Director of Public Prosecutions (Vic) v Harmouch (Ruling)
[2022] VCC 2150
| IN THE COUNTY COURT OF VICTORIA AT Melbourne COMMON LAW DIVISION | Revised Not Restricted Suitable for Publication |
| Confiscation List |
Case No. CI-22-01032
IN THE MATTER of the Confiscation Act 1997
and
IN THE MATTER of property which a police officer suspects on reasonable grounds was not lawfully acquired
and
IN THE MATTER of an Application by THE DIRECTOR OF PUBLIC PROSECUTIONS FOR VICTORIA
BETWEEN
| THE DIRECTOR OF PUBLIC PROSECUTIONS FOR VICTORIA | Applicant |
| and | |
| MARWAN ABDEL HARMOUCH | Respondent |
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JUDGE: | HIS HONOUR JUDGE FRAATZ | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 26 July 2022 | |
DATE OF RULING: | 9 December 2022 | |
CASE MAY BE CITED AS: | Director of Public Prosecutions (Vic) v Harmouch (Ruling) | |
MEDIUM NEUTRAL CITATION: | [2022] VCC 2150 | |
RULING
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Subject:CRIME – CONFISCATIONS
Catchwords: Application for leave to cross-examine deponent
Legislation Cited: Confiscation Act 1997, s40F(2), s40I
Cases Cited:Scanlon v American Cigarette Company (Overseas) Pty Ltd (No 1) [1987] VR 261; Friends of Hinchinbrook Society Inc v Minister for Environment & Others (No 1) (1996) 69 FCR 1; Yunghanns & Ors v Elfic Pty Ltd & Ors (2000) 1 VR 92; Wu v Avin Operations Pty Ltd (No 3) [2006] FCA 1321; National Mutual Life Association of Australasia Limited v Tolfield Pty Ltd (No 2) [2011] FCA 1309; Matthews v SPI Electricity Pty Ltd & Ors (No 6) [2013] VSC 422; Director of Public Prosecutions v (Property) Aziz (Ruling) [2020] VCC 241; McMunn v Director of Public Prosecutions for Victoria [2010] VSCA 330; George v Rockett (1990) 170 CLR 104; Queensland Bacon Pty Ltd v Rees (1966) 115 CLR 266; Saad & Others v Commissioner of the Australian Federal Police [2021] VSCA 246; Mai v Commissioner of the Australian Federal Police (2020) 62 VR 118; Hadjigeorgiou v New South Wales Crimes Commission [2007] 174 A Crim R 124
Ruling: Application refused.
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr S Fuller | Solicitor for the Office of Public Prosecutions |
| For the Respondent | Mr N Bird | Dennaoui Lawyers |
HIS HONOUR:
1On 23 March 2022, the Director of Public Prosecutions for Victoria (“the Director”) made application under s40F(2) of the Confiscation Act 1997 (“the Act”) for an unexplained wealth restraining order of the following property or interest in property:
(a) White 2015 Mercedes-Benz GLE 450 Coupe vehicle with registration number 503503 registered in the name of Marwan Harmouch (“Mr Harmouch” or “the respondent”);
(b) Ceramic heritage numberplates 503503;
(c) $20,000 cash seized by police on 16 September 2020;
(hereinafter collectively referred to as “the property”).
2The grounds on which the application is made is that a police officer suspects on reasonable grounds that the property was not lawfully acquired: Section 40F(3)(c) of the Act. The Director relies upon an affidavit sworn by Victoria Police Constable Dan Wolf.
3By Notice dated 9 June 2022, Mr Harmouch intends to contest the application for restraint on the grounds that:
(a) he acquired the property lawfully; and
(b) he denies that the belief of Constable Wolf – that is, the suspicion that the property was unlawfully acquired – is based on reasonable grounds.
4Mr Mahmoud seeks the leave of this Court to cross-examine Constable Wolf at the hearing of the Director’s application for an unexplained wealth restraining order as to the basis of his suspicion.
5Both Mr Harmouch and the Director filed submissions, dated 8 July 2022 and 14 July 2022 respectively, in relation to whether such leave ought be granted.
The evidence
6The application for an unexplained wealth restraining order is supported by the affidavit of Constable Wolf sworn 22 March 2022, in which he states that the property is located in Victoria; his suspicion that the property was not lawfully acquired, and the grounds upon which he has formed the suspicion.
