Commissioner of the Australian Federal Police v Nguyen
[2023] WASC 186
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE -v- NGUYEN [2023] WASC 186
CORAM: ARCHER J
HEARD: 26 MAY 2023
DELIVERED : 1 JUNE 2023
FILE NO/S: CIV 1717 of 2022
BETWEEN: COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE
Applicant
AND
VAN DIEN NGUYEN
Respondent
Catchwords:
Proceeds of Crime Act 2002 (Cth) - Restraining orders - Ancillary orders - Examination orders - Not all proposed examinees notified
Legislation:
Proceeds of Crime Act 2002 (Cth), s 18, s 19
Result:
Restraining orders and ancillary orders made
Examination orders made only in relation to those given notice
Category: B
Representation:
Counsel:
| Applicant | : | C Moss |
| Respondent | : | No appearance |
Solicitors:
| Applicant | : | Australian Federal Police - Criminal Assets Litigation |
| Respondent | : | No appearance |
Case(s) referred to in decision(s):
Flack v Chairperson, National Crime Authority (1997) 150 ALR 153
Mai v Commissioner of the Australian Federal Police [2020] VSCA 38
Mulholland v Winslow [2018] WASCA 19
Ng v Commissioner of the Australian Federal Police [2022] WASCA 48
Onley v Commissioner of the Australian Federal Police [2019] NSWCA 101; (2019) 345 FLR 241
Re Application Pursuant to Section 19 of the Proceeds of Crime Act 2002; Ex parte Commissioner of the Australian Federal Police [2014] WASC 390
Rinaldi v The State of Western Australia [2019] WASC 420
Saad v Commissioner of the Australian Federal Police [2021] VSCA 246
ARCHER J:
Introduction
The Commissioner of the Australian Federal Police applies by originating summons for restraining orders under s 18 and s 19 of the Proceeds of Crime Act 2002 (Cth) against the respondent.[1] The orders relate to cash seized by the Australian Federal Police (AFP) on 1 September 2021 at the Perth Domestic Airport. The Commissioner has filed an undertaking as to damages.[2]
[1] Section 27 authorises a 'proceeds of crime authority' to apply for restraining orders over the same property under more than one section of the Act. The Commissioner is a proceeds of crime authority, by s 338.
[2] The undertaking was filed on 19 July 2022 and is in accordance with s 21.
The Commissioner also seeks a custody and control order in relation to the cash, an ancillary order that the respondent provide a sworn statement as to his finances, and an order that the respondent and others be examined as to the respondent's affairs.
The respondent does not consent to the orders being made, but does not object.
The Commissioner did not adduce evidence that all of the proposed examinees had been notified of the application for examination orders. During the hearing, the Commissioner did not press for examination orders to be made in relation to those he had not proved had been notified.
For the reasons that follow, I would make examination orders in relation to those proposed examinees that I am satisfied were notified of the application. I would also make the restraining orders, custody and control order and the order that the respondent provide a sworn statement as to his finances.
Legal framework
In these reasons, when I refer to legislative provisions, I am referring to provisions of the Proceeds of Crime Act, unless I say otherwise.
Jurisdiction
The Supreme Court has jurisdiction to make orders with respect to matters arising under the Act.[3]
[3] Section 314.
With the exception of the custody and control orders, the orders sought by the Commissioner may only be made by a court with 'proceeds jurisdiction'.[4] The Supreme Court, having jurisdiction to deal with criminal matters on indictment in Western Australia, will relevantly have 'proceeds jurisdiction' where all or part of the conduct constituting an offence to which the order would relate occurred, or is reasonably suspected to have occurred, in Western Australia.[5]
[4] See s 18(1), s 19(1), s 39(1) and s 180(1). In relation to custody and control orders, the Act does not appear to limit jurisdiction to courts with 'proceeds jurisdiction'. (Compare s 38 with s 18(1) and s 19(1) and, read with s 18(1) and s 19(1), s 39(1) and s 180(1)).
[5] Section 335(2).
The orders sought in this case relate to alleged offences under s 135.1(3) and s 400.4(1) of the Criminal Code Act 1995 (Cth), sch 1 (Criminal Code). I will refer to these offences as the 'relevant offences'. Part of the conduct constituting the relevant offences occurred, or is reasonably suspected to have occurred, in Western Australia.[6] Therefore, the Supreme Court has 'proceeds jurisdiction', and may make the orders.
Proof
[6] See the summary of the facts, below.
Proceedings on an application for a restraining order or a confiscation order are not criminal proceedings.[7] The applicant in any proceedings under the Act bears the onus of proving the matters necessary to establish the grounds for making the order applied for.[8] Subject to exceptions which are not here relevant, any question of fact is to be decided on the balance of probabilities.[9]
Ex parte applications
[7] Section 315(1).
[8] Section 317(1).
[9] Section 317(2). The exceptions relate to where it is alleged that a suspected offender has absconded.
A person who applies for a restraining order, an ancillary order, or an order for the examination of any person (examination order) must give notice in accordance with the applicable provisions.[10] Despite this, the court 'must consider' an application made without notice if certain conditions are met. Although the court 'must consider' an application on an ex parte basis if so requested, the court is not bound to proceed on that basis.[11]
[10] See s 26, s 39(3) and (3A), and s 182(2). The specific notice requirements for each type of order will be outlined in the sections dealing with each type of order.
[11] Ng v Commissioner of the Australian Federal Police [2022] WASCA 48 [132], discussing examination orders. See also at [226].
