Commissioner of the Australian Federal Police v Safadi and Ors (Ruling)
[2017] VCC 1913
•21 December 2017
tr
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMON LAW DIVISION | Revised Not Restricted Suitable for Publication |
CONFISCATION LIST
Case No. CI-12-06210
IN THE MATTER of the Proceeds of Crime Act 2002 of the Commonwealth
and
IN THE MATTER of the property suspected to be the proceeds of a serious offence
and
IN THE MATTER of an Application by the COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE
between
| THE COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE | Applicant |
| and | |
| SAMI GHAZI SAFADI (aka AL-SAFADI) RANDA SAFADI (aka AL-SAFADI) DANIEL SAFADI (aka AL-SAFADI) YVETTE SAFADI (aka AL-SAFADI) FADI SAFADI (aka AL-SAFADI) ELIZABETH SAFADI (aka AL-SAFADI) EVIT SAFADI (aka AL-SAFADI) | Respondents |
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JUDGE: | HIS HONOUR JUDGE MISSO | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 12, 13, 14, 15, 16, 17 and 22 September 2017 and 17 October 2017 | |
DATE OF RULING: | 21 December 2017 | |
CASE MAY BE CITED AS: | Commissioner of the Australian Federal Police v Safadi & Ors (Ruling) | |
MEDIUM NEUTRAL CITATION: | [2017] VCC 1913 | |
RULING
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Subject: CRIMES CONFISCATION
Catchwords: Proceeds of crime – application for a restraining order pursuant to s25, s18 and s19 of the Proceeds of Crime Act 2002 (Cth)
Legislation Cited: Proceeds of Crime Act 2002 (Cth), s18 and s19, s25, s31, s39(1)(a), s47, s49, s59, s74; Criminal Code (Cth), s11.1, s134.2, s135(5), s307.2, s307.6, s400.9 and s11.1; Criminal Code Act 1995 (Cth), s400.9
Cases Cited:O’Donnell v Reichard [1975] VR 916; Commissioner of Australian FederalPolice v Vo (2015) 302 FLR 209; Lin v The Queen (2015) 253 A Crim R 1
Ruling: Forfeiture Order granted pursuant to s47(1) of the Proceeds of Crime Act 2002 (Cth).
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Ms R Burton | Proceeds of Crime Litigation Australian Federal Police |
| For the Respondents | Mr D Sheales with Mr T Greenway | Madison Branson Lawyers Pty Ltd |
Table of Contents
The Commissioner’s applications...................................................................................... 2
The exclusion applications................................................................................................... 4
Some background facts........................................................................................................ 7
Sami and Randa’s financial background.......................................................................... 8
The source of monies.......................................................................................................... 10
5.1 Some general observations.......................................................................................... 12
5.2 Touros and the $40,000................................................................................................. 13
5.2.1 Was the $40,000 used as a deposit?.............................................................. 14
5.2.2 The actual payment of the deposit.................................................................. 15
5.2.3 Did Randa retain the $40,000?........................................................................ 15
5.3 The home loan account.................................................................................................. 17
5.4 Sandra Abby................................................................................................................... 18
5.5 Remon Abureem............................................................................................................. 23
5.6 Evit Saraf 25
5.7 The Bankwest loan......................................................................................................... 25
5.8 The cost of the building work......................................................................................... 28
5.8.1 Evidence of the value of the building work..................................................... 33
5.9 Did Masri lend $400,000?............................................................................................. 34
5.10 Purchase and sale of cars............................................................................................. 37
5.11 Gambling monies............................................................................................................ 41
5.12 International money transfers......................................................................................... 42
The Kafer forensic report.................................................................................................... 44
Conclusions about the sources of money..................................................................... 48
The Applications for exclusion.......................................................................................... 48
Proceeds of crime – potential offences........................................................................... 48
Conclusions about the sources of money..................................................................... 52
The Applications for exclusion.......................................................................................... 53
The Application for forfeiture............................................................................................. 53
HIS HONOUR:
1 The Commissioner’s applications
1 The Commissioner of the Australian Federal Police (“the Commissioner”) filed an Application dated 17 December 2012 in this Court, applying for a restraining order against Mr Sami Ghazi Safadi (aka Al-Safadi) (“Sami”) pursuant to s25, s18 and s19 of the Proceeds of Crime Act 2002 (Cth) (“the Proceeds Act”).[1]
[1]Section 25 refers to the persons who may apply for a restraining order; section 18 refers to an application for a restraining order relevant to person suspected of committing serious offences, and section 19 refers to an application for a restraining order relevant to property suspected of being the proceeds of indictable offences
2 The Application contains particulars that an authorised officer suspected, on reasonable grounds, that the property located at 57-59 Rade Macut Court, Narre Warren, in the State of Victoria (“the restrained property”) is the proceeds of the commission of indictable serious offences by Sami, as follows:
· An attempt to import a marketable quantity of a border controlled drug, namely heroin, contrary to s307.2 and s11.1 of the Criminal Code Act 1995 (Cth) (“the Code”).
· An attempt to possess a marketable quantity of an unlawfully imported boarded controlled drug, namely heroin, contrary to s307.6 and s11.1 of the Code.
· Dealing with property, valued at $100,000 or more, which is reasonably suspected of being the proceeds of crime, contrary to s400.9 of the Code.
· By deception, dishonestly obtained a financial advantage from a Commonwealth entity, namely Centrelink, contrary to s134.2 of the Code.
· Dishonestly caused a loss or a risk of a loss to a Commonwealth entity, namely the Australian Taxation Office, with the knowledge or belief that the loss will occur or that there is a substantial risk of the loss occurring, contrary to s135(5) of the Code.
3 The Commissioner’s application was supported by an affidavit of Federal Agent Amanda Glover, sworn 17 December 2012.[2]
[2]Joint Court Book (“CB”) 100-132
4 The application was heard by Judge Cohen on 18 December 2012. Her Honour made a Restraining Order pursuant to s18 and s19 of the Proceeds Act in respect of the restrained property.
5 The Commissioner made an application for variation of the Restraining Order pursuant to s39(1)(a) of the Proceeds Act in respect of $3000 in Australian currency which was seized when members of the AFP searched the restrained property.[3]
[3]CB 45-48
6 The Commission’s application for variation was supported by an affidavit of Federal Agent Daniel James Culliford, sworn 11 January 2016.[4]
[4]CB 133-139
7 The application for variation was heard by Judge Lacava on 19 January 2016. His Honour varied the Restraining Order made by Judge Cohen to include the $3000 referred to in paragraph 5.
8 The Commissioner also made an application for forfeiture of the restrained property pursuant to s59 of the Proceeds Act, and for forfeiture orders pursuant to s47 and s49 of the Proceeds Act. I will return to the applications for forfeiture later in these Reasons.
2 The exclusion applications
9 Sami, his wife, Ms Randa Safadi (“Randa”), and three of their children, made applications for exclusion from the Restraining Order [5] pursuant to s31 and s74 of the Proceeds Act.
[5]Sami - 24 June 2013 at CB 39-41; Randa - 29 April 2016 at CB 52-54; Yvette Safadi - 27 January 2017 at CB 55-57; Fadi Safadi - 27 January 2017 at CB 58-60 and Daniel Safadi - 27 January 2017 at CB 61-63
10 Section 31 provides the basis for the making of an exclusion order if a 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 and *interest has been made.”
11 Section 29 deals with an application to exclude property from a restraining order after a restraining order has been made:
“(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 the 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 in the order exists.”
12 Subsection (2) then sets out the reasons for excluding a specified interest in property from a restraining order made under s17, s18 and s19:
“(2) The reasons for excluding a specified * interest in property from a * restraining order are:
(a) for a restraining order under section 17 if the offence, or any of the offences, to which the order relates is a * serious offence—the interest is neither *proceeds nor an * instrument of * unlawful activity; or
(b) for a restraining order under section 17 if paragraph (a) does not apply—the interest is now the proceeds nor an instrument of the offence, or any offence, to which the order relates; or
(c) for a restraining order under section 18 - the interest is neither:
(i) in any case - proceeds of unlawful activity; nor
(ii) if an offence to which the order relates is a serious offence—an *instrument of any serious offence; or
(d) for a restraining order under section 19 - the interest is neither:
(i) proceeds of an *indictable offence, a *foreign indictable offence or an *indictable offence of Commonwealth concerned; nor
(ii) if an offence to which the order relates is a serious offence—an * instrument of any serious offence.”
13 Section 29A does not appear to me to apply to the circumstances of these applications.
14 Section 73 provides the basis for excluding property from a forfeiture order:
“(1) A court that made a *forfeiture order, or that is hearing, or is to hear, an application (a forfeiture application) for a forfeiture order, must make an order excluding a specified *interest in property from forfeiture (and exclusion order) if:
(a) a person applies for the exclusion order; and
(b) the forfeiture order, or the forfeiture application, specifies property in which the applicant has an interest; and
(c) if the forfeiture order was (or the forfeiture order applied for would-be) made under section 47 or 49—the court is satisfied that the applicant interest in the property is neither of the following:
(i)*proceeds of * unlawful activity;
(ii) if an offence on which the order was (or would-be) based is a *serious offence—an instrument of any serious offence; and
(d) If the forfeiture order was (or the forfeiture order applied for would be) made under section 48—the court is satisfied that the applicant’s interest in the property is neither proceeds nor an instrument of any of the offences to which the forfeiture order or forfeiture application relates.”
15 The word “proceeds” is defined in the dictionary, at s338, in the Proceeds Act to have the same meaning as defined in s329 and s330. Only s329 is relevant, and it includes the definition of “instrument”:
“(1) Property is proceeds of an offence if:
(a)it is wholly derived or realised, whether directly or indirectly, from the commission of the offence; or
(b) it is partly derived or realised, whether directly or indirectly, from the commission of the offence;
whether the property is situated within or outside * Australia.
(2) Property is an instrument of an offence if:
(a) the property is used in, or in connection with, the commission of an offence; or
(b) the property is intended to be used in, or in connection with, the commission of an offence;
whether the property is situated within or outside * Australia.
(3) Property can be proceeds of an offence or an instrument of an offence even if no person has been convicted of the offence.
(4) Proceeds or an instrument of an * unlawful activity means proceeds or an instrument of the offence constituted by the act or omission that constitutes the unlawful activity.”
16 The words “unlawful activity” are defined in the dictionary in the Proceeds Act in the following terms:
“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.”
