Corruption and Crime Commission v Abdul-Aziz
[2022] WASC 106
•5 APRIL 2022
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: CORRUPTION AND CRIME COMMISSION -v- ABDUL-AZIZ [2022] WASC 106
CORAM: CURTHOYS J
HEARD: 26 MAY 2021
DELIVERED : 31 MARCH 2022
PUBLISHED : 5 APRIL 2022
FILE NO/S: CIV 2190 of 2020
BETWEEN: CORRUPTION AND CRIME COMMISSION
Applicant
AND
MUJTABA IBN ABDUL-AZIZ
First Respondent
LNK HOLDINGS PTY LTD
Second Respondent
TPT HOLDINGS PTY LTD
Third Respondent
MACLMA PTY LTD
Fourth Respondent
Catchwords:
Criminal property confiscation - Freezing order made ex parte against first and second respondents - Application to set aside freezing order on basis of defective affidavit
Legislation:
Criminal Property Confiscation Act 2000 (WA), s 43(1)(c)
Rules of the Supreme Court 1971 (WA), O 58 r 23
Result:
Application dismissed
Category: B
Representation:
Counsel:
| Applicant | : | S Mullins & J Jupp |
| First Respondent | : | E Greaves |
| Second Respondent | : | E Greaves |
| Third Respondent | : | Not Applicable |
| Fourth Respondent | : | Not Applicable |
Solicitors:
| Applicant | : | Corruption and Crime Commission of Western Australia |
| First Respondent | : | Kingdom Legal |
| Second Respondent | : | Kingdom Legal |
| Third Respondent | : | Holborn Lenhoff Massey |
| Fourth Respondent | : | In Person |
Cases referred to in decisions:
Bennett & Co (a firm) v Director of Public Prosecutions (WA) [2005] WASCA 141; 31 WAR 212
Director of Public Prosecutions (WA) v Yeo [2012] WASC 440
Erpen v IG Markets Ltd [2016] WASC 35
Mansfield v Director of Public Prosecutions (WA) [2006] HCA 38; (2006) 226 CLR 486
CURTHOYS J:
Introduction
On 1 December 2020, the Corruption and Crime Commission (CCC) filed an application by ex parte motion for a freezing order under s 43(1) of the Criminal Property Confiscation Act 2000 (WA) (CPC Act) against the first and second respondents (the respondents).
The application for a freezing order was supported by an affidavit sworn by an officer of the CCC on 1 December 2020 (CCC Affidavit) and a written outline of submissions.
The ground for the application was that the CCC had made examination orders in relation to property under s 58(1) of the CPC Act to advance its investigation into whether one or more of the respondents or associated persons have unexplained wealth or criminal benefits, or both.
On 3 December 2020, the court made a freezing order against the respondents as sought by the CCC.
This is an application by the respondents to set aside the freezing order under O 58 r 23 of the Rules of the Supreme Court 1971 (WA) (Rules).
The basis of the respondents' application to set aside the freezing order is that the CCC Affidavit filed in support of the freezing order 'contained voluminous inadmissible (unsourced) hearsay' and 'objectionable conclusions, irrelevant material and vague statements that are embarrassing'.[1]
[1] Submissions in support of application by first and second respondents to set freezing order aside pursuant to RSC O 58 r 23 dated 4 May 2021 [8] (Respondents' Submissions).
Legal principles
The court's discretion to set aside ex parte freezing order
The court has the power under O 58 r 23 of the Rules to set aside a freezing order made under the CPC Act on an ex parte basis.[2] The approach to be taken in an application to set aside an ex parte order was set out by Master Sanderson in Erpen v IG Markets Ltd:[3]
The traditional view has been to set aside an ex parte order a party must either adduce additional material evidence or establish there was material non-disclosure by the party who obtained the order. This is the effect of the Full Court’s decision in Bell Group NV (in liq) v Aspinall (1998) 19 WAR 561. Recently that approach has been questioned. In Popovic v Panagoulias [2014] WASCA 86 it was suggested a broader review of the issues de novo was required to reflect the fact that ex parte orders are made in denial of basic procedural fairness. At present it seems to be an open question which of these two approaches is proper.
[2] Bennett & Co (a firm) v Director of Public Prosecutions(WA) [2005] WASCA 141; 31 WAR 212 [62] ‑ [64].