In Ng v Commissioner of the Australian Federal Police,[12] the Court of Appeal was considering whether the primary judge had erred in making examination orders ex parte. The Court said (citations omitted):
It is fundamental to a court's exercise of its judicial power that a party whose rights or interests will be affected by an order of the court is entitled to be heard. A court may, however, in exceptional circumstances, make an order which affects the rights or interests of a party without notice to the party. Ordinarily, a court should only exercise the power to proceed without notice in exceptional or special cases; for example, where there is some extraordinary hazard or compelling urgency. A risk that property may be dissipated so as to frustrate the objects of the law will usually be an exceptional or special case.
[12] Ng [130].
The Court noted that the circumstances which justify the making of an examination order will not necessarily justify the making of the order ex parte.[13] The Court said:[14]
It is readily apparent why it was necessary for the restraining orders to be made on an ex parte basis, namely to guard against the risk that the property in question may be dissipated, before the making of the restraining orders sought by the respondent, so as to frustrate the objects of the [the Act]. However, it is not apparent why it was necessary for the examination orders to be made on an ex parte basis.
Section 18 - people suspected of committing serious offences
[13] Ng [134], citing Basten JA (Meagher JA relevantly agreeing) in Onley v Commissioner of the Australian Federal Police [2019] NSWCA 101; (2019) 345 FLR 241 [310].
[14] Ng [139].
Section 18 is concerned with the making of restraining orders in relation to people suspected of committing 'serious offences'. A 'serious offence' is defined to include various 'indictable offences'[15] punishable by imprisonment for 3 or more years.[16]
[15] Section 338 relevantly defines 'indictable offence' to mean an offence against a law of the Commonwealth that may be dealt with as an indictable offence. Section 4G of the Crimes Act 1914 (Cth) provides that offences against a law of the Commonwealth punishable by imprisonment for a period exceeding 12 months are indictable offences, unless the contrary intention appears.
[16] Defined in s 338.
Subject to a matter not relevant here,[17] the court must make a restraining order under s 18 when the criteria set out in that section are satisfied. Those criteria are as follows.
[17] Section 21 permits the court to refuse to make a restraining order if the Commonwealth, or the 'responsible authority' on its behalf, does not make an undertaking as to damages. The Commissioner is a 'responsible authority', as defined in s 338, and has provided an undertaking.
First, the applicant must be a 'proceeds of crime authority'.[18]
[18] Section 18(1)(c).
Second, there must be reasonable grounds to suspect that a person has committed a serious offence.[19] The reasonable grounds need not be based on a finding as to the commission of a particular serious offence.[20]
[19] Section 18(1)(d).
[20] Section 18(4).
Third,[21] the application for the order must be supported by an affidavit of an 'authorised officer'.[22]
[21] Section 18(1)(e) and s 18(3).
[22] Defined in s 338.
Fourth, the affidavit must:[23]
(1)state that the authorised officer suspects that the 'suspect'[24] committed the offence; and
(2)include the grounds on which the authorised officer holds the suspicion.
[23] Section 18(1)(e) and s 18(3).
[24] 'Suspect' is defined in s 338 to include, in relation to restraining orders, a person charged with, or suspected of having committed, the offence or offences to which the order relates. In this case, that person is the respondent.
Fifth, the court must be satisfied that the authorised officer who made the affidavit holds the suspicion on reasonable grounds.[25] If this criterion is met, the second criterion will also be met.[26]
[25] Section 18(1)(f).
[26] See Mai v Commissioner of the Australian Federal Police [2020] VSCA 38 [50] ‑ [58] (cf Saad v Commissioner of the Australian Federal Police [2021] VSCA 246 [87] ‑ [94]).
Sixth, the court must be satisfied that there are reasonable grounds to suspect that the property falls within at least one of the categories listed in s 18(2). Those categories include property that is the suspect's property or subject to his or her effective control.[27]
[27] See s 18(2)(a) and (c).
If the property sought to be restrained is the property of a person other than the suspect (and which is not the 'bankruptcy property'[28] of the suspect), two additional criteria must be satisfied.
[28] See the definition of 'bankruptcy property' and 'interest' (which includes a contingent interest) in s 338. In essence, this subsection does not apply where immediately before the property was vested in another person under s 58(1) of the Bankruptcy Act 1966 (Cth), the property was the property or within the effective control of the suspect or the suspect's estate.
The first additional criterion is that the affidavit must:[29]
(1)state that the authorised officer suspects that the property is:
(a)subject to the effective control of the suspect; or
(b)'proceeds' of the offence; or
(c)if the alleged offence is a serious offence, an 'instrument' of the offence; and
(2)include the grounds on which the authorised officer holds the suspicion.
[29] Section 18(1)(e) and s 18(3).
Relevantly, property is 'proceeds' of an offence if it is derived or realised, whether wholly or partly, whether directly or indirectly, from the commission of the offence, and whether the property is situated within or outside Australia.[30]
[30] Section 329(1). See also s 330.
Property is relevantly an 'instrument' of an offence if it is, or is intended to be, used in, or in connection with, the commission of an offence, whether the property is situated within or outside Australia.[31]
[31] Section 329(2). See also s 330.
Property can be proceeds of an offence or an instrument of an offence, even if no person has been convicted of the offence.[32]
[32] Section 329(3).
The second additional criterion is that the court must be satisfied that the authorised officer who made the affidavit holds the suspicion referred to in the first additional criterion on reasonable grounds.[33]
[33] Section 18(1)(f). See also s 18(2).
