45 Bonview Circuit Pty Ltd (ACN 656 766 077) and others according to the schedule attached Applicants v The Commissioner Of the Australian Federal Police

[2024] VSC 481

THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION
CONFISCATION AND PROCEEDS OF CRIME LIST

S ECI 2023 04939

45 BONVIEW CIRCUIT PTY LTD (ACN 656 766 077) and others according to the schedule attached	Applicants
v
THE COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE	Respondent

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JUDGE:	Forbes J
WHERE HELD:	Melbourne
DATE OF HEARING:	13 June 2024
DATE OF JUDGMENT:	14 August 2024
CASE MAY BE CITED AS:	45 Bonview Circuit Pty Ltd & Ors v Commissioner of the Australian Federal Police (No 2)
MEDIUM NEUTRAL CITATION:	[2024] VSC 481

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CONFISCATION AND PROCEEDS OF CRIME – Confiscation – Suspected proceeds of crime – Restraining order – Application to revoke restraint over real property and shareholdings – Whether no grounds to make order at time of revocation application – Whether in the interests of justice to revoke restraint – Proceeds of Crime Act 2002 (Cth) ss 42(5)(a) and (b) – Saad v Commissioner of the Australian Federal Police (2021) 361 FLR 261 – Director of Public Prosecutions (Cth) v Kamal (2011) 248 FLR 64 – Commissioner of the Australian Federal Police v Tjongosutiono (2018) 329 FLR 103.

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APPEARANCES:	Counsel	Solicitors
For the Applicants	T Mitchell SC M James	Moray & Agnew
For the Respondent	A Dinelli KC R Burton	Australian Federal Police

Contents

A.. INTRODUCTION

B.. THE STATUTORY SCHEME

C.. Revocation

C.1          No grounds to restrain

C.2          Interests of justice

C.3          Which ground should be considered first?

D.. EVIDENCE

D.1         Creighton’s affidavits

D.2         Zhu’s suspected offending

D.3         45 & 50–54 Grosvenor Street

D.3.1        Information recorded in the affidavits

D.3.2        Suspicions as to 45 & 50–54 Grosvenor Street

D.4         30–36 Grosvenor Street

D.4.1        Information recorded in the affidavits

D.4.2        Suspicions as to 30–36 Grosvenor Street

D.5         Zhu shareholdings

D.5.1        Information recorded in the affidavits

D.5.2        Creighton’s suspicions as to Zhu Investments and their grounds

D.6         Reasons for seeking ex parte restraint

E... NO GROUNDS TO RESTRAIN

E.1          Applicants’ submissions

E.2          Respondent’s submissions

E.3          Consideration

E.3.1        Shareholdings

F... INTERESTS OF JUSTICE

F.1          Applicants’ submissions

F.1.1        Fourth to sixth applicants

F.1.2        First to third applicants

F.2          Respondent’s submissions

F.3          Consideration

HER HONOUR:

A          INTRODUCTION

1. On 26 April 2024 I delivered reasons in relation to part of an application to revoke restraining orders made on 16 November 2023 (the first reasons) under the Proceeds of Crime Act 2002 (Cth) (the POC Act).[1] The first reasons dealt with particular properties in circumstances of urgency. These reasons deal with the balance of the revocation application. These reasons assume some familiarity with the first reasons. Although largely dealing with different property, both arise out of suspected offending of the same person, Jing Zhu (Zhu) and her husband Ye Qu (Qu).

   [1]45 Bonview Circuit Pty Ltd & Ors v Commissioner of the Australian Federal Police [2024] VSC 180 (‘First Reasons’). Described in these reasons as the first part of the revocation application. As in the First Reasons the relevant restraining orders are described as the November restraining orders.

2. The suspected offending relied on for the restraining orders made by Gorton J on 16 November 2023 (the November restraining orders) relates to five suspected offences:

   (a)one offence of dealing with money or other property that is reasonably suspected to be proceeds of crime , contrary to s 400.9(1) of the Criminal Code Act 1995 (Cth) (the Criminal Code);

   (b)one offence of dishonestly causing a loss to the Commonwealth, contrary to s 135.1(3) of the Criminal Code;

   (c)

   two offences of obtaining a financial advantage by deception, one contrary to

   
   

   s 134.2 of the Criminal Code and the other contrary to s 82 of the Crimes Act 1958 (Vic); and

   (d)one offence of conspiring to deal in money or property that was believed to be proceeds of an indictable offence contrary to ss 400.2B(1) and 11.5 of the Criminal Code.[2]

   [2]Zhu was charged with a conspiracy offence on 25 October 2023.

3. In overview, Zhu and Qu are suspected of involvement in a money laundering operation (MLO), informally known as ‘Long River’.

4. The November restraining orders were made ex parte, and the revocation application is brought on two grounds. The first is that there are ‘no grounds’ for making a restraining order over the relevant properties. Those properties are:

   (a)Two parcels of land at 45 and 50–54 Grosvenor Street, Abbotsford, more particularly described as Certificate of Title Volume 11250 Folio 263 and Certificate of Title Volume 8817 Folio 995 respectively (collectively 45/54 Grosvenor Street);[3]

   (b)One title at 30–36 Grosvenor Street, Abbotsford, more particularly described as Certificate of Title Volume 11305 Folio 624 (30–36 Grosvenor Street);[4]

   ((a) and (b) collectively the Grosvenor properties);

   (c)Shares in Zhu Investments Pty Ltd (Zhu Investments, the fourth applicant); and

   (d)Shares held by Zhu Investments in:

   (i)Southlink Grosvenor Pty Ltd (Southlink Grosvenor, the fifth applicant); and

   (ii)Southlink Grosvenor No 2 Pty Ltd (Southlink Grosvenor 2, the sixth applicant);

   ((c) and (d) collectively the Zhu shareholdings).

   [3]Commissioner of the Australian Federal Police, ‘Affidavit of Mark Creighton’ sworn 10 November 2023 in 45 Bonview Circuit Pty Ltd & Ors v Commissioner of the Australian Federal Police S ECI 2023 04939 [36] (‘Second Affidavit of Mark Creighton sworn 10 November 2023’); Register Search Statement - Volume 11250 Folio 263 dated 5 September 2023, which forms part of exhibit bundle MC in the Second Affidavit of Mark Creighton sworn 10 November 2023, exhibit pages 12–3; Register Search Statement - Volume 8817 Folio 995 dated 5 September 2023, which forms part of exhibit bundle MC in the Second Affidavit of Mark Creighton sworn 10 November 2023, exhibit pages 14–5.

   [4]Second Affidavit of Mark Creighton sworn 10 November 2023 [41]; Register Search Statement - Volume 11305 Folio 624 dated 18 September 2023, which forms part of exhibit bundle MC in the Second Affidavit of Mark Creighton sworn 10 November 2023, exhibit pages 16–7.

5. The second ground for revocation, the ‘interests of justice’ ground, is in respect of the properties listed above as well as the shareholdings that remain restrained in accordance with the first reasons: shares in Felixz Investments Pty Ltd (Felixz Investments, the third applicant), and shares held by Felixz Investments in 45 Bonview Circuit Pty Ltd (45 Bonview Circuit, the first applicant) and Greens 35 Pty Ltd (Greens 35, the second applicant)(collectively, the Felixz shareholdings). 45 Bonview Circuit and Greens 35 are the special purpose companies formed to hold real property formerly restrained by the November restraining orders.

6. All property was initially restrained under both s 18 and s 19 of the POC Act on affidavits of an authorised officer, namely Australian Federal Police (AFP) officer Mark Creighton (Creighton). Section 18 applies when a suspect is identified, in this case Zhu and to some extent Qu, and suspected of committing a serious offence. The Grosvenor properties and the Zhu shareholdings restrained under s 18 are property of persons other than Zhu. Creighton suspects that the property is ‘proceeds’ of Zhu’s offending or an ‘instrument’ of her offending, or, in the case of the Zhu shareholdings, is property subject to her ‘effective control’.

7. The Felixz shareholdings also remain restrained pursuant to s 18 of the POC Act as being under the effective control of Zhu.[5]

   [5]First Reasons, 42 [130].

8. Under s 19 of the POC Act it is not necessary to identify a person suspected of committing an offence. The relevant suspicion is that the property for which restraint is sought is either proceeds of an indictable offence[6] or, where the offence is a ‘serious offence’,[7] is an instrument of the offence. The concept of effective control is not relevant under s 19. The Grosvenor properties and the Zhu shareholdings have been restrained under s 19 on the basis of Creighton’s suspicions that each is proceeds or an instrument of a relevant offence. For the purpose of this application the distinction between proceeds and instrument is only relevant to the Zhu shareholdings and the Felixz shareholdings.

   [6]As defined in Proceeds of Crime Act 2002 (Cth) s 19(1)(d)(i) (‘POC Act’).

   [7]POC Act s 338.

B          THE STATUTORY SCHEME

1. The framework providing the power to make and revoke restraining orders is set out in detail in the first reasons.[8] Restraint is generally the first step in a statutory scheme providing for forfeiture of property.

   [8]First Reasons, 3–10 [8]–[26].

2. Any application for a restraining order must be supported by an affidavit of an authorised officer. The affidavit requires an authorised officer to state:

   (a)the relevant suspicions that they hold; and

   (b)the grounds on which those suspicions are held.[9]

   [9]POC Act ss 18(3) and 19(1)(e).

3. The suspicions go both to identifying the relevant offending and, unless property is that of the suspect, to identifying suspicions as to the nature of the property – whether it is proceeds or an instrument of the suspected offending, or under the effective control of the suspect.

4. Sections 18 and 19 of the POC Act do not provide a discretionary power to restrain. Where the requirements of the section are met, the Court must order restraint, save in limited circumstances.[10] In each section the affidavit requirements are prescriptive. The basis upon which the Court acts is the suspicions articulated by the authorised officer, not a broader inquiry as to available grounds.[11] The evaluative task for the Court is to assess the grounds or reasons given by the authorised officer and determine whether those grounds are reasonable.[12]

   [10]Ibid ss 17(4), 19(3), 20(4) and 20A(4) which provide circumstances where a court may refuse to make a restraining order if ‘it is not in the public interest to make the order’; see also POC Act s 21.

   [11]Mai v Commissioner of the Australian Federal Police (2020) 62 VR 118, 136 [54] and [58] (‘Mai’).

   [12]Ibid; Saad v Commissioner of the Australian Federal Police (2021) 361 FLR 261 at 284 [90] (‘Saad’).

5. The Court is to be satisfied that suspicions the authorised officer holds amount to a state of mind that is ‘more than a mere idle wondering…it is a positive feeling of actual apprehension or mistrust’.[13] If that state of conjecture or surmise is reached then it is for the Court to assess, whether the matters identified in the affidavit, are ‘sufficient to induce that state of mind in a reasonable person’.[14]

   [13]George v Rockett (1990) 170 CLR 104, 115 citing Kitto J in Queensland Bacon Pty Ltd v Rees (1966) 115 CLR 266, 303.

   [14]Ibid 112–3.

C          Revocation

1. Under s 42(1) of the POC Act, a revocation application may be made by a person who was not notified of the application for the restraining order. The present revocation application is brought by Zhu Investments, Southlink Grosvenor and Southlink Grosvenor 2. They are joined by 45 Bonview Circuit, Greens 35, Felixz Investments, whose application relates to the Felixz shareholdings to argue the interests of justice ground only.

2. The present revocation application was made within 28 days after being notified of the November restraining orders.[15] Section 42(5) of the POC Act sets out the two circumstances in which a court may revoke a restraining order. It provides:

   (5)       The court may revoke the restraining order if satisfied that:

   (a) there are no grounds on which to make the order at the time of considering the application to revoke the order; or

   (b)       it is otherwise in the interests of justice to do so.

   [15]POC Act s 42(1A)(a).

C.1      No grounds to restrain

1. The ‘no grounds’ test for revocation under s 42(5)(a) of the POC Act asks whether an applicant can satisfy the Court that on the material before it, a restraining order could not be made.[16] The test is no different to the test applied when making the restraining order:

   Accordingly, if there are not “reasonable grounds to suspect that a person has committed a serious offence”, or if the court is not satisfied that the suspicion stated in the supporting affidavit is held on reasonable grounds, the requirements for the making of an order imposed by s 18 of the [POC] Act will not be made out, and the court will be empowered to revoke the order.[17]

   [16]Director of Public Prosecutions (Cth) v Kamal (2011) 248 FLR 64 (‘Kamal’); Mai (n 11).

   [17]Kamal (n 16) 92–3 [106] with reference to Director of Public Prosecutions (Cth) v Tan [2003] NSWSC 717; the Court in Mai (n 11) at 134 [48] observed this approach was also consistent with observations made by way of obiter in Lee v Director of Public Prosecutions (Cth) (2009) 75 NSWLR 581 at 589 [30].

