Hu v Commissioner of the Australian Federal Police

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCI 2022 0015

QUEENIE HU	Applicant
v
COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE	Respondent

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JUDGES:	PRIEST, T FORREST and KAYE JJA
WHERE HELD:	Melbourne
DATE OF HEARING:	13 February 2023
DATE OF JUDGMENT:	28 February 2023
MEDIUM NEUTRAL CITATION:	[2023] VSCA 32
JUDGMENT APPEALED FROM:	[2021] VCC 2059 (Judge Murphy)

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PROCEEDS OF CRIME – Appeal – Respondent granted restraining order on applicant’s bank account – Application by applicant for exclusion pursuant to s 94 and for compensation order pursuant to s 94A of Proceeds of Crime Act 2002 (Cth) refused by trial judge – Whether reasons adequate – Whether judge addressed correct issues – Whether judge erred in concluding that applicant had not established that did not know that deposits into account were proceeds or instrument of an offence – Whether judge erred in concluding that applicant had not established that deposits into the account were made in circumstances that did not arouse a reasonable suspicion that were proceeds or instrument of an offence – Whether judge erred in concluding that applicant not entitled to compensation for the proportion of the account which not the proceeds or instrument of offence – Appeal allowed in part.

Proceeds of Crime Act 2002 (Cth) ss 94, 94A, 330; Anti-Money Laundering and Counter-Terrorism Act 2006 (Cth) s 142.

Government Insurance Office of New South Wales (1997) 48 NSWLR 430; Lordianto v Commissioner of Australian Federal Police (2019) 266 CLR 273; Director of Public Prosecutions (Victoria) v Le (2007) 232 CLR 562; Browne v Dunn (1894) 6 R67; Reid v Kerr (1974) 9 SASR 367 applied.

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Counsel
Applicant:		Mr T Mitchell
Respondent:		Mr R Craig KC with Ms R Burton
Solicitors
Applicant:	FCG Legal
Respondent:	Criminal Assets Litigation, Australian Federal Police

PRIEST JA
T FORREST JA
KAYE JA:

On 28 August 2018, a judge of the County Court, on the application of the respondent, made a restraining order under s 18 of the Proceeds of Crime Act 2002 (Cth) (the ‘Act’) in respect of a number of items of property, which included a bank account held in the name of the applicant with the St George Bank (the ‘St George account’). On 18 September 2020, the applicant made an application for an exclusion order in respect of the property under s 94 of the Act, or alternatively, for compensation under s 94A of the Act. The application came before a judge of the County Court on 15 November 2021. In a reserved decision delivered on 17 December 2021, the judge dismissed the application.[1] The applicant now seeks leave to appeal the decision.
[1]Hu v The Commissioner of the Australian Federal Police [2021] VCC 2059 (‘Reasons’).

Background circumstances

The restraining order was made following the arrest of a number of persons who were charged with dealing with monies that were reasonably suspected of being the proceeds of crime contrary to s 400.9 of the Criminal Code (Cth), and with conducting transactions to avoid reporting requirements contrary to s 142 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (‘AMLA’). The accused persons included Mingche Weng (‘Weng’) and Ruxin Zheng. It was alleged that Weng and others had knowingly arranged for tobacco products to be imported into Australia with the intention of not declaring them, in order to unlawfully evade payment of custom duties and/or excise on the tobacco. It was further alleged that Weng and his co-accused had been involved in the possession, storage and sale of the illegal tobacco products, and that they had laundered the proceeds of the sale of those products.
In an affidavit in support of the restraining order, an officer of the Australian Federal Police (‘AFP’), Sharron Knott (‘Agent Knott’), deposed that it was suspected that the St George account, in the name of the applicant, was directly connected to Weng. Agent Knott further deposed that she suspected that the funds, standing to the credit of the account, were the proceeds of crime, that they were held on trust by the applicant for Weng, and that they had been received into the account from Weng via his associate Yuhong Zeng without the applicant having provided consideration for them.
The applicant is a Chinese business person who is ordinarily resident in China. Her husband Phigo Zhang (‘Zhang’) resided in their home in Doncaster with their daughter. Until 2019, the applicant visited them each year.
At the time the applicant held two bank accounts in Australia. The first was the St George account which was the subject of the restraining order, and the second account was a Westpac account (the ‘Westpac account’). The St George account is an offset account for the home loan secured against the Doncaster home.
In November or December 2017, Weng proposed to Zhang an exchange of funds, by which Weng would provide approximately AU$800,000 to the applicant in Australia, in exchange for the payment of an equivalent sum, converted into Chinese currency (‘RMB’), to accounts nominated by him in China. Zhang agreed to that proposal.
Subsequently, between January and June 2018, the applicant received a number of deposits into the Westpac account and the St George bank account at the instigation of Weng.
Specifically, in January 2018, Ruxin Zheng deposited $192,450 in cash into the Westpac account. That amount formed part of three transfers, totalling $200,000, which the applicant made from the Westpac account into the St George account between 25 January and 26 February.
Between 18 April and 24 April 2018, four cash deposits totalling $33,300 were made into the St George account. Each such deposit was for an amount less than $10,000.
On 27 April 2018, Weng, having flown to Sydney to collect a suitcase containing cash, deposited $195,000 in cash into the St George account. Three days later, on 30 April, Yuhong Zeng transferred two further sums, each of $100,000, from his account to the St George account. Those sums had previously been deposited in cash into the account of Yuhong Zeng.
Subsequently, between 12 June and 19 June 2018, three further cash deposits, totalling $106,000, were made into the St George account.
At about the time of each of the deposits into her two bank accounts, the applicant transferred amounts in Chinese currency to bank accounts within China that had been nominated by Weng.
The restraining order was initially made on the basis of a suspicion by Officer Knott that the St George account was under the effective control of Weng. However, subsequently she recognised that that suspicion had been incorrect, but the restraining order was maintained on the basis that she suspected that the St George account had received the proceeds of offences committed by Weng.
At the time of the restraint the balance in the St George account was $797,640.34. The 13 deposits that had been made into the St George account between 25 January 2018 and 19 June 2018, totalling $734,300, were the subject of the judge’s determination in this case. The following is a table (‘the Table’) setting out the 13 deposits:

#

CB Ref

Transaction Date

Bank Statement Narration

Deposit Amount $

1

284

25 Jan 2018

QUEENIE HU QUEENIE HU

10,000.00

2

284

29 Jan 2018

QUEENIE HU QUEENIE HU

10,000.00

3

280

26 Feb 2018

QUEENIE HU

180,000.00

4

280

18 Apr 2018

CASH DEPOSIT

9,000.00

5

280

21 Apr 2018

CASH DEPOSIT

9,500.00

6

280

23 Apr 2018

CASH DEPOSIT

9,800.00

7

280

24 Apr 2108

CASH DEPOSIT

5,000.00

8

280

27 Apr 2018

CASH DEPOSIT

195,000.00

9

280

30 Apr 2018

YUHONG ZENG queenie HU

100,000.00

10

280

30 Apr 2018

YUHONG ZENG queenie HU

100,000.00

11

278

12 Jun 2018

CASH DEPOSIT

50,000.00

12

278

13 Jun 2018

CASH DEPOSIT

40,000.00

13

278

19 Jun 2018

CASH DEPOSIT

16,000.00

TOTAL

$734,300.00

The first three deposits consisted of transfers made by the applicant from the Westpac account. At the trial, there was no dispute that the payments by Ruxin Zheng into the Westpac account, which were thus transferred by the applicant to the St George account, and that deposits 8 to 13, were each made by or at the instigation of Weng. The respondent’s case at the trial was that deposits numbered 1 to 3 and 8 to 13 were proceeds of crime contrary to s 400 of the Criminal Code, and that deposits 4 to 7 evidenced structuring contrary to s 142 of the AMLA.
In September 2020, Weng and Zheng, and their co-offenders, pleaded guilty in the County Court to one charge of dealing with the proceeds of crime in the period between 21 April and 13 August 2018, and to one charge of importing tobacco with the intention of defrauding the revenue in the period between 7 March and 18 August 2018. They were sentenced on 20 December 2020.
On 18 September 2020, the applicant filed an amended application for an exclusion order and for a compensation order. On 18 May 2021, on the application of the applicant, a judge of the County Court made an order, under s 93(1) of the Act, extending the forfeiture period, for the purposes of s 92(3) of the Act, to 18 December 2021. The primary judge handed down reasons for judgment with some expedition on 17 December 2021, the day before the extension order made by the County Court was due to expire.
At the trial, the applicant’s primary case was that the payments, that she had received from Weng, were not the proceeds or an instrument of an offence, and therefore they should be excluded from forfeiture pursuant to s 94 of the Act. Alternatively, the applicant’s case was that she had received the money from Weng in circumstances in which she did not know, and it was not reasonable for her to suspect, that it was the proceeds or an instrument of an offence, and accordingly the money ceased to be the proceeds of an offence or an instrument of an offence by reason of s 330(4)(a) of the Act. In the alternative, it was put on behalf of the applicant that a proportion of the value of her interest in the St George account was not derived from the commission of any offence and was not an instrument of an offence, and accordingly the applicant was entitled to an amount of compensation equal to that proportion pursuant to s 94A of the Act.
At the trial, the respondent contended that the applicant had failed to discharge the onus of proving each of those matters. The judge upheld that submission, and dismissed the applicant’s application for exclusion under s 94 of the Act and her application for compensation under s 94A.

