Commissioner of the Australian Federal Police v Hills Greenery Pty Ltd (No 2)

[2024] NSWSC 448

Supreme Court

New South Wales

Medium Neutral Citation:

Commissioner of the Australian Federal Police v Hills Greenery Pty Ltd (No 2) [2024] NSWSC 448

Hearing dates:

8, 9, 10, 12, 15, 18 and 19 April 2024

Decision date:

26 April 2024

Jurisdiction:

Common Law

Before:

Ierace J

Decision:

(1) Pursuant to section 49 of the Proceeds of Crime Act 2002 (Cth) (the Act), the property specified in Schedule One of these orders (which is the property referred to in Schedule Four of the Amended Summons filed in these proceedings on 29 May 2020 (Summons) and, for the purposes of s 56 of the Act, has a value of AUD1,030,000), be forfeited to the Commonwealth.

(2)    Pursuant to section 69(2) of the Act, leave is granted to the Commonwealth, and persons acting on its behalf, to dispose of or deal with the forfeited property in Schedule One immediately.

(3)    The Commissioner of the Australia Federal Police and the Commonwealth are released from the usual undertaking as to costs and damages provided to the Court in these proceedings on 29 May 2020, insofar as it relates to the property specified in Schedule One of these orders.

(4)    The Fourth Defendant pay the Plaintiffs costs of and incidental to the Fourth Defendant’s Notices of Motion filed 14 July 2020 and 28 November 2020 and the Plaintiff’s costs of and incidental to his application for forfeiture of the property specified in Schedule One on and from 18 March 2024.

(5)    The Court notes the agreement as between the Plaintiff and the Fifth Defendant that the Fifth Defendant consents to the making of the forfeiture order in relation to his interest in the property specified in Schedule One of these orders on the basis that there be no order as to costs in relation to the Fifth Defendant’s participation in the proceedings with a view to the Plaintiff and the Fifth Defendant each bearing their own costs.

(6)    Make no order as to the Fifth Defendant’s costs, to the intent that he bear his own costs.

Catchwords:

CRIME – proceeds of crime – whether forfeiture orders must be made pursuant to s 49(1) of the Proceeds of Crime Act 2002 (Cth) – whether the court’s discretion to refuse forfeiture orders is to be exercised under s 49(4) of the Proceeds of Crime Act 2002 (Cth)

Legislation Cited:

Proceeds of Crime Act 2002 (Cth), ss 5, 19, 29, 31, 49, 73, 74, 77, 78, 317, 329

Taxation Administration Act 1953 (Cth), Sch 1, ss 308-110, 308-125

Cases Cited:

Commissioner of the Australian Federal Police v Fernandez (2018) 100 NSWLR 610; [2018] NSWCA 198

Commissioner of the Australian Federal Police v Hills Greenery Pty Limited [2023] NSWSC 288

Commissioner of the Australian Federal Police v Hills Greenery Pty Ltd [2024] NSWSC 189

Courtenay Investments Ltd v Director of Public Prosecutions (Cth) [2012] WASCA 121

McKinnon v Secretary, Department of Treasury (2006) 228 CLR 423; [2006] HCA 45

O'Sullivan v Farrer (1989) 168 CLR 210 at 216; [1989] HCA 61

Tedesco v Director of Public Prosecutions (2010) A Crim R 473; [2010] SASC 336

Category:

Principal judgment

Parties:

The Commissioner of the Australian Federal Police (Plaintiff)
Hills Greenery (First Defendant)
NSW Greenery Pty Limited (Second Defendant)
Bilal Hassan Allam (Third Defendant)
ATM Greenland Pty Limited (Fourth Defendant)
Belal El Alami (Fifth Defendant)

Representation:

Counsel:
Ms S Clemmett; Ms H Lam (Plaintiff)
Mr T Pickering (Second Defendant) (8 and 9 April 2024)
Mr T Barber (Fourth Defendant)

Solicitors:
MinterEllison (Plaintiff)
Abbas & Co Lawyers (Second Defendant)
Barber Lawyers (Fourth Defendant)

File Number(s):

2020/102598

JUDGMENT

1. HIS HONOUR: This is an application by the plaintiff for forfeiture orders pursuant to s 49 of the Proceeds of Crime Act 2002 (Cth) (the Act) in respect of four properties owned, partly or wholly, by the defendants.

2. In the period shortly before and after the hearing commenced on 8 April 2024, the proceedings involving four of the defendants resolved, as is explained in the section of this judgment titled ‘Background’, so that the matter only continued to a full hearing in respect of the fourth defendant. In summary, they were as follows.

3. The first defendant did not appear at the hearing and was the subject of a forfeiture order made in its absence, which is explained in this judgment. The second and fifth defendants reached agreements with the plaintiff as to consent orders. The third defendant, who had already suffered a forfeiture order in respect of their interest in one of the properties, had put forward a notice of constitutional matter dated 3 July 2023, which I determined in favour of the plaintiff on 1 March of this year: Commissioner of the Australian Federal Police v Hills Greenery Pty Ltd [2024] NSWSC 189 (‘[2024] NSWSC 189’). Since that judgment, the third defendant foreshadowed an application for leave pursuant to s 74(2) of the Act, which is required to bring an exclusion application under s 73 of the Act. Due to timetabling issues, the leave application was adjourned to the registrar’s list to set a timetable for a future hearing date.

4. I have found that the plaintiff satisfied the legislative prerequisites to a forfeiture order being made in respect of a property in which the fourth defendant had a 75 per cent interest. The fourth defendant sought to have the order refused pursuant to s 49(4) of the Act, but failed to establish the matters required to satisfy the court to exercise its discretion to do so.

The relevant provisions of the Act

5. Section 49 of the Act 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.”

6. As to the onus and standard of proof, s 317 provides:

“317   Onus and standard of proof

(1)   The applicant in any proceedings under this Act bears the onus of proving the matters necessary to establish the grounds for making the order applied for.

(2) Subject to sections 52 and 118, any question of fact to be decided by a court on an application under this Act is to be decided on the balance of probabilities.”