2. Revocation applications have been described as ‘strike-out’ proceedings heard after the restraining orders are first made and before the matter proceeds any further’.[18] Although the test for revocation is the same as for restraint, a revocation application is distinguished in two ways. First, the onus is on an applicant for revocation to satisfy a court that there are ‘no grounds’. The proceeds of crime authority bears no onus. Second, a court is not limited to the evidence upon which the restraining order was made and additional material can be adduced by the proceeds of crime authority,[19] including identifying further suspicions and additional grounds for holding suspicions,[20] beyond that relied on when seeking restraint. The decision of the Court in a revocation application brought under s 42(5)(a) is made by considering the existence and disclosure of reasonable grounds for suspicions at the time of the revocation application, not by revisiting the state of the evidence at the time of restraint.

   [18]Commissioner of the Australian Federal Police v Tjongosutiono (2018) 329 FLR 103, 124 [98] (‘Tjongosutiono’).

   [19]POC Act s 42(4).

   [20]Mai (n 11) 133 [46] and relied on in Saad (n 12) at 283 [85].

C.2      Interests of justice

1. The second ground for revocation which arises for consideration is whether it is ‘otherwise in the interests of justice’ as provided by s 42(5)(b) of the POC Act. The phrase is one of wide import.[21] The applicants rely on breach of the Commissioner’s disclosure obligations in the ex parte application.

   [21]Saad (n 12) 300 [146] (Walker JA).

2. Section 42(5) was repealed and substituted in its current form by the Crimes Legislation Amendment (Serious and Organised Crime) Act 2010 (No. 3, 2010) (Cth) with the addition of the alternative ground in sub-paragraph (b). Section 42(5)(b) has been accepted as being introduced in response to the decision of the High Court in International Finance Trust Co Ltd v New South Wales Crime Commission (‘International Finance’).[22] The majority held that the New South Wales (NSW) legislation[23] removed any discretion of the Court whether to hear a restraining order ex parte, thus removing its ability to control its own procedures. The legislation also made no provision for the Court to review an ex parte order by an early inter partes hearing, instead creating a regime that remained in place during an ongoing forfeiture application. [24] These two features required the Court to act in a manner that was repugnant to its judicial function. [25] The relevant provision was therefore invalid.

   [22](2009) 240 CLR 319 (‘International Finance’); see also Tjongosutiono (n 18) at 144 [209] referencing Kamal (n 16) at 79 [44].

   [23]Criminal Assets Recovery Act 1990 (NSW).

   [24]International Finance (n 22) 364 [89] (Gummow and Bell JJ).

   [25]Ibid 367 [98] (Gummow and Bell JJ).

3. By contrast, where an application under the POC Act seeks a restraining order ex parte, a court ‘must consider the application without notice having been given’[26] but is not bound to determine the application ex parte. A court is given specific powers in s 26(5) to direct the proceeds of crime authority to give notice to specified persons at any time before finally determining the application.[27] This distinguishes the POC Act from the first feature of the statutory scheme considered repugnant in International Finance.[28] Section 26(5) confers power to ensure procedural fairness to anybody whose interests might be affected by making a restraining order.[29]

   [26]POC Act s 26(4).

   [27]Kamal (n 16) (Martin CJ, McLure P and Buss JA).

   [28]International Finance (n 22) 346–7 [34] (French CJ), 364 [89] (Gummow and Bell JJ) and 384–6 [152]–[160] (Heydon J); see also discussion of Martin CJ in Kamal (n 16) at 69–72 [11]–[21]and Walker JA in Saad (n 12) at 287 [102].

   [29]Kamal (n 16) 87–8 [85].

4. The POC Act also addresses the second issue identified in International Finance by making specific provision for an inter partes revocation application within a short time of being notified of the orders.[30] The basis of such an application was broadened by the addition of s 42(5)(b) from 20 February 2010.

   [30]International Finance (n 22) was handed down on 12 November 2009; POC Act, as at 12 November 2009. [Also: Trade Practices Amendment (Cartel Conduct and Other Measures) Act 2009 (Cth) sch 1 item 1, amending POC Act s 338.]

5. Martin CJ in Director of Public Prosecutions (Cth) v Kamal (‘Kamal’) also referred to International Finance and said that the introduction of s 42(5)(b) responded:

   …in particular, to address concerns expressed by some of the majority justices in that case relating to the lack of any facility to enforce the obligation to make full disclosure when proceeding ex parte in the [Criminal Assets Recovery Act 1990 (NSW)]. The breadth of the power of revocation provided by the amendment would be sufficient to empower a court to revoke a restraining order because of the [Director of Public Prosecution’s] failure to comply with the obligation of full disclosure.[31]

   [31]Kamal (n 16) 79 [44] (Martin CJ) see also at 92 [104].

6. The meaning of s 42(5)(b) was considered by N Adams J in Commissioner of the Australian Federal Police v Tjongosutiono (‘Tjongosutiono’). At the time there had been no decision revoking a restraining order under s 42(5)(b) since the introduction of the section. Her Honour concluded it was a broader concept than circumstances of non-disclosure as referred to in Kamal. Her Honour made three observations. First, that the discretion falls to be exercised at an early stage in the forfeiture scheme.[32] Second, it exists in a regime where the making of restraining orders, exclusion orders and forfeiture orders are not generally subject to discretionary considerations.[33] She observes the curiosity that a properly made restraining order may be revoked near the commencement of the proceeding before examination of the property owner, but there is no power to do so at the time of final hearing when the court would have a much clearer picture of the true circumstances.[34] Third, her Honour had regard to the fact that if a restraining order was not revoked under s 42(5)(b) an applicant might not have the benefit of any further judicial discretion in the proceeding. Notwithstanding the prospect that an applicant might be an unwitting and blameless victim, her Honour concluded:

   The legislation aimed at curtailing money laundering is harsh… The difficulty is that, at this stage of the proceedings, in what is effectively a strike out application, I am not satisfied on the material before me that it is in the interests of justice to revoke the orders which were otherwise properly made.[35]

   [32]Tjongosutiono (n 18) 144 [208].

   [33]Ibid 146 [215] which distinguished s 42(5)(b) of the POC Act from the public interest discretion to decline to make a forfeiture order contained in s 49(4) of the POC Act.

   [34]Ibid 147 [222].

   [35]Tjongosutiono (n 18) 148 [224].

1. More recently Walker JA in Saad v Commissioner of the Australian Federal Police gave examples, beyond non-disclosure in an ex parte application, of other matters relevant to the interests of justice.[36] In her Honour’s opinion a restraining order obtained by fraud or one based upon inadmissible evidence are examples of other matters that might give rise to revocation.[37]

   [36]Saad (n 12) at 300 [147] by reference to the supplementary explanatory memorandum to the amending legislation.

   [37]Saad (n 12) 300 [148].

2. Orders made ex parte form an exception to the general rule that no person’s rights are prejudiced without an opportunity to be heard. In such an exception, the party appearing is obliged to present all material facts, whether or not those facts support their application. In Thomas A Edison Ltd v Bullock (‘Edison’)[38] Isaacs J set aside an ex parte interlocutory injunction saying:

   Dalglish v. Jarvie, a case of high authority, establishes that it is the duty of a party asking for an injunction ex parte to bring under the notice of the Court all facts material to the determination of his right to that injunction, and it is no excuse for him to say he was not aware of their importance. Uberrima fides is required, and the party inducing the Court to act in the absence of the other party, fails in his obligation unless he supplies the place of the absent party to the extent of bringing forward all the material facts which that party would presumably have brought forward in his defence to that application. Unless that is done, the implied condition upon which the Court acts in forming its judgment is unfulfilled and the order so obtained must almost invariably fall.[39] 

   [38](1912) 15 CLR 679 (‘Edison’).

   [39]Ibid 681–2 (emphasis added).

3. The facts in Edison put these statements in context. The injunction was obtained on evidence of an agreement between the parties that required the defendant not to sell at below list price and the applicant alleged that the defendant was intending to sell his entire stock in violation of that agreement. On application for dissolution, the defendant led evidence of having sought and obtained the plaintiffs’ permission to sell his entire stock on certain conditions to another retail dealer approved by the plaintiffs. On this basis the dealer to dealer price was immaterial because the purchasing dealer would be required to enter into the same pricing agreement with the plaintiffs. Prior to the statement of principle Isaacs J said:

   But, however that may be, it is an entirely new case, and essentially different from that presented to my learned brother. He was not afforded the opportunity of considering the real circumstances, and of exercising his discretion upon them.[40]

   [40]Ibid 681.

4. Identifying which facts are material will vary depending on the particular circumstances. Gillard AJA in Savcor Pty Ltd v Catholic Protection International APS (‘Savcor’)[41] in discussing Edison said that the facts material to the decision must be identified and disclosed. [42]

   [41](2005) 12 VR 639 (‘Savcor’).

   [42]Ibid 648 [27]; see also Commissioner of the Australian Federal Police v Kalimuthu (No 2) [2015] WASC 376 [29] (‘Kalimuthu (No 2)’) which cited Savcor (n 41) at [35]–[36] to similar effect.

5. In Savcor, the decision of a master to extend the time for service of a writ was obtained ex parte. Gillard AJA described the task of the Court, asked to set aside an order for material non-disclosure or misrepresentation, in this way:

   The application to set aside involves the Court placing itself in the shoes of the Master and considering all matters placed before him to determine whether or not he was induced to make an order in the absence of some material fact which was not disclosed. It is necessary to identify the alleged non-disclosure and determine whether it was a matter material to the decision. Would it have made any difference to the outcome? The application is not concerned with whether the Master should have made the order on the material before him.[43]

   [43]Savcor (n 41) 650 [38] (emphasis added).

6. One illustration of a factual matter found to be material is found in Lamb v Ariss (‘Lamb’),[44] where a trustee in bankruptcy swore an affidavit deposing that the bankrupt woman swore certain jewellery belonged to her and sought a mandatory injunction that the husband deliver up the jewellery. The affidavit was sworn with knowledge of examinations of both the woman and her husband. The affidavit did not disclose the husband’s assertion that the jewellery belonged to him, nor other evidence by the woman that the jewellery was not hers. Both matters were known to the applicant. The injunction was discharged for material non-disclosure.[45]

   [44]229 ALR 685.

   [45]Ibid [49].

7. A duty of full disclosure extends not only to matters of fact but also to legal and procedural aspects. In Commissioner of the Australian Federal Police v Kalimuthu (No 2) (‘Kalimuthu (No 2)’) the Court was asked to set aside a restraining order as an abuse of process.[46] Although it was not an application to revoke under s 42(5)(b) of the POC Act the parties accepted that s 42 did not exclude this inherent power of the Court.[47] At the time that the application for restraint of various bank accounts was made, a freezing order had been made by a Magistrate under s 15B of the POC Act. An extension could be ordered if an authorised officer applies for one in accordance with the POC Act and the Magistrate is satisfied that an application for restraint has been made to, but not yet decided by, a court. The non-disclosure of this ability to seek an extension of the freezing order was material to the Court exercising its discretion to proceed and determine the application for restraint without notice because the Court relied on affidavit material going to the ease and risk of dissipation of funds if notice was given. The Court concluded that the Commissioner should have disclosed the possibility of extending the freezing order and this non-disclosure was material to the Court exercising its discretion to hear the matter urgently and ex parte. However, Allanson J concluded that the non-disclosure did not amount to an abuse of process because it was not deliberate and because of the availability of s 42(5), saying:

   The criteria for an order under s 42(5) include the interests of justice. Proof of a material non-disclosure should be sufficient to satisfy the section. The need to satisfy the court of that criterion cannot properly be described as an undue burden.[48]

   [46]Kalimuthu (No 2) (n 42) [30] (this is at common law because court was dealing with an application to set aside a restraining order due to an abuse of process not a revocation application under s 42(5)(b) of the POC Act).

   [47]Ibid [27].

   [48]Ibid [45].

8. The parties in this proceeding agreed as a matter of principle that the ‘no grounds’ basis for revocation under s 42(5)(a) and the ‘interests of justice’ ground under s 42(5)(b) give rise to separate considerations about which there is little overlap. This is consistent with authority.[49]

   [49]Saad (n 12) 300–2 [146]–[154]; Kamal (n 16) 79 [44] (Martin CJ); Senate of the Parliament of the Commonwealth of Australia, Crimes Legislation Amendment (Serious and Organised Crime) Bill 2009, Supplementary Explanatory Memorandum Amendments to be Moved by the Government, Amendment (6), 3–4.

9. Another distinction, addressed by the Commissioner,[50] is that under s 42(5)(a) either ‘no grounds’ are established or they are not. However s 42(5)(b) provides the Court with a discretion. This arises by the language of the section – a court ‘may’ revoke – and is consistent with the Court’s discretion to set aside ex parte orders generally. One purpose may be to ameliorate an inability to revoke restraint where a no grounds application is not made out. Another is to make clear that the Court’s power to ensure its own processes are used in the interests of justice.

   [50]June 2024 Transcript 10.19–24 and 58.24–25.

