Commissioner of the Australian Federal Police v Wu

[2018] NSWSC 1108

Supreme Court

New South Wales

Medium Neutral Citation:	Commissioner of the Australian Federal Police v Wu [2018] NSWSC 1108
Hearing dates:	20 February 2018
Date of orders:	19 July 2018
Decision date:	19 July 2018
Jurisdiction:	Common Law
Before:	Rothman J
Decision:	(1)   Motion dismissed;  (2)   The applicant on the motion shall pay the plaintiff's costs of and incidental to the proceedings.
Catchwords:	CRIME – proceeds of crime – Proceeds of Crime Act 2002 (Cth) – application to exclude property from restraining orders – interaction of ss 29, 31 and 330(4)(a) – property purchased with alleged “gift” from aunt in China – unnecessary to resolve – loan moneys obtained by dishonest deception – real property is both proceeds of crime and instrument of serious crime – motion dismissed
Legislation Cited:	Crimes Act 1900 (NSW) Crimes Act 1914 (Cth) Criminal Code Act 1995 (Cth) Proceeds of Crime Act 2002 (Cth)
Cases Cited:	Commissioner of the Australian Federal Police v Gwe & Hoang [2018] NSWSC 992 Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 Lee v Director of Public Prosecutions (NSW) (2009) 75 NSWLR 581 MA v Commissioner of the Australian Federal Police [2016] VSC 553
Category:	Principal judgment
Parties:	The Commissioner of the Australian Federal Police (Plaintiff) Qiao Wan Wu (Applicant)
Representation:	Counsel: D Tynan (Plaintiff) D C Eardley (Applicant)   Solicitors: Criminal Assets Litigation, Australian Federal Police (Plaintiff) Russo & Partners Pty Ltd (Applicant)
File Number(s):	2016/124936

Judgment

1. HIS HONOUR: An interested party, Ms Qiao Wan Wu (hereinafter “the applicant”), by motion seeks that the net proceeds of sale of real property located at 50 Godfrey Street, Hurstville Grove (hereinafter “the Property”) be excluded from the operation of an order made under the Proceeds of Crime Act 2002 (Cth) (hereinafter “the Act”). Initially, the motion sought a number of orders, only the last of which is extant under the amended motion filed 7 February 2018. It is necessary to set out some background facts.

Background Facts

2. The applicant is married to Zhang Yi (also known as Michael). The applicant’s mother-in-law is Ning Ling Li and her father-in-law is Zumin Zhang. On 21 January 2016, Ms Li was arrested and charged with a number of drug offences. It is the plaintiff's submission that monies from the proceeds of these offences were used in the purchase of the Property.

3. On 26 April 2016, the Australian Federal Police (hereinafter “the AFP”) applied for and were granted an ex parte order restraining any dealings, or enjoining any party from dealing with the Property, pursuant to s 19(1)(b) of the Act.

4. On 23 May 2016, the applicant filed a notice of the original motion seeking, as earlier stated, an exclusion application and, relevantly, a revocation application.

5. On 19 July 2016, consent orders were made to permit the sale of the Property and for the net proceeds of the sale to be subject to the terms of the restraining order.

6. As attested to in the affidavit of Angus Lee, sworn 22 April 2016, in 2009 and 2010, the AFP were conducting Operation Hixon, an investigation into the importation of commercial quantities of methamphetamine into Australia facilitated, it is said, by Taiwanese organised crime syndicates. During the course of that investigation, Ms Li, Mr Zhang and Mr Yi each came to the attention of authorities.

7. On 3 January 2016, three sea freight consignments from China arrived in Sydney. One consignment, said to contain furniture, was consigned to Lucky Import and Export Pty Ltd (hereinafter “Lucky”) in Peakhurst. The second and third consignments, said to contain furniture and foodstuffs respectively, were consigned to Star East Group Pty Ltd (hereinafter “Star East”).

8. Operation Hixon, in conjunction with the Australian Border Force and Department of Immigration and Border Protection, then organised a controlled operation pursuant to the Crimes Act 1914 (Cth), allowing the AFP to conduct a controlled delivery of the consignments to the intended recipients. The consignments were delivered and a number of people were arrested including Ms Li, Mr Zhang and Mr Yi.