[3] Erpen v IG Markets Ltd [2016] WASC 35 [8].
I have not only considered whether there was material non‑ disclosure by the CCC and whether the respondents have adduced additional material but also reviewed the matter afresh to determine whether the freezing order should have been made.
The CPC Act
Section 11(1) of the CPC Act relevantly provides that the CCC may apply to the court for an unexplained wealth declaration against a person. This application may be made in conjunction with an application for a freezing order, in proceedings for the hearing of an objection to confiscation, or at any other time.[4]
[4] Criminal Property Confiscation Act 2000 (WA) s 11(2) (CPC Act).
Section 12 of the CPC Act relevantly provides:
(1)On hearing an application under section 11(1), the court must declare that the respondent has unexplained wealth if it is more likely than not that the total value of the respondent's wealth is greater than the value of the respondent's lawfully acquired wealth.
(2)Any property, service, advantage or benefit that is a constituent of the respondent's wealth is presumed not to have been lawfully acquired unless the respondent establishes the contrary.
(3)Without limiting the matters to which the court may have regard, for the purpose of deciding whether the respondent has unexplained wealth, the court may have regard to the amount of the respondent's income and expenditure at any time or at all times.
(4)When making a declaration, the court is to -
(a)assess the value of the respondent's unexplained wealth in accordance with section 13; and
(b)specify the assessed value of the unexplained wealth in the declaration.
(5)The court may make any necessary or convenient ancillary orders.
Section 41 of the CPC Act provides that the CCC may apply to the court ex parte for a freezing order for property.
The court's power to make a freezing order is provided for in s 43 of the CPC Act. Section 43 provides for several bases to invoke the power to make a freezing order:
(1)The court may make a freezing order for property if ‑
(a)an examination order, a monitoring order or a suspension order obtained by the applicant for the freezing order is in force in relation to the property; or
(b)the applicant for the freezing order advises the court that the applicant has applied for an examination order, monitoring order or suspension order in relation to the property or is likely to apply for such an order within 21 days after the freezing order is made; or
(c)the CCC advises the court that the CCC has made an examination order in relation to the property, or is likely to make an examination order in relation to the property within 21 days after the freezing order is made.
(2)The court may make a freezing order under subsection (1) whether or not the person against whom the examination order, monitoring order or suspension order is made, or is to be sought, owns or effectively controls the property.
(3)The court may make a freezing order for all or any property that is owned or effectively controlled by the person or that the person has at any time given away if -
(a)a production order has been made against the person; or
(b)an application has been made against the person for an unexplained wealth declaration, criminal benefits declaration, crime‑used property substitution declaration or production order; or
(c)the applicant for the freezing order advises the court that such an application is likely to be made within 21 days after the freezing order is made.
(4)The court is not to refuse to make a freezing order for property under subsection (3) only because the value of the property exceeds, or could exceed, the amount that a person could be liable to pay under section 14, 20 or 24 if the declaration is made.
(5)The court may make a freezing order for all or any property that is owned or effectively controlled by a person, or that the person has at any time given away if -
(a)the person has been charged with an offence, or the DPP advises the court that a person is likely to be charged with an offence within 21 days after the day on which the freezing order is made; and
(b)the person could be declared to be a drug trafficker under section 32A(1) of the Misuse of Drugs Act 1981 if he or she is convicted of the offence.
(6)A freezing order may be made under subsection (3) or (5) for all property owned or effectively controlled by the person, whether or not any of the property is described or identified in the application.
(7)A freezing order may be made under subsection (3) or (5) for all property acquired after the order is made -
(a)by the person; or
(b)by another person at the request or direction of the first‑mentioned person.
(8)The court may make a freezing order for property if there are reasonable grounds for suspecting that the property is crime‑used or crime‑derived.
Section 58(1) provides for the power to make an examination order:
The court or the CCC may order a person to submit to an examination about any or all of the following -
(a)the nature, location and source of frozen property;
(b)the nature, location and source of property that is not frozen, but is suspected on reasonable grounds of being confiscable;
(c)the wealth, liabilities, income and expenditure of a person who has been convicted of a confiscation offence;
(d)the wealth, liabilities, income and expenditure of a person who is suspected on reasonable grounds of being involved or of having been involved in the commission of a confiscation offence;
(e)the wealth, liabilities, income and expenditure of a person who has, or is suspected on reasonable grounds of having, unexplained wealth;
(f)the wealth, liabilities, income and expenditure of a declared drug trafficker;
(g)the nature, location and source of any property-tracking documents.