17 The words “serious offence” are defined in the dictionary in the Proceeds Act. The relevant part of the lengthy definition is in the following terms:
“serious offence means:
(a)an * indictable offence punishable by imprisonment for 3 or more years, involving:
(i) unlawful conduct relating to a * narcotic substance; or
(ia) unlawful conduct constituted by or relating to a breach of Part 9.1 of the Criminal Code (serious drug offences); or
(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
(aa) unlawful conduct by a person that consists of an indictable offence (the 3 year offence) punishable by imprisonment for 3 or more years and one or more other indictable offences that, taken together with the 3 year offence, constitute a series of offences:
(i) that are founded on the same facts or are of a similar character; and
(ii) that cause, or are intended to cause, a benefit to the value of at least $10,000 for that person or another person, or a loss to the Commonwealth or another person of at least $10,000; or … .”
18 The foregoing is a sufficient summary of the legislative scheme on which the application for a restraining order, in this proceeding, was based, and the basis for the applications for exclusion and forfeiture.
3 Some background facts
19 On 23 October 2012, customs officers in Sydney intercepted a package shipped from Syria, with Melbourne as its intended final destination. The contents of the package were described as a rug, and watch samples, addressed to Mr Gorge Zalume of 24 Fawkner Drive, Endeavour Hills (“Fawkner Drive”).
20 The package was x-rayed and opened by customs officers. A number of straws were found within a rug. Forensic analysis of the content of the straws disclosed that they contained heroin. The net weight of the heroin was 1.1 kilograms.
21 It is sufficient to briefly summarise what then happened. The heroin was substituted with an inert substance. The package was reconstructed. An operation was designed and executed, which involved delivery of the package by members of the Australian Federal Police (“the AFP”) on 2 November 2012. Members of the AFP posed as commercial delivery drivers. The package was delivered and Randa accepted delivery.
22 Sami was arrested later that day outside Fawkner Drive. A search warrant was executed which led the AFP to confiscate a quantity of mobile phones and a large volume of documents relating to the financial affairs of both Sami and Randa.
23 Sami was charged with the importation of illicit narcotics. He stood trial in this Court and was acquitted by the verdict of a jury on 17 September 2015.
4 Sami and Randa’s financial background
24 Sami was born in 1960. He is now fifty-seven years of age. Randa was born in 1963. She is now fifty-four years of age. Sami and Randa migrated to Australia in 1987. They have four children:
· Yvette Al-Safadi, who is twenty-eight years of age
· Fadi Al-Safadi, who is twenty-seven years of age
· Daniel Al-Safadi, who is twenty-one years of age; and
· Elizabeth Al-Safadi, who is nineteen years of age.
25 In about 1989, Sami suffered an injury to his lower back in the workplace. He was thereafter incapacitated for work. He received WorkCover payments for an undisclosed period of time. In about 1994, Sami suffered further injury in a transport accident.
26 In about 1997, Sami obtained a ‘no fault’ award of compensation under the Accident Compensation Act1985 of $29,000. It would appear that it was approximately at the time, he received the award that his weekly payments of compensation ceased. He also obtained an award of damages of $140,000 referable to the injuries he suffered in the transport accident.
27 From about 1995, Sami qualified for the receipt of a Disability Support Pension. Correspondingly, Randa received a pension as well.
28 In about 1998, Sami and Randa purchased a property at 4 Nevis Court, Endeavour Hills, in the State of Victoria (“Nevis Court”) for $123,000. The award of damages was used to make the purchase.
29 On 4 June 2010, Sami and Randa sold Nevis Court for $420,000. Subsequently, on 30 June 2010, they purchased the restrained property for $402,000 which was, at that time, vacant land. The transaction was completed by the payment of a deposit of $40,000 and the payment of the balance on 22 October 2010.
30 The deposit allegedly came from monies held by Randa. Those monies came from her father’s estate. He was a Syrian National. He died in Syria. Randa’s sister came to Australia from Syria and gave her $40,000 in cash which, when converted into Australian currency, represented one third of the father’s estate. Randa retained the cash. She did not apply any part of it to any living expenses incurred by her family.
31 After selling Nevis Court, Sami and Randa, and their children, lived in a rental property at 2 Nowell Court, Endeavour Hills. It was Sami and Randa’s intention to build a family home on the vacant land of the Restrained Property. They did not have the funds to do that. The sale price of Nevis Court, together with the monies received by Randa from her father’s estate, appear to have only covered the purchase price of the vacant land, and perhaps leaving a small amount left over.
32 On 14 December 2010, Sami and Randa obtained a certificate of consent from the Building Practitioners Board enabling them to build as owner builders. They obtained a building permit, and between December 2010 and November 2012, the building of their family home was undertaken.
33 The building of the family home was undertaken by Sami and Randa coordinating builders and tradespeople, with the assistance of Mr Fred Raffoul, Sami’s brother-in-law.
34 At the commencement of the building work, the only income coming into the hands of Sami and Randa was their pensions. Sami accepted that a letter from Centrelink addressed to him, and dated 22 November 2011,[6] correctly identified Disability Support Pension payments for the period between 31 August 2011 and 22 November 2011. At the payment date of 24 November 2011, he was in receipt of $564.50 per fortnight. Randa also received a pension at about the same rate as Sami, plus other benefits.
[6]CB 2485
35 The total Centrelink payments received by Sami for the period 24 December 2008 to 19 June 2012 was $48,453 when rounded to the nearest dollar. When annualised, it totalled $13,844.[7] The Centrelink payments received by Randa for the period 31 December 2008 to 26 June 2012 was $99,110 when rounded to the nearest dollar. When annualised, it totalled $28,317.[8] When the Centrelink payments of both Sami and Randa are combined for the period from 1 January 2009 to 20 June 2012, the annualised average was $42,161.
5 The source of monies
[7]Exhibit 13 (CB 2715)
[8]Exhibit 13 (CB 2717)
36 The house which Sami and Randa built comprises of six bedrooms, four bathrooms, one laundry, a study, a lounge, a living room, a rumpus/multipurpose room, a powder room, a family/meals area, two kitchens (although, one is apparently fairly small), a four-car garage and a heated swimming pool.[9] It was an expensive house to build and it was plainly beyond the means of Sami and Randa.
[9]Transcript (“T”) 102, and described in more detail in the Valuation Report prepared by National Property Valuers and Consultants undertaken on 4 July 2017, at CB 3390-3406 (“the Valuation”)
37 In order to build the house, Sami and Randa say they obtained funds from a number of sources which I will now trace through. In summary, the following is what Sami and Randa say was the main source of the funds:
· Ms Madlin Touros (“Touros”) (Randa’s sister) gave them $40,000 in January 2008.
· Mr Arz Masri (“Masri”) loaned them $400,000.
· Mr Remon Abureem (“Abureem”), Sami’s brother, loaned them approximately $150,000.
· Ms Sandra Abby (“Abby”), Sami’s mistress, gave Sami approximately $110,000 between about 2002 and 2009.
· The sale of motor vehicles provided $44,450.
· Gifts obtained by Randa from her family of $35,000, being $15,000 from her sister in 2007 and gifts to a total of $20,000 from her mother between 2005 and 2006.[10]
· Winnings from Sami’s gambling habit of $216,864.
[10]CB 3419
38 It would appear that not all of the sums were applied to the building of the restrained property. Rather, they constitute sums which came into the possession of Sami and Randa which went to meet their living expenses and also the cost of the building on the restrained property. In total, these sums amount to $779,500 over and above the monies they received from Centrelink.
5.1 Some general observations
39 I will now trace through the sources of income which Sami and Randa submit were from legitimate and identifiable sources, which enabled them to purchase the restrained property, to build a substantial family home at significant cost, and to maintain an independent financial life of some comfort.
40 What will become evident as I do this tracing is that I accept very little of the evidence of Sami, Randa and their witnesses regarding the sources of the capital applied, particularly, to the building of the family home.
41 One of the characteristics of the evidence of Sami and Randa was that they identified sources of the capital, but their evidence was almost universally vague regarding when and how those capital sums were provided to them. There are very few records through banking accounts and other documentation to verify their receipt of most of the capital sums. Their evidence was almost universally that the money was given to them in cash which meant that they had very large amounts of cash in their possession at any one time during the course of building the family home.
42 Another of the characteristics of their evidence was their inability or unwillingness to trace the provision of the capital, and often when they were either unable or unwilling to identify when and how the capital was provided to them, they resorted to saying they could not remember. Their inability to remember is extraordinary. The fact that they were not entirely ignorant of property transactions, building works, banking, applying for finance, buying and selling cars, sending money overseas, and like transactions which would require knowledge and experience, of at least domestic financial planning and the capacity to execute steps associated with the handling and spending of significant sums of money. Their answers simply do not fit in with the fact that in other respects they were, to some serious degree, sophisticated in their understanding of the handling and spending of money and the acquisition of valuable assets.
43 There cannot be any doubt that the basis of the Commissioner’s case is that Sami and Randa, and some of their witnesses, are seriously lacking in creditworthiness and reliability. It must have brought to the minds of Sami and Randa that they needed to do a tracing exercise in significant detail, or as best they could, to identify when and how those capital sums were provided to them. For reasons which will become plain, they have not done that. This has undermined my confidence that there is any basis for how they account for the capital sums they allege they were provided, and that they have told the truth.
44 In the end, what I have concluded is that Sami and Randa came into sums of capital from unknown sources. By reference to one or other methods of accounting, they have come into receipt of monies which are grossly out of proportion to their base income even if some allowance is made that they did receive some sums of capital from the persons who they have identified.
5.2 Touros and the $40,000
45 Touros swore a statutory declaration at Dandenong on 21 January 2008 declaring that she gave Sami and Randa $40,000.[11] The relevant parts of the statutory declaration read as follows:
“Have given my sister Randa Safadi and brother-in-law Safadi the lump sum of $40,000 AU to help them with their expenses and home mortgage.”
[11]Exhibit F
46 The Commissioner submitted that it is unlikely that Touros brought $40,000 in Australian currency or in equivalent foreign currency into Australia, because the incoming passenger card which she completed on 7 July 2010 discloses that she said that she was not carrying the equivalent of $10,000 or more in Australian or foreign currency.[12]
[12]CB 3506
47 The fact that Touros did not disclose that she had brought into Australia $40,000 in Australian currency or in equivalent foreign currency, does not of itself mean that she did not do so. It may mean that she made a false declaration on the incoming passenger card.