C.3      Which ground should be considered first?

1. A preliminary matter was raised as to the order in which I should determine the grounds. The applicants submit I should first consider the interests of justice ground, and only if that fails should I go on to consider whether the restraining order should be revoked because there are no grounds for making it on the evidence now before the Court. The respondent submits I should deal first with the no grounds basis for revocation and then consider the interests of justice ground.

2. The two bases for revocation are expressed as alternatives and are in general terms directed at different matters. The order of the sub-sections in s 42(5) of the POC Act and the phrase ‘otherwise in the interests of justice’ in s 42(5)(b) makes clear it is a ground for revocation even where there are grounds for restraint and suggests that, where both limbs are relied on, s 42(5)(a) is considered first.[51] Given the breadth of circumstances that might be captured by the interests of justice ground on a revocation application, it may be that the order in which the Court considers applications when both grounds are relied on might necessarily respond to the way the issues, particularly those raised by s 42(5)(b), are framed.

   [51]I note that in Tjongosutiono (n 18) at 121–2 [76] N Adams J dealt first with the ‘no grounds’ application and then with the interests of justice ground where the applicant described the no grounds limb as his primary application.

3. In this case, the applicants elected to split their application, not only in respect of the no grounds argument between properties that required urgent determination in the first reasons and those that are subject to this proceeding, but they also elected to reserve their position in relation to the interests of justice limb of the application for those urgent properties. For the urgent properties, therefore, I have already considered the no grounds limb. In those circumstances, I will consider the balance of the no grounds limb of the application first and then turn to the interests of justice argument as the alternative basis for revocation of restraint for the balance of the application as a whole.

D          EVIDENCE

D.1      Creighton’s affidavits

1. The Commissioner relies on the affidavits of Creighton sworn:

   (a)24 October 2023 (the first affidavit);

   (b)10 November 2023 (the second affidavit);

   (c)11 December 2023 (the third affidavit);

   (d)14 December 2023 (the fourth affidavit);

   (e)28 March 2024 (the fifth affidavit); and

   (f)12 June 2024 (the sixth affidavit) – paragraphs [1] through to [9] and the exhibits only.

   The first and second affidavits were relied on in the ex parte application for the November restraining orders. The third and fourth affidavits were relied on in the revocation hearing on 14, 19 and 20 December 2023. The fifth and sixth affidavits have been sworn subsequently.

2. In relation to the real properties, most of the relevant suspicions and information providing the grounds for those suspicions can be found in the second and fifth affidavits.

3. In addition to the material exhibited to the fifth affidavit, Creighton has provided four annexures for the purpose of clarifying the information identified by the affidavits and which inform his suspicions. It is only necessary to outline Annexure 3 of the fifth affidavit (Annexure 3) at present.

4. Annexure 3 is relied on by the Commissioner. It contains:

   (a)four flow charts, tracing funds used to pay the deposit and then to settle the each of the Grosvenor properties;

   (b)a table listing various bank accounts, with identifying information including the name of the account holder, account number, date and description of money transfers, whether transfers were debit or credit and account balance; and

   (c)a table of 12 transfers relating to a Southlink Grosvenor 2 ANZ account ending in 604 (CBA account 604).

5. The applicants object to reliance on the fourth affidavit because reliance was not confirmed by Creighton in his fifth affidavit. The applicants’ written submissions noted they inferred from Creighton’s silence that the Commissioner did not rely on it.[52] Nevertheless the applicants’ submissions addressed the fourth affidavit outlining Creighton’s stated suspicions as to the Zhu shareholdings and Felixz shareholdings (collectively, the shareholdings) being proceeds or an instrument of offending or under the effective control of Zhu.[53] The applicant’s submissions set out the argument for rejecting Creighton as subjectively holding the suspicions stated in the fourth affidavit given the circumstances in which it was sworn. This argument was also made in the first part of the revocation application. The submissions were appropriate given that at the time my decision was reserved on the first part of the application.

   [52]Fourth to Sixth Applicants, ‘Fourth to Sixth Applicants’ Submissions on Revocation Application’, Submissions in 45 Bonview Circuit Pty Ltd & Ors v Commissioner of the Australian Federal Police S ECI 2023 04939, 17 April 2024, 2 [5] (‘Fourth to Sixth Applicants’ Submissions’).

   [53]Fourth to Sixth Applicants’ Submissions 6 [23].

6. The Commissioner’s written submissions did not rely on the fourth affidavit, describing it as having the effect of making corrections to the evidence in the first part of the application and not relevant to the balance of the application before me presently. That submission clearly overlooked the role of the affidavit in stating or clarifying suspicions as to the shareholdings.[54] It is apparent from the balance of the Commissioner’s submissions that the suspicions as to the shareholdings in the fourth affidavit were relied on, notwithstanding a disavowal of reliance. This is clear because of the written submission that my reasoning, in the first reasons, as applied to the effective control of the Felixz shareholdings, ought also apply to the Zhu shareholdings in this part of the application.[55]

   [54]The submissions were prepared by different Counsel to those appearing at the time of restraint and the first part of the revocation applications.

   [55]Commissioner of the Australian Federal Police, ‘Respondent’s Outline of Submissions Opposing Revocation on “No Grounds” Basis’, Submissions in 45 Bonview Circuit Pty Ltd & Ors v Commissioner of the Australian Federal Police S ECI 2023 04939, 8 May 2024, 5 [14] (‘The Commissioner’s No Grounds Submissions’).

7. While the non-reliance by the Commissioner was said to be put ‘up in lights’ by the applicants, the applicants’ written submissions did not state that without recourse to the fourth affidavit, the relevant suspicions as to the Zhu shareholdings could not be maintained. Rather they dealt substantively with the argument as presented by the fourth affidavit. Counsel for the Commissioner said that until production of the applicants’ aide memoire at the 13 June 2024 hearing they were not aware that the holding of the suspicion was in issue,[56] particularly in light of the first reasons.

   [56]Transcript of Proceedings, 45 Bonview Circuit Pty Ltd & Ors v Commissioner of the Australian Federal Police (Supreme Court of Victoria, S ECI 2023 04939, Justice Forbes, 13 June 2024), 54.16–20 (‘June 2024 Transcript’).

8. In this application the fourth affidavit has been put before the Court and cross-examined upon as to the circumstances in which it was made. This includes putting to Creighton that the earlier suspicions needed to be supplemented[57] and that the suspicions stated in the fourth affidavit regarding the shareholdings were not suspicions subjectively held by him.[58] But for the bifurcated nature of the hearing there would be no issue as to reliance on the fourth affidavit and I am satisfied that the stated non-reliance on it was made by the Commissioner in error. It does not render the fourth affidavit inadmissible. In those circumstances I will have regard to the fourth affidavit.

   [57]Transcript of Proceedings, 45 Bonview Circuit Pty Ltd & Ors v Commissioner of the Australian Federal Police (Supreme Court of Victoria, S ECI 2023 04939, Justice Forbes, 14, 19, 20 December 2023), 37.8 (‘December 2023 Transcript’).

   [58]December 2023 Transcript 48.1–7.

9. The fourth to sixth applicants do not rely on any evidence in support of their application. In pressing the interests of justice ground, the first to third applicants do not identify any evidence additional to that identified in the first reasons.[59]

   [59]First Reasons 3 [7].

10. The sixth affidavit was filed on 12 June 2024. In so far as it is admitted, its purpose is to replace the International Funds Transfer Instructions (IFTIs) that were incorrectly exhibited to the fifth affidavit with the correct documents.

11. The Commissioner also seeks to rely on a historical company search of Chang Jiang Imports Pty Ltd (Chang Jiang Imports) and this was tendered without objection.[60] Its purpose was to correct the date of incorporation of the company.

    [60]June 2024 Transcript 5.2–6; Commissioner of the Australian Federal Police, ‘Historical ASIC Search – Changjiang Imports Pty Ltd’ dated 21 August 2023 in 45 Bonview Circuit Pty Ltd & Ors v Commissioner of the Australian Federal Police S ECI 2023 04939, Supplementary Courtbook pages 477–80.

12. The applicants provided a table of objections on 11 June 2024 as to the admissibility of sections of the second and fifth affidavits. After argument, the applicants notified the Court that they do not press these objections, but maintain their submission as to the weight that the Court should give the identified evidence for the reasons set out in the table accompanying the objections.

13. Creighton was cross-examined. He accepted that there were errors in his first affidavit and a purpose of the third and fourth affidavits sworn by him was to correct those errors. These include the date of registration of Chang Jiang Imports on 14 November 2019[61] when it was in fact registered on 27 July 2018. The company was suspected of receiving funds from a fraudulent investment scheme believed to be laundered through Long River MLO.[62] Creighton was not able to say when or how the error was drawn to his attention. He accepted that if he became aware of it before 28 March 2024 he would have included the information in his fifth affidavit.[63] Creighton also agreed the sixth affidavit was made to correct a mistake he made in relation to the IFTIs exhibited to the fifth affidavit. He could not recall when he became aware of the error with the exhibited IFTIs.[64] The sixth affidavit was sworn two days prior to the 13 June 2024 hearing. Creighton accepted that more care should have been taken in the preparation of his affidavits.[65]

    [61]Commissioner of the Australian Federal Police, ‘Affidavit of Mark Creighton’ sworn 24 October 2023 in 45 Bonview Circuit Pty Ltd & Ors v Commissioner of the Australian Federal Police S ECI 2023 04939, [46] (‘First Affidavit of Mark Creighton sworn 24 October 2023’).

    [62]An operation commencing on 19 October 2022, described in the First Affidavit of Mark Creighton sworn 24 October 2023 [42]–[50].

    [63]June 2024 Transcript 20.31–21.5.

    [64]Ibid 16.30–17.14; 18.15–9.

    [65]Ibid 21.23–4.

D.2      Zhu’s suspected offending

1. As in the first hearing, the applicants accept for the purpose of s 42(5)(a) that Creighton holds suspicion as to Zhu’s relevant offending on reasonable grounds.[66] The dispute focuses on the grounds for the suspicions going to the character of each property. In light of the submissions that the suspicions articulated could not be reasonably held, it is necessary to set out some of the detail of the suspected offending described in the first affidavit beyond that briefly described in the first reasons.

   [66]Fourth to Sixth Applicants’ Submissions [13].

1. The Long River MLO has been investigated jointly by the Australian Criminal Intelligence Commission (ACIC), AUSTRAC, Australian Federal Police (AFP) and Australian Border Force (ABF) with assistance from the Australian Taxation Office (ATO) and the Australian Securities and Investment Commission (ASIC). Money laundering was suspected to be conducted using five Australian based money remitters registered with the Australian Transaction Reports and Analysis Centre (AUSTRAC), and a number of digital currency exchanges. Chang Jiang Financial Pty Ltd (Chang Jiang Financial) is one of the five registered money remitters. A number of companies use variations of the name ‘Chang Jiang’. Relevant to this application, one of those entities is Chang Jiang Imports, which is not one of the five AUSTRAC registered companies.

2. Investigation into suspected offending began with the AFP’s Operation Wickham investigation in October 2022 and an investigation by the ATO in November 2022. Those investigations looked historically at various transactions, and led to an application for restraint made in October 2023 on the basis of the first affidavit. The investigation gave rise to the suspicion that proceeds of offending were used to purchase, amongst other assets:

   (a)8 Edward Street, Kew in 2010;[67]

   (b)32 Tivey Parade, Balwyn in 2014;[68] and

   (c)10 Lytton Street, Kew in September 2022.[69]

   The first affidavit sets out financial information going to the purchase and finance of those properties and the tracing of funds through accounts held in the name of various Zhu family members. This included accounts and property in the name of Wenquian Ding, wife of Jie Zhu and other accounts and property in the name of Jing Zhu’s brothers Li Zhu and Heng Zhu and her parents. These properties are amongst those restrained by 24 October 2023 orders pursuant to ss 18 and 19 of the POC Act.

   [67]First Affidavit of Mark Creighton sworn 24 October 2023 [11(a)].

   [68]Ibid [11(b)].

   [69]Ibid [11(d)].

3. Creighton suspects that Long River MLO has laundered money using Australian based registered money remitters and digital currency exchanges. Creighton identifies a number of companies said to be controlled by Long River MLO that use variations on the Chang Jiang name ‘to appear legitimate and maintain familiarity with clients, who engage their services and expect to receive a remittance from a Chang Jiang bank account’.[70] Such entities, who are not registered money remitters, include Chang Jiang Financial Services Pty Ltd, registered 8 August 2018[71] and Chang Jiang Imports, in fact registered on 27 July 2018.[72]

   [70]Ibid [15].

   [71]Ibid [22].

   [72]Commissioner of the Australian Federal Police, ‘Historical ASIC Search – Changjiang Imports Pty Ltd’ dated 21 August 2023 in 45 Bonview Circuit Pty Ltd & Ors v Commissioner of the Australian Federal Police S ECI 2023 04939, Supplementary Court Book pages 477–80.