Section 26(1) and s 26(2) set out the notice requirements for applications for restraining orders. By s 26(3), the court must not (unless subsection 4 applies) hear the application unless it is satisfied that the owner of the property to which the application relates has received reasonable notice of the application. By s 26(4), the court must consider[34] the application without notice having been given if the 'responsible authority' requests the court to do so. The 'responsible authority' in this context relevantly means the proceeds of crime authority which made the application for the restraining order.[35]
Section 19 - property suspected of being proceeds or instruments of crime
[34] Although the court 'must consider' an application on an ex parte basis if so requested, the court is not bound to proceed on that basis - see the earlier discussion under the heading 'Ex parte applications'.
[35] See the definitions of 'responsible authority' and 'principal order' in s 338.
Section 19 is concerned with the making of restraining orders in relation to property that is suspected of being the proceeds of an indictable offence or, if the indictable offence is also a serious offence, an instrument of that offence.
Subject to s 21 (which is not relevant here[36]) and s 19(3) (discussed later[37]), the court must make a restraining order under s 19 when the criteria set out in that section are satisfied. Those criteria are as follows.
[36] See footnote 19.
[37] Discussed later under the heading 'Discretionary refusal under s 19'.
First, the applicant must be a proceeds of crime authority.[38]
[38] Section 19(1)(c).
Second, there must be reasonable grounds to suspect that the property is proceeds of an indictable offence or an instrument of a serious offence.[39] The reasonable grounds need not be based on a finding as to the commission of a particular offence.[40]
[39] Section 19(1)(d).
[40] Section 19(4).
Third, the application for the order must be supported by an affidavit of an authorised officer.[41]
[41] Section 19(1)(e).
Fourth, the deponent of the affidavit must:[42]
(1)if the suspected offence is a serious offence, state that he or she suspects that the property is proceeds of the offence or an instrument of the offence;
(2)if the suspected offence is not a serious offence, state that he or she suspects that the property is proceeds of the offence; and
(3)include the grounds on which he or she holds the suspicion.
[42] Section 19(1)(e).
Fifth, the court must be satisfied that the authorised officer who made the affidavit holds the suspicion stated in the affidavit on reasonable grounds.[43] If this criterion is met, the second criterion will also be met.[44]
[43] Section 19(1)(f).
[44] See Mai v Commissioner of the Australian Federal Police [50] ‑ [58] (cf Saad v Commissioner of the Australian Federal Police [87] ‑ [94]).
As noted in the discussion of s 18, by s 26(3), the court must not (unless subsection 4 applies) hear the application unless it is satisfied that the owner of the property to which the application relates has received reasonable notice of the application. However, the court must consider[45] the application without notice having been given if requested to do so by the proceeds of crime authority which made the application for the restraining order.
Discretionary refusal under s 19
[45] Although the court 'must consider' an application on an ex parte basis if so requested, the court is not bound to proceed on that basis - see the earlier discussion under the heading 'Ex parte applications'.
Section 19(3) provides that a court may refuse to make a restraining order in relation to an indictable offence that is not a serious offence if the court is satisfied that it is not in the public interest to make the order.
As will be seen, the relevant offences in this case are both serious offences. Accordingly, s 19(3) does not apply.
Reasonable grounds for suspicion
In Ng,[46] the Court said:
The concept of 'reasonable suspicion' in s 19(1) does not require proof of a suspicion that the property in question is, relevantly, the proceeds of an indictable offence or an instrument of a serious offence. The word 'suspicion', in its natural and ordinary meaning, refers to a state of conjecture or surmise where there is an absence of proof. However, a suspicion as to the existence of a fact or circumstance is a positive feeling of actual apprehension or mistrust. Reasonable grounds for a suspicion will not exist unless there is information or material which is sufficient to give rise to the state of suspicion in the mind of a reasonable person. However, information or material which gives rise to a state of suspicion in the mind of a reasonable person need not be based on evidence that is admissible at law.
Ancillary orders
[46] Ng [256]. Although specifically dealing with restraining orders under s 19 in this passage, the comments apply equally to s 18. See also Re Application Pursuant to Section 19 of the Proceeds of Crime Act 2002; Ex parte Commissioner of the Australian Federal Police [2014] WASC 390 [19] ‑ [21].
Section 39 relevantly provides that a court that makes a restraining order may make ancillary orders that it considers are appropriate.[47] One of the ancillary orders that may be made is that the suspect in relation to the restraining order provide a sworn statement setting out all of his or her interests in property and his or her liabilities.[48]
[47] See s 39(1) and s 39(4). An ancillary order may be made when making a restraining order or after a restraining order is made.
[48] Section 39(1)(ca).
A court may only make ancillary orders on the application of specified persons.[49] Specified persons are the responsible authority, the owner of the property covered by the order, any person who has the leave of the court and, if the Official Trustee was ordered to take custody and control of the property, the Official Trustee (Specified Persons).
[49] Section 39(2).
By s 39(3), the applicant must give written notice of the application to all other Specified Persons. However, by s 39(3A), the court must consider[50] an application for an ancillary order without notice if the responsible authority asks the court to do so and the restraining order to which the application relates was considered without notice.[51]
Examination orders
[50] As noted earlier, although the court 'must consider' an application on an ex parte basis if so requested, the court is not bound to proceed on that basis - see the discussion under the heading 'Ex parte applications'.
[51] Note that a person may apply to revoke an ancillary order heard without notice - see s 39B.
