Commissioner of the Australian Federal Police v Huang

[2019] NSWSC 1076

Supreme Court

New South Wales

Medium Neutral Citation:	Commissioner of the Australian Federal Police v Huang [2019] NSWSC 1076
Hearing dates:	14 November 2017, 15 November 2017
Date of orders:	22 August 2019
Decision date:	22 August 2019
Jurisdiction:	Common Law
Before:	Johnson J
Decision:	1. The Defendant’s Notice of Motion filed on 20 April 2016 is dismissed. 2. The Defendant is to pay the Plaintiff’s costs of the Notice of Motion.
Catchwords:	PROCEEDS OF CRIME – application to exclude property from restraining orders – whether interest is the proceeds of an indictable offence or instrument of any serious offence under s.29(2)(d) Proceeds of Crime Act 2002 (Cth) – whether property ceases to be proceeds or an instrument – whether acquisition of property was by a third party for sufficient consideration under s.330(4)(a) Proceeds of Crime Act 2002 – application of Lordianto v Commissioner of the Australian Federal Police (2018) 337 FLR 17; [2018] NSWCA 199 – where Applicant was not a third party – where Applicant did not acquire interest for sufficient consideration – where Applicant was wilfully blind – application dismissed
Legislation Cited:	Acts Interpretation Act 1901 (Cth) Crimes Act 1900 (NSW) Criminal Proceeds Confiscation Act 2002 (Qld) Proceeds of Crime Act 2002 (Cth) Criminal Code (Cth)
Cases Cited:	Brauer v DPP (1989) 91 ALR 491 Commissioner of Australian Federal Police v Kalimuthu (No 3) (2017) 338 FLR 241; [2017] WASC 108 Commissioner of the Australian Federal Police v Courtenay Investments Ltd (No. 4) [2015] WASC 101 Commissioner of the Australian Federal Police v Fernandez (2018) 336 FLR 386; [2018] NSWCA 198 Commissioner of the Australian Federal Police v Fernandez [2017] NSWSC 1197 Commissioner of the Australian Federal Police v Gwe and Hoang [2018] NSWSC 992 Commissioner of the Australian Federal Police v Kalimuthu (No. 2) (2018) 340 FLR 1; [2018] WASCA 192 Commissioner of the Australian Federal Police v Lordianto (2017) 324 FLR 237; [2017] NSWSC 1196 Commissioner of the Australian Federal Police v Tjongosutiono (2018) 329 FLR 103; [2018] NSWSC 48 Commissioner of the Australian Federal Police v Vo [2015] NSWSC 1523 Director of Public Prosecutions (NSW) v Ronen [2005] NSWSC 990 Henderson v State of Queensland (2014) 255 CLR 1; [2014] HCA 52 Lordianto v Commissioner of the Australian Federal Police (2018) 337 FLR 17;[2018] NSWCA 199 Lordianto and Anor v Commissioner of the Australian Federal Police; Kalimuthu and Anor v Commissioner of the Australia Federal Police [2019] HCATrans 150 and 151 Vu v New South Wales Crime Commission [2013] NSWCA 282
Texts Cited:	---
Category:	Principal judgment
Parties:	Commissioner of the Australian Federal Police (Plaintiff) Shana Huang (Defendant)
Representation:	Counsel: Mr G O’Mahoney (Plaintiff) Mr PJ English (Defendant)   Solicitors: Australian Federal Police (Plaintiff) Michael Bowe, Solicitor (Defendant)
File Number(s):	2015/308772
Publication restriction:	---

Judgment

1. JOHNSON J: By Summons filed on 21 October 2015, the Plaintiff, the Commissioner of the Australian Federal Police (“the AFP Commissioner”), sought a restraining order pursuant to s.19(1)(b) Proceeds of Crime Act 2002 (Cth) (“POC Act”) in respect of real property known as Unit 625, 12 Grandstand Parade, Zetland (“the Zetland property”) held in the name of Shana Huang (“Ms Huang”).

2. On 21 October 2015, restraining orders were made by Button J with respect to the Zetland property pursuant to s.19(1)(b) POC Act. A restraining order was sought and made on the basis of the AFP Commissioner’s suspicions that the Zetland property was wholly or partly the proceeds and/or instrument of a serious offence contrary to s.400.9(1) Criminal Code (Cth), namely dealing in property reasonably suspected to be the proceeds of crime in the sum of $A100,000.00 or more. That suspected offence included, in relation to the Zetland property, an intention to defraud the Australian and New Zealand Banking Group (“ANZ Bank”) by a false or misleading statement contrary to s.192G Crimes Act 1900 (NSW).

3. In the Summons, the AFP Commissioner sought examination orders under s.180 POC Act with respect to Ms Huang and Yi Feng (“Mr Feng”). Ms Huang was examined on 26 April 2016 and Mr Feng was examined on 17 February 2017.

4. The AFP Commissioner also sought in the Summons forfeiture orders concerning the Zetland property pursuant to s.49 POC Act. That aspect of the Summons is yet to be determined.

The Present Application

5. The present application arises from a Notice of Motion filed 20 April 2016 by Ms Huang in which she seeks various orders, including an order that the Zetland property be excluded from restraint pursuant to s.29 POC Act.

6. On 18 September 2017, Ms Huang filed a Further Amended Notice under s.31(4) POC Act setting out the grounds on which she relies in support of her application.

7. By letter dated 8 November 2017, the AFP Commissioner gave notice, for the purpose of s.31(6) POC Act, of grounds upon which it was proposed to contest Ms Huang’s application.

Hearing of the Application

The Hearing in November 2017

8. The hearing of the Notice of Motion proceeded before me on 14 and 15 November 2017. Mr P English of counsel appeared for Ms Huang. Mr G O’Mahoney of counsel appeared for the AFP Commissioner.

9. A Court Book containing affidavits and documents relied upon by Ms Huang and the AFP Commissioner was admitted into evidence (Exhibit A). Ms Huang relied upon the following affidavits:

1. affidavits of Ms Huang affirmed 6 January 2016, 31 August 2016, 19 September 2016, 13 April 2017 and 7 June 2017; and

2. affidavits of her solicitor, Michael Bowe, sworn 20 April 2016 and 31 August 2016.

10. Ms Huang was cross-examined on her affidavits. Mr Bowe was not required for cross-examination.

11. Counsel for the AFP Commissioner relied upon the affidavit of Glyn Evan Roberts sworn 20 October 2015 and affidavits of Scott Michael Mathews affirmed 11 November 2016 and 30 March 2017 (and associated exhibits and annexures). In addition, the AFP Commissioner relied upon a further affidavit of Mr Mathews affirmed on 14 November 2017.

12. Mr Roberts and Mr Mathews were not required for cross-examination.

13. Detailed written submissions had been provided by counsel in advance of the hearing and these were supplemented by additional written submissions and oral submissions (T55-100).

Further Submissions Are Made After the Hearing

14. After the Court reserved its decision on 15 November 2017, written submissions were furnished by the parties, with the permission of the Court, concerning a number of decisions of courts which bear significantly upon the issues to be determined on the present application.

15. Submissions at the hearing were made by reference to a number of authorities, including single Judge decisions in Commissioner of the Australian Federal Police v Lordianto (2017) 324 FLR 237; [2017] NSWSC 1196 (Simpson J), Commissioner of the Australian Federal Police v Fernandez [2017] NSWSC 1197 (Simpson J) and Commissioner of Australian Federal Police v Kalimuthu (No 3) (2017) 338 FLR 241; [2017] WASC 108 (Allanson J).

16. Written submissions made by counsel for the AFP Commissioner and Ms Huang in March 2018 addressed the decision of N Adams J in Commissioner of the Australian Federal Police v Tjongosutiono (2018) 329 FLR 103; [2018] NSWSC 48.

17. Written submissions made in August 2018 by counsel for the AFP Commissioner addressed the decision of Rothman J in Commissioner of the Australian Federal Police v Gwe and Hoang [2018] NSWSC 992.

18. Written submissions made in October 2018 by counsel for the AFP Commissioner addressed the important decisions of the New South Wales Court of Appeal in Lordianto v Commissioner of the Australian Federal Police (2018) 337 FLR 17; [2018] NSWCA 199 (“Lordianto (CA)”) and Commissioner of the Australian Federal Police v Fernandez (2018) 336 FLR 386; [2018] NSWCA 198 (“Fernandez (CA)”).

19. The most recent written submissions made on behalf of the AFP Commissioner were dated 26 November 2018 and addressed the decision of the Court of Appeal of Western Australia in Commissioner of the Australian Federal Police v Kalimuthu (No. 2) (2018) 340 FLR 1; [2018] WASCA 192 (“Kalimuthu (No. 2)”). Put shortly, the Court of Appeal of Western Australia applied the reasoning in Lordianto (CA) with respect to the construction of relevant provisions of the POC Act. As will be seen, these decisions bear upon the proper construction of provisions in the POC Act which fall for determination in this application.

20. I note that Ms Huang’s legal representatives indicated that no further submissions would be made on her behalf concerning these later judgments.

