Director of Public Prosecutions for the State of South Australia v Ilich - [2023] SADC 14

District Court of South Australia
(Civil: Application)
DIRECTOR OF PUBLIC PROSECUTIONS FOR THE STATE OF SOUTH AUSTRALIA v ILICH
[2023] SADC 14
Judgment of his Honour Judge Stretton
13 February 2023
CRIMINAL LAW - PROCEDURE - CONFISCATION OF PROCEEDS OF CRIME AND RELATED MATTERS
Application for permission to apply for the exclusion of property from a forfeiture order previously made in criminal proceedings to which the applicant was not a party. The applicant called evidence establishing that the property belonged to her, was not the proceeds of crime or involved in the offending to which the original criminal proceedings related.
HELD: Application granted. Exclusion order made.
Criminal Assets Confiscation Act 2005 (SA) s 59, s 60; Magistrates Court Act 1991 (SA) s 19, referred to.

DIRECTOR OF PUBLIC PROSECUTIONS FOR THE STATE OF SOUTH AUSTRALIA v ILICH
[2023] SADC 14
Civil Jurisdiction

This is an application by Karla Nicholas pursuant to the Criminal Assets Confiscation Act 2005. Ms Nicholas seeks an order excluding certain property from forfeiture.
Background
On 23 December 2020, in the criminal jurisdiction of this court, Alexander Michael Ilich was convicted and sentenced for trafficking a large commercial quantity of methamphetamine, aggravated possession of firearms with a firearms prohibition order in force, and money laundering. That conduct was part of a criminal enterprise conducted by Mr Ilich, committed against a backdrop of a long history of criminal offending. Mr Ilich was sentenced to 12 years imprisonment. The police case against Mr Ilich included significant amounts of cash that was seized from him on 21 March 2019, 31 May 2019, and 30 August 2019, alleged to reflect the proceeds of Mr Ilich’s ongoing criminal conduct.
$11,655 seized on 31 May is the subject of the current application.
In the course of submissions in 2020, whilst a submission was made that Mr Ilich was simply holding the money for others, no evidence was called in support of that proposition. Following submissions, the court held at that time that the overwhelming inference was that the monies variously seized from Mr Ilich’s premises were the proceeds of drug trafficking. A forfeiture order was made.
The DPP had previously made an application for forfeiture of property in the Magistrates Court. Subsequent to Mr Ilich’s conviction, sentencing and the forfeiture of his property, the applicant, Karla Nicholas, lodged an application in that matter for the release of the $11,655 in cash on the grounds that it was in fact her property.[1] Ms Nicholas filed an affidavit in support of her application. She deposed that the $11,655 was taken directly from her when she was arrested adjacent to the accused’s premises on 31 May 2019. She said that the money was receipted by police in her name. She said it was part of the proceeds of a $25,000 house sale which she could evidence by way of bank statements. She said that she had been storing the cash in Mr Ilich’s safe with her credit card and other personal items.
[1] Application dated 15 February 2021.
The matter came before the Magistrates Court on 8 April 2021. The Magistrate informed Ms Nicholas that to seek return of the funds she would need to make an application pursuant to s 60 of the Criminal Assets Confiscation Act and provide sufficient evidence to establish that the property was hers. The DPP took the stance that as the initial forfeiture order had been made in the District Court, it would be appropriate for the matter to be referred to the District Court.[2]
[2] Written submissions of the DPP dated 23 July 2021.
On 3 August 2021 Ms Nicholas’ application was transferred by consent to the District Court pursuant to s 19(2) Magistrates Court Act 1991. The matter was then administratively listed before me as the original judge in Mr Ilich’s case.
Procedural Note
As Ms Nicholas was unrepresented, the court has endeavoured as best it can to explain to Ms Nicholas her rights, the relevant procedures, and the applicable legal criteria.
The court enquired of Ms Nicholas and counsel whether there was any objection to my hearing the matter given I was the original sentencing judge and had made the earlier findings that the money was the proceeds of Mr Ilich’s drug trafficking. The court offered to transfer the matter to another judicial officer should anyone wish it. Both the DPP and Ms Nicholas indicated a preference that I deal with the matter.
The findings in Mr Ilich’s matter are not binding
Those earlier findings do not bind this court on the current application, for the following reasons. Firstly, Ms Nicholas was not a party to the criminal proceedings conducted by the DPP against Mr Ilich, nor did she have any opportunity to speak, intervene or be heard at the time the relevant issue was being discussed and considered. Those proceedings were primarily for the purposes of Mr Ilich’s sentencing. Secondly, s 60 of the Criminal Assets Confiscation Act envisages that an application can be made to exclude property that has already been the subject of a confiscation order.