An examination order may only be made on 'application of the responsible authority for the principal order, or the application for a principal order, in relation to which the examination order is sought'.[52] Accordingly, and relevantly to this case, where a restraining order has been made, an examination order may be made on the application of the proceeds of crime authority which made the application for the restraining order.[53]
[52] See s 180(1) and s 182(1).
[53] See the definitions of 'responsible authority' and 'principal order' in s 338.
The court that made the restraining order, or any other court that could have made the restraining order, may make an examination order.[54]
[54] Section 180(1).
A restraining order is in force from the time it is made.[55] Therefore, the power to make an examination order arises as soon as a restraining order is made, even if the restraining order is made ex parte and before notice of the restraining order has been given to the persons affected.[56]
[55] Section 41.
[56] Onley [308] (Basten JA, with whom Meagher JA relevantly agreed at [418]).
The court's power to make an examination order is discretionary. The making of a restraining order does not mean that an examination order will necessarily be made.[57]
[57] Ng [135].
In Ng,[58] the Court said (citations omitted):
The apparent purpose or object of an examination, pursuant to an order made under s 180(1), includes, at least, to enable information to be gathered to facilitate an application by the responsible authority for a forfeiture order and to assist the responsible authority in resisting exclusion orders and compensation orders.
If the responsible authority satisfies the court, on the balance of probabilities, that the preconditions to the making of an examination order under s 180(1) exist and that the proposed examination is sought to enable the responsible authority to gather information in accordance with the statutory purpose or object of an examination, the court should ordinarily exercise its discretion and make the examination order.
[58] Ng [136] ‑ [137].
By s 182(2), a court must consider[59] an application for an examination order without notice having been given to any person if the responsible authority requests the court to do so.
Custody and control orders
[59] Again, as noted earlier, although the court 'must consider' an application on an ex parte basis if so requested, the court is not bound to proceed on that basis - see the discussion under the heading 'Ex parte applications'.
Under s 38 of the Act, the court may order the Official Trustee to take custody and control of property covered by a restraining order if the court is satisfied that this is required. A custody and control order enables the powers and duties imposed by pt 4‑1 of the Act to be invoked.
Facts
The facts were set out in an affidavit sworn by a special member of the AFP, Ankica Smith,[60] and were helpfully summarised in the AFP's submissions.
[60] Affidavit of Ankica Smith filed 19 July 2022 (Smith Affidavit).
On 1 September 2021, the respondent arrived at the Perth Domestic Airport on a flight from Adelaide. He was found to have $679,950 cash in his backpacks. The AFP officers arrested the respondent, interviewed him and seized the cash (Seized Cash).
During the interview, the respondent said (through an interpreter), among other things:[61]
(a)the money was revenue from two months' supply of cucumbers to two companies in Adelaide, known as 4 Ways ($130,000) and HHN ($584,000);
(b)he had collected the cash some time before 9.30 am on Tuesday, 31 August 2021 and flew back to Perth at 7.00 am on Wednesday, 1 September 2021; and
(c)he intended to deposit the cash, declare it to the ATO and use it to pay for goods and labour.
[61] Smith Affidavit [16].
During a later interview (again through an interpreter), the respondent said, among other things:[62]
(a)he believed that he had collected the cash on Friday but could not remember the date;
(b)he intended to bank the cash into the business bank account but collected it late on a Friday afternoon and did not have time to bank it prior to his flight departing Adelaide; and
(c)he was planning to use $150,000 of the cash to pay his workers directly and then bank the balance.
[62] Smith Affidavit [106] and [110].
The AFP conducted an investigation. It is unnecessary to set out the results of that investigation in full. It is sufficient to note the following facts which emerged from the investigation.
The respondent and his wife Au My Du (Ms Du) carry on a cucumber growing business through the Dien Nguyen Family Trust (Nguyen Trust).[63] It appears that they are the primary beneficiaries of the Nguyen Trust.[64] NVD Fresh Produce Pty Ltd (NVD Fresh) is the trustee of the Nguyen Trust.[65] The respondent and Ms Du are the directors of NVD Fresh and each are 50% shareholders.[66]
[63] Smith Affidavit [64] and AS‑16.
[64] Smith Affidavit [64(e)] and AS‑16 page 189.
[65] Smith Affidavit [64] and AS‑16.
[66] Smith Affidavit [44], AS‑9 and AS‑10.
The principal place of business for NVD Fresh is a property in Geraldton owned by the respondent (First Geraldton Property). A related company, NVD Family Pty Ltd (NVD Family), owns another property in Geraldton (Second Geraldton Property). The respondent and Ms Du own another property in Deepdale.[67]
[67] Smith Affidavit [44] and [46].
Both 4 Ways and HHN had made electronic payments to the Nguyen Trust in the months preceding the cash payments.[68]
[68] Smith Affidavit [77(a)], [79], and [95(b)].
When conducting an audit of the Nguyen Trust for the 2014/2015 financial year, the ATO detected a previous under‑declaration of income ($552,905) by the Nguyen Trust in relation to the supply of cucumbers to a customer, Odeum Farms, which were not recorded in the Nguyen Trust bank account and were not taken into account by the Nguyen Trust's accountant when calculating business income.[69]
[69] Smith Affidavit at [71] ‑ [72], and annexures AS‑16 (pages 191 ‑ 193) and AS‑17 (pages 223 ‑ 225).
On 9 September 2021, the Western Australian Police Force, with members of the Australian Border Force, conducted a search of the Second Geraldton Property. Twelve people were found working in a shed on the Second Geraldton Property, of which four were unlawful non‑citizens working illegally.[70]
[70] Smith Affidavit [98].