Background

7. By a summons filed on 3 April 2020, the plaintiff sought various orders including, pursuant to ss 19 and 49 of the Act, a restraining order and a forfeiture order in respect of a rural property at Peelwood (the Peelwood property). The restraining order was made that day. The basis upon which the restraining order was sought was a suspicion that the property was an instrument of tobacco growing offences, contrary to ss 308-125 and ss 308-110 of Sch 1 of the Taxation Administration Act 1953 (Cth) (the Taxation Act), being the manufacture and possession of tobacco with a weight over 500kg, which are serious and indictable offences for the purposes of the Act.

8. By an amended summons filed on 29 May 2020, the plaintiff sought, amongst other orders, restraining and forfeiture orders in respect of three other rural properties, at Mendooran (the Mendooran property), Bevendale (the Bevendale property) and Boxers Creek (the Boxers Creek property). On the same date, restraining orders were made in respect of all three properties on the basis of the same type of suspicion. The registered proprietors of the four properties were joined as defendants, as follows.

1. The Peelwood property was owned by Hills Greenery Pty Ltd (the first defendant). The directors and shareholders of that company were Ahmad Kazem Dib, Mahmoud Mohamad Hamze and Roukia Abbas;

2. The Mendooran property was owned by NSW Greenery Pty Ltd (the second defendant), the sole director and shareholder being Chadi Abbas;

3. The Bevendale property was owned by Bilal Hassan Allam (the third defendant); and

4. The Boxers Creek property was owned by ATM Greenland Pty Ltd (the fourth defendant) as to 75 per cent of the property, the sole director and shareholder being Mohammed Ahmed, and by Belal El Alami (the fifth defendant) as to 25 per cent of the property, as tenants in common.

9. The first, second and fourth defendants filed applications for the revocation of the restraining orders and/or exclusion of their respective properties pursuant to ss 29 and 31 of the Act. [1] On 14 December 2023, those applications were set down by Cavanagh J for a three-week joint hearing commencing on 8 April 2024. Some of the defendants sought severance orders, so that their exclusion applications could be heard separately. Cavanagh J set down those applications for severance orders for hearing before me on 7 February 2024. However, shortly prior to that date, the parties informed the Court that the severance applications would not be pursued.

The joining of the third and fifth defendants

1. The first defendant by a notice of motion filed on 15 July 2020, the second defendant by a further amended notice of motion filed on 19 July 2023 and the fourth defendant by a notice of motion filed on 14 July 2020.

10. A forfeiture order was made by Walton J on 27 March 2023 in respect of the Bevendale property, in the absence of the third defendant: Commissioner of the Australian Federal Police v Hills Greenery Pty Limited [2023] NSWSC 288. The third defendant filed a notice of motion on 16 May 2023 submitting that the forfeiture order should be stayed or set aside. On 3 July 2023, the plaintiff filed a notice of constitutional matter in relation to certain orders of the notice of motion. The constitutional issue was determined against the third defendant: [2024] NSWSC 189. The third defendant filed an amended notice of motion on 8 March 2024 seeking leave, under ss 74 and 78 of the Act, to apply for an exclusion order pursuant to s 73 of the Act concerning the Bevendale property, or alternatively, a compensation order, pursuant to s 77 of the Act, respectively, subject to leave being granted, which initially was to be heard prior to 8 April 2024.

11. The fifth defendant was listed for hearing on 8 April 2024. Although he did not have an application on foot, he had foreshadowed that when the plaintiff sought a forfeiture order against the Boxers Creek property, he would seek the refusal of the making of a forfeiture order with respect to his 25 per cent interest in the property, pursuant to s 49(4) of the Act.

The finalisation of property orders in respect of the first, second, third and fifth defendants.

12. There were numerous mentions of the matter in March and early April 2024. By the time of the hearing date, the first, second and fourth defendants had withdrawn their notices of motion concerning the exclusion applications with respect to the restraining orders. [2] The plaintiff and all five defendants agreed that the three-week hearing time could be utilised instead by a hearing of the plaintiff’s forfeiture application in respect of the first, second, fourth and fifth defendants and those defendants’ applications pursuant to s 49(4) of the Act.

    2. The first and fourth defendants withdrew their notices of motion on 18 March 2024 and the second defendant on 4 April 2024.

13. There were further developments shortly before or after the commencement date of the hearing that resulted in only the fourth defendant remaining in the proceedings. Those other developments were as follows.

14. On 28 March 2024, the Court was informed that, on the basis that there would be no order for costs, the fifth defendant would consent to a forfeiture order in respect of his share of the Boxers Creek property.

15. On 3 April 2024, by consent, the third defendant’s application was referred to the registrar to set a fresh timetable and hearing date, in view of insurmountable obstacles to the matter being ready in time for hearing on 8 April 2024.

16. On 10 April 2024, the second defendant consented to orders for the forfeiture of the Mendooran property. A mortgage was outstanding on the property. Two affidavits of a solicitor of the plaintiff were read on the application for orders, which were to the effect that correspondence had been directed to the office of the mortgagor and that the solicitor had spoken to an officer of the company to ensure they were aware of the proceedings. The mortgagor did not act on an invitation to join the proceedings.

The first defendant’s interest in the Peelwood property

17. The first defendant was represented at the mentions of the matter in February, March and early April 2024 by Trevor Hall, solicitor, who said he appeared on the instructions of Dr Accoto, who was the first defendant’s solicitor on the record.

18. On 6 March 2024, Dr Accoto filed a notice of intention to file notice of ceasing to act. At the next mention of the matter, which was on 14 March 2024, Mr Hall said that there were funding issues that might require him and Dr Accoto to withdraw, but which they were attempting to resolve.

19. As noted, on 18 March 2024, the first defendant withdrew its notice of notion seeking an exclusion order in respect of the restrained Peelwood property and instead consented to the plaintiff’s forfeiture application being heard on the allocated hearing dates together with its application pursuant to s 49(4) of the Act.

