Director of Public Prosecutions v (Property) Aziz (Ruling)
[2020] VCC 241
•24 March 2020
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMON LAW DIVISION | Revised Not Restricted Suitable for Publication |
| CONFISCATION LIST |
Case No. CI-19-04710
IN THE MATTER of the Confiscation Act 1997
and
IN THE MATTER of property which a person authorised by or under an Act to prosecute the relevant type of offence suspects on reasonable grounds to be tainted property in relation to one or more Schedule 2 offences
and
IN THE MATTTER of an application by THE DIRECTOR OF PUBLIC PROSECUTIONS for a civil forfeiture order
BETWEEN:
| THE DIRECTOR OF PUBLIC PROSECUTIONS | Applicant |
| v | |
| PROPERTY (SAMEH AZIZ) | Respondent |
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JUDGE: | HIS HONOUR JUDGE MISSO | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 27 and 28 February 2020 | |
DATE OF RULING: | 24 March 2020 | |
CASE MAY BE CITED AS: | Director of Public Prosecutions v (Property) Aziz (Ruling) | |
MEDIUM NEUTRAL CITATION: | [2020] VCC 241 | |
RULING
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Subject: CONFISCATION OF PROPERTY
Catchwords: Application for an exclusion order – application made out of time – whether time ought to be extended
Legislation Cited: Confiscation Act 1997 (Vic); Limitation of Actions Act 1958; Supreme Court (General Civil Procedure) Rules 2015
Cases Cited:Matthews v SPI Electricity Pty Ltd (No 6) [2013] VSC 422; Scanlon v American Cigarette Co (Overseas) Pty Ltd (No 1) [1987] VR 261; Yunghanns v Elfic Pty Ltd (No 2) (2000) 1 VR 92; Friends ofHinchinbrook Society Inc v Minister for Environment (No 1) (1996) 69 FCR 1; Cargill Australia Ltd v Viterra Malt Pty Ltd (No 17) [2018] VSC 750; Finn v Director of Public Prosecutions (DPP) (Vic) [2011] VSC 234; Gallo v Dawson (1990) 93 ALR 479; Luxmore Pty Ltd v Hydedale Pty Ltd (2008) 20 VR 481
Judgment: Time to be extended for the applicant to bring an exclusion application.
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Ms R Burton | Solicitor for the Office of Public Prosecutions |
| For the Respondent | Ms S Rubenstein | Moray & Agnew |
HIS HONOUR:
Introduction
1 The Director of Public Prosecutions (“the Director”) obtained a civil forfeiture restraining order pursuant to s36K (“the order”) of the Confiscation Act 1997 (“the Act”) on 8 October 2019 against Mr Sameh Aziz (“Aziz”). The order was personally served on Aziz on 9 October 2019.
2 The order restrained the residential property at 5 Barak Avenue, Berwick (“the Berwick property”), and a Bluestone mortgage loan account secured by the Berwick property (“the Bluestone account”).
3 Aziz was the owner of the Berwick property. He has a direct interest in the Bluestone account.
4 The application for the order was supported by an affidavit of Mr Darren Prickett (“Prickett”) of the Independent Broad-based Anti-corruption Commission (“IBAC”) sworn 7 October 2019 (“the Prickett affidavit”).
5 The application pleaded that a suspicion was held on reasonable grounds that the Berwick property and the Bluestone account are “tainted property”. The specific grounds pleaded in the application are that Aziz has engaged in Schedule 2 offences, namely, misconduct in public office, bribery of a public official and dealing with proceeds of crime.
6 Subsequent to the making of the order, the Berwick property has been sold. The net proceeds of sale amount to $300,000. A further order was made on 21 October 2019 that the net proceeds be held by the office of the asset confiscations operation.
The exclusion application
7 Aziz filed an application for exclusion from the order (“the exclusion application”) pursuant to s36U on 15 January 2020. The application is out of time. Subsection (2) contemplates that in one of the two circumstances referred to, that an exclusion application must be made within 30 days. In this case, to be within time, the exclusion application should have been made by 8 November 2019.
8 The exclusion application included a pleading that the Court extend the period within which the exclusion application may be made. The basis for extending time is if it is in the interests of justice to do so.
