Commissioner of the Australian Federal Police v Jiang (Costs Ruling)

[2019] VSC 761

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

CONFISCATION AND PROCEEDS OF CRIME LIST

S ECI 2018 02124

IN THE MATTER of the Proceeds of Crime Act 2002 of the Commonwealth
-and-
IN THE MATTER of property suspected of being proceeds of an indictable offence, a foreign indictable offence and/or an instrument of serious offences
-and-
IN THE MATTER of the suspect, HAI JIANG	Respondent
-and-
IN THE MATTER of an application by the Commissioner of the Australian Federal Police	Applicant

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JUDGE:	FORBES  J
WHERE HELD:	Melbourne
DATE OF HEARING:	16 October 2019
DATE OF RULING:	20 November 2019
CASE MAY BE CITED AS:	Commissioner of the Australian Federal Police v Jiang (Costs Ruling)
MEDIUM NEUTRAL CITATION:	[2019] VSC 761

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PROCEEDS OF CRIME – Costs order – Supreme Court (General Civil Procedure) Rules2015 Order 63 - Proceeds of Crime Act 2002 (Cth) – Application for variation of restraining order

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Ms R Burton	Australian Federal Police
For the Defendant	M W L Symons	Mr S  Tsapepas Madison Branson Lawyers

HER HONOUR:

1. This is the ruling on the appropriate costs order following the judgment of Moore J on 6 March 2019 which made variations to a restraining order.[1]

   [1]Commissioner of the Australian Federal Police v Hai Jang [2019] VSC 334 (Moore J) (‘Jiang’).

1. The Australian Federal Police (‘AFP’) suspect Hai Jiang of committing a number of serious offences.  They sought restraining orders in relation to funds suspected of being proceeds of those crimes.  Orders were made on 9 November 2018, including Order 4(b) which restrained  funds totalling $414,078.67, believed to be held in an account of Compass Global Holdings Pty Ltd.[2] At that time orders were also made pursuant to s 38 of the Proceeds of Crime Act 2002 (Cth) that the funds be taken into the custody of and placed under the control of the Official Trustee.

   [2]Paragraph 4(b) of the orders read “The sum of $414,078.67 in the account of Compass Global Holdings Pty Ltd, in the Bank of Queensland account number [account number identified], being the residual funds held by Compass Global Holdings Pty Ltd in relation to Hai Jiang;”.

1. After the orders had been made, the AFP learnt that only $129,987.77 remained in the nominated Compass Global Holdings account.  The balance of $284,090.90 had been transferred to another company called Goldmate Pty Ltd.  Goldmate is described as a ‘money remitter’ whose business involved transferring funds between China and Australia.

1. Armed with this further information, the AFP sought variation of the restraining order to restrain the actual funds held by Compass Global Holdings and separately restrain the funds held by Goldmate.   In total, restraint was sought of the same amount, namely $414,078.67 but was directed at each relevant entity in light of the further information obtained. The matter was determined at a contested hearing before Moore J on 6 March 2019.  The question of costs of the application remained outstanding.  This ruling deals with the appropriate costs orders. 

1. By the time of the hearing two applications were on foot in relation to the original restraining orders.  The AFP served an application and affidavit in support dated 22 February 2019 to vary the original restraining order by removing paragraph 4(b) and references in the accompanying schedule and replacing it with orders reflecting the identification of funds as set out above in paragraph 3.  On 28 February 2019, Compass Global Holdings Pty Ltd made an application to revoke paragraph 4(b) of the original restraining order contending that revocation rather than variation was required. On 1 March 2019 an amended application was served by the AFP.

1. Compass Global Holdings submits that each party should bear their own costs on the basis that both parties enjoyed success as ‘the original restraining order was revoked’.  The Commissioner argues that it is entitled to be paid its costs in making the variation application. 

1. It is apparent, and was conceded before Moore J, that the revocation application filed by the lawyers for Compass Global Holdings was ‘subsumed by the relief sought by the Commissioner in the Commissioner’s amended application filed 1 March 2019’.[3]  That being so, one might have anticipated consent for the variation would have been reached.  However, as is clear from the reasons delivered by Moore J, Compass Global Holdings opposed the proposed orders on the basis that they did not sufficiently nominate what property was to be restrained.  It was submitted that as the account referred to in the earlier orders has been closed and no other account was nominated there was no proper identification of property to be restrained. That is the contest ruled upon by Moore J in which Compass Global Holdings was unsuccessful. 

   [3]Jiang (n 1), 2 [6].

1. It is clear from the correspondence between the parties prior to 6 March 2019 that the information as to the bank account and amount of the funds that were held was provided to the AFP by a statutory declaration of Mr Andrew Su, Chief Executive Officer of associated Compass companies. That statutory declaration was sworn in June 2017. It deposed to the shutting down of the Jiang business in December 2015.  Further investigations made after the original restraining order was made shed light on two matters.  They are outlined at paragraph [14] of Moore J’s reasons.  They are: that the account believed to hold the sum of $414,078.67 was in fact closed as at the time the restraining order was originally made and that the original sum, an amount of $284,090.90 had in fact been transferred by Compass Global Holdings to Goldmate in September 2015.[4] 

   [4]Jiang (n 1), 4 [14].

1. Mr Su, on behalf of Compass Global Holdings, was the source of the incorrect or incomplete information upon which the AFP acted in obtaining the original restraining orders.  Compass Global Holdings maintained an opposition to the making of a restraining order on the basis that the property to be restrained was inadequately particularised. This opposition was unsuccessful. In that application Moore J identified as significant, the absence of any explanation from Mr Su or anyone from Compass Global Holdings to explain what had occurred as to the sum of $129,987.77. This was information uniquely within Compass’ knowledge.

1. The Court has a discretion to award costs pursuant to s 24 Supreme Court Act 1986, exercised subject to and in accordance with r 63.02 of the Supreme Court (General Civil Procedure) Rules 2015. Where the AFP has succeeded in an application which was in substance contested, the ordinary practice of costs following the event would apply. I’m satisfied that, for the reasons set out above, my discretion should be exercised to order that the Compass Global Holdings Pty Ltd pay the costs on a standard basis of and associated with the application to vary the restraining order. In relation to the costs associated with the application I include the cost of written submissions dated 23 October 2019 prepared by the AFP but not the cost of appearing at the directions hearing on 16 October 2019 which canvassed a number of issues and was not specifically listed to deal with the costs argument.