Commissioner of the Australian Federal Police v He

[2021] NSWSC 1455

Supreme Court

New South Wales

Medium Neutral Citation:	Commissioner of the Australian Federal Police v He & Ors [2021] NSWSC 1455
Hearing dates:	6 October 2021
Date of orders:	6 October 2021
Decision date:	06 October 2021
Jurisdiction:	Common Law
Before:	Hamill J (as Duty Judge)
Decision:	Orders made under Proceeds of Crime Act 2002 (Cth)
Catchwords:	CIVIL LAW – proceeds of crime – freezing orders – orders for disclosure of assets and liabilities – whether appropriate to deal with applicant ex parte – no question of principle
Legislation Cited:	Proceeds of Crime Act2002 (Cth) ss 18, 19, 39, 39B, 266A(2)(b)
Category:	Principal judgment
Parties:	Commissioner of the Australian Federal Police (Plaintiff) Wenfang He (First Defendant) Yanguo Sun (Second Defendant) Wenqing Sun (Third Defendant) Haiyan Xu (Fourth Defendant) Yongjie Wei (Fifth Defendant) Y J Building Pty Ltd (Sixth Defendant) Quan Lin (Seventh Defendant) QL Building Pty Ltd (Eighth Defendant) Xinwang He (Ninth Defendant) Bruce Byron Pty Ltd (Tenth Defendant) OMI Construction Pty Ltd (Eleventh Defendant) Enxi Yu (Twelfth Defendant) ENX Building Pty Ltd (Thirteenth Defendant) Kaicheng Xue (Fourteenth Defendant) AKC Projects Pty Ltd (Fifteenth Defendant) Union Team Construction Pty Ltd (Sixteenth Defendant) Shuying He (Seventeenth Defendant) SYH Project Pty Ltd (Eighteenth Defendant) HSY Group Pty Ltd (Nineteenth Defendant)
Representation:	Solicitors: Australia Federal Police General Counsel (Plaintiff)
File Number(s):	2021/00282855
Publication restriction:	Nil

EX TEMPORE Judgment (revised)

1. The Commissioner of the Australian Federal Police (“AFP”), as plaintiff, seeks a number of orders under the Proceeds of Crime Act2002 (Cth) (“the Act”) in respect of 19 named defendants. The orders are in the nature of restraining orders under ss 18 and 19 of the Act as well as orders for the provision of sworn statements of assets and liabilities under s 39 of that Act, as well as some other orders.

2. The first decision I made today was that it was appropriate to hear the application in camera. I concluded that it was, for the simple reason, as is often the case in orders of this nature made by either the AFP or the NSW Crime Commission or other similar bodies, that disclosure of the making of the orders may have the capacity to thwart the very purpose of the orders, which is to freeze the movement of assets said to be the proceeds of crime. For that reason, I made the order that the hearing be heard in camera.

3. For the same reasons, I agreed that I should hear the application ex parte, at least in relation to the orders in the nature of restraining orders. In the course of the argument I challenged Mr Short, who appears on behalf of the AFP, to convince me that it was appropriate for the application for orders under s 39 of the Act compelling various people to provide sworn statements to be dealt with on an ex parte basis. He persuaded me to do so on the basis that there is a power under s 39B for the people subject to such orders to seek revocation of the orders and the time limit for that essentially dovetails with the time limit set out in the orders, and also proposed the making of an order said to be under s 266A(2)(b) of the Proceeds of Crime Act forbidding disclosure of information provided to various relevant agencies.

4. Mr Short was kind enough to dictate for me an order that was made recently and in similar circumstances by her Honour Wilson J. I find the implication of the power in s 266A(2)(b) to be somewhat challenging, but I am satisfied, as her Honour must have been, that it is appropriate to make the order. Certainly that section proceeds on an assumption that a court can make an order prohibiting disclosure. It seems a little bit odd that the section, or the Act itself, does not provide an express power to do so, but given that such an order would be to the benefit of anybody subject to the compulsory swearing or affirming of an affidavit of a statement of assets and liabilities, I am inclined to make the order.

5. The application on the whole is supported by an affidavit of Nicholas McLenaghan, which was affirmed on 5 October 2021 and exhibits a vast number of records. The affidavit is, I must say with respect to whoever drafted it, an extremely helpful, comprehensive and sensibly constructed document which sets out with great clarity the circumstances that give rise to the applications that are made before the Court today. It is unnecessary for the purpose of this judgment to set out all of the details, but it is necessary for the purpose of the application of ss 18 and 19 of the Act to indicate that the contents of that application are such that I am satisfied, as I must be under s 18(1)(c), that there are reasonable grounds to suspect that a person has committed a serious offence, and I am satisfied similarly under s 19.

6. As I have said, the material in the affidavit is comprehensive, but to put it in very general terms, the factual matters that give rise to such a reasonable suspicion include the movement of substantial sums of money and the tracing of the moving of that money through various means disclosed in Mr McLenaghan's affidavit; two, the summary of the contents of induced interviews with some of the people either involved or suspected of being involved; three, the surveillance evidence as summarised in the affidavit demonstrating the way money seems to have been channelled through and passed through various accounts; and the expenditure of some of the relevant targets of the investigation when compared and contrasted to their means or known income, something which Mr McLenaghan correctly characterises in his affidavit in one instance at least as "grossly disproportionate." It could also be said that a number of the transactions appear to be suspicious in the sense that they are not generally the way people deal with legitimately obtained funds. Those five bullet points, as it were, are in a sense the tip of the iceberg, but they I think are sufficient for me to discharge the necessity to give reasons for making orders of the kind I am about to make.

7. The other more formal requirements of the relevant sections, that is, that a proceeds of crime authority has made the application for the order and the affidavit requirements in subs (3), are satisfied, as is the requirement under (f) that the authorised officer in question holds a suspicion stated in the affidavit on reasonable grounds.

8. The form of order proposed by the AFP appears to comply with the formal requirements. For example, in subs (2) of s 18 and the section itself is in compulsory terms once the formal requirements are established and reasonable grounds for the suspicion are also established. That is so by reference to the first words of subs 18(1) that a court with jurisdiction such as that which I am now exercising "must" make orders.

9. The ancillary orders which are sought are not compulsory. Those are the orders requiring various people to go on oath or affirmation in relation to their assets and liabilities. That is clear from the use of the word "may" in s 39(1), and as I have said, I needed a little persuasion that such orders should be made in the exercise of the discretion.

10. But the safeguards proposed by Mr Short as well as his submissions to the effect that things will happen quickly hereafter and there remains a risk of the dissipation of the assets the subject of the order satisfy me that I should exercise the discretion, noting both that anyone subject to the orders may apply for revocation under s 39B, and also providing the safeguard that I have referred to and that was employed by Wilson J in that earlier case. I note that the earlier case has not yet been published, hence I have been using vague terms in referring to it.

11. For those reasons I propose to make the orders provided in short minutes of order by the AFP and those representing them. That includes some additional orders in what is 44 through 46, which are simply facilitative of having the matter move forward. In doing so I note that the applicant has provided the usual undertaking as to costs and damages made in cases such as this.

12. I do propose to add an order along the lines of that provided by Wilson J and 44 will become 45, 45 will become 46, 46 will become 47, and order 44 will be:

“In relation to orders 34 through to 43, until further order and pursuant to s 266A(2)(b) of the Proceeds of Crime Act 2002, any sworn statement provided by any of the defendants pursuant to an order made under s 39 is prohibited from disclosure to any authority of the Commonwealth or of any State or Territory that has a function of investigating or prosecuting offences.”

13. Otherwise the orders will be in accordance with the short minutes of order provided.

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