7Mr Harmouch relies upon the following materials:
(a) his affidavit sworn 27 June 2022;
(b) an affidavit of Mohammed Mahmoud sworn 28 June 2022; and
(c) an affidavit of Mohamad Mourad sworn 29 June 2022.
8By way of summary, the affidavits relied upon by Mr Harmouch depose to the purported sale of land in his possession in the Republic of Lebanon to an acquaintance, Mohammed Mahmoud, on or about 27 July 2022, the consideration for which was the Mercedes-Benz vehicle and the licence plate the subject of the application for restraint. Further, that the $20,000 cash seized by Victoria Police on 16 September 2020, represents a deposit for the on-sale of the Mercedes‑Benz vehicle to Mohamad Mourad.
Principles
9The application for restraint is interlocutory in nature.
10Sections 40F and 40I of the Act relevantly provide as follows:
“40F Application for unexplained wealth restraining order
(1)…
(2)The DPP or an appropriate officer may apply without notice to a court for an unexplained wealth restraining order in respect of property if a police officer suspects on reasonable grounds that—
(a)the property was not lawfully acquired; and
(b)either—
(i) the property is located in Victoria; or
(ii)the person who has acquired the property is ordinarily resident in Victoria.”
“40I Determination of application for unexplained wealth restraining order
(1)…
(2)…
(3)On an application under section 40F(2) for an unexplained wealth restraining order, the court must make an unexplained wealth restraining order if it is satisfied that—
(a)the deponent of the affidavit supporting the application does suspect that—
(i)the property sought to be restrained was not lawfully acquired; and
(ii) either—
(A)the property is located in Victoria; or
(B)the person who has acquired the property is ordinarily resident in Victoria; and
(b)there are reasonable grounds for that suspicion.
(4)For the purposes of subsection (3)(b), in determining whether there are reasonable grounds for suspecting that property was not lawfully acquired, the court may have regard to one or more of the following—
(a)the lawful income of a person with an interest in, or effective control of, the property;
(b)any suspected unlawful activity of a person with an interest in, or effective control of, the property;
(c)the prior ownership of the property and any suspected unlawful activity of a person, or persons, who previously owned the property;
(d)the circumstances under which the property has come to the attention of Victoria Police;
(e)any other relevant matter.”
11The Director must prove Constable Wolf holds a suspicion based on reasonable grounds to the civil standard of proof: Section 132 of the Act.
12Leave of the Court to cross-examine a witness at an interlocutory stage should be exercised sparingly.[1]
[1]Scanlon v American Cigarette Company (Overseas) Pty Ltd (No 1) [1987] VR 261 (“Scanlon”) at 272
13In Friends of Hinchinbrook Society Inc v Minister for Environment & Others (No 1),[2] the Court refused cross-examination of witnesses for reasons including that the application was not made for bona fide reasons and that the Court would not have been assisted by the relevant cross-examination.
[2](1996) 69 FCR 1
14In Yunghanns & Ors v Elfic Pty Ltd & Ors,[3] Warren J refused leave to cross-examine Mr Yunghanns for the following reasons:
“… Firstly, in my view, insofar as there were inconsistencies in the statements of Mr Yunghanns as to his position such inconsistencies were appropriately a matter for submission. Secondly, insofar as there was potential for an allegation of recent invention against Mr 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.”
[3] (2000) 1 VR 92 at paragraph [18]
15In Wu v Avin Operations Pty Ltd (No 3),[4] Kenny J considered Scanlon and observed that:
“The Court has a discretion to permit or refuse an application made in an interlocutory proceeding to cross-examine a deponent on an affidavit that he or she has made, although the discretion to permit such cross-examination is exercised cautiously and, as Nicholson J said in Scanlon … at 272, ‘normally’ ‘somewhat sparingly’.”
[4] [2006] FCA 1321 at paragraph [18]
16In National Mutual Life Association of Australasia Limited v Tolfield Pty Ltd (No 2),[5] Collier J held:
“While the importance of parties being afforded a fair trial cannot be over-emphasised, it is also important to ensure that the time of the Court is not wasted by cross-examination of witnesses which would be of no assistance to the Court.”