Application

In the application for leave to appeal the applicant relies on six proposed grounds of appeal, namely:
1.The learned trial judge erred by failing to give adequate reasons.
2.The learned trial judge erred in law by asking the wrong questions when purporting to apply s 330(4)(a) of the Proceeds of Crime Act 2002 (Cth) (the POCA).
3.The learned primary judge erred by not finding, despite the weight of the evidence in favour, that the applicant acquired the property without knowing that it was the proceeds or an instrument of an offence.
4.The learned primary judge erred by not finding, despite the weight of the evidence in favour, that the applicant acquired the property in circumstances that would not arouse a reasonable suspicion that it was the proceeds or an instrument of an offence.
5.The learned trial judge erred by declining to follow binding authority and applying an erroneous construction of sections 338, 94 and 94A of the POCA to the facts, namely holding proportions less than the whole of a bank account may not be excluded under s 94, or the subject of compensation under s 94A.
6.The learned primary judge should have found that at least $276,030.34:
(a) was not proceeds or an instrument of an offence;
(b) was excluded from forfeiture; or
(c)was the specified proportion in a compensation order pursuant to s 94A of the POCA.
Based on those grounds, the applicant initially sought the following four orders:
1.Leave to appeal is granted.
2.The appeal is allowed.
3.The orders of the primary judge made on 17 December 2021 are set aside, and in lieu thereof there be orders that:
(a)pursuant to s 94 of the POCA, the funds formerly standing to the credit of Queenie Hu in the St George Bank account number 412936219 (the Restrained Account) are excluded from forfeiture, and from the restraining order made on 28 August 2018; and
(b)the Official Trustee is directed to transfer the balance of the funds held on account of the Restrained Account (including any accretions thereto) to Ms Hu forthwith; or
(c)pursuant to s 94A of the POCA, the proportion of the value of the Restrained Account not derived or realised from the commission of any offence be paid to the applicant by the Commonwealth; and
(d)the Commissioner of the Australian Federal Police pay all of Ms Hu’s costs of the proceeding pursuant to s 323 of the POCA.
4.The respondent pay the appellant’s costs of the application for leave and of the appeal.

Notice of objection to competency

The respondent has filed a notice of objection to the competency of the applicant’s application for leave to appeal, to the extent that it seeks the orders proposed in paras 3(a) and 3(b). Pursuant to s 93(1) of the Act, a court cannot, for the purposes of Part 2–3 of Division 1 of the Act, extend the period, at the end of which property is forfeited, beyond a period of 15 months from the start of the conviction day. Section 94(2) of the Act provides that an order under s 94 cannot be made in respect of property if it has already been forfeited. The respondent notes that the New South Wales Court of Appeal has confirmed, in three decisions, that in those circumstances there is no proper basis for the court to make such an order after the property has been forfeited: see AD v Commissioner of the Australian Federal Police;[2] Studman v Commonwealth Director of Public Prosecutions[3] and Halac v Commissioner of the Australian Federal Police.[4] In the present case, the date of conviction was 17 December 2020. The funds in the St George account were forfeited on 18 December 2021. Accordingly, it is submitted, proposed orders 3(a) and 3(b) in the leave application are devoid of utility since those orders cannot be made. The respondent has specifically noted that its objection to competency does not extend to the order proposed in para 3(c), namely, an order for compensation pursuant to s 94A of the Act.
[2](2007) 97 NSWLR 588 (Beazley P, Meagher and Gleeson JJA).
[3](2007) 177 A Crim R 34 [2007] NSWCA 285 (Spigelman CJ, McClennan CJ at CL and Handley AJA).
[4][2016] NSWCA 146 (McColl, Ward and Leeming JJA).
The applicant filed a response to the respondent’s notice of objection to competency. On the hearing in this Court, the applicant accepted that the Court cannot grant the relief sought in paragraphs 3(a) and (b) of the application. However, the applicant has contended that the Court has jurisdiction on appeal to make restitutionary orders for the reversal of a payment made, or property transferred, in consequence of an order that has later been set aside. It was contended that such an order should be made in the present case if the applicant were to succeed in the appeal.

The respondent’s evidence

The evidence in the application consisted primarily of affidavits of the applicant and her husband Zhang, and a number of affidavits filed on behalf of the respondent. The applicant and Zhang were each cross-examined. It is convenient to summarise first the relevant aspects of the evidence adduced on behalf of the respondent before turning to the evidence relied on by the applicant.
Agent Knott, the AFP member, swore an affidavit in support of the application to vary a restraining order and that affidavit was also relied on in the applications before the judge. Agent Knott set out the basis upon which she suspected that the funds standing to the credit of the St George account were wholly or at least in part the proceeds of crime for the purposes of s 19 of the Act.
The respondent also relied on an affidavit sworn by Abigail Gibson, a forensic accountant employed by the AFP, in which she exhibited a report she had prepared containing her analysis of bank transactions associated with the applicant and others. As a result of her analysis, she compiled the Table of unexplained payments into the St George account set out at [14] above.
Ms Gibson also identified the following cash deposits to the applicant’s Westpac bank account:
(1)A deposit of $72,450 on 25 January 2018;
(2)A deposit of $120,000 on 29 January 2108; and
(3)A deposit of $16,000 on 26 February 2018.
The respondent in that respect also relied on an affidavit sworn by Ruxin Zheng, who was a member of the syndicate involved in the importing of the tobacco products and the laundering of the proceeds of the importation. Mr Zheng deposed that on 25 January 2018, Weng had provided him with a bag containing a large amount of cash which he deposited into the applicant’s Westpac bank account. The amount deposited was $72,450. Subsequently, on 29 January 2018, at the request of Weng, Zheng received another bag containing a large amount of cash from an associate of Weng. Zheng then deposited that amount into the applicant’s Westpac bank account. The amount deposited was $120,000.
In her report, Ms Gibson also examined the accounts of Weng in relation to the proceeds of the sale by him of three properties in Balwyn. Ms Gibson established that apart from $140,000, it could be demonstrated that the proceeds from the sale of those three properties were dispersed to persons other than the applicant. She was unable to identify the recipient of the sum of $140,000 which was part of the proceeds of the sale of those properties.
The applicant’s evidence
The applicant deposed two affidavits in support of her application. In the first affidavit, she said that while she had known Weng, she had only met him on a few occasions. Her husband Zhang had met Weng in 2015. In July 2017, Weng told Zhang that he planned to sell residential properties he owned in Balwyn and Balwyn North and move back to China with his family. Subsequently, in November or December 2017, Weng told Zhang that he needed Chinese currency due to the relocation of his family to China. He asked Zhang whether he could arrange for RMB to be transferred to Weng in China and Weng would reimburse the applicant and Zhang in Australian dollars. Weng told Zhang that those repayments would be made from the nett proceeds from the sale of his properties in Australia, which was approximately AU$800,000.
Zhang then discussed the proposal with the applicant. In her affidavit, she said she agreed to the proposal, as her family lived in Australia and needed Australian dollars for daily expenses, mortgage interest payments and tuition fees for the children. It was agreed that the applicant and Zhang would advance RMB to Weng based on the exchange rate that applied on the day in which Weng reimbursed the applicant’s account. Weng gave Zhang and the applicant details of the nominated bank accounts in China which were in the names of a number of different people who, he said, were his relatives. The funds, which the applicant remitted to those accounts in China, were derived from the mortgage of properties that she owned in China.
The applicant then referred to the thirteen deposits referred to in the Table set out above. She said that the first two amounts, of $10,000 each, were paid into the account by Xing Qan Huang, a friend of Zhang. She said that Zhang had loaned Mr Huang $20,000 in cash, and the deposits were repayments of that loan. The applicant further deposed that the fourth, fifth, sixth and seventh deposits had nothing to do with Weng. They were cash deposits that she had paid into the account. The applicant had obtained $20,000 in cash from Zhang, and a further $15,000 in cash had been brought by Zhang and herself into Australia from China, for their personal use.

