Application by the Commissioner of the Australian Federal Police

[2015] NSWSC 1843

Supreme Court

New South Wales

Medium Neutral Citation:	Application by the Commissioner of the Australian Federal Police [2015] NSWSC 1843
Hearing dates:	3 December 2015
Decision date:	03 December 2015
Jurisdiction:	Common Law
Before:	Adamson J
Decision:	See paragraph 20
Catchwords:	CRIMINAL LAW – proceeds of crime – application for restraining order – reasonable grounds for suspicion that funds are proceeds of indictable offence – custody and control orders
Legislation Cited:	Criminal Code Act 1995 (Cth), Sch 1, Pt 10.2, s 400.9 Proceeds of Crime Act 2002 (Cth), ss 19, 21, 38, 329, 338
Category:	Principal judgment
Parties:	Commissioner of the Australian Federal Police
Representation:	Counsel: W Staples (Plaintiff)     Solicitors:
File Number(s):	2015/334488

Judgment (EX TEMPORE – REVISED)

Introduction

1. By summons filed on Thursday 13 November 2015 the Commissioner of the Australian Federal Police seeks various orders under the Proceeds of Crime Act2002 (Cth) (the Act) including a restraining order pursuant to s 19 of the Act and an order for custody and control of the property pursuant to s 38 of the Act.

2. In support of the summons the Commissioner, for whom Mr Staples appears, relies on the affidavit of Jeffrey Aaron Kokles sworn 12 November 2015. Federal Agent Kokles deposes in paragraph one of the affidavit that he is a member of the Australian Federal Police.

3. The summons and the affidavit were served on Lap Keung Ng, who is an interested person in the making of the orders. Mr Ng is presently in custody at the Kirkconnell Correctional Centre having pleaded guilty to one count of the offence of dealing with money or other property reasonably suspected of being proceeds of crime worth in excess of $100,000 against s 400.9 of the Schedule to the Criminal Code Act 1995 (Cth) (the Criminal Code). On 9 October 2015 Mr Ng was sentenced to two years’ imprisonment to commence on 7 April 2015. He was ordered to serve a minimum of 12 months and to be released after serving 12 months upon entering into a recognizance to be of good behaviour for 12 months.

4. I am satisfied, on the basis of the affidavit of Erica Jayne Last sworn 2 December 2015, that Mr Ng has been served with the summons and affidavit. He has, however, neither appeared nor given any indication, as I understand it, that he wishes to appear today, as could have been arranged by audio visual link had he expressed a wish to do so.

The background facts

5. In 2015, the Australian Federal Police (AFP) began an investigation into suspected money laundering being undertaken by a group of Chinese students who had been observed depositing large sums of cash and then remitting the sums overseas.

6. As referred to above, Mr Ng pleaded guilty to an offence against s 400.9(1) of the Criminal Code. According to the Agreed Facts filed at the sentence hearing on 9 October 2015:

1. At about 2.05pm on 7 April 2015, the AFP stopped a red Toyota Echo motor vehicle (the Vehicle) of which Mr Ng was the sole occupant and registered owner. They seized $511,855 cash from the vehicle. Mr Ng was arrested.

2. At about 6.50pm on 7 April 2015, the AFP executed a search warrant at the flat in Rhodes where Mr Ng lived. The total amount of cash located in the flat was $3,653,020.

Legislative requirements

Section 19 of the Act

7. The legislative requirements for a restraining order are set out in s 19 of the Act which provides that a court with proceeds jurisdiction, which includes this Court, must, if certain conditions are fulfilled, make an order that the property not be disposed of or otherwise dealt with by any person. The Court’s obligation to make an order with respect to serious offences is subject to satisfaction that an appropriate undertaking has been given: s 21 of the Act.

8. Mr Staples has provided the Commissioner’s usual undertaking as to damages and costs, which I regard as an appropriate undertaking pursuant to s 21 of the Act.

9. Section 19 provides:

“Restraining orders—property suspected of being proceeds of indictable offences etc.

When a restraining order must be made

(1) A court with *proceeds jurisdiction must order that:

(a) property must not be disposed of or otherwise dealt with by any person; or

(b) property must not be disposed of or otherwise dealt with by any person except in the manner and circumstances specified in the order;

if:

(c) a *proceeds of crime authority applies for the order; and

(d) there are reasonable grounds to suspect that the property is:

(i) the *proceeds of a *terrorism offence or any other *indictable offence, a *foreign indictable offence or an *indictable offence of Commonwealth concern (whether or not the identity of the person who committed the offence is known); or

(ii) an *instrument of a *serious offence; and

(e) the application for the order is supported by an affidavit of an *authorised officer stating that the authorised officer suspects that:

(i) in any case—the property is proceeds of the offence; or

(ii) if the offence to which the order relates is a serious offence—the property is an *instrument of the offence;

and including the grounds on which the authorised officer holds the suspicion; and

(f) the court is satisfied that the *authorised officer who made the affidavit holds the suspicion stated in the affidavit on reasonable grounds.

Property that a restraining order may cover

(2) The order must specify, as property that must not be disposed of or otherwise dealt with, the property specified in the application for the order, to the extent that the court is satisfied that there are reasonable grounds to suspect that that property is:

(a) in any case—*proceeds of the offence; or

(b) if the offence to which the order relates is a *serious offence—an *instrument of the offence.

Refusal to make a restraining order

(3) Despite subsection (1), the court may refuse to make a *restraining order in relation to an *indictable offence that is not a *serious offence if the court is satisfied that it is not in the public interest to make the order.