21. On 2 April 2019, the Court was informed by the solicitors for the AFP Commissioner that, on 22 March 2019, the High Court of Australia granted special leave to appeal from the decisions in Lordianto (CA) and Kalimuthu (No. 2). The hearing of those appeals proceeded before the High Court on 7 and 8 August 2019 with the Court reserving its decision: Lordianto and Anor v Commissioner of the Australian Federal Police; Kalimuthu and Anor v Commissioner of the Australia Federal Police [2019] HCATrans 150 and 151.

22. Given the period of time which has passed since the Court reserved its decision in this matter, it is not appropriate to delay further the giving of judgment on the application heard in November 2017 until the High Court of Australia has determined the appeals in Lordianto (CA) and Kalimuthu (No. 2). Whilst acknowledging the possibility that the decisions of the High Court of Australia may affect the outcome of these proceedings, it is appropriate to proceed to give judgment on the application. I note that the parties to the present application have not requested the Court to further delay the delivery of judgment pending the determination of the appeals by the High Court of Australia.

23. For the purpose of preparation of this judgment, I have read the transcript of the hearing which proceeded in November 2017. In addition, I have had regard to contemporaneous notes and summaries which were prepared by me at that time. I have had regard, as well, to the documentary evidence and the submissions made by counsel for the AFP Commissioner and Ms Huang concerning findings and conclusions which should be reached by reference to her evidence.

Factual Background

24. The following narrative is based largely upon the affidavits of Mr Roberts and Mr Mathews, which were not the subject of challenge at the hearing before me, and also parts of Ms Huang’s account which were not challenged in these proceedings.

25. I will consider separately issues concerning the credibility and reliability of Ms Huang’s evidence, which came under strong challenge at the hearing.

Ms Huang in Australia

26. Ms Huang was born in June 1995 and is a citizen of the People’s Republic of China. She had been in Australia since 14 January 2014 on a TU573 visa, which allowed her to study as a full-time student at the University of New South Wales with limited working rights.

Mr Feng and Money Laundering Offences

27. In June 2014, members of the AFP commenced an investigation into suspected money laundering undertaken by a syndicate of Chinese students who were observed depositing large sums of cash in Australian financial institutions and remitting most of the funds overseas. Mr Feng was suspected of being involved in the syndicate.

28. On 11 August 2014, Mr Feng made two deposits of large amounts of cash (totalling $108,000.00) into Ms Huang’s bank account at two bank branches in Sydney. In the period following these deposits, Mr Feng also made large cash deposits into other bank branches across Sydney.

29. As will be seen, Ms Huang said that she does not know Mr Feng and has never met him.

30. On 17 August 2015, Mr Feng was charged with offences including dealing with property reasonably suspected of being proceeds of crime contrary to s.400.9 Criminal Code (Cth). Mr Feng pleaded guilty and has been sentenced for that offence (affidavit, SM Mathews, 14 November 2017).

Ms Huang’s ANZ Bank Account

31. From 14 January 2014 to 2 December 2014, Ms Huang had a bank account with the ANZ Bank. It was this account which received the deposits made by Mr Feng in August 2014 referred to at [28] above.

32. Ms Huang stated that it was her belief that any funds over $5,000.00 which she received came from her father, Mr Jilong Huang.

Ms Huang’s Citibank Loan Application

33. On 5 August 2014, Ms Huang signed a Citibank Package Application form provided by Citigroup Pty Limited stating that she was employed full time as a public relations officer by Guang Dong Jian Xin Construction with a gross monthly salary of $A3,000.00. On the same day, Ms Huang signed an income declaration form provided to Citibank stating that she had been employed by Guang Dong Jian Xin Construction for two-to-three months.

34. These documents contained several representations which the AFP Commissioner contends were false in material respects. As will be seen, Ms Huang acknowledged signing these documents and accepted that various representations contained in them were false, but she stated that she did not prepare these forms.

35. Citibank was also provided with a letter of employment with a handwritten translation in English that reads:

“This is to confirm that Ms Shana Huang was employed on June 2014 as public relation and admin officer. Her current after tax income is $14,500 p/month. Tax are paid by a company.”

36. Ms Huang has acknowledged that the information in this letter was untrue.

Purchase of the Zetland Property

37. Ms Huang stated that she bought the Zetland property through Auschain Investment Group (“Auschain”) which was recommended to her by a friend. She stated that on or around 11 August 2014, Emily Tan from Auschain recommended the Zetland property to her and said that, if she wanted to purchase that property, she would need to pay a deposit of $108,000.00 as soon as possible.

38. On 11 August 2014, two cash deposits and one card entry from various branches around Sydney (Eastwood, Merrylands and Kingsford) were made into Ms Huang’s ANZ Bank account totalling $108,996.00. Mr Feng made these two cash deposits.

39. On 11 August 2014, a cheque was drawn from Ms Huang’s ANZ Bank account in the amount of $A108,000.00 made payable to Meriton Property Services. This cheque was used by Ms Huang to pay the deposit on the Zetland property.

40. On 13 August 2014, a contract for sale in respect of the Zetland property was entered into between Ms Huang as purchaser and Karimbla Properties (No. 2) Pty Limited as vendor. The purchase price was $A1,080,000.00 and a deposit was payable in the amount of $A108,000.00.

41. On or about 3 October 2014, settlement occurred in relation to the purchase of the Zetland property. Ms Huang is the registered proprietor of the Zetland property which is subject to a registered mortgage in favour of Citigroup in respect of a loan to Ms Huang in an amount of $A445,000.00.

Ms Huang’s Version Concerning These Events

42. Ms Huang does not now seek to challenge that the deposits made by Mr Feng into her ANZ Bank account were the proceeds and instrument of a money laundering offence. Rather, she contends that she had no knowledge of this at the time nor any basis to reasonably suspect that it was the position.

43. Ms Huang stated that her father “paid the deposit” and stated, as well, that Sean Huang of Auschain recommended “a currency exchange service to facilitate the transfer of the deposit from China on short notice”.

44. Ms Huang said initially that her father was in Australia in July/August 2014 when the deposits were made into her ANZ Bank account. She states that Emily Tan arranged for the transfer of the deposit with her father through the currency exchange service.

45. Ms Huang did not adduce evidence from either Emily Tan or Sean Huang in support of her application. Nor did Ms Huang adduce evidence from her father. The AFP Commissioner submitted that the failure (and unexplained failure) to adduce evidence from any of these persons was significant to the resolution of the issues falling for determination on this application.

46. Ms Huang said initially that the purchase price of the Zetland property was $A1,080,000.00 comprised of the deposit in the amount of $A108,000.00 and the loan from Citibank (of which $A70,000.00 was applied to acquire the Zetland property) with the balance coming from Ms Huang’s father. The balance of the loan from Citibank was used in an offset account ($A90,000.00) and to purchase units in financial products ($A380,000.00).

47. However, Ms Huang later said that she borrowed $A445,000.00 from Citibank and “all of this money was used to pay” for the Zetland property (Ms Huang’s affidavit of 31 August 2016, paragraph 5(b)). Ms Huang stated that she spoke with her father who suggested that the deposit and balance (being sums in the amount of $A686,106.35 and $A350,896.89 transfer from Hong Kong) paid towards the Zetland property (as well as to make other investments) were sourced from his personal earnings (Ms Huang’s affidavit of 31 August 2016, paragraph 7).

48. Counsel for the AFP Commissioner noted that the figures asserted by Ms Huang did not equate to the asserted price of the Zetland property and observed, as well, that Ms Huang’s father had not given evidence. In these circumstances, it was submitted that no weight should be given to Ms Huang’s account of her telephone conversation with her father.

Overview of Arguments of Ms Huang and the AFP Commissioner

49. Ms Huang’s Further Amended Notice of Grounds under s.31(4) POC Act filed on 18 September 2017 stated that there were three sources of funds used by her to acquire the Zetland property:

1. $108,000.00 paid by way of deposit into Ms Huang’s ANZ Bank account by Mr Feng;

2. $445,000.00 advanced by Citibank by way of a mortgage over the Zetland property; and

3. $527,000.00 of cash equity that was transferred to Ms Huang by her father.

50. Put shortly, Ms Huang contended that her interest in the Zetland property should be excluded from the restraining order for the following reasons:

1. the funds which comprised the $108,000.00 deposit to acquire the Zetland property were acquired by the ANZ Bank for sufficient consideration (the provision of a bank account to Ms Huang on terms) without her knowing (and in circumstances that would not arouse a reasonable suspicion) that the money deposited into Ms Huang’s account were the proceeds or the instrument of the commission of any offence said to have been committed - specifically, the ANZ Bank was a third party to any alleged criminality performed by Mr Feng and/or others;

2. alternatively, by calling on the funds standing to the credit of her account to be paid by way of a bank cheque, Ms Huang acquired a chose in action requiring the ANZ Bank to draw on its own funds for payment of the deposit monies to the vendor, so that Ms Huang acquired this chose in action for sufficient consideration (the sum of $108,000.00) without knowing (and in circumstances that would not arouse a reasonable suspicion) that the funds standing to credit in her account were the proceeds or the instrument of the commission of any offence said to have been committed - specifically Ms Huang was a third party to any alleged criminality performed by Mr Feng and/or others, and was a further step removed than the ANZ Bank from the transaction said to give rise to this alleged illegal conduct;

3. further, and in the alternative, Ms Huang’s father acquired his interest in the funds standing to the credit of Ms Huang’s bank account for sufficient consideration and in circumstances that would not give rise to a reasonable suspicion that the Zetland property was the proceeds or the instrument of the commission of any offence said to have been committed - this submission assumes that the funds in Ms Huang’s bank account constituted a chose in action held in trust by Ms Huang for her father and were not in the nature of a gift;

1. in relation to the offence under s.192G Crimes Act 1900 (NSW), no offence has been committed by Ms Huang or any other person in contravention of an indictable offence or an indictable offence of a Commonwealth concern in connection with Ms Huang’s application for the mortgage, it being submitted for Ms Huang that a s.192G offence does not satisfy the definition of those terms with an alternative submission being made that no s.192G offence was committed and the loan funds were not the proceeds of such offences.