9. ASIC searches of the relevant companies show that Star East was registered on 20 May 2008 and its directors and shareholders included Mr Zhang, Ms Li and Mr Yi, together with Qiao Wan Wu, the applicant.

10. The applicant was born in China on 11 January 1983, arrived in Australia on 4 November 2000 and became an Australian citizen on 19 April 2011. She first registered for income tax on 7 January 2008 and listed as her residential address the same address as the registered office of Star East. The applicant did not lodge, or it was unnecessary for her to lodge, an income tax return in the financial years ending 30 June 2008 through to 30 June 2015, inclusive. The applicant never declared any income from employment, nor rental income, nor capital gains in the financial years ending 2008 through to 2015 inclusive. Further, the applicant received Commonwealth benefits in the financial years ending 2012, 2013 and 2014 in the amounts of $7,581, $4,768 and $3,542 respectively.

11. Ms Li registered for income tax on 16 May 1990, but did not lodge an income tax return in financial years ending 30 June 2011 through to 30 June 2015, inclusive. Ms Li did lodge an income tax in the financial year ending 30 June 2005 and received New Start Allowance in the financial years ending 2011, 2012 and 2013 in the amounts of $3,202, $10,222 and $7,982 respectively.

12. Records of the Land and Property Information database show that the applicant acquired three properties: the Pemulwuy property, the Greystanes property and the Property (being the relevant property in these proceedings). The Pemulwuy property was purchased, on the material before the Court for $300,000 in June 2011 by the applicant. Subsequently it was sold for $980,000 on 8 April 2015. The Greystanes property was purchased by the applicant for $569,800 in October 2013. Subsequently, in March 2014, the applicant sold the Greystanes property for $633,000.

13. The relevant Property was purchased by the applicant for $939,900 in December 2014. In other words, the relevant Property was purchased after the sale of the Greystanes property, but before the sale of the Pemulwuy property.

14. The applicant and Ms Li are now the registered owners of that Property, as tenants in common with a 9/10 and 1/10 share respectively. The Property is mortgaged with National Australia Bank (hereinafter “NAB”). The Property records show that the 1/10 share of the Property was transferred to Ms Li by the Applicant for the consideration of $100,000 and that transfer was lodged on 12 February 2016.

15. On 12 February 2016, the Property was advertised for sale with a real estate agent at $1,250,000, but the price was lowered on 1 March 2016 to a price of between $1,150,000 and $1,190,000. The property has development approval for a double storey house.

16. In order to obtain the home loan associated with the mortgage over the Property, the applicant completed supporting documentation with NAB, which claimed that she owned $252,000 in cash assets; 14 Carrick Street, Pemulwuy (the Pemulwuy property), worth $1 million; a motor vehicle worth $45,000; and home contents worth $65,000.

17. The ANZ records also show a facsimile of a Residential Tenancy Agreement for the Pemulwuy property between the applicant and Mr Yi, dated 9 May 2014, which discloses that the applicant was to be paid $950 in cash per week in rental income for 12 months; and that Mr Yi was the witness to the Residential Tenancy Agreement.

18. The ANZ records also disclose that the applicant made monthly repayments of $3,910.13 on the mortgage and also shows that on 31 July 2015 two large deposits of $10,000 and $200,000 respectively were made into accounts. The address on the applicant’s ANZ bank records was changed to the address earlier recorded for the Lucky Consignment.

19. The Affidavit of Angus Lee, to which earlier reference has been made, sets out the suspicions based upon the foregoing facts to which Mr Lee attested. The applicant filed an Affidavit affirmed 26 May 2016 which sought to trace the funds used in the purchase of the Property. In short, after explaining that an “aunt” in Chinese culture does not necessarily mean an older female relative, but rather an older female who has the respect of the person describing them, the applicant recalled having a conversation with Ms Li in which Ms Li told her that an aunt from China had sent to Australia around $85,000 and they could use that money to look for a property, because it was a gift. The money, according to the applicant was not the money of Ms Li or Mr Zhang but, rather, money gifted to Mr Yi and the applicant from their aunt in China.

20. Further, the applicant explains that the Hurstville Grove Property was purchased for $939,000, of which $751,920 was borrowed from the ANZ Bank and she was required to pay the balance of the purchase price which was $187,080, being the deposit monies.