[5] [2011] FCA 1309 at paragraph [13]
17In Matthews v SPI Electricity Pty Ltd & Ors (No 6),[6] Derham AsJ performed an examination of the authorities on this issue and concluded:
[6] [2013] VSC 422 at paragraphs [28]-[29]
“28. An examination of the authorities shows that the variety of circumstances in which it may be appropriate to allow cross- examination varies according to the nature of the application and the facts of the case. The overriding principle is that of procedural fairness. There are, however, a number of factors that have been found relevant to granting leave to cross-examine, as follows:
(a)where the credit of the witness is important to resolving the interlocutory application;
(b)the interlocutory application requires the establishment of material facts;
(c)there is a relevant factual dispute which requires cross-examination for its resolution;
(d)the interlocutory application is unusual and it is difficult to know what issues will eventually be relevant.
29.There are, of course, factors that will exclude or limit cross- examination, including:
(a)that the application is not made bona fide to test an issue of material fact on the interlocutory application, but rather to engage in a rehearsal of issues relevant to the trial;
(b)the extent to which the pressure of the business of the Court permits cross-examination.
(c)The factors referred above from the decision of Warren J in Yunghanns.”
[footnotes omitted]
18In Director of Public Prosecutions v (Property) Aziz (Ruling),[7] after a restraining order had been made, the respondent brought an exclusion application. It was, however, out of time and an extension of time was sought. The Director sought leave to cross-examine the respondent to address whether the explanation for delay and the prospects of success were what they appeared to be. His Honour Judge Misso denied leave on the basis that he was not satisfied that the specific topics on which the Director wished to cross-examine were identified but were rather a more general cross-examination which appeared to be directed to issues going to the core of the proceedings.
[7] [2020] VCC 241
19I turn now to consider these principles in the circumstances of this application.
Analysis
20The basis of Constable Wolf’s suspicions is set out in detail in his affidavit sworn on 22 March 2022. The stated grounds relied upon for his suspicion that the three items of personal property were not lawfully acquired, are:
(a) Mr Harmouch did not have a lawful income, given that he has not lodged taxation returns with the ATO and, for most of his time in Australia, was present unlawfully;
(b) he is suspected of being involved in the activity of importing illegal tobacco as evidenced by:
(i)police surveillance observing him associating with individuals who have convictions for, or are suspected of, tobacco-related offending;
(ii)police surveillance observing him associating with the leader of an organised crime syndicate who is a member of the Comancheros Outlaw Motorcycle Gang and has prior convictions for firearms, drug trafficking, violence and property-related offences; and
(iii)during the execution of the Search Warrants at his residence on 16 September 2020, investigators seized two bags of tobacco and observed molasses in the shed at the property, which is a commonly used mixing agent for tobacco;
(c) he is suspected of being involved in the activity of dealing with property reasonably suspected of being proceeds of crime, namely the $20,000 seized cash and the Mercedes-Benz vehicle.
(d) the Mercedes-Benz vehicle, numberplates and cash were seized during the execution of the Search Warrants on 16 September 2020. Various documents relating to the numberplates and the vehicle were also seized on that day;
(e) enquiries with VicRoads reveal that the Mercedes-Benz vehicle and the numberplates are registered in the respondent’s name. A seized purchase contract shows the vehicle was purchased by Mr Mouhamad Mahmoud on 24 March 2020 for $86,833. A seized handwritten note dated 27 July 2020 suggests that Mr Mahmoud sold the Mercedes-Benz vehicle to the respondent for AUD$35,000 by way of a land transfer in Lebanon from the respondent to Mr Mahmoud’s father.
(f) a search of carsales.com.au reveals that the conservative estimated value of the vehicle is $60,000;
(g) a search of vicroads.vic.gov.au reveals that the numberplates are now worth approximately $14,000;
(h) during the execution of the Search Warrants, investigators found the cash in a laundry basket amongst the respondent’s clothing. The respondent told investigators that the $20,000 cash was his.
21In support of his application for leave to cross-examine, the respondent submitted that an assessment of Constable Wolf’s credibility is required in order to determine the reasonableness of his suspicions. This, it is said, is particularly so, given the evidence adduced by the respondent referred to above.
22The substantive application is for an unexplained wealth restraining order. There is a low threshold inherent in the test in s 40I(3) of the Act. The Director need only show the relevant suspicion and its formation on reasonable grounds.
23The existence of a suspicion is a subjective matter; it is a state of mind possessed by the deponent.