The applicant further deposed that the eighth, ninth and tenth deposits (totalling $395,000) were made pursuant to the arrangement that the applicant had entered into with Weng. In return for those deposits, the applicant caused the following three deposits to be made into accounts nominated by Weng with the Industrial and Commercial Bank of China:
(1)RMB 1,000,000,000 on 27 April 2018;
(2)RMB 424,053 on 28 April 2018; and
(3)RMB 479,500 on 1 May 2018.
Finally, the applicant deposed that the eleventh, twelfth and thirteenth deposits (totalling $106,000) constituted transfers from Weng pursuant to the arrangement that he had entered into with her. In return, she made six transfers, totalling RMB 980,000, into accounts nominated by Weng with the Bank of China on 8 June and 9 June 2018.
In her second affidavit, the applicant stated that at the time of each transaction, she and her husband had checked the exchange rate to confirm the amount that was to be received and paid into her account. At that time, the exchange rate was approximately five RMB to one Australian dollar. The applicant deposed that Weng had contacted either her husband or herself on three occasions to exchange funds namely, in January, April and June 2018. On each occasion, he had nominated a bank account or bank accounts into which the funds were to be transferred. She said that she had no reason to expect that any person other than Weng would make the deposits.
The applicant further deposed that the first three deposits into the St George bank account (on 25 January, 29 January and 26 February 2018 respectively) were transferred from funds in the Westpac account. The source of those funds was from a deposit of $72,450 on 25 January 2018, and a deposit of $120,000 on 29 January 2018, set out in the Gibson report. She said that at the request of Weng, she had paid RMB 991,019 to a Mr Yongpai Yang. In exchange, Weng caused the two payments (totalling $192,450) to be made into her Westpac bank account.
The applicant further stated that the four deposits made between 18 April and 24 April 2018, of $9,000, $9,500, $9,800 and $5,000 respectively (deposits numbered 4 to 7 in the Table), comprised cash money that her husband and herself had brought into Australia. She said that they would bring in slightly less than $10,000 each, but they would not bank the funds immediately. Rather, the money would be kept in envelopes at home and used from time to time. At that time, they were hosting guests from China, and some of the money was used for entertainment expenses.
The applicant was cross-examined at some length on the contents of her two affidavits.
In cross-examination, she said that when her husband and daughter came to Australia in 2008, she had remained working in China in real estate development. She had previously been involved in conducting an import/export business. She described herself as an experienced businesswoman. After 2016, her visits to Australia were for periods of about ten days. She did not work in Australia and she had not undertaken any property development in Australia. The house in Doncaster was purchased in 2011 for $980,000. In order to finance the purchase, she had obtained a loan of $900,000. The balance of the purchase price was monies that the applicant had brought from China. She said that it was permissible to purchase US$50,000 from Chinese banks each year. The loan for the purchase of the Doncaster property was originally with Westpac, but later was transferred to the St George bank. The account was an offset account.
The applicant said that each time she or her husband came to Australia they would bring about $9,000 in cash with them. She acknowledged that if she brought more than $10,000, she would have to declare the amount to Customs.
The applicant said that in accordance with the arrangement which Zhang had made with Weng, she would pay RMB in China, and Weng would pay her in Australia in Australian dollars. At that time, Zhang did not have his own bank account. The applicant was in charge of all the accounts, because her husband was not familiar with digital transfers.
The applicant said that before the arrangement was made, she had met Weng several times, but she described him as an acquaintance and not a friend. Weng had come from the same province (Fujian) as the applicant and her husband. She would only transfer the amount requested by Weng in RMB, if she had sufficient funds to do so, because she needed to obtain money for the cashflow of her business. She did not have direct contact with Weng, but he had told Zhang that the deposits into her account constituted the proceeds of selling his own house. Zhang had attended the auction of Weng’s house. Weng told him that after selling the properties he would have $800,000 nett. As her husband had attended the auction, the applicant believed Weng. However, she did not know whether Weng had a mortgage over his properties.
When pressed in cross-examination, the applicant said that she did not conduct any research into Weng’s financial capacity, because he was not just an acquaintance, he was a friend. She agreed that the fact that Zhang had attended the auction did not mean that they knew how much the sale proceeds would be. In order to remit $800,000 to the accounts nominated by Weng in China, she had to borrow that amount in China. The arrangement was that while she would receive currency in Australia, in return she would incur a debt for that amount in China.
The applicant was then questioned about the three deposits, totalling $395,000, that were made into her account in late April 2018 (deposits 8, 9 and 10 in the Table). She agreed that she had made a payment in China, for RMB 1,000,000,000, before she received the deposit on 30 April. Sometimes she would send the Chinese transfer first before she received the transfer into her account in Australia, and sometimes she did it on the same day. She did not make any inquiry to ascertain whether the persons, into whose accounts the monies were paid in China, were relatives of Weng. She did not receive any receipts from Weng in respect to those payments, because normally she would receive an equivalent deposit into her Australian bank account on the same date. She paid the amounts in China into accounts in other people’s names, because Weng did not have a bank account in China. She did not propose to him that they should only undertake the transactions after he had opened such account in China.
The applicant said that she did not consider that it was necessary for her to check whether the monies paid into her account were ‘problematic’. She was only concerned as to how much money she paid in China. She did not check the manner in which the monies had been deposited into her account, she was only concerned that the correct amount was deposited. The details of the manner in which the amounts were deposited were written in English, which she could not understand. She did not ask her husband to interpret the bank statements, because his English was not good, although he had been living in Australia since 2008. The applicant reiterated that her only concern was to ensure that she had received the correct amount of money that was equivalent to the monies that she had transferred to accounts in China. She did not care about the description or the nature of the deposit into her account, provided that the correct amount was deposited into it. She believed that Weng had the proceeds from the sale of his property and that he also operated a café, so that he would have a cashflow. When questioned about the eighth deposit ($195,000 on 27 April 2018), the applicant said she did not think it was a strange thing for such a large amount to be deposited in cash. She said that ‘for a Chinese, as a Chinese, it’s easier, easy to deal with cash’.
The applicant said that she was not concerned that the deposits did not include the name of Weng, she was only concerned to receive the money. She reiterated that she did not think it necessary for her to check who had paid the money into her account.
The applicant agreed that on 9 June 2018, she made six payments in China that totalled RMB 980,000. It was noted that those payments were made before the three deposits into her account on 12 June, 13 June and 19 June totalling $106,000. She said that the difference, between the payments that she had made and those deposits, was accounted for by a deposit of $50,000 that was paid into her Westpac account, and $45,000 which was delivered in cash to Zhang.
When questioned about the four cash deposits that were made into her account between 18 April and 24 April 2018, totalling $33,500, the applicant confirmed that those deposits were made in cash which had been brought from China in amounts, each of which were less than $10,000. She agreed that she was only in Australia between 12 April and 27 April 2018, yet during that short time she made four separate deposits on six days. When asked why she made those deposits separately, she said that she had a client or guests with her and she had retained the money at home in case she needed it. She agreed that when she made those payments into the account, there was already some $240,000 in it. She said that if money could be kept in the account, that would reduce the amount of interest payable on the loan.
The applicant was further pressed as to why she did not request a receipt from Weng each time that she made a payment to a nominated bank account in China. She responded that after a while she had reminded Zhang to ask for a receipt, but Zhang did not go ahead and do so. It was pointed out to the applicant that previously she had said that she was not troubled to ask for a receipt. In response, she said that overnight (while under cross-examination) she had thought about that issue, and she could remember asking Zhang to request a receipt. The applicant denied that she had any doubts about the legitimacy of the money that was being paid into her account. She said that Weng was a friend of Zhang, and she trusted him enough to believe anything he told Zhang. She agreed that Weng had sold his house early in 2017, and the arrangement he made with Zhang was not raised until the end of 2017.
In re-examination, the applicant said that she could not think of any reason why she would not want the four deposits, consisting of deposits numbered 4 to 7, to be reported to the Australian Government.
Phigo Zhang deposed in his affidavit that he first met Weng in 2015 at a café in Box Hill. It emerged that they both came from the same province in China, and over time he and Weng became friends. In July 2017, Weng told Zhang that he intended to return to China, and that he intended to sell residential properties he owned in Australia. Subsequently, in around November or December 2017, Weng made a proposal to Zhang. Weng said that he needed Chinese currency in China, and he offered to exchange his currency in Australia, for the RMB owned by the applicant and Zhang in China.
Zhang then discussed Weng’s proposal with the applicant. They decided to accept it, because their family needed money in Australia for mortgage payments, tuition fees and living expenses. It was not easy to remove money or assets from China. Weng told Zhang that the funds would come from the sale of his Australian properties and that he would receive about $800,000 from those proceeds. In his affidavit, Zhang said that he had believed Weng, because he had attended the auction of his properties in Balwyn and Balwyn North.
Subsequently, Weng contacted Zhang on three occasions to exchange funds, in January, April and June 2018. On each occasion, he nominated a bank account or accounts in China and he specified a sum of money which he said he had available to transfer to the applicant and Zhang in Australian dollars. Weng also provided Zhang with the exchange rate of the Bank of China for the day of the transaction, and, based on that rate, they agreed the amount of RMB to be paid to the account nominated in China by Weng.
Zhang further stated that before the commencement of the proceeding, he had deleted the WeChat conversations and messages by which Weng and himself had conducted the transactions on their accounts. Some of those messages were subsequently recovered by an IT technician.
In cross-examination, Zhang said that originally it was the applicant who came to Australia on her own, and she opened the St George account and purchased the Doncaster property in her own name. He confirmed that after he met Weng in 2015, they became friends. He was also introduced to Ruxin Zheng in 2015 and they also became friends. When Zheng first came to Australia, Zhang let him stay with him in his home. The applicant was then in China, and Zhang did not tell his wife that Zheng was staying with him. Subsequently, he permitted Zheng to use the Doncaster address for the purpose of purchasing a mobile telephone and a motor vehicle.
Zhang said that Weng knew that he and his wife had RMB in China, because he knew that they were doing business there and had properties in China. When asked if he attended the sale of the two properties owned by Weng, he said that he went to one auction, but the other sale was a private transaction. He said that that property was sold to a Korean person and a lot of his friends knew about it. When asked whether he requested Weng to prove to him that he had the proceeds of sale of at least $800,000, Zhang said that he thought Weng had a solid background, owning four or five shops in China. He also had four or five properties in Australia. In addition, Zhang had seen Weng driving a Porsche motor vehicle in China.
Zhang agreed that he had been living in Australia since 2008, and the applicant had been sending money to him for living expenses. Accordingly, he was not reliant on the arrangement with Weng to be able to continue to live in Australia. However, he said, he needed some money.
When questioned about the identity of the persons to whom the funds were remitted in China, Zhang said that he knew that one of those persons was Weng’s wife, Liangliang Yang, but he did not know the other persons. When asked whether he wondered why none of the accounts were in Weng’s own name, Zhang responded ‘I did not think about that.’ He said that he understood that Weng had a sound financial background. He agreed that in theory he should have asked Weng to put something in writing, and he said that the applicant had talked to him several times about that, but ‘due to the difficult situation of face saving’ he did not do that. He said that he was aware that Weng had a factory in China and four or five shop fronts and a big grand mansion in Xiamen. He did not think it was strange that Weng nominated the accounts of relatives, rather than an account owned by himself.
Zhang further said that the applicant did not show him copies of her bank accounts in order to indicate what deposits were made there under the arrangement with Weng. After the applicant received the money, she would check online and then inform Zhang.
When questioned about specific payments made to him, Zhang said that Ruxin Zheng’s wife, Yan, paid him $150,000 in cash on 8 June 2018. He did not think it was strange to be paid such a large amount in cash, because Weng was operating a café and he was receiving cash and people in China liked to deal with cash. Zhang said that Weng would have several thousands of dollars available from the income from his café. When Yan handed him the sum of $150,000 in cash, he thought it must have come from Weng, but he forgot to check whether that in fact was the case. Zhang did not give a receipt to Weng after receiving the cash. He deposited part of the amount into the applicant’s bank account in three separate amounts of $50,000, $40,000 and $16,000. Of the balance, $50,000 was paid into the Westpac account.
Zhang further said that he did not recall Ruxin Zheng depositing the two amounts of $72,450 and $120,000 into the Westpac account in late January 2018. He only knew that money had arrived and that it would be from Weng. The applicant told him it was money from Weng.
Zhang further stated that after he learned that Weng had been arrested, he deleted any WeChat messages he had from Weng on the telephone, and he also deleted his telephone records of his dealings with Weng. He thought that Weng was a person who was not worthy of being a friend, so he ‘black listed him’. He denied that he had attempted to destroy that evidence because he was concerned that he was implicated in Weng’s offending. He reiterated that he had been confident that the money, received into the applicant’s accounts, came from the sale of Weng’s house in Balwyn.