51. The submissions advanced at [50](a)-(c) above require consideration to be given to the construction and application of s.330 POC Act.

52. Put shortly, the AFP Commissioner opposed Ms Huang’s application and submits that it should be refused for the following reasons:

1. the Zetland property is wholly or partly the proceeds of an indictable offence and/or an instrument of a serious offence within the meaning of the POC Act, the offence being dealing with money that is reasonably suspected to be proceeds of crime and at the time of dealing, the value of the money was $A100,000.00 or more contrary to s.400.9(1) Criminal Code (Cth) (“the money laundering offence”);

2. the money laundering offence was a “serious offence” and an “indictable offence” as defined by the POC Act;

3. Ms Huang has the legal and evidential onus of proof which she has not discharged in this application: s.317 POC Act; Brauer v DPP (1989) 91 ALR 491 at 494, 497-499;

4. Ms Huang has not established pursuant to s.29(2)(d) POC Act that she has an interest in the Zetland property that is neither;

1. the proceeds of an indictable offence, nor

2. an instrument of any serious offence;

5. in relation to the money laundering offence, Ms Huang has not established the contractual arrangements with the money remitters in China and their Australian associates upon which she seeks to rely;

6. Ms Huang has failed to establish that her interest is neither the proceeds nor an instrument of an indictable offence or a serious offence and has also failed to establish that her interest is not the proceeds or instrument of any such offence committed by another person;

7. the entirety of the Zetland property is the proceeds of an offence under s.329(1) POC Act as the Zetland property was at least “partly derived or realised” from the commission of an offence: Director of Public Prosecutions (NSW) v Ronen [2005] NSWSC 990 at [7];

8. the Zetland property is an instrument of an offence for the purpose of s.329(2) POC Act on the basis that it has been used in connection with an offence: Commissioner of the Australian Federal Police v Vo [2015] NSWSC 1523; Commissioner of the Australian Federal Police v Courtenay Investments Ltd (No. 4) [2015] WASC 101;

9. Ms Huang has not established that the Zetland property (both in the sense of the Zetland property itself and the respective sources of funds used to purchase the Zetland property) ceased to be the proceeds of an offence or an instrument of a relevant offence by the operation of s.330(4)(a) POC Act - Ms Huang is not a “third party” for the purpose of s.330(4)(a) and she has failed to establish that she acquired her interest in the Zetland property for sufficient consideration and without knowing, and in circumstances that would not arouse a reasonable suspicion, that the Zetland property was the proceeds or an instrument of the offences referred to, particularly having regard to the manner and circumstances in which deposits were received into her bank account;

10. in relation to the s.192G Crimes Act 1900 (NSW) offence, Ms Huang dishonestly made or published (or concurred or was wilfully blind in the making or publishing) statements to Citibank that were false or misleading in a material particular with the intention of obtaining a financial advantage contrary to s.192G - in that regard, Ms Huang contravened s.400.9 Criminal Code (Cth) since she dealt with money or other property that was worth $A100,000.00 or more in circumstances where it was reasonable to suspect that the loan from Citibank, the funds held in her ANZ Bank account and the Zetland property were proceeds of crime - the AFP Commissioner contends that the s.192G offence was the predicate offence for one of the various money laundering offences relevant to this case.

Some Provisions in the POC Act

53. It is appropriate to mention various provisions in the POC Act which are important to the determination of this application.

54. Section 29 POC Act relevantly provides:

“29    Excluding property from certain restraining orders

(1)    The court to which an application for a restraining order under section 17, 18 or 19 was made must, when the order is made or at a later time, exclude a specified interest in property from the order if:

(a)    an application is made under section 30 or 31; and

(b)    the court is satisfied that the relevant reason under subsection (2) or (3) for excluding the interest from the order exists.

…

(2)    The reasons for excluding a specified interest in property from a restraining order are:

…

(d)    for a restraining order under section 19 - the interest is neither:

(i)    in any case - proceeds of an indictable offence, a foreign indictable offence or an indictable offence of Commonwealth concern; nor

(ii)    if an offence to which the order relates is a serious offence - an instrument of any serious offence.”

55. Section 31 POC Act states:

“31    Application to exclude property from a restraining order after restraining order has been made

(1)    A person may apply for an order under section 29 or 29A if a restraining order that covers property in which the person claims an interest has been made.

(1A)    An application under subsection (1):

(a)    must be made to the court that made the restraining order; and

(b)    may be made at any time after the restraining order is made.

(2)    However, unless the court gives leave, the person cannot apply if he or she:

(a)    was notified of the application for the restraining order, but did not appear at the hearing of that application; or

(b)    appeared at the hearing of that application.

(3)    The court may give the person leave to apply if the court is satisfied that:

(a)    if paragraph (2)(a) applies - the person had a good reason for not appearing; or

(b)    if paragraph (2)(b) applies - the person now has evidence relevant to the person’s application that was not available to the person at the time of the hearing; or

(c)    in either case - there are other special grounds for granting the leave.

(4)    The person must give written notice to the responsible authority of both the application and the grounds on which the exclusion is sought.

(5)    The responsible authority may appear and adduce evidence at the hearing of the application.

(6)    The responsible authority must give the person notice of any grounds on which it proposes to contest the application. However, the authority need not do so until it has had a reasonable opportunity to conduct examinations in relation to the application.”

56. Section 317 POC Act relevantly states:

“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.”

57. Section 330 POC Act relevantly provides:

“330 When property becomes, remains and ceases to be proceeds or an instrument

(1)    Property becomes proceeds of an offence if it is:

(a)    wholly or partly derived or realised from a disposal or other dealing with proceeds of the offence; or

(b)    wholly or partly acquired using proceeds of the offence;

including because of a previous application of this section.

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

(a)    wholly or partly derived or realised from the disposal or other dealing with an instrument of the offence; or

(b)    wholly or partly acquired using an instrument of the offence;

including because of a previous application of this section.

(3)    Property remains proceeds of an offence or an instrument of an offence even if:

(a)    it is credited to an account; or

(b)    it is disposed of or otherwise dealt with.

(4)    Property only ceases to be proceeds of an offence or an instrument of an offence:

(a)    if it is acquired by a third party for sufficient consideration without the third party knowing, and in circumstances that would not arouse a reasonable suspicion, that the property was proceeds of an offence or an instrument of an offence (as the case requires); or

…

(f)    if the property is otherwise sold or disposed of under this Act; or

…

(6)    Property becomes, remains or ceases to be proceeds of an unlawful activity, or an instrument of an unlawful activity, if the property becomes, remains or ceases to be proceeds of the offence, or an instrument of the offence, constituted by the act or omission that constitutes the unlawful activity.”

58. Several terms of significance to this application are defined in the POC Act.

59. The term “derived” is defined in s.336 POC Act as follows:

“A reference to a person having derived proceeds, a benefit, literary proceeds or wealth includes a reference to:

(a)    the person; or

(b)    another person at the request or direction of the first person;

having derived the proceeds, benefit, literary proceeds or wealth directly or indirectly.”

60. Section 338 contains the Dictionary of the POC Act which includes the following definitions:

“338    Dictionary

In this Act, unless the contrary intention appears:

…

indictable offence means an offence against a law of the Commonwealth, or a non‑governing Territory, that may be dealt with as an indictable offence (even if it may also be dealt with as a summary offence in some circumstances).

...

serious offence means:

(a)    an indictable offence punishable by imprisonment for 3 or more years, involving:

…

(ii) unlawful conduct constituted by or relating to a breach of section 81 of the Proceeds of Crime Act 1987 or Part 10.2 of the Criminal Code (money‑laundering); or

(iii)    unlawful conduct by a person that causes, or is intended to cause, a benefit to the value of at least $10,000 for that person or another person; or

(iv)    unlawful conduct by a person that causes, or is intended to cause, a loss to the Commonwealth or another person of at least $10,000; or

…

State indictable offence means an offence against a law of a State or a self‑governing Territory that may be dealt with on indictment (even if it may also be dealt with as a summary offence in some circumstances).

sufficient consideration: an acquisition or disposal of property is for sufficient consideration if it is for a consideration that is sufficient and that reflects the value of the property, having regard solely to commercial considerations.

unlawful activity means an act or omission that constitutes:

(a)    an offence against a law of the Commonwealth; or

(b)    an offence against a law of a State or Territory; or

(c)    an offence against a law of a foreign country.”