After initially claiming that he employed workers through labour hire firms, the respondent admitted that he employed them directly. He said that the labour hire firms put the workers on their books (even though they work directly for the respondent), take a cut, then give cash back to the respondent to pay the workers.[71]
[71] Smith Affidavit [108] ‑ [109].
Section 18 criteria
First criterion - proceeds of crime authority
The Commissioner is a proceeds of crime authority.[72] The first criterion is met.
Second criterion - reasonable grounds to suspect that a person has committed a serious offence
[72] Section 338.
As noted earlier, this criterion will be met if the fifth criterion is met.
Third criterion - affidavit of an authorised officer
The application was supported by Ms Smith's affidavit. Ms Smith is an authorised officer.[73] This criterion is met.
Fourth criterion - suspicion of serious offence - affidavit requirements
[73] Smith Affidavit [1] ‑ [2] and AS‑1.
Ms Smith's affidavit meets the fourth criterion. She states her suspicion that the suspect committed two serious offences and her grounds.
Ms Smith deposes that she suspects:[74]
(a)the respondent has committed an offence contrary to s 135.1(3) of the Criminal Code, namely doing anything with the intention of dishonestly causing a loss to another person, that person being a Commonwealth entity (Tax Evasion Offence); and
(b)the respondent has committed an offence contrary to s 400.4(1) of the Criminal Code, namely dealing with money or other property which was, and which he believed to be, proceeds of crime or which he intended would become an instrument of crime, and its value is $100,000 or more (Money Laundering Offence).
[74] Smith Affidavit [9] ‑ [10].
As will be seen, each of these offences is a serious offence.
The maximum penalty for the Money Laundering Offence is 20 years, or 1200 penalty units, or both. Section 400.4(1) is contained in pt 10.2 of the Criminal Code. The suspected Money Laundering Offence therefore falls within the definition of 'serious offence' in s 338(a)(ii).
The maximum penalty for the suspected Tax Evasion Offence is 10 years. Initially, the Commissioner submitted that it fell within the definition of 'serious offence' in s 338(aa), in the circumstances. Later, and after the hearing, the Commissioner corrected that submission and said he submitted that it fell within the definition of 'serious offence' in s 338(a)(iv). By that subsection, 'serious offence' is defined to include:
(a)an *indictable offence punishable by imprisonment for 3 or more years, involving:
…
(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.
The Commissioner submits that it can be inferred from the large amount involved (of over $600,000) that the suspected offence was intended to cause a loss of more than $10,000 in tax revenue. I accept this. The suspected Tax Evasion Offence therefore falls within the definition of 'serious offence' in s 338(a)(iv).
Ms Smith's suspicion that the respondent had committed each of these offences was helpfully summarised by the Commissioner (citations omitted):[75]
[75] Applicant's Outline of Written Submissions filed 4 May 2023 (Applicant's Submissions) [61] ‑ [62].
61.Ms Smith suspects the respondent has committed the Tax Evasion Offence, contrary to s 135.1(3) of the Criminal Code, specifically that:
(a)the respondent collected and carried the Property back to Western Australia with the intention of concealing all or part of it to under‑report the Nguyen Trust's business income and reduce the tax payable on that income - for the reasons articulated in paragraph [150] of the Smith Affidavit;
(b)the respondent intended to use all or part of the Property to pay workers directly without paying withholding income tax and paying it to the ATO - for the reasons articulated in paragraph [151] of the Smith Affidavit;
(c)the respondent, prior to the seizure of the Property, paid workers in cash with the intention of enabling the Nguyen Trust to avoid PAYG withholding and paying the withheld amounts to the ATO - for the reasons articulated in paragraph [152] of the Smith Affidavit;
(d)the respondent caused the Nguyen Trust to pay large amounts of funds to purported labour hire firms which did not provide labour hire services, for the purposes of claiming tax deductions for those expenses which he (the Nguyen Trust) was not entitled to - for the reasons articulated in paragraph [153] of the Smith Affidavit.
62.Ms Smith suspects the respondent has committed the Money Laundering Offence, contrary to s 400.4(1) of the Criminal Code, specifically that:
(a)the respondent received and possessed the Property and carried it with him to Western Australia (thereby dealing with the money).
(b)the Property was proceeds of the offence of allowing unlawful non‑citizens to work contrary to section 245AB(3) of the Migration Act 1958 (Cth) (Migration Act Offence) - for the reasons articulated in paragraph [154](b) of the Smith Affidavit.
(c)the Property was proceeds of the Tax Evasion Offence - for the reasons articulated in paragraph [154](c) of the Smith Affidavit.
(d)the respondent intended that the Property would become an instrument of indictable crime, namely the Tax Evasion Offence - for the reasons articulated in paragraph [155] of the Smith Affidavit.
Ms Smith also set out in her affidavit her reasons for holding that suspicion.[76]
[76] Smith Affidavit [150] ‑ [155].
Accordingly, the fourth criterion is met.
Fifth criterion - suspicion of serious offence - reasonable grounds
Ms Smith's affidavit amply demonstrates that there are reasonable grounds for her suspicion that the respondent committed the offences. It is sufficient to refer only to some of the bases upon which she holds the suspicion:[77]
[77] Smith Affidavit [150], [151] and [155].