Application for permission to apply for exclusion
Section 60 of the Criminal Assets Confiscation Act provides that a person cannot, except with the permission of the court, apply for an exclusion order after a forfeiture order specifying the person’s property has been made if the person appeared at the hearing of that application or was given notice of the application for the forfeiture order but did not appear at the hearing of that application, or if six months have elapsed since the forfeiture order was made.
Ms Nicholas’ application was made on 18 February 2021, well within the six-month time limitation set out in s 60(2)(b).
Further, having regard to the transcript of proceedings during Mr Ilich’s sentencing and the sentencing remarks delivered on 23 December 2020, there is no indication that Ms Nicholas appeared at the hearing of the application. Nor was she ostensibly or formally given notice of the application for the forfeiture order such that she had an opportunity to oppose it.
Accordingly, the court has a discretion to grant permission to Ms Nicholas to make her application.
Section 60(3) of the Criminal Assets Confiscation Act provides that if the person appeared at the hearing of the application or if they had notice of the application and had good reason for not appearing, or that in the event that more than six months have elapsed, various criteria must be satisfied for permission to be granted. None of those sub-sections apply to Ms Nicholas given that six months had not elapsed at the time of her application, and she was neither given notice of nor did she formally appear at the hearing of the application.
Accordingly, the only criteria that Ms Nicholas must satisfy for a grant of permission is per s 60(3)(d) that there are ‘special grounds’ for giving the permission.
Ms Nicholas gave a detailed explanation to the court on 30 March 2022. She repeated that the money was seized from her by police and receipted in her name. She said she was therefore under the impression that when the criminal proceedings against Mr Ilich were over it would be returned to her.
Ms Nicholas said that while she was present in court during some of the appearances by Mr Ilich and during his sentencing, she did not fully appreciate what was happening concerning her money. Ms Nicholas said she asked Mr Ilich’s lawyer, Mr Patsouris, about it but that he would not really give her any information. She said that she was excluded from any of the advice being provided by Mr Patsouris to Mr Ilich. She said she was trying to tell Mr Patsouris that some of the money was hers, but he ignored her. In fairness, Mr Patsouris had no duty to advise Mr Nicholas or tell her anything. She was not his client.
Ms Nicholas said she was not really aware of the court’s processes nor if she was able to interrupt. Ms Nicholas said that at the time she was distressed due to her relationship with Mr Ilich and had mental health issues which affected her ability to understand what was occurring. She said she did not really become aware at the time that she could potentially interrupt proceedings and raise the matter.[3]
[3] 30 March 2022 T16 et seq.
Ms Nicholas then gave evidence on oath concerning those matters. The court accepts her evidence on that issue.
In the court’s view, where a party is not given notice of an application for forfeiture and the circumstances are such that they do not fully appreciate that in a collateral proceeding of which they are aware, in this case the criminal prosecution of Mr Ilich, it is proposed to forfeit their property, and upon that realisation take all reasonable steps to make application for the exclusion of that property from the forfeiture order, ‘special grounds’ for granting permission to apply for an exclusion order are made out.
The court accepts on the balance of probabilities that is the situation here. Accordingly, permission is granted for Ms Nicholas to proceed with her application for an exclusion order.
The Law
A court must make an order excluding property from forfeiture if an application is made in accordance with s 60 of the Criminal Assets Confiscation Act, and the court is satisfied that the applicant was not involved in the commission of a serious offence to which the forfeiture order relates, and the property is neither the proceeds of nor an instrument of the offence.[4]
[4] Section 59(1)(c).
The Evidence
Ms Nicholas gave evidence that she met Mr Ilich 22 years ago when she was 16. Unfortunately, Mr Ilich would ultimately spend a significant proportion of his time in custody. When she was 26 they had twins. Unfortunately, shortly after they were born Mr Ilich was imprisoned for 6 years. By the time he was subsequently released Ms Nicholas was in a relationship with a Mr Piscioneri. In the course of that relationship Ms Nicholas and Mr Piscioneri bought a house together in Helen Terrace Valley View. The purchase price was $340,000. Ms Nicholas provided the purchasers’ settlement statement and title documents.[5]
[5] Exhibit P1.
Stresses arose in the relationship with Mr Piscioneri and they separated in November 2018. Ms Nicholas gave evidence that she and Mr Piscioneri agreed to go halves in the equity of the house.[6]
[6] T36.