48 On the basis of this evidence, I accept that it is more probable than not that Touros did bring $40,000 into Australia.
5.2.1 Was the $40,000 used as a deposit?
49 Under cross-examination, Sami was asked about the use to which the $40,000 was put. He said that it might have been put towards a mortgage, but he was not sure and could not remember.[13]
[13]T121-122
50 Sami said that he could not remember whether the actual deposit came from the $40,000 given by Touros to Randa. He said that Randa controlled “the money” and that these questions would need be asked of her.[14]
[14]T111-112 and 123
51 Sami was shown a Commonwealth Bank statement beginning on 1 January 2008 and ending on 30 June 2008 which contains an entry dated 31 January 2008 for the deposit of $39,000.[15] Under cross-examination, he was asked whether the $39,000 represented a deposit of the larger part of the $40,000 provided by Touros. He said that he was not sure whether the deposit was made from the $40,000 and could not remember anything about the deposit. He deferred to Randa, saying that she had a better memory of these things than he did. He said he was unsure how the $40,000 was used, and whether it was banked by Randa or kept by her, presumably in cash.[16]
[15]CB 1902
[16]T122-124
52 Randa was cross-examined along the same lines. She said that the $40,000 was given to her in cash. She insisted that she kept it intact. She was unable to explain the deposit of $39,000 in the Commonwealth Bank account on 31 January 2008.[17]
[17]T254-255
53 Later in the cross-examination, she gave materially different answers. She said that it was used to pay the deposit. She also said that she could have spent some of the $40,000 and then returned what she had spent to reconstitute the $40,000, but then said she could not remember.[18]
[18]T261-262
54 The cross-examination of Randa was put in the context that she was reminded that when she was given the $40,000 in 2008, neither she nor Sami were thinking of purchasing the restrained property and building a house. This was put to test her evidence that there was no sound reason for her to retain the $40,000. Therefore, there was some likelihood that the reference in the statutory declaration of Touros that it was given to her to help with expenses and the mortgage was probably how the monies were used.[19]
5.2.2 The actual payment of the deposit
[19]T262
55 Ms Nicole Vamplew (“Vamplew”) is the general manager of Hall & Partners First National, which is a real estate agency in Dandenong. She produced a receipt for a holding deposit for the purchase of the restrained property of $1000 which was paid in cash by Randa on 1 July 2010.[20] She also produced a receipt for the payment of $39,000 which was paid by bank cheque by Randa on 7 July 2010.[21]
[20]CB 983
[21]CB 982
56 On the basis of Vamplew’s evidence, it must be that Randa paid the holding deposit in cash and the balance by bank cheque. The only way she could obtain a bank cheque is if she deposited $39,000 into a banking account and then obtained the bank cheque or presented $39,000 in cash to a bank and then obtained a bank cheque.
5.2.3 Did Randa retain the $40,000?
57 I think it is improbable that Randa retained the $40,000 in cash. My reasons for reaching that conclusion are as follows:
· Firstly, there was no reason for Randa to retain those monies because neither she nor Sami had turned their attention to purchasing the restrained property and building a house. It must be remembered that they were surviving on Centrelink benefits and could not have been flush with funds given the need to meet daily living expenses for themselves, their children and Randa’s mother.
· Secondly, Sami all but disavowed any knowledge of Randa’s alleged retention of the $40,000. I think this is improbable, because when they purchased the retained property, they must have discussed how they were to pay the deposit, which is likely to have included Randa’s retention of the $40,000.
· Thirdly, the deposit of the $39,000 is unexplained. It is more than just coincidental that Randa received $40,000 and in the same month, a deposit of $39,000 was made into a banking account in the name of both Sami and Randa. Sami and Randa have attempted to explain the source of monies they received to purchase the restrained property and build a house on it, particularly large sums of money, yet here is a deposit of a large sum of money into their joint banking account which they are simply unable to explain satisfactorily.
· Fourthly, when Sami and Randa were confronted with the statutory declaration and the reasons why Touros gave them the $40,000, they sought to explain how they retained it for so long. Sami disavowed any knowledge of what Randa did with the money. Randa said that maybe she used part of it for general expenses, but reconstituted the sum by putting monies back. What she did not explain was on what she spent the $40,000, and where the money came from to reconstitute that sum. The evidence points to it being probable that they did use at least some of the $40,000 for domestic living expenses, or at least some expenses they needed to meet, and is more consistent with the stated purpose in the statutory declaration that it was monies provided to meet particular and identifiable expenses.
58 Therefore, I think it is improbable that Randa retained the $40,000 until the time when the restrained property was purchased. I think it is more probable that the monies that were applied to the holding deposit and the residue of the deposit came from other sources which neither Sami nor Randa have been prepared to identify.
5.3 The home loan account
59 Sami and Randa’s home loan account with the Commonwealth Bank demonstrates that very significant deposits, which were well in excess of their income, were made by them between 3 February 2006 and 14 December 2009. The home loan account was secured over Nevis Court.[22]
[22]CB 1885-1912
60 The first entry in the relevant bank statement is 3 February 2006. It shows drawings of $198,753.29.[23] Between 3 February 2006 and 31 August 2007, there were regular deposits, probably consistent with the aggregate of the pensions received by Sami and Randa.[24]
[23]CB 1885
[24]CB 1885-1900
61 However, from 5 September 2007 to the last entry of 14 December 2009, where there is a closing balance of nil, there are a large number of deposits which appear to me to be in excess of the aggregate of Sami and Randa’s pensions. These deposits are as follows:
Date
Amount
5 September 2007 $7,900.00 1 October 2007 $8,500.00 1 November 2007 $8,800.00 6 December 2007 $40,000.00 31 January 2008 $39,000.00 4 February 2008 $9,700.00 11 February 2008 $15,600.00 18 February 2008 $7,000.00 25 March 2008 $1,350.00 10 April 2008 $1,800.00 15 April 2008 $2,250.00 5 May 2008 $1,800.00 2 June 2008 $2,931.00 23 June 2008 $6,200.00 1 August 2008 $5,000.00 4 September 2008 $3,048.00 10 September 2008 $9,200.00 7 October 2008 $4,400.00 3 November 2008 $7,500.00 10 November 2008 $3,000.00 24 December 2008 $2,000.00 9 February 2009 $2,200.00 11 March 2009 $7,300.00 14 April 2009 $1,800.00[25] Total $198,279.00 [25]CB 1900-1912
62 The total of these deposits amount to $198,279.00 over a period of twenty months.[26] The average of Sami and Randa’s Centrelink benefits is $42,161.00 annually (or $3,513.42 when rounded up per calendar month).
[26]The Commissioner submitted that the deposits were made over 17 months, but I have chosen to assume that part of a month represents a whole month in calculating a 20 month period
63 The only other sources of money obtained by Sami and Randa over that period of time were allegedly from a woman named Abby, from the sale of motor vehicles, gifts from Randa’s family and from Sami’s gambling. I think it is improbable that they obtained money from those sources to explain how they came by $198,279.00 in that twenty-month period.
5.4 Sandra Abby
64 Sami and Randa said that that they obtained $110,000 from Abby. In Sami’s affidavit sworn 31 August 2017, he described how Abby came to give him that sum of money. This was:
“8.In or about 2002, my friend, Ben Sussi, invited me to observe his workplace at OneSteel in Scoresby, Victoria, with the view that if I liked his work I may apply for employment because I am a welder by trade.
9.I spent two days at OneSteel observing and assisting Ben, during which time I met Sandra Abby, who I came to know as the daughter of the owner of OneSteel.
10. Between in or about 2002 and in or about 2009, I had an extramarital affair with Sandra. During this time, Sandra gave me many various gifts, the value of which I quantify to be more than $110,000.00. For example:
(a)In or about October 2007, I purchased a Ford Fairmont with registration number TMZ025. The invoice of which is exhibited to the Affidavit of Stephen Parker affirmed 17 March 2017. All of the money to acquire the vehicle was gifted to me by Sandra;
(b)I estimate that Sandra has given me cash in various instalments between $3,000.00 and $8,000.00, which I used to pay off my credit cards. In total, I received approximately $30,000.00 from Sandra, which I used to pay the credit cards. To the best of my knowledge:
i.approximately $20,000.00 was applied to my National Australia Bank credit card with account number 4557 0211 5299 9806; and
ii.approximately $10,000.00 was applied to my Commonwealth Bank of Australia credit card with account number ending in 2749.
(c)Sandra gave me money to pay down my home loan with the Commonwealth Bank. Sandra paid me approximately $50,000.00 in approximately between 5 to 10 instalments, which I applied to the home loan account ending with the numbers 2000; and
(d)Sandra paid for many of my living expenses and living expenses for my family. This amounted to approximately $20,000.00.
11. Sandra would often give me money whenever I needed it. I understood that she would give me money with the view that I would leave my wife for her. However, this did not happen because we stopped seeing each other in or about 2009.”[27]
[27]CB 3380-3381. Randa's affidavit evidence was in almost identical terms at CB 3412-3413 and CB 3419
65 Sami and Randa did not obtain an affidavit from Abby, nor any evidence from her in any form to demonstrate that she gave Sami $110,000.00 or more.
66 There are a number of witnesses whose evidence is critically important to Sami and Randa’s case that there are legitimate and verifiable sources from which monies were obtained which explain a series of critically relevant financial transactions to their case. Abby is one of those. Sami alleges that one of the source of monies in making the deposits of $198,753.29 came from Abby. He is very specific that of the total deposits made, $50,000.00 came from Abby.
67 Under cross-examination, Sami described the circumstances which prevailed which led to Abby giving him money. He said that he asked Abby for money to help him, and I understood that to mean to help him financially. He claims that Abby complied and gave him money. He described the money as being borrowed, and is money which he intends to repay when he is able to.[28]
[28]T158-159
68 Randa gave similar evidence that she and Sami will repay Abby when they have the money to do so.[29]
[29]T284
69 The Commissioner submitted that Sami and Randa’s intention to repay Abby all the monies that she gave Sami is capable of an inference being drawn that they know her and her whereabouts, sufficient to make contact with her in order to effect repayment of those monies.
