Application by the Commissioner of Australian Federal Police (No 3)
[2016] NSWSC 759
•10 June 2016
Supreme Court
New South Wales
Medium Neutral Citation: Application by the Commissioner of Australian Federal Police (No 3) [2016] NSWSC 759 Hearing dates: 17 May 201619 May 2016 Decision date: 10 June 2016 Jurisdiction: Common Law Before: Button J Decision: (1) Pursuant to s 49 of the Proceeds of Crime Act 2002 (Cth), the property listed in Sch 1 to the summons filed 11 November 2015 be forfeited to the Commonwealth.
(2) Pursuant to s 49 of the Proceeds of Crime Act 2002 (Cth), the property listed in Sch 2 to the summons filed 11 November 2015 be forfeited to the Commonwealth.Catchwords: CRIMINAL LAW – proceeds of crime – application for forfeiture under s 49 of the Proceeds of Crime Act 2002 (Cth) Legislation Cited: Criminal Code Act 1995 (Cth) Sch, ss 11.1, 119.2
Proceeds of Crime Act 2002 (Cth), ss 19, 49, 49(1), 49(1)(a), 49(1)(b), 49(1)(c), 49(1)(e), 49(2), 49(3), 49(4), 74, 335, 338Cases Cited: Application by the Commissioner of the Australian Federal Police re Matter 2012/249599 [2013] NSWSC 1444
Application of the Commissioner of the Australian Federal Police (No 2) [2015] NSWSC 1171
Commissioner of the Australian Federal Police v Krstic [2016] NSWSC 510Category: Procedural and other rulings Parties: Commissioner of Australian Federal Police (Applicant)
Hala Zahab (Interested Party)Representation: Counsel:
Solicitors:
A Moses SC (Applicant)
S Callan (Applicant)
Birchgrove Legal (Interested Party)
File Number(s): 2015/332858
Judgment
Introduction
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This is an application pursuant to s 49 of the Proceeds of Crime Act 2002 (Cth) (the Act) for forfeiture of sums of money held in bank accounts and on travel debit cards (the property) by a number of persons. The section in its entirety is as follows:
49 Forfeiture orders—property suspected of being proceeds of indictable offences etc.
(1) A court with *proceeds jurisdiction must make an order that property specified in the order is forfeited to the Commonwealth if:
(a) the *responsible authority for a *restraining order under section 19 that covers the property applies for an order under this subsection; and
(b) the restraining order has been in force for at least 6 months; and
(c) the court is satisfied that one or more of the following applies:
(i) the property is *proceeds of one or more *indictable offences;
(ii) the property is proceeds of one or more *foreign indictable offences;
(iii) the property is proceeds of one or more *indictable offences of Commonwealth concern;
(iv) the property is an instrument of one or more *serious offences; and
(e) the court is satisfied that the authority has taken reasonable steps to identify and notify persons with an *interest in the property.
(2) A finding of the court for the purposes of paragraph (1)(c):
(a) need not be based on a finding that a particular person committed any offence; and
(b) need not be based on a finding as to the commission of a particular offence, and can be based on a finding that some offence or other of a kind referred to in paragraph (1)(c) was committed.
(3) Paragraph (1)(c) does not apply if the court is satisfied that:
(a) no application has been made under Division 3 of Part 2‑1 for the property to be excluded from the *restraining order; or
(b) any such application that has been made has been withdrawn.
Refusal to make a forfeiture order
(4) Despite subsection (1), the court may refuse to make an order under that subsection relating to property that the court is satisfied:
(a) is an *instrument of a *serious offence other than a *terrorism offence; and
(b) is not *proceeds of an offence;
if the court is satisfied that it is not in the public interest to make the order.
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The matter came before me in the Duty List on 17 May 2016. On that occasion the solicitor for Ms Hala Zahab appeared, and sought a lengthy adjournment. Instead, I stood the matter over, part-heard before me, for two days until 19 May 2016, and delivered two short ex tempore judgments in support of doing so.
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On that latter occasion, the solicitor for Ms Zahab again appeared, and informed me that she did not oppose the making of the orders. Senior counsel for the Commissioner of the Australian Federal Police (the plaintiff) nevertheless submitted that it would be inappropriate for orders simply to be made with the consent of Ms Zahab without deeper consideration by me of their appropriateness, a proposition that I accepted. Very courteously, her solicitor obliged me by remaining in court so that he could offer any assistance that I required.
Background
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The background may be shortly stated.