Ms Nicholas gave evidence that the house had been purchased for $340,000 and with the renovations they had carried out was worth approximately $390,000 as at the time of the separation. Ultimately, after the outstanding loan was taken into account, there was $50,000 in equity. Accordingly, they agreed her share was $25,000.[7] So, on payment to her of that sum, Ms Nicholas transferred her share of the house to Mr Piscioneri on 28 February 2019.[8] A copy of Ms Nicholas’ ANZ bank statement was tendered, indicating that $25,000 was deposited on 28 February 2019.[9]
[7]    T37.
[8]    T38.
[9]    Exhibit P2.
Ms Nicholas then gave evidence that she withdrew the money. She said:
Q.    You got the $25,000 on 28 February 2019. Is that what you're saying.
A.    Yes.
Q.    Then what did you do with the money.
A.I withdrew a lot of it. My bank account was - my house was broken into, my accounts were compromised by a hacker, I think you would call them. They were getting into my bank account. I kept having to get new bank cards. My mail was being stopped. There was a lot of harassment going on. I was taking it out. Alex was holding it for me. I would keep it in the safe where my credit card was. I was also very stressed and erratical at the time, so I was spending a lot on my credit card unnecessarily. So with him having it, I suppose it was safe from the shopping and all of that.[10]
[10] T43-44.
With reference to the bank statement, Ms Nicholas gave evidence that between 28 February 2019 and 25 March 2019 she paid nearly all of the $25,000 out to two credit card accounts and a further separate account. Then on 25 March 2019 $12,000 came back into the account, and $10,000 was withdrawn again on that same day. Then follows a number of cash deposits and withdrawals of between $300 and $900.[11] Ms Nicholas explained that some of these transactions would reflect assistance from her family, but she could not explain why, for example on 5 April 2019 $500 cash was deposited, then later that same day $600 cash was withdrawn.[12] In relation to a deposit into her account on 23 April 2019 of $10,019.86, Ms Nicholas said these were savings she had in a separate online account, in the context of being helped by her mother and her brother.[13]
[11] T46.
[12] T47.
[13] T47.
Ms Nicholas also identified a payment of $1,000 to her Citibank Credit card and a $5,000 cash withdrawal back on 23 April 2019.
Ms Nicholas gave evidence that when she withdrew the $10,000, she did it to keep the money in cash. She said:
Q.When you got that $10,000 out, what did you do with it.
A.I had it in cash, I mean I suppose that Italian side came out in me, I wanted it physically in cash so I could not be hacked and not be - yeah, I kept it on me and then when my house got broken into, I didn't feel safe there either, so I kept it in a safe that Alex had with my credit card.
Q.Let's take it step by step: at the stage when you took the $10,000 out in cash in - was that March 2019.
A.I believe it was March or April, yeah, around that time.
Q.Where were you living.
A.At Campbelltown in my own home, a rental.
Q.Because you'd moved out from Robbie at that stage.
A.I moved out from Robbie and had to find a place for me and my sons, yes.
Q.What was the address there that you were at.
A.Gorge Road, Campbelltown, unit 6 - sorry, I'm having a mental blank - it was unit [number given] I want to say, Gorge Road, Campbelltown.
Q.Who was living there.
A.Just me and my sons.
Q.That's the two twins.
A.Yeah.
Q.And so what did you physically do with it when you got home with it.
A.I put it in my room, I had it with me.
Q.So did you carry it with you or did you put it under the bed, or what did you do.
A.Yeah, in my couch, in the side of my couch in my room.
Q.So you would keep it there.
A.Yeah.
Q.How long was it there before you did anything else with it.
A.Less than a month, less than four weeks.
Q.Over that time you said you had some problems, what were they.
A.There were a lot of problems, yeah, my family, there were a lot of factors that come into it. I suppose I was depressed, really badly depressed, I didn't know what I wanted anymore, I didn't know if leaving Robbie was the right decision. I wasn't myself, I lost my job at Solid Gold Diamonds, there's a back story behind that; when I was 14 I was raped and sold by a Muslim man called [name given]. He, yeah, basically sold me to a lot of older men, this is the situation that I suppose Alex saved me from.
Q.I am very sorry to hear that.
A.That's okay. I saw him on a lunchbreak at Solid Gold Diamonds.
Q.The man you mean who did this.
A.Yeah, [name given]; I hadn't seen him in so long and I think that just - I spiralled, my mental health got worse. There was also domestic violence between Alex and I with the fights we had, also my family they didn't understand, I kept it very hush about what happened to me as a child until I spoke to Laurie about it when I was about 30; Robbie was actually the first person I ever told, Robbie being a friend, I told him what happened.
Q.It is the lunch hour now which is 1 o'clock, so it might be a good time to have a break anyway, I just notice you are getting a little bit upset.[14]
…..