20. On 20 March 2024, the first defendant filed a written outline of its case. The document concluded with the following: “This outline was prepared by Trevor Hall, instructed by Dr Accoto, solicitor for the first defendant”. It was signed by Mr Hall and dated 20 March 2024.

21. In the outline of its case, the first defendant conceded that the plaintiff would likely establish the prerequisites for a forfeiture order and anticipated that it would submit that the forfeiture order should be refused pursuant to s 49(4) of the Act. It made the following concession:

“[T]he first defendant concedes for the purposes of the forfeiture hearing of the Peelwood property, that the property came to be used for an illegal enterprise and that the property became an instrument of a serious offence.

The serious offence was the propagation of tobacco at the property. This is an admitted fact.”

22. Under the heading “The first defendant’s case”, the first defendant referred to filed affidavits by two of its directors, Mahmoud Hamze and Ahmad Dib, [3] both sworn on 31 July 2020, that it intended to read at the hearing, and excerpts of an examination of the third director, Roukia Abbas. It was submitted that this evidence would establish that the purchase moneys for the Peelwood property were lawfully obtained; that the property was purchased in 2017 in the name of the company as an investment for the propagation of olive trees. Roukia Abbas was effectively a silent partner in the enterprise who had no involvement other than contributing part of the purchase price. The first defendant leased the property to a person who, without the initial knowledge or consent of Mr Dib and Mr Hamze, cultivated tobacco on the property. The tenant told Mr Hamze that he had a licence to grow the tobacco. In their affidavits, Mr Dib and Mr Hamze denied having any involvement with the cultivation or being aware that it was grown unlawfully, and therefore, it was submitted, the court should refuse the forfeiture order on the basis of s 49(4) of the Act.

    3. In the written outline, Ahmad Dib’s family name was spelt as “Diab”, although in court documents, and as confirmed by Mr Dib when he appeared on 12 April 2024, the correct spelling is “Dib”.

23. On 3 April 2024, the plaintiff filed a reply to the first defendant’s written outline, in which it challenged the first defendant’s submission that the purchase funds for the Peelwood property were lawfully obtained and submitted that Mr Dib and Mr Hamze were aware of, and centrally involved with, the propagation of tobacco on the property.

24. On 6 April 2024, the first defendant’s solicitor electronically filed a notice of ceasing to act. The notice stated: “A notice of intention to file and serve this notice was filed on 6 March 2024 and served on Hills Greenery Pty Ltd on 6 March 2024 by post and email”.

25. On 8, 9 and 10 April 2024, there was no appearance by or on behalf of the first defendant or any of its three directors/shareholders, and no communication was received from them.

26. I was satisfied that the plaintiff had complied with the matters specified in s 49(1) of the act. The plaintiff applied for a forfeiture order by its amended summons dated 29 May 2020 in which it specified that the application was made pursuant to s 49 of the Act (s 49(1)(a)); the restraining order had been in place for well over 6 months (4 years) (s 49(1)(b)); and there was no need for s 49(1)(c) to be satisfied because, pursuant to s 49(3)(b), the first defendant’s exclusion application had been withdrawn, so that s 49(1)(c) had no application.

27. As to s 49(1)(e), I had before me copies of title searches in respect of the property that were obtained on 28 February 2018 and 28 March 2024, both of which identified Hills Greenery Pty Ltd, as being the sole proprietor and there being no other registered interests. The three directors and shareholders of Hills Greenery Pty Ltd were identified from the database maintained by the Australian Securities and Investments Commission (ASIC). The legal representation of the first defendant until two days before the hearing, and the filing of the written outline of its case, which mentioned the commencement date of the hearing as 8 April 2024, satisfy me that the authority had taken reasonable steps to identify and notify all persons with an interest in the property, and that all persons with an interest in the property were in fact aware of the plaintiff’s application for an order for its forfeiture of the Peelwood property and the hearing date for such application.

28. Since I was satisfied that the first defendant was aware of the hearing date and the substance of the issue to be determined, its non-appearance for a period of three days, in the absence of any explanation, satisfied me that it had abandoned its claim for an exclusion order. In those circumstances, the Court was obliged to make a forfeiture order in respect of the Peelwood property. Accordingly, on 10 April 2024, I made an order pursuant to s 49 of the Act for the forfeiture to the Commonwealth of the Peelwood property.

29. The Court did not sit on Thursday 11 April 2024. On Friday 12 April, Mr Dib and Mr Hamze appeared with an interpreter and without legal representation. Mr Dib informed the Court that his solicitor was Dr Accoto, although “he’s not responding with us. Not cooperating with us”. When informed that Dr Accoto had filed a notice of discontinuance, he said: “Yes, he told us about two days ago … Tuesday, 9.30 in the morning”. I informed Mr Dib and Mr Hamze that orders had been made in the absence of the first defendant and that he needed to obtain legal advice. The solicitor for the plaintiff kindly gave Mr Dib and Mr Hamze his contact details so that he could assist their legal representative to become acquainted with the nature of the matter.

The plaintiff’s application for an order for forfeiture of the Boxer’s Creek property

Background to the plaintiff’s application

30. Relevant unchallenged documentary evidence and events by way of background to the plaintiff’s application are as follows. On 5 February 2020, a search warrant was executed on the Boxers Creek property. A tobacco crop of 3.789 acres was discovered, as well as 1,256.95kg of dried tobacco and 343.15kg of dry tobacco leaf in a baling press. Located on the premises were two tobacco drying kilns with tobacco leaf inside. A criminal investigator with the Australian Tax Office at the time, who gave evidence at the hearing, attended the execution of the warrant and estimated that the total excise value of the tobacco that was seized was $4,512,566.