Assessment of the Evidence of Ms Huang

61. As would be clear from what has been said so far, the evidence of Ms Huang is central to the present application. Ms Huang bears the onus of proof on the balance of probabilities. She gave oral evidence and was cross-examined in a number of areas. It is submitted for the AFP Commissioner that her evidence is not credible or reliable in a number of significant respects. Apart from the evidence of Ms Huang, the evidence before the Court is entirely documentary in nature. The account of Ms Huang with respect to a number of significant documents in evidence is central to the determination of the questions arising on this application.

62. A Mandarin interpreter attended the hearing to assist Ms Huang in evidence if assistance was required. In that respect, Mr English informed Ms Huang in examination-in-chief that the interpreter was present to assist if needed, although it was anticipated that Ms Huang would give her evidence in English unless the assistance of the interpreter was sought by her (T7.21-24). In the result, Ms Huang gave her evidence almost entirely without the assistance of the interpreter.

63. Ms Huang was 22 years old at the time of the hearing. She was engaged in tertiary studies in Australia at the time when she was giving evidence. My impression was that her command of English was good, but that the attendance of the interpreter was appropriate in the event that there was any particular area of difficulty which, as it turned out, there was not.

64. As noted earlier, Ms Huang made five affidavits which were read at the hearing.

65. Ms Huang’s evidence occupied a substantial part of the hearing (T7-51). She explained that she had come to Australia in 2014 for the purpose of undertaking a course in aviation management at the University of New South Wales (T8). Prior to coming to Australia, Ms Huang had undertaken studies in Singapore where she completed her secondary education and also a course in the English language (T8-9). There was a requirement for a level of proficiency in the English language for the purpose of her tertiary studies in Australia and Ms Huang continued English studies whilst in Australia (T9).

66. Ms Huang stated that she had never met Mr Feng and did not know him (T11-12). She said that she was not in a position to tell the Court what Mr Feng did for work (T12). Ms Huang said that she did not know Mr Feng’s associate, Shiyu Cong, and had never met him (T12). Ms Huang stated that she had no knowledge how it was that Mr Feng and Mr Cong were depositing large sums of cash in bank accounts in Sydney in 2014.

67. It is appropriate to set out extracts from the evidence of Ms Huang to assist an understanding of conclusions reached concerning the credibility and reliability of important parts of her evidence.

68. In cross-examination, counsel for the AFP Commissioner asked Ms Huang (T13.31-48):

“Q. Tell us, Ms Huang, when you learnt that someone you didn't know had turned up to, on the same day, two different branches of the ANZ and deposited large amounts of cash, $70,000 and $36,000 odd, what did you think? What was your response?

A. WITNESS: I know that my dad will transfer the money to me to purchase the property for the deposit, but I don't know who transferred the money to me and I normally won't ask my dad how he transferred the money to me or who transferred the money to me.

Q. Your dad was living in China at that time, correct?

A. WITNESS: Yes.

Q. Ms Huang, you must have been in shock when you discovered that someone you didn't know had deposited large amounts of cash at two different branches into your bank account on the same day?

A. WITNESS: No, because I know in advance my dad will transfer the money to me, so I thought it just, yeah. I know I will receive that money for the property.”

69. Ms Huang stated that she had not seen the Zetland property until settlement had occurred (T14).

70. Ms Huang was asked in cross-examination concerning the deposit used for the purchase of the Zetland property (T14.33-15.3):

“Q. Was the thinking that you were going to live in this apartment?

A. WITNESS: Yes.

Q. Was the thinking that this apartment, if you purchased it, would become your residential address in Sydney?

A. WITNESS: Yes.

Q. It is the case, isn't it, that in order to buy this apartment, Ms Huang, you needed to put down a deposit to make the acquisition, correct?

A. WITNESS: Yes.

Q. The deposit was 10% of the total value of the apartment?

A. WITNESS: Yes.

Q. Do you remember what the total value of the apartment was?

A. WITNESS: One million, one million and 90,000.

Q. It is the case, isn't it, Ms Huang, that in order to make the 10% deposit you withdrew funds from your ANZ Bank account, correct?

A. WITNESS: Yes.

Q. You withdrew funds after Mr Feng deposited those amounts into your ANZ Bank account, correct?

A. WITNESS: Yes.”

71. Counsel for the AFP Commissioner asked Ms Huang concerning funds used for the balance of the purchase price for the Zetland property (T15.34-16.22):

“Q. There was then the question or the issue about how you were going to pay for the balance of the property, the rest of the 950 or $980,000?

A. WITNESS: Yes.

Q. You needed to make that payment, correct?

A. WITNESS: Yes.

Q. You did not have 950 or $980,000, correct?

A. WITNESS: Yes.

Q. You decided, didn't you, that in order to proceed with this property purchase you were going to borrow money?

A. WITNESS: No, because actually my dad transferred the whole, the full fund of money to me.

Q. Ms Huang, it is the case, isn't it, that you decided that in order to fund this property purchase you were going to borrow money from Citibank, or you were at least going to try to borrow money from Citibank, correct?

A. WITNESS: My dad decided, not me.

Q. Well, it was your property, wasn't it, Ms Huang?

A. WITNESS: Yeah.

Q. It was going to be your home, correct?

A. WITNESS: Yeah.

Q. It was you who applied for the loan with Citibank, correct?

A. WITNESS: Yes.

Q. It was you who signed the loan application form, correct?

A. WITNESS: Yes.

Q. And it was only you who signed the loan application form, correct?

A. WITNESS: Yes.

Q. It is the case, Ms Huang, isn't it, that you decided at some point, maybe with your father's advice, that the best way to fund the purchase of the property was through borrowing money from Citibank?

A. WITNESS: And recommended to my dad and my dad decided, not me.

Q. You followed your dad's advice, is that correct?

A. WITNESS: Yes.”

72. Ms Huang was asked about her own lack of assets and income in mid-2014 (T17):

“Q. In mid 2014 when you made this application to Citibank, Ms Huang, you did not have any significant assets to your name at all, did you?

A. WITNESS: No, I don't have.

Q. You didn't have any assets really at all, correct?

A. WITNESS: Yes.

Q. You might have owned a few things at your rental property, a few household items but other than that you had no assets?

A. WITNESS: Yes, no assets.

Q. In mid 2014 you also had no income, correct?

A. No.

Q. At that point in time you were not employed, correct?

A. WITNESS: No.

Q. When you say no, I think you're agreeing with me?

A. WITNESS: Yes, I'm not being employed.

Q. At that point in time you had no income, am I right in saying that?

A. WITNESS: Yes.

Q. At that point in time you were studying in Australia on a student visa, correct?

A. WITNESS: Yes.

Q. You certainly had no fulltime employment?

A. WITNESS: No.

Q. Indeed, you had no employment at all, correct?

A. WITNESS: No.

Q. Again, I think you're agreeing with me. I think, are you saying, yes, I am right in saying you had no employment at all?

A. WITNESS: I have no employment at all.”

73. Ms Huang was asked about documents used in support of the loan application with Citibank which asserted that she was employed by her father’s company in China as a public relations officer. It was apparent that the document contained false information. Ms Huang was asked (T19.33-20.40):

“Q. Could you now look at the right hand side of the page, madam, and under the heading, employment details; do you see that?

A. WITNESS: Yes.

Q. The first line item it says, primary employment details, employment status, and you'll see a tick next to fulltime?

A. WITNESS: Yes.

Q. You see that?

A. WITNESS: Yes.

Q. Then beneath that there's the word, occupation and there's some handwritten text, public relation officer?

A. WITNESS: Yes.

Q. You see that?

A. WITNESS: Yes.

Q. Then it says, current employer/trading name, it says Guang Dong Jian Xin Construction?

A. WITNESS: Yes.

Q. I'll just spell that, G U A N G D O N G Jian Xin, J I A N X I N Construction; do you see that?

A. WITNESS: Yes.

Q. You did not have a fulltime job in August of 2014, did you, madam?

A. WITNESS: No.

Q. You have never been in your life a public relation officer, have you?

A. WITNESS: During my holiday, I went to like assist my father.

Q. Madam, are you suggesting that you have been a public relations officer, you've worked fulltime as a public relations officer at some point in your life?

A. WITNESS: Actually, I don't really know [what] public relation officer means but I have been working for my father during my holiday.

Q. You don't even know what those words mean, do you, public relations officer?

A. WITNESS: Yes, I don't know.

Q. If I asked you, madam, what a public relations officer does, you couldn't even tell me, could you?

A. WITNESS: No.

Q. It is the case that you've never held such a role, you've never been a public relation officer, isn't it?

A. WITNESS: Yes.

Q. This company, Guang Dong Jian Xin Construction, that is a company you're familiar with, correct?

A. WITNESS: Yes.

Q. That's a company controlled by your father, correct?

A. WITNESS: Yes.

Q. Your father is not giving evidence in these proceedings, is that right?

A. WITNESS: No.”

74. Ms Huang agreed that a document provided to Citibank was false and misleading in several respects (T21.16-50):

“Q. It says, by signing below, I, 1, make an application for the Citibank product package, and so on, do you see that?

