Police v Mussell [2012] CKHC 58; CR418.2011 (18 June 2012)

IN THE HIGH COURT OF THE COOK ISLANDS
HELD AT RAROTONGA
(CRIMINAL DIVISION)
CR NO’S 418-424/11, 257/12(8), 414-415/11, 256/12

POLICE

V

AKISI MUSSELL and CHRISTOPHER MUSSELL

Hearing date(s): 18 June 2012

Counsel: Ms Henry for the Crown
Mr Manarangi for the Defendants

Date: 18 June 2012

JUDGMENT 1 OF JUSTICE HUGH WILLIAMS

[FTR 9:43:28]

[1] Mr and Mrs Mussell are charged with a number of offences under the Financial Transcations Reporting Act 2003 (“FTR Act”). They intend to plead guilty to the charges brought against them, but a question has arisen as to the correct way in which informations under the FTR Act should be phrased and this Judgment deals with that aspect of the prosecution.

[2] As far as counsel and the Court are concerned this is the first occasion when the FTR Act has come before the Court for consideration.

[3] As far as Mr Mussell is concerned, there is a separate information charging an offence on 7 December 2010. That, it is accepted, is outside the period of the financial transactions with which the rest of the charges are concerned and accordingly may be put to one side, save to note that the form of the information there is in effectively identical terms with the others.

[4] It is helpful to précis a consideration of the proper form of informations under the FTR Act by reciting the principal terms of the statute itself. Its Long Title says it is “an act to facilitate the prevention, detection, investigation and prosecution in money laundering and other serious offences and the enforcement of the Proceeds of Crime Act 2003” by establishing a financial intelligence unit and “requiring financial institutions to undertake due diligence measures and other measures to combat money laundering”.

[5] The FTR Act is part of a suite of statutes passed in 2003 and 2004 designed to modernise the Cook Islands banking industry and to ensure it adopted international standards for offending in that industry. The suite of statutes includes the Mutual Assistance in Criminal Matters Act 2003, the Proceeds of Crime Act 2003, and the Crimes Amendment Act 2004 which enacted Section 280A defining money laundering.

[6] The charges brought against Mr and Mrs Mussell are under Section 10 of the FTR Act and it is helpful to set out the whole of that section.

10. Financial institution must report financial transactions - (1) A financial institution must, within 3 working days, report to the FIU, within a time and in the form and manner that may be prescribed, -

(a) any transaction of an amount in cash exceeding $10,000, or any other amount that may be prescribed, in the course of a single transaction, unless the recipient and the sender is a financial institution;

(b) the sending out of the Cook Islands at the request of a customer of any electronic funds transfer exceeding that $10,000, or any other amount that may be prescribed in the course of a single transaction;

(c) the receipt from outside the Cook Islands of an electronic funds transfer, sent at the request of a customer, of an amount exceeding $10,000, or other amount as may be prescribed, in the course of a single transaction.

(2) Nothing in paragraph (1)(a) overrides requirements relating to suspicious transactions reports.

(3) Paragraph (1)(b) does not apply when the financial institution sends an electronic funds transfer to a person or entity in the Cook Islands, even if the final recipient is outside the Cook Islands.

(4) Paragraph (1)(c) does not apply when the financial entity receives an electronic funds transfer from a person or entity in the Cook Islands, even if the initial sender is outside the Cook Islands.

(5) If a financial institution contravenes subsection (1), the financial institution commits an offence punishable by –

(a) in the case of an individual, to a fine of up to $10,000;

(b) in the case of a body corporate, to a fine of up to $50,000.

(6) Every person commits an offence who conducts 2 or more transactions or electronic funds transfers that are of an amount below the threshold set out in subsection (1) if, having regard to the matters in subsection (7), it would be reasonable for the Court to conclude that the person conducted the transactions, or transfers in that manner or form, for the sole or dominant purpose of ensuring, or attempting to ensure, that no report in relation to the transactions or transfers is required to be made.