150.I suspect Mr Nguyen has committed the Tax Evasion Offence, by collecting the Seized Cash and carrying it with him back to Western Australia, with the intention of concealing all or part of it to underreport the Nguyen Trust's business income to reduce the amount of tax paid on it, based on the facts deposed to in this affidavit, in particular:
(a)based on my experience conducting tax audits in my previous role at the ATO and investigating criminal activity in my current role, and on the findings set out in the Black Economy Taskforce Report, I know that that dealing in cash rather than electronic funds transfers enables people to conceal funds from the ATO to avoid paying tax;
(b)if Mr Nguyen did not intend to conceal business income from the ATO and avoid paying all of the required tax, he could have requested that HHH Fresh and 4 Ways pay the Nguyen Trust electronically;
(c)Both of HHH Fresh and 4 Ways had made electronic payments to the Nguyen Trust in the months preceding the cash payments, which demonstrate they had the capacity to do so;
(d)Receiving payments electronically would have avoided travel time and costs, the effort of carrying the heavy amount of cash on the plane and remove any risk any of it being lost or stolen;
(e)Mr Nguyen had no legitimate reason to travel to South Australia to collect the Seized Cash;
(f)Mr Nguyen's explanation that he travelled to collect the cash because HHH Fresh and 4 Ways were slow to make their payments or did not want to pay, was not compelling because:
(i)Mr Lam of 4 Ways informed FA Guadagnuolo that:
1.Mr Nguyen's aunty had collected the cash on Mr Nguyen's behalf in instalments from 15 July 2021, and that she was the only one who had collected cash; and
2.'at the beginning of the season, negotiation between (Mr Nguyen) and the Owner (of 4 Ways) was a request by Mr Nguyen to obtain 50% advance payment in cash (not a normal term) in a first few weeks, continuing until further notice' and that this was done 'to strengthen cash flow position until its position improved or to buy any product in South Australia'; and
(ii)Betty Nguyen of HHH Fresh:
1.stated that Mr Nguyen had asked to be paid in cash, and she did not know why;
2.provided statements demonstrating she had made payments to the Nguyen Trust by electronic funds transfer over July and August 2021; and
3.said that she had withdrawn around $60,000 or $70,000 each week from June 2021 and saved it up to pay Mr Nguyen;
(g)Mr Nguyen admitted that he was going to use $150,000 of the Seized Cash to pay workers 'off the books' rather than deposit into the Nguyen Trust's bank account;
(h)Mr Nguyen's statement during the AFP Search Warrant that he intended to put the cash into the business account when he returned home to Geraldton, but had not done so in Adelaide, because he did not have time is not compelling because:
(i)he departed Adelaide at 6.40 am on 1 September 2021 (Wednesday) and he said during the Airport Interview that he had collected all the funds on the previous morning (Tuesday);
(ii)NAB opening hours on Tuesdays are 9.30 am to 4.00 pm;
(iii)Mr Lam said that Mr Nguyen's aunty had collected the cash from 4 Ways in the months preceding 1 September 2021;
(iv)Mr Nguyen's aunty could have banked the 4 Ways cash to the Nguyen Trust bank account in South Australia without the need for Mr Nguyen to travel; and
(v)Mr Nguyen could have banked all of the cash (from HHH and 4 Ways) in Adelaide rather than carrying such a large amount on a plane.
(i)The findings in the Nguyen Trust Audit Report included that during the audit period:
(i)Mr Nguyen had poor record keeping practices and relied on Ms Phu for the preparation of tax returns and business statements;
(ii)income received from sales of cucumbers was generally deposited directly into the business bank account by direct deposit and Ms Phu used this amount to calculate assessable income; and
(iii)Ms Phu had not included sales that had not been deposited into the business bank account in the calculation of assessable income resulting in $552,905.00 in undeclared business income and an income tax shortfall in the audit period;
(j)it appears that the business uses a similar system as it did during the audit period because the Nguyen Trust still uses Ms Phu as its tax agent and Mr Nguyen said during the AFP Search Warrant that he had no filing system for his business records; and
(k)I suspect that any income that did not pass through the business bank account would not be reported as income to the ATO.
151.I also suspect Mr Nguyen has committed the Tax Evasion Offence, by collecting the Seized Cash and carrying it with him back to Western Australia, with the intention of using all or part of it to pay workers directly without withholding income tax and paying it to the ATO, based on the information in this affidavit, in particular that he said he intended to put $150,000 aside to pay the workers directly.
…
155.I also suspect that Mr Nguyen has committed the Money Laundering Offence, by dealing with the Seized Cash, which he intended to become an instrument of indictable crime, namely the Tax Evasion Offence, because he received and possessed the Seized Cash and carried it back with him to Western Australia with the intention of:
(a)using it to pay the workers directly and without any records to enable the Nguyen Trust to avoid its PAYG obligations to withhold and to pay the withheld amounts to the ATO (as set out in paragraph 151 above); and
(b)concealing all or part of it to avoid declaring it as business income to the ATO and paying the requisite tax (as set out in paragraph 150 above).
Accordingly, the fifth criterion is met.
Sixth criterion - property falls within s 18(2) - reasonable grounds
Property that is the suspect's property or subject to his or her effective control falls within s 18(2).
I am satisfied that there are reasonable grounds to suspect that the Seized Cash is the respondent's property.
Ms Smith deposes that she suspects that the Seized Cash is the respondent's or is in his effective control, and sets out her reasons for holding that suspicion.[78] Her reasons for suspecting this include:[79]
(a)the Seized Cash was found in the respondent's possession at the time of seizure;
(b)it was asserted by the respondent that the Seized Cash was to be payment for cucumbers produced by the farming business (which is run by the Nguyen Trust); and
(c)the respondent is one of the beneficiaries of the Nguyen Trust and a director and shareholder of the corporate trustee of the Nguyen Trust.