70 Federal agent Malcolm Scott (“Scott”) conducted a search of databases and agencies in an attempt to find Abby. He described the searches he made as follows:
“11. I have made enquiries in relation to Sandra Abby by conducting searches on the following databases and agencies:
(a)Victoria Police LEAP data base, which includes information regarding Victorian drivers’ licences;
(b)Australian Securities and Investment Commission, to check for any association to an Australian company as a director, secretary and/or shareholder;
(c)Australian Transaction Reports and Analysis Centre (AUSTRAC), to ascertain whether there were any reportable movements of money connected to Sandra Abby;
(d)Land Titles Office, to ascertain whether there was any property registered in her name;
(e)Australian Taxation Office, to confirm the lodgement of any tax returns;
(f) Open source regarding persons, including telephone checks;
(g) National Police Reference System; and
(h) OneSteel.
12. The searches I conducted for Sandra Abby on the databases and agencies set out above recorded a nil result.
13. The Human Resources department of OneSteel confirmed, by reference to payroll records and direct contact with employees with lengthy service at the Scoresby plant, that OneSteel has no record of persons by the name of Ben Sussi, Sandra Abby or Sandra Abbey being employed at OneSteel in 2002 or at any time since.”[30]
[30]CB 3512-3513
71 The Commissioner submitted that a request was made of the solicitors for Sami to provide information which would enable Abby to be tracked down. What that produced was an email dated 8 September 2017 from the solicitors for Sami informing the Commissioner of the following:
“We understand that Ms Sandra Abby’s correct then full name is Sandra Dorothy Abbey; that she previously resided at # Hambleton Court, Lysterfield and that her telephone number is 0410#### #.”[31]
[31]Exhibit M
72 I granted leave for Scott to be further cross-examined on 22 September 2017. The cross-examination concentrated on the searches conducted by Scott, and whether he had conducted a further search based upon the information provided in the email. He said that he did not conduct any further searches after he was armed with that information.[32]
[32]T596
73 Whether Abby exists or is a fictional person became an issue in the trial. However, the Commissioner did not press me to conclude that she does not exist, but rather, that she was not the source of any funds which came into Sami and Randa’s hands.
74 The Commissioner submitted that I should draw an adverse inference against Sami for failing to call Abby. The basis upon which such an inference can be drawn was considered in O’Donnell v Reichard[33] in which Newton and Norris JJ observed the following in relation to the failure of a party to call a relevant witness:
“… It is sufficient to say that in our opinion for the purposes of the present case the law may be stated to be that where a party without explanation fails to call as a witness a person whom he might reasonably be expected to call, if that person’s evidence would be favourable to him, then, although the jury may not treat as evidence what they may as a matter of speculation think that that person would have said if he had been called as a witness, nevertheless it is open to the jury to infer that that person’s evidence would not have helped that party’s case; if the jury draw that inference, then they may properly take it into account against the party in question for two purposes, namely: (a) in deciding whether to accept any particular evidence, which has in fact been given, either for or against that party, and which relates to a matter with respect to which the person not called as a witness could have spoken; and (b) in deciding whether to draw inferences of fact, which are open to them upon evidence which has been given, again in relation to matters with respect to which the person not called as a witness could have spoken.”[34]
[33][1975] VR 916
[34]O’Donnell v Reichard (ibid) at 929
75 It is a remarkable submission for Sami to make, that Abby is not a witness who he might reasonably be expected to call and that her evidence would not be favourable to his case. Her evidence, and that of a number of other witnesses, is central to Sami’s case that can verify the legitimate sources of monies which came into his hands, and on the issue I am presently dealing with, how he came to make deposits totalling $198,753.29.
76 I will not speculate as to what Abby would have said had she been called as a witness, but I will draw the inference that the failure to call her would not have helped Sami’s case. Having drawn that inference, I properly take it into account for the two purposes referred to. This is, firstly I think Sami’s evidence that someone named Abby gave him $110,000 is improbable. It is a matter on which Abby could have spoken. Secondly, I infer that the deposits of $198,753.29 came from other sources not identified by Sami.
77 Furthermore, through Sami’s own investigations, Abby’s full and proper name, potential address and telephone number were discovered, yet no effort was made to track her down using that information. Sami has effectively cast that burden on the Commissioner through the use of the email as if that then shifts the burden to the Commissioner to disprove her existence or to call her to give evidence to disprove parts of Sami’s case.
5.5 Remon Abureem
78 Abureem is Sami’s brother. He initially said that he lent approximately $150,000 to Sami and Randa between 2005 and 2012.[35] Under cross-examination, his evidence changed materially regarding the total sum he lent Sami and Randa. He said that he probably lent them more than $150,000, but he could not remember exactly how much.[36] He described the amounts he lent, when he made the loans, and his understanding of the purpose of the loans as follows:
[35]CB 3442. Sami's evidence that Abureem provided him with money is at CB 3387
[36]T321
· Between 2007 and 2008 - approximately $15,000 in various instalments.
· In about July 2007 - approximately $12,000 for Randa to make an overseas trip.
· Between 2007 and 2008 - approximately $50,000 to help Sami and Randa make repayments on their home loan.
· In November 2012 - approximately $26,500 as a contribution to a surety of $100,000 set as one of Sami’s bail conditions.
· Between 2005 and 2012 - loans of small amounts of money amounting to $30,000.[37]
[37]CB 3442-3443
79 Under cross-examination, Abureem described the source of monies he loaned Sami and Randa as coming from cash which he earned from his job as the manager of a pizza business in Noble Park.
80 Abureem’s evidence of his business activities was characterised by a serious level of vagueness. He referred to total amounts which he gave to Sami and Randa over specified periods of time, but was unable or unwilling to identify specific amounts and dates on which those specific amounts were given to Sami and Randa. He could not identify the source of the money he gave Sami and Randa except to say that he keeps cash, and banks very little. So, it must be that when Sami and Randa asked him for money, he gave them lump sums of cash. Whilst he has had banking accounts with many banks, he said he has rarely deposited much in those banking accounts. It is strange that his preferred method of dealing with his earnings is to retain cash, yet at the same time maintain banking accounts which he appears to have used relatively rarely, and for an unstated purpose.
81 Abureem has not filed a taxation return since 2010, so there is no evidence that he generated enough income for his own support, and then to be such a significant financial benefactor for Sami and Randa.[38]
[38]T319-336
82 Abureem’s evidence that he gave Sami and Randa more than $150,000 is extraordinary. It must mean that when he swore his affidavit, that the figure of $150,000 was wrong. He did not say how much more he gave them nor when he gave them any monies in excess of the $150,000 he deposed to in his affidavit. Neither Sami nor Randa have given evidence that they received more than $150,000 from Abureem.
83 I think it is improbable that Abureem provided Sami and Randa with $150,000 or more. The impression I was left with after hearing Abureem’s evidence, is that the evidence was given to assist Sami and Randa to fill in gaps to explain where they obtained monies to engage in the many financial transactions which they have deposed to in their affidavits.
5.6 Evit Saraf
84 Evit Saraf (“Saraf”) is Randa’s mother and Sami’s mother-in-law. She lives with them, and has done so since 2011. Sami says that she gave him and Randa $20,000, and I infer that to be in lump sums. He described the circumstances under which the gifts of those monies were made as follows:
“43. In or about 2005 and 2006, mother in-law travelled to Australia twice. Each time, my mother in-law gave my wife a gift of $10,000.”[39]
[39]CB 3388. Randa's affidavit evidence was in almost identical terms at CB 3419
85 Saraf gives an entirely different account. In her affidavit sworn 23 January 2017,[40] she says nothing about travelling to Australia on two occasions in or about 2005 or 2006 and giving Randa $10,000 on each occasion. Her only reference to a total sum of $20,000 is as follows:
“14. I estimate that I have paid approximately $20,000.00 in the last four years for household living expenses and maintenance costs of the Property. … .”[41]
[40]CB 140-142
[41]CB 142
86 The reference in Saraf’s affidavit to paying that sum of money in the last four years must be understood to be four years preceding the date upon which she swore her affidavit, which was 23 January 2017. That must mean that she paid that money from about January 2013 (or thereabouts). Her only source of income was the age pension which she has received since 10 January 2012.[42]
[42]CB 141
87 The evidence of Sami and Randa is in stark contrast to the evidence of Saraf. I think it is improbable that Saraf provided $20,000 in lump sums to Randa because if she had done so, I would have expected that she would have said as much in her affidavit.
5.7 The Bankwest loan
88 Sami and Randa applied for a loan from a bank. The application was refused. They then engaged Mr Faouzi Nashaar (“Nashaar”) of an organisation known as Capital House to source $170,000 which they needed to complete the building work. An application was made to Bankwest, which was successful.
89 The success of the application was based upon an application in writing signed by both Sami and Randa on 5 December 2011.[43] The content of the application is misleading in what it discloses and what it omits to disclose.
[43]CB 1067-1070
90 Firstly, it discloses that Sami had been employed by a company known as Mr Extreme Clean Pty Ltd as an office manager for one year and nine months, and for six years with a previous employer, although, the application does not state when he was employed for that six-year period and with whom.[44]
[44]CB 1067
91 Secondly, another part of that application discloses Sami’s income as $67,964 gross per annum.[45] In support of that representation are two documents which appear to be payslips generated by Mr Extreme Clean Pty Ltd naming Sami as an employee, setting out his income for the period 3 to 9 November 2011 and 10 to 16 November 2011.[46]
[45]CB 1076
[46]CB 1072-1073
92 Mr Nidal Raffoul is a director of Mr Extreme Clean Pty Ltd. Through that company name, he is self-employed, providing cleaning and restoration services. He is Sami’s nephew. In his affidavit sworn 20 October 2016, he said that Sami has never been an employee of Mr Extreme Clean Pty Ltd, nor had he provided any payslips or letters to anyone suggesting that Sami had ever been an employee.[47] His denials of having any involvement in Sami and Randa’s application to Bankwest must mean either one of two things: he is not telling the truth, or Sami and Randa, and perhaps with the complicity of Nashaar, have falsely created the documents representing that Sami was an employee of Mr Extreme Clean Pty Ltd.
[47]CB 784-785
93 Thirdly, the application does not disclose two potentially important financial matters which Bankwest probably needed to know, and that is, that Sami and Randa were renting a house at 2 Nowell Court, Endeavour Hills for $1,733 a month, and it did not disclose the significant loan from Masri for $400,000 and loans from other sources. These matters would probably go to an assessment of their potential risk to their prospective financier.
94 Under cross-examination, Sami admitted that there are many features of the application which are wrong. His explanation for submitting the application in that form is that he did not read it, and that if the application was wrong, then it was Nashaar’s fault.[48] Randa’s evidence was to the same effect.