24In McMunn v Director of Public Prosecutions for Victoria,[8] Weinberg JA held that:
“… suspicion is a state of mind which falls well short of belief, as the High Court made clear in George v Rockett.”
[8] [2010] VSCA 330 at paragraph [18]
25In George v Rockett,[9] the High Court considered that:
“Suspicion, as Lord Devlin said in Hussien v. Chong Fook Kam (1970) AC 942, at p 948, ‘in its ordinary meaning is a state of conjecture or surmise where proof is lacking: ‘I suspect but I cannot prove’.’ The facts which can reasonably ground a suspicion may be quite insufficient reasonably to ground a belief, yet some factual basis for the suspicion must be shown. … .”
[9] (1990) 170 CLR 104 at paragraph [14]
26The High Court also cited Queensland Bacon Pty Ltd v Rees,[10] where Kitto J held:
“… A suspicion that something exists is more than a mere idle wondering whether it exists or not; it is a positive feeling of actual apprehension or mistrust, amounting to ‘a slight opinion, but without sufficient evidence’, as Chambers’s Dictionary expresses it. … .”
[10] (1966) 115 CLR 266 at 303, paragraph [4]
27In Saad & Others v Commissioner of the Australian Federal Police,[11] Walker JA (with whom Beach and Sifris JJA agreed) held:[12]
“… what is being ‘proved’ by the affidavit filed under s 18(3) is not the existence of the offending, or the asserted facts to which the authorised officer deposes, but the basis (ie grounds) on which he or she formed the relevant state of mind (ie suspicion). In that statutory context, if the affidavit includes hearsay evidence, that evidence is not deposed to for the existence of the asserted fact. It is for that reason that the ‘grounds’ for a suspicion under s 18 (and related provisions) may include matters that subsequently are found to be false.
…
In Mai [Mai v Commissioner of the Australian Federal Police (2020) 62 VR 118] this Court went on to explain the nature of the test for ‘reasonable grounds for suspicion’, drawing on George v Rockett:
‘[I]t is necessary under ss 18 and 19 of the Act to consider whether the authorised officer had an actual apprehension that an offence had been committed, or that the property and the vehicle were proceeds or an instrument of a relevant offence, rather than a mere idle wondering as to that matter or a desire to look into the possibility. It was not in issue before us that Mr White held suspicions meeting this description. The question is whether the grounds upon which he had that state of mind were reasonable. Again applying the above reasoning, that involves asking whether those grounds would in all the circumstances create in the mind of a reasonable person an apprehension that an offence had been committed or that relevant property was the proceeds or an instrument of an offence.’”[13]
[11] [2021] VSCA 246 at paragraphs [129] and [96]
[12] Ibid at 295
[13]At 138-9, paragraph [68]
28In Hadjigeorgiou v New South Wales Crimes Commission,[14] the New South Wales Court of Appeal considered that State’s equivalent statute. Santow JA held:
“To introduce requirements of precision beyond that modest level is to my mind unjustifiably to raise the threshold to a level which might more plausibly apply to reasonable grounds for belief than suspicion. … Nor does it call for a close consideration of each element of those offences to be matched against specific evidence so long as there is sufficient to take the relevant officer to a positive feeling of actual apprehension or mistrust, based on the standard of ‘a reasonable person’.”
[emphasis in original]
[14] [2007] 174 A Crim R 124 at paragraph [44]
29A lack of clarity or ambiguity in the evidence may go to whether there are reasonable grounds for that suspicion. That might attend if the evidence comprises conclusions without identification of the source of the information on which those conclusions are based, or is comprised of otherwise unsubstantiated assertions. In those circumstances, a court might readily conclude that the affidavit does not disclose reasonable grounds for any asserted suspicion.
30The appropriate question in determining this application is whether the asserted grounds would, in all the circumstances, create in the mind of a reasonable person an apprehension that the property in question was not lawfully acquired. A suspicion is a low threshold that falls well short of a belief. A suspicion falls short of proof of the facts.
