Director of Public Prosecutions (Vic) v Kakis
[2020] VCC 1373
•7 September 2020
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMON LAW DIVISION | Revised Not Restricted Suitable for Publication |
| CONFISCATION LIST |
Case No. CI-20-02418
| IN THE MATTER of the Confiscation Act 1997 | ||
| and | ||
| IN THE MATTER of property of a person who a police officer suspects on reasonable grounds has engaged in serious criminal activity | ||
| and | ||
| IN THE MATTER of an Application by THE DIRECTOR OF PUBLIC PROSECUTIONS FOR VICTORIA | ||
| DIRECTOR OF PUBLIC PROSECUTIONS (VICTORIA) | Applicant | |
| v | ||
| STEPHEN KAKIS (aka STEVE KAKIS, STAVROS KAKIS, STAVROSS KAKIS) | Respondent | |
---
JUDGE: | HIS HONOUR JUDGE CARMODY | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 27 August 2020 (via Zoom hearing) | |
DATE OF JUDGMENT: | 7 September 2020 | |
CASE MAY BE CITED AS: | Director of Public Prosecutions (Vic) v Kakis | |
MEDIUM NEUTRAL CITATION: | [2020] VCC 1373 | |
REASONS FOR JUDGMENT
---
Subject: CONFISCATION
Catchwords: Restraining Order for unexplained wealth – second application – reasonable suspicion – effect, if any, of a previous Restraining Order made in respect of the same property
Legislation Cited: Confiscation Act 1997, s40F, s40I, s7C
Cases Cited:Proudfoot v Director of Public Prosecutions [2020] VSCA 138
Judgment: Order that the application for an unexplained wealth restraining order in respect of property ($95,650.00) seized pursuant to a search warrant on 16 May 2018 from the respondent is granted.
---
APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Ms E Ruddle | Solicitor for Public Prosecutions |
| For the Respondent | Mr A Schlicht | Christopher James Lawyers |
HIS HONOUR:
1 The Director of Public Prosecutions (Victoria) is the applicant in this proceeding. Mr Steven Kakis is the respondent. The application is under s40F (1) of the Confiscation Act 1997 (“the Act”) for an unexplained wealth restraining order. The application is dated 29 May 2020.
2 The application was heard on 27 August 2020. The Court was satisfied that all necessary requirements for the proceedings to be conducted via audio-visual link pursuant to the provisions of the Evidence (Miscellaneous Provisions) Act 1958 were met.
3 The applicant was represented by Ms E Ruddle of counsel. The respondent was represented by Mr A Schlicht of counsel. The proceeding was also attended by the respondent’s solicitor, Mr V Andreou, and the respondent via video-link (Zoom).
4 The applicant tendered and relied upon the following documents:
(a) Exhibit “A”, affidavit of Jonathan Allie dated 17 August 2018;
(b) Exhibit “B”, affidavit of Jonathan Allie dated 27 May 2020;
(c) Exhibit “C”, two sets of submissions prepared by Ms Ruddle on behalf of the applicant.
5 The respondent tendered and relied upon the following documents:
(a) Exhibit 1, affidavit of Stephen Kakis dated 5 December 2019;
(b) Exhibit 2, affidavit of Stephen Kakis dated 9 July 2020;
(c) Exhibit 3, submissions prepared by Mr Schlicht dated 23 August 2020.
6 There was no viva voce evidence given in this proceeding and each party relied on the written materials and oral submissions.
Background to the application
7 On 16 May 2018, police executed a Search Warrant at Mr Stephen Kakis’ premises at 139 Handsworth Street, Mulgrave. Mr Kakis was in attendance at the property when the search was conducted.
8 In the course of the search, police located the following items:
(a)$95,650.00 cash (mostly $100 and $50 notes) which was seized by investigators on suspicion of being the proceeds of crime;
(b)approximately ten (10) Samsung mobile phone devices, approximately ten (10) Apple phone devices, as well as additional mobile phone SIM cards. Eight (8) of these mobile phones are alleged to be stolen;
(c)electronic equipment, including an eavesdropping device;
(d)approximately 5 grams of a crystal-like substance, believed to be methylamphetamine;
(e)three (3) Viagra pills (without a prescription);
(f)four (4) ecstasy pills;
(g)two (2) caplets containing a crystal-like substance, believed to be MDMA;
(h)a ledger of money owed or ‘tick sheet’;
(i)a small amount of loose ammunition; and
(j)a damaged firearm.
9 Mr Kakis was interviewed by police after these items were located, and he was arrested.
10 During the record of interview, Mr Kakis was questioned in relation to the drugs located at the Mulgrave property. Mr Kakis stated that the drugs were for his personal use and admitted that he had engaged in swapping drugs for other drugs within a friendship circle for several years. Mr Kakis was questioned about the ledger – ‘tick sheet’ seized at the Mulgrave property. Mr Kakis stated that he did not know if the ‘tick sheet’ was his, and he could not recall it.