[78] Smith Affidavit [156].
[79] Smith Affidavit [156].
Ms Smith's affidavit amply demonstrates that there are reasonable grounds to suspect that the Seized Cash is the respondent's property. 'Property' is defined to include personal property of every description, including an equitable interest in any such property.[80] The respondent's possession of the Seized Cash gave him an equitable interest in it, making it his property.[81] He would not have lost his equitable interest when the Seized Cash was seized by the police. Unless and until such time as the Seized Cash is forfeited, he retains an interest in it.[82]
Additional criteria - property not the suspect's property
[80] See the definitions of 'property' and 'interest' in s 338.
[81] See Flack v Chairperson, National Crime Authority (1997) 150 ALR 153, 156 ‑ 157 and 162 ‑ 163. See also, in relation to State legislation, Rinaldi v The State of Western Australia [2019] WASC 420 [30].
[82] See, in relation to State legislation, Mulholland v Winslow [2018] WASCA 19, where the court found that a person who had the right to possess property prior to its seizure retained that right of possession after its seizure as against everyone except the Commissioner of Police. See, in particular, at [34], [51], [56] ‑ [57], and [61].
The additional criteria must be met only if the application is to restrain property of a person other than the suspect (and which is not the bankruptcy property of the suspect). As I have explained, I am satisfied that the Seized Cash was the respondent's property. Accordingly, the additional criteria do not need to be met.
Notice
The respondent received reasonable notice of the application. The respondent's wife, Ms Du, did not.
In my view, given the broad definition of property, Ms Du is also an owner of the Seized Cash. With her husband, she carries on the cucumber business through the Nguyen Trust. She is one of the two primary beneficiaries of the Trust, and has a 50% shareholding in the corporate trustee.
The applicant does not dispute that Ms Du is also an owner of the Seized Cash. However, the applicant invites me to infer that Ms Du had been notified from various circumstances (some of which were advanced from the bar table). In my view, the evidence is insufficient to enable that inference to be drawn. Nevertheless, I am satisfied that it is appropriate to make the restraining orders. If, having received notice of the orders, Ms Du wishes to apply to revoke them, she may do so.[83] As the Seized Cash is already in the hands of the authorities, she would suffer no prejudice in the meantime.
[83] Section 42.
To ensure that she receives notice, I will require the applicant to formally give notice to Ms Du of the order (and associated materials) and provide proof of that service to the court.
Conclusion on section 18 order
The applicant is a proceeds of crime authority.
There are reasonable grounds to suspect that the respondent has committed two serious offences.
The application is supported by an affidavit of an authorised officer, Ms Smith.
Ms Smith deposes that she suspects that the respondent committed the offences. Her affidavit includes the grounds for her suspicion.
I am satisfied that Ms Smith holds her suspicion on reasonable grounds.
I am satisfied that there are reasonable grounds to suspect that the Seized Cash is the respondent's property.
Therefore, I would make an order under s 18.
Section 19 - have the remaining criteria been met?
First criterion - proceeds of crime authority
As noted in the discussion of the s 18 criteria, the Commissioner is a proceeds of crime authority. The first criterion is met.
Second criterion - reasonable grounds to suspect that the property is proceeds of an indictable offence or an instrument of a serious offence
As noted earlier, this criterion will be met if the fifth criterion is met.
Third criterion - affidavit of an authorised officer
As noted in the discussion of the s 18 criteria, the application was supported by an affidavit of Ms Smith who is an authorised officer. This criterion is met.
Fourth criterion - suspicion that proceeds or an instrument - affidavit requirements
The fourth criterion requires the authorised officer to state that he or she suspects that the property is proceeds of an indictable offence or an instrument of a serious offence. The affidavit must also include the grounds for that suspicion. As each of the offences suspected by Ms Smith in this case are serious indictable offences, the relevant suspicion is that the property is proceeds of, or an instrument of, the offence(s).
Ms Smith's affidavit meets this criterion. Ms Smith deposes that she suspects that the Seized Cash is proceeds of, and an instrument of, each serious offence, and includes the grounds on which she holds the suspicion.[84]
Fifth criterion - suspicion that proceeds or an instrument - reasonable grounds
[84] Smith Affidavit [157] ‑ [160].
Ms Smith's affidavit amply demonstrates that there are reasonable grounds for her suspicion. It is sufficient to refer only to paragraph 158(b). In that paragraph, Ms Smith deposed:[85]
158.I suspect the Seized Cash is an instrument of the Tax Evasion Offence, because Mr Nguyen intended to use it in the commission of that offence, based on the information in this affidavit, in particular that he collected it and possessed it, and carried it with him back to WA, with the intention of:
…
(b)concealing all or part of it to avoid declaring it as business income to the ATO and paying the requisite income tax (as set out in paragraph 150 above).
Notice
[85] Smith Affidavit [158(b)].
The respondent received reasonable notice of the application. Again, the respondent's wife, Ms Du, did not.
For the same reasons as I gave in relation to the s 18 order, I consider it appropriate to make the restraining orders. I will require the applicant to formally give notice to Ms Du of the order (and associated materials) and provide proof of that service to the court.
Conclusion on section 19 order
The applicant is a proceeds of crime authority.
There are reasonable grounds to suspect that the Seized Cash is the proceeds of, or an instrument of, a serious offence.
The application is supported by an affidavit of an authorised officer, Ms Smith.
