The High Court on Fri 14.2.2014, unanimously allowed a taxpayer’s appeal from a decision of the NSW Court of Criminal Appeal in Milne v R [2012] NSWCCA 24 which had upheld his conviction for money laundering under s 400.3(1) of the Criminal Code (Cth).
- The High Court said Mr Milne was the sole director and shareholder of Barat Advisory Pty Ltd. Barat Advisory owned shares in a company called Admerex Ltd.
- In February 2005, Mr Milne arranged for certain Admerex shares to be swapped for shares in another company, Temenos Group AG.
- The Court said he intended at that time that Barat Advisory would not declare, in its income tax return, the capital gain derived from that transaction.
- An intentional failure by Barat Advisory to declare the capital gain would be an offence against the Code.
- In November 2006, Mr Milne caused an income tax return to be lodged for Barat Advisory that did not declare the capital gain derived from the swap of Admerex shares.
- Mr Milne was convicted of money laundering under s 400.3(1) of the Code after a trial by jury in the NSW Supreme Court.
The Court of Criminal Appeal then dismissed the taxpayer’s appeal against his conviction and sentencing for money laundering and tax fraud offences in a Project Wickenby matter. In November 2010, the appellant had been found guilty by a jury in the NSW Supreme Court on:
- one count of “money laundering”, contrary to s 400.3(1) of the Criminal Code Act 1995 (Cth), and
- one count of doing an act with the intention of dishonestly obtaining a gain from the Commonwealth, contrary to s 135.1(1) of the Code.
On 17 December 2010, Johnson J (the trial judge) imposed jail sentences on the appellant.
Before the High Court, the taxpayer argued that the Court of Criminal Appeal erred in its interpretation of the definition of “instrument of crime” and wrongly held that the Admerex shares in question were capable of falling within that definition in the circumstances of the case.
In allowing the appeal, the High Court held that s 400.3(1) requires there be a dealing with the property and an intended future use of the property. On the Crown case, the Court said there could not be an intended future use of the Admerex shares after they were swapped for the Temenos shares. The Court quashed Mr Milne’s conviction for money laundering and entered a verdict of acquittal on that charge.
(Milne v The Queen [2014] HCA 4, High Court, French CJ, Hayne, Bell, Gageler and Keane JJ, 14 February 2014.)
[LTN 30, 14/2/14]