21. The 10% deposit was paid for the purchase of the Property with the funds from Ms Li and Mr Zhang, who in turn received it from relatives in China, as earlier stated. Moreover, the applicant “believed” that the money obtained from China as a gift was not sufficient to cover the whole 10% deposit, which is the reason she contributed $5,000 from her own funds towards the expression of interest or holding deposit. An amount of approximately $95,000 was paid by the applicant, or caused to be paid by the applicant, from her Westpac accounts.

22. Regardless of the source of the funds, which I suspect, without proof, are the funds from drug importation, the plaintiff, the Commissioner of the AFP (hereinafter “the Commissioner”), submits that the money used for the purchase of the Property is, in any event, tainted. The applicant has admitted that she made false declarations in various bank loan applications in order to obtain finance to purchase various properties, including the Property.

23. The aforementioned admission means that the obtaining of the loans (which are a financial advantage) was dishonestly by deception, an offence contrary to s 192E(1) of the Crimes Act 1900 (NSW) (hereinafter “the Crimes Act”). Further, the provision of false information to obtain financial advantage is also an offence, contrary to s 192G of the Crimes Act.

24. As a consequence, at least, the loan moneys, which were the substantial amounts utilised for the purchase of each of the properties, were provided by virtue of the commission of an offence and are “the proceeds of an offence”.

25. Further, the Commissioner submits that the net proceeds of sale is the proceeds of an offence committed by the applicant, contrary to s 400.9(1) of the Schedule to the Criminal Code Act 1995 (Cth) (hereinafter “the Criminal Code”), by dealing with money or property reasonably suspected to be proceeds of crime, which has a value of $100,000, as the finance obtained by the applicant referred to in the preceding paragraph was over $100,000.

Applicant’s submissions

26. Essentially, the applicant submits that the evidence establishes that the money paid by Ms Li to the applicant, which the applicant used for the purposes of obtaining a loan from the relevant financial institution, was a loan. The applicant accepts that, pursuant to s 317 of the Act, the interested party bears the onus of proving, on the evidence before the Court, the facts necessary for the exclusion application to succeed.

27. The applicant submits that:

1. the applicant has not been charged with any offence;

2. the applicant has not been convicted of any offence;

3. the source of the money for the property came from three sources: a loan from a bank; a gift from an aunt in China; and moneys held in the account of the applicant;

4. the evidence establishes that the money from the sale of the property is not:

1. the proceeds of any indictable offence;

2. an instrument of any serious offence; or

3. an instrument of an unlawful activity;

5. the applicant is not involved in the business affairs of Ms Li. Further, a familial connection of itself, the applicant submits, does not lead to the conclusion that the applicant is automatically tainted with that person's alleged activities.

28. The applicant submits that the principles in Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 do not assist in the determination of facts, because, amongst other things, Ms Li has a right to silence or a privilege against self-incrimination and each would explain the absence of evidence from Ms Li.

29. Lastly, the applicant seeks costs and refers to the principles in the determination of costs underpinning s 323 of the Act. The applicant seeks indemnity costs.

Principles on Revocation

30. The Court, as presently constituted, dealt at length with the application of the Proceeds of Crime Act in the judgment of the Court in Commissioner of the Australian Federal Police v Gwe & Hoang [2018] NSWSC 992 at [25] and following. As a matter of completeness, rather than simply adopting the analysis by reference, I repeat that analysis:

“The Act establishes a scheme for the confiscation of the proceeds of crime and establishes a process by which, amongst others, the Commissioner of the Australian Federal Police may make application for confiscation and interlocutory orders on the way to that confiscation. It also sets out the methods of investigation of that property which may fall within what are described as ‘proceeds of crime’.

Chapter 2 of the Act provides for orders that may be made, being freezing orders, which may limit the use of monies in accounts with financial institutions as an interlocutory step toward the determination of restraining orders and confiscation orders. Further, those freezing orders may enjoin persons from the disposal of, or dealing with, any property.

The Act sets out forfeiture orders that may be made, under which property is forfeited to the Commonwealth, and requires the forfeiture of property to the Commonwealth on conviction of serious offences in relation to property that is relevant to the commission of the offence.