11 Mr Kakis was also questioned in relation to the sum of $95,650.00 cash seized at the Mulgrave property. Mr Kakis stated that the cash was legitimate, having been derived from income, money withdrawn from the bank and money from customers. Mr Kakis stated that he could earn anything between $500 and $2,000 per week.
12 The sum of cash totalling $95,650.00 is the subject of this application. Relevantly, Mr Kakis was charged with dealing with property suspected of being the proceeds of crime in the amount of $95,650.00. This was Charge 9.
13 Mr Kakis was charged with numerous other charges, including trafficking in, and possession of, a drug of dependence (methylamphetamine).
14 On 4 December 2018, Mr Kakis appeared at the Ringwood Magistrates’ Court, where he pleaded guilty to six charges in total. The six charges were:
(a) possession of a drug of dependence (methylamphetamine);
(b) possession of a drug of dependence (ecstasy) (two charges);
(c) negligently deal with proceeds of crime, relating to mobile phones (six of the twenty);
(d) possession of cartridge ammunition without a licence; and
(e) commit an indictable offence whilst on bail.
15 The charge known as Charge 9 relating to dealing with property suspected of being the proceeds of crime in the amount of $95,650.00 was withdrawn.
16 On 20 August 2018, the Director of Public Prosecutions filed an application pursuant to s40F (1) of the Confiscation Act 1997 seeking a restraining order in respect of the seized money ($95,650.00). The application was supported by the affidavit of Jonathan Allie, which is exhibit “A” in this application. The first application was Court Case Number CI-18-03599. The first application had a number of procedural hearings and was ultimately heard and determined by Judge Misso on 18 December 2018. Mr Kakis attended that hearing unrepresented. Neither he nor the applicant informed the Court that Charge 9 (the suspicion charge) had been withdrawn on 4 December 2018 at the Ringwood Magistrates’ Court.
17 On 21 December 2018, Judge Misso made an amendment to his Order of 18 December 2018, but that amendment is not relevant for the purposes of the application before me.
18 Mr Kakis’ submission is that the Order made on 18 December 2018 and amended on 21 December 2018 should be set aside as the charge upon which it was based was withdrawn on 4 December 2018.
The application dated 29 May 2020
19 The statutory framework for this application commences with s40F(1) of the Act. It provides as follows:
“(1)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)a person has engaged in serious criminal activity; and
(b)that person has an interest in the property; and
(c)in the case of property located outside Victoria—that serious criminal activity occurred within Victoria; and
(d)the total value of the property that is the subject of the application is $50 000 or more.”
20 The applicant relies on the affidavits of Jonathan Allie, which were exhibit “A” and exhibit “B”, to support this current application.
21 Mr Schlicht, on behalf of the applicant, conceded that his client had an interest in the property ($95,650.00), that the property was located in Victoria and that it was valued in excess of $50,000.
22 The issue in this application is confined to whether Mr Allie (a police officer) “suspects on reasonable grounds that Mr Kakis has engaged in serious criminal activity”.
23 The test for reasonable grounds for suspicion is an objective test. (Section 40I(1)(b)).
24 The statutory definition of “serious criminal activity” is set out in s7C of the Act as follows:
“For the purposes of this Act, serious criminal activity means—
(a)an act or omission or a course of conduct done or occurring in Victoria that constitutes one or more of the following—
(i) a Schedule 2 offence;
(ii)any other offence that is punishable by a term of imprisonment of 5 years or more and involves theft, fraud, obtaining financial benefit from the crime of another, money laundering, extortion, violence, bribery, corruption, harbouring criminals, blackmail, obtaining or offering a secret commission, perverting the course of justice, tax or revenue evasion, illegal gambling, sex work, production or distribution of child abuse material, drug cultivation, drug trafficking, forgery or homicide;
(iia)an offence against section 51E(1), 51F(1) or 51I(1) of the Crimes Act 1958;
(iii)an offence against section 7C, 59, 93, 94 or 96 of the Firearms Act 1996;
(iv) an offence against section 195 of the Crimes Act 1958;
(v)an offence of attempting to commit, or of conspiracy or incitement to commit, any offence referred to in the above paragraphs;
(vi)an offence against a law of the Commonwealth punishable by a term of imprisonment of 5 years or more that involves anything referred to in subparagraph (ii); or
(b)an act or omission or a course of conduct done or occurring in another jurisdiction that—
(i) constitutes an offence in that other jurisdiction; and
(ii)if done or occurring in Victoria, would constitute an offence referred to in paragraph (a).”