31. An historical title search of the Boxers Hill property on 20 September 2023 was tendered by the plaintiff. It established that on 28 January 2015, the property was transferred to ATM Greenland Pty Ltd (ATM). On 20 December 2018, ATM transferred 25 per cent of the property to the fifth defendant. An historical ASIC company extract dated 20 September 2023 for ATM records that it was registered on 18 September 2014. The sole director and shareholder is Mohammed Ahmed. Antonios Boumelhem and Mr Dib were directors on 18 September 2014 and they ceased to be directors on the same date. On 3 November 2015, Mr Boumelhem and Mr Dib transferred their one share each to Mr Ahmed, so that he held all three issued shares from that date.

32. As noted, the plaintiff sought a forfeiture order against the Boxers Creek property in its amended summons filed on 29 May 2020. Subsections 49(1)(a) and (b) of the Act are satisfied by the amended summons and the restraining order made on that date, that is, more than six months before the application for a forfeiture order. Again, there was no need for s 49(1)(c) to be satisfied because, pursuant to s 49(3)(b), the fourth defendant’s exclusion application had been withdrawn, so that s 49(1)(c) did not apply. As to s 49(1)(e), the fourth and fifth defendants were the registered proprietors as tenants in common and there are no other interests on the title. Mr Ahmed and the fifth defendant both gave evidence in the hearing and neither suggested that an interest in the property was held by anyone else, so there is no question as to whether s 49(1)(e) is satisfied.

33. Accordingly, the Court was required to make a forfeiture order in respect of the Boxers Creek property unless it was satisfied by the fourth defendant on the balance of probabilities that the matters specified in either or both of ss 49(4) or 73 of the Act were satisfied.

The fourth defendant’s written outline of its case

34. The fourth defendant’s written outline of its case is dated 2 April 2024. Much of its contents are identical to the first defendant’s outline, including the concession that the plaintiff could comply with the requirements specified in s 49(1) to obtain a forfeiture order and the concession in the passage excerpted at [21] above, in almost identical terms:

“[T]he fourth defendant concedes for the purposes of the forfeiture hearing of the Boxers Creek property, that the property came to be used for an illegal enterprise and that the property became an instrument of a serious offence.

The serious offence was the propagation of tobacco at the property with a prospect of distributing and selling the product. This is an admitted fact.”

35. The outline of the fourth defendant’s case drew exclusively on Mr Ahmed’s evidence when examined pursuant to provisions of the Act on 16 June 2021. It submitted that the Court would refuse the forfeiture order in accordance with s 49(4) of the Act.

36. In its written closing submissions, the fourth defendant again confined its case as to the basis for refusal of the forfeiture order to s 49(4) of the Act.

The principles applicable to an application of s 49(4) of the Act

37. As noted, pursuant to s 317 of the Act, the onus of proof rests on the fourth defendant to satisfy the court of each of the three elements of s 49(4) of the Act if the court is not to make a forfeiture order that it is otherwise obliged to make pursuant to s 49(1): Commissioner of the Australian Federal Police v Fernandez (2018) 100 NSWLR 610; [2018] NSWCA 198 per Beazley P and Payne JA at [45], [83]-[86]. These elements are, first, that the property is an instrument of an offence (other than a terrorism offence) but is not proceeds of an offence; second, that it is not in the public interest to make the forfeiture order; and, third, if satisfied of those first two elements, that the court should exercise its discretion (noting that the terms of s 49(4) of the Act specify that the court may refuse to make an order) in favour of the fourth defendant.

What is “an instrument of a serious offence” and what are “proceeds of an offence”?

38. Section 329 of the Act provides:

“329   Meaning of proceeds and instrument

(1)   Property is proceeds of an offence if:

(a)   it is wholly derived or realised, whether directly or indirectly, from the commission of the offence; or

(b)   it is partly derived or realised, whether directly or indirectly, from the commission of the offence;

whether the property is situated within or outside Australia.

(2)   Property is an instrument of an offence if:

(a)   the property is used in, or in connection with, the commission of an offence; or

(b)   the property is intended to be used in, or in connection with, the commission of an offence;

whether the property is situated within or outside Australia.

(3)   Property can be proceeds of an offence or an instrument of an offence even if no person has been convicted of the offence.

(4)   Proceeds or an instrument of an unlawful activity means proceeds or an instrument of the offence constituted by the act or omission that constitutes the unlawful activity.”

What is the “public interest”?

39. There is no statutory elucidation as to the meaning and effect of the expression “public interest” in the Act, so that the term must be construed according to the usual principles of statutory construction, that is, having regard to the subject matter, scope and purpose of the enactment in which it appears: Commissioner of the Australian Federal Police v Fernandez per Beazley P and Payne JA at [87] citing O’Sullivan v Farrer (1989) 168 CLR 210 at 216; [1989] HCA 61.

40. The question of where the “public interest” lies imports a value judgement that takes into account “competing arguments about, or features or ‘facets’ of, the public interest”, and is made not within a normative vacuum, but rather within the context, and for the purpose, of the statute: McKinnon v Secretary, Department of Treasury (2006) 228 CLR 423; [2006] HCA 45 per Gleeson CJ and Kirby J at [5], [16] and per Hayne J at [55]. In Courtenay Investments Ltd v Director of Public Prosecutions (Cth) [2012] WASCA 121, Buss JA (McLure P and Mazza JA agreeing) stated at [115] that “public interest” for the purpose of s 49(4) of the Act is “sufficiently broad to include, as factors requiring consideration, any relevant prejudice or hardship”.

41. Having regard to the above statement of principle, it is apposite to review the objects of the Act, as provided by s 5:

“5   Principal objects

The principal objects of this Act are:

(a)   to deprive persons of the proceeds of offences, the instruments of offences, and benefits derived from offences, against the laws of the Commonwealth or the non‑governing Territories; and

(b)   to deprive persons of literary proceeds derived from the commercial exploitation of their notoriety from having committed offences; and

(ba)   to deprive persons of unexplained wealth amounts that the person cannot satisfy a court were not derived or realised, directly or indirectly, from certain offences; and

(c)   to punish and deter persons from breaching laws of the Commonwealth or the non‑governing Territories; and

(d)   to prevent the reinvestment of proceeds, instruments, benefits, literary proceeds and unexplained wealth amounts in further criminal activities; and

(da)   to undermine the profitability of criminal enterprises; and

(e)   to enable law enforcement authorities effectively to trace proceeds, instruments, benefits, literary proceeds and unexplained wealth amounts; and

(f)   to give effect to Australia’s obligations under the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime, and other international agreements relating to proceeds of crime; and

(g)   to provide for confiscation orders and restraining orders made in respect of offences against the laws of the States or the self‑governing Territories to be enforced in the other Territories.”