Pursuant to the terms of s 15C of the Act, if an authorised officer (defined in the Act) applies for a freezing order, the application must be accompanied by an affidavit of an authorised officer that sets out sufficient information to identify the account to be frozen; identifies the financial institution in which it is held; sets out the grounds under which the authorised officer suspects that the balance of the account is proceeds of an indictable offence, or of a foreign indictable offence, or of a indictable offence of Commonwealth concern; or, otherwise, is wholly or partly an instrument of a serious offence; and sets out the grounds on which the authorised officer and the Court would be satisfied that, without the order, there is a risk of dissipation of the money in the account.

Under the provisions of s 15Q of the Act, a freezing order made by a magistrate may be varied by a magistrate to allow for the reasonable living expenses of the person affected by the freezing order; the reasonable living expenses of any of the dependants of that person; the reasonable business expenses of that person (assuming the business is not the criminal concern); and a specified debt incurred in good faith by the person. The magistrate may vary the freezing order only if certain conditions are met, which include that the person affected has applied for the variation; the expenses do not relate to legal proceedings under the Act; and the person could not otherwise meet the expenses or debts.

Apart from the powers of a magistrate to which reference is made above, restraining orders may be made by a Court with “proceeds jurisdiction” (a defined term under the provisions of s 335 of the Act), which includes, relevantly, in relation to conduct that occurred in New South Wales, the Supreme Court of New South Wales and the District Court of New South Wales, being Courts that have jurisdiction to deal with criminal matters on indictment in New South Wales.

Section 17 of the Act deals, inter alia, with restraining orders against persons convicted of, or charged with, indictable offences. The terms of s 17 of the Act require the Court, on application, to order that property must not be disposed of or otherwise dealt with by a particular person either absolutely or except in the manner and circumstance specified in the order. The requirement to make such an order occurs if an appropriate authority applies for the order; the person has been convicted of or has been charged with an indictable offence of a relevant kind or it is proposed that the person be charged for such an offence; the affidavit requirements in s 17(3) have been complied with; and the Court is satisfied that the authorised officer, who has made the affidavit, holds the suspicion stated in the affidavit on reasonable grounds.

By s 17(2) of the Act, the order must specify the property over which any restraining order is made and the restrictions imposed upon any dealings with the property and can do so only to the extent that the Court is satisfied that there are reasonable grounds to suspect that the property is one or more of the following: property of the suspect; bankruptcy property of the suspect; specified property of another person (whether or not known) that is subject to the effective control of the suspect; or specified property of another person (whether or not known) that is the proceeds of the offence or an instrument of the offence.

Section 17(3) of the Act sets out the affidavit requirements. It is unnecessary to detail those as there is no issue currently before the Court in relation to same.

Sections 18 and 19 deal, respectively, with persons suspected of committing serious offences and with property suspected of being the proceeds of indictable offences. It is appropriate to deal with the definition of property suspected of being proceeds of indictable offences.

In this case, there is no suggestion that any of the property relates to proceeds of a terrorism offence or of a foreign indictable offence. In that definition one must include the definition of an instrument of a serious offence.

Property is proceeds of an offence if it is wholly or partly derived or realised, whether directly or indirectly, from the commission of the offence and relates to property situated within or outside Australia. Further, property is an instrument of an offence, as defined, if the property is used in, or intended to be used in, or in connection with, the commission of an offence. Neither definition depends upon the conviction of a person for the offence in question: s 329 of the Act.

By the provisions of s 330 of the Act, property becomes proceeds of an offence if it is wholly or partly derived from a disposal or other dealing with proceeds of the offence or wholly or partly acquired using proceeds of the offence. It remains so, notwithstanding its credit to an account or its disposal.

Further, s 330(4) of the Act provides that property only ceases to be proceeds or an instrument of an offence, if acquired by a third party for ‘sufficient consideration’ without knowledge, or without knowledge of the circumstances that would arouse a reasonable suspicion, that the property was proceeds or instrument of an offence; or if the property vests from the distribution of a deceased estate; is distributed in accordance with an order or approved financial agreement under the Family Law Act 1975 (Cth) and six years has elapsed since that distribution; or if the property is acquired as payment for reasonable legal expenses; or if a forfeiture order under the Act in respect of the property is satisfied; or if the property is forfeited, confiscated or otherwise disposed of under the Act or a corresponding law (being State laws in or to the same effect or for the same purpose); or if the property is disposed of under the Act; or other circumstances specified in the regulations.