25 The remainder of ss(ii) is not relevant to this application.
26 Relevantly in this case, Mr Kakis pleaded guilty on 4 December 2018 to a charge of negligently dealing with the proceeds of crime (six mobile phones). Mr Kakis deposes to this fact in both of his affidavits, exhibit 1 and exhibit 2. The charge of negligently dealing with the proceeds of crime has a penalty of five years’ imprisonment. The six mobile phones in this case were stolen phones. In that case, by his own admission, Mr Kakis was engaged in “serious criminal activity” as defined by the Act.
Is the suspicion of Mr Allie in respect of the $95,650.00 reasonable?
27 Mr Kakis was originally charged with dealing with the proceeds of crime ($95,650.00). This was Charge 9. After negotiations with the prosecution, Charge 9 was withdrawn on 4 December 2018. The basis of the negotiated plea was that Mr Kakis pleaded guilty to the following charges at the Ringwood Magistrates’ Court on 4 December 2018:
(a) possession of a drug of dependence (methylamphetamine) (Charge 4);
(b) possession of a drug of dependence (ecstasy) (Charge 5);
(c) possession of a drug of dependence (ecstasy) (Charge 6);
(d) negligently deal with proceeds of crime (Charge 27);
(e) possession of cartridge ammunition without a licence (Charge 29); and
(f) commit an indictable offence whilst on bail.
28 Mr Kakis was sentenced to forty-two days’ imprisonment as timed served. Charge 27 is the admitted “serious criminal activity” charge.
29 Mr Allie was not the police officer who brought the original charges against Mr Kakis arising from the police raid on 16 May 2018. Mr Allie was not involved in the ultimate resolution of the charges on 4 December 2018. The fact that Charge 9 was withdrawn does not of itself remove or negate Mr Allie’s suspicion in respect of the seized $95,650.00. The provisions of s40F of the Act are conjunctive in respect of:
(a) engage in serious criminal activity; and
(b) the person has an interest in the property ($95,650.00); and
(c) the property is located in Victoria; and
(d) the total value of the property is greater than $50,000.
30 I find that Mr Allie’s suspicion is reasonable, based on the following matters:
(a) Mr Kakis has pleaded guilty to a charge that is defined as “serious criminal activity” under the Act (Charge 27);
(b) the combination of the other items found during the search, including twenty mobile phones, eavesdropping devices, illegal drugs, a ledger of money owed or ‘tick sheet’ and the $95,650.00 in cash;
(c) Mr Kakis has previously been charged, and pleaded guilty to, trafficking methylamphetamine in 2016 and on that occasion, a total of $121,250.00 cash was seized from him. Of that seized sum, an agreed amount of $74,920.00 was to be returned to Mr Kakis but that sum had not been returned to him by the time of the police raid on 16 May 2018; and
(d) more historical, but again, in 2007, Mr Kakis pleaded guilty to trafficking cannabis, and a seized sum of $71,150.00 was forfeited to the State from that police raid.
31 The combination of all of these matters lead to the conclusion that Mr Allie’s suspicion as outlined in his two affidavits was based on reasonable grounds.
Conclusion
32 The appropriate order in this application is that the property ($95,650.00) is restrained pursuant to s40F of the Act. The relief sought in this application is distinct from the considerations that apply in freezing orders. The Act and its provisions are harsh in their application but in a case such as this, Mr Kakis can bring an exclusion application to recover some or all of the money seized at his property on 16 May 2018.
33 The Court of Appeal in Proudfoot v Director of Public Prosecutions[1] clearly set out the distinction between freezing orders and a restraining order under the Act at paragraph 43 as follows:
“In any event, the fact that the courts provide for exclusions from freezing orders for the purpose of meeting legal expenses says nothing as to the existence of any constitutional imperative to that effect. Furthermore, as the DPP submits, the regime for imposing freezing orders to which Proudfoot refers is a distinct and unrelated statutory scheme to that imposed under the Act and in relation to which the court has no power equivalent to s 143(1). Its purpose is to prevent frustration or abuse of the process of the court before final judgment in a civil proceeding. On this basis, the value of the assets should not exceed the likely maximum amount of the applicant’s claim. The power to impose, or relax, freezing orders in civil proceedings has no bearing on a scheme designed to restrain property where, for example, the property represents the proceeds of offences, or is used in connection with the commission of certain offences, to render it available for forfeiture to the Crown and to preserve assets for the purpose of restitution or compensation to victims of crime.”
[1][2020] VSCA 138
34 I note, in the course of argument and submissions, that the orders made by Judge Misso on 18 or 21 December 2018 are to be vacated in the event that I grant the restraining order pursuant to s40F of the Act in respect of the $95,650.00 seized on 16 May 2018 from Mr Kakis.
35 I request that the appropriate draft orders be forwarded to the Court to comply with my reasons.
36 I reserve the question of costs.
- - -
0
1
0