42. The principal objects set out above outline, amongst other matters, a punitive and deterrent purpose of the legislative scheme. Viewed through that lens, it is apparent that the hardship caused to an individual by a forfeiture of their property is an intended operation of the Act.

43. In Tedesco v Director of Public Prosecutions (2010) A Crim R 473; [2010] SASC 336, White J extensively considered the operation of the public interest criterion in s 76(1)(c) of the Criminal Assets Confiscation Act 2005 (SA). The issue arose in circumstances where the magistrate refused to make an exclusion order from a statutory forfeiture of property, where the appellant argued that the forfeiture caused hardship to the appellant’s wife (who had not committed the relevant offence) as tenant in common, which should have positively satisfied the court that an exclusion order would not be contrary to public interest. White J explained and applied the public interest criterion in that context:

“61 The consideration of the public interest for the purposes of s 76(1)(c) must take account of the scope and purpose of the CAC Act. In that respect it is significant that it is both an intended, and inevitable, effect of the regime of forfeiture contemplated by the CAC Act that there will be some resultant hardship. Debelle J referred to this consideration in Taylor v Attorney-General (SA)18 when he said:

‘The fact that hardship will occur is not a factor which, standing alone, will militate against an order for forfeiture. It is necessary to bear in mind that it is the intention of the Act that the forfeiture of property will cause a measure of hardship’

…

Of course, these purposes are directed to the offender and not the family or dependants of the offender. However, the legislature must have contemplated that the achievement of the purposes of forfeiture would be likely to result in many cases in hardships to the family and dependants of the offenders.

…

64   I doubt that considerations of hardship could support the routine making of exclusion orders under s 76(1). Such routine exclusions could have the effect of undermining the primary purposes sought to be achieved by the CAC Act. It would be contrary to the public interest as manifested in the structure and content of the CAC Act for that to occur. However, that leaves open the possibility that there may be cases in which, because of the particular hardship which forfeiture may cause, it would not be contrary to the public interest for the property in question to be excluded, and therefore for the discretion to exclude the property from forfeiture to be exercised.

65   I do not regard the present case as one in which it can be said that the particular effect upon the appellant’s family indicates that it would not be contrary to the public interest for the statutory forfeiture to occur …I agree that the financial effect of the statutory forfeiture is likely to be severe, but, as noted earlier, it is consistent with the scope and purpose of the CAC Act that statutory forfeiture should have that effect. Put slightly differently, the hardships identified by the appellant and his wife are not such as to outweigh the public interest in the scheme for forfeiture contemplated by the CAC Act having its full effect.”

44. Thus, while “public interest” for the purposes of s 49(4) is sufficiently broad so as to canvass relevant prejudices and hardship, hardship alone does not, in view of the statutory objects of punishment and deterrence, suffice to satisfy the court that the exercise of discretion favours the refusal of forfeiture.

The evidence in the hearing

45. The plaintiff tendered documentary material without objection that included Mr Ahmed’s declared taxable income for 2015 ($34,823), 2016 ($21,787), 2017 ($21,829), and 2019 ($20,120). No tax return was received from ATM in the years 2015 to 2020. The tendered material included Mr Dib’s taxable income for 2015, which was $35,424.

Mohammed Ahmed’s evidence

Mohammed Ahmed’s affidavit evidence

46. The fourth defendant read affidavits, with certain deletions, by Mr Ahmed dated 13 July 2020 (the first affidavit), 27 November 2020 (the second affidavit) and 20 March 2024 (the third affidavit). The affidavit evidence of Mr Ahmed was to the following effect. He purchased the Boxers Creek property “for family leisure and recreation” with two other men, Tony Boumelhem and Ahmad Dib, in equal shares in January 2015, through a company that they set up for that purpose, known as ATM Greenland Pty Ltd. The purchase price of the property was $422,000. Each of them contributed about $57,000 to the purchase “from our own resources and various bank accounts”. He said they also received a short-term loan from a company known as NWC Finance Pty Ltd (NWC) in the sum of $241,947.90 (the NWC loan). Settlement of the purchase was on 16 January 2015. Mr Ahmed said he signed a deed of guarantee with NWC. Annexed to the third affidavit is a copy of a caveat that was placed on the title of a property of which Mr Ahmed was the registered proprietor concerning a “Deed of Guarantee” dated 15 January 2015.

47. In February 2016, Mr Boumelhem and Mr Dib transferred their shares in ATM to Mr Ahmed. A document purporting to be a share transfer agreement, dated 20 April 2016, was produced by Mr Ahmed during the course of his examination on 16 June 2021. According to the document, Mr Dib and Mr Boumelhem agreed to transfer their shares in ATM to Mr Ahmed for the sum of $333,000.

48. In the third affidavit, Mr Ahmed purported to provide more information about the purchase of the property and his subsequent purchase of the shares of Mr Boumelhem and Mr Dib. The affidavit is unsatisfactory, in that the meaning of the text is sometimes unclear and some of the annexures do not match their descriptions in the body of the affidavit. One of the annexures, to which there is no reference in the body of the affidavit, is a letter that purports to be from a chartered accountant, dated 16 January 2015, which is the day after the settlement of the purchase of the Boxers Creek property, that purports to explain “to whom it may concern” Mr Ahmed’s “exit strategy for the loan from [NWC]” (the chartered accountant’s letter). It continues:

“•   Mr. Ahmed is borrowing $260,000.00 to finance the acquisition of a block of land at … Boxers Creek NSW 2580. The blocks purchase value is $422,000.00 of which $162,000.00 contributed by the owners of the property and $260,000.00 borrowed from NWC Finance Pty Ltd.