A. WITNESS: Yes.

Q. Two, warrant that all the information provided in this application is true and correct and not misleading; do you see that?

A. WITNESS: Yes.

Q. Ms Huang, the information contained in this document wasn't true and correct, was it?

A. WITNESS: No.

Q. It was misleading, wasn't it?

A. WITNESS: Yes.

Q. It was seriously misleading, wasn't it, Ms Huang?

A. WITNESS: Yes.

Q. Because although it indicated that you had fulltime employment as a public relations officer you had no such employment at all, did you?

A. WITNESS: Yes.

Q. You had no income at all when you signed this document, did you, Ms Huang?

A. WITNESS: Yes.

Q. You're agreeing with me that you had no income?

A. WITNESS: I have no income.

Q. Anyone reading this document would have been entitled to think that you held a fulltime paid employment position, correct?

A. WITNESS: Yes.

Q. That would have been a false impression, wouldn't it, Ms Huang?

A. WITNESS: Yes.”

75. Ms Huang agreed that she had signed documents before for banking purposes in Singapore and China. Although she was aware that the reason for signing the document was to verify the accuracy of its contents, Ms Huang said she did not read the document which contained false and misleading information before signing it.

76. Ms Huang agreed that another document which formed part of the Citibank home loan application contained false information concerning her place of residence (T26-28).

77. A further document signed by Ms Huang contained false or misleading statements concerning her employment and income position (T28-30).

78. A further false and misleading statement acknowledged by Ms Huang was a statement that the property was an investment property and not her residence (T30).

79. The difficulties confronting Ms Huang in her loan application were illustrated by the following part of the cross-examination (T31.31-32.9):

“Q. You knew that given those two things, the fact that you had next to no assets and you had zero income that if you were truthful to the bank about those matters you never would have got the home loan, correct?

A. WITNESS: I don't know. I never thought of the way to get the loan because it's not my matter.

Q. Madam, you signed the home loan application forms, didn't you?

A. WITNESS: Yes, but I haven't had the communication with them at all.

Q. You knew that those forms were prepared and signed because you were applying for a home loan, correct?

A. WITNESS: Yes.

Q. You wanted to get the home loan, correct?

A. WITNESS: Yes.

Q. But there were some problems with getting that home loan, weren't there, Ms Huang, one of the problems was that you had no job or income, correct?

A. WITNESS: But I don't know. I have no idea how to get the loan at that time because I haven't got a loan.

Q. Ms Huang, I appreciate this might have been the first time you wanted to get a loan.

A. WITNESS: Yes.

Q. But, what you did to try to get the loan was to not tell the truth about your job and income, correct?

A. WITNESS: I don't know, because my dad have a communication with them and they decided what to do and what they should provide, not me and nothing provided by me except the email.”

80. Ms Huang was asked about the part of the application signed by her which confirmed the truth, accuracy and correctness of the information provided (T32.23-33.27):

“Q. And it's your signature, isn't it, Ms Huang?

A. WITNESS: Yes.

Q. You'll see that there is some text again above the signature box that you signed, correct?

A. WITNESS: Yes.

Q. That text says at the end, and let's read it slowly, ‘I/we confirm that all information contained in and accompanying this application is true, accurate and correct.’ Do you see that?

A. WITNESS: Is it above the signature box?

Q. Above the signature, it's about half way down that paragraph of text, the last three lines?

A. WITNESS: Yes.

Q. Just read that to yourself.

A. WITNESS: Yes.

Q. You understood in signing this document, didn't you, Ms Huang, that the reason for signing it was to verify the accuracy of the information in the document, correct?

A. WITNESS: Yes.

Q. You knew there was no other reason to sign the document, correct?

A. WITNESS: Yes.

Q. You knew at the time you signed this document, didn't you, that it contained false and misleading information?

A. WITNESS: I don't know.

Q. Ms Huang, you knew when you signed this document that it was indicating that you had a fulltime job, didn't you?

A. WITNESS: I don't know at the time.

Q. What do you mean you didn't know at the time?

A. WITNESS: I don't know that I was employed by my father when I applying the loan and the first time I know that I was employed is until I knew this case.

Q. Are you saying, Ms Huang, that you might have been employed fulltime at the time you applied for this loan?

A. WITNESS: I was being employed at that time.

Q. You say you were employed at the time?

A. WITNESS: I don't know if I was employed.

Q. You're not sure if you were employed at the time you applied for the home loan, is that your sworn evidence to his Honour?

A. WITNESS: Yes.

Q. You see, Ms Huang, who would be a better person to ask than you about whether or not you had a fulltime job at the time you applied for this home loan?

A. WITNESS: My dad, because he could just said I'm being employed and record it in his company even though I was not there.”

81. Soon after, counsel for the AFP Commissioner returned to the question whether Ms Huang was aware at the time of signing the document that it contained false information (T34.8-39):

“Q. I rather thought you agreed with my proposition that all of the information contained thereunder, employment details, fulltime, the public relations role, the payroll officer name, the gross monthly salary; I thought you agreed with me only minutes ago, madam, that all of that was false?

A. WITNESS: Yes, that's false.

Q. Do you still agree that all of that is false?

A. WITNESS: Yes.

Q. You see there's no doubt that you had no fulltime job at the time you made this loan application, is there?

A. WITNESS: Yes.

Q. There's no doubt at all, you know that you had no fulltime job when you applied for this loan, correct?

A. WITNESS: Yes.

Q. I want to put to you out of fairness, and I've got to do this, Ms Huang, that when you signed this loan application form, you did so knowing that it would mislead the reader about your personal position, what do you say to that?

A. WITNESS: Could you please reframe it?

Q. I'll repeat the question or reframe it. I'm suggesting to you that when you signed this loan application form you knew it contained misleading and false information, what do you say?

A. WITNESS: I don't know.

Q. Pardon?

A. WITNESS: I don't know.

Q. You don't know whether you knew?

A. WITNESS: I don't know whether it contained false information or not.”

82. Ms Huang maintained in cross-examination that she had not read the document (T34.49-35.19):

“Q. There's no doubt in your mind, is there, that all of that is incorrect, that it's inaccurate?

A. WITNESS: Because I told you I didn't read.

Q. You say you didn't read this either?

A. WITNESS: Yeah.

Q. You're laughing, Ms Huang, is there a reason why?

A. WITNESS: Because they hand a whole file to me and it's hard for me to read all those things.

Q. When you say they gave a whole file to you, this document contains a number of, a small number of pages of handwritten text, correct?

A. WITNESS: Yes.

Q. I've taken you to another document which was three pages?

A. WITNESS: Yes.

Q. Correct, how long would it have taken you to read the text on pages 64 and 65?

A. WITNESS: But I didn't read.”

83. Counsel for the AFP Commissioner asked Ms Huang (T35.37-36.2):

“Q. How could you verify the accuracy of the contents of the document if you didn't read it, Ms Huang?

A. WITNESS: I knew that I supposed to read but I didn't.

Q. Again, out of fairness to you, Ms Huang, I want to put to you that you did read, and you did know the contents of this document and that you deliberately tried to mislead the bank about your financial position. What do you say to that?

A. WITNESS: No, I didn't because when I, when Jack hand this document to me he just told me to sign it, but he didn't ask me to read and it's quite a lot for me to read.

Q. To be completely clear, Ms Huang, I want to put to you the reason you tried to mislead the bank was because you knew that if you told the truth in that document you would never get the home loan, what do you say to that?

A. WITNESS: No, I don't know.”

84. The cross-examination of Ms Huang proceeded in a similar pattern where the witness was taken to various documents which contained false information which she had signed as being correct, but with her response being that she had not read the documents and did not know at the time that the contents were false or misleading.

85. Ms Huang asserted that she had not read a document which had been signed by her father which she had certified as being accurate. She was asked (T42.8-32):

“Q. What your father has done there, is completely mislead the reader about what the true position was, correct?

A. WITNESS: Yes.

Q. You were asked to sign this document, weren't you?

A. WITNESS: Yes.

Q. Let's look at what the text above your signature says; ‘I, Shana Huang, acknowledge this declaration to be a true representation of my current living arrangement.’?

A. WITNESS: Yes.

Q. There's no talk about the future there, is there, Ms Huang?

A. WITNESS: Yes.

Q. There's only talk about the current position, isn't there?

A. WITNESS: Yes.

Q. When you signed this document acknowledging it to be true, you knew it was false, didn't you, Ms Huang?

A. WITNESS: I don't know.

Q. You knew this document was false when you signed it, didn't you, Ms Huang?

A. WITNESS: I don't know because I didn't read.”

86. Counsel for the AFP Commissioner asked Ms Huang whether she had ever discussed with her father the false information which had been provided concerning her address and employment (T45):

“Q. By the way, before I take you to this document, Ms Huang; did you ever raise with your father why he said in that declaration that you were living with him in September of 2014; have you spoken to your dad about that?