(7) The matters referred to in subsection (6) are –

(a) the manner and form in which the transactions or transfers were conducted, including, without limiting the generality of this, all or any of the following:

(i) the value of the currency involved in each transaction or transfer;

(ii) the aggregated value of the currency involved in the transactions or transfers;

(iii) the period of time over which the transactions or transfers occurred;

(iv) the interval of time between any of the transactions or transfers;

(v) the locations at which the transactions or transfers were initiated or conducted; and

(b) any explanation made by the person about the manner or form in which the transfers were conducted.

(8) Every person who contravenes subsection (6) is liable on conviction –

(a) in the case of an individual, to a fine of up to $10,000 or a term of imprisonment of up to 12 months, or both;

(b) in the case of a body corporate, to a fine of up to $50,000.

[7] It is immediately apparent that the section falls into two halves, the first relating to financial institutions and the second relating to persons such as the Mussells who entered into transactions with financial institutions.

[8] According to the police Summary of Facts, Mr and Mrs Mussell are self employed running the Waterline Restaurant and Bar in Rarotonga. They had a number of accounts. The ones which are particularly at issue in this case are a Westpac account in the name of Mr Mussell, 01872590-50, and a Westpac account in the couple’s joint names, 01623359-50. The Summary of Facts says that the Financial Intelligence Unit conducted an audit and as a result found that the Mussells had credited a number of amounts to their accounts, all of which were under the threshold of $10,000 set out in Section 10(1)(a). The deposits were apparently always in denominations of either $50 or $100 and the total deposited, which forms the basis of the charges, was $87,000.

[9] Mrs Mussell made two transactions by way of deposits totalling $18,000 on 8th and 11th April 2011. Mr Mussell made all of the remaining deposits, some $8,000 on 7th December 2010, the subject of CR 467/12, and all of the remaining funds over a period between 24th March 2011 and 4th April 2011. Those are the subject of the remaining charges CR 468/12 to 474/12 against Mr Mussell, and the two charges against Mrs Mussell of offending on 8th and 11th April 2012, CR 465/12 and 466/12.

[10] The submissions by Mr Manarangi for the defendants are that it was incorrect for the Crown to charge Mr and Mrs Mussell with a series of offences and in fact all transactions other than that on 7th December 2010 should be consolidated and Mr and Mrs Mussell charged jointly with the total deposit of money over the period 24th March to 11th April 2011.

[11] Mr Manarangi submits that in banking the $79,000, the sum at issue apart from that banked on 7th December 2010, the Mussells committed one offence spread over several days, and he points to the proximity of the transactions to support that interpretation.

[12] For the Crown however, Ms Henry submits that each of the pairs of deposits constituted a single offence and accordingly the Crown is correct in the stance it has taken in charging the Mussells with a number of counts.

[13] Mr Manarangi says that flies in the face of the facts and submits that the difficulty with the Crown approach is that it must concede the report the defendants were avoiding could only be the report that would have been made if the $79,000 had been banked in one sum. He submits that the Court should amend the charges under Section 47 of the Criminal Procedure Act 1980-1 and consolidate the March-April 2011 offending into the one information.

[14] In considering that issue, it is first important to note the form in which the Crown has phrased the informations. All say – with the amounts varying according to pairs of deposits and common dates – that one or other defendant “contravened Section 10(6) of the Financial Transactions Report Act 2004 by conducting two transactions that were of an amount below the threshold of $10,000 set out in Section 10(1)(a) of the Act, being the deposit of one sum into the Westpac account in Mr Mussels name earlier mentioned, and the deposit of another sum into the Westpac account earlier mentioned in the couples joint names. The informations then give the total and allege that the deposit of those sums was made “in circumstances where it would be reasonable for the Court to conclude taking into account the matters referred to in Section 10(7) of the Act, that the defendant conducted the transactions in that form or manner for the sole or dominant purpose of ensuring or attempting to ensure that no report in relation to the transactions as required to be made.”