[48]T156-157
95 I think Sami and Randa’s evidence is improbable. Glover said that during the raid on Sami and Randa’s home, that a letter was found signed by Mr Nidal Raffoul. The letter stated that Sami had been employed by Mr Extreme Clean Pty Ltd since March 2010, earning an annual gross salary of $67,964.00.[49] Sami responded by saying that he had never seen the letter; had never requested a letter from Mr Nidal Raffoul, and had never been employed by Mr Extreme Clean Pty Ltd.
[49]CB 107-108
96 I think it is improbable that the application was made by Sami and Randa in a state of total ignorance, and that in some way Nashaar found Mr Nidal Raffoul and had him provide false documents. I think it is probable that Sami and Randa needed the money and were prepared to engage in a high level of misleading conduct by falsifying circumstances which they knew was likely to result in approval of their loan application.
97 This evidence goes primarily to the creditworthiness of Sami and Randa. It suggests that they were prepared to engage in fraudulent conduct, and not to put too fine a point on it that they are prepared to lie to obtain a desired result.
98 It also casts some doubt on whether in fact they did obtain a loan from Masri and from the other sources, because none were disclosed in the application for finance. Another reason why they did not make any disclosure is that it may have led to the application being refused.
5.8 The cost of the building work
99 Sami and Randa purchased the land for $402,000. They commenced building their family home in about December 2010. Neither Sami nor Randa referred to an itemised breakdown of the cost of the building work in their affidavits. This is something I would have expected them to do. Sami has attempted to avoid providing such an itemised breakdown by engaging a Valuer whose valuation he has exhibited to his second affidavit. The Valuer considered that to construct the family home as an owner builder would cost in the vicinity of $685,000.[50]
[50]CB 3403
100 During the search of the restrained property, a book written in Arabic was seized. It appears to be an itemised breakdown of the cost of the building work[51] (“the building book”). Ms Vera Oujaimi, a nationally accredited translator and interpreter, translated the book from Arabic into English.[52]
[51]CB 790-809
[52]Exhibit VO-1 to Oujaimi’s affidavit sworn 25 November 2016 at CB 789-830, and in particular, at CB 811-830 and 3445-3446
101 The Commissioner submitted that the contents of the building book represents the itemised breakdown of the cost of the building work. Ms Michelle Kafer, forensic accountant, undertook a forensic analysis of the financial affairs of Sami and Randa. Part of this involved an analysis of the building book. She concluded that it disclosed an itemised breakdown of the cost of the building work amounting to $1,106,916.[53]
[53]CB 3065-3102 (excluding the annexures), and in particular at CB 3095
102 The closest the evidence of Sami and Randa came to an estimate of the cost of the building work is what Sami swore to in his affidavit sworn 31 August 2017:
“38. I also note that the Affidavit Material states that the construction costs for my family’s new home at the Rade Macut Property was approximately $1.1m, and that those costs were calculated by the Commissioner, again, by reference to the notebook.
39. Many of the items in the notebook represented costs that I saved (such as the cost for the purchase of the Rade Macut Property discussed above) by doing the jobs myself, from receiving unpaid help from people such as my brother in-law, Fred Raffoul, and by already owning, or borrowing, equipment and inventory to be used in the construction.
40. I do not know why the Commissioner states that the construction cost must’ve been closer to $1.1m. The costs for the construction are better represented by the Exhibit AG5 to the Affidavit of Amanda Glover sworn 17 December 2012, which contains a list of the costs. They are also better represented by the invoices which appear at Exhibit SS-7 to my First Affidavit.”[54]
[54]CB 3387-3388
103 Exhibit AG-5 is a spreadsheet which identifies dates, subject matter, expenditure, the person presenting an invoice for payment, and notes describing the materials or work paid for. The total is $682,993.42.[55] Exhibit SS-7 comprises 221 pages of invoices and receipts. No effort was made by Sami to put the invoices and receipts into chronological order; to explain how they related to any or which part of the building work; to create a total of the amount represented by the invoices and receipts, and to link the invoices and receipts to payments made in cash or from some other source.
[55]CB 128-132
104 Although, the foregoing is very unsatisfactory, I will work on the basis that one estimate of the cost of the building works approximated to exhibit AG5 and the Valuer’s opinion. However, that leaves me to determine whether the building book is in fact a true representation of the actual cost of the building work.
105 There is no doubt that Sami is the author of the building book.[56] Furthermore, there is no doubt that some of the entries in the building book are an accurate representation of the cost of the building work. Sami’s qualification on its reliability is that many of the items in the notebook represent a cost that he saved in various ways.
[56]CB 3387 and T103
106 Sami did not contest the accuracy of what he wrote in the building book nor its translation. He did not identify those entries which represent a saving as opposed to an expense. The only step he took approaching that was to prefer exhibits AG5 and SS-7 as being more accurate, and reliance upon the Valuer’s opinion of the cost of the building work.
107 Under cross-examination, Sami denied that the content of the building book is an accurate representation of the actual cost of the building work. He estimated that the cost of the building work was $600,000.[57] His explanation for the building book was to show how much the building work would have cost had he engaged a building company.[58] Randa appears to have had little knowledge of Sami’s use of the building book. She said that he told her that it was something of a hobby, that he was doing it for himself, and essentially, that it was none of her business.[59]
[57]T130
[58]T132
[59]T259
108 Under cross-examination, Sami was taken to the first page of the building book. There are three figures in handwriting on that page. They are written in a column form thus:
“- 510000
- 108000
- 001000.”[60]
[60]CB 790
109 It was put to Sami that:
· The figure of 1000 represented the holding deposit of $1,000 for the purchase of the restrained property. There is no doubt that a holding deposit of $1,000 was paid before the residue of the deposit.[61]
[61]T104
· The figure of 510000 represented the actual purchase price of the restrained property of $510,000. There is no doubt that he wrote that figure.[62]
· The figure of 108000 represented $108,000 paid in cash in addition to the contractual sale price of $402,000 to make up the total agreed purchase price of $510,000.
[62]T105
110 Sami agreed that the Arabic writing to the left-hand side of 108,000 and 1,000 is correctly translated to the word “cash”.[63] He agreed that $1,000 was paid as a holding deposit for the restrained property.[64] He denied that the figure of 510,000 represented the actual purchase price of the restrained property of $510,000 and that the figure of 108,000 represented a cash payment of $108,000 in addition to the contractual purchase price of $420,000 to make up the total alleged purchase price of $510,000.[65]
[63]T106
[64]T106-108
[65]T106-108 and following
111 Vamplew exhibited a number of documents to her affidavit, none of which are controversial. Those documents are relevant to the purchase of the restrained property by Sami and Randa and a tenancy agreement for Nowell Court.[66] In addition to those documents, there are others exhibited to Sami’s first affidavit[67] relevant to the purchase of the restrained property. I do not propose to set out what those documents are and what they disclose except to note that a holding deposit of $1,000 was paid, followed by the payment of $39,000 which was the residue of the deposit of $40,000, and at settlement a balance was paid to make up the contractual purchase price of $402,000.
[66]CB 978-1006
[67]Exhibit SS-1
112 Under cross-examination, Vamplew said that if a cash sum of $108,000 had been paid as part of the purchase price of the restrained property then a receipt would have been issued relevant to that sum. She was not aware of any departure from that accepted practice.[68]
[68]T565
113 The only plausible hypothesis consistent with the purchase price of the restrained property being $510,000 is that Sami and Randa conspired with the vendors to reduce the purchase price noted on the Contract of Sale to reduce agent’s commission for the benefit of the vendors and stamp duty for their benefit, and perhaps a saving of capital gains tax for the vendors.
114 The vendors are witnesses who Sami might reasonably have been expected to call whose evidence would be favourable to his case that the purchase price of the restrained property was not $510,000. I will not speculate as to what they may have said had they been called as witnesses, but I will draw the inference that the vendors would not have helped his case. Having drawn that inference, I properly take that into account for the two purposes referred to in O’Donnell v Reichard[69] - I think it is improbable that the building book is not the representative account of the work undertaken in building his family home, and therefore, the notation of 510,000 is a reference to the purchase price of $510,000. This is a matter on which the vendors could have spoken directly. I also infer that the figures represent the expenditure in paying a holding deposit, the residue of the deposit, monies paid through the agent as part of the purchase price and monies paid in cash to make up the balance of the purchase price.
[69]Supra
115 Sami’s evidence that the building book was a frolic of his is improbable for the following reasons.
· Firstly, there is no doubt that he made each of the entries in the building book.
· Secondly, there is no doubt that at least some of the entries relate to building work that was actually undertaken for which Sami and Randa became liable to pay for materials and labour.
· Thirdly, as I have already observed, neither have made any attempt to distinguish between what Sami says is his frolic as opposed to those entries which relate to building work that was actually undertaken.
· Fourthly, when Sami says it was a frolic for him to demonstrate to himself what he would have paid to a building company, that is, what it would have charged him, is an odd proposition because how would he know what a building company would have charged him when there is no evidence that he ever obtained any quotes from a building company.
· Fifthly, as I read through the translation it would appear to me to be a careful account of the liability to meet progressive payments for materials and labour as the building work progressed from its early stages to its completion.
5.8.1 Evidence of the value of the building work
116 Sami and Randa nominated Fred Raffoul as a friend who helped them engage “many tradespersons and builders”.[70] It is a fair inference to draw that he must know something of the cost of labour and materials required to build the family home. Logically, he must have conferred with Sami and Randa as the building work progressed, because it is improbable that Sami and Randa would have blindly spent more money than was necessary to build the family home.
[70]CB 155
117 Fred Raffoul is a witness, as well as other principal tradespeople and builders, who Sami and Randa might reasonably have been expected to call to go some way to confirming that the cost of the building work was consistent with, for example the Valuer’s estimate. Their evidence would have been favourable to them. I will not speculate as to what he may have said had he been called as a witness, but I will draw the inference that his evidence would not have helped Sami and Randa’s case.
118 Having drawn that inference, I properly take it into account the two purposes referred to in O’Donnell v Reichard[71] - that the cost of the building work was in excess of the Valuer’s estimate and probably more like $1,106,916,[72] and I infer that the greater proportion of the cost of the building work came from other sources not identified by Sami or Randa.
5.9 Did Masri lend $400,000?
[71]Supra
[72]Kafer’s estimate is that if it is assumed that the purchase price was $510,000.00, then the total cost of building was $1,636,806.00
119 Masri allegedly loaned Sami and Randa $400,000. Of all the monies loaned from the various sources identified by Sami and Randa, Masri’s loan was by far and away the largest. Sami described the circumstances which led to Masri lending that amount to them:
“26. Because my wife and I are pensioners, we did not have enough income, nor capital, to construct a home at the Rade Macut Property.