Applications for freezing order
The section of the CPC Act that grounded the freezing order in this case is s 43(1)(c). It provides that the court has the power to make a freezing order over property if, amongst other things, the applicant advises the court that it has made an examination order under s 58(1) of the CPC Act.[5] The use of the term 'may' in s 43(1) in the context of the CPC Act suggests that the exercise of the power to make a freezing order is permissive not mandatory.[6]
[5] CPC Act s 41(1)(c).
[6] Mansfield v Director of Public Prosecutions (WA) [2006] HCA 38; (2006) 226 CLR 486 [24].
The making of an examination order by the CCC is what grounds the court's discretionary power to make a freezing order. The Court of Appeal has stated that:[7]
the jurisdiction conferred by [s 43(1)] is not one which must be exercised if the relevant pre-conditions are established (as suggested in respect of s 43(1) by Pullin JA in Mansfield v The Director of Public Prosecutions for Western Australia [2005] WASCA 79 at [66]), but rather, that there is a discretion. That view stems in part from the structure of the Act and in part from reasons of principle.
[7] Bennett & Co (a firm) v DPP [48].
However, the making of an examination order provides not only the jurisdiction to make a freezing order but a basis to make that order. The respondents' submissions appear to contend that once an examination order is made by the CCC and the existence of that order established to the court's satisfaction that the court is somehow required to find some other basis for the grant of a freezing order.
A freezing order under the CPC Act is an interim measure to preserve property pending a final order under other provisions of the CPC Act such as the power of the court to make an unexplained wealth declaration under s 12 of the CPC Act. The imposition of a freezing order ensures that a final order is not rendered nugatory by the respondent taking steps to remove the property from the reach of the CCC. Given the nature of an application for an unexplained wealth declaration under s 11 of the CPC Act, it is almost inevitable that the CCC will not be in a position to provide hard evidence as to the holding of unexplained wealth by a respondent. In this context it is important to note the reverse onus of proof under s 12(2) of the CPC Act which requires the respondent to establish that their wealth has been lawfully acquired.[8]
[8] Director of Public Prosecutions (WA) v Yeo [2012] WASC 440 [18].
In Director of Public Prosecutions (WA) v Yeo,[9] Kenneth Martin J stated:
The unexplained wealth declaration process is different in character to some of the other grounds for issuing a freezing order, such as property being identified as the direct proceeds of crime, or a criminal benefit, or under a crime-used property substitution declaration, or in some fashion that shows a direct nexus between a crime or criminal activity and property created or obtained as a result of criminal activity. It is effectively a security process by which the state, given the pendency of an application for an unexplained wealth declaration, may secure its position in the interim by obtaining freezing orders against real or personal property. Such property may have no connection whatsoever with a crime. The process is effectively a commercial outcome to sustain the viability of the process of seeking the unexplained wealth declaration: see Centurion Trust Company Ltd v Director of Public Prosecutions (WA) [2010] WASCA 133 [191(b)] (Buss JA). The end result, if the state is ultimately successful, may be that there is an order of the court requiring a defendant to pay to the state the amount of what has been declared to be unexplained wealth.
[9] Director of Public Prosecutions (WA) v Yeo [2012] WASC 440 [17].
The broad discretion conferred on the court by s 43 of the CPC Act suggests that the standard of proof required to justify the issue of a freezing order is low. Even the respondents concede that the court ought to require some but perhaps not a great deal of positive persuasion that a freezing order is appropriate.[10]
[10] Respondents' Submissions [7].
The evidence in support of the unexplained wealth allegation
In summary, the evidence against the respondents in support of the unexplained wealth allegation is as follows:
(1)the alleged unexplained wealth is $US588,960 (the Funds) standing to the credit of a Commonwealth Bank of Australia (CBA) foreign currency account;[11]
[11] Affidavit of CCC officer sworn 1 December 2020 [58] (CCC Affidavit).