[15] Reverting to the terms of Section 10 itself, it is clear from subsection (1)(a) that the threshold transaction amount is cash exceeding $10,000. That sum has not been varied since the Act came into force. When that sum is translated to the individual charges under Section 10(6) the elements would appear to be as follows:

A. the section makes it an offence for any person to conduct “two or more” transactions or electronic funds transfers of an amount below the threshold.

B. that deposit or those transfers must have been transacted in circumstances where, under subsection (7), it would be reasonable to infer that the motive for the transaction being undertaken in that fashion is

C. for the sole or dominant purpose of ensuring or attempting to ensure that the report otherwise required of financial institutions under the earlier part of Section 10 was not made.

[16] Subsection (7) sets out the matters from which the inference of offending conduct may be drawn including manner and form, value and aggregated value, period and interval of time, locations and any explanation made.

[17] The unusual but critical element of offending in subsection (6) is that no person can be guilty of an offence under that subsection unless they conduct more than one transaction from which the statutory inference may be drawn. So the threshold for offending is the conducting of at least “two or more” transactions.

[18] In this case, what the Crown has done is paired the deposits made by one or other defendant into each of the two accounts but on the same day when the deposits were made. Thus CR 468/12 relates to two deposits, one of $5,000 and one of $3,000 made on 24th March 2011, the former into Mr Mussells account and the latter into the joint account. The other informations follow the same form for 25, 28, 30, 31 March, 1 April and 4 April.

[19] As earlier mentioned, the question is whether the Crown has adopted the correct form for those informations. Given that the Crown has identified two transactions on each of the days in the informations it has satisfied the minimum requirement of Section 10(6) in setting out an offence. Alleging just one transaction in an information would not allege a Section 10(6) offence. It might have been open – as Mr Manarangi submits – for the Crown to have amalgamated all the transactions into one offence but had it adopted that course, the informations may well have been regarded as bad for the inclusion of all the transactions in the one offence. It would be arguable in those circumstances that the consolidated information would infringe s 15 of the Criminal Procedure Act 1980-1 in that it would be alleging more than one offence in one information. Given that the known threshold is two or more transactions it would appear to be open to the Crown in bringing prosecutions under the FTR Act to allege that minimum, or more transactions. The subsection says as much. But if the Crown adopted that stance, it would be open to the assertion that it had alleged more than one offence in the same information and particularisation or division of the information would be required. In this case, therefore, the Crown had the option of doing more than it did in phrasing the informations and it could, in light of the statutory mandate to allege “two or more” transactions, have included more than that number but it would have opened itself to the charge of duplication in the offences and the informations may have been held bad on that account.

[20] In relation to the dates, Mr Manarangi submits that this couple’s activity was in truth one offence committed over several days. Given that on each day at least two transactions were effected then it would certainly be open to the Crown to do as it has done and bring separate informations. Equally, it could have filed informations saying something like “on and between 24th March 2011 and 4th April 2011.” But again, particularisation would then have been required and the ultimate result, whether in date or amounts or deposits, is likely to have been much the same as the defendants now face.

[21] It is important for defendants and the Crown, when informations such as this are brought, to recognise that provided the offending is pleaded as falling within the ambit of the statutory scheme it is a matter for prosecutorial discretion as to how informations are phrased.

[22] Whatever may be the pairings (or more) and the dates of the transactions said to amount to s 10(6) offending will be dictated by the circumstances of the alleged offending. But as long as the information alleges two or more transactions and otherwise complies with all other pleading requirements – particularisation, one offence only and the like – the way in which the information is phrased is for the prosecution as a matter of prosecutorial discretion.

[23] As mentioned, it would have been open for the Crown to have chosen a different route in this case from the one it has, but in the Court’s view the manner in which the informations have been phrased is a matter within the Crown’s discretion: it adequately advises the defendants of the times, dates and places of the alleged offending and although the form of the subsection makes the phrasing of an information lengthy, the way the Crown has approached it in this case was, in the Court’s view, open to the Crown. On that basis, unless the Crown wishes to reconsider its position in light of this judgment the prosecution may proceed on the basis of the informations already filed.

Hugh Williams, J

Editorial Note: Derived from the Court’s electronic records and believed to be correct and final.