4. Phone intercepts including one between Qu and another suspect Zhuo Chen[73] on 22 March 2023 records Qu estimating Chang Jiang profits of approximately 60 to 70 million dollars per year. Creighton describes Long River MLO as using a ledger system that uses both registered money remitters and ‘feeder companies’ to facilitate the transfer of currency value between the People’s Republic of China (China), Australia and other countries through an informal value transfer system also known as ‘offsetting or underground banking’.[74] Creighton describes how this is done.[75]

   [73]Another suspect.

   [74]First Affidavit of Mark Creighton sworn 24 October 2023 [29].

   [75]Ibid [30]–[35].

5. Creighton deposes that Long River MLO controlled companies often have family members or other trusted persons registered as directors but that those persons are essentially ‘straw directors’ performing no real role in the operation of the company and exercising no control over company bank accounts.[76] He describes this as a feeder account methodology. In addition, he deposes to Long River MLO increasingly using cryptocurrency exchanges to remit funds in and out of the country.[77]

   [76]Ibid [15].

   [77]Ibid [16].

6. Creighton deposes to the distribution of profits which he defines as ‘Distribution Funds’, from this exchange activity. These funds are paid to the trusted family members or others to distance the suspects, including Zhu and Qu, from the payments.[78] This information is in part supported by conversations recorded by telephone intercepts. Similarly, Creighton describes the movement of Distribution Funds through digital currency exchanges.[79]

   [78]Ibid [67]–[71].

   [79]Ibid [72]–[83].

7. The analysis of money laundering activity shows that it is based upon a three step process. First, placement of funds in accounts that allow Long River MLO to deal with the funds in a way that does not trigger AUSTRAC reporting requirements or bank oversight as is required for accounts held by registered remitter businesses. Distribution Funds are said to be placed in the account of a trusted family member or a controlled company or placed with a digital currency exchange.[80]Then, layering occurs which involves moving the funds from feeder companies through other accounts to further disguise the source before step three, which is to integrate suspect funds by the acquisition of assets in a way that appears legitimate.[81]

   [80]Ibid [178]–[179].

   [81]Ibid [180]–[184].

8. Creighton sets out his suspicions as to tax offences. In part they are also based on telephone intercepts in 2023.[82] They also rely on Chang Jiang Financial taxation information showing the company declared losses to the ATO in the three years from 2019 to 2021 inclusive. He also relies on declared income of the suspects and relevant Zhu family members.[83] Zhu’s brother, Jie Zhu, a resident of PRC, is not included in this tax information although his wife Wenqian Ding (Ding) is as she is a tax resident of Australia.

   [82]Ibid [84]–[89].

   [83] Ibid [90]–[93].

9. As stated earlier, the basis for the suspicions as to offending are conceded by the applicants to be reasonably held.

D.3      45 & 50–54 Grosvenor Street

D.3.1   Information recorded in the affidavits

1. The following specific information is provided as to these properties:

   (a)The purchaser named in the contract of sale of 12 October 2018 was Southlink Developments Pty Ltd (Southlink Developments).[84] Southlink Developments was registered on 12 February 2015.

   (b)On 12 October 2018 a deposit of $3,728,000 was paid to the vendor by South Fuji Developments Pty Ltd (South Fuji Developments).[85] The deposit was paid directly to the vendor.[86] Because of the way the Commissioner has put his case it is not necessary presently to say anything about the source of deposit funds paid by South Fuji Developments.

   (c)On 15 October 2018, Southlink Grosvenor was incorporated. Creighton suspects, and the applicants accept, that Southlink Grosvenor is a special purpose company created to be the registered proprietor of 45/54 Grosvenor Street. [87]

   (d)On incorporation, Zhu Investments held 25 of 100 issued shares.[88] Three other shareholders also hold 25 shares each.

   (e)On 29 October 2018, Southlink Developments completed a nomination form nominating Southlink Grosvenor as purchaser.[89]

   (f)Southlink Grosvenor was registered on title on 18 December 2018.[90] The transfer of land dated 18 December 2018 records the consideration as $37,280,000.[91]

   [84]Commissioner of the Australian Federal Police, ‘Affidavit of Mark Creighton’ sworn 28 March 2024 in 45 Bonview Circuit Pty Ltd & Ors v Commissioner of the Australian Federal Police S ECI 2023 04939 [9] (‘Fifth Affidavit of Mark Creighton sworn 28 March 2024’); Nomination Form – Sale of Real Estate dated 29 October 2018, which forms part of exhibit bundle MC 28 March 2024 in the Fifth Affidavit of Mark Creighton sworn 28 March 2024, exhibit page 133.

   [85]Annexure 3, Fifth Affidavit of Mark Creighton sworn 28 March 2024, 25.

   [86]Fifth Affidavit of Mark Creighton sworn 28 March 2024 [21]; Correspondence with HWL dated February 2024, which forms part of exhibit bundle MC 28 March 2024 in the Fifth Affidavit of Mark Creighton sworn 28 March 2024, exhibit pages 152–5.

   [87]Fifth Affidavit of Mark Creighton sworn 28 March 2024 [9]; also stated generally in relation to commercial properties in Commissioner of the Australian Federal Police, ‘Affidavit of Mark Creighton’ sworn 11 December 2023 in 45 Bonview Circuit Pty Ltd & Ors v Commissioner of the Australian Federal Police S ECI 2023 04939 (‘Third Affidavit of Mark Creighton sworn 11 December 2023’).

   [88]Second Affidavit of Mark Creighton sworn 10 November 2023 [38].

   [89]Fifth Affidavit of Mark Creighton sworn 28 March 2024 [9]; Nomination Form – Sale of Real Estate dated 29 October 2018, which forms part of exhibit bundle MC 28 March 2024 in the Fifth Affidavit of Mark Creighton sworn 28 March 2024, exhibit page 133.

   [90]Second Affidavit of Mark Creighton sworn 10 November 2023 [37]; Fifth Affidavit of Mark Creighton sworn 28 March 2024 [6(a)].

   [91]Second Affidavit of Mark Creighton sworn 10 November 2023 [37].

2. The fifth affidavit addresses the source of some of the funds paid at settlement. Southlink Grosvenor paid the balance of the purchase price, $35,562,536.73 (including stamp duty and lodgement fee of $2,054,321.30). That sum was drawn over two transactions on 18 December 2018 and 19 December 2018 from a Southlink Grosvenor ANZ account ending in 832, an account opened on 22 November 2018 (ANZ account 832).[92]

   [92]Annexure 3, Fifth Affidavit of Mark Creighton sworn 28 March 2024, 48.

3. The fifth affidavit traces funds transferred into this account. One series of transfers is relevant passing through a CBA account ending in 029 (CBA account 029), [93] in the name of Bloom International Trading Pty Ltd (Bloom International). Bloom International was incorporated on 12 October 2018 and the bank account opened on 16 October 2018. Initial funds were transferred into the account on 10 December 2018. Three transfers are made into CBA account 029 on this day. One is a deposit in the sum of $1,000,000, with the narration ‘Mr Ye Qu REF 2018121000023890’. The other two deposit transfers from other sources total $300,000. [94] The deposit with the narration ‘Ye Qu’ forms the initial funds deposited in this new account. The bank statement for the Bloom International CBA account 029 shows four transactions on 10 December 2018, the three deposits identified and one debit of $1,300,000 with a narration ‘Bloom Internatio Jie Zhu’.[95]

   [93]Ibid 25.

   [94]Ibid 25.

   [95]Relevant pages of CBA account ending in 029 dated 16 January 2019, which forms part of exhibit bundle MC 28 March 2024 in the Fifth Affidavit of Mark Creighton sworn 28 March 2024, exhibit page 227.

4. Documents relating to Bloom International were located during the execution of search warrants at the home of Zhu and her husband Qu and on a device used by Qu.

5. On 10 December 2018, $1,300,000 is credited to a South Fuji Developments ANZ account ending in 581 (ANZ account 581) with a narration ‘Transfer from Bloom Internatio Jie Zhu’.[96] There is then a transfer from that South Fuji Developments ANZ account of $31,743,928.24 on 14 December 2018 into Southlink Grosvenor ANZ account 832.[97] The tables of transactions that form part of Annexure 3 shows this amount as a withdrawal from the South Fuji Developments ANZ account 581 and a deposit into the Southlink Grosvenor ANZ account 832.[98]

   [96]Annexure 3, Fifth Affidavit of Mark Creighton sworn 28 March 2024, 25.

   [97]Ibid 25.

   [98]Ibid 26 and 48.

6. According to the table of transfers forming part of Annexure 3 , this transfer is also the first deposit in the newly opened Southlink Grosvenor ANZ account 832.[99] Two other transfers into this account are noted: one transfer dated 18 December 2018 totalling $4,652,097.81, described as ‘proceeds of discount of commercial bill’ and one transfer on 18 December 2018 totalling $67,976 from another Southlink entity, bringing the balance of Southlink Grosvenor ANZ account 832 to $36,464,002.05 at the time of settlement for 45/54 Grosvenor Street.[100] The funds disbursed at settlement on 18 and 19 December 2018 totalled $35,562,536.73.[101]

   [99]Ibid 48.

   [100]Ibid 25 and 48.

   [101]Annexure 3, Fifth Affidavit of Mark Creighton sworn 28 March 2024, 48.

7. Creighton deposes that the tracing exercise in Annexure 3 is undertaken on the presumption that last funds in are first withdrawn, which he describes as a tracing principle that assumes the latest deposit was for the purpose of funding the next debit transaction.[102]

   [102]Fifth Affidavit of Mark Creighton sworn 28 March 2024 [28].

8. The second affidavit also sets out payments received relating to the Grosvenor properties. A Westpac account belonging to Ding and ending in 871 (Westpac account 871) is restrained by order of 24 October 2023. Information about that account was relied on by the Commissioner in the first part of the revocation application and is discussed in my first reasons. The second affidavit deposes to bank statements demonstrating that in the period between February 2019 and May 2021 payments totalling $1,005,334.52 were made on a monthly basis into Westpac account 871 and described as either ‘Grosvenor Rent’ or ‘Grosvenor No2’.[103] The amount identified as ‘Grosvenor rent’ totals $725,627.02 over that period.

   [103]Fifth Affidavit of Mark Creighton sworn 28 March 2024 [57]; Second Affidavit of Mark Creighton sworn 10 November 2023 [39], [44] and [45].

D.3.2   Suspicions as to 45 & 50–54 Grosvenor Street

1. Creighton articulates the following suspicions about 45/54 Grosvenor Street:

   (a)The properties have been acquired partly using proceeds derived from Zhu’s involvement in Long River MLO;[104]

   (b)The properties have been used as an instrument in dealing with the proceeds of crime;[105]

   (c)Jie Zhu is a straw director of Zhu Investments[106] which is under the effective control of Zhu.[107]

   (d)Zhu Investments has a financial interest in the properties by reason of its 25% shareholding in the registered proprietor company, Southlink Grosvenor;[108]

   (e)Significant amounts of funds have been transferred to Southlink Grosvenor at the direction of Zhu, for the purpose of Zhu securing a financial interest in the properties, which to a great extent are derived from funds from Long River MLO and so are proceeds of crime and are funds not disclosed to the ATO.[109]

   (f)These funds include $1,000,000 transferred from Qu to Bloom International and on to South Fuji Developments and forms part of the transfer to Southlink Grosvenor ANZ account 832 from which the balance of funds due at settlement were drawn.[110]

   (g)Companies, of which Bloom International is one, are used as facilitator companies for the receipt and transfer of funds derived from unlawful activities.[111]

   (h)Rent income marked Grosvenor is paid into Westpac account 871 of Ding, sister-in-law of Zhu. That account is suspected of being controlled by Zhu and is currently restrained on that basis.[112] That income has not been disclosed by Zhu Investments or by Ding as income to the ATO.[113]

   (i)Zhu will be entitled to a distribution of profits to be generated from any future development of the 45/54 Grosvenor Street.[114]

   [104]Second Affidavit of Mark Creighton sworn 10 November 2023 [12(b)] –[12(c)]; Fifth Affidavit of Mark Creighton sworn 28 March 2024 [29].

   [105]Ibid.

   [106]Second Affidavit of Mark Creighton sworn 10 November 2023 [46].

   [107]Commissioner of the Australian Federal Police, ‘Affidavit of Mark Creighton’ sworn 14 December 2023 in 45 Bonview Circuit Pty Ltd & Ors v Commissioner of the Australian Federal Police S ECI 2023 04939 (‘Fourth Affidavit of Mark Creighton sworn 14 December 2023’).

   [108]Second Affidavit of Mark Creighton sworn 10 November 2023 [29].

   [109]Ibid [72]–[73].

   [110]Annexure 3, Fifth Affidavit of Mark Creighton sworn 28 March 2024, 25.

   [111]Fifth Affidavit of Mark Creighton sworn 28 March 2024 [43].