•   The loan from NWC is only a short term loan for period of two months until Mr. Ahmed completes refinancing arrangements currently in process.

•   Mr. Ahmed owns a property at … Auburn with market valued in excess of $1,000,000 as per Mr. Ahmed's evaluation. The property has debt of $150,000.00 and equity of $850,000.00 which Mr. Ahmed is plans to use to settle the $260,000.00 to NWC Finance Ply Ltd.

Please note the above was discussed with Mr. Mohammed Ahmed. We have made enquires in relation to the refinancing of the [Auburn] property with the relevant financial institution and they have confirmed the above refinancing arrangement is currently in process.”

49. Mr Ahmed also provided more information in the third affidavit about his subsequent purchase of the shares of Mr Boumelhem and Mr Dib. Although the transfer is dated 20 April 2016, Mr Ahmed stated that Mr Boumelhem and Mr Dib decided to sell their shares to him in about March 2015. He said he used “the equity in my home” to pay out Mr Boumelhem and Mr Dib and the NWC loan, by which I presume he meant that he borrowed the necessary funds using the equity in his home as security. He annexed what he described as “a copy of National Australia Bank Account Limited evidencing the transfer of funds about the same time” (annexure 4).

50. Mr Ahmed qualified that proposition by going on to state that his settlement with Mr Boumelhem involved Mr Boumelhem transferring his interest in an industrial property to Mr Ahmed:

“… on or about 11/11/15 … with an adjustment of $160,000 I paid to him for the said interest in the property and his interest in the industrial unit with the balance of funds borrowed from (NAB) was used to discharge the mortgage on the industrial unit. … All money paid by me to buy the industrial land at Horsley Drive, Smithfield was borrowed from NAB.”

He stated that annexure 4# was a copy of his agreement with Mr Boumelhem and annexure 5 was a copy of the bank statement “evidencing the borrowing from NAB”.

51. Annexure 4 is in fact copies of bank statements of two accounts, one being a two-page National Australia Bank (NAB) account statement and the other an ANZ account, both in Mr Ahmed’s name. The entries in the NAB statement show that the account was opened on 28 January 2015 with a nil balance. The last transaction was on 13 April 2015. The first transaction was a deposit on 13 February 2015 of $260,840.66, which was described as “loan proceeds”. I note that this amount is approximately the same sum as the loan he said he received from NWC for the settlement the day before, raising the possibility it had something to do with a refinancing of that loan. However, that hypothesis is not borne out by the subsequent transactions. On 20 February 2015, the sum of $170,000 was withdrawn by bank cheque, which I presume to be, in Mr Ahmed’s evidence, the payment to Mr Dib. There were other withdrawals, of $20,000 on 16 February and $5,000 on 17 February 2015. There were two deposits, titled “loan repayment”, on 13 March and 13 April 2015, each in the amount of $3,710, the latter being the last entry, by which time the account balance was $59,408.66 in credit.

52. The ANZ account statement was for the period 14 November 2014 to 15 January 2015. Its relevance was not apparent. Over that period, there were numerous withdrawals totalling $55,496.14 and no deposits. The opening balance was $243,847.27 in debit and the closing balance was $299,343.41 in debit.

53. Annexure 4# is a short, typed note, unsigned. It is as follows:

“To who it may concern:

I’m Mohammed Ahmed from … Auburn, I gave mr

Antonios Boumelhem (my friend) $180.000 by transfer on 11/11/2015

from Nab to Nab & on 9 February 2016

I gave him another $100.000, so total $280.000.

We deduct $160.000 as a deposit when I bought his factory unit &

$120.000 still outstanding, but he will build for me soon then we work it

out as we trust each other.

My phone number: …

My email: …”

54. This note raises obvious questions. On its face, it has no relevance to the share transfer. In any event, there is no bank documentation of the alleged transfer on 11 November 2015 of $180,000 or the subsequent payment of $100,000, or any evidence as to where Mr Ahmed obtained those two significant amounts.

55. Annexure 5 is another NAB account statement in Mr Ahmed’s name, for the period from 24 December 2015 to 4 January 2017. The last page, which is of any transactions after 30 December 2016, is completely illegible. Many of the transactions throughout the statement are also illegible.

56. The account was opened on 24 December 2015 with a nil balance. On 7 January 2016, there was an entry titled “Loan Drawdown” in the sum of $919,882.35. Thereafter, there are monthly interest charges of between $2,395.53 and in excess of $3,000, and monthly deposits titled “Loan Instalment” in the amount of $4,600. An hypothesis, based on the “Loan drawdown” amount and description, is that it could be the manner by which Mr Ahmed accessed the equity in his home to repay NAB and pay out Mr Boumelhem and perhaps Mr Dib. However, there are no other transactions. The last legible balance, which was on 30 December 2016, was a debit in excess of $907,000.00.

54. Returning to Mr Ahmed’s affidavit evidence of events, he said that the property had about 1,800 olive trees on it. Until 2018:

… “the Property was used only occasionally by me and my family by way of recreational visits on the weekends or otherwise in our spare time. … For the balance of 2018, and throughout 2019, I continued to visit the Boxers Creek Property on weekends with my family. I also used the property to store and pick up air conditioning parts and equipment and some building material.”

58. In his first affidavit, Mr Ahmed stated that through Ahmad Dib, he met Mohamed Dib (M Dib). In around January 2019, M Dib’s father discussed the possibility of purchasing a share of the property for his son, M Dib. Mr Ahmed said he might be interested. M Dib then said he wanted to buy a 25 per cent share of the property in the name of his cousin, the fifth defendant, who Mr Ahmed did not meet until shortly afterwards, and agreed to sell him a 25 per cent interest for $150,000, which was completed on about 25 October 2018. I note the obvious conflict of dates between when M Dib’s father first raised the issue on Mr Ahmed’s assertion and the date of transfer. In his second affidavit, Mr Ahmed gave the same version, with the exception that the time that M Dib’s father asked about buying a share for his son was “in or around 2018”.