27. In or about November 2010, during a family gathering, my wife and I indicated to a friend of ours, Mr Arz Masri , that we were looking for an investor, or lender, to provide funds, so that we could construct a home on the Rade Macut Property (‘Proposed Construction’). Mr Masri informed my wife and I that he would be willing to consider providing some funds to enable us to complete the Proposed Construction.
28. On or about 13 December 2010, my wife and I entered into a loan agreement with Mr Masri for Mr Masri to loan my wife and I $400,000.00 (‘Loan Agreement’). The essential terms of the Loan Agreement were that:
(a)my wife and I would provide the Rade Macut Property, as security to Mr Masri, in return for the loan sum of $400,000.00.
(b)my wife and I would repay the principal loan sum, plus interest of $88,000.00, at the expiration of 2 years from the date of the Loan Agreement; and
(c)my wife and I agreed for Mr Masri to lodge a caveat on the Rade Macut Property.
29. At the time of executing the Loan Agreement, Mr Masri provided the $400,000.00 loan sum in cash to my wife and I (‘Loan Sum’). At about that time, I placed the Loan Sum in a safe at the Rental Property with the view that I would access the safe and each time that I was required to make payments for necessary work and materials for the Proposed Construction.”[73]
[73]CB 154-155
120 Randa swore an affidavit in precisely the same terms, describing the loan obtained from Masri.[74]
[74]CB 462-463
121 The relevant parts of the loan agreement are as follows:
“IT IS NOW HEREBY AGREED:
1.The Lender has already provided the Principal Sum to the Borrower and the Borrower hereby agrees they borrowed from the Lenders [the] sum of $400,000.00.
2.The Borrower after the expiration of 2 years from the date of this agreement must repay the Principal Sum and interest of $88,000.00. a total of $488,000.00 within two years of the date herein.
… .”[75]
[75]CB 192-194
122 The loan agreement makes it clear that at the time the parties to the loan agreement executed it, that the $400,000 had already been paid by Masri to Sami and Randa. The loan agreement does not specify when the monies were paid or how the monies were paid, that is, by cash, cheque or by bank transfer.
123 Both Sami and Randa deposed to having received the $400,000 “at the time of executing the Loan Agreement …”;[76] however, what is contained in the loan agreement and what they deposed to in their affidavits was contradicted by them in their oral evidence.
[76]CB 154 and 463
124 Under cross-examination, Sami said that the $400,000 was given by Masri in instalments. One of the instalments was $100,000.[77] Under cross-examination, Randa gave similar evidence that the $400,000 was given by Masri in instalments, and she also nominated that one instalment was $100,000.[78] She was asked how she and Sami were keeping track of how much Masri had given them by instalments to know that the instalments added up to $400,000. She said that Masri was putting that in writing, and then she added “so when it gets to 400, we do the loan agreement”.[79]
[77]T138-139
[78]T263-264
[79]CB 264
125 Under cross-examination, Sami and Randa were asked about Masri’s background, and in particular, what he did for a living and the source of the $400,000 he loaned them. Neither were able to give any sensible and informative answers. Indeed, I was left with the strong impression that even though they described Masri as a family friend, and probably a close family friend, that they knew little about him and his business interests.
126 Both Sami and Randa were almost flippant and dismissive of the cross-examination about Masri. Strangely, when given the opportunity to give evidence which would point to the arrangements with Masri being true, Sami gave very vague evidence about Masri’s involvement with a pizza shop and other businesses, adding that it was not his business to ask him, and “maybe he doesn’t tell me the truth but I don’t know what he work exactly”.[80] He then added that if information was wanted about Masri’s businesses, “you will have to ask him”.[81] Randa gave evidence in a similar vein: “Why should I care where he get the money, I just borrow.”[82]
[80]T136
[81]T136
[82]T264
127 Apart from evidence that Masri has not lodged an income taxation return since 2010, there is no other evidence about his business interests, financial state of affairs, and where he obtained the money which he is alleged to have loaned to Sami and Randa. He swore an affidavit on 25 January 2017 in which he described lending Sami and Randa $400,000 and the execution of a loan agreement. He described the execution of the loan agreement and the payment of the $400,000 as follows:
“9.On 13 December 2010, the particulars of the Loan Agreement were articulated in writing and, pursuant to the Loan Agreement, I provided $400,000.00 in cash to Mr Al-Safadi and Ms Al-Safadi
… .”[83]
[83]CB 778
128 Masri said nothing about having paid the $400,000 before the execution of the loan agreement nor that it was paid by instalments. Indeed, what he deposed to is consistent with the $400,000 being paid contemporaneously with the execution of the loan agreement.
129 Masri said that when he understood that Sami had been charged with criminal offences, that he instructed a firm known as Allied Conveyancing Services Pty Ltd to lodge a caveat over the restrained property on his behalf.[84] The caveat was lodged on 12 November 2012.
[84]CB 779
130 Masri was not called by Sami or Randa. It was contemplated by them that they might call him. That became evident during an exchange between myself and counsel regarding witnesses which Sami intended to call in his case.[85] I was left with the understanding that the Commissioner required his attendance for cross-examination.
[85]T298-299
131 Masri’s loan to Sami and Randa is, like the other monies which they say came into their hands, central to their case that they can account for monies expended on the building of their family home. I am in no doubt that Masri is a witness who Sami might reasonably be expected to call and that his evidence would be favourable to his case. I will not speculate what he might have said had he been called as a witness to give evidence over and above what is in his affidavit, but I will draw the inference that his evidence would not have helped Sami and Randa’s case.
132 Having drawn that inference, I properly take it into account for the two purposes referred to in O’Donnell v Reichard[86] - I think it is improbable that he loaned Sami and Randa $400,000 because of the conflict in the evidence given by Sami and Randa and in Masri’s affidavit which is difficult to reconcile, and I, again, infer that the greater proportion of the cost of the building work came from other sources not identified by Sami or Randa.
5.10 Purchase and sale of cars
[86]Supra
133 Between 2006 and 2013, Sami and Randa purchased a number of cars which are set out in a table to Kafer’s report dated 13 April 2017.[87] A number of cars were purchased from Manheim Pty Ltd, which is a car wholesaler. Mr Stephen Parker is a data support officer employed by Manheim Pty Ltd. Annexed to his affidavit sworn 17 March 2007 are tax invoices relevant to the purchase of fifteen cars by Sami and Randa between November 2006 and August 2012.
[87]CB 3361
134 The table prepared by Kafer refers to sixteen cars. Of the total purchase price of those cars of $147,363.83, $131,891.83 was in cash, and $15,472 was paid by direct debit from a bankcard in the name of both Sami and Randa.
135 In addition to the purchase and sale of those cars, there were other purchases and sales and car-related financial transactions about which Sami was cross-examined:
· The purchase of a Kawasaki ZX2R motorcycle in 2010 which he said was owned by his son, Fadi.[88]
[88]T168
· The purchase of a 2009 Falcon FG XR6 utility in 2011 and a trade-in of a Mercedes C320 which he said were owned by his son, Fadi.[89]
[89]T168
· Payment of car insurance over the 2009 Falcon FG XR6 utility in 2011 which he denied paying for.[90]
[90]T168
· Purchase of a Mazda 3 car in 2011 which he said belonged to his daughter.[91]
· The transfer of a Holden sedan in 2007 to Randa, which she could not remember, and expressed some surprise that there were documents suggesting such a transaction.[92]
[91]T169
[92]T293
136 The Commissioner referred to documents in the court books relevant to each of the car and insurance transactions just referred to which appear to implicate Sami and Randa in each of the transactions on which Sami and Randa were cross-examined. At best, this evidence suggests that there were financial transactions relevant to cars and insurance for which Sami and Randa were responsible and that there were monies at their disposal which they used to complete those transactions.
137 Sami referred to the purchase and sale of nine vehicles in his affidavit sworn 31 August 2017, and the source of the monies used to purchase those cars.[93] In summary he described the purchase and sale of those vehicles as follows:
[93]CB 3383-3386
· The 2005 Ford Fairmont TMZ025, purchased in 2008 for $17,800, was sold for $16,000 and that money was used to purchase a 2006 Holden Commodore, together with monies borrowed from Abureem.
· The Toyota Tarago four-wheel-drive for $25,000 in 2006. He used $17,000 of monies withdrawn from a Commonwealth Bank account on 6 October 2006. The balance to make up the purchase price was borrowed from Abureem.
· The Toyota Tarago four-wheel-drive was sold for $40,000. $7,000 was repaid to Abureem and $3,000 to a repairer. The balance left over was used to purchase a 2000 BMW 528i. It was purchased for $18,478. The remaining funds were deposited into a Commonwealth Bank account.
· An insurance claim on the BMW 528i on AAMI resulted in an insurance payout of $19,450 paid into Randa’s banking account. Those monies were used to buy a 2002 Land Rover Discovery for $12,178 and the 2001 Land Rover Freelander for $5,628.
· The Land Rover Discovery and the Land Rover Freelander were sold and the proceeds used to purchase a 1997 Holden van combo for $3,128 and a 2009 Holden Commodore for $27,389.
· The Holden van combo was sold for $3,000 in about September 2012. Sami said that it is the $3,000 which was taken from him as a result of the raid on his home.
· The 2009 Holden Commodore was sold and the proceeds were deposited into a banking account on 13 September 2011.
· The 2003 Holden Berlina was purchased in 2010 for $9,078 using $25,000 gifted by Randa’s family.
· The 2006 Holden Commodore was sold in 2011 and the proceeds were used to buy the 1993 Ford Falcon for $1,011, a 2004 Peugeot 407 for $10,261, a 1991 Lexus LS 400 sedan for $3,223.61, a 2005 Alpha Romeo for $8,761 and a 2007 Ford Falcon for $7,983.
· Each of the vehicles just referred to was sold and the proceeds were used to purchase a 2001 Toyota Avalon for $3,645.22.
· A 2007 Ford Falcon purchased in 2012 for $7,983 was given to Fadi.
138 Where there is a conflict in the evidence relevant to the purchase price and sale price of cars, I prefer the evidence of Kafer, which identifies each of the vehicles and the primary evidence demonstrating the actual purchase price.