9 The exclusion application is supported by an affidavit of Mr Jeremy Majella Peck, solicitor (“Peck”), engaged by Aziz sworn 14 January 2020 (“the Peck affidavit”). Aziz did not swear an affidavit. The factual basis relied upon by Aziz in support of the application for extension of time is to be found in the Peck affidavit.
The case for forfeiture
10 The Prickett affidavit describes a complex series of relationships and financial transactions which are the foundation of the allegations made by the Director which the Director relied upon to obtain the order. I propose to provide a short summary of the facts to provide an adequate context within which the response of Aziz is to be understood.
11 Aziz was elected to the Council of the City of Casey in about 2008. He held the office of Mayor from 2011-2012, 2015-2016 and 2016-2017.
12 John Woodman (“Woodman”) is a property developer who is alleged to have paid secret commissions to councillors of the City of Casey, including Aziz. The purpose of the payments of the secret commissions was to influence those councillors to vote in favour of planning applications made for the benefit of Woodman. The favourable outcome of those planning applications is alleged to have benefited Woodman financially.
13 Prickett is a principal investigator with IBAC. He conducted an investigation into Woodman, corporate entities associated with him, other persons associated with Woodman who assisted him in influencing councillors of the City of Casey, councillors who are alleged to have been paid secret commissions by Woodman, and Aziz. Part of the investigation conducted by Prickett included information which he obtained from Mr Christopher Chow, who is a senior financial investigator with IBAC (“Chow”). Chow conducted a forensic accounting analysis which Prickett considered as part of his investigation, and which is exhibited to the Prickett affidavit.[1]
[1]Exhibit "DP-1" to the affidavit of Darren Prickcett sworn 18 February 2020
14 The specific allegations relevant to this application contained in the Prickett affidavit are that at least $860,000 was paid to Aziz by Woodman as secret commissions. Those payments are alleged to have been made as follows:
·Payments made between March and May 2018 into accounts in the name of Aziz’s wife, mother, vehicle financer and/or lawyer totalling $660,063. Of that sum, $299,544.60 was transferred to Aziz’s wife as part of a family law property settlement.
·Payments made between June and November 2018 through Spicer Thoroughbreds totalling $22,550.
·Payments made into the Bluestone account totalling $115,000.[2]
[2]Pricket affidavit paragraph [15]
Application to cross-examine
15 As I have already observed, Aziz did not swear an affidavit in support of this application. Instead, the Peck affidavit was sworn on his behalf based upon his instructions.
16 The Director submitted that because Aziz has chosen to present his evidence in support of the application by means other than directly swearing to them himself, the Director is deprived of the opportunity to cross-examine Aziz on matters which are crucial to my determination of the application.
17 Aziz submitted that this is an interlocutory application. It is permissible in interlocutory applications for a solicitor to obtain instructions, and then swear the affidavit on behalf of the solicitor’s client on the basis of information and belief. I was referred to a number of authorities which appear to me to support that proposition.
18 I must observe before going any further that s133(1) of the Act provides that proceedings under the Act are civil in nature; however, ss(2) provides that the rules regulating practice and procedure of a court in civil proceedings do not apply to a proceeding on application under the Act. Despite this clear statement, something is nonetheless learned through the authorities which deal with similar applications and creates an analogy.