The judge’s reasons

At the trial, there was an issue as to whether the applicant bore the onus of proving that the funds in the St George account were not the proceeds of crime. The judge, having considered the relevant statutory provisions, concluded that the applicant bore the evidentiary and substantive onus of establishing that the chose in action, constituted by the St George account, and the contested deposits, were not the proceeds of crime or an instrument of crime.[5] That ruling is not the subject of any proposed ground of appeal.
[5]Reasons, [28].
The judge commenced by considering the three cash deposits received in the St George account in June 2018 (deposits 11, 12 and 13) totalling $106,000. His Honour noted that the applicant had remitted RMB 980,000 in China before she had received any of those three deposits. It was only when she was challenged in cross-examination as to the balance of the source of the funds remitted by her in China, that the applicant referred to the $50,000 deposit that had previously been made into her Westpac account, and that she had retained the balance of the monies ($45,000) at hand for daily use.[6] The judge noted that, in that respect, Zhang gave evidence that he had received $150,000 from the wife of Ruxin Zheng, and made the three cash deposits (totalling $106,000) into the applicant’s account in June. Zhang stated that the balance of $50,000 had been paid into the applicant’s Westpac account. The judge noted that the total of those three sums ($156,000) was inconsistent with Zhang’s earlier evidence that he had received $150,000 from the wife of Ruxin Zheng.[7] The judge further noted that, on Zhang’s account, the applicant had remitted the equivalent of $200,000 in China, yet she had only received $150,000.[8] By contrast, in April she had remitted $380,071, yet had been paid a total of $395,000 (deposits 8, 9 and 10).
[6]Ibid [55].
[7]Ibid [57].
[8]Ibid [58].
In respect of the four cash deposits made between 18 April and 24 April 2018 (deposits 4 to 7), the judge noted that there was an inconsistency in the evidence given by the applicant as to the source of those funds. In her first affidavit, she had said that $20,000 of that amount had been provided in cash by Zhang. However, when the applicant addressed those deposits in her second affidavit, she did not refer to the amount of $20,000 obtained from Zhang. Nor did Zhang refer to or explain where he would have obtained that cash from. The judge also noted that there was no specificity in the applicant’s evidence as to the dates of travel, the names and circumstances of the guests referred to, and whether Zhang also travelled with her when she brought envelopes of money into Australia.[9]
[9]Ibid [65].
The judge next considered the three deposits into the St George account made on 25 January, 29 January and 26 February 2018 respectively (deposits 1, 2 and 3), totalling $200,000. The judge noted the evidence of the respondent that Ruxin Zheng had deposited $72,450 on 25 January and $120,000 on 29 January into the applicant’s Westpac account. The applicant was unable to comment on that evidence, as she did not know Zheng. The judge then referred to the evidence given by the applicant that a third deposit of $16,000 into the Westpac account, on 26 February 2018, had been made by Zhang. The judge noted that Zhang did not give evidence supporting that aspect of the applicant’s evidence.[10] Further, the applicant did not explain why, after the two payments had been made into the Westpac account on 25 January and 29 January, she had only transferred two individual amounts of $10,000 each to the St George account, but had not transferred the balance of the original deposits into the St George account, until she transferred $180,000 on 26 February 2018.[11]
[10]Ibid [71].
[11]Ibid [72].

