Ex Parte - [2012] WASC 252

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: EX PARTE THE COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE [2012] WASC 252

CORAM: MARTIN CJ

HEARD: 15 JUNE 2012

DELIVERED : 15 JUNE 2012

PUBLISHED : 13 JULY 2012

FILE NO/S: CIV 2029 of 2012

MATTER :An application pursuant to section 18 of the Proceeds of Crime Act 2002 (Cth)
EX PARTE
THE COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE
Applicant
AND
ADAM JAMES AMBROZIAK
Respondent

Catchwords:

Restraining order - Proceeds of Crime Act 2002 (Cth), s 18 - Ex parte application - Reasonable grounds for suspicion of commission of offences under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) - Risk of disposition of property by respondent - Relevant that restraining order binds third parties; the bank and the Registrar of Titles - Relevant that respondent maintained right to apply for revocation of the order in the interests of justice - Order made without notice to respondent

Legislation:

Anti-Money Laundering and Counter-Terrorism Financing Act 2008 (Cth), s 43, s 142
Crimes Act 1914 (Cth), s 44
Proceeds of Crime Act 2002 (Cth), s 18, s 26, s 42, s 314, s 335, s 338
Rules of the Supreme Court 1971 (WA), O 52

Result:

Application successful
Restraining order pursuant to s 18 of the Proceeds of Crime Act 2002 (Cth) granted
Applicant allowed to delay providing notice to the respondent of the restraining order until execution of a search warrant, or in any event no later than 22 June 2012

Category: B

Representation:

Counsel:

Applicant: Mr E W L Greaves
Respondent: No appearance

Solicitors:

Applicant: Australian Federal Police
Respondent: No appearance

Case(s) referred to in judgment(s):

Director of Public Prosecutions (Cth) v Chan [2004] ACTSC 101; (2004) 150 A Crim R 163
Director of Public Prosecutions (Cth) v Kamal [2011] WASCA 55
Queensland Bacon Pty Ltd v Rees [1966] HCA 21; (1966) 115 CLR 266

MARTIN CJ: (This judgment was delivered extemporaneously on 15 June 2012 and has been edited from the transcript.)