19 At least one of the authorities relied upon by Aziz deals with interlocutory applications in civil proceedings is based upon Rule 40.04 (1) of the Supreme Court (General Civil Procedure) Rules 2015, which provides that where an affidavit is filed in any proceeding, a court “may” order that the deponent be examined before a court. The relevant County Court rule is in the same terms.[3]
[3]See for example Matthews v SPI Electricity Pty Ltd (No 6) [2013] VSC 422 ("Matthews")
20 Aziz submitted that the discretion to permit cross-examination on affidavits in interlocutory applications is normally exercised sparingly. I was referred to Scanlon v American Cigarette Co (Overseas) Pty Ltd (No 1)[4] in which Nicholson J ruled in that way when denying an application for cross-examination on affidavits in an interlocutory application for an extension of time under s23A(2) of the Limitation of Actions Act 1958.[5]
[4][1987] VR 261 ("Scanlon")
[5](Supra) 272
21 Aziz referred me to Yunghanns v Elfic Pty Ltd (No 2)[6] in which Warren J (as she was then) refused an application to cross-examine on an affidavit. Her Honour observed:
“… First, in my view, in so far as there were inconsistencies in the statements of Mr Yunghanns as to his position such inconsistencies were appropriately a matter for submission. Secondly, in so far as there was potential for an allegation of recent invention against Yunghanns again such matter was appropriate for submission. Thirdly, in my view, it is undesirable except in special compelling circumstances for a court to permit a party to have the opportunity at an interlocutory stage to cross-examine an opposing party upon an issue of fact that goes to the core of the proceeding. To do so enables the party seeking to cross-examine to have, in effect, a dress rehearsal of a vital component of evidence to be ventilated at trial. Fourthly, I formed the view that in the exercise of the discretion I would not be assisted by the cross-examination of Mr Yunghanns.”[7]
[6](2000) 1 VR 92 ("Yunghanns")
[7](Supra) at paragraph [18]
22 Whether cross-examination will be permitted in interlocutory applications appears to me to much depend upon the judge being apprised very specifically of the topics on which are to be investigated through cross-examination. That appears to be the case in Yunghanns, and also in Friends ofHinchinbrook Society Inc v Minister for Environment (No 1),[8] and Cargill Australia Ltd v Viterra Malt Pty Ltd (No 17).[9] On my reading of the authorities, leave will not be granted generally, but only where the party seeking to undertake cross-examination on affidavit can satisfy what the authorities demonstrate and that it will be permitted only sparingly, or in special compelling circumstances.
[8](1996) 69 FCR 1 at 74
[9][2018] VSC 750
23 The way in which I need to test the Director’s submission is to assume that Aziz had deposed to the relevant matters contained in the Peck affidavit. If he had, would I have permitted the Director to cross-examine him? I think what the Director wishes to do is to cross-examine Aziz on issues of fact which go to the core of the proceeding which is impermissible for the reasons enunciated in Yunghanns. I will say more about this after I have summarised Aziz’s evidence.
Relevant considerations
24 Both parties referred me to Finn v Director of Public Prosecutions (DPP) (Vic)[10] in which Dixon J dealt with an application for an extension of the period within which an exclusion application could be made, then under s20(1B) of the Act, but in identical terms as s36U(3). His Honour made a number of observations which are of great assistance in determining what is in the interests of justice. He first observed:
“Provisions for discretionary extension of time are common. There are many cases to which reference might be made. It is not appropriate to construct a formula of arbitrary principles from relevant factors identified on other occasions in different circumstances to be applied when considering an application under s 20(1B). This is not to say that it is unhelpful to identify, from other contexts, matters commonly thought of particular relevance, particularly when considering the material upon which the Court is asked to exercise its discretion. Rather it is to underline that the discretion under s 20(1B), is unfettered, to be exercised flexibly with regard to the circumstances of the particular application. The broad unfettered discretion is clear in the language of Parliament: the court may extend the period if it is in the interests of justice to do so.”[11]
[10][2011] VSC 234 (“Fin”’)
[11](Supra) at paragraph [14]
25 Dixon J cited, with approval, observations made in Gallo v Dawson,[12] and Luxmore Pty Ltd v Hydedale Pty Ltd.[13]From those authorities, and others, his Honour very helpfully summarised additional considerations which would ordinarily be addressed on an application for extension of time:
[12](1990) 93 ALR 479, and in particular, observations made by McHugh J at 480-481
[13](2008) 20 VR 481, and in particular, the observations of Maxwell P and Kellam JA at paragraph [3]
·The period of delay.
·Explanations for the delay and the reasons advanced to justify delay being excused.
·Whether there is any injustice or prejudice to any applicant for exclusion if the period is not extended.
·Whether there is any irremediable prejudice to the Director if the period is extended.
·Whether the prospect of success of the application is realistic, not fanciful.
·The history of the proceedings under the Act and of the prosecution of the charges faced by the defendant.
·The statutory context of orders providing exclusion from restraining orders.”[14]
[14]Finn n 10 [17]
Aziz’s evidence
Delay
26 The following is a summary of the evidence contained in the Peck affidavit on which Aziz relies.
27 Aziz left Australia to travel to Egypt on 9 October 2019. He executed the contract with Bloom Business School to undertake work as a teacher. He was scheduled to return to Australia on 9 December 2019. He changed his plans and continued his employment with Bloom Business School, which he contemplates he will pursue until at least July 2020.