A. WITNESS: No.

Q. You've never mentioned it to him?

A. WITNESS: No.”

87. Ms Huang stated that she had last seen her father when she went to China for a holiday and she confirmed that he was not to give evidence in the proceedings (T46).

88. Ms Huang agreed that her first affidavit (of 6 January 2016) contained the inaccurate statement that her father was in Australia at the time when the sums were placed in her bank account which were used for the deposit on the purchase of the Zetland property (T46-47).

89. In re-examination, Ms Huang told Mr English that writing on part of the documentation signed by her had not been written by her (T48-51).

90. I have considered submissions made by counsel concerning findings to be made with respect to Ms Huang’s evidence. In approaching this topic, I have had regard to the content of her evidence and her demeanour, together with the substantial contemporaneous documentary evidence about which she was questioned in some detail.

91. Counsel for the AFP Commissioner submitted that the evidence of Ms Huang in significant areas was implausible and ought not be accepted. The areas referred to by counsel are illustrated by the extracts from Ms Huang’s evidence set out earlier in this judgment. Counsel challenged Ms Huang squarely concerning false statements contained in documents which she signed with her repeated explanation for this state of affairs being that she had not read the documents and a suggestion that parts of the documents had not been completed at the time when she signed them.

92. I am satisfied that the evidence of Ms Huang strains credulity in a number of significant respects. She was an educated and intelligent young woman in 2014 at the time of these events. She had a more than reasonable command of English. To the extent that a number of the documents were written in Mandarin, Ms Huang, of course, had an excellent understanding of that language.

93. The acquisition of the Zetland property by Ms Huang was itself a very significant event in her life. Even if the Court accepted her account that she deferred to her father with respect to aspects or this process, it still does not account for her certification of clearly false details about herself being true and correct. It was abundantly clear that the information which was being supplied, and which she was prepared to certify as being correct, was highly material to the process of the loan application to Citibank.

94. I do not accept Ms Huang’s evidence that parts of the documents were not completed at the time when she signed them, but were, in some way, completed thereafter in circumstances which are not otherwise made clear in the evidence. I am satisfied that the documents which she signed as being true and correct were complete at that time and were, on their face, false in a number of serious and material respects.

95. The unexplained failure of Ms Huang to call evidence from her father does not assist her with respect to findings of fact related to alleged activities of those persons. On Ms Huang’s account, her father was a critical participant in these events. In Vu v New South Wales Crime Commission [2013] NSWCA 282, McColl JA (Meagher and Emmett JJA agreeing) said at [83]-[85]:

“83   While demonstrating that other evidence could have been, but was not, called may properly be taken into account in determining whether a party has proved its case to the requisite standard, both the circumstances in which that may be done and the way in which the absence of evidence may be taken into account are confined by known and accepted principles: Australian Securities and Investments Commission v Hellicar (at [165]) per the plurality.

84   Here the appellant seeks to weaken the cogency of the respondent's case by invoking the rule in Jones v Dunkel. However, that rule does not apply whenever a potential witness is not called. Rather, it applies ‘where an inference is open from facts proved by direct evidence and the question is whether it should be drawn, [so that] the circumstance that the [party] disputing it might have proved the contrary had he chosen to give evidence is properly to be taken into account as a circumstance in favour of drawing the inference’: Jones v Dunkel (at 312) per Menzies J; RPS v The Queen [2000] HCA 3; (2000) 199 CLR 620 (at [26]) per Gaudron ACJ, Gummow, Kirby and Hayne JJ; see also Manly Council v Byrne [2004] NSWCA 123 (at [54]) per Campbell J (as his Honour then was), Beazley JA and Pearlman AJA agreeing.

85   Further, while the rule in Jones v Dunkel authorises, but does not require, a tribunal of fact to infer that the evidence of an absent witness, if called, would not have assisted the party who failed to call that witness (Lym International Pty Ltd v Marcolongo [2011] NSWCA 303 (at [91]) per Campbell JA (Basten JA and Sackar J agreeing)), it does not entitle a court to speculate about ‘what other evidence might possibly have been led’ (Australian Securities and Investments Commission v Hellicar (at [165] per the plurality) nor ‘does [it] enable the trier of fact to infer that the evidence of the absent witness would have been positively adverse to [the] party’ who fails to call the witness: Australian Securities and Investments Commission v Hellicar (at [232]) per Heydon J; see also Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; (2011) 243 CLR 361 (at [64]) per Heydon, Crennan and Bell JJ.”

96. In approaching this aspect of the case, I am not purporting to draw a Jones v Dunkel inference that any evidence which Ms Huang’s father may have given would not have assisted her. Rather, I am taking into account the fact that her father was not called to give evidence in her case so that Ms Huang’s evidence stands alone in important areas. I have kept in mind Ms Huang’s account of a telephone conversation with her father on 2 June 2017, which appears in her affidavit affirmed on 7 June 2017. This account of statements made by Ms Huang’s father is hearsay, unsworn and cannot be tested. It does not provide support for Ms Huang’s case in a manner which deserves weight to be given to it.

97. I observe, as well, that Ms Huang did not adduce evidence from other persons, including Sean Huang and Emily Tan. Those persons are said to have been participants in events affecting Ms Huang’s acquisition of the Zetland property. The absence of evidence from those persons does not assist Ms Huang in the discharge of the onus of proof which she bears on this application.

98. Further, and most significantly, the evidence of Ms Huang does not sit comfortably with the contemporaneous documentation which contained clearly false and material statements which she had certified as being correct.

99. The conclusion which I have reached with respect to Ms Huang’s evidence is that, in any area of controversy, I will not act upon Ms Huang’s evidence unless it is corroborated by some objective and independent evidence.

Onus and Standard of Proof

100. Ms Huang bears the onus of proving all matters necessary to establish the grounds for a grant of the relief presently sought: s 317 POC Act. Accordingly, the Court’s assessment of the evidence of Ms Huang, and a decision as to whether her evidence ought be accepted or rejected, forms a very important part of the determination of this application.

101. It will be apparent that this finding concerning Ms Huang’s evidence will have a significant bearing upon the question whether she has discharged the onus of proof which lies upon her on this application.

102. I keep in mind that it is for Ms Huang to demonstrate, to the civil standard, a negative - that the Zetland property does not fall within these particular provisions. The enquiry is not whether Ms Huang can establish on the civil standard that she has not committed one of the relevant offences, or that she had not illegally acquired the Zetland property. The question is whether her interest in the Zetland property does not fall within any of the categories in s.29 POC Act. There is no onus on the AFP Commissioner to prove the contrary.

103. If it is found that the Zetland property is the proceeds of an offence, or an instrument of an offence, it again falls to Ms Huang to demonstrate on the civil standard that the property ceases to be proceeds or an instrument of an offence.

104. If Ms Huang’s evidence as to the source of the Zetland property is disbelieved or rejected, it is permissible for the Court to conclude that she has not discharged the onus which is placed upon her by the statute: Henderson v State of Queensland (2014) 255 CLR 1; [2014] HCA 52.

105. I note that counsel for Ms Huang accepted as being correct the submission of the AFP Commissioner that in confiscation proceedings, a general presumption that persons do not engage in criminal activity cannot displace the burden of proof on an applicant for exclusion based upon Henderson v State of Queensland at 9 [15].

106. Although the decision in Henderson v State of Queensland was dealing with the Criminal Proceeds Confiscation Act 2002 (Qld) and not the POC Act, I am satisfied that the reasoning in that decision operates by analogy to assist the proper construction and operation of s.330 POC Act in the circumstances of the present application.

The 2018 Decisions in Lordianto (CA), Fernandez (CA) and Kalimuthu (No. 2) Concerning the Construction and Operation of the POC Act

107. As noted earlier, written submissions were made by counsel after the hearing (with the permission of the Court) with respect to a number of subsequent decisions of Courts. It is not necessary to refer to the submissions of counsel made by reference to single-Judge decisions addressed in written submissions up to August 2018, given that the law to be applied is now to be found in the appellate decisions in those cases.

108. Those appellate decisions are, as previously mentioned, Lordianto (CA), Fernandez (CA) and Kalimuthu (No. 2).

109. Those decisions were referenced in the submissions of the AFP Commissioner dated 10 October and 26 November 2018. The legal representatives for Ms Huang did not make further submissions concerning these decisions nor seek to challenge the arguments advanced by the AFP Commissioner with respect to them. Accordingly, it is appropriate that I set out here the approach which I have adopted concerning these decisions which is based largely upon an acceptance of written submissions made by counsel for the AFP Commissioner.

110. In both Lordianto (CA) and Fernandez (CA), the New South Wales Court of Appeal considered the concepts of “property” and “interests” in property for the purpose of the POC Act in respect of funds in bank accounts.

111. In Lordianto (CA), the Court addressed the meaning and operation of s.330(4)(a) POC Act in relation to a factual scenario broadly analogous to that which arises in the present case. Relevantly, the following matters fell for determination in Lordianto (CA):

1. the circumstances in which a person will be a “third party” for the purposes of s.330(4)(a) POC Act;

2. what constitutes “sufficient consideration” for the purposes of s.330(4)(a); and

3. whether the circumstances would have given rise to a reasonable suspicion that property was the proceeds of an offence for the purposes of s.330(4)(a) POC Act.