59. Mr Ahmed said that he agreed to lease part of the property to M Dib, although there were again variations between the accounts in his affidavits of how that came about. In his first and second affidavits, he said that in December 2019, M Dib approached him and proposed that he lease part of the Boxers Creek property “to grow vegetables. I’ve already spoken to [the fifth defendant] and he agreed”. Mr Ahmed said he would think about it and get back to him. Mr Ahmed spoke to the fifth defendant who agreed to the proposal. Mr Ahmed then prepared a lease agreement for M Dib. In his third affidavit, Mr Ahmed stated that the fifth defendant approached him and proposed that M Dib lease the property to grow vegetables. Mr Ahmed agreed and asked the fifth defendant to provide Mr Ahmed with M Dib’s details for the lease. Five days later, he received a copy of M Dib’s licence, with his address being that of the property. He spoke to M Dib who said: “I want to live here”.

60. In his first two affidavits, Mr Ahmed said that in January or February 2020, he noticed plants being grown at the property. The fifth defendant told him they were “egg plants, spinach and other vegetables”. The first time he knew that tobacco was being grown on the property was when he received court documents.

61. In his third affidavit, Mr Ahmed stated:

“I travelled to the property on many occasions as I used to store building material on the property together with air conditioners in a farm shed which was situated about 100 metres away from the house built on the property.

The tobacco growing activities was about 250 away from the farm shed and hidden behind hills.

I had no reason to doubt their assertion.

I never travelled far enough on subsequent visit to be close to the plantation operation.

My only knowledge of the plantation was it was about 20cm high not enough to distinguish from many other plants.

I had not knowledge or experience in tobacco plants.”

Mohammed Ahmed’s oral evidence

62. Mr Ahmed gave oral evidence through an interpreter in the Arabic language. He said that the consideration for the transfer to the fifth defendant of 25 per cent of the Boxers Creek property was $225,000, which was a contradiction of his affidavit evidence. He said that the fifth defendant paid $150,000 and M Dib paid Mr Ahmed the balance in cash.

63. Mr Ahmed said that he was approached by M Dib about the proposal for a lease. When it was pointed out that according to his third affidavit it was the fifth defendant who approached him about the lease, he said it was “both of them, they used to come together”, which I note is a third version of that event.

64. Mr Ahmed’s account that he did not realise that tobacco was being grown on the property and that he had nothing to do with that venture was tested in cross-examination. At one point he contradicted himself as to the nature of his arrangement with the fifth defendant and M Dib. He said that the fifth defendant and M Dib introduced him to a person named “Abdul” who was assisting them with the farming. He saw Abdul on the farm “all the time”, for example, working on the irrigation of the farm with them. He was asked:

“Q. So is it your evidence that you had nothing to do with the planting of the crops?

A. INTERPRETER: No.

Q. No, you had nothing to do with it?

A. INTERPRETER: Well, before they started to plant, I didn’t know anything. But then they came to my house and they told me and I said I want nothing to do with it. Yes. And they told me, ‘You can become partner number 4.’ And I said, ‘No. I don’t want to divide the dollar between four.

Q. You don’t want to divide the dollar between four. Which dollars?

A. INTERPRETER: I mean, like, you know, any--

A. WITNESS: Income.

A. INTERPRETER: Any income that we get, I don’t want to divide it between four.

Q. And so is that because you preferred a different division of the income?

A. INTERPRETER: Okay. No. I didn’t want anything to do with that because I only wanted the rent from them. And - because I had my own business outside the - like, you know, this.”

65. Mr Ahmed initially denied that he had anything to do with farming on the property; he attended only for recreational purposes with his family or to store air conditioning or building materials in the sheds. He was asked:

“Q. And so you only visited to put material there or pick it up?

A. WITNESS: Yes.

Q. And did you do anything farming related yourself?

A. INTERPRETER: No, I have nothing to do with it.”

66. Essentially, it was put to Mr Ahmed that he was involved in a joint venture whereby the costs and profits were to be split in three equal parts between him, the fifth defendant and M Dib. To that end, Mr Ahmed kept an expenditure list of farming and other items (the list), two pages of which was tendered at the hearing. At the bottom of the list on one page, the costs were tallied and divided three ways, with notation indicating that Mr Ahmed, the fifth defendant and M Dib were liable for one-third each.

67. Mr Ahmed agreed that he wrote the list which was titled “Expenses of the farm”. It included a disc plough, irrigation equipment including a pump and water tank cover, an unregistered trailer and motor bike to be used only on the farm, utility fees for the property (council rates and electricity), gas bottles, tractor fuel, maintenance costs and repairs, and household items such as toilet paper and soap. He said:

“[The fifth defendant] was my partner. Because I didn’t have time to maintain, you know, like, the farm. So I spoke to them and we divided the, like, you know, the maintenance or whatever the cost between the three of us. I’ve got 1,500 olive trees need to be maintained.”

68. Mr Ahmed said that the plough was used to turn the ground between the olive trees and he used the electricity to run a pump that provided irrigation to the olive trees. He was shown text messages that he agreed he had sent to the fifth defendant concerning possible equipment purchases, including irrigation pipes, a water pump, fans and an industrial heat pump. He said that he was simply assisting the fifth defendant and M Dib with items they had told him they wanted, although he did not know what they wanted them for. He knew that they wanted “something to heat air … I don’t know why. But they were looking for something to give heat”. He understood the fans were “Maybe to dry something. I don’t know”. He denied that he knew the heat pump was for a kiln to dry tobacco leaves.

The evidence of the fifth defendant and M Dib

69. The fifth defendant and M Dib gave evidence and were cross-examined by Mr Barber, who appeared for the fourth defendant. They both admitted that they cultivated tobacco on the Boxers Creek property and said that they did so as part of a joint venture with Mr Ahmed. They said that they had an arrangement to split the costs and profits equally. M Dib had expertise in plumbing and was responsible for the pumps and irrigation. Mr Ahmed did all electrical work, including the electric water pumps on the property that were used to water the tobacco plants. Mr Ahmed was actively involved in the operation. As an example, they said that Mr Ahmed insisted on using a shipping container as a large water tank and fitted it out for that purpose. He was advised by M Dib that it was unsuitable and would not withstand the pressure. When Mr Ahmed attempted to fill the container, it leaked and had to be abandoned.