   [112]Second Affidavit of Mark Creighton sworn 10 November 2023 [27(d)].

   [113]Ibid [73].

   [114]Fifth Affidavit of Mark Creighton sworn 28 March 2024 [58].

2. The suspicions are summarised at [54] of the fifth affidavit, set out in full below at [109].

D.4      30–36 Grosvenor Street

D.4.1   Information recorded in the affidavits

1. Creighton sets out the following information about 30–36 Grosvenor Street:

   (a)that Southlink Grosvenor 2 was incorporated on 12 February 2019.

   (b)Southlink Grosvenor 2 is a special purpose company incorporated for the purpose of becoming the registered proprietor of 30–36 Grosvenor Street. [115]

   (c)Since incorporation, Zhu Investments has held 25 of 100 issued $1 shares in Southlink Grosvenor 2.[116]

   (d)Southlink Grosvenor 2 is the registered proprietor of 30–36 Grosvenor Street, which was purchased on 15 February 2019 for $17,310,000.[117]

   (e)The deposit of $1,731,000 was paid from a South Fuji Developments ANZ account ending in 185.

   (f)Settlement of the purchase occurred on 14 August 2019. The balance of the purchase price due at settlement was $16,533,902.36.

   [115]See ibid [9]; also stated generally in relation to commercial properties in the Third Affidavit of Mark Creighton sworn 11 December 2023.

   [116]Second Affidavit of Mark Creighton sworn 10 November 2023 [42]; Fifth Affidavit of Mark Creighton sworn 28 March 2024 [17].

   [117]Fifth Affidavit of Mark Creighton sworn 28 March 2024 [6(b)].

2. Settlement funds comprised $8,655,000 sourced from a CBA loan, a further $7,875,080.76 paid by Southlink Grosvenor 2, and $3,821.60 paid by ‘the purchaser’.[118]

   [118]Ibid [22].

3. The Commissioner relies on two sources of funds suspected to be part of the funds paid by Southlink Grosvenor 2 at settlement. They are:

   (i)Two transfers from a Chang Jiang Imports CBA account ending in 410 (CBA account 410) to a Southlink Grosvenor 2 ANZ account ending in 226 (ANZ account 226) on 8 August 2019 totalling $1,410,000, one for $610,000 and the other for $800,000; and

   (ii)Five transfers from a Bank of China (BOC) account ending in 013 in the name of Jie Zhu (BOC account 013) to Southlink Grosvenor 2 ANZ account 226 between 6 and 9 August 2019 via IFTIs totalling $800,080.

4. The IFTIs for the five transfers from Jie Zhu’s BOC account 013 are summarised in a table in the fifth affidavit.[119] There are four payments of $159,988 and one of $160,129 in round dollars, totalling $800,080.[120] It is these five transfers that were incorrectly exhibited to the fifth affidavit and correctly exhibited to the sixth affidavit.

   [119]The table incorrectly transposed the figures for four of the IFTIs, writing $159,967 rather than the correct figure of $159,987 for each transaction. This was corrected in Commissioner of the Australian Federal Police, ‘Affidavit of Mark Creighton’ sworn 11 June 2024 in 45 Bonview Circuit Pty Ltd & Ors v Commissioner of the Australian Federal Police S ECI 2023 04939 (‘Sixth Affidavit of Mark Creighton sworn 11 June 2024’). The corrected figures have been used in this judgment.

   [120]Fifth Affidavit of Mark Creighton sworn 28 March 2024 [32].

5. The Southlink Grosvenor 2 ANZ account 226 which received the funds subsequently transferred $1,810,000 on 8 and 9 August 2019 to another Southlink Grosvenor 2 account, this one CBA account 604. The settlement funds for 30–36 Grosvenor Street were paid from that CBA account on 14 August 2019.

6. The seven transfers set out at [71] into Southlink Grosvenor 2 ANZ account 226 and out again to Southlink Grosvenor 2 CBA account 604 of $1,810,000 are best illustrated by a table drawn from the diagram and bank records summarised in Annexure 3.

Source	Date of deposit into Southlink Grosvenor 2 ANZ account 226	Date of transfer to Southlink Grosvenor 2 CBA account 604	Transfer description
IFTI from Jie Zhu BOC account 013	$159.987.72 6 August 2019	806017001
IFTI from Jie Zhu BOC account 013	$159,987.70 6 August 2019	806023249
IFTI from Jie Zhu BOC account 013	$159,987.69 6 August 2019	807021963
Transfer from Southlink Grosvenor 2 ANZ account 226	$479,903.11 8 August 2019	From Jay 1 Jay 1
Transfer Chang Jiang Imports CBA account 410	$610,000 8 August 2019	Transfer from CommBiz CJ
Transfer from Southlink Grosvenor 2 ANZ account 226	$520,096.89 8 August 2019	From Jay 2 Jay 2
Transfer Chang Jiang Imports CBA account 410	$800,000 8 August 2019	Transfer from CommBiz CJ
IFTI from Jie Zhu BOC in 013	$159,987.66 8 August 2019	808021178
Transfer from Southlink Grosvenor 2 ANZ account 226	$649,870.77 9 August 2019	From Jay 3 Jay 3
IFTI from Jie Zhu BOC account 013	$160,129.23 9 August 2019	809019367
Transfer from Southlink Grosvenor 2 ANZ account 226	$160,129.23 9 August 2019	From Jay 3 Jay 3
Total transferred	$2,210,080 ($1,410,000 from Chang Jiang, $800,080 from Jie Zhu)	$1,810,000

1. Rent income marked ‘Grosvenor No 2’ is paid into Ding’s Westpac account 871, sister-in-law of Zhu. The amount of deposits referenced as ‘Grosvenor No 2’ in the account between February 2019 and May 2021 is $279,707.50.[121] That income has not been disclosed by Zhu Investments or by Ding as income to the ATO.[122]

   [121]Second Affidavit of Mark Creighton sworn 10 November 2023 at [44]. This total is derived from the total amount of rental payments of $1,005,334.52 identified in Second Affidavit of Mark Creighton sworn 10 November 2023 at [45] less the amount of $725,627.02 attributed to Southlink Grosvenor in the same affidavit at [39].

   [122]Ibid [73].

D.4.2   Suspicions as to 30–36 Grosvenor Street

1. Creighton articulates the following suspicions about 30–36 Grosvenor Street:

   (a)The property has been acquired partly using proceeds derived from Zhu’s involvement in Long River MLO;[123]

   (b)The property has been used as an instrument in dealing with the proceeds of crime;[124]

   (c)Jie Zhu is a straw director of Zhu Investments[125] which is under the effective control of Zhu.[126]

   (d)Zhu Investments has a financial interest in the property by reason of its 25% shareholding in the registered proprietor company, Southlink Grosvenor 2;[127]

   (e)Significant amounts of funds have been transferred to Southlink Grosvenor 2 at the direction of Zhu, for the purpose of Zhu securing a financial interest in the property, which to a great extent is derived from funds from Long River MLO and so are proceeds of crime[128] and are funds not disclosed to the ATO.[129]

   (f)These funds include $1,410,000 tranced from Chang Jiang Imports and $800,080 traced from Jie Zhu.

   (g)The $800,080 transferred by Jie Zhu as described in the second affidavit at [43] and in the table in the fifth affidavit at [32][130] is suspected to have been transferred on behalf of Zhu and derived from her involvement in the Long River MLO;

   (h)Ding’s Westpac account 871 which receives funds associated with the property is suspected to be controlled by Zhu.[131] These funds are suspected to be monthly rent payments from lessees.[132]

   (i)Zhu will be entitled to a distribution of profits to be generated from any future development of 30–36 Grosvenor Street.[133]

   [123]Ibid [12(b)] –[12(c)]; Fifth Affidavit of Mark Creighton sworn 28 March 2024 [29].

   [124]Ibid.

   [125]Second Affidavit of Mark Creighton sworn 10 November 2023 [46].

   [126]Fourth Affidavit of Mark Creighton sworn 14 December 2023.

   [127]Second Affidavit of Mark Creighton sworn 10 November 2023 [29].

   [128]Second Affidavit of Mark Creighton sworn 10 November 2023 [72].

   [129]Second Affidavit of Mark Creighton sworn 10 November 2023 [73].

   [130]Figures corrected in Sixth Affidavit of Mark Creighton sworn 11 June 2024 at [8].

   [131]Second Affidavit of Mark Creighton sworn 10 November 2023; Fifth Affidavit of Mark Creighton sworn 28 March 2024 [16].

   [132]Fifth Affidavit of Mark Creighton sworn 28 March 2024 [57].

   [133]Fifth Affidavit of Mark Creighton sworn 28 March 2024 [58].

2. Although the Chang Jiang transfers set out above are not specifically referenced in the ‘examples’ of transfers that Creighton states demonstrate links between the Southlink entities and Zhu family, he says generally that the diagram that is Annexure 3 illustrating the movement of funds used to pay the deposit and settlement of the Grosvenor properties (collectively) was prepared by qualified professional experts in financial analysis and funds tracing and he has relied on their analysis and spreadsheets.[134] Annexure 3 contains both the diagram and the spreadsheets compiled from the available source documents and specifically references the transfers relied on.

   [134]Ibid [26].

3. The suspicions are summarised at [54] of the fifth affidavit, relevant to all Grosvenor properties. The affidavit states:

   Based upon the above evidence I have collated as part of my investigation, I suspect that:

   (a)Jing Zhu has acquired an interest in the Grosvenor properties, which interest includes a right to a share of the rents received each month and any profits to be derived from any future development of those properties;

   (b)Jing Zhu’s interest in the Grosvenor properties has been acquired by providing the relevant entities in the Southlink group of companies with funds required to acquire each relevant property, which funds, based upon her declared income to the Australian Taxation Office is unexplained and for the reasons set out in my 24 October affidavit, I suspect to be derived from her participation in the Long River MLO;

   (c)The Grosvenor properties were acquired with the proceeds of crime due to the large sums of unexplained funds used to settle the purchase of each property, which sums are unexplained not only by reference to the deposits into bank accounts which appear to be from totally unrelated parties but also due to the discrepancies between the reported income of each individual or entity. Also, by reference to the manner in which funds are moved between bank accounts of entities and between offshore and onshore accounts, which for the reasons set out below, confirms to well known patterns of money laundering;

   (d) The Grosvenor properties have all been used as instruments of money laundering due to the unexplained sources of funds used to acquire them, the corporate structures in place to hold these properties, which often rely on corporate shareholdings within shareholdings, the layering of funds between accounts and the comingling of suspect funds with legitimate loan funds. There I suspect, are indicators of attempts to disguise not only the source of funds used to acquire the properties but also the true owners of the beneficial interest in these properties.

4. Creighton then sets out grounds for this summary of suspicions in the fifth affidavit at paragraphs [56] to [64]. These grounds are in addition to specific references to information grounding a particular suspicion expressed at other places in the second, third and fifth affidavits. They include specific other transactions moving funds between Zhu family members and various Southlink entities which transactions are not relied on for the current application.

5. Creighton also states two other general suspicions:

   (a)Zhu and her husband have moved substantial illicit funds derived from Long River MLO ‘offshore over the years and arrange for funds to be re-directed to Australia as required’;[135] and

   (b)Zhu and her husband have moved substantial illicit funds derived from Long River MLO ‘offshore over the years and arrange for funds to be re-directed to Australia as required’.[136]

D.5      Zhu shareholdings

[135]Ibid [35].

[136]Ibid [35].

D.5.1   Information recorded in the affidavits

1. Zhu Investments is described as an illustration of a company having a family member as director who performs no real role in the companies and exercise no control over the company bank accounts.[137] Jie Zhu is suspected to be a straw director[138] and his wife Ding is also identified as a trusted family member. With reference to the suspicion of using trusted family members articulated in paragraph [94] of the first affidavit, in the second affidavit Creighton identifies the sole director, secretary and shareholder of Zhu Investments as Jie Zhu, who is one of Zhu’s three brothers.[139] He resides in China and visits Australia from time to time. His wife Ding, is the sole director and shareholder of Felixz Investments.[140]

   [137]First Affidavit of Mark Creighton sworn 24 October 2023 [15]–[94].

   [138]Second Affidavit of Mark Creighton sworn 10 November 2023 [46].

   [139]Ibid [16].

   [140]Fifth Affidavit of Mark Creighton sworn 28 March 2024 [18].

2. Zhu Investments has a 25% shareholding in both Southlink Grosvenor and Southlink Grosvenor 2.[141] The company searches confirm this and that the shares, valued at $1 each, were issued at the time of incorporation.

   [141]Second Affidavit of Mark Creighton sworn 10 November 2023 [18].

3. In the second affidavit, Creighton deposes that Jie Zhu is not a resident of Australia[142] and that Zhu Investments could not be located on the ATO database as a registered taxpayer.[143]

   [142]Ibid [67].

   [143]Ibid [69].

