unlawfully obtained. He agreed that the evidence would permit one to suspect, as a matter of possibility, that the money was the proceeds of illegal drug sales and this without having taken into account matters which he should have in considering whether there was a case to answer. The question he would then have been required to ask himself would have been whether, having regard to all the evidence pointing to the moneys having been unlawfully obtained, he was satisfied beyond reasonable doubt that it was then proper for him to entertain a reasonable suspicion that the money was unlawfully obtained, bearing in mind that suspicion is less than prima facie proof and certainly less than proof beyond reasonable doubt. Ex parte Patmoy; re Jack and anor. (1944) 44 SR (NSW) 351 at p 356; Hussien v. Chong Fook Kam (supra). It is to be borne steadily in mind that s.527A(1)(a) of the Act proscribes the having of money or goods in custody which might reasonably be suspected of having been stolen or otherwise unlawfully obtained.

20. What the learned Magistrate appears to have done is to ask himself whether he was entitled to be satisfied beyond reasonable doubt that the $11,000.00 was the proceeds of illegal drug sales. That question was impermissible. What he should have asked himself was whether he could, as a matter of law, conclude that the evidence for the prosecution taken at its highest entitled him to be satisfied beyond reasonable doubt that the $11,000.00 might be reasonably suspected of having been unlawfully obtained, having regard to the fact that the offence alleged was having in custody money suspected of having been unlawfully obtained.

21. In my opinion, the learned Magistrate took the incorrect approach to the matter and the appeal must be allowed. The matter should be remitted to the Magistrates Court to be dealt with according to law.

22. The appeal is allowed. The dismissal of the information is quashed and the order that the informant should pay the respondent's costs fixed in the sum of $2,853.75 should be set aside.

23. In the circumstances, I will hear argument on the question of costs and the appropriate course to be taken regarding remitter of the matter to the Magistrates Court.