139 The Commissioner pointed to obvious shortfalls between the sale price of cars and the purchase of subsequent cars, for example:
· The sale of the Land Rover Discovery and the Land Rover Freelander in 2010 for $24,000 did not cover the purchase price of the Holden van combo for $3,128 and the 2009 Holden Commodore for $27,389.
· The sale price of the 2009 Holden Commodore of $22,500 did not cover the purchase price of the subsequently purchased five cars of $31,239.
· The Commissioner also referred to a 2007 Holden special vehicle GTS E series car registered with a market value of $29,950,[94] but with an agreed insured value of $50,000 with a purchase price of $47,000 noted on the insurance documents. Both Sami and Randa denied ever owning that car despite what the documents disclose.[95]
[94]CB 2274
[95]T170 and T293
140 I should next deal with the sources of the money identified by Sami and Randa used to engage in these many purchases and sales of cars. For reasons which are now plain, I do not accept the evidence of Sami, Randa and Abureem that Abureem loaned them monies in excess of $150,000. Based upon the same reasoning, I do not accept that Sami and Randa obtained $25,000 from the estate of Randa’s father. Presumably it was cash, and was never accounted for in any way that permits its receipt to be verified.
141 I think it is probable that Sami and Randa purchased the 2007 Holden special vehicle GTS E series car. The relevant documents obtained from the statutory authority and from an insurer clearly demonstrate that the car was registered and insured in Randa’s name.
142 At the very least what I take from this evidence is that they had available to them significant monies from unidentified sources to be able to engage in this level of sale and purchase of cars.
5.11 Gambling monies
143 Kafer calculated that between 2007 and 2013, Sami received $107,681 in gaming cheque deposits from the Dandenong Club Gaming account and $109,183 in gaming cheque deposits from ALH Group. The accounts into which those deposits were made is set out in her report. [96]
[96]CB 3082-3083
144 Sami did not refer to his gambling in either of his two affidavits. However, it must be that he relies upon the gambling wins to explain how he paid for the cost of the building of the family home and maintaining his family financially. He did not have an account with either of the gambling venues, so there is no record of the monies he gambled as his stake and his winnings over and above the monies he invested to obtain those winnings.[97] He said that he attended those venues, or one of them, as frequently as every day to as little as once a week, and whether he attended would depend on whether he had nothing to do that week.[98]
[97]T172
[98]T171-172
145 The Commissioner obtained an opinion from Mr Paul Daniel Murtagh, who is a gambling and liquor inspector. He possesses tertiary qualifications in mathematics. He was provided with a list of twenty-nine cheque payments from the Dandenong Club to Sami between 16 November 2008 and 21 December 2012. He calculated the probability of having the number of wins contended for by Sami as very unlikely.[99]
[99]CB 1046-1047
146 It is inherent in the cross-examination of Sami that it can be inferred that he was engaging in gambling to launder monies already in his possession. I think it is improbable that Sami was only using meagre sums from his Centrelink benefits to gamble at these particular venues.
5.12 International money transfers
147 Sami and Randa admit that they transferred monies through Western Union to members of their family who reside in Syria and Jordan.[100] Sami admits having made eight international transfers between 2 July 2007 and 21 September 2011 totalling $14,991. Randa made transfers between 4 May 2007 and 29 January 2012 totalling $29,350. The total which they transferred between mid-2007 and early 2012 was $44,341.00.[101]
[100]CB 159
[101]CB 3381-3383
148 The Commissioner produced AUSTRAC records which Kafer examined. She concluded that between 2006 and 2013, Sami and Randa made outgoing international fund transfers totalling $125,018. In addition, there were three currency exchanges made in the financial year ending 30 June 2007 totalling $24,968, the financial year ending 30 June 2008 totalling $23,781 and for the financial year ending 30 June 2012 totalling $25,503, the sum being $74,252.[102] These figures are based upon the assumption that all of the Western Union and Travel X documents which are retained by the Commissioner demonstrate outgoing international fund transfers undertaken by Sami and Randa. They deny that they transferred as much as is alleged.
[102]CB 3097
149 Part of the explanation for the number of currency exchanges given by Sami is that in April 2007, Abureem asked him to exchange $25,000 in Australian dollars into American dollars. Sami did as he was asked. I assume that Sami then gave those American dollars to Abureem. Later, and in July 2007, Abureem again asked Sami to exchange $24,000 in Australian dollars into American dollars. Sami did as he was asked, but retained $12,000 in American dollars which he described as a loan from Abureem, so that Randa could make a trip overseas to Syria.
150 Another part of the explanation was a denial by Sami that he was the person who made two international transfers. The first is alleged to have occurred on 11 July 2007 in the name of Sami transferring the sum of $59,839 in Australian dollars converted to $50,332 in American dollars.[103] The second is alleged to have occurred on 11 July 2007 in the name of Sami transferring the sum of $60,500 in Australian dollars.[104] The particulars on each of the transfers identifies Sami by name and the address where he was living at the time. Despite what is contained on the face of the documents, he denies that he made those transfers.[105]
[103]CB 3520-3521
[104]CB 3522-3523
[105]CB 3382
151 I think it is probable that Sami made those international fund transfers. What is clear is that he had made a number of international fund transfers. These two international transfers fit in with the pattern of what he had undertaken in the past, and the fact that he is clearly identified by name and address satisfies me that he undertook those international transfers.
6 The Kafer forensic report
152 Kafer is a forensic accountant with the AFP. She prepared a report dated 13 April 2007.[106] The most convenient starting point is to go to the end of her report and to recite her conclusions:
“15.1 I have undertaken financial analysis and assessed the financial activities of S & R SAFADI for the period 1 July 2006 to 18 December 2012.
15.2 Based on this analysis on the information provided to me I have calculated that, for the period 1 July 2006 to 18 December 2012, S & R SAFADI acquired $1,455,626.43 in funds unexplained sources.
15.3 I have calculated that of this amount $1,214,916 was applied towards the purchase and construction of the residence at Rade Macut Court (Lot 18, Volume 10580, and Folio 778). Specifically $107,958 in unsourced funds was used for the purchase of the land, and $1,106,958 in unsourced funds was used for pre-build and construction costs.”[107]
[106]CB 3068-3104, excluding the annexures from 3105-3377
[107]CB 3102
153 In their written submissions, Sami and Randa make trenchant criticisms of Kafer’s methodology in undertaking the forensic accounting exercise, her treatment of some financial transactions, and the assumptions upon which her final conclusions are based. The starting point in those submissions is that Sami and Randa submit the following facts are established:
“(a) That the purchase price of the vacant land was $402,000.00;
(b)That Sandra Abby advanced to Sami in the relevant time approximately $110,000.00 in cash;
(c)That Remon Abureem advanced to Sami and the relevant time approximately $150,000.00 in cash;
(d)That Arz Masri loan $400,000.00 to Sami and Randa in December 2010, which loan was drawn down in instalments of cash;
(e)That Madelaine (sic) Torros (sic) gave to Randa $40,000.00 in cash in December 2008;
(f)That Sami received $44,450.00 from the disposal of motorcars previously unknown to the respondent;
(g)That Randa received further gifts in cash from her family totalling $35,000.00 in the relevant time;
(h)That Kafer erred in overstating foreign currency transfers purchases by $25,503.00 and understating foreign currency purchases by the same amount;
(i)That the balance of the foreign currency transfers purchased in the relevant period ($49,749.00) was purchased predominantly with funds provided by family members, or were not purchased by Sami or any other related person (the Sydney transaction of 11 July 2010).”
154 Annexed to Sami and Randa’s submissions is a document which it was submitted are the conclusions which I should reach regarding the source of the monies they had at their disposal and how the monies were used. The annexure describes the non-cash source of funds as $1,376,660.23; the total cash available as $1,289,147.23, and then analyses the application of funds through bank transactions, property and non-bank transactions to arrive at a figure described as known disbursements as $2,330,273.62. If that analysis were accepted, then broadly speaking, there is an accounting of monies coming into the possession of Sami and Randa and how they were applied, which adds up.[108]
[108]The annexure is attached to these reasons
155 I accept that the forensic accounting methodology applied by Kafer is an appropriate method to apply to a case of this kind. Whilst Sami and Randa challenged her application of a particular type of forensic accounting methodology, it was not my impression that Kafer conceded that the forensic accounting methodology she used is an inappropriate method. Sami and Randa did not employ their own forensic accountant, so the only evidence I have of the appropriateness of the forensic accounting methodology used by Kafer is from Kafer herself.
156 Some of the criticisms made by Sami and Randa of the manner in which Kafer applied the forensic accounting methodology might have some merit. However, it seems to me that the real use for which Kafer’s ultimate opinion is to be used, is to look at that opinion rather more broadly than by looking at individual figures because doing that does not impact upon the thrust of her opinion that there were unexplained sources of funds in the possession of Sami and Randa.
157 Taking Kafer’s opinion at face value, there are a number of conclusions she reached, which I accept. They are as follows:
· Firstly, she identified sources of funds which came into the possession of Sami and Randa amounting to $1,534,893.33.[109]
[109]CB 3080-3081
· Secondly, she identified the application of funds which came into the possession of Sami and Randa of $2,990,519.76.[110]
· Thirdly, she identified unexplained sources of funds of $1,455,626.43.[111]
[110]CB 3088
[111]CB 3099-3101
158 What these raw figures demonstrate is that there are a significant number of financial transactions which have not been explained by Sami and Randa except in a most summary way if not only vaguely.
159 The criticisms made of Kafer’s analysis of some of these transactions I think is ill founded. I will deal with the more significant criticisms - for example that some withdrawals of monies could have been the subject of redeposit;[112] however, Kafer said that she allowed for that possibility.[113] The Commissioner submitted that Kafer made that allowance when she undertook a reconciliation of unexplained sources of funds by allowing for what she described as an adjustment for cash expenditure of $561,719.43.[114] This amount was subtracted from the unexplained sources of funds to give the figure of $1,455,626.43.
[112]T485
[113]T487
[114]CB 3101
160 Kafer was criticised for not taking into account sources of money from, for example Abby and Abureem. The reason for that is that evidence from those two persons came into the possession of the Commissioner on 1 September 2007, which was less than a fortnight prior to the commencement of the trial. This meant that Kafer did not have access to it when she wrote her report. The criticism is easily accommodated by simply adjusting her figures to take account of the monies identified by Sami and Randa that they received by way of loans and gifts, so I do not think this criticism has any particular validity.