Note: A court can also refuse to make a restraining order if the Commonwealth refuses to give an undertaking: see section 21.

Restraining order need not be based on commission of a particular offence

(4) The reasonable grounds referred to in paragraph (1)(d) need not be based on a finding as to the commission of a particular offence.

Risk of property being disposed of etc.

(5) The court must make a *restraining order even if there is no risk of the property being disposed of or otherwise dealt with.”

10. The conditions the fulfilment of which entitles the Commissioner to an order under s 19(1)(a) or (b) are set out in 19(1)(c), (d), (e) and (f) of the Act. These will be considered in turn.

Section 19(1)(c): application made by a proceeds of crime authority

11. Section 19(1)(c) requires that the application is made by a proceeds of crime authority. The Commissioner falls within the definition in s 338 of the Act. Accordingly, the condition in s 19 (1)(c)(i) is fulfilled.

Section 19(1)(d): reasonable grounds for suspicion

12. Section 19 (1) (d) requires there to be reasonable grounds to suspect that the property is relevantly the proceeds of an indictable offence of the Commonwealth or an instrument (as defined by s 329 of the Act) of a serious offence. The relevant offence is an offence contrary to s 400.9(1) of the Criminal Code. It is contained in Part 10.2 of the Criminal Code which deals with money-laundering. As such, it is a serious offence within the meaning of (a)(ii) of the definition of a serious offence in s 338 of the Act.

13. Having read the affidavit of Federal Agent Kokles, I am satisfied that there are reasonable grounds to suspect that the property referred to in Schedule 1 (the cash found in Mr Ng’s vehicle) and Schedule 2 (the cash found in Mr Ng’s flat at Rhodes) of the summons and to the minute of order, are proceeds of an indictable offence, or an offence within the meaning of s 19(1)(d)(i) and (ii).

14. I am satisfied on the basis of that affidavit that there are reasonable grounds to suspect that the property referred to in the two Schedules are the proceeds of indictable offences.

Section 19(1)(e): the application is supported by an affidavit of an authorised officer

15. Section 19(1)(e) of the Act provides that a condition of the making of the order is that the application is supported by an affidavit of an authorised officer who states that the authorised officer suspects that the property is proceeds of the offence. As referred to above, the definition of authorised officer under s 338 of the Act includes a member of the AFP if authorised by the Commissioner. The evidence establishes that the Commissioner, by authorisation dated 26 August 2013, authorised all members of the AFP to be authorised officers under the Act. Accordingly, Federal Agent Kokles is an authorised officer.

16. I am satisfied that the condition in s 19(1)(e)(i) is fulfilled by the affidavit of Federal Agent Kokles sworn 12 November 2015. He sets out the grounds for his suspicion in paragraphs [10]-[38] of the affidavit and summarises those grounds in paragraphs [39] of the affidavit.

Section 19(1)(f): reasonable grounds

17. I am also required, by reason of s 19(1)(f), to be satisfied that the authorised officer who made the affidavit holds the suspicion stated in the affidavit on reasonable grounds. I am satisfied that the matters set out in paragraphs [10]-[38] of the affidavit and summarised in paragraph [39] of the affidavit. provide sufficient basis by way of reasonable grounds for the suspicion to which Federal Agent Kokles deposes.

Conclusions

Conclusion regarding a restraining order

18. For these reasons I am persuaded that I am obliged to make an order under s 19(1)(b) of the Act with respect to the cash sums referred to in Schedules 1 and 2 to the summons and to the short minutes of order.

Other orders sought

Custody and control order: s 38 of the Act

19. I am satisfied that it is appropriate to make an order under s 38 of the Act that the Official Trustee in Bankruptcy is to take custody and control of the property specified in both Schedules 1 and 2, being the sums referred to.

Orders

20. For those reasons, and noting the undertaking on behalf of the plaintiff as to damages and costs, I make the orders in terms of paragraphs 1, 2, 3 and 4 of the short minutes of order which I will sign and date with today’s date.

21. I make the following orders:

UPON THE PLAINTIFF PROVIDING ITS USUAL UNDERTAKING AS TO DAMAGES AND COSTS:

Restraining Order

1. Pursuant to s 19(1)(b) of the Proceeds of Crime Act 2002 (Cth) (the Act), the property specified in Schedule One must not be disposed of or otherwise dealt with by any person except in the manner and circumstances specified in these orders.

2. Pursuant to s 19(1)(b) of the Act, the property specified in Schedule Two must not be disposed of or otherwise dealt with by any person except in the manner and circumstances specified in these orders.

Custody and Control Order

3. Pursuant to s 38 of the Act, the Official Trustee in Bankruptcy (Official Trustee) is to take custody and control of the property specified in Schedule One.

4. Pursuant to s 38 of the Act, the Official Trustee is to take custody and control of the property specified in Schedule Two.

Other orders

5. The proceedings be stood over for further directions before the Common Law Registrar at 9:00am on Wednesday, 8 June 2016.

6. The plaintiff and Lap Keung Ng (as a potential interested party) have liberty to restore on three day’s written notice.

SCHEDULE ONE

The sum of $511,825 cash seized by the Australian Federal Police on 7 April 2015 from a red Toyota Echo motor vehicle, registration number CA56SW (NSW) at Rhodes, NSW.

SCHEDULE TWO

The sum of $3,652,700 cash seized by the Australian Federal Police on 7 April 2015 from Unit 810, 46 Walker Street, Rhodes, NSW.

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Decision last updated: 04 December 2015