Hu v Commissioner of the AFP (Ruling No 1 as amended)
[2020] VCC 654
•8 May 2020 (amended 22 May 2020)
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMON LAW DIVISION | Revised Not Restricted Suitable for Publication |
CONFISCATION LIST
Case No. CI-18-03555
| IN THE MATTER of the Proceeds of Crimes Act 2002 (Cth) | |
| and IN THE MATTER of property suspected to be proceeds and/or an instrument of a serious offence and BETWEEN QUEENIE HU (PREVIOUSLY KNOWN AS QUIPING HU) and THE COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE | Applicant Respondent |
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JUDGE: | HIS HONOUR JUDGE DYER | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 1 April 2020 | |
DATE OF RULING: | 8 May 2020 (amended 22 May 2020) | |
CASE MAY BE CITED AS: | Hu v Commissioner of the AFP (Ruling No 1 as amended) | |
MEDIUM NEUTRAL CITATION: | [2020] VCC 654 | |
REASONS FOR RULING
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Subject: Proceeds of Crime
Catchwords: Procedure; related applications; criminal proceedings
Legislation Cited: Proceeds of Crime Act (2002) (Cth)
Cases Cited: Onley v Commissioner of the AFP (2019) 367 ALR 291; AFP v
Zhao [2015] HCA 5; Commissioner of AFP v Dong Hua
International Investments Pty Ltd & Yuhong Zhou [2015] VSC 748
Ruling: Application adjourned to further directions 15 September 2020
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr T Mitchell | FCG Legal Pty Ltd |
| For the Respondent | Ms R Burton | Australian Federal Police |
HIS HONOUR:
1 On 28 August 2018 a restraining order was made by this court pursuant to section 18 of the Proceeds of Crime Act 2002 (Cth) (“POCA”). The restraining order operated in respect of funds standing to the credit of the applicant, Ms Queenie Hu, in a bank account maintained by the St George Bank and held in the applicant’s name.
2 The basis upon which the restraining order was granted was, in short compass, that the court was satisfied that an authorised officer of the Australian Federal Police held a suspicion on reasonable grounds that a serious offence had been committed by Mingche Weng and Mr Weng had effective control over the funds standing to the credit of the applicant in her bank account.[1]
[1]Affidavit of Federal Agent Sharron Knott affirmed 27 August 2018
3 Following that restraining order a number of further applications were made. These are set out in a procedural chronology which was agreed between the parties and is set out as an appendix to this ruling.[2]
[2]Appendix 1
4 The issue presently in dispute is whether Ms Hu’s exclusion application, which has been on foot since February 2019, should be heard and determined as soon as practicable, or whether it should be adjourned until September 2020 at the earliest, to enable further examination to occur. The respondent submits that any further examinations are unlikely to occur until after July 2020 when criminal proceedings involving Mingche Weng and other persons are finalised.
5 Counsel for both parties provided written outlines of submissions and the application was heard on 4 April 2020.
6 Ms Burton, on behalf of the Commissioner, affirmed the position adopted by her client in her outline of submissions dated 30 March 2020. In essence she submitted that the Commissioner needed to complete examinations involving proposed examinees Weng and Bi, and those examinations had been adjourned at the request of the examinees until after criminal pleas listed for July of this year.
7 Ms Burton submitted that there should be no separate hearing of Ms Hu’s application as this would involve the court hearing and determining substantially the same issues with possibly the same witnesses as for remaining applications relating to the same subject matter. She submitted that Ms Hu’s proceeding should be stood over to 15 September 2020, together with other applications in these proceedings.
8 Ms Burton referred me to the second affidavit of Federal Agent Sharron Knott affirmed 10 December 2018 as to the substance of the Commissioner’s case in respect of the restrained bank account held in the applicant’s name.[3]
[3]Commissioner’s submissions at paras 10 to 11
9 Ms Burton’s submissions set out the procedural history in some detail and noted that the examination hearings conducted by the Administrative Appeals Tribunal were held between March and July 2019, but had not concluded. She noted that criminal proceedings in respect of three of the persons examined, Zheng, Weng and Bi, had then intervened.
10 These persons have entered guilty pleas in relation to tobacco importation offences and are to be arraigned on 13 July 2020. Ms Burton noted that the Commissioner had consented to the adjournment of the examination hearings to permit Zheng, Weng and Bi to prepare for their forthcoming plea hearings.
11 Ms Burton made further submissions concerning the current difficulties of conducting examination hearings at the AAT, given the COVID-19 restrictions. These included difficulties conducting telephone examinations where interpretation is required, and the inability of the Commissioner to direct the AAT as to the conduct of examinations. It was simply not practicable for the examinations to be completed at any time in the near future.
12 Finally, Ms Burton submitted that whilst some delay in Ms Hu’s applications for exclusion was unavoidable, the interests of justice would be better served by ensuring that all applicants proceeded in a single hearing following the conclusion of the plea hearings scheduled for July 2020.