4. The fifth affidavit states no tax has been paid on rental income derived from the Grosvenor properties by Zhu, her family or entities connected to her.[144]

   [144]Fifth Affidavit of Mark Creighton sworn 28 March 2024 [49].

5. In his fifth affidavit Creighton sets out Jie Zhu’s travel movements exhibiting a schedule of arrival and departure dates sourced from ABF records. Creighton deposes that it demonstrates that Jie Zhu visits Australia intermittently.[145] No particular suspicion arises from the timing of visits.

   [145]Ibid [18].

D.5.2   Creighton’s suspicions as to Zhu Investments and their grounds

1. Creighton suspects that Zhu holds a financial interest in the Grosvenor properties because he suspects she controls the Zhu Investments shareholding in the companies that are the registered proprietors of the properties.[146]

   [146]Second Affidavit of Mark Creighton sworn 10 November 2023 [15] and [46].

2. As to the five IFTIs totalling $800,080 transferred in the period from 5 to 9 August 2019, Creighton suspects these were transfers made by Jie Zhu on behalf of Zhu Investments[147] to Southlink Grosvenor 2. He suspects the transfers were:

   (a)related to the settlement of 30–36 Grosvenor Street and were made at the direction of Zhu;[148] and

   (b)the funds used were derived from Zhu’s involvement in Long River MLO and so the Zhu Investments contribution is proceeds or an instrument of offending.[149]

   [147]Ibid.

   [148]Ibid.

   [149]Fifth Affidavit of Mark Creighton sworn 28 March 2024 [34].

3. Creighton suspects that amounts paid into the Ding’s Westpac account 871 on a monthly basis are rent paid by lessees of the Grosvenor properties. That account is restrained by 24 October 2023 orders in part on the basis that it is an account controlled by Zhu.

D.6      Reasons for seeking ex parte restraint

1. The second affidavit deposed to the prospect of there being a substantial amount of equity in the properties and loan facilities that could be further drawn on, dissipating equity in the properties in circumstances where the AFP does not have access to complete property or financial records. Creighton says he assumes, based on the known information about the Grosvenor properties, that the payment of income from the Grosvenor properties to Ding means that rental income is an amount in excess of that required to service any mortgage and so indicative of substantial equity.

2. Additionally, the first affidavit addressed the risk of dissipation of funds in accounts controlled by Zhu and the other suspects and a large family network employed to hold assets, including offshore accounts. This gives rise to a risk of the quick transfer of funds.[150]

   [150]First Affidavit of Mark Creighton sworn 24 October 2023 [191].

3. It is apparent from the affidavits as a whole that an investigation into the reach of Long River MLO is an ongoing one.

4. The November restraining orders noted in other matters that the Court was satisfied it was appropriate to consider the application for restraint without notice pursuant to s 26(4) of the POC Act and made an order that it be heard and determined ex parte.

E          NO GROUNDS TO RESTRAIN

1. As with the first part of the revocation application the Commissioner does not press a suspicion that the Grosvenor properties are under the effective control of Zhu, only that they are proceeds or an instrument of offending.

E.1       Applicants’ submissions

1. The aide memoire provided by the applicants at the hearing identified four deficiencies in the material now before the Court regarding property of the fourth to sixth applicants:

   (a)there was no stated suspicion that any of the Zhu shareholdings were under the effective control of Zhu as the fourth affidavit was not relied on;

   (b)the failure to distinguish between the companies that hold the Grosvenor properties and the shares in those companies means that grounds to suspect the shares are an instrument of offending are not articulated;

   (c)Creighton’s suspicion in respect of the Grosvenor properties is stated but only in respect of them being proceeds, not instruments; and

   (d)the grounds for Creighton’s suspicion as to the Grosvenor properties are not reasonably held.[151]

   [151]Fourth to Sixth Applicants’ Submissions 27–8 [115].

2. The argument surrounding the first deficiency has been outlined above at paragraphs [40] to [43].

3. Regarding the second deficiency, the applicants contend that the stated suspicion that the companies are instruments of offending treats the companies as if they were property and not legal persons. The applicants submit that where there is offending by a company it does not result in the shares in that company being instruments of that offending. The applicants submit that the Commissioner’s suspicion is misconceived as the Commissioner needs to show how the relevant shareholdings were used as an instrument of an offence, rather than identify the action of the company itself. The applicants highlight paragraphs [53] to [55] and [71] to [73] of the Commissioner’s written submissions[152] as demonstrating this error in analysis. These paragraphs state that the registered proprietor company is a special purpose vehicle for holding the real property and that purchase funds came from a relevant Southlink account, some of which have been partly traced to suspected offending. Therefore, it is reasonable to suspect that the real property is proceeds and an instrument of offending, and that there are also reasonable grounds to restrain the relevant shares in the Southlink companies.

   [152]The Commissioner’s No Grounds Submissions.

4. As to the third deficiency, the applicants concede that there is no distinction between proceeds and instrument when applied to the real property in this case. The third deficiency will not be determinative of the application if the Court is satisfied that the Grosvenor properties were purchased with proceeds of offending. The distinction as to instrument, raised by this deficiency, bears only upon the issue to be determined as to the Zhu shareholdings.

5. The applicants otherwise accept that, for the Grosvenor properties, Creighton has stated relevant suspicions in his affidavits and has set out the grounds for those suspicions.[153] While accepting Creighton actually holds those suspicions, the applicants contend that the Court ought not be satisfied that the grounds are reasonable.[154]

   [153]June 2024 Transcript 37.8–13.

   [154]June 2024 Transcript 37.14–20. This is not to overlook the criticisms of those stated suspicions in the Fourth to Sixth Applicants’ Submissions at 6–8 [20]–[27].

6. As to the fourth deficiency, the fourth to sixth applicants contend that the grounds are not reasonable for five main reasons as set out in Part F of their written submissions at paragraphs [28] through to [97] and highlighted by their oral submissions. These reasons are:

   (a)First, the evidence does not point to a basis to suspect there was money laundered and available for distribution in 2018, only that it is suspected later in time.[155]

   (b)Second, when Creighton voiced suspicions about the transfers from Chang Jiang Imports to Southlink Grosvenor 2 on 8 August 2019, on the information he had to hand no such company existed. Although the company was in fact registered on 27 July 2018, as demonstrated by the company extract tendered at the hearing, the error goes to whether Creighton’s suspicion was reasonable on the information he had.

   (c)Third, it is unsurprising that overseas investors would use a money remitter and the fact that the settlement funds came through Chang Jiang Imports, which also remitted legitimate funds, means that tracing the money from Chiang Jiang Imports to Southlink Grosvenor 2 is not sufficient to ground a reasonable belief that those funds are laundered money.[156]

   (d)Fourth, the $800,080 transferred by IFTIs from Jie Zhu to Southlink Grosvenor 2 for investment in Australia by Zhu Investments, of which Jie Zhu is director, is not sufficient information for Creighton to extrapolate that both the source and destination of those funds is in fact Zhu.[157]

   (e)Fifth, the incomplete financial evidence referred to in the fifth affidavit has not been updated. That affidavit deposed to 12 outstanding bank vouchers which would accurately disclose the source of transfers into two South Fuji Developments bank accounts and would therefore be relevant as to the source of funds for the purchase of 45/54 Grosvenor Street. The gap in the evidence undermines the reasonableness of the suspicions because they are based on that incomplete information.

   [155]Dealt with principally at Fourth to Sixth Applicants’ Submissions 9–11 [33]–[41].

   [156]Fourth to Sixth Applicants’ Submissions 19 [76].

   [157]Fourth to Sixth Applicants’ Submissions 17–9 [65]–[76].

7. The earliest occasion of alleged dealings with proceeds of crime outlined in the first affidavit is the Wickham fraud and the identification of Chang Jiang Imports receiving proceeds of the Wickham fraud. The applicants submit that the error in registration date of Chang Jiang Imports in the first affidavit, being a date after the funds were said to have been received, together with the other facilitator companies referred to in that affidavit being registered in 2021 and 2023, highlights the lack of any reasonable basis to suspect proceeds were being transferred for the purchase of the Grosvenor Street properties in 2018 and 2019. Further, offending with which Zhu is now charged relates only to conduct in 2023. The applicants submit, therefore, that when the November restraining orders were made Creighton had no reasonable grounds to suspect the properties purchased in 2018 and 2019 were using funds that were proceeds because funds could not be tracked past the South Fuji Developments account in circumstances where the settlement funds were withdrawn from a general treasury account in a different amount than the suspected proceeds that were deposited.[158]

   [158]June 2024 Transcript 50.19–51.3.

8. The applicants submit that even assuming that Long River MLO was operating in 2018, there is no reasonable basis to suspect that funds used for the purchase of the Grosvenor properties were from Long River MLO. Even though some settlement funds have been traced by the fifth affidavit, large sums used for the purchases have not. The present information is qualified by outstanding bank vouchers which would demonstrate the true source or destination of transfers. Further, the applicants submit that the information contained in Annexure 3 is unreliable, unexplained, not finalised and previous attempts to diagrammatically outline money transfers have been shown to be ‘riddled with error’ as discussed in the first reasons. The unreliability of the information is heightened by the confusion and errors demonstrated by Creighton’s viva voce evidence. The applicants maintain that the information in the fifth affidavit, like the earlier affidavits, cannot safely be relied on and no weight should be placed on it.

1. The Commissioner has traced the movement of funds from Qu through intermediary accounts to the Southlink Grosvenor ANZ account 832 from which settlement funds were drawn in the week prior to settlement of 45/54 Grosvenor Street. The timing of the movement of funds and the ultimate destination are both matters that makes Creighton’s suspicion that the property was purchased in part using funds sourced from Qu to be a reasonable one. The transfer from Qu with subsequent transfers to Southlink Grosvenor referencing Jie Zhu and not Qu is also information that links Qu and Zhu with Zhu Investment funds and goes to a suspicion as to effective control.

2. Another matter relevant to the reasonableness of the suspicion is the absence of anything in Qu’s disclosed income that might explain his access to funds of the magnitude transferred. The first affidavit sets out Qu’s declared income from ATO records where for the five financial years from 2015 to 2019 he disclosed an annual income of no greater than $37,201.[177] On its face the available information does not account for such funds so a suspicion that a transfer of $1,000,000 is related to suspected money laundering offences is reasonable.

   [177]First Affidavit of Mark Creighton sworn 24 October 2023 [92].

3. The applicants also submit that the funds transferred by Qu, at best, contribute to the 25% interest of Zhu Investments in the Southlink companies not to any property acquired by the company. The applicants submit the funds contribute not to the property purchased, but to the 25% interest in the purchaser company, again raising the distinction between the shareholders interest in the company and the assets owned by the company.[178]

   [178]June 2024 Transcript 92.8–11.

4. The submission that offending by a company does not make the company shares proceeds misses the point. The company is not suspected of offending, Zhu is suspected of offending. It is not presently relevant whether or not the company had knowledge of the source of funds provided, what is relevant is whether those funds made available to the companies are suspected of originating in the Long River MLO. The point of the tracing exercise in identifying proceeds is not that the funds were put in the hands of a company by a shareholder, but that they were put in the hands of the purchaser of property for its acquisition. If the Court is satisfied that the suspicion that the settlement funds are proceeds is reasonable and that they were provided to the purchaser for the acquisition of particular property, then whether funds were provided to a company who used them in this way is the relevant analysis. . This may not demonstrate that the shares are instruments of offending, but it can demonstrate that proceeds of offending have been used to acquire property.

5. I do not accept that the Commissioner is misconceived in his submissions as to the distinction between a company and its shares as set out at [96]. It is true that in each paragraph relied on, the reasoning as to the real property also ‘applies to make Southlink an instrument’[179] could be read as a reference to the company and not to the shares in the company. However, the concluding paragraph makes clear that there is no confusion between the company and its shareholding. The submission specifically states ‘there are therefore reasonable grounds [to restrain the shares]’.[180]

   [179]As stated at [55]and [74]-[75] of the Commissioner’s written submissions 8 May 2024

   [180]The Commissioner’s No Grounds Submissions 12 [55].

6. The only information about the purchase of shares by Zhu Investments in Southlink Grosvenor and Southlink Grosvenor 2, is obtained from the company extracts. In each case 100 $1 shares were issued on registration of the company, establishing a $25 share investment in each company. The fund transfers relied on by Creighton post-date incorporation in each case, are proximate to settlement and are ultimately paid into the accounts from which settlement funds are drawn. The applicants’ submission that $1,000,000 is a contribution to the 25% interest in the purchaser company but not to the settlement funds of the particular asset is mere assertion. The fourth to sixth applicants have not put on any evidence to support an argument that the funds as traced are explained by some other arrangement than funds contributed to the purchase of the Grosvenor properties.

7. Even if I am wrong that the contribution of Jie Zhu is to the purchase price of 30–36 Grosvenor Street but is only related to Zhu Investments shares in Southlink Grosvenor 2 as the applicants submit, the Chang Jiang funds transfer alone would be sufficient to demonstrate a reasonable suspicion to support restraint on the basis of the property being partly derived from proceeds.