The application by motion relies on the operation of ss 29 and 31 of the Act and it is appropriate for those provisions to be set out:

‘29.   Excluding property from certain restraining orders

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

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

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

Note: s 32 may prevent the Court from hearing the application until the responsible authority has had a reasonable opportunity to conduct an examination of the applicant.

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

(a)    for a restraining order under s 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 s 17 if paragraph (a) does not apply--the interest is neither proceeds nor an instrument of the offence, or any offence, to which the order relates; or

(c)    for a restraining order under s 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 s 19--the interest is neither:

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

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

Note:   One of the circumstances in which property ceases to be proceeds of an offence or unlawful Activity involves acquisition of the property by an innocent third party for sufficient consideration: see paragraph 330(4)(a).

(3) If the offence, or each offence, to which a *restraining order relates is a *serious offence that is an offence against s 15, 24, 29 or 31 of the Financial Transaction Reports Act 1988 or s 53, 59, 136, 137, 139, 140, 141, 142 or 143 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, a further reason for excluding a specified *interest in property from the order is that each of the following requirements is met:

(a)    there are no reasonable grounds to suspect that the interest is *proceeds of the offence, or any of the offences;

(b)    there is a *suspect in relation to the order, but he or she has not been convicted of, or charged with, the offence, or any of the offences;

(c)    the conduct in question was not for the purpose of, in preparation for, or in contemplation of, any other *indictable offence, any *State indictable offence or any *foreign indictable offence;

(d)    the interest could not have been covered by a restraining order if none of the offences had been serious offences.

(4)    However, the Court must not exclude a specified *interest in property from a *restraining order under s 17 or 18 unless it is also satisfied that neither a * pecuniary penalty order nor a *literary proceeds order could be made against:

(a)    the person who has the interest; or

(b)    if the interest is not held by the *suspect but is under his or her *effective control--the suspect.

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

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

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

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

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

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

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

(b)    appeared at the hearing of that application.

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

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

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

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

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

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

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

Dealing firstly with the provisions of s 31 of the Act, it seems clear that each of the defendants is a person who may apply under s 31(1) of the Act and has applied to the correct body: s 31(1A) of the Act.

Further, the restraining order enjoining the defendants was made ex parte and the defendants were not notified of the application for the restraining order, before it was made. Nor, obviously, did either of the defendants appear at the hearing of that application.

As a consequence of the foregoing, the Court has jurisdiction under s 31(2) of the Act to determine an application to exclude property from the restraining order made by the defendants. The foregoing conclusion takes into account that the Commissioner of the Australian Federal Police, being the responsible authority, has been given written notice (and has appeared) on the application, thereby satisfying the provisions of s 31(4) of the Act.

The fundamental issue in contention between the parties derives from the operation of s 330(4) of the Act. The defendants submit that the property in question has ceased to be proceeds of an offence and relies upon the provisions of s 330(4)(a) of the Act for their application to succeed.

It is necessary to recite a number of provisions, including ss 329(1), 329(3), 329(4), 330(1), 330(3), 330(4)(a) and 330(6) of the Act. Further s 338 of the Act is the Dictionary and, relevantly, defines ‘sufficient consideration’ and other terms, which are either directly relevant or give context. The Court recites each of the foregoing sections and some definitions:

‘329.    Meaning of proceeds and instrument

(1)    Property is proceeds of an offence if:

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

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

whether the property is situated within or outside *Australia.

…

(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.

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

(1)    Property becomes proceeds of an offence if:

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

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

(c)    an *encumbrance or a security on, or a liability incurred to acquire, retain, maintain or make *improvements to, the property is wholly or partly discharged using proceeds of the offence; or

(d)    the costs of retaining, maintaining or making improvements to the property are wholly or partly met using proceeds of the offence; or

(e)    the property is improved using proceeds of the offence;

including because of one or more previous applications of this section.

…

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

(a)    it is credited to an *account; or

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

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

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

…

(6)    Property becomes, remains or ceases to be proceeds of an * unlawful Activity, or an instrument of an unlawful Activity, if the property becomes, remains or ceases to be proceeds of the offence, or an instrument of the offence, constituted by the Act or omission that constitutes the unlawful Activity.’

