5, No. In its judgement, the Court held that where a company is ordered not to do certain acts or gives an undertaking to like effect and a director of that company is aware of the order or undertaking, he is under a duty to take reasonable steps to ensure that the order or undertaking is obeyed, and if he wilfully fails to take those steps and the order or undertaking is breached, he can be punished for contempt. If you have questions regarding your legal rights, contact the criminal lawyers at Barrison Law. Has the accuseds suspicion been triggered about a fact that would reveal a prohibited consequence or situation? [citation needed] Notably, this rule has only ever been applied to independent couriers, and has never been used to hold larger services that qualify as common carriers (e.g., FedEx, United Parcel Service, or the U.S. The difficulty for the AA Trust was that the evidence was again contradictory, and that an onus of proof was not discharged at a general level of abstraction. hbbd```b``@$ "nH K*k@|m }#3F2 j(( Cases with similar facts will follow the precedents set by other common law countries, a clear example of this can be seen in Public Prosecutor v Dato Sri Mohd Najib bin Hj Abd Razak [2020] 11 MLJ 80813. This reoccurring trend in the Malaysian courts clearly illustrates that although the doctrine is not codified in a statute, it is still regularly referred to in instances where the facts of the case include the deliberate avoidance of knowledge of the facts to avoid self-incrimination. They might do it unconsciously, because they hate dealing with that subject matter. Thus to the very limited extent to which the AA Trust had succeeded in discharging its onus of proof, the relevant assessments were excessive. Furthermore, the liability of wilful blindness does not only fall on the executive directors. Their choice is clear. Arizona State Law Journal, 2021, Forthcoming, UC Irvine School of Law They will have little defence to accusations of wilful blindness. However, a taxpayer who was wilfully blind to the obvious (ie that the practices he adopted could not possibly give rise to the tax deductions claimed or assessable income or losses returned) would at least be reckless. The allegations about ongoing phone-hacking at News of the World had come from a competitor newspaper, The Guardian. All rights reserved. This case discusses the issue of wilful blindness specifically on the element of knowledge (attributing to the element of mens rea) in a money laundering offence under section 3 of the previous Anti Money Laundering, Anti-Terrorism Financing Act 2001 (now s 4(2) of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001. jason@freemanlaw.com. The court relied on the words of Charron J. in the Supreme Court of Canada decision of 2010 in R. v. Briscoe: The doctrine of willful blindness imputes knowledge to an accused whose suspicion is aroused to the point where he or she sees the need for further inquiries, but deliberately chooses not to make those inquiries. As such some have stated that the courts should move away from these potential interpretations in future rulings and instead adopt a totality of the circumstances test8. There must have been reasonable means of inquiry available to the accused person, which, if taken, would have led him to discovery of the truth, at least in the context of the fact of possession; and. In Global-Tech, a civil patent law case, a majority ruling in the Supreme Court held that the accused could be found liable for knowingly inducing the infringement of a patent where it could be shown that the defendant was wilfully blind as to the existence of a pre-existing patent7. We miss opportunities, overlook risks, and potentially deliver our competitors a huge advantage. 1 56 Fed. Arizona State Law Journal, 2021, Forthcoming, UC Irvine School of Law Research Paper No. According to the willful ignorance doctrine, when conviction of a crime requires knowledge of some fact, the defendants willful ignorance may be allowed to satisfy the relevant knowledge requirement. Wolters Kluwer is a global provider of professional information, software solutions, and services for clinicians, nurses, accountants, lawyers, and tax, finance, audit, risk, compliance, and regulatory sectors. This effectively resulted in a penalty rate of 90% of the tax shortfalls for all but the base year. It is not in their interests to silence the person making the report, to quash the information or explain away the issue. Other common law countries have attempted to eviscerate the ambiguity of the doctrine by using a test to determine how the doctrine should be applied in certain cases in this particular instance it was for the misuse of drugs. Corporate Liability due to Willful Blindness. In respect of the interest deductions relating to the onshore debt, Logan J said that a conflict of evidence suggested that none of the claimed novations occurred. How can the organisation be accountable if there are no processes in place for considering feedback? Leaders can choose not to know, and allow misconduct and illegal activity to occur in the organisation without their knowledge. Healthcare mega-mergers drive need for nursing policy and procedure standardization, How cloud document storage can support your practice security processes, How to choose the right practice management software for your accounting firm, Navigating the ESG landscape: Key considerations for CFOs, Beyond reporting: Make ESG data elevate your business, OneSumX for Finance, Risk and Regulatory Reporting, CCH Tagetik: Budgeting Planning & Forecasting, Quick consolidation: How Sealord speeds up their consolidation process, From historical financial management to CCH Tagetik, 5 Paybacks of automated Financial Close and Consolidation, How Priva Manages Diverse Offices with Integrated Data. Wilful blindness refers to a person deliberately refusing to inquire into facts and from which an inference of knowledge may be sustained . Another factor was profitability. Wilful blindness LWp,dptA&GN1E3|x`=n[s'00udutdt100.B"m=H- 2 nrGv400ul.D &@Ay{i }'s*6y0nb| 4;YxLd0@` n 10 [2017] EWHC 2856 9 EU{pbI&?