8. I do not accept that the Commissioner was required to turn his mind to whether some lesser interest in property ought be restrained if a suspicion of effective control of the whole property could not be maintained. If the property is suspected of being partly derived from proceeds of offending, that is sufficient to restrain the whole of the property. Sections 18 and 19 of the POC Act do not refer to restraint of ‘interests’ in property. Section 18 refers to specified property, in the alternative to ‘all property’ of a suspect in paragraphs (a) to (ba) and refers to specified property of another person in the remaining sub-paragraphs. It is, on a plain reading directed to identifying the property in question, rather than the nature of the interest. As is clear from the Hart, at the point of restraint the focus is on the identification of the property concerned, and not with identifying the interests in that property.

9. Finally, as to the Grosvenor properties, when applying for restraint should Creighton have turned his mind to whether the Southlink companies were innocent third parties who received funds as part of financing a commercial investment for fair value, as the applicants contend?[181] The short answer to the question is no. As her Honor said in Tjongosutiono in order for property to cease being the proceeds of offending, it must first be found to be proceeds.[182] The question of cessation generally is not one for consideration at the time of restraint but subsequently.

   [181]Fourth to Sixth Applicants’ Submissions 21 [84].

   [182]Tjongosutiono (n 18) [113]–[114].

10. The applicants point to an undated request for payment document, translated from Chinese in relation to a Southlink Alvina project, a document located at the home of Zhu and Qu during the execution of the search warrant. The document requests shareholders to make payment to cover the cost of the project, noting the shareholders accumulated capital investment to date and the target amount of the current request. No such document relating to the Grosvenor properties is identified and, while perhaps of some interest arousing a suspicion as to proceeds as to other properties, the Southlink Alvina document says nothing as to the source of any contribution made pursuant to that request.

11. As stated earlier, the onus on a revocation application is on the applicants. It is for the fourth to sixth applicants if they choose, to demonstrate that the funds provided by them were legitimate funds forming part of a commercial financing arrangement and thereby dispel the reasonableness of the suspicion held by Creighton. They have led no evidence as to the commercial arrangements between Zhu, Qu or Zhu Investments and the respective Southlink companies. The requirement that the authorised officer go beyond the articulation of reasonable suspicions and consider whether any funds might have ceased to be proceeds in the hands of a third party is not stated in the POC Act and not a matter raised by ss 18 or 19. The POC Act specifically targets proceeds, including property in the hands of ‘innocent’ third parties at the point of restraint.

12. Nor is the position of third parties a relevant consideration on a revocation application, absent evidence led by an applicant that casts doubt on the reasonableness of the suspicions as to whether the funds are proceeds or were funds used to acquire or otherwise contribute to the property. In this regard reliance on Phan is misconceived. In Phan the registered proprietor of a house and land restrained under the POC Act (Quach) applied for revocation of the restraint. The property was restrained because of offending on the part of Phan including charges of sophisticated drug trafficking for which Phan was convicted. The issue on revocation was whether the property ceased to be proceeds on purchase by Quach for fair value.

13. The purchase short settled by an amount of approximately $192,000. In the hands of Quach the house and land was suspected to remain proceeds for three reasons: first, because the acquisition was not for sufficient consideration; second, because Quach had, or ought to have had, a suspicion that it was proceeds of Phan’s offending; or third, that it remained under the effective control of Phan. Unexplained deposits in Quach’s account were suspected to be proceeds of drug activities of Phan and the income of Quach did not support the purchase. Quach swore an affidavit dealing with the sources of the unexplained funds and the sources of purchase funds other than from income, including from the sale of other properties. Davis J concluded that the authorised officer maintained certain suspicions which were not reasonable ‘in the face of compelling evidence to the contrary’.[183] However, other suspicions remained reasonable and were not addressed by the explanations as to the legitimate source of funds. Reference was made to an alternative avenue to exclude an interest from forfeiture, but this was not pressed in Quach’s revocation application.

    [183]Phan (n 164) 24 [90].

14. The applicants here challenge the sufficiency of the initial evidence relied on by Creighton but have led no evidence to dispel the suspicions, as expanded by him with further evidence. In those circumstances, the authorised officer is faced with no contradictory evidence that gives rise to a need to reconsider the suspicions previously articulated.

15. The tracing exercise relied on by the Commissioner as articulated in the fifth and sixth affidavits does ground a suspicion as to real property partly derived from proceeds of offending and so the no grounds application fails. The specific and limited tracing exercise overcomes the criticism of lack of information regarding other substantial funds that have contributed to the deposit and settlement of the Grosvenor properties.

E.3.1   Shareholdings

1. Once consideration of the fourth affidavit is included, the no grounds basis for restraining the Zhu shareholdings does proceed along the same line of reasoning as the Felixz shareholding in the first reasons. Jie Zhu, like his wife Ding who is the sole director and shareholder of Felixz Investments, is a trusted family member of Zhu. Jie Zhu uses Zhu’s residential address as the registered address of Zhu Investments. One significant difference is that, unlike Ding who is a tax resident of Australia, there is no information as to Jie Zhu’s income. However, the available information demonstrates that although Zhu Investments is the shareholder in Southlink Grosvenor 2 and therefore Zhu Investments or Jie Zhu is entitled to any income from the Southlink Grosvenor 2, payments associated with 30–36 Grosvenor Street appear to be paid not to either of Jie Zhu or Zhu Investments but to Ding. This raises the circumstances of moving funds to other trusted family or associates, in order to put distance between property and funds, as deposed to by Creighton. In the absence of any information about Jie Zhu’s financial circumstances and given the similarity of the arrangement to that utilised for Felixz, I am satisfied that there are grounds to restrain the Zhu shareholdings on the basis that the shares are under the effective control of Zhu.

F           INTERESTS OF JUSTICE

F.1       Applicants’ submissions

1. All six applicants press the revocation application on the basis that it is otherwise in the interests of justice to grant the application.

F.1.1    Fourth to sixth applicants

1. The fourth to sixth applicants rely on a failure of the Commissioner to alert the Court to deficiencies in the original evidence when seeking the November restraining orders ex parte. They submit that the deficiencies, whether by misstatement or by non-disclosure, were such that justify the revocation of the order.[184] Unlike a no grounds basis for revocation, the applicants submit that the touchstone for revocation in the interests of justice is considered by reference to the information and submissions made to the judicial officer ordering the ex parte restraint.

   [184]June 2024 Transcript 26.17–18.

2. The applicants’ central argument identifies six statements in respect of the Grosvenor properties. The written submissions provided to Gorton J were accompanied by two tables headed ‘Specified Property’ which purported to summarise the Commissioner’s position. One table dealt with real property and the other with shareholdings. The first table set out columns for each identified real property over which restraint was sought, its registered owner and suspected owner/controller, date and cost of purchase and grounds for suspected ownership or control. The other set out similar information in respect of the various shareholdings to be restrained.[185] The impugned statements are in the column headed ‘Grounds for suspected ownership, or control’. They are:

   (a)three statements that Zhu is suspected to own or control the property through its registered proprietor company, which were made once in relation to each title of 45/54 Grosvenor Street and once in relation to 30–36 Grosvenor Street; and

   (b)three statements that Zhu is to have partly acquired each of the real properties using proceeds of crime, or is an instrument of a serious offence, similarly stated once in relation to each of the three titles in question.

   [185]The columns setting out the grounds for suspected ownership or control refers to the respondent. It is clear that this is in fact a reference to the suspect Zhu, there being no respondent to the ex parte application.

3. The applicants submit that the statements are not borne out by the affidavit evidence. Only one of the six statements is footnoted with a reference to the affidavits in support. The suspected ownership or control of 45/54 Grosvenor Street through Southlink Grosvenor is referenced by paragraphs [37] to [39] of the second affidavit. Those paragraphs merely set out the registration of the proprietor company on title, the registration of mortgages on title, the information contained in the Transfer of Land, the incorporation and shareholding of the proprietor company and an analysis of the bank statements of the account in which deposits described as ‘Grosvenor rent’ appear. The applicants submit that none of this evidence addresses grounds for a suspicion as to effective control of the property.

4. Similarly where the shareholdings are concerned, the applicants rely on four statements in the column headed ‘Grounds for suspected ownership, control or instrument’ relating to the shares of Zhu Investments, two statements regarding Southlink Grosvenor and the same statements regarding Southlink Grosvenor 2. They are:

   (a)two statements that Yuan Tao is a person linked to other companies controlled by Zhu, including Tao being a director and shareholder of Jianhao Pty Ltd; and

   (b)statements that Zhu is suspected to have effective control of the two registered proprietor companies, which are being used by her as an instrument to distribute Long River MLO profits to herself and her husband Qu.

5. The statements in the schedule are described by the applicants as misleading and making critical assertions in what purports to be a summary of the evidence. To the extent the statements are footnoted, paragraphs [37] to [39] of the second affidavit referencing the property at 45/54 Grosvenor Street do not assert effective control over the real properties. Further, the applicants submit that in relation to Yuan Tao the ‘links’ are overstated as the only link disclosed by the material is that both Zhu Investments and Jianhao Pty Ltd are shareholders in Southlink Grosvenor and Southlink Grosvenor 2. Further, the applicants submit that the Creighton’s statement about effective control of the proprietor companies is wrong because the company is a legal person not property identified as being under effective control . It was for the Commissioner to identify how shares in the company are used or connected with offending. The distinction was not drawn to the attention of Gorton J by the Commissioner at the ex parte hearing.

6. Apart from reliance on the positive statements made to the Court, the applicants’ written submissions posit four matters that the Commissioner failed to disclose, namely that:

   (a)there were no reasonable grounds to suspect any of the restrained real property was ‘owned or controlled’ by Zhu;

   (b)the restrained real property was owned by Southlink Grosvenor and Southlink Grosvenor 2, companies which had no known affiliation with Zhu or the Long River MLO;

   (c)there were no reasonable grounds to suspect that Long River MLO was laundering funds prior to the acquisition of the restrained real property; and

   (d)Creighton had no information about the source of the funds by which the shares in any of the companies, or the restrained real property were acquired.

7. These four matters reflect the same point that is made regarding the misleading nature of the positive statements.

8. The applicants’ written submissions also contend that the restraint application could and should have been made on notice.[186] The reasons advanced are that there was no immediately apparent risk of removal of property from the jurisdiction, no basis to suspect the two Southlink Grosvenor companies were involved with Long River MLO and would dissipate property and Creighton only posited the position that ‘there could be substantial equity in the properties’.[187]

   [186]Fourth to Sixth Applicants’ Submissions 24 [101].

   [187]Second Affidavit of Mark Creighton sworn 10 November 2023 [75].

9. The submissions also raise a general complaint as to the Commissioner’s alleged ‘practice’ of making all applications for restraint ex parte and of relying on general ‘and/or submissions’ as to the various statutory criteria for restraint. They submit that such an approach provides no specificity as to the grounds.

F.1.2    First to third applicants

1. The first to third applicants adopt the submissions of the fourth to sixth, and further submit that:

   (a)none of the affidavit material before the Court on 16 November 2023 contained a stated suspicion that the Felixz shareholdings were subject to Zhu’s effective control, including failing to articulate a suspicion that Ding was a ‘straw director’; and

   (b)the submissions advanced by the Commissioner in relation to Felixz Investments at the time of seeking restraint were not based on any affidavit material before the Court.

2. All applicants submit that the Court should not endorse the ‘vague and general way’[188] in which the restraining order was sought and obtained and that the interests of justice demand that, even if the Commissioner has now assembled evidence that would now sustain the orders, restraint be revoked.

   [188]Fourth to Sixth Applicants’ Submissions 29 [122]; see also First to Third Applicants, ‘First to Third Applicants’ Submissions on Revocation in the Interests of Justice’, Submissions in 45 Bonview Circuit Pty Ltd & Ors v Commissioner of the Australian Federal Police S ECI 2023 04939, 13 May 2024, 7 [23] (‘First to Third Applicants’ Submissions’).

F.2       Respondent’s submissions

1. The respondent drew the Court’s attention to the Supplementary Explanatory Memorandum of the Bill introducing s 42(5)(b) of the POC Act, which described the two purposes of the section:

   The proposed subsection will allow a court to revoke a restraining order if it is satisfied that there is no basis on which to make the restraining order at the time that the revocation application is considered, or if the court is satisfied that it is otherwise in the interests of justice to do so. This amendment will ensure that, in addition to considering whether there is a basis for making a restraining order, a court that is hearing a revocation application will also be able to have regard to other matters that are relevant to the administration of justice.[189]

   [189]Senate of the Parliament of the Commonwealth of Australia, Crimes Legislation Amendment (Serious and Organised Crime) Bill 2009, Supplementary Explanatory Memorandum Amendments to be Moved by the Government, Amendment (6), 3–4.