In order to come to any conclusion, one needs to examine the definitions of ‘the proceeds of an offence’, ‘an instrument of an offence’, ‘property’, ‘derived’, ‘lawfully acquired’, ‘deal’, ‘sufficient consideration’ and ‘suspect’. Not each of the definitions is directly relevant but each will be recited. An understanding of each of them is necessary for an understanding of the Act, and the terms of the Act, in context.

‘336.   Meaning of derived

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

(a)    the person; or

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

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

336A.   Meaning of property or wealth being lawfully acquired

For the purposes of this Act, property or *wealth is lawfully acquired only if:

(a)    the property or wealth was lawfully acquired; and

(b)    the consideration given for the property or wealth was lawfully acquired; and

(c)    the property or wealth is not *proceeds or an *instrument of an offence.

…

338.   Dictionary

In this Act, unless the contrary intention appears:

‘deal’: dealing with a person’s property includes:

(a)    if a debt is owed to that person--making a payment to any person in reduction of the amount of the debt; and

(b)    removing the property from *Australia; and

(c)    receiving or making a gift of the property; and

(d)    if the property is covered by a *restraining order--engaging in a transaction that has the direct or indirect effect of reducing the value of the person’s interest in the property.

‘interest’, in relation to property or a thing, means:

(a)   a legal or equitable estate or interest in the property or thing; or

(b)   a right, power or privilege in connection with the property or thing;

whether present or future and whether vested or contingent.

Note: For references to an interest in property of a person who has died, see subs 325(2).

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

‘suspect’ means:

(a)    in relation to a *restraining order (other than a restraining order made under s 20A) or a *confiscation order (other than an *unexplained wealth order)--the person who:

(i)    has been convicted of; or

(ii)    has been *charged with, or is proposed to be charged with; or

(iii)    if the order is a restraining order--is suspected of having committed; or

(iv)    if the order is a confiscation order--committed;

the offence or offences to which the order relates; or

(b)    in relation to a restraining order made under s 20A or an unexplained wealth order--the person whose *total wealth is suspected of exceeding the value of *wealth that was *lawfully acquired.’”

Consideration

31. The foregoing construction of the statute is adopted and applied, without further comment.

32. Essentially, the applicant submits that the evidence before the Court is to the effect that the monies received and utilised for the purpose of the purchase of the real estate was a gift. That proposition depends, fundamentally, on the acceptance of the evidence of Ms Li. Further, the submission limits the proceeds of crime or the instrument of serious crime to the monies received from China.

33. The Court has serious doubts as to the proposition that the monies received from China were by way of gift. Part of the doubt stems from the fact that each of the actors is a director of at least one of the aforementioned companies involved in the handling of the amounts of money.

34. Further, the applicant submits that, if it were not a gift, it was a loan and repayable. I have even more doubt as to the veracity of a claim that the amounts received were by way of loan.

35. If it were a loan, there is no documentation to support such a proposition or to govern the terms and conditions upon which such repayment would be effected. Further again, if the amounts received were a loan and repayable, no such repayment has been made, since the monies were advanced.

36. Ultimately, as the plaintiff, the Commissioner, puts its case, it does not matter whether the cash amounts received were by way of loan or by gift or the direct proceeds of crime that involved or related to Ms Li. The Commissioner refers to the manner in which the loan from the financial institution or institutions was obtained.

37. The Commissioner refers to the provisions in ss 192E(1) and 192G of the Crimes Act, which provide, in the case of s 192E(1), that it is an offence to obtain dishonestly a financial advantage by deception; and, in the case of s 192G, that it is an offence to provide false or misleading information to obtain a financial advantage.

38. The applicant was questioned during an examination, undertaken pursuant to the interlocutory orders made by the Court and under s 180 of the Act, which is summarised in the second Lee Affidavit at [14]-[55]. Apart from the examination demonstrating that the applicant is unreliable (to say the least), it discloses that the applicant made false declarations to obtain significant financial benefits, being the loans.

39. The applicant admitted that she made various false declarations in the home loan application she signed and provided to the ANZ Bank in respect of the Hurstville Grove Property in December 2014. Those false declarations included that she earned $87,000 per annum at a company called T & F Group and the address at which she was living when she made the application. The applicant has never worked for T & F Group.

40. It matters not that the applicant suggests she signed the application because the broker told her, or asked her, to sign it. Ultimately, she made the declaration, which is a false declaration and is misleading information to obtain financial advantage.