Ms Smith deposes that she suspects that the Seized Cash is the proceeds of, or an instrument of, two serious offences. Her affidavit includes the grounds for her suspicion.
I am satisfied that Ms Smith holds the suspicion on reasonable grounds.
Accordingly, the criteria under s 19 are met and I would make an order under s 19.
Ancillary order for sworn statement
As noted earlier, a court may make ancillary orders on the application of the responsible authority. The Commissioner is the responsible authority, being the proceeds of crime authority who made the application for the restraining order. Therefore, the jurisdiction to make ancillary orders is enlivened.
The ancillary order sought is an order pursuant to s 39(1)(ca) that the respondent provide a sworn statement setting out all of his interests in property and his liabilities.
The Commissioner submits that the order is appropriate given the circumstances which raise a suspicion that each of the relevant offences have been committed. I accept this.
As noted earlier, the applicant must give written notice of an application for an ancillary order to all other Specified Persons. In this case, the only other Specified Persons are the respondent and his wife Ms Du. The respondent was given notice, but the Commissioner did not prove that Ms Du was given notice. Nevertheless, as the order only directly affects the respondent, I am satisfied that it is appropriate to make the ancillary order. If, having received notice of the order, Ms Du considers the order affects her, she may apply to revoke it.[86]
[86] See s 39B.
To ensure that she receives notice, I will require the applicant to formally give notice to Ms Du of the order (and associated materials) and provide proof of that service to the court.
Examination orders
The Commissioner seeks an order, pursuant to s 180 of the Act, for the examination of the respondent and seven other persons (proposed examinees).
Once I have made the restraining orders, as I propose to do, the restraining orders will be in force. The Commissioner is the proceeds of crime authority who made the application for the restraining order. I therefore have the power to make the examination orders.
Ms Smith deposes as to the potential areas of knowledge of the proposed examinees.[87] She deposes that she suspects that each proposed examinee will be able to provide information about the respondent, his affairs and the source of the Seized Cash.[88]
[87] Smith Affidavit [162]. See also the further affidavit of Ms Smith filed 10 May 2022 (Supplementary Smith Affidavit).
[88] Smith Affidavit [163].
I am satisfied that the purpose of the examination orders is to enable the Commissioner to gather information in accordance with the statutory purpose or object of examinations, including to enable information to be gathered to facilitate applications for forfeiture orders.
The respondent is aware that the Commissioner seeks this order. I am satisfied it is appropriate to make an examination order in relation to him.
As noted earlier, the Commissioner did not adduce evidence that all of the proposed examinees had been notified of the application for examination orders. During the hearing, the Commissioner did not press for examination orders to be made in relation to those he had not proved had been notified.
The Commissioner proved that three of the proposed examinees (in addition to the respondent) had been notified, namely, Karen Phu, Hoang Duy Ly, and Thuan Kim Lam.
The Commissioner relied on an affidavit of Sumarie Steyn filed 25 May 2023. Ms Steyn deposed that she arranged for letters to be sent to each of the proposed examinees enclosing the originating summons, the undertaking as to damages and the Smith Affidavit. She also emailed the documents to various email addresses.
Karen Phu is the tax agent for the respondent, the Nguyen Trust and NVD Fresh.[89] One of the email addresses to which Ms Steyn sent the documents appears to be Ms Phu's email address. Ms Phu responded to that email.[90] I am therefore satisfied she was given notice.
[89] Supplementary Smith Affidavit [11].
[90] Affidavit of Sumarie Steyn filed 25 May 2023 (Steyn Affidavit) page 168.
Another email address (Ly email address) was said to be Hoang Duy Ly's email address. Mr Ly is the secretary, a director, and a shareholder, of 4 Ways.[91] An email exchange between a Vincent Lam, Payroll and Accounts Officer of 4 Ways, and the AFP in relation to this matter, was copied to the Ly email address.[92] It is reasonable to infer that the Ly email address is the email address of Hoang Duy Ly. I am therefore satisfied that Mr Ly was given notice.
[91] Smith Affidavit [74] and AS-24.
[92] Steyn Affidavit page 410.
Another email address was the email address of Vincent Lam.[93] I am satisfied that Vincent Lam is also known as Thuan Kim Lam.[94] I am therefore satisfied that Mr Lam was given notice.
[93] Steyn Affidavit page 410.
[94] Steyn Affidavit page 409 [10].
Accordingly, I would make examination orders in relation to the respondent, Karen Phu, Hoang Duy Ly and Thuan Kim Lam. The application for examination orders in relation to the other proposed examinees will be adjourned.
Custody and control order
The Commissioner also seeks a custody and control order in relation to the Seized Cash.
Under s 38 of the Act, the court may order the Official Trustee to take custody and control of property covered by a restraining order if the court is satisfied this is required. A custody and control order enables the powers and duties imposed by pt 4‑1 of the Act to be invoked.
I am satisfied that the order is required.
Orders
For these reasons, I will make orders in terms of paragraphs 1 ‑ 4 and 5(a), (c), (d) and (e) of the minute of proposed orders filed by the Commissioner on 4 May 2023.
I will adjourn the application for orders under paragraphs 5(b), (f), (g) and (h), being the application for examination orders of the proposed examinees who have not yet been notified.
I will also order the applicant to formally give notice to Ms Du of the orders (and associated materials) and provide proof of that service to the court, and will hear from the Commissioner as to the appropriate deadline.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
KH
Associate to the Honourable Justice Archer
1 JUNE 2023
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