28 Aziz has a heart condition. He produced two medical reports relevant to his heart condition from Dr Lim, general and interventional cardiologist, dated 10 July 2019 and Associate Professor Fourlanos, endocrinologist and diabetes physician, dated 8 July 2019.[15] Dr Lim treated Aziz for cardiac failure at the Epworth Hospital as an inpatient. Aziz then came under the care of a Dr Zimmet while he was an inpatient. He noted that he had suffered from a diabetic condition since 2006. He discharged him from inpatient care with a raft of medication. He noted that Aziz had a number of other medical conditions which appear to be complications of his diabetic condition.
[15]Exhibit “JMP-7” to the affidavit of Jeremy Majella Peck affirmed 14 January 2020
29 Aziz also produced a transthoracic echocardiogram report authored by Dr Ellims, cardiologist, dated 19 September 2019. All I am able to derive from it is that he has non-ischaemic cardiomyopathy, and the echocardiogram disclosed a number of findings which I assume are relevant to his cardiac failure.
30 The foregoing medical history becomes relevant because Aziz intended to depart from Cairo to travel to Melbourne on 19 November 2019. He became unwell with symptoms of heart palpitations, shortness of breath and he was perspiring. The flight check-in staff denied him entry onto the plane. He believes his ability to fly is impaired due to his ongoing health issues.
31 The foregoing medical history also becomes relevant because Peck has had difficulties obtaining instructions from Aziz due to what he describes as logistical difficulties and delays resulting from Aziz currently residing in Cairo.
32 The length of the delay, if calculated from the date of service of the order on 9 October 2019, is ninety-eight days, and if calculated after the thirty days has expired is sixty-eight days. Both parties worked on the latter period as being the relevant period of delay.
Prospects of success
33 Prickett, through reference to Chow’s forensic accounting analysis, deposed, in paragraphs 51-53 of the Prickett affidavit, that Woodman paid a total of $115,000 into the Bluestone account between 28 February 2019 and 1 July 2019. The payments were made by Watsons Pty Ltd (“Watsons”), which is a corporate entity associated with Woodman.
34 Prickett concluded that the payments were secret commissions paid by Woodman to Aziz through Watsons and into the Bluestone account as intermediaries to give effect to the arrangement that existed between Woodman and Aziz.
35 In paragraphs 48 to 56 of the Peck affidavit, Aziz says that he met with Woodman in early November 2018, at which time they discussed a project known as the “Little River Project”. Following that meeting, Aziz entered into a contract with Watsons to provide consulting services to Watsons relevant to that project. The consideration was a payment to Aziz of $600,000 over a two-year period to be paid by monthly instalments of $25,000. The $25,000 was to be paid by $23,000 via an electronic transfer into an account nominated by Aziz, and $2000 in cash.
36 The contract was seized by IBAC when it searched Aziz’s home at 5 Ferntree Walk, Roxburgh Park on 17 September 2019, pursuant to a search warrant. He did not retain a copy of it. The Director acknowledged, during the parties’ submissions, that it had the contract.
37 The first account nominated by Aziz was the Macquarie Bank. In paragraphs 51 to 53 of the Prickett affidavit, there are three payments of $23,000 in that account made by Watsons between 3 December 2018 and 1 February 2019. The second account nominated by Aziz was the Bluestone account into which five further payments of $23,000 were made, totalling $115,000.
38 Aziz explained why those moneys were paid into the Bluestone account. He entered into an arrangement with Dr Maher Luka to obtain finance to pay out the mortgage on the Berwick property. That step was associated with his divorce proceedings with his former wife. He was not able to proceed with that arrangement, and as an alternative, obtained funding from Bluestone Mortgages in February 2019.
39 Following obtaining funding from Bluestone Mortgages, Aziz instructed Watsons to deposit the payments of $23,000 into the Bluestone account. He invoiced Watsons via a company through which he traded, known as Global Business Advisory Pty Ltd (“Global”). He produced twelve invoices covering the period from 1 December 2018 to 1 November 2019. The invoices bear the name of Global, invoiced to Watsons, and described the “matter” relevant to the invoice as being the “Little River Project Research and Consulting”.