Having summarised the evidence of the applicant and Zhang, the judge noted that the credibility of the applicant was a ‘central consideration’.[12] He considered that the account given by the applicant and Zhang, as to the amounts deposited into the St George account by Weng, was substantially undermined by the analysis of Ms Gibson that, save for $140,000, she had been able to trace the proceeds of the sale of Weng’s properties, and thus to demonstrate that those amounts had not been the source of funds paid into the St George account.[13]
[12]Ibid [86].
[13]Ibid [87].
The judge considered that there were ‘significant unexplained gaps’ in the accounts given by the applicant in her affidavits, and that the applicant had not sought to address the unexplained deposits to her accounts.[14] Further, no evidence had been adduced from Zhang to support the applicant’s account that when she and Zhang travelled to Australia from China, they would bring amounts of cash of $9,000 each time.[15] Although the applicant produced a receipt for the deposit of $16,000 cash into the Westpac account on 26 February, she did not produce any receipts in respect of the cash deposits numbered 4 to 7 on the Table.[16] Further, Zhang did not give evidence supporting the proposition that the family had kept envelopes of money at home from the money brought from China to be used to host guests and for entertainment. The judge considered that the evidence of the applicant, of keeping envelopes of cash available, was inconsistent with her evidence that she would transfer funds electronically from China for expenses of living.[17] The judge further considered that the applicant’s evidence, that she was aware that funds deposited into the offset account would reduce her interest payments, was inconsistent with the fact that she had held some $33,300 in cash in her home that she had previously brought back from China on her trips to Australia.[18] In addition, the applicant’s evidence, that she had transferred funds electronically from China for the family living expenses, raised the question why she needed to bring funds for living expenses in cash on her trips to Australia.[19]
[14]Ibid [89].
[15]Ibid [90].
[16]Ibid [92].
[17]Ibid [94].
[18]Ibid [96].
[19]Ibid [97].
The judge further considered that the evidence given by Zhang, as to the deposit of $16,000 into the Westpac account on 26 February 2018, was unsatisfactory and that he did not remember having made the deposit. There was no explanation why that amount went into and then out of the Westpac account on the same day. The judge also noted that Zhang’s evidence, that the money that he received from Weng were the proceeds of the sale of the Balwyn properties by Weng, was unsatisfactory. When he was pressed in cross-examination, he elaborated on Weng owning other assets in Australia and China and that he had at one point sold his café.[20] The judge also noted that the contents of the WeChat messages between Zhang and the applicant were inconsistent with his evidence that he had little or no involvement in the transfer of monies held in the applicant’s bank accounts in China.[21] Finally, in assessing the account given by the applicant, the judge considered there was a gap in her explanation as to why she and Zhang required $800,000 in Australia. Zhang admitted that the applicant had been providing him with living expenses. In view of the fact that the family had been operating satisfactorily in Australia for some years before 2018, he considered that the explanation given by Zhang was ‘a very thin explanation’.[22]
[20]Ibid [100].
[21]Ibid [102].
[22]Ibid [104].
The judge then turned to the question as to the correct characterisation of the interest of the applicant in the amount held in the St George account. That question was raised as a result of a submission made on behalf of the applicant that a court may, in an application under s 94 of the Act, exclude from the application of a restraining order an amount less than the total amount held in the account. Having referred to a number of authorities, including the Director of Public Prosecutions v Le[23] and Commissioner of the Australian Federal Police v Fernandez,[24] the judge concluded that the St George account constituted a single chose in action of the applicant, rather than separate proprietary interests constituted by each deposit that had been made to that account.[25] Having referred to the decision of the High Court in Lordianto v Commissioner of the Australian Federal Police,[26] the judge noted that the test which must be applied under s 330(4)(a) is an objective test, namely whether a reasonable person in the position of the acquirer would have a suspicion that the property was the proceeds of an offence or an instrument of an offence.[27]
[23](2007) 232 CLR 562; [2007] HCA 52 (Gleeson CJ, Gummow, Kirby, Hayne and Crennan JJ) (‘Le’).
[24](2018) 100 NSWLR 610; [2018] NSWCA 198 (Beazley P, Payne and McColl JJA (‘Fernandez’).
[25]Reasons, [126].
[26](2019) 266 CLR 273; [2019] HCA 39 (Kiefel CJ, Bell J, Keane J, Gordon J, Edelman J) (‘Lordianto’).
[27]Reasons, [143].
Having considered the competing arguments advanced on behalf of each party, the judge commenced his consideration by noting that according to the account given by the applicant and Zhang, the applicant had been asked to deal with a person with whom she had only had ‘very episodic contact’, who allegedly had substantial assets in Australia and China, and yet had no bank accounts in China. Further, the ‘sheer quantum’ of cash involved ($800,000) would have put ‘even a hard-nosed Chinese businesswoman’ on notice. The applicant was an experienced businesswoman, who had been used to dealing in property in both Australia and China, and who was sufficiently sophisticated to realise that placing money in an offset account would reduce interest liabilities.[28]
[28]Ibid [162].
The judge further noted that in considering whether to accept the applicant’s account, and as to whether she discharged the onus of establishing that the monies received were not the proceeds of crime, it was relevant that the actual transactions were more complex than those which she had described in her first affidavit. In particular, the amounts deposited into her account did not match with the amounts transferred in China, and the dates did not coincide. In respect of the first three deposits, she was effectively an unsecured creditor of Weng until the deposit into the St George account on 26 February which matched the amount that she had transferred one month earlier in China. At that time she was a party to two mortgages in residential properties as well as a significant loan in China which she had incurred in July 2017.[29]
[29]Ibid [163].
The judge further noted discrepancies affecting the transactions that constituted the eighth, ninth and tenth deposits[30] and the three deposits made in June 2018 (deposits 11, 12 and 13).[31]
[30]Ibid [164].
[31]Ibid [165].
The judge then observed:
The complexity of the transactions, which also involved a level of risk to the Applicant in that in each of the set of transactions she has remitted RMB before she received, if she actually did, the full Australian dollar equivalent, makes the Applicant’s assertion that she was very much hands-off and looked only at the amount received on the Internet banking record, difficult to accept.[32]
[32]Ibid [166].
The judge stated:
It is important to note … that in the various exchanges of RMB for Australian dollars there was disparity in both the direct equivalent of the transfer, and in the timing. These are all part of the overall circumstances known to the applicant.[33]
[33]Ibid [167].
The judge noted that the applicant had disavowed that there was anything suspicious about the arrangement with Weng, because of the amount of $800,000 in cash that was available from the sale of Weng’s property. The judge rejected the disavowals of the applicant that the deposits into the St George account were not suspicious, and concluded that the applicant had not discharged the onus on her to establish that she did not have knowledge that the property, being deposits 1 to 3 and 8 to 11, were the proceeds or an instrument of a relevant offence.
In reaching that conclusion, his Honour stated:
To reiterate, she was a sophisticated mature businesswoman. She had previously used Internet transfers to remit funds to Australia. She knew how to transfer funds between her accounts in order to reduce her interest liability on the mortgage. The complexity of the transactions that I have referred to above is such that her evidence that she only looked at the amount of the deposit as received is not credible, as is the lack of evidence of any receipts from Weng. The reliance on cash as not being anything untoward is also not credible. Cash in the low tens of thousands of dollars may be one thing, but the case of hundreds of thousands of dollars from a real estate transaction after the payout of any mortgages is something completely different. The Gibson analysis is that nowhere near $800,000 appeared to be available following the sale of the properties.
The inability of the Applicant and Zhang to straightforwardly account for the monies received in the January and the June transactions tells against the Applicant’s effectively boilerplate response that she trusted Weng and no suspicions were raised. It was put in closing address that the Applicant was mistaken in [11] of her first affidavit when she described the deposits numbered 11 - 13 as transfers when it later emerged that they were deposits as a result of the receipt by Zhang of $150,000 in cash from Ms Pan. This explanation does not sit well given the experience of the Applicant.
Unlike the position in GWE, where the denials of anything untoward were not challenged in cross-examination, here it was “inherently incredible” that the Applicant did not go further than checking whether the Australian dollar amount was received into her account, and that she had no suspicions as to the whole arrangement. Her denials are not accepted.[34]
[34]Ibid [171]–[173] (emphasis in original).
Further, the judge considered that the objective circumstances were such that the applicant had not established, on the balance of probabilities, that she received the deposits in circumstances that would not arouse a reasonable suspicion that the property was the proceeds of crime.[35]
[35]Ibid [176].
In relation to deposits 4 to 7, the judge concluded that the applicant had not established that the deposits were not contrary to s 142 of the AMLA. The applicant’s evidence, of bringing envelopes of cash from China and depositing them on four virtually consecutive days shortly before the applicant returned to China, lacked credibility. Weng had arrived in Australia before those deposits were made. The failure to produce receipts in respect of them did not assist the applicant to discharge the onus of proof. The failure to elicit supporting evidence from Zhang in respect of the deposits also made it more difficult to accept the applicant’s denials in relation to them.[36]
[36]Ibid [198].
The judge then considered the applicant’s alternative claim under s 94A, namely, that there were amounts within the St George account which had been deposited separately from the contested deposits (deposits 1 to 13), and which were not derived or realised directly or indirectly from the commission of an offence. Specifically they consisted of two deposits and the opening balance totalling $76,030.34. The judge accepted the submission by the respondent, that the effect of the decision in Fernandez is that a bank account constitutes one chose in action, so that any amount in the account is ‘tainted’ if the account becomes an instrument of an offence. Accordingly, the judge rejected the submission that an order be made under s 94A of the two deposits (totalling $76,030.34) that were not the subject of the impugned transactions.[37]
[37]Ibid [182]–[184].