(2)the Funds derive from a sale of shares (the Shares) by the second respondent and a particular company linked to the respondents (the Company), in May 2020, in two entities that operated a business and the land on which that business operated;[12]
[12] CCC Affidavit [58] ‑ [63].
(3)the sale of shares realised $AUD1,050,000 with $AUD900,000 remaining in the fourth respondent's account after a series of transactions;[13]
(4)the $AUD900,000 was converted to $US588,610;[14]
(5)the Shares were acquired by the second respondent and the Company in July 2017 for $AUD849,253.50;[15]
(6)the first respondent has not lodged a tax return since 2008;[16]
(7)the Company and the second respondent lodged tax returns in 2018 but there is no item referrable to interest charges. There is no item for liabilities or debt;[17]
(8)the source of the $AUD849,253.50 is not able to be explained from taxation records, or otherwise;
(9)the director and secretary of the second respondent is the first respondent;[18]
(10)the Company was deregistered on 17 September 2020. During its existence the second respondent was the director and secretary;[19]
(11)the third respondent was incorporated on 17 January 2019 and was the sole shareholder of the Company when it sold the Shares;[20] and
(12)the third respondent's sole shareholder is the first respondent’s sister. Prior to the incorporation of the third respondent, she was the sole shareholder of the Company.[21]
[13] CCC Affidavit [56a] ‑ [56g].
[14] CCC Affidavit [56f] ‑ [56g].
[15] CCC Affidavit [32], [41].
[16] CCC Affidavit [49].
[17] CCC Affidavit [50].
[18] CCC Affidavit [24].
[19] CCC Affidavit [24], [28].
[20] CCC Affidavit [25], [27].
[21] CCC Affidavit [26] - [27].
The nature of the CCC's application for freezing order
The respondents submitted that much of the CCC Affidavit in support of the making of a freezing order should be struck out as inadmissible. They assert that the 'thrust of the inadmissible material was to the effect that WA Police believe the first respondent's family are involved in drugs'.[22]
[22] Respondents' Submissions [9].
The factual basis for the CCC's application and the supporting paragraphs in the CCC Affidavit were set out in its submissions as relevantly summarised above.[23]
[23] CCC Affidavit [33] - [54].
A belief that the first respondent's family was involved in drugs was not the primary or sole basis of the CCC's application for a freezing order. That is obvious from the paragraphs that remain in the CCC Affidavit even if the paragraphs objected to by the respondents are struck out.
In its submissions in support of the freezing order application, the CCC stated that it is 'investigating whether one or more of the respondents or associated persons have unexplained wealth or criminal benefits, or both (emphasis added)'.[24]
[24] Applicant's outline of submissions dated 1 December 2020 [34].
The respondents submitted that the purported defects in the CCC Affidavit coupled with the CCC's submissions directly affected the outcome of the freezing order application.[25] They assert that on a proper analysis there was no admissible connection between either the property sought to be frozen or any of the respondents on the one hand and drugs on the other.[26]
[25] Respondents' Submissions [34].
[26] Respondents' Submissions [37].
It is not entirely clear what the respondents' submissions are intended to assert. As stated above, the application was not brought solely on the basis of a connection to drugs; rather the emphasis was on the unexplained wealth. No 'die had been cast' in granting the freezing order.
No submissions have been made by the respondents that the paragraphs relating to the unexplained wealth are insufficient to ground the freezing order.
CCC Affidavit
The paragraphs of the CCC Affidavit which the respondents object to as inadmissible are marked and appear as an attachment to the affidavit of Cathryn Peng Ling Ng sworn 6 May 2021.[27]
[27] Affidavit of Cathryn Peng Ling Ng sworn 6 May 2021, attachment CPN-1, 4 ‑ 16.
It is unnecessary to rule on the admissibility of the paragraphs which are objected to by the respondents. Even if the objections were allowed the remaining paragraphs provide ample grounds for a freezing order on the basis of unexplained wealth.
Conclusion
There is sufficient evidence to support a freezing order based on unexplained wealth. There is no basis for the freezing order to be discharged. It is appropriate therefore that the respondents' application be dismissed.
Accordingly, I make the following orders:
(1)The application is dismissed.
(2)The first and second respondents are to pay the CCC's costs of the application to be taxed if not agreed.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
SB
Associate to the Honourable Justice Curthoys
5 APRIL 2022
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