Q.I think I had asked you to explain how the cash went out and then back in to your account before you then took it out again, and I think you were in the course of doing that. So just explain why you took all the money out in those two or three transactions, and then not long afterwards you put the money back in.
A.Yeah, it was I suppose just a paranoia that someone was going to get it when they were infiltrating my bank accounts and my passwords and everything. So, yeah, I sort of lost faith in everyone around me and didn't trust a lot of people and I just got worried I suppose.
Q.What was it that was happening to you at that time. You mentioned -
A.A lot of people were trying to discredit me I think.
Q.But why.
A.There's a lot of reasons behind that; jealousy was with one girl; she, I suppose, wanted my life and was jealous; then there was my family who were trying to sort of control aspects of my life; there was also legal issues at that present time because the crime gang taskforce were after Alex and they were putting a lot of pressure on me. Then like I've got into [name given]. I did decide to press charges and write a statement about [name given] and what happened to me as a child.
Q.So what happened with that.
A.It got closed without my choosing; the police officers just closed it, the CIB officers.[15]
[14] T48-50.
[15] T51.
Ms Nicholas said that she kept the sum of around $10,000 in her house, using some, then replacing some, until a point where she decided to put the cash and her credit cards in the safe at Mr Ilich’s house. Ms Nicholas said she did so to control her credit card use and also because it was safer to keep the cash and credit cards there.[16] She said she made the decision to store her money with Mr Ilich approximately a month prior to the events whereby it was seized by police. She also stored jewellery and some paperwork in the safe.
[16] T53.
Ms Nicholas explained what can only be described as the chaotic nature of many aspects of her life at that time.[17]
[17] T53-55.
Ms Nicholas gave evidence that at about 10 pm on the day in question she and Mr Ilich were in a city nightclub. Ms Nicholas said:
Q.How did the argument arise.
A.I just wanted my card and my money - I wanted money and he wouldn't give me any so I said 'I'll go and get mine, and I want my credit card as well' and he was sort of like me taking control back I think and just being 'I'm not under your control any more'. Not having a job it was hard for me because I'd always worked, with Alex, the whole time, I'd had a job since I was 15 and for him to have that financial control over me and my money it was overwhelming and I was like 'No, I'll take it'.
Q.When you said that to him in the nightclub what did he say.
A.He ignored me.
Q.Did he say anything back.
A.He just laughed and I got angry and I just left.
Q.Did you have a key to his house.
A.Yes.
Q.Did you tell him you were going to get the money.
A.Yes.
Q.And he didn't say anything to that.
A.No, laughed, and I left.
Q.And then you drove to his place.
A.Yes.
Q.About what time did you get there.
A.Would have been about closer to midnight.
Q.What did you do.
A.I went upstairs and I grabbed the safe and I didn't have the code.[18]
[18] T57-58.
Ms Nicholas gave evidence that because she did not have the code, she took the safe out into the carpark, smashed it on the ground until she could pry it open and retrieve her credit cards, cash and property. Ms Nicholas conceded she also smashed some of Mr Ilich’s property that was in the safe. She also saw some knives in the safe. At that point she was unsure what to do, so she decided to sit on top of Mr Ilich’s parked car to await his return. The police then arrived, arrested her and seized the knives and the cash. She protested to the police that it was her own money and conceded that she may have been somewhat unco-operative and abusive towards the police. She was placed in a padded cell.[19]
[19] T56-62.

Ms Nicholas tendered a letter from her treating psychologist Ms Field attesting to her mental health issues, including Post Traumatic Stress Disorder, ADHD and depression.[20]
[20] Exhibit P4, T63.
Ms Nicholas tendered a bundle of documents evidencing the transfer of her share of the property to Mr Piscioneri and the discharge of the joint mortgage in early 2019.[21]
[21] Exhibit P5.
Ms Nicholas was then cross-examined extensively.
Ms Nicholas agreed that the bundle of police photographs put to her in cross-examination accurately depicted the situation she was in when police attended late on the evening of 31 May 2019.[22] Ms Nicholas conceded that she would have had various illicit drugs in her system at that time.[23] Ms Nicholas was closely questioned about her accounts, and in particular the movement of monies in and out of her primary account after the deposit of her $25,000 settlement on 28 February 2019.[24] At times, Ms Nicholas had difficulty explaining where deposits back into her account had come from, for example $10,019 in 23 April 2019.[25]
[22] Exhibit A1, T75-84.
[23] T91.
[24] T112-124.
[25] T121.