13 Mr Mitchell, who appeared on behalf of the applicant, Ms Hu, submitted that a delay in progressing Ms Hu’s application until September 2020 would in effect amount to a stay of her proceeding on grounds which were directly prohibited by the provisions of s 319(2)(b), (c) and (d) of the POCA. He referred me to the affidavit of Mr McCleave sworn 23 March 2020, which was relied upon by the respondent.
14 Mr Mitchell submitted that the substance of that affidavit indicated an agreement between the Commissioner and other persons to adjourn other applications until at least September 2020 without any consent being given by Ms Hu. Such a course was contrary to the prohibited grounds in the Act and the court had no power to stay Ms Hu’s application on the basis of such grounds.
15 Mr Mitchell referred me to recent authority in Onley v Commissioner of the AFP[4] where the New South Wales Court of Appeal emphasised the primacy of the interests of justice in deciding whether to stay a POCA proceeding.
[4](2019) 367 ALR 291
16 Absent reliance upon the prohibited grounds in the Act, Mr Mitchell submitted that the Commissioner’s only reasons for opposing the early hearing of Ms Hu’s application were; first, to entitle the Commissioner more time to complete its examination of Ms Hu, and secondly, the possible transmission of COVID-19.
17 In relation to the first point, Mr Mitchell noted that Ms Hu and Mr Weng had been examined in July 2019 following orders permitting that examination being made some five months earlier. Mr Mitchell pointed out that examinations of other persons said to be involved with Ms Hu had also been examined during 2019, with their examinations again left unconcluded.
18 Ms Hu was not asked to consent, nor did she consent, to the adjournment of those other examinations. Mr Mitchell submitted that the opportunity to conduct examinations given to the Commissioner was reasonable. He submitted that the evidence established that whilst a reasonable opportunity had been given, the factual scenario of the unconcluded examinations more than a year after they were ordered, was indicative of the Commissioner in effect waiving any further rights to examination.
19 Insofar as the restrictions on the court’s business flowing from the COVID-19 emergency measures, there was still available to the court the use of technology which ought to permit Ms Hu’s matter being heard promptly.
20 The timing and order by which a court should determine competing applications made under the POCA and related criminal proceedings has been the subject of considerable appellate authority and legislative change. In AFP v Zhao[5] the High Court determined that the civil proceedings relating to exclusion and forfeiture applications under the POCA could be stayed pending the outcome of criminal proceedings relating to substantially the same matters.
“The prospect that civil proceedings may prejudice a criminal trial and that such prejudice may require a stay of the civil proceedings is hardly novel. In some jurisdictions, procedures are provided for making an application for a stay in such circumstances. The risk of prejudice in a case such as this is real. The second respondent can point to a risk of prejudice; the Commissioner cannot.
So far as concerns the first respondent, the Court of Appeal was correct to identify as relevant that to permit the forfeiture proceedings to proceed against her would produce two sets of proceedings, rather than one. The principle of the common law that seeks to prevent a multiplicity of actions has a long history and cannot be ignored.”[6]
[5][2015] HCA 5
[6]Ibid at [47] to [48]
21 Following the High Court’s decision in Zhao s 319 of the POCA was amended. In the course of argument Mr Mitchell referred me to the explanatory memorandum relevant to the prohibited grounds for the granting of a stay which are set out in s 319(2) to (5). As to these provisions the explanatory memorandum states:
“Secondly, new sub-sections 319(2)-(5) clarify where a court must not grant a stay. These principles are designed to clarify the intention that concurrent civil and criminal proceedings are possible, and require specific consideration of the individual circumstances and associated risks of prejudice. The amendments clarify that proceedings under the Act may only be stayed where the granting of a stay is the only means of addressing the circumstances (ie. the prejudice that may result to a concurrent or subsequent criminal trial). The proposed amendments are primarily designed to ensure that the court will consider the individual circumstances of the proceeding, including the nature of the overlap between the civil and criminal proceedings, and prevent the risk that a person need only claim a risk of prejudice but not provide evidence explaining the nature of that risk.”[7]
[7]Crimes Legislation Amendment (Proceeds Of Crime and Other Measures) Bill 2015. Explanatory memorandum [49]
22 Mr Mitchell referred me also to Commissioner of the Australian Federal Police v Dong Hua International Investments Pty Ltd and Zhou (“Dong Hua”) where the Court of Appeal affirmed a judge’s decision to refuse the adjournment of a fourth trial date to enable the Commissioner to complete examinations of a number of persons, many not resident in Australia. Ms Burton submitted that the facts in Dong Hua were substantially different from those in the present case.
23 In Dong Hua the judge initially determining the application noted the difficulties with the conduct of examination orders involving persons resident outside of Australia:
“If I were to grant these applications it is entirely unclear to me as to whether and when the examinations of the five Chinese residents would occur. Even if the Act has extraterritorial reach, and a foreign non‑party resident can be compelled to respond to compulsive Australian court process, there is no temporal certainty at all. As I have indicated I am asked to exercise a broad discretion that involves consideration of many factors, including delay. I have concluded that delay, in the context of the procedural history that I have outlined, is a decisive factor in the exercise of my discretion.