(,m:V^eAfv'&5:5{l)\7A/ In its purest form, wilful blindness (also known as Nelsonian Blindness) refers to the act of intentionally shutting ones eyes to an obviously unlawful situation. Postal Service) liable for the contents of packages they deliver. Wilful blindness refers to the accused's state of mind. In the first proceeding of Anglo American Investments Pty Ltd (Trustee) v FC of T 2022 ATC 20-836; [2022] FCA 971 (Anglo American), Logan J held that the deduction claims had not been made out save for a relatively minor amount of interest and facility fees relating to a documented offshore loan. Murdoch said he struggled with understanding why his direct reports allegedly didnt tell him about the seriousness of the ongoing phone hacking: Why wouldnt they tell me? She admitted that her conscience was telling her she was doing something wrong. We streamline legal and regulatory research, analysis, and workflows to drive value to organizations, ensuring more transparent, just and safe societies. Last but not least there is the imposition of penalties to consider. /Resources 716 0 R /Rotate 0 /Thumb 1355 0 R From the comparison, above between both the English and Malaysian legal system we can see that the doctrine of wilful blindness is applicable when there is an element of knowledge to be scrutinised. Justice Logan said that, although Mr Gould may not have been actively dishonest, again and again he closed his eyes to the obvious to the point of wilful blindness. For instance, where an employee raises concerns about inefficient processes, bullying by their peers, or illegal activity in the workplace, does he or she genuinely trust that they will be protected and, ideally, thanked? One could argue that a culture of mindfulness is valuable to achieving all of our organisational goals. Given the amounts of shortfall involved (even after adjustment for the claims allowed) this seems a generous outcome for a highly qualified accountant who believed he could equate deduction pretence with reality (Anglo American at [23]). The low performing workplaces in the study had an average profit margin ratio of 5.44%, whilst the high performing workplaces had an average profit margin of 15.63% a notable correlation between profitability and responsive management practice. Many have questioned the underlying normative justification for the the so-called equal culpability thesis. Regardless, it has been endorsed by the Supreme Court and some version of the doctrine has been employed by all of the federal courts of appeal to some degree. Can Magnet help advance your nursing career? The courts in Tan Kok An referred to the English cases of R v Griffiths (1974) and PP v Hla Win (1995) to apply the doctrine as it was not codified in any statute, Malaysian courts had to look to the precedent set in other cases in jurisdictions that used common law. I dont want to conjecture but I think that must be it, that I would say cut out the cancer and there was some desire not to do that, that is, Murdochs known ethical stance might have discouraged people from bringing lucrative but potentially illegal practices to his attention. 715 0 obj A summary of the main topics discussed in the Fringe Benefits Tax 2023 Annual FBT Compliance Update with the ATO webinar hosted by Wolters Kluwer. Leaders must be able to prove that they turned their minds to the risk, and that they had good reason not to act. This page is dedicated to keeping readers informed of the latest news and thought leadership articles from It can be seen from this case that although the doctrine is still applied in the Malaysian courts at the discretion of judges with consideration of the facts of the case. Webthe Second, Ninth, and Tenth Circuits with regard to willful blindness. If they choose this path, they should prepare for the judgment of staff, shareholders and others, in case they are later accused of allowing it to happen. BSJP Brockhuis Jurczak Prusak Sroka Nilsson Sp. Mr. Freeman was named the Leading Tax Controversy Litigation Attorney of the Year for the State of Texas for 2019 and 2020 by AI. A further use of the doctrine of wilful blindness can be seen in the Court of Appeal case of Azmi bin Osman v Public Prosecutor and another appeal [2016] 3 MLJ 98. by failing to make a reasonable Responsiveness to feedback from employees has recently been identified as one of the key elements of building a high performing workplace. /TT9 1092 0 R >> )q*F;V.Y! Law School Student Scholarship. After painstakingly unravelling a complex web of arrangements spun over several decades, Logan J found that Mr Gould had convinced himself that it was