Application is made by the Commissioner of the Australian Federal Police for a restraining order pursuant to s 18 of the Proceeds of Crime Act 2002 (Cth) (the Act). The order is sought against the respondent, Mr Ambroziak, on the grounds set out in two affidavits by an officer of the Australian Federal Police.
It is necessary for me to determine whether the requirements for the making of a restraining order under s 18 of the Act have been satisfied and I will do that by running through those requirements in the order in which they are found within the section. The first requirement of s 18 is that I be satisfied that this court is a court with proceeds jurisdiction. I am so satisfied and would note that s 314 and s 335 of the Act provide this court with the relevant jurisdiction.
The next question which must be addressed is whether application for the order has been made by an entity which falls within the description of a proceeds of crime authority as required by s 18(1)(c) of the Act. In this case the application is made by the Commissioner of the Australian Federal Police. It is clear from s 338 of the Act that the Commissioner is an entity falling within the description of a proceeds of crime authority, as defined by the Act.
I must then address whether, pursuant to s 18(1)(d), there are reasonable grounds to suspect that a person has committed a serious offence. There are in my view reasonable grounds which I will address in more detail in the context of the affidavit requirements of s 18(3). I note that the officer of the Australian Federal Police to whom I referred has sworn in par 13 of his first affidavit that he holds a reasonable suspicion to the effect that the respondent has committed three specified serious offences, and the grounds underlying that suspicion are set out at pars 17 to 26 of his first affidavit.
The next requirement imposed by s 18 is that the affidavit requirements of s 18(3) must be met (s 18(1)(e)). The first of those requirements is that the affidavit be from an authorised officer, defined in s 338 of the Act as including an AFP employee authorised by the Commissioner. I have no doubt that the officer who has sworn the affidavit, whom I will not name, is an officer of the Australian Federal Police and has been authorised by the Commissioner. I would draw attention also to par 1 of the first affidavit of the officer to whom I have referred.
The next requirement is that the affidavit must state that the officer suspects that, relevantly to this case, the respondent has committed the offence or offences (s 18(3)(a)). That requirement is met by par 13 of his first affidavit to which I have already referred.
In addition if, as is the case here, the application is to restrain the property of another, then the affidavit must state that the authorised officer suspects the property is subject to the effective control of the person who is suspected of committing a serious offence (s 18(3)(b)). In this case the applicant seeks an order in respect of funds standing to the credit of a corporate entity in a term deposit account with a bank, amongst other items of property. The authorised officer has deposed to the fact that he believes that the respondent has effective control over the funds standing to the credit of the bank account. He has deposed to the grounds upon which he holds that suspicion. Those grounds include the fact that the account is held in the name of a corporate entity of which the respondent is the sole director and shareholder and also include the fact that the respondent is the sole signatory of the bank account in respect of which the restraining order is sought.
Another requirement of the affidavit is that where there is a claim brought on the basis that property is proceeds of the commission of an offence, that must be deposed to and the basis of the suspicion that it is the proceeds of an offence must also be deposed to. In respect of this restraining order, that provision would apply to the property known as 15 Yirrawari Street, Baynton and to the funds standing to the credit of the bank account to which I have referred. The officer has deposed to his belief that they are the proceeds of crime at par 30 of his first affidavit and the other portions of his affidavit set out the grounds upon which he holds that suspicion, and they are closely related to the grounds for suspicion that the respondent has committed a serious criminal offence, to which I will now refer.
I turn then to the question of whether the grounds upon which the officer holds a suspicion that the respondent has committed an offence are reasonable. The question of whether the grounds are reasonable is affected by the notion of what is a suspicion. There are a number of cases that have dealt with the meaning of suspicion. Pertinent are the observations of Kitto J in Queensland Bacon Pty Ltd v Rees [1966] HCA 21; (1966) 115 CLR 266, and more recently the observations made in Director of Public Prosecutions (Cth) v Chan [2004] ACTSC 101; (2004) 150 A Crim R 163. In Queensland Bacon, Kitto J observed that:
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 the Chambers' Dictionary expresses it. Consequently, a reason to suspect that a fact exists is more than a reason to consider or look into the possibility of its existence (303).
These observations were referred to by Crispin J in Chan, who held that the Act requires 'only reasonable grounds for a suspicion and not … a prima facie case' (15).
In relation to the offences to which the authorised officer refers, the most significant for present purposes is the offence of contravention of the provisions of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (the AMLCTF Act). The submissions filed on behalf of the applicant conveniently refer to the offence under s 142(1) of that Act by reference to the shorthand title of 'a structuring offence' and I will use the same terminology.
In very brief terms, s 43 of the AMLCTF Act requires financial institutions, including banks, to report to AUSTRAC, which is an agency of the Commonwealth Government, transactions which involve physical currency of an amount equal to or greater than $10,000.
Section 142 of the AMLCTF Act creates an offence punishable by up to 5 years imprisonment, which is therefore an indictable offence pursuant to s 4G of the Crimes Act 1914 (Cth), for actions that have the sole or dominant purpose of thwarting the report from a bank or financial institution to AUSTRAC that would otherwise be required by the AMLCTF Act.
The facts relied upon to give rise to the reasonable grounds for suspicion of the commission of that offence or offences are set out in the AFP officer's first affidavit. In summary, the evidence strongly suggests that 268 deposits of cash - that is, physical currency - of amounts just under $10,000 have been made to a bank account by the respondent. It is significant that on 28 occasions upon which those deposits were made, more than one cash deposit of under $10,000 was made on the very same day. That evidence gives rise to a reasonable suspicion that the respondent was deliberately structuring his deposits to the bank for the sole or dominant purpose of thwarting the bank being obliged to report to AUSTRAC the lodgment of cash amounts that exceeded $10,000.
A structuring offence is a serious offence as defined by s 338 Act if the transactions in breach of s 142 of the AMLCTF Act total at least $50,000 in value during a six-month period. The 268 transactions are, according to the first affidavit of the authorised officer, said to have taken place over a period of just over five years and involve a total sum of just over $2.5 million. It will be obvious from those figures that necessarily as a matter of simple mathematics more than $50,000 must have been deposited in at least one six-month period within that time frame and therefore there is at least one serious offence of which the authorised officer has reasonable grounds of suspicion.
There are other offences relied upon by the authorised officer but it is unnecessary to consider them in any detail because one offence is sufficient to justify the relief sought.
The applicant has requested the court to consider the application without complying with the notice requirements imposed by s 26 of the Act. Under s 26(4), the court is obliged to accede to that request and consider the application. For the reasons given by the majority in Director of Public Prosecutions (Cth) v Kamal [2011] WASCA 55, that section does not oblige the court to determine the application without giving notice to parties but only to consider the application, and to consider the best way of proceeding, having regard to the possibly competing interests of procedural fairness on the one hand and the legislative objectives which are apparent from the terms and structure of the Act on the other.