Acquisition of an Interest in Property

112. With respect to bank accounts and the acquisition of an “interest” in “property” for the purposes of the POC Act, in Lordianto (CA) and Fernandez (CA), a threshold issue arose as to whether the relevant bank account holders “acquired” an interest in the relevant property for the purposes of s.330(4)(a) upon deposits being made into their Australian bank accounts. Ultimately, the Court of Appeal in each case held that:

1. there is one continuous chose in action held by an account holder against a bank: Lordianto (CA) at [48], [68] and [75]; Fernandez (CA) at [48]-[49], [59];

2. however, that chose in action is inchoate until a demand is made by the account holder, and is for an amount that varies as deposits are made: Lordianto (CA) at [77], [80]; Fernandez (CA) at [48]-[49], [59]; and

3. a deposit affecting the amount of that inchoate chose in action causes the account holder to acquire a “right” or “power … in connection with” that chose in action and/or the newly deposited funds, and accordingly amounts to an acquisition of property for the purposes of s.330(4)(a) POC Act (having regard to statutory definitions and context): Lordianto (CA) at [55]-[56], [60]-[62], [76] and [80]-[81]; Fernandez (CA) at [69]-[70], [77]-[78].

113. Insofar as the AFP Commissioner contended at the hearing before me that each deposit into a bank account created a new chose of action against the bank in the hands of the relevant account holder, replacing the previous chose in action for a lesser amount, I accept the submission of the AFP Commissioner that the decisions in Lordianto (CA) and Fernandez (CA) arrive at the same conclusion by way of a different path of reasoning.

114. I accept the further submission of the AFP Commissioner that the difference between those paths of reasoning is not significant for present purposes. Regardless of whether a bank account gives rise to a single inchoate chose in action or a series of choses in action as a matter of general law, the salient point is that property is derived and acquired upon each deposit under the expanded statutory definition of “property” in the POC Act.

Meaning of “Third Party”

115. The meaning of “third party” for the purposes of s.330(4)(a) POC Act was addressed by Beazley P and Payne JA in Lordianto (CA) at [83]-[117]. Their Honours held that “third party” within s.330(4)(a) refers to a person who is not involved in the transactions by which the property in question becomes proceeds of an offence, but rather is wholly removed from that property at the time of the relevant criminal conduct: Lordianto (CA) at [106]-[107] and [110]-[117]. Their Honours reasoned to this conclusion on the basis of several factors, including the following:

1. the fact that the POC Act establishes a regime that is centred on transactions rather than the involvement of particular persons in criminal conduct: Lordianto (CA) at [94]-[95];

2. the legislative intention to “provide a broad intrusion upon private property rights with the avowed aim of forfeiting property which constitutes proceeds of an offence, as very broadly defined … subject to strictly confined exclusions”: Lordianto (CA) at [93];

3. the incongruity inherent in the construction of s.330 whereby property becomes proceeds under s.330(1) at precisely the same time by reason of the same transaction as it ceases to be proceeds under s.330(4): Lordianto (CA) at [113], [116];

4. the fact that their Honours’ construction of “third party” gave the term some work to do within s.330(4)(a), whereas a construction requiring only that a “third party” not be involved in the criminal offending does not: Lordianto (CA) at [111].

116. I accept the submission of the AFP Commissioner that the analysis contained in the preceding paragraph ought be accepted and that it supports the submissions made previously by the AFP Commissioner in these proceedings.

117. Accordingly, I adopt and apply the reasoning of Beazley P and Payne JA concerning the meaning of “third party” for the purposes of s.330(4)(a) POC Act in determining the present application.

Meaning of “Sufficient Consideration”

118. In Lordianto (CA), the “sufficient consideration” requirement in s.330(4) was considered at [118]-[140]. After reiterating that the “property” acquired was a “right” or “power” with respect to the chose in action constituted by the appellants’ bank accounts, the Court of Appeal (at [137]) reasoned that:

1. whilst not specifying in terms to whom the consideration must be provided, s.330(4) is concerned with the acquisition of property by a third party “for sufficient consideration”;

2. as a matter of construction, there can be no such “sufficient consideration” unless it is provided for the acquisition of the property in question;

3. an interest in property having been acquired by the account holders each time a cash deposit was made into their accounts from unnamed persons in Australia from funds from unknown sources located within Australia, the property was thus acquired from the unnamed persons who made the deposits.

119. The Court held unanimously in Lordianto (CA) (at [138]) that the “sufficient consideration” requirement in s.330(4) could not be satisfied where:

1. the relevant account holders had “no connection, contractual or otherwise” with the persons who made the deposits in Australia;

2. the relevant account holders disavowed any suggestion that they had agreed with anybody that money would be transferred from overseas to Australia by the making of structured deposits into their Australian bank accounts; and

3. there was no contractual relationship, whether as agents or otherwise, established between the foreign money changers and the persons who made the structured deposits in Australia.

120. I accept the submission on behalf of the AFP Commissioner that the reasoning and conclusions in Lordianto (CA), as summarised in the last two paragraphs, apply with no less force to the present case.

Meaning of “Reasonable Suspicion”

121. In Lordianto (CA) at [141]-[163], the Court of Appeal addressed the question whether the circumstances would have given rise to a “reasonable suspicion” on the part of the account holders that the property was proceeds of an offence or an instrument of an offence for the purpose of s.330(4)(a).

122. The Court held unanimously that the relevant account holders had failed to discharge their onus of proof on this issue: Lordianto (CA) at [163]. In reasoning to this conclusion, the Court found, amongst other things:

1. the question is “whether, having regard to what the person knew, the conduct identified by the known circumstances would arouse a reasonable suspicion that the property was proceeds of an offence or an instrument of an offence”: Lordianto (CA) at [156]-[159], [161];

2. s.330(4)(a) “does not require the person to have known that the conduct identified by the known circumstances constituted an offence” (at [161]) - dealing with this issue, the Court noted the submissions of the appellants that there was no evidence of the account holders having any knowledge of money laundering or structuring offences (at [152]);

3. there were “abundant circumstances” which would arouse a reasonable suspicion that the interests in property were proceeds, or an instrument of an offence, where (at [163]):

1. it would have been obvious to a reasonable person in the position of the appellants that, for the foreign money changers to have offered a better exchange rate than sophisticated financial institutions, Australian regulatory requirements must have been circumvented, and

2. there was actual awareness of multiple deposits under a particular amount being made at various branches in different locations across Australia.

123. Whilst acknowledging that the question as to whether an applicant for exclusion orders has discharged the burden of establishing that the property was acquired in circumstances that would not arouse a reasonable suspicion for the purpose of s.330(4)(a) must be answered by reference to all of the factual circumstances in the particular case, it was submitted for the AFP Commissioner that the approach adopted unanimously on this issue in Lordianto (CA) is instructive. When applied to the facts of this case, it was submitted that Ms Huang had failed to discharge the same objective burden in circumstances where there were a range of matters that gave rise to a reasonable suspicion for the purpose of s.330(4)(a) POC Act.

The Decision in Kalimuthu (No. 2)

124. The written submissions of counsel for the AFP Commissioner dated 26 November 2018 noted the decision in Kalimuthu (No. 2), and the areas where that Court followed the reasoning in Lordianto (CA). It is sufficient to note that the decision in Kalimuthu (No. 2) did not depart materially from that in Lordianto (CA) so that the construction of the POC Act adopted in Lordianto (CA) and outlined above, remains to be applied by me, as a single Judge of this Court, in determining Ms Huang’s application.

Decision on the Application

125. I have made a number of findings concerning aspects of the evidence including the credibility and reliability of Ms Huang.

126. By her Notice of Motion filed 20 April 2016, Ms Huang sought an order pursuant to s.29 POC Act that her interest in the Zetland property be excluded from the restraining order. I note that the proceedings have been litigated upon the basis that it is Ms Huang’s interest in the Zetland property which is the subject of the application. It has not been contended, by reference to the evidence, that the subject of the application is Ms Huang’s father’s interest in the Zetland property whether by way of a trust or otherwise. The application should be determined upon the basis that it is Ms Huang who asserts the interest in the Zetland property.

The Zetland Property is the Proceeds of an Indicatable Offence or an Instrument of a Serious Offence

127. It is for Ms Huang to establish, on the balance of probabilities, that her interest in the Zetland property is neither the proceeds of an indictable offence nor an instrument of any serious offence: ss.29(2)(d) and 317 POC Act, and therefore excluded from the restraining order.

128. As noted earlier (at [42]), counsel for Ms Huang did not contend that her interest in the Zetland property was not so affected. Rather, the submission was that Ms Huang did not know or reasonably suspect that the Zetland property was so affected.

129. The terms “indictable offence” and “serious offence” are defined in s.338 POC Act. A “serious offence” includes a money laundering offence under s.400.9(1) Criminal Code (Cth). Section 329 POC Act provides for the meaning of “proceeds” and “instruments”.