possible, in relation to entities which he controlled and by an act of will on his part, to designate, after the end of an income year, that those entities had been in a particular relationship, and incurred particular liabilities in particular amounts, during that year. To conclude, it is clear to see that despite the ambiguities faced by both the English and Malaysian courts on the interpretation of the doctrine of wilful blindness, it remains a relevant legal principle which is used in common law countries when faced with the matter of avoidance of knowledge and whether it can be held to be an autonomous decision by an individual or a deliberate decision to avoid to self-incrimination. WebMuhammad Ridzuan bin Md Ali v Public Prosecutor and other matters (2014) 3 SLR 72 (76). See Brea C. Burgie, The Convention Against Torture and Acquiescence: Willful Blindness or Willful Awareness?, Immigration Law Advisor, Vol. Specialized in clinical effectiveness, learning, research and safety. ness : deliberate failure to make a reasonable inquiry of wrongdoing (as drug dealing in one's house) despite suspicion or an awareness of the high probability of its existence Note: Willful blindness involves conscious avoidance of the truth and gives rise to an inference of knowledge of the crime in question. What is Wilful Blindness in Criminal Law? 2023 Wolters Kluwer N.V. and/or its subsidiaries. Without mindfulness, we risk doing the same thing over and over again. Channel Ten and production company Endemol Shine Australia said in a statement: '[We] are deeply shocked and saddened at the sudden loss of Jock Zonfrillo, a If a manager does not take seriously an allegation that is brought to his or her attention, or refuses to take responsibility for fixing the issue, the employee is unlikely to act alone to rectify risky behaviour. There are many reasons why a manager might close their eyes to a risk. A review of the official company values of some of Australias biggest employers shows that they all contain values that indicate a willingness to learn from mistakes, integrity or practicing what we preach, and accountability to shareholders, employees, customers and other stakeholders. 4 (April 2011). Freeman Law represents companies, executives, and individuals in regulatory and white-collar government investigations and prosecutions. Counsel argued that there was no evidence from which to draw the inference that Downey had suspected that she had guns (rather than some other criminal contraband) in her vehicle. Mr. Freeman is the founding member of Freeman Law, PLLC. 57974, 57976 (November 15, 1991); citing United States v Jewell, 532 F.2dat 697, 700 (9th Cir. WebTo establish wilful blindness, the CRA must prove the existence of suspicious circumstance indicating a need for the taxpayer to inquire about the tax return's accuracy. Assuming, however, that there was a loan and that it was novated and varied in amount owing from time to time, it was not established that the loan ever carried interest. For example, In the landmark case of Adili Chibuike Ejike v Public Prosecutor [2019] SGCA 38, the Singaporean Court of Appeal clarified the issue of whether an accused can be said to be wilfully blind as to his knowledge that he was in possession of the drugs. Similarly, almost every interest liability that the AA Trust had claimed as a deduction was satisfied by a transfer of funds by it. Explainable Predictions. This latter approach might be described as mindfulness: deliberately seeing what is in front of you, being fully present, and noticing what youre doing, thinking and feeling in the moment. Put simply, wilful blindness is the legal equivalent of actual knowledge. The trial judge gave these examples: The Court of Appeal dismissed the conviction appeal and dismissed the sentence appeal by concluding that there was no basis to interfere with the sentence of two years less a day. They didnt. Web108 Melbourne University Law Review [Vol 34 derived from criminal law concepts,4 not surprisingly, some resort has been made to criminal cases in order to give content and meaning to the civil liability accessorial provisions. To apply the doctrine of wilful blindness successfully, relevant inferences have to be drawn from all the facts and circumstances of the particular case, giving due weight, where necessary, to the credibility of the witnesses. Simons, Kenneth W., The Willful Blindness Doctrine: Justifiable in Principle, Problematic in Practice (January 4, 2021). "PNB In respect of the bad debts, the AA Trust claimed 5 deductions relating to loans of $90,000, $120,000 and $50,000 in the 2005 year, $173,295 in the 2008 year and $185,000 in the 2009 year to various entities that had been written off. stream Mr. Freeman also served multiple terms as the President of the North Texas chapter of the American Academy of Attorney-CPAs. However, there are still ambiguities to this doctrine, a prime example would be when courts must draw a distinction between wilful blindness and the element of recklessness in criminal law. Freeman Law can navigate the complexities and collateral consequences of multiple proceedings. And when it comes to the court of public opinion, we employ ethical and strategic tactics to manage publicity. Murdoch apparently didnt ask what governance processes had been implemented, or turn his mind to whether or not the strengthened governance described by his direct reports would actually be effective in its prevention of further allegedly illegal activity. When considering the application of the doctrine of wilful blindness in matters of corporate liability; it is stated that a corporation can be held liable for the conscious avoidance of facts that would otherwise indicate wrongful activity. Wilful Blindness is a powerful narrative that follows the investigators who refused to go along with institutionalized negligence and corruption that enabled the Vancouver Model, with Cooper drawing on extensive interviews with the whistle-blowers; thousands of pages of government and court documents obtained through legal Res. endstream endobj 880 0 obj <. 