Ms Nicholas was taken over the events of 31 May in some detail, and her evidence as to the circumstances under which she put her cash and property into Mr Ilich’s safe.[26] Her answers were broadly consistent with her evidence in chief.
[26] T149-153.
Ms Nicholas was cross-examined about her knowledge of, and any participation in, Mr Ilich’s 2020 sentencing process whereby the cash she is now claiming was initially forfeited. Ms Nicholas repeated that when the police took her cash on arrest, she was given a receipt, and so expected it to be returned to her, but it wasn’t.[27] She repeated her evidence in chief as to her knowledge of, and contact, with Mr Ilich’s sentencing process. [28]
[27] T155-156.
[28] T155-158.
After an adjournment to allow Ms Nicholas to locate further documents evidencing the transfer of the Valley View address and evidencing the settlement of her and Mr Piscioneri’s domestic arrangements by his payment to her of $25,000 in exchange for her transfer to him of her title to the address, these documents were tendered.[29]
[29] Exhibit P8.
Ms Nicholas called Mr Piscioneri to give evidence. He corroborated Ms Nicholas’ evidence about their relationship, how it came to an end, and the ultimate settlement whereby he paid Ms Nicholas in exchange for her transferring her share of their house to him. He also corroborated Ms Nicholas’ evidence as to the chaotic nature of her life.[30]
[30] T130-143.
Upon receipt and consideration of the further documentation provided by Ms Nicholas, the DPP conceded it was ‘open on the evidence … to find that the transfer on 28 February 2019 was legitimate’.[31]
[31] T164.
Ms Nicholas closed her case.
The DPP opened their case. Their position was that Ms Nicholas had not proven her case that the $11,655 seized from her on 31 May 2019 was her own money.[32]
[32] T177.
The DPP tendered the transcript of Mr Ilich’s original sentencing proceedings together with the sentencing remarks.[33] Mr Watson conceded that Mr Ilich had taken the position at the time that the $11,655 was not his money but was being held in his safe for someone else, but ultimately declined to give evidence on oath.[34] The DPP tendered the original prosecution statements from Mr Ilich’s matter.[35]
[33] Exhibit A2.
[34] T179-180.
[35] Exhibits A3 and A4.
Consideration
The court has been assisted by detailed written and oral submissions from the DPP and Ms Nicholas. They have all been read, heard and carefully considered. For the sake of brevity, I will not set them all out, but they have all been taken into account.
Ms Nicholas’ position can be simply put. She submitted the money was hers, and that she had done all she could to prove that it was hers. She submitted she had provided all the available paperwork to evidence her financial settlement with Mr Pisconieri, the consequent deposit of $25,000 into her account, then all her accounts from that time through to when the $11,655 was seized from her by police.
The DPP’s position was to concede that there was evidence to support Ms Nicholas’ assertion that the $25,000 that initially went into her account was not the proceeds of unlawful activity, but submit that there were issues undermining Ms Nicholas’ credibility such that the court should not ultimately accept that the cash seized was lawfully obtained.
The court has carefully examined Ms Nicholas’ evidence, the tendered accounts, and the totality of the evidence.
Ms Nicholas’ evidence was consistent with the evidence of the police who attended her on the evening in question. She was located sitting on top of a parked car, safe broken open, in possession of the cash, her credit card and with other property of Mr Ilich’s strewn about the place.
Ms Nicholas could not recall the purpose or reason for all of the withdrawals, deposits and transfers of money in her accounts over the period 28 February 2019 to 31 May 2019. The court has closely scrutinised her evidence. It is clear that there were elements of trauma and chaos in her life at that time; indeed trauma and chaos characterise exactly the events witnessed by police on 31 May 2019. Further, three years have passed between the events in question and the point at which Ms Nicholas gave evidence.
Ms Nicholas gave evidence in a clear, frank and very forthright way. She admitted aspects of her history and life which did not necessarily paint herself in the best light but which had the ring of truth. Her evidence was consistent over an extended period in the witness box.
At the end of the day, the court accepts Ms Nicholas’ evidence on the balance of probabilities that the $11,655 seized from her on 31 May 2019 was her property, that it was not unlawfully obtained, and that it was not the proceeds of any criminal activity. Further, the court accepts her evidence on the balance of probabilities that she was not involved in Mr Ilich’s relevant offending.
Conclusions
The $11,655 seized from Ms Nicholas on 31 May 2019 was neither proceeds of crime or the instrument of any offending.
Ms Nicholas was not involved in the commission of any offence to which the forfeiture order related.
Orders
The application by Ms Nicholas is granted.
The $11,655 seized from Ms Nicholas on 31 May 2019 is excluded from the forfeiture order, and must be returned to her.