40 Aziz described the background to the consultancy work which he says he undertook for Watsons pursuant to the contract through his work with Southern Cross University, a research paper relating to Smart Liveable Cities, and some background about his academic work. I do not propose to set any more of that out here, because it is referred to in sufficient and significant detail in paragraph 53 of the Peck affidavit.
The Director’s cross-examination
41 This is a convenient point to distil from the Director’s submissions why the Director wishes to cross-examine Aziz.
42 The impression with which I was left from the Director’s submissions relevant to cross-examination of Aziz, is that it was to test whether the explanation for delay and the prospects of success are what they appear to be.
43 There are many authorities which deal with applications to extend time where a time limit has not been met. I am left with the strong impression that none of those authorities require the applicant to be explicit in condescending to prospects of success, in other words, there is no requirement that the applicant provide the detail of facts going to the prospects of success which would be investigated at the trial of the proceeding. It will be adequate if the applicant sets out what the prospect of success is by deposing to facts sufficient to demonstrate those prospects.
44 The authorities I referred to above make it abundantly clear when cross-examination will be permitted in any interlocutory application. I am not satisfied, from the submissions of the Director, that the specific topics on which the Director wishes to cross-examine were identified, but rather a more general cross-examination which I considered was directed to issues going to the core of the proceedings, which I would not have allowed if Aziz had sworn the affidavit instead of Peck.
Exercise of discretion
45 Aziz must have known that he had thirty days within which to file the exclusion application. If he did not know that, then it was for him to determine the steps he needed to take if it was his intention to contest the order.
46 Despite time running against him from the date of service of the order on 9 October 2019, Aziz left Australia, not intending to return until 19 November 2019, when the time ultimately ran against him by 9 November 2019.
47 Aziz appears not to have acted expeditiously in providing instructions to Peck. The fact that the exclusion application was filed on 15 January 2020 is a clear demonstration of that. I do not accept that because it was the end of the legal year and that the activities of practitioners and courts might slow at the end of December and into early January, is any measure of an explanation for the delay.
48 I consider that Peck’s explanation of difficulties obtaining instructions from Aziz due to what he describes as “logistical difficulties” and delays resulting from Aziz currently residing in Cairo, is not much of an explanation for the delay. To merely say that there were logistical difficulties begs the question of what they were, and, similarly, to merely say that there were delays, begs a similar question. In the modern era where telephone, email, Skype and other electronic means of direct contact are available, makes it difficult for me to accept that there were such difficulties.
49 I accept that Aziz suffers from a significant heart and diabetic conditions which may well make returning to Australia difficult. If he had not had those medical impediments to boarding a flight and returning to Australia on 19 November 2019, his exclusion application would still have been out of time, but the period of delay is likely to have been much shorter than it is now.
50 Despite my misgivings about the explanation for delay, I do not accept that the period of delay of sixty-eight days is excessive and has resulted in any irremediable prejudice to the Director. The Director submitted that the prejudice that the Director will suffer is to delay the proceeding and the obtaining of the ultimate orders which the Director sought in the first place. I do not see that as amounting to prejudice. If Aziz had filed his exclusion application in time, then there would be inevitable delay in determining orders appropriate to manage the proceedings to trial. I am not satisfied that there is any irremediable prejudice to the Director if leave is granted to extend the time for Aziz to file his exclusion application.
51 It appears to me that Aziz’s prospects of success are realistic, and not fanciful. If it is accepted by the trial judge that he earned the moneys deposited by Watsons into the Bluestone account legitimately, then he has a complete answer to the allegations made by the Director relevant to $115,000.
52 I do not have much doubt that a poor explanation for delay, but realistic prospects of success, should not see that poor explanation for delay defeat an application such as this. It calls for balance of the competing discretionary considerations and the flexibility referred to by Dixon J in Finn.
53 The conclusion I have reached is that, in the application of the discretionary considerations, although the explanation for delay is a poor explanation, the period of delay is relatively short and the prospects of success are realistic. In balancing the competing considerations, I have reached the conclusion that it is in the interests of justice to extend the time for Aziz to file his exclusion application.
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