The applicable legislation

Before we commence to consider the proposed grounds of appeal, it is convenient first to set out the relevant legislation.
Section 18 of the Act provides that a court may make a restraining order in relation to property if there are reasonable grounds to suspect that a person has committed a serious offence, and that the property is (inter alia) the ‘proceeds of the offence’ or ‘an instrument of the offence’. Section 92 provides that the property is forfeited to the Commonwealth at the end of the sixth month period which commences on the date on which the person is convicted of the offence, or at the end of the period provided for in an extension order. As we have mentioned, in the present case, an extension order was granted extending that period to 18 December 2021. Section 93 provides that the extended period specified must end no later than 15 months from the start of the conviction day.
Section 94(1) requires the court, that made a restraining order, to make an order excluding particular property, if the court is satisfied that the applicant’s interest in the property is ‘neither proceeds of unlawful activity nor an instrument of unlawful activity’, and the court is satisfied that the applicant’s interest was lawfully acquired. Section 94(2) provides that an exclusion order cannot be made in relation to property if it has already been forfeited.
Pursuant to s 329(1), property is the ‘proceeds of an offence’ if it is ‘derived or realised whether directly or indirectly’ either wholly or partly from the commission of the offence. Section 329(2) provides that property is an ‘instrument of an offence’ if the property is used, in or in connection with the commission of an offence.
Section 330(1) provides that property becomes ‘proceeds of an offence’ if (inter alia) the property is wholly or partly derived or realised from the disposal or other dealing with proceeds of the offence. Section 330(4)(a) is of particular relevance to the present application. It provides:
(4)Property only ceases to be proceeds of an offence or an instrument of an offence:
(a)if it is acquired by a third party for sufficient consideration without the third party knowing, and in circumstances that would not arouse a reasonable suspicion, that the property was proceeds of an offence or an instrument of an offence (as the case requires).
At the trial, it was not in issue that deposits numbered 1 to 3 and 8 to 13 were made by or on behalf of Weng. The prosecution case was that those deposits were the proceeds of the criminal activities undertaken by Weng and the syndicate with which he was associated. The prosecution contended that the remaining four deposits — deposits 4 to 7 — constituted ‘structuring’ contrary to s 142 of AMLA and thus were themselves either the proceeds of an offence or the instrument of an offence. Section 142 of that Act provides:
142Conducting transactions so as to avoid reporting requirements relating to threshold transactions
(1)A person (the first person) commits an offence if:
(a)the first person is, or causes another person to become, a party to 2 or more non‑reportable transactions; and
(b)having regard to:
(i)the manner and form in which the transactions were conducted, including the matters to which subsection (3) applies; and
(ii)any explanation made by the first person as to the manner or form in which the transactions were conducted;
it would be reasonable to conclude that the first person conducted, or caused the transactions to be conducted, in that manner or form for the sole or dominant purpose of ensuring, or attempting to ensure, that the money, digital currency or property involved in the transactions was transferred in a manner and form that would not give rise to a threshold transaction that would have been required to have been reported under section 43.
Penalty: Imprisonment for 5 years or 300 penalty units, or both.
(2)Subsection (1) does not apply if the defendant proves that the first person did not conduct the transactions, or cause the transactions to be conducted, as the case may be, for the sole or dominant purpose of ensuring, or attempting to ensure, that the money, digital currency or property involved in the transactions was transferred in a manner and form that would not give rise to a threshold transaction that would have been required to have been reported under section 43.
Note: A defendant bears a legal burden in relation to the matters in subsection (2)—see section 13.4 of the Criminal Code.
(3)This subsection applies to the following matters:
(a)the value of the money, digital currency or property involved in each transaction;
(b)the total value of the transactions;
(c)the period of time over which the transactions took place;
(d)the interval of time between any of the transactions;
(e)the locations at which the transactions took place.
A ‘threshold transaction’ is defined by the Act to constitute a transfer of currency in amounts not less than $10,000.
In the present application, the applicant does not seek to appeal the finding by the judge that the chose in action, constituted by the balance of the St George account, comprised ‘proceeds of an offence’, in that it was wholly or partly derived or realised from a dealing with the proceeds of an offence. The focus of the application was therefore on the judge’s conclusion that the applicant had failed to establish that s 330(4)(a) applied to the thirteen impugned deposits, and thus had failed to establish that the account ceased to be proceeds of an offence.

Grounds of appeal

The first four grounds of appeal address the judge’s conclusion that the applicant had failed to establish, pursuant to s 330(4)(a), that she had received the funds paid into the St George account without knowing, and in circumstances that would not have aroused a reasonable suspicion, that they were the proceeds of an offence or an instrument of an offence. There is necessarily a material overlap in the considerations relevant to each of those four grounds. Counsel for the applicant, on the oral hearing of the application, addressed the four grounds together. Nevertheless, it is appropriate for us to consider each of grounds 1 and 2 separately, since they involve different considerations than those which apply to grounds 3 and 4.

Ground 1 — submissions

In support of ground 1, counsel for the applicant submitted that the judge’s reasons did not contain findings of fact, or a consideration of competing evidence, on three fundamental questions that arose in the trial.
First, in considering whether the applicant had proven that she did not know that the monies paid into the St George account were the proceeds of crime, the judge made no finding as to what the applicant actually knew about the provenance of those funds. The judge did, in his reasons, refer to the quantum of the cash that was deposited into the account ($800,000 in total), but, it was submitted, that fact alone could not establish, or equate to knowledge by the applicant that the money was the proceeds of an offence. Further, the applicant did not herself receive the cash; rather, it was deposited into her account, or, in respect of the thirteenth deposit, was received by the applicant’s husband Zhang in her absence.
Counsel further submitted that other facts, referred to by the judge, did not have any logical connection with the question of whether the applicant had actual, or suspected, knowledge that the monies paid into the account were the proceeds of crime.
Secondly, counsel submitted that the judge failed to give any reasons for his conclusion that the applicant had not established, on the balance of probabilities, that she did not receive the monies in circumstances which would arouse a reasonable suspicion that they were the proceeds of an offence. Counsel submitted that the judge went no further, in his reasons, than recite the statutory test, and conclude that the applicant had failed to discharge the applicable onus in respect of it.

Thirdly, counsel submitted that the judge failed to provide reasons for his conclusion that the applicant had failed to prove that she did not know, and did not have reason to suspect, that deposits 4 to 7 were the proceeds of an offence. Counsel submitted that it was necessary for the judge to make a finding as to the identity of the person who made the deposits, because, in order to establish that an offence has been committed under s 142 of AMLA, it is necessary first to prove the intention of the person who conducted the transaction. Further, counsel submitted, the judge did not provide reasons why he concluded that the applicant had failed to discharge the onus of proof in relation to those four deposits. Counsel accepted that it was open to the judge to reject the explanation given by the applicant that the deposits consisted of monies which she had retained in the family home in Doncaster in envelopes. However, counsel submitted, that a conclusion was an insufficient basis for a finding that the applicant herself had structured the deposits into the account, or that she knew that Weng had structured those deposits, in order to avoid complying with statutory reporting obligations in respect of them.
In response, counsel for the respondent submitted that the reasons given by the judge were adequate. The applicant bore the onus of establishing that she did not know that the monies paid into her account were the proceeds of an offence. The judge provided reasons as to why he considered that the applicant’s evidence on that matter, lacked credibility. Accordingly, the judge adequately explained why he did not accept the evidence of the applicant, and thus the applicant had not discharged the onus of proving the requisite lack of knowledge that the amounts paid into her account were the proceeds of an offence.
Counsel further submitted that the judge’s conclusion, that the applicant had not discharged her onus of proof as to the existence of a reasonable suspicion, followed his Honour’s exposition of the relevant surrounding circumstances that attended the receipt by the applicant of the funds paid into her account.
In respect of deposits 4 to 7, counsel submitted that it was not necessary for the judge, or the respondent, to identify the person who had paid the money into the applicant’s account. Rather, the applicant bore the onus of establishing the factual foundation which would demonstrate that she did not know, and did not have reason to suspect, that the four payments were paid into her account by individual deposits for the sole or dominant purpose of ensuring that those deposits were not required to be reported to AUSTRAC. In his reasons, the judge clearly identified the reasons why he considered that the applicant had failed to discharge the onus of proof in respect of the four deposits. In particular, the judge did not accept the applicant’s evidence as to the reasons for, and the circumstances surrounding, the deposit of the four sums under the reporting limit over a period of six days. The judge concluded that the applicant had not provided any appropriate explanation why, during her short period of stay in Australia, she had taken the trouble to make four separate visits to the bank, on each of which she had deposited a sum that was less than the $10,000 threshold for reporting.