70. In oral evidence, the fifth defendant said the trailer that was mentioned on the list was used in the cultivation of the tobacco. A sprayer was placed on the trailer to spray the tobacco plants. The fifth defendant and M Dib both gave evidence that neither they nor anyone else, including Mr Ahmed, did any work on the olive trees; they were abandoned. There were old irrigation pipes on that part of the farm, but they were in disrepair and were incapable of use.

Assessment of the witness’ evidence

71. I found Mr Ahmed’s evidence to the effect that he was not part of the tobacco growing venture on the Boxers Creek property to be unconvincing. The list of farm expenses, which he conceded he wrote, included items used in the cultivation of the tobacco and divided the expenses in three equal parts between him, the fifth defendant and M Dib, which was probative evidence to the effect that he was a partner in that enterprise.

72. I found both the fifth defendant and M Dib to be reliable witnesses. As an example, it was put to the fifth defendant in cross-examination that Mr Ahmed had emailed him a copy of the lease of the farm in December 2019. The fifth defendant denied that he had ever received a copy of it, but offered to look at his emails on his smart phone to check, which he did, and informed counsel for the fourth defendant that in fact he did receive an email from Mr Ahmed in December 2019 that had attached to it a copy of the lease. In closing submissions, the fourth defendant submitted that this incident demonstrated that the fifth defendant was an unreliable witness. On the contrary, I found it to be demonstrative of the witness’s candour and adherence to the truth.

73. I conclude that I am satisfied that Mr Ahmed was a partner in a joint enterprise with the fifth defendant and M Dib to cultivate tobacco on the Boxers Creek property.

Consideration of the fourth defendant’s application

Whether the Court is satisfied that the property is not proceeds of an offence

74. Although the fourth defendant has not provided any evidence that directly corroborates Mr Ahmed’s evidence that its purchase of the Boxers Creek property was partly financed by a loan from NWC, I am disposed to accept that it was.

75. However, Mr Ahmed’s financial circumstances give rise to obvious questions concerning the source and legitimacy of his personal funds that were used to purchase his initial share of the Boxers Creek property. In evidence, Mr Ahmed said that his employment was as an installer of air conditioning equipment. His taxable income for the years 2015 to 2019 demonstrates a limited, at best, financial capacity for saving money and servicing a loan. Although Mr Ahmed annexed some copies of bank statements to his third affidavit, their contents are not explained in his evidence as to the source of funds, including loan repayments, that were deposited into the accounts.

76. The fourth defendant did not provide evidence of the source of the $57,000 that Mr Ahmed, Mr Boumelhem and Mr Ahmad Dib each contributed to the purchase of the property. Mr Ahmad Dib’s taxable income in the tax year 2015, in which the property was purchased, was also a modest amount, $35,942.00.

77. Section 49(4) of the Act obliged the fourth defendant to satisfy the Court that the property, not just its share of the property, is not proceeds of an offence. Accordingly, it must also satisfy the Court that the funds used by the fifth defendant to purchase his one quarter share of it were not proceeds of an offence. It has not led any evidence as to the source of those funds or, as Mr Ahmed claimed in his oral evidence, the additional funds paid in cash by M Dib.

78. I am not satisfied that the fourth defendant has established that the funds used by Mr Ahmed, Mr Boumelhem and Mr Ahmad Dib to purchase the Boxers Hill property were not, in total or in part, proceeds of an offence. Accordingly, the fourth defendant has not established the second element of s 49(4) of the Act, namely, that the property was not the proceeds of an offence as defined in s 329(1) of the Act.

79. Although it is unnecessary to determine the second element, that is, whether it would be in the public interest to refuse the forfeiture order, I note that I have found that Mr Ahmed was cultivating tobacco on the Boxers Creek property and the scale of that venture. Had I been satisfied that the property was not the proceeds of an offence, I would nevertheless have found that it was not in the public interest to refuse the forfeiture order.

80. Accordingly, I grant the plaintiff’s application.

Costs

81. It is appropriate that an order for costs should follow the outcome.

Orders

82. I make the following orders:

1. Pursuant to section 49 of the Proceeds of Crime Act 2002 (Cth) (the Act), the property specified in Schedule One of these orders (which is the property referred to in Schedule Four of the Amended Summons filed in these proceedings on 29 May 2020 (Summons) and, for the purposes of s 56 of the Act, has a value of AUD1,030,000), be forfeited to the Commonwealth.

2. Pursuant to s 69(2) of the Act, leave is granted to the Commonwealth, and persons acting on its behalf, to dispose of or deal with the forfeited property in Schedule One immediately.

3. The Commissioner of the Australia Federal Police and the Commonwealth are released from the usual undertaking as to costs and damages provided to the Court in these proceedings on 29 May 2020, insofar as it relates to the property specified in Schedule One of these orders.

4. The Fourth Defendant pay the Plaintiffs costs of and incidental to the Fourth Defendant’s Notices of Motion filed 14 July 2020 and 28 November 2020 and the Plaintiff’s costs of and incidental to his application for forfeiture of the property specified in Schedule One on and from 18 March 2024.

5. The Court notes the agreement as between the Plaintiff and the Fifth Defendant that the Fifth Defendant consents to the making of the forfeiture order in relation to his interest in the property specified in Schedule One of these orders on the basis that there be no order as to costs in relation to the Fifth Defendant’s participation in the proceedings with a view to the Plaintiff and the Fifth Defendant each bearing their own costs.

6. Make no order as to the Fifth Defendant’s costs, to the intent that he bear his own costs.

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Schedule (35284, pdf)

Endnotes

Decision last updated: 26 April 2024