161 Kafer was criticised for not having undertaken investigative enquiries, for example contacting the vendors of the restrained property regarding the sale price and whether a portion of it was paid in cash, and otherwise engaging in other levels of investigation to verify whether her analysis was sound or otherwise. Inevitably, criticism can be made that the investigation by the Commissioner could have been more detailed and precise, but that criticism really goes nowhere unless something can be pointed to which reasonable investigation would have turned up. I think the criticism almost amounts to shifting the onus to the Commissioner to disprove Sami and Randa’s case when it is their onus to prove, by persuasive evidence, that an order should be made excluding the property from forfeiture.
162 The conclusions I have reached are that I prefer Kafer’s analysis to the alternative submitted by Sami and Randa. I recognise that when an analysis is based upon assumptions that if some of the assumptions are doubtful, that the conclusions based upon the analysis must change. Even if, for example I accepted Sami and Randa’s evidence that they did not pay cash as part of the purchase price of the restrained property, or that they did receive some monies from family, then that is insufficient to overcome the substance of Kafer’s analysis. It may shave off some of what is said to be unexplained sources of funds, but on my broader view of the basis of Kafer’s analysis, I do not accept that it would be affected in a material way. I think it is probable that the unexplained source is consistent with the sum referred to by Kafer.
7 Conclusions about the sources of money
163 The conclusion I have reached after making as detailed an analysis of the evidence as I think is necessary, is that the real and identifiable source of income coming into the hands of Sami and Randa was their Centrelink pensions.
164 I think it is improbable that they obtained the large sums of money they have referred to from the sources they identified.
8 The Applications for exclusion
165 The applications for exclusion brought by Yvette, Daniel and Fadi are abandoned, leaving consideration only of the applications brought by Sami and Randa.
166 I return to the basis upon which Restraining Orders were made on 18 December 2012 and 19 January 2016. They were made based upon the evidence of Glover and Culliford.
9 Proceeds of crime – potential offences
167 The onus is borne by Sami and Randa on the civil standard to demonstrate by evidence that the restrained property should be released from restraint.
168 I am not satisfied that Sami and Randa have discharged the onus they bear to satisfy me that their interest in the restrained property is neither the proceeds of unlawful activity nor related to a serious offence and is not an instrument of a serious offence.[115]
[115]Section 29(2)(c)(i) and (ii)
169 Section 29(2)(c) of the Proceeds Act does not require me to make any specific findings that Sami and Randa have committed particular offences. Although, the Commissioner relies upon the affidavit of Glover in which she has proposed that Sami and Randa have committed particular offences, in this case. I need not be satisfied of anything more than what is made an offence by s400.9 of the schedule of the Criminal Code Act (Cth) (“the Criminal Code”).
170 I will now refer to a number of relevant provisions in the Criminal Code, starting with s400.9, which is as follows:
“(1) A person commits an offence if:
(a) the person deals with money or other property; and
(b) it is reasonable to suspect that the money or property is proceeds of crime; and
(c) at the time of the dealing, the value of the money and other property is $100,000 or more.
Penalty: Imprisonment for 3 years, or 180 penalty units, or both.
(1A) A person commits an offence if:
(a) the person deals with money or other property; and
(b) it is reasonable to suspect that the money or property is proceeds of crime; and
(c) at the time of the dealing, the value of the money and other property is less than $100,000.
Penalty: Imprisonment for 3 years, or 180 penalty units, or both. “
171 The other relevant subsections are:
“(2) Without limiting paragraph (1)(b) or (1A)(b), that paragraph is taken to be satisfied if:
…
(c) the value of the money and property involved in the conduct is, in the opinion of the trier of fact, grossly out of proportion to the defendant's income and expenditure over a reasonable period within which the conduct occurs …
…
(4) Absolute liability applies to paragraphs (1)(b) and (c) and (1A)(b) and (c).
(5)This section does not apply if the defendant proves that he or she had no reasonable grounds for suspecting that the money or property was derived or realised, directly or indirectly, from some form of unlawful activity.
Note: A defendant bears a legal burden in relation to the matter in subsection (5) (see section 13.4).”
172 In relation to the legal burden borne by the respondent to discharge the onus borne under ss(5), s13.4 provides:
“A burden of proof that a law imposes on the defendant is a legal burden if and only if the law expressly:
(a) specifies that the burden of proof in relation to the matter in question is a legal burden; or
(b) requires the defendant to prove the matter; or
(c) creates a presumption that the matter exists unless the contrary is proved.”
173 The expression found in s400.9 “deals with money or other property” is defined in s400.2 as follows:
“A person deals with money or other property if the person does any of the following:
(a) receives, possesses, conceals or disposes of money or other property;
(b) imports money or other property into Australia;
(c) exports money or other property from Australia;
(d) engages in a banking transaction relating to money or other property.”
174 In relation to the legal burden borne by the Commissioner, s400.13 provides:
“(1) To avoid doubt, it is not necessary, in order to prove for the purposes of this Division that money or property is proceeds of crime, to establish:
(a) a particular offence was committed in relation to the money or property; or
(b) a particular person committed an offence in relation to the money or property.
(2) To avoid doubt, it is not necessary, in order to prove for the purposes of this Division an intention or risk that money or property will be an instrument of crime, to establish that:
(a) an intention or risk that a particular offence will be committed in relation to the money or property; or
(b) an intention or risk that a particular person will commit an offence in relation to the money or property.”
175 The Commissioner referred me to two authorities which explain the operation of s400.9. The first of those was Commissioner of Australian FederalPolice v Vo.[116] Schmidt J observed:
“An offence under s 400.9 comprises three physical elements: first, specified conduct, including dealing with money, which may include possession of cash, given the provision made in s 400.2(a); second, it being reasonable to suspect that the money is proceeds of crime; and third, that its value is $100,000 or more (see s 4.1 and Lin v R [2015] NSWCCA 204; (2015) 297 FLR 457 at[15]). There being no fault element specified in s 400.9, intention is thus the fault element for the physical elements of the offence (see s 5.6(1) of the Criminal Code). Accordingly, to commit a s 400.9 offence, it is sufficient for an offender to intend to take possession of more than $100,000 cash, which it is reasonable to suspect is proceeds of crime. That it is the proceeds of any particular prior offence, need not be established.”[117]
[116](2015) 302 FLR 209
[117]Paragraph [95]
176 In Lin v The Queen,[118] the New South Wales Court of Criminal Appeal observed:
“13. Section 400.9(1) differs from the preceding six sections in two material respects. The first is that it does not contemplate proof of the actual commission of an indictable offence; to prove the offence it is sufficient that the prosecution prove a dealing with money or property which it is reasonable to suspect is the proceeds of an indictable offence that has been committed. The second distinguishing feature is that s 400.9 contains no equivalent of an offence constituted by dealing in money or property that is intended to be, or is at risk of being, an instrument of crime - that is, an indictable offence that it is intended will be committed, or as to which there is a risk that it will be committed, in the future.
14. On its own, therefore, s 400.9(1) would create an offence only of dealing with money or property which it is reasonable to suspect is ‘wholly or partly derived or realised directly or indirectly’ by the past or completed commission of an indictable offence and which is to the value of $100,000 or more. It is important to note the words ‘derived or realised’.”[119]
[118](2015) 253 A Crim R 1
[119]Paragraphs [13]-[14]
177 And later:
“22. What sub-s (2) does is expand the ambit of sub-s (1)(b) by providing that the physical element provided by that paragraph - that is, that it is reasonable to suspect that the money or property is the proceeds of crime - is satisfied by proof of conduct of the various kinds specified. In other words, par (1)(b) is satisfied if the Director proves any of the kinds of conduct specified in the various paragraphs of sub-s (2).
23. That conduct is additional to conduct constituting an indictable offence from which the money (or property) is derived or realised. That is sub-s (2) provides an alternative route to proof of the ‘reasonable to suspect’ element of the offence. By reason of sub-s (2), the Director is not obliged to prove that the money or property is derived or realised from an indictable offence; it is sufficient if he proves that it involves conduct of the kind specified. For example, sub-s (2)(a) provides that sub-s (1)(b) is taken to be satisfied if the dealing involves a number of transactions that amount to an offence of ‘structuring’ within the meaning of the Financial Transactions Reports Act. Structuring offences are, by s 31 of that Act, indictable offences; but they are not offences from which money or property is derived or realised. Without the provisions of s 400.9(2)(a), it could not be said that money used in a structuring offence was derived or realised from the commission of an indictable offence and thus was the ‘proceeds of crime’. Such conduct would not come within s 400.9(1).
24. Section 400.9(2)(a) thus expands the operation of s 400.9(1). The same reasoning applies to pars (aa), (b), (ba), (d) and (da): in each case, the conduct referred to is conduct that does, or might, in conjunction with other conduct, amount to an indictable offence; but it is not an indictable offence from which the money or property the subject of the asserted dealing could be said to have been derived or realised. Accordingly, those paragraphs also expand the operation of s 400.9(1)(b).
25. Similarly, the two paragraphs to which specific reference was made in response to the request for particulars, par (2)(c), and par (2)(e) (which do not, of themselves or in conjunction with other conduct, constitute indictable offences), expand the operation of s 400.9(1)(b) to encompass dealing in money or property grossly disproportionate to the defendant’s income and expenditure over a reasonable period within which the conduct occurs (par (c)), and dealing in property in circumstances where the defendant has stated that the dealings were engaged in on behalf of or at the request of another person, and has failed to provide relevant information concerning that person (par (e)).”[120]
10 Conclusions about the sources of money
[120]Paragraphs [22]-[25]
178 The conclusion I have reached is that the real and identifiable source of income coming into the hands of Sami and Randa was their Centrelink pensions. I think it is improbable that they obtained the large sums of money they have referred to from the sources they identified.
179 I think the evidence strongly points to the monies they had available to them being grossly out of proportion to their income and expenditure over the time they purchased the restrained property until the building work of their family home reached completion.
11 The Applications for exclusion
180 For reasons which I have made clear, I do not accept very much of the evidence of Sami and Randa, with the result that their applications for exclusion are dismissed.
12 The Application for forfeiture
181 I am satisfied on the same evidence relevant to the applications for exclusion by Sami and Randa that the Commissioner has discharged the onus he bears in satisfying me that Sami and Randa have dealt with monies which are grossly out of proportion to the income which they have derived from their Centrelink benefits.
182 For reasons which I have made clear, I will make a Forfeiture Order pursuant to s47(1) of the Proceeds Act.
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