Ground 1 — analysis and conclusion

The principles concerning the obligation of a judge to provide adequate reasons for a decision are well established. The reasons must be sufficient to enable the parties to understand the extent to which their respective cases have been either accepted or rejected, and to understand the basis of the judge’s decision. Further, the reasons must be adequate to enable an appeal court to identify the line of reasoning upon which the decision has been made.[38]
[38]Pham v Legal Services Commissioner [2016] VSCA 256, 29 [88] (Redlich and Kaye JJA and Cavanough AJA).
In Beale v Government Insurance Office of NSW,[39] Meagher JA identified three fundamental elements of the requirement of the provision of adequate reasons. First, the judge should refer to the relevant evidence. Secondly, the judge should state any material findings of fact and conclusions or ultimate findings of fact reached. Thirdly, the judge should provide reasons for making those relevant findings of fact (and conclusions) and reasons for applying the law to those facts.[40]
[39](1997) 48 NSWLR 430 (Mason P, Meagher and Sheller JJA).
[40]Ibid 443; Fletcher Construction Pty Ltd v Lines Macfarlane & Marshall Pty Ltd (No 2) (2002) 6 VR 1, 31–32 [101] (Charles, Buchanan and Chernov JJA).
On the other hand, the judge is not required to make an express finding in respect of each fact that leads to a final conclusion of fact. It is sufficient if the reasons provide the parties with a broad outline of the constituent facts necessary for the judge’s reasoning.[41] Further, it is not incumbent upon a judge to deal with each argument and issue that might arise in the course of a trial. On the other hand, if an argument or point is substantial, it is necessary to refer to it and to provide adequate reasons for rejecting the argument or resolving the point that is in issue.[42]
[41]Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247, 273 (Mahoney JA).
[42]Hunter v Transport Accident Commission & Anor [2005] VSCA 1, 9 [21] (Nettle JA).
In applying those principles, it is important to bear in mind that the question, which must be addressed in respect of ground 1, is not whether the reasons provided by the judge, for his conclusions, were valid or correct. Rather, the issue is whether the judge made sufficient findings of fact, and appropriately disclosed the reasoning that was the basis for his conclusions.
In considering that question, it is also necessary to bear in mind that the issue before the judge was whether the applicant had proven, on the balance of probabilities, that she did not know that the deposits into the St George account were the proceeds of an offence, and that the deposits were not received by the applicant in circumstances that would arouse a reasonable suspicion that they were the proceeds of an offence.
Ordinarily, the resolution of those two questions would substantially involve a consideration of the same facts and circumstances. Thus, in Lordianto v Commissioner of The Australian Federal Police, the effect of s 330(4)(a) was explained in the compendious terms:
… the exclusion provided by s 330(4)(a), by which property ceases to be proceeds, or an instrument, of an offence, is limited. It is limited to a person who acquired specific property (necessarily, the subject of an existing or proposed restraining order) for sufficient consideration without that person knowing, and in circumstances that would not arouse a reasonable suspicion, that the property was proceeds, or an instrument, of an offence. In many cases, perhaps most, that will be an inquiry very similar to the inquiry under the general law about whether a person is a bona fide purchaser for value without notice.[43]
[43]Lordianto, 302 [63].
In those circumstances, it is unsurprising that the judge addressed the two questions — as to the knowledge of the applicant, and as to whether the circumstances were such as to arouse a reasonable suspicion — by reference to the same considerations.
Further, it is important to bear in mind that the onus of proving the pre-conditions to the application of s 330(4)(a), was on the applicant. The applicant was required to prove, on the balance of probabilities, two negative propositions: first, that she did not know that the deposits into her account were the proceeds of an offence; and secondly, that those deposits were not made in circumstances that would arouse a reasonable suspicion that the deposits were the proceeds of an offence or an instrument of an offence. The respondent did not bear an onus to establish the converse of those propositions. In particular, the respondent did not bear an onus to establish what the applicant knew about the provenance of the deposits that were made into the St George account.
It follows that, in reaching a conclusion that the applicant had not discharged the onus of proof in respect of those matters, it was not necessary that the judge make a positive finding, on the balance of probabilities, as to what the applicant knew about the source and provenance of the deposits. Rather, the judge was required to provide reasons which disclosed the factual and inferential basis upon which he concluded that the applicant had not discharged the onus of proof in relation to the two pre-conditions to the application of s 330(4)(a) of the Act.
On an examination of the judge’s reasons, it is apparent that, in considering whether the applicant had discharged that onus, the judge did address a number of facts and circumstances which, ultimately he concluded, precluded a conclusion that the applicant had discharged the onus of proof of each of those two requirements.
The judge’s consideration, of those issues, commenced in the section of his Honour’s reasons in which he summarised the evidence of the applicant and the evidence of Zhang.
As we have noted,[44] the judge commenced by considering the three cash deposits that were received into the St George account in June 2018, namely, deposits 11, 12 and 13, which totalled $106,000. The judge noted that there were discrepancies between that amount, and the amount that the applicant had remitted to China, and that the applicant had, in that respect, added to her evidence when challenged about it in cross-examination. The judge further noted deficiencies in the evidence given by Zhang in respect of those deposits, and, in particular, the judge noted that the amount that Zhang said that he deposited into his wife’s account, and retained, exceeded the amount that he had said that he had received from the wife of Ruxin Zheng.[45]
[44]Ibid [63].
[45]Reasons, [55]–[58].
We have summarised the principal findings and conclusions by the judge in respect of deposits numbered 4 to 7, namely, the cash deposits of $9,000, $9,500, $9,800 and $500 respectively made by the applicant into her St George account between 18 April 2018 and 24 April 2018[46]. At the risk of repetition, the judge noted a number of deficiencies in the evidence adduced on behalf of the applicant in respect of those deposits. In particular, his Honour noted that Zhang did not give evidence supporting the applicant’s account that when the applicant and he travelled to Australia from China they would bring in amounts of cash of $9,000. The applicant did not produce any receipts in respect of the four cash deposits. Zhang did not give any evidence supporting the applicant’s evidence that the family kept envelopes of money at home from the money that was brought from China. The evidence of the applicant was inconsistent with her evidence that she would transfer funds electronically from China for living expenses. The applicant’s evidence, that she retained $33,300 in cash in her home, was also inconsistent with her knowledge that funds deposited to the offset account would reduce her interest payments.[47]
[46]See above [67].
[47]Reasons, [89]–[97].
Pausing there, the judge clearly identified the particular facts and circumstances on the basis of which he concluded that the applicant had not satisfied the onus of proof, under s 330(4)(a), in respect to those four deposits.
Contrary to the submission made on behalf of the applicant, the judge was not required to make a finding as to the identity of the person who deposited the monies into the account. It was sufficient for the judge to conclude that he was not satisfied, on the balance of probabilities that, when the four deposits were made into the St George account, the applicant did not know, and the deposits were made in circumstances that would not arouse a reasonable suspicion, that, the deposits were so structured for the sole or dominant purpose of ensuring that they did not constitute a threshold transaction which would have required to have been reported under s 43 of the AMLA.[48]
[48]Reasons, [198].
In his reasons, the judge also stated a number of findings of fact which preceded his conclusion that the applicant had not satisfied the onus of proving the preconditions to the operation of s 330(4)(a) of the Act[49]. They included the following. In his evidence Zhang stated that the monies, that he received from Weng, were the proceeds of the sale of the Balwyn properties by Weng. However, when pressed in cross-examination, he expanded the explanation to include that Weng owned other assets in Australia and China and that he operated a café.[50] The explanation given by the applicant, as to why she and Zhang required $800,000 in Australia, was inconsistent with the evidence that the applicant had been remitting living expenses to Zhang from China.[51] The applicant was an experienced businesswoman, who, on her evidence, had dealt in large sums of money provided by a person (Weng), with whom she had only had episodic contact, who allegedly had substantial assets in Australia and China, yet who professed to have no bank accounts in China.[52] The transactions were more complex than those described in the applicant’s first affidavit. The amounts deposited into her account did not match with amounts transferred in China, and the dates of the transactions did not coincide.[53] The judge relied on those matters for the observation that given the complexities of the transactions, and the level of risk to the applicant in respect of each of the transactions, it was difficult to accept the assertion by the applicant that she was ‘very much hands off’ and only looked at the amount that was received on the internet banking record.[54]
[49]See above [69]–[77].
[50]Reasons, [102].
[51]Ibid [104].
[52]Ibid [162].
[53]Ibid [163]–[165].
[54]Ibid [166].
The judge then, in the passage quoted earlier in these reasons,[55] compendiously summarised those considerations, and concluded by rejecting the applicant’s denials about her knowledge as to the provenance of the deposits.[56] It was on the basis of those reasons that the judge concluded that the applicant had not discharged the onus of proving that she did not know that deposits 1 to 3 and 8 to 13 were the proceeds of an instrument of a relevant offence.[57]
[55]See above [76].
[56]Reasons, [171]–[173].
[57]Ibid [170]–[174].
In the next paragraph of his reasons, the judge concluded that the surrounding circumstances, that he had ‘just discussed,’ were such that the applicant had not satisfied the court on the balance of probabilities that they would not arouse in her a reasonable suspicion that the deposits and transfers numbered 1 to 3 and 8 to 13 were not the proceeds of crime or that the account was not an instrument of crime.[58] In that way, the judge expressly identified the factors, which he had earlier set out in his judgment, and on the basis of which he concluded that the second pre-condition to the application of s 330(4)(a) of the Act had not been satisfied.
[58]Ibid [175]–[176].
Finally, the judge expressed the same conclusions in respect of deposits 4 to 7. In doing so the judge reiterated a number of the considerations he had referred to earlier. In particular, he noted that the account given by the applicant of having cash brought from China on previous trips, and then depositing them on four virtually consecutive days, shortly before she flew back to China, lacked credibility. The judge also referred to the applicant’s failure to produce receipts for those deposits, and her failure to elicit supporting evidence from Zhang in respect of the deposits from the fact that cash filled envelopes were being kept at home.[59] The judge noted that it was significant that Weng had arrived in Australia before the deposits were made.[60] It was for those reasons that the judge concluded that the applicant had not discharged the onus of proving that the four deposits that she made to the St George bank were not intentionally structured to be less than the reporting requirements ‘… in order not to cast any suspicion on her own conduct just as she was about to leave Australia’.[61]
[59]Ibid [177].
[60]Ibid [177].
[61]Ibid [178].
We have set out, at some length, the reasoning undertaken by the judge, and have repeated part of our earlier summary of those reasons, because by doing so, it is quite apparent that the judge did identify the findings that he made concerning evidence adduced by or on behalf of the applicant, and his Honour also identified the facts and circumstances on the basis of which he concluded that the applicant had failed to satisfy both of the pre-conditions, in s 330(4)(a). In that way, in our view, the judge adequately complied with the requirement that he identify the relevant findings of fact on the basis of which he made that conclusion, and his Honour sufficiently stated the reasons upon which he concluded that the applicant had not discharged the onus of proof in relation to those two matters.
For those reasons, ground 1 of the application for leave to appeal must fail.