41. Further, I do not accept that the applicant was unaware that the information was false and I accept, on the material before the Court, that the deception that obtained a financial advantage was done “dishonestly”.

42. Moreover, the applicant's home loan application for the Hurstville Grove Property was supported by a payroll advice, addressed to the applicant, purporting to be from T & F Group. The applicant maintained she has never worked for T & F Group. Nevertheless, the applicant admitted that she provided the name of that company to the broker but suggested that it was the broker who forged the document.

43. Over and above the false information relating to the ANZ loans, the applicant also admitted, during the course of the examination, to the making of numerous false declarations in an application she signed and provided to the NAB to refinance the loan for the Hurstville Grove Property in November 2015.

44. In that NAB documentation, the applicant falsely declared that: she was working full-time as a marketing manager in China; she had worked full-time as a manager at a company called Bob Power Tech Pty Ltd; her home address was in China; she owned a Toyota Camry worth $24,000; and her gross monthly income was HK$51,369.83. None of the foregoing declarations were true.

45. Despite her signature on the document, the applicant says she never saw the document. The company at which she declared she was working was a company owned by her father.

46. Further again, there were similar false declarations made in relation to a Westpac loan offer signed by her and dated 14 June 2013. That loan related to the Pemulwuy property and contained similarly false declarations for the purpose of obtaining that loan.

47. Part of the evidence on the examination of the applicant related to a Residential Tenancy Agreement, which is in evidence adduced by the plaintiff, in which the applicant admitted that it was she, who provided the false information to the broker to include in the Residential Tenancy Agreement.

48. Generally, the applicant's evidence during the course of the examination was unsatisfactory. Overall, the applicant ought not to be believed.

49. Further, only three months after affirming the third Wu Affidavit in which she purportedly particularised her assets over $5,000 and confirmed that she had no other property, on 12 December 2016, she, on oath, revealed that she had further interest in property being: a 10% share in real property located at 48 Burwood Road, Burwood worth approximately $500,000 and purchased in 2015; an interest in property at 37 Delhi Road, North Ryde worth approximately $590,000; and funds standing to the credit of a China Agricultural Bank account of about $15,000.

50. The applicant then asserted that she had, in fact, told her solicitor about the North Ryde property, but nevertheless signed the Affidavit and swore to its truth, without mentioning that (and other) property and she does not know why she did that.

51. Over and above all of the foregoing, the evidence of the applicant on examination was, to say the least, obfuscatory. According to her tax returns, it would be impossible to have purchased the properties that stand to her credit. The proposition that an unidentified older female to whom she shows respect has provided $85,000 via Ms Li and Mr Zhang is fanciful.

52. If it were necessary so to do, I would draw the inference, on the balance of probabilities, that the applicant was an agent of, or a party to, the purchase of real property by Ms Li and Mr Zhang, using the proceeds of crime derived from their serious criminal activity. It is unnecessary to come to that finding.

53. It is sufficient for present purposes to conclude that it is beyond doubt, or any reasonable doubt, that the applicant made false declarations and obtained a loan or loans fraudulently. As a consequence, the loans and amounts she received from the ANZ and NAB were the proceeds of her unlawful activity; the proceeds of crime and an instrument of serious crime.

54. In coming to those findings, it is unnecessary to utilise any Jones v Dunkel, supra, inference. The inferences otherwise available, and the direct evidence, are irrefragable.

55. As earlier stated, it is for the applicant to satisfy the Court. The applicant bears the onus of establishing that there are “no grounds” on which the restraining order could have been or can be made. The Court has not been satisfied, even on the lower standard of proof.

56. Further, the Court does not consider it is in the public interest to revoke the restraining orders. In my view, the restraining orders were properly made and are appropriate.

57. The revocation of the restraining order is not a means by which one can circumvent the limitations on the exclusion of property from a restraining order: MA v Commissioner of the Australian Federal Police [2016] VSC 553 at [12]; Lee v Director of Public Prosecutions (NSW) (2009) 75 NSWLR 581

58. The Court is satisfied that the property held by the applicant is, at least in part, the proceeds of criminal activity and no exclusion or revocation order should be made. For the foregoing reasons, the Court makes the following orders:

1. Motion dismissed;

2. The applicant on the motion shall pay the plaintiff's costs of and incidental to the proceedings.

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Decision last updated: 19 July 2018