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On 11 November 2015, Adams J made a restraining order over the accounts in question, pursuant to s 19 of the Act. That order was in turn founded on satisfaction that the property was an instrument of a serious offence, the offence relied upon being entering, or remaining in, a “declared zone” (the Al Raqqa province in Syria) pursuant to s 119.2 of the Schedule to the Criminal Code Act 1995 (Cth)(the Criminal Code); or a conspiracy to commit such an offence, contrary to s 11.1 of the Criminal Code.
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As I understand it, no person identified as a possible interested person in the sums of money has had any communication with the plaintiff or taken any forensic step since the making of that restraining order.
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The exception is Ms Zahab. On 18 November 2015, seemingly whilst unrepresented, she complied with a further order of Adams J that she provide a sworn statement setting out all of her assets and liabilities. Thereafter, she approached her current solicitors, including with regard to the application under consideration.
The evidence before me
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By way of a number of affidavits of a Federal officer, a substantial amount of documentary evidence was placed before me by the plaintiff. In a nutshell, it showed that a restraining order with regard to the property in question had been sought and granted on 11 November 2015; that various attempts have been made by the plaintiff to contact individuals who may be persons with an interest in the property; and that Ms Zahab has a general power of attorney over the affairs of one interested party, and separately is a signatory to two bank accounts that are included within the restrained property.
Submissions
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Senior counsel for the plaintiff took me through the structure of s 49 of the Act.
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First, he submitted that there is no question but that this Court is a court “with proceeds jurisdiction”, pursuant to s 335 of the Act.
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Secondly, he invited my attention to the use of the word “must” in the chapeau of s 49(1) of the Act, and submitted that Parliament has expressed an intention that, once certain preconditions are satisfied, the making of the order sought is either mandatory or very close to it.
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Thirdly, turning to s 49(1)(a), he submitted that, pursuant to s 338 of the Act, his client is a “responsible authority”, and it has undoubtedly applied for a restraining order.
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Fourthly, with regard to s 49(1)(b), he submitted that, as a matter of simple mathematics, the restraining order has indeed been in force for over six months.
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Fifthly, he submitted, for reasons that I shall come to in a moment, that s 49(1)(c) has no application, in light of the evidence placed before me.
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Sixthly, with regard to s 49(1)(e), he submitted that, for reasons that I shall discuss in more detail shortly, I would be satisfied that his client had taken reasonable steps to identify and notify persons who may have an interest in the property.
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Seventhly, he submitted that, because s 49(2) is merely an elucidation of s 49(1)(c), it does not require satisfaction.
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Senior counsel then took me to s 49(3) of the Act. He submitted that no application that the property, or any portion of it, be excluded from the restraining order had been made by any person, including Ms Zahab. Accordingly, he submitted, s 49(3) is engaged, with the consequence that s 49(1)(c) and s 49(2) of the Act are of no moment.
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Eighthly and finally, he noted that s 49(4) provides me with a discretion not to make the orders sought, despite the use of the word “must” in the chapeau of s 49(1) to which he had invited attention. But focusing on the essential preconditions for the exercise of that discretion contained in s 49(4) of the Act, he submitted that, based on the evidence placed before me, I would not be satisfied of any of them, let alone all of them.
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Turning to the particular question of s 49(1)(e), and the need for me to be satisfied that his client had taken reasonable steps to identify and notify persons who may have an interest in the property, he submitted that, in short, identification of them has readily been achieved, in that the account or card holders of the bank accounts and the travel cards are named in connection with them. He noted that the evidence placed before me shows that all of them left Australia some time ago, and that none of them have returned. He also submitted that his client had sent emails to all of the email addresses associated with those individuals that are able to be known to his client, including by way of addresses given by those individuals to the Department of Foreign Affairs and Trade in passport request forms. Some of the emails sent by his client had “bounced”, but, with regard to each individual, at least one email address appeared to be open and operating.
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Senior counsel submitted that it is simply not practical for his client to undertake extensive investigations of the whereabouts of persons once they leave Australia, especially if they may well have entered a zone of armed conflict.
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Separately, he submitted that the legislation imposes a requirement that his client take “reasonable steps”, not (for example) “all possible steps” or that “no stone be left unturned”.
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Furthermore, he drew attention to s 74 of the Act, which, in summary, provides a regime whereby it is possible for persons who have in truth not had notice of an application for forfeiture to apply subsequently to have the forfeiture reversed. That facility, he submitted, can inform how one would interpret the meaning of the phrase “reasonable steps” in s 49(1)(e), bearing in mind that one must interpret that subparagraph in the context of the whole of the Act.
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Separately, although he submitted that, in light of the fact that no application for exclusion from the restraining order had ever been made by Ms Zahab, it was not strictly necessary, senior counsel engaged in an analysis of her position, as part of the obligation of his client as a model litigant and in order to assist my understanding of the position.