The Commissioner has been entitled to seek examination orders under s 180 of the Act for more than two years. He has not sought to do so until very recently. In the meantime the trial date has been vacated on three occasions, the last two of which were due to delay on the Commissioner’s part. On at least the last two occasions multiple days of court time were set aside. If I allow the application for the Chinese resident examination orders I will be compelled to vacate another block of court days. I am simply not prepared to delay this matter further.
Yuhong Zhou is in a different category. As I understand it, she currently resides in Melbourne. I have concluded that I ought make an examination order in respect of her. I am unsure whether it is logistically possible to carry out all the steps in the examination process (including transcription) before 23 February 2016, but I am satisfied the Commissioner should have the opportunity to do so. The parties should proceed on the basis that the hearing will commence on 23 February 2016 regardless of whether the Zhou examination has been conducted.”[8]
[8]Commissioner of AFP v Dong Hua International Investments Pty Ltd & Yuhong Zhou [2015] VSC 748
24 The factual scenario in Dong Hua is significantly different from the facts in the present application. First, in Dong Hua the Commissioner had delayed seeking examination orders for a period of two years. Secondly, three trial dates had previously been vacated, two at the request of the Commissioner. Thirdly, the proposed examinations had not been commenced in the case of the five non-resident proposed examinees. Fourthly, there was considerable uncertainty as to whether they would in fact occur and great uncertainty as to any timeline. Finally the trial judge did order an examination in respect of a Melbourne-based proposed examinee, notwithstanding that a trial date was looming at the time of His Honour’s order.
25 In those circumstances I do not believe the present case should be approached in a similar manner.
26 Mr Mitchell also referred to Onley v Commissioner of the AFP[9] as authority for the proposition that primacy should be given to the interests of justice in deciding whether to stay a POCA proceeding. Mr Mitchell submitted that once the prohibited grounds were excluded from the court’s consideration, the Commissioner’s application concerned only whether there should be more time provided to the Commissioner to conduct examinations and the possible transmission of COVID-19. Neither of these matters should entitle the Commissioner to stay Ms Hu’s application.
[9][2019] NSWCA 101 & (2019) 367 ALR 291
27 The affidavit of Justin McCleave sworn 23 March 2020 sets out in considerable detail the procedural history relating to the present application and related proceedings, including the criminal proceedings involving Mingche Weng, Ruxin Zheng and Haochu Bi. The affidavit deposes to Mr Weng entering a plea of guilty in respect of certain tobacco importing charges and notes that he is to be arraigned on a guilty plea in the County Court on 13 July 2020.[10]
[10]Affidavit of Justin McCleave sworn 23 March 2020 at [17]
28 Mr McCleave’s affidavit refers to three applications commenced by Ms Hu. Of these only the application under s 74 of the Act for exclusion from forfeiture which was made on 25 February 2019 remains on foot.[11] The specific basis for the adjournment of Ms Hu’s application is set out in Mr McCleave’s affidavit at [33]. With the exception of the current COVID-19 concerns, the basis for the adjournment application is essentially that the various applications, not only by Ms Hu but by other applicants, should be heard and determined in one proceeding.
[11]Affidavit of Justin McCleave sworn 23 March 2020 at [23] to [25]
29 When fairly viewed the Commissioner does not seek to stay the proceedings, rather to adjourn them until the conclusion of any further examinations which may occur following the finalisation of the plea hearings listed in this court in mid‑July. Any orders requiring the Commissioner to file material prior to that time would be unfairly prejudicial.
30 Applications of this type invariably involve the exercise of a broad discretion which must focus in large extent on the ultimate object of finalising the outstanding applications in a matter compatible with the wording of the POCA and general common law principles.
31 At the time of this application being argued before me, the criminal plea hearings concerning Mr Weng and other accused persons, was less than four months from their anticipated conclusion. The adjournment application proposed by the Commissioner was for a period of six months. Notwithstanding the forceful and careful argument advanced by Mr Mitchell, I cannot be satisfied that the proposed orders sought by the Commissioner amount to a stay application which relies upon the prohibited grounds in s 319(2) to (5) of the POCA.
32 This is not an application where the Commissioner seeks to adjourn proceedings to an indefinite date where the outcome of criminal proceedings remains in the balance. In this case Mr Weng has entered a plea of guilty and a plea hearing is scheduled for mid-July 2020. The Commissioner’s case concerning the restrained funds in Ms Hu’s account relies on Weng having effective control over that account.
33 I am satisfied that an adjournment of Ms Hu’s proceeding to a further direction hearing on 15 September 2020 is the preferred course of action in her proceeding as it will then permit the Commissioner to seek any further examination in accordance with s 180 of the Act. Additionally, and of perhaps equal importance, is that criminal proceedings concerning Mr Weng will have concluded and the parties will not suffer any prejudice in terms of the evidence available to them for use in this proceeding.
34 I therefore propose to make the following orders:
i)The application made by Queenie Hu pursuant to s 74 of the Act is adjourned to 15 September 2020.
ii)The costs of this application are costs in the proceeding.
iii)Liberty to apply.
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