2. The Commissioner agrees with the position articulated by the applicants, that the two grounds in s 42(5) of the POC Act address separate considerations, or as the applicant described it, ‘two conceptual paths’.[190] However, he submits that the applicants, by their interests of justice ground, are in fact attempting to reventilate their no grounds arguments using the language of interests of justice to force rather than avoid an overlap.

   [190]June 2024 Transcript 25.7–10 and 83.30–84.3.

3. In essence, the Commissioner submits that any vague, insufficient or even misleading statements that were made before Gorton J are not material either factually or procedurally. An interests of justice ground that makes a subjective criticism of the state of the evidence at the ex parte hearing blurs the distinction between the two grounds. The phrasing in the affidavits of suspicions as to proceeds and/or instruments and/or effective control is neither vague, nor does it ignore the need to consider the three separate ways property might be restrained. While interests of justice is a concept of broad import, going beyond the interests of the parties themselves, the Commissioner submits that separately to misconduct, abuse of process, bad faith, material non-disclosure and the like, there is no basis for a lack of precision or ‘vagueness’ to be an independent consideration under this ground.

4. As to the applicants’ submission that the restraining orders should not have been made ex parte,[191] the Commissioner submits that the course of action was taken once his Honour determined the appropriateness of that course. To say the making of the November restraining orders ex parte is itself a ground to revoke is impermissibly circular and ignores the opportunities in s 42(5) of the POC Act of which the applicants have availed themselves.

   [191]First to Third Applicants’ Submissions 4 [11(b)].

5. The Commissioner further submits that to describe the evidence before the Court as being ‘misstated’ is itself misleading. In the first part of the revocation application Creighton attempted to explain his actual suspicions. The fact that some of his evidence was held to be insufficient to uphold the reasonableness of those suspicions does not mean of itself that anything was misstated. As such, the Commissioner contends that no material non-disclosure was made before his Honour.

F.3       Consideration

1. While information provided to Gorton J is relevant when considering an obligation of full disclosure, in my view the interests of justice requires consideration of all matters subsequently put before the Court. There are four reasons why the application for revocation of the November restraining orders in the interests of justice does not succeed.

2. First, the fact that the application was made ex parte does not mean that the orders were improperly made. There was material addressing a risk of dissipation of funds. There was an incomplete financial picture of the property holdings, as well as the potential relationship between the Southlink entities and the suspect Zhu and her family. There was a continuing criminal investigation. The information as to the suspected offending, with the ability to move funds offshore including through cryptocurrency avenues that are difficult to trace, was set out in the first affidavit. That information remained relevant at the time of the November restraining orders.

3. On the face of the matters recorded with the orders, his Honour was satisfied that a risk was present and he did not use s 26(5) of the POC Act to require that notice be given. Whether or not that risk had, or might in future, eventuate is not to the point. A proceeds of crime authority is entitled to request an ex parte hearing and a Court is bound to consider an application for restraint, in the first instance, without notice having been given.

4. Nor do I accept the argument as to a ‘practice’. Each application is considered by the Court on its merit. It is the Court’s consideration, not any alleged practice of a proceeds of crime authority, that determines whether s 26(5) is engaged.

5. Further, while the defendants assert as a fact that ‘no dissipation had occurred after the first round of restraining orders made weeks earlier’,[192] there is no evidence one way or the other about actual dissipation. The financial material placed before the Court by the Commissioner does not extend to information after October 2023. There is no financial information as to equity in the properties between October 2023 and June 2024. Unlike civil freezing orders, the POC Act provides that a restraining order under s 18 or s 19 must be made ‘even where there is no risk of the property being disposed or otherwise dealt with’.[193] It is one reason why Walker JA noted some difficulties drawing a close analogy between s 42 and a general power to set aside an ex parte order.[194] Any failure by the proceeds of crime authority to request the matter be heard inter partes in the first instance itself does not give rise to any breach of any disclosure obligations. The general suspicions of Creighton as to suspicions of movement of funds offshore as set out above at [80] remains relevant to the determination of an ex parte hearing. Even if the application could have been made on notice but wasn’t, a s 42(5) application as has been made removes the need to consider the interests of justice based upon the ex parte procedure.

   [192]Fourth to Sixth Applicants’ Submissions.

   [193]See POC Act ss 18(5) and 19(5).

   [194]Saad (n 12) 301 [150].

6. Second, a difficulty is raised by the applicants’ case which identifies no positive material fact or matter that has been withheld or misrepresented. Rather, the matters that are identified as being material are matters of submission or conclusion, not matters of fact or even information that was known or ought have been known to the Commissioner and therefore disclosed. The written submissions identify the following ‘material matters’ which would have been raised in argument if on notice:

   (a)no reasonable grounds to suspect real property was owned or controlled by Zhu;

   (b)no reasonable grounds to suspect Long River MLO was laundering funds prior to the acquisition of the Grosvenor properties;

   (c)Creighton had no information about the source of funds used to acquire shares in the companies; and

   (d)the Southlink entities had no known affiliation with Zhu or Long River MLO.

7. All of those matters have subsequently been raised on notice by submission and dealt with under the no grounds application. The present situation can be distinguished from the failure to disclose competing evidence as to ownership known to the applicant for restraint as in Lamb. There is no shortcoming identified as to the ownership of the property in the application and no particular information that was withheld from the Court as to the source of funds identified.

8. The inter-related links between members of the Zhu family, property owning companies in which Yuan Tao is a director and properties in which Zhu Investments, Felixz Investments, Mercator Holdings and other companies share interests, are all identified by Creighton in his affidavits. Links between Chang Jiang Financial and Yuan Tao through support for his immigration application are also identified.[195] Zhu Investments and Felixz Investments hold shares in common with a number of Southlink entities and other companies that appear to be special purpose vehicles for landholdings. In light of information set out in the second affidavit and the diagram at Annexure 2 of the fifth affidavit, there is information about connections between Southlink entities and the two investment companies whose shares are presently restrained. It cannot be said on the present evidence with any confidence, as the applicants submit, that there is no affiliation between Southlink entities and Zhu or Long River MLO. There are at the very least unanswered questions.

   [195]Second Affidavit of Mark Creighton sworn 10 November 2023 [30]–[35].

9. The applicants do not contend that the Commissioner should have disclosed material matters, being those that would present the circumstances of ‘an entirely new case’ to afford the judge ‘the opportunity of considering the real circumstances, and of exercising his discretion upon them’, as described by Isaacs J.[196] What lies at the heart of the applicants’ submission is an attack as to deficiencies that could be alleged on the information that had been put before the Court, but on no other information.[197] No new or different case has been advanced.

   [196]Edison (n 38) 681.

   [197]Fourth to Sixth Applicants’ Submissions 26–7 [112].

10. Third, I appreciate that the applicants submit that, at its heart, the critical non-disclosure was a failure to fairly identify and disclose deficiency or insufficiency in the evidence as it existed at the time of the initial application and which should have been known to the Commissioner. If that is accepted the Court should express its disapproval of applications made that are vague, general, careless and defective.[198]

    [198]First to Third Applicants’ Submissions 7 [23].

11. Walker JA in Saad addressed the question of sufficiency of the evidence raised in a revocation application, in the context of considering whether admissibility issues could be raised under s 42 of the POC Act.[199] Her Honour expressed the view that admissibility can be considered on a rehearing and may be a relevant matter, particularly under s 42(5)(b). This, like evidence that was otherwise improperly obtained and which in the interests of justice ought not form part of the consideration of the court, is relevant to the interests of justice ground.[200]

    [199]Saad (n 12) 302–3 [153]–[156].

    [200]Commissioner of the Australian Federal Police v He [2021] NSWSC 1455.

12. Ultimately in my view, the submission in this application that insufficient information led to restraint on grounds that were not reasonable, sits largely within the no grounds limb of the revocation provision and the applicants have raised the argument under the no grounds rubric. If, on a rehearing, a different outcome is achieved, it does not necessarily follow that a court in the first hearing was misled. It may be that other information renders suspicions no longer reasonable. One of the challenges posed by assessing proper disclosure of material matters on a restraining order, is that the application for restraint is based upon suspicion. The information upon which those suspicions are based might later be shown to be incomplete, wrong or mistaken. If not within the actual knowledge, or something that ought to have been known when the restraint was sought, the information may well not be material under the interest of justice limb in the context of non-disclosure of material matters.

13. The deficit or insufficiency in the evidence upon which restraint was initially ordered, is a matter of judgment and degree. On some occasions shortcomings arise because evidence was improperly admitted or obtained such that it may not be in the interests of justice to have regard to it on a rehearing. This is not the current situation. Some of the shortcomings in Creighton’s affidavit material were not exposed until cross-examination in the subsequent contested hearings. Ultimately the evidence before me on the revocation application includes Creighton’s evidence as to his suspicions and the reasons for them as tested. The ability of the Commissioner to lead further evidence on revocation suggests that insufficiency without impropriety in the evidence will not, without some additional argument, generally found an interests of justice ground.

14. The state of the evidence for restraint initially and at the December hearing for revocation has been criticised by me in the first reasons. It was less than a model of clarity and it did articulate suspicions, although actually firmly held by Creighton as was apparent from his evidence, that in some instances overreached the state of information known at the time. Criticism is warranted and has been expressed. It might be said that, insofar as the evidence on revocation was either sufficient or not, then justice as between the parties is served by the outcome of the revocation on no grounds. The real question is whether the broader interests of justice are served by revoking the balance of the restraining order. The applicants submit that it does because ‘orders were made where they shouldn’t have been’.[201] Even were I to accept this argument, the interests of justice cannot ignore the present state of the admissible evidence in considering this limb.

    [201]Fourth to Sixth Applicants’ Submissions 29 [119].

15. Fourth, there are two overarching considerations when considering whether to exercise the discretion in s 42(5). One is the obligation of the judiciary to protect its processes and to ensure the protection of individual rights, the other is the statutory context and purpose of depriving persons of benefits derived from offences against the laws of the Commonwealth. As to the first matter, in my view this application under s 42(5)(a) has addressed any shortcomings of the initial restraint application. It has now dealt with the matter on the basis of material properly put before it by the Commissioner and scrutinised by cross-examination and submissions of the applicants. There was minimal further evidence relied on by the applicants, and only in relation to the December 2023 hearing. The Court has been able to control its processes and express concern as to the preparation of supporting material. Within this statutory framework the legislature intends to interfere with property rights subject to the right to seek exclusion of interests. Unanswered questions remain as to significant funds associated with the various property and this is a factor against exercising the discretion at this early stage but to allow a much clearer picture of the full circumstances for the determination of rights.

16. Restraint is, as has been observed, the first step only, and not a time when the full circumstances of rights and entitlements in respect of the relevant property are known. In other circumstances where applicants have put forward positive evidence to demonstrate a lack of reasonable grounds for suspicions, and that evidence has been accepted, courts are still reticent to revoke restraint where some suspicions remain. Neither N Adams J in Tjongosutiono nor Davis J in Phan were prepared to set aside the orders despite a contrary narrative being put forward by applicants. In both cases, the interests of justice were thought to be better served by the normal progression of the statutory process set out by the POC Act.

17. The applicants distinguish the present circumstances because they argue that the initial restraint was not properly obtained. Whether or not the initial evidence supported both the necessary suspicion and grounds that were judged objectively reasonable, exercising the discretion conferred by s 42(5)(b) is not confined to the state of the evidence at that time. Any shortcoming is a matter of nature and degree. Whilst I concluded that the affidavit material was in a number of respects unsatisfactory, it was also developed in the revocation applications such that a proper basis for restraint was established in respect of some but not all real property and all shareholdings. Absent any impropriety in the totality of the evidentiary basis relied on, I am not persuaded that the broader interests of justice warrant the revocation of the restraint.

18. In balancing any injustice to the applicants by initial insufficiencies in the evidence that they identified, ameliorated by their rights under the legislative framework, with the objectives of the legislative framework, the disclosed circumstances do not warrant revocation in the broader interests of justice. As is clear from these and my first reasons, permitting this restraint to remain is not to encourage applications that are not carefully prepared with the strict statutory criteria in mind. Nor does it lessen the obligation on the proceeds of crime authority to assist the Court appropriately as to the matters of which it is to be satisfied before ordering restraint.

19. The restraining orders will not be revoked. I will hear the parties on any further orders in respect of the application.

SCHEDULE OF PARTIES

45 BONVIEW CIRCUIT PTY LTD (ACN 656 766 077)	First Applicant
- and -
GREENS 35 PTY LTD (ACN 650 885 199)	Second Applicant
- and -
FELIXZ INVESTMENTS PTY LTD (ACN 634 498 623)	Third Applicant
- and -
ZHU INVESTMENTS PTY LTD (ACN 163 927 615)	Fourth Applicant
- and -
SOUTHLINK GROSVENOR PTY LTD (ACN 629 396 229)	Fifth Applicant
- and -
SOUTHLINK GROSVENOR NO 2 PTY LTD (ACN 631 590 175)	Sixth Applicant
v
THE COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE	Respondent