Milne v R [2014] HCA 4: Money Laundering and Directors' Duties

Today the High Court unanimously allowed an appeal from a decision of the Court of Criminal Appeal of the Supreme Court of New South Wales which had upheld the conviction of Mr Milne for money laundering under s 400.3(1) of the Criminal Code Act 1995 (Cth).

Facts of the Case

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.  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.

Appeal

Mr Milne's appeal against the conviction to the Court of Criminal Appeal for money laundering was dismissed.  By special leave, he appealed to the High Court.  He 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 were capable of falling within that definition in the circumstances of the case.

High Court Verdict

Allowing the appeal, the High Court held that s 400.3(1) of the Criminal Code (contained in Schedule 1 of the Criminal Code Act 1995 (Cth)) requires that there be a dealing with the property and an intended future use of the property.  On the Crown case, 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.

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High Court of Australia Judgment Summary - Milne v R [2014] HCA 4