13 This case is now at the Court of Appeal. The court held that this was willful blindness on the defendant's part and would not constitute a defense to a claim of contributory infringement. The High Court held that: The doctrine of wilful blindness has to be applied rigorously when one considers the question of knowledge. << /Filter /FlateDecode /Length 8067 >> /Contents 717 0 R /CropBox [ 0 0 483.543 738.661 ] Mr Gould was painted by the Commissioner as a fiscal Svengali with his controlling presence said to be very much a part of the relevant wider context. The journal entries that purported to record management fee liabilities incurred by a particular entity prior to the end of a given income year were but a faade in respect of a liability that was never incurred prior to the end of the income year concerned. Under this doctrine, the knowledge of several agents is combined in order to establish the collective knowledge required to impose liability on the corporation. The view that Mr Gould could not be said to be actively dishonest meant that his conduct (and that of the corporate taxpayers) could not be labelled intentional disregard. The offshore debt related to 14 loans totalling $4.28 million made to the AA Trust by a Samoan entity, Hua Wang Bank Berhad (HWBB) from July 1994 onwards. Sound familiar? The accused person must have deliberately refused to pursue the reasonable means of inquiry available to avoid such negative legal consequences as might arise in connection with his knowing that fact. fm"FLZ g%vl^fVH1:cDz "r(6*bdt%S?NTLX',.sPtx4z&ghy})FH0D/ M7-zMbx Du'%KPJ$[>$[.! They suggested that their inability to monitor the activities of users meant that they could not be contributing to copyright infringement by the users. Disclaimer | Privacy Policy | Website designed and managed by Umbrella Legal Marketing. 1976). The Supreme Court observed in Global-Tech Appliances, Inc. v. SEB S.A., that [t]he traditional rationalefor th[e] doctrine is that defendants who behave in [a willfullyignorant] manner are just as culpable as those who have actualknowledge. The Ninth Circuit, in a seminal willful blindness case, explained that [t]he substantive justification for the rule is that deliberate ignorance and positive knowledge are equally culpable.. Enabling tax and accounting professionals and businesses of all sizes drive productivity, navigate change, and deliver better outcomes. However, there were inconsistencies between its accounts for the 2007 year and the financial accounts of the GF Trust and the Gould Share Trust, which also had prima facie evidentiary status. In such a test courts are to be given the discretion and flexibility to assess the facts of the case and to determine the degree of deliberate action required to prove Wilful Blindness. [1] Murdochs answer was, in essence, that he was kept in the dark by his direct reports. Reg. The proceedings were determined at the same time and by the same judge (Logan J) at the joint request of the parties due to an overlap in evidence and the common issue of the credibility of Mr Gould, the principal witness. It was held that a more appropriate definition should include the caveat except where the defendant was wilfully blind. In Global-Tech, the Supreme Court found reasons to believe that the requirement of knowledge mens rea should be redefined for all federal courts by extending the doctrine of Wilful Blindness from the domain of criminal law into the territory of civil law6. Mr Gould and his associates went to a great deal of trouble over many years to carry the relevant loan agreements into effect in terms of invoicing, making related payments (including withholding tax) and accounting for the same. Whatever the reason, fundamentally, a disinclination to manage the failures, as well as enjoy successes, is a failure of leadership. The principle of wilful blindness is derived from criminal law and is prevalent in both the Malaysian and English legal systems, however, the application of the principle in each jurisdiction differs. Justice Logan agreed with the Commissioner that a consideration of the deductions claimed in their wider context necessarily entailed detailing the ownership and control of a large number of corporate actors, as well as detailing the roles undertaken by relevant individuals. Mr. Freeman is the founding member of Freeman Law, PLLC. However, one of the Commissioners bases on which the assessments were said to have not been proved excessive was that Mr Gould was a pervasive, controlling, interested presence and that the alleged deductions were the product of ex post facto fiscal opportunism rather than contemporaneous legal relationships.