130. Section 338 POC Act contains a broad definition of “unlawful activity” as an act or omission that constitutes an offence against a law of the Commonwealth, a law of a State or Territory or a law of a foreign country.

131. Section 330 POC Act is an important provision in this case. Section 330(1) and (2) provides for property to become “proceeds” of an offence or an “instrument of an offence”. Section 330(3) provides for circumstances where property remains proceeds of an offence or an instrument of an offence. Section 330(4) provides for circumstances where property caught by s.330(3) ceases to be proceeds of an offence or an instrument of an offence. The proper construction of s.330 POC Act was considered in Lordianto (CA) as mentioned earlier.

132. The AFP Commissioner has pointed to various offences which may be raised for consideration in this case. In particular, reference is made to predicate offences under s.192E or s.192G Crimes Act 1900 (NSW). Reference is made, as well to money laundering offences contrary to s.400.9(1) Criminal Code (Cth).

133. I am satisfied that the sum of $108,000.00 deposited by Mr Feng into Ms Huang’s ANZ Bank account involved a money laundering offence under s.400.9(1) Criminal Code (Cth). The definition of “proceeds of crime” in s.400.1 Criminal Code (Cth) included an offence against the law of New South Wales, in this case being an intention to defraud by false or misleading statement contrary to s.192G Crimes Act 1900 (NSW).

134. I accept the submission of the AFP Commissioner that the funds which were the subject of the money laundering offence were used in connection with the commission of an offence in acquiring the Zetland property.

135. There is a solid foundation for regarding the deposit money placed in Ms Huang’s ANZ Bank account by Mr Feng as being tainted. The chose in action advanced for Ms Huang does not provide material assistance to the resolution of these proceedings. In any event, as noted earlier, it was never contended by Ms Huang that such funds were not tainted.

136. I am satisfied that the funds provided by Citibank for the purchase of the Zetland property followed Ms Huang’s false statements made in support of the loan application.

137. A particularly damaging document (Exhibit A, Tab 15, page 79) is a false statement signed by Ms Huang’s father, and a further false statement signed by Ms Huang as to her place of residence at the time of the making of the application. As observed earlier, the approach of Ms Huang to the execution of these various documents, and her oral evidence concerning those matters on 14 November 2017, is especially troubling.

138. As stated above at [94], I am satisfied that the Citibank Package application form was complete at that time and Ms Huang was aware of its contents. Even if this conclusion was not reached, an appropriate finding would be that Ms Huang was prepared to sign documents (thereby asserting the truth of the contents of the false documents) without any real concern as to their content, whilst knowing that her employment and income details, and her capacity to repay any loan, were material features for the purpose of any loan application. Such a finding would not, in any event, assist Ms Huang on the present application.

139. As a result, these funds were the proceeds and instrument of a money laundering offence in combination with the s.192G offence as a predicate offence.

140. I accept that the property obtained initially by Ms Huang, upon the opening of the ANZ Bank account, was a chose in action represented by the rights that she had against the bank concerning the amount standing to her credit in the bank account at that time. I am likewise satisfied that the series of successive choses in action, represented by the rights of Ms Huang had against the ANZ Bank concerning the amount standing in her account from time to time as a result of Mr Feng’s deposits, was property either wholly or partly derived from the commission of the money laundering offences.

141. Property remains proceeds of an offence or an instrument of an offence even if it is credited to an account: s.330(3)(a) POC Act.

142. In addition, the funds obtained by Ms Huang though the Citibank loan were also the proceeds and instrument of a money laundering offence, in combination with the s.192G Crimes Act 1900 (NSW) offence arising from the use of documents containing false information in support of the loan application.

143. Accordingly, it follows that the Zetland property is the proceeds of an indictable offence or an instrument of a serious offence under s.29(2) POC Act upon the basis that it had been used in connection with an offence.

The Zetland Property did not Cease to be Proceeds or Instrument of an Offence

144. Section 330(4)(a) provides for property ceasing to be proceeds of an offence or an instrument of an offence, if it is acquired by a third party for sufficient consideration without the third party knowing and in circumstances that would not arouse a reasonable suspicion that the Zetland property was proceeds of an offence or an instrument of an offence (as the case requires).

145. Ms Huang must demonstrate each of the elements of s.330(4)(a) POC Act in order to establish that the Zetland property has ceased to be the proceeds of an offence or an instrument of an offence. These are cumulative requirements to be proved by Ms Huang on the balance of probabilities.

146. I accept the submission of the AFP Commissioner that the property did not cease to be proceeds or an instrument under s.330(4)(a) POC Act.

147. Firstly, I accept the submissions of the AFP Commissioner that Ms Huang is not a “third party” under s.330(4)(a) POC Act. Ms Huang cannot be characterised properly as a “third party” given her involvement in the arrangements between herself, her father and others. Ms Huang was the purchaser of the Zetland property. Money was deposited by Mr Feng and Mr Cong into her account with the ANZ Bank. It was Ms Huang who applied for a loan from Citibank for the purpose of the purchase of the Zetland property. The submissions made with respect to a chose in action by reference to a bank account, and the nature of a bank cheque, do not assist Ms Huang. The reasoning in Lordianto (CA) (at [115]-[117] above) supports this conclusion.

148. Properly understood, the concept of a third party for the purpose of s.330(4)(a) POC Act does not include a person in the position of Ms Huang. There is force in the AFP Commissioner’s submission that the vendor of the Zetland property to Ms Huang may be described as a third party, but certainly not Ms Huang.

149. Secondly, there was no “acquisition” for “sufficient consideration” in this case. There was no evidence in this case that Ms Huang provided any consideration to any other person, including her father, as part of the process of acquiring her interest in the Zetland property. To the contrary, the evidence points to the funds being in the nature of a gift without any (let alone sufficient) consideration.

150. At the hearing, counsel for the AFP Commissioner relied upon the Explanatory Memorandum to the POC Act (page 111) is support of a submission concerning the proper construction of s.330(4)(a) POC Act. The Court is entitled to take into account extrinsic material such as the Explanatory Memorandum in construing s.330(4) POC Act. Section 15AB Acts Interpretation Act 1901 (Cth) is not confined to consideration of extrinsic material to determine the meaning of a provision when the provision is ambiguous or obscure. That is one permitted use (s.15AB(A)(b)(i)), but s.15AB permits the use of extrinsic material in the interpretation of a statute (inter alia) to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision, taking into account its context in the Act and the purpose of object underlying the Act: s.15AB(1)(a). Further, in interpreting a provision of an Act, the interpretation that would achieve the purpose or object of the Act, whether or not that purpose or object is expressly stated in the Act, is to be preferred to an alternative interpretation: s.15AA Acts Interpretation Act 1901 (Cth).

144. The Explanatory Memorandum to the POC Act states expressly that “a person who receives the proceeds of an offence as a gift (and therefore does not supply any consideration for the property) will be liable to forfeit that property, whether or not they are aware of the property’s origin” and is consistent with what was said in Lordianto (CA).

145. The submission of the AFP Commissioner that the evidence points to this being a form of gift by Ms Huang’s father to Ms Huang is sound. Accordingly, there was no acquisition for sufficient consideration.

146. Thirdly, even if Ms Huang was a “third party” (and she is not) who provided “sufficient consideration” (and she did not), she has not established that the Zetland property ceased to be the proceeds of an offence or an instrument of a relevant offence by operation of s.330(4)(a) POC Act. The objective and subjective tests contained in this section pose further difficulties for Ms Huang.

147. Ms Huang needed to establish that she acquired the Zetland property without her knowing (the subjective element) that the property was proceeds or instrument of an offence. “Knowledge” for the purpose of s.330(4)(a) includes wilful blindness such as deliberately refraining from making enquiries or wilfully shutting one’s eyes for fear that one may learn the truth.

148. Further, s.330(4)(a) refers to “circumstances that would not arouse a reasonable suspicion”, the test is objective - would the circumstances arouse a suspicion in a reasonable person in the position of Ms Huang, knowing what she knew, that the property was the proceeds or an instrument of an offence?

149. In my view, a reasonable person would be placed on inquiry in the circumstances of this case. Ms Huang demonstrated wilful blindness towards the circumstances in which funds were deposited into her ANZ Bank account by Mr Feng. In addition, Ms Huang provided (or adopted) false information in support of her Citibank loan application. The approach in Lordianto (CA) once again supports this conclusion.

150. Ms Huang has failed to establish that she acquired an interest in the Zetland property (including the funds used to purchase it) without knowing, and in circumstances that would not arouse a reasonable suspicion that the property was the proceeds of or an instrument of an offence.

Conclusion

158. Ms Huang has failed to establish that her interest in the Zetland property is neither the proceeds of an indictable offence nor an instrument of any serious offence. Ms Huang has also failed to establish that such an interest has ceased to be the proceeds or instrument of any offence.

159. I make the following orders:-

1. The Defendant’s Notice of Motion filed on 20 April 2016 is dismissed;

2. The Defendant is to pay the Plaintiff’s costs of the Notice of Motion.

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Decision last updated: 22 August 2019