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As I have said, there is evidence to suggest that Ms Zahab has a power of attorney over some of the restrained property and has been made a signatory to two bank accounts. Senior counsel took me to the definition of interest contained in s 338 of the Act, which is as follows:
Interest, in relation to property or a thing, means:
(a) a legal or equitable estate or interest in the property or thing; or
(b) a right, power or privilege in connection with the property or thing;
whether present or future and whether vested or contingent.
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He submitted that it is quite true that Ms Zahab has a “power” in the sense that she has a power of attorney. He also submitted, as I understand it, that she has “a right… in connection with” some of the property, in that she is able to operate the bank accounts.
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But with regard to the former, he submitted that, in accordance with well-established principles about the rights and duties of a person conferred with a power of attorney, the power conferred upon Ms Zahab does not, in truth, provide her with “an interest”. All it provides her with is the duty to conduct the affairs of the principal in his or her interests.
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As for the signatory rights, he submitted that, without more, that could not be seen as an interest of Ms Zahab either. In other words, senior counsel submitted that unless there were some specific evidence that Ms Zahab is entitled to operate the accounts for her own benefit, I should not interpret the signatory rights as permitting her to do so.
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Furthermore, senior counsel invited attention to the statement of assets of Ms Zahab which was placed before me, and in which she makes no claim that either the property over which she holds a power of attorney or the bank accounts to which she is a signatory is an asset of hers.
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In short, senior counsel submitted that, due to the structure of the statute, any question of an interest of Ms Zahab does not require my consideration. Nevertheless, if I did proceed to consider it, I would come to the view that neither her power of attorney nor her signatory rights should be regarded as an interest for the purposes of the Act.
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Finally, senior counsel for the plaintiff made it clear that, in the circumstances that I have outlined, there was no application for costs against Ms Zahab.
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At the conclusion of the submissions of senior counsel for the plaintiff on that topic, the solicitor for the defendant explicitly confirmed that he had reflected upon those two possible “interests” of his client, and wished to make no submission about them standing in the way of the making of the orders sought.
Determination
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Turning to my determination, I accept the submissions of senior counsel for the plaintiff about the structure of the Act. Examination of previous judgments of this Court shows that those submissions are uncontroversial: see Application of the Commissioner of the Australian Federal Police (No 2) [2015] NSWSC 1171; Commissioner of the Australian Federal Police v Krstic [2016] NSWSC 510; and Application by the Commissioner of the Australian Federal Police re Matter 2012/249599 [2013] NSWSC 1444.
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Secondly, I accept on all the evidence placed before me that the plaintiff has taken reasonable steps to identify and notify individuals who are or may be interested persons, and accordingly the requirement contained in s 49(1)(e) is made out. I accept the proposition that Parliament has not imposed an unduly onerous obligation upon the plaintiff pursuant to that subparagraph, when read in light of the Act in general, and in light of s 74 in particular.
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Thirdly, there is no question of me exercising any discretion not to make the order pursuant to s 49(4) of the Act, for the simple reason that, on the evidence placed before me, I can be satisfied of none of the essential preconditions contained in that subsection.
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Fourthly, although it is not necessary to come to a firm view about it due to the statutory structure, I am prepared to accept (without having heard from a contradictor) that a power of attorney, unless of an unusual or exceptional nature, does not provide the recipient with an interest, as one would generally understand that concept pursuant to the definition in s 338 of the Act.
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Whether a person who is able to operate a bank account has such an interest is, to my mind, more open to debate, especially when, as here, there is no evidence as to whether or not there was any restriction placed by the conferrer upon that operation. But in light of the fact that no application for exclusion of any part of the property has been made by any person, including by Ms Zahab; and in light of the express disavowal by her solicitor of any reliance upon those signing rights in opposition to the making of the order; I do not believe that that possible controversy requires resolution by me.
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In summary, then, I accept the submission of senior counsel that all of the essential preconditions for the making of an order have been established, and that there is no basis for me exercising my discretion not to make such an order. It follows that the mandatory force of the chapeau of s 49(1) is indeed engaged.
Orders
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I make the following orders:
Pursuant to s 49 of the Proceeds of Crime Act 2002 (Cth), the property listed in Sch 1 to the summons filed 11 November 2015 be forfeited to the Commonwealth.
Pursuant to s 49 of the Proceeds of Crime Act 2002 (Cth), the property listed in Sch 2 to the summons filed 11 November 2015 be forfeited to the Commonwealth.
[SCHEDULES OMITTED]
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Decision last updated: 15 June 2016
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