The applicant presses me to not only consider the application without notice having been given to the respondent but also to proceed to determine the application. That course would be contrary to fundamental principles of procedural fairness which generally require that any person whose interests are to be affected by an order of the court be given notice of the prospect of an order being made and the opportunity to make submissions to the court and place any evidence before the court that is relevant to the question of whether or not the order should be made.
I have therefore given very careful consideration to the question of whether a departure from those fundamental principles of procedural fairness is justified in this case. In particular I have given consideration to the question of whether an alternative course might be to make orders under the general powers of the court, including the powers of the court to preserve property pending the grant of final relief, which are specifically enunciated by O 52 of the Rules of the Supreme Court 1971 (WA) (the Rules). Those powers could be used in order to preserve the current position until notice can be given to the respondent and he or his lawyers can appear before the court and put submissions or evidence before the court as to why the orders should not be made under the Act.
The basis upon which the applicant presses me to make the orders without notice to either the respondent or to other parties whose interests might be affected, such as the bank holding the account to which I have referred, is that there is an apprehension that the respondent may deal with or otherwise dispose of the property contrary to the interests of the applicant.
I note that s 18(5) of the Act provides that a court must make a restraining order even if there is no evidence of a risk of disposition contrary to the interests of the applicant and I take account of that provision. However, the question that I am now required to consider is the question of procedural fairness. That requires me to give consideration to the question of whether there is a real likelihood that there would be a risk of disposal if the respondent was given notice prior to the restraining order being made.
As the applicant concedes, there is no direct evidence of a disposition or likelihood that the property will be dealt with in a way adverse to the applicant's claim, or so as to defeat the applicant's claim, but I note that part of the property over which the restraining order is sought is funds standing to the credit of a bank account, being an amount in excess of $2 million. Plainly the funds standing to the credit of that account could be moved very quickly and very easily if notice were given to the respondent before a restraining order was made.
I therefore conclude that the interests of justice require that the interests of the applicant be protected on an interim basis before the respondent receives any notice of these proceedings or of the intention of the Commonwealth authorities to proceed against him.
In that regard the affidavit of the authorised officer to which I have referred deposes to the intention of the authorities to obtain and execute search warrants next week and to then arrest the respondent and bring charges against him in relation to at least some of the offences to which reference has been made in the papers.
The submission that has been put by the applicant is that if the respondent were to receive notice of those events or indeed of this application prior to some interim restraint being placed upon the property, there is a risk of disposition of the property. I accept that submission.
The question that I am required to address in these circumstances is whether it is preferable in the interests of justice, having regard to the requirements of procedural fairness to which I have referred, to make a restraining order now without notice to the respondent or alternatively to hold the current position by making an order under O 52 of the Rules for a limited period until such time as the search warrants to which I have referred are executed and perhaps charges brought against the respondent, and until such time as he is given notice of these proceedings.
The answer to that question will depend upon the particular circumstances of each case. In this case it is relevant that there is no direct evidence of propensity to deal with the property adverse to the interest of the applicant. Also relevant is the fact that there is a large amount of property which is capable of being easily transferred in a way that would defeat the interests of the applicant.
Relevant also are the interests of third parties in this property and the possible impact of orders that could be made under the Act on the interests of third parties. The property over which the restraining order is sought is essentially real estate in Western Australia and the funds standing to the credit of the bank account to which I have referred.
Plainly, the most effective way of restraining any dealing in those properties would be by making an order which would restrict the actions of those whose cooperation would be necessary before any effective disposition of the property could take place. In the case of the bank account, the relevant entity is the bank. In the case of the real estate, the relevant official is the Registrar of Titles.
It follows that the most effective way of protecting that property from disposition would be by the making of orders that would bind relevantly the bank and the Registrar of Titles. Neither the bank nor the Registrar of Titles is before the Court; nor is it proposed that they be given notice of the intention of the Commonwealth authorities until some point in the process of execution of search warrants and charges to which I have referred.
If I were to proceed under O 52, it would be necessary to make orders against the bank and the Registrar of Titles without notice to those parties if those orders were to be as effective as a restraining order made under the Act. That is because various provisions of the Act require that all persons, whether the subject of the order or not, are to give effect to the order. Thus, the making of an order under the Act would effectively bind both the bank and the Registrar of Titles.
I should also mention by way of an aside that I raised with counsel the question of whether it is possible to make an interim restraining order under the Act. Counsel submitted, for reasons which I accept, that the Act does not contemplate the making of an interim restraining order and I accept that that is not an option that I have available to me.
Returning then to the assessment of the relative merits of proceeding by way of the making of an order under O 52 as compared to the making of a restraining order, it is relevant also to take into account that if I make a restraining order, any person affected by that order will have the rights conferred by s 42 of the Act to apply within a limited period to revoke the order which I make.
The grounds upon which a court may make an order revoking a restraining order are broader than they were in the Act as previously enacted and include, under s 42(5)(b), any ground that would make it in the interests of justice to revoke the restraining order.
The breadth of that jurisdiction seems to me to give very real and very substantial rights to a party who is affected by the making of a restraining order made without notice. The ambit of those rights, although different from the right to be heard before the order is made, is not so materially different as to lead me to conclude in this case that there would be irremediable prejudice to the party who is most affected by the order sought - that is, the respondent - by proceeding to make the orders without notice and then leaving him to the exercise of the rights he has under s 42 of the Act.
In summary, the practical considerations to which I have referred, most particularly the need to make an interim order that binds parties not before the court, leads me to the conclusion that in the particular circumstances of this case, it is preferable to make a restraining order without notice to the respondent, as compared to making interim orders under the general powers of the court and giving the respondent the opportunity to be heard before any order under the Act is made. For those reasons, the application will be granted and a restraining order made as sought.