31The following is evident from the above authorities and the nature of the Act in general:
(a) The Court’s task is not to determine, as a fact, that the relevant property was acquired unlawfully. It is merely required to determine whether there are reasonable grounds for suspecting that the property was acquired unlawfully;
(b) The police deponent should depose to the grounds or bases of the suspicion. There must be some reason why he or she holds that suspicion;
(c) The suspicion can be formed on the basis of enquiries made by the police officer or by information provided by other individuals or sources;
(d) The notion of the lawful acquisition depends on the particular facts involved in the application at hand. Some assistance can be derived from the matters set out in s40G(1) of the Act;
(e) Deficiencies in the evidence in support of the application go to the reasonableness of the suspicion;
(f) If the grounds or bases for the suspicion are objectively considered by the Court to be reasonable, the test is satisfied. If the test is satisfied, the order must be made. There is no discretion.
Disposition
32The application for leave to cross-examine proceeded on the basis that there was no prospect of Constable Wolf changing his mind about his suspicion, as he had already deposed to his consideration of the material relied upon by Mr Harmouch.[15]
[15] Further affidavit of Constable Wolf sworn 4 July 2022
33Mr Harmouch relies on the following matters:
(a) he has not been charged with any criminal offence;
(b) the factual assertions made by Constable Wolf do not give rise to allegations of criminal conduct;
(c) he has denied wrongdoing and deposed to the circumstances by which he allegedly came to lawfully possess the relevant property; and
(d) two witnesses have sworn affidavits to corroborate his assertion that he lawfully came into possession of the relevant property.
34There is no requirement in the Act that Mr Harmouch be charged with any criminal offence or that he has engaged in criminal conduct. The Court will, in accordance with s40F, s40I and to the civil standard of proof, make a finding at the substantive hearing of the application for restraint. Such contest is unexceptional.
35The appropriate time to consider the evidence relied upon by Mr Harmouch is at the time the application for restraint of proper is heard.
36The general and vague intention expressed to address Constable Wolf’s credibility is an irrelevant purpose in the present application for leave to cross-examine him.
37The role played by the credibility of Constable Wolf is very limited. The question of whether the suspicion is a reasonable one depends on the Court’s view of the two affidavits of Constable Wolf. Those affidavits set out the specific sources of information: his own enquiries and information provided by the informant in charge of the criminal investigation.
38Having considered the affidavit material relied upon by Mr Harmouch referred to above, Constable Wolf has confirmed in his further affidavit that he maintains his suspicions, supported by the matters raised in his original affidavit. The credit of Constable Wolf is not in issue in this proceeding, and there is no utility in granting leave to cross-examine him in those circumstances.
39The respondent does not submit that Constable Wolf is expressing quite untenable opinions which are outside the mainstream of accepted opinion such as in Scanlon.
40The “indicative” topics of cross-examination of Constable Wolf nominated by Mr Harmouch[16] are either irrelevant, or in the nature of submissions. It is apparent that Constable Wolf has no personal knowledge of the matters deposed to by Mr Harmouch or the other deponents, and there is no utility in Mr Harmouch putting factual allegations to Constable Wolf in the circumstances of Constable Wolf having already considered those matters. The topics in substance indicate a general cross-examination which appear to be directed to issues going to the core of the proceeding. 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 upon an issue of fact that goes to the core of the proceeding.
[16] Set out at paragraph 30 above, which reflect Mr Harmouch’s submissions at paragraphs 19, 33 and 34
41Mr Harmouch has not demonstrated special compelling circumstances or any sufficient justification for departing from the usual practice on interlocutory applications. His case is more appropriately agitated by an exclusion application when he will have an adequate opportunity to examine the Director’s case.
42Against the grant of leave, the evidence required to satisfy the low threshold involved in establishing the matters in s40I(3) of the Act is of a lesser quality than is required to satisfy a civil finding about the existence of facts on the balance of probabilities. Such findings of fact are irrelevant to the Court’s task under s40I(3) and (4). As such, there appears to be little that might be achieved by cross-examination. Further, the cross-examination is likely to unnecessarily and unreasonably delay the adjudication of the restraining order application.
43There is no issue of fact before this Court that will be finally determined against the respondent such as to justify the grant of leave. After the determination of the application, Mr Harmouch is at liberty to apply to revoke or vary the Restraining Order, and to make an exclusion application. (See s40W and s40R of the Act respectively.)
44Mr Mahmoud is also at liberty to make submissions at the substantive hearing of the application for an unexplained wealth restraining order, including that the reasonableness of Constable Wolf’s suspicion is untenable or otherwise displaced by the material relied upon by him.
45Leave to cross-examine Constable Wolf is refused.
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