Ground 2 — submissions

In support of ground 2, counsel for the applicant submitted that, throughout the reasons, the judge mischaracterised the two pre-conditions relevant to s 330(4)(a) in a way that raises a doubt that the judge addressed and determined the correct questions.
In particular, counsel relied on parts of the judge’s reasons in which his Honour referred to submissions made by counsel for the respondent in respect of denials by the applicant that she had any ‘suspicion’ in relation to the deposits,[62] and the judge’s observation that the amount of cash involved ($800,000) would have put ‘a hard-nosed Chinese businesswoman on notice’.[63] Counsel also referred to a passage in which the judge referred to a number of considerations relevant as to whether to accept the applicant’s account and as to whether she had discharged the onus to establish ‘that the monies were not the proceeds of crime or an instrument of an offence’.[64] Counsel submitted that although the judge, in his conclusions, correctly specified the relevant test, nevertheless the foregoing passages in his Honour’s reasons reveal that he had addressed the wrong questions in determining whether the applicant had established the component elements of the test prescribed by s 330(4)(a) of the Act.
[62]Ibid [155]–[169].
[63]Ibid [162].
[64]Ibid [163].
In response, counsel for the respondent noted that the judge correctly articulated the statutory test in s 330(4)(a) at an earlier point in his reasons,[65] and correctly identified that the applicant bore the onus in respect of each of the two component elements of the statutory test. In addition, as conceded by counsel for the applicant, the judge correctly stated the applicable test in concluding that the applicant had failed to discharge the onus of proof in respect of each of the two component parts of the statutory provision.[66]
[65]Ibid [141]–[144].
[66]Ibid [170]–[176].

Ground 2 — analysis and conclusion

On analysis, none of the matters relied on by the applicant demonstrate that the judge applied an incorrect test in determining that the applicant had failed to establish the two pre-conditions to the operation of s 330(4)(a) of the Act.
In identifying the applicable legal principles, the judge[67] quoted a passage from the judgment of Simpson J in Commissioner of the Australian Federal Police v Lordianto,[68] in which her Honour identified five elements of the test specified in s 330(4)(a) in the following terms:
(i)       that property is acquired;
(ii)      by a third party;
(iii)     for sufficient consideration;
(iv)without knowledge that the property was the proceeds or an instrument of a relevant offence; and
(v)in circumstances that would not arouse a reasonable suspicion that the property was the proceeds or an instrument of a relevant offence.
[67]Ibid [144].
[68](2017) 324 FLR 237, 244 [31] (Simpson J).

The judge was not correct in thus characterising each of the deposits as by way of cash. On the other hand, they comprised eight deposits of cash, at least three of which (deposits 8, 11 and 12) were in substantial amounts, and five deposits by a person or persons unknown to the applicant.
Counsel for the applicant was on firm ground in noting that it would appear that the judge did make an error in his application of the applicable exchange rate when considering that the amounts deposited to the St George account did not, on each occasion, in monetary terms match the equivalent amounts of RMB remitted by the applicant to nominated payees in China. As counsel noted, the judge appears to have applied an inflexible exchange rate of five RMB to one Australian dollar, whereas, as is ordinarily the case, the precise exchange rate fluctuated from day-to-day.
For the purposes of this appeal, it may be accepted that that misconception affected the judge’s perception that there was some discrepancy between the amounts received by the applicant and the amounts that she paid to recipients in China.[99] Nevertheless, in respect of each of the transactions, the judge was correct in regarding that there were particular ‘complexities’ about each of the deposits. For example, the first two deposits into the applicant’s accounts — deposits of $72,450 and $120,000 into the Westpac account — were made on 25 January and 29 January 2018 respectively. On those dates, the applicant remitted an equivalent amount to nominated payees in China. On the same date, only $10,000 was transferred from the Westpac account to the St George account, notwithstanding that the latter was an offset account. The balance ($180,000) was not transferred until 26 February 2018 (deposit number 3).
[99]Reasons, [163]–[165], [167].
In respect of the June deposits (deposits 11 to 13), on 9 June 2018, the applicant made six payments in China that totalled RMB 980,000. Those payments were made before the three deposits into the St George account on 12 June, 13 June and 19 June 2018, which totalled $106,000. In cross-examination, the applicant sought to account for the discrepancy by reference to a deposit of $50,000 that had been paid into her Westpac account (and not into the St George account) and cash totalling the sum of $45,000 which (she said) had been delivered to Zhang.
There was also a complexity about the three deposits (deposits 8, 9 and 10) made in late April 2018 into the St George account, with no explanation having been given why one amount of $195,000 (deposit 8) was made in cash, and two deposits (deposits 9 and 10) were made by the unknown person, Yuhong Zheng.
Taken together, the matters to which we have just referred justified the judge’s consideration that there were anomalies and complexities in the transactions. It must be remembered that the applicant’s evidence, in relation to the deposits, was that she understood that they were the proceeds of a sale by Weng of his real estate in Balwyn. In those circumstances, the judge was correct in considering that that explanation was very much at odds with the unusual and unnecessarily complex manner in which the deposits were made into the St George account.
Counsel for the applicant was also correct in observing that the judge was in error in noting that the applicant had given no evidence to indicate how she had rearranged her affairs in China in order that she have sufficient RMB available to transmit to nominated payees under the arrangement.[100] However, that observation by the judge did not detract from the point that he was making in that part of his judgment, namely, that at the time that Weng approached her, she had already, in July 2018, borrowed RMB 8.5 million for the purposes of her business, and in her evidence she said that she made the arrangement with Weng on the condition that she have the capability to transfer the requisite funds in China, because she also needed to maintain an adequate cashflow for her business there. The point thus made by the judge was that the applicant’s agreement with Weng did involve an additional complexity, which was at odds with her assertion that the transaction was quite simple in concept, and thus required little involvement by her.
[100]Ibid [168].
Taking those matters into account, the question, then, is whether the judge erred by not finding that the applicant received the deposits into the St George account without knowing that they were the proceeds or an instrument of an offence (ground 3), and in not finding that the applicant had received those deposits in circumstances that would not arouse a reasonable suspicion that they were the proceeds or instrument of an offence (ground 4). For the reasons that follow, we consider that the judge was correct in his conclusions in respect of each of those two matters. Specifically, having reviewed the evidence and the reasons provided by the judge, there was a strong basis for the conclusion that the applicant had failed to discharge the onus of establishing each of the two limbs of the test contained in s 330(4)(a) of the Act that were in issue in this appeal.
The crux of the account, given by the applicant for her receipt of the funds into the St George account, was that they were part of a business transaction with Weng which involved a mutual benefit for both parties. On the applicant’s account, she understood that Weng had sold properties in Australia, and that he had available funds which he wished to transfer to China. The applicant’s evidence was that the proposed transaction would be a benefit to her and her husband, because it would assist them with making payments for her husband and daughter’s living expenses and mortgage in Australia. On analysis, the judge was well justified, and was correct, not to be satisfied, on the balance of probabilities, in respect of that explanation given by the applicant for the transactions that involved the deposit of funds to the St George account.
As the judge noted, the applicant was a sophisticated and mature businesswoman. At the time at which she concluded the arrangement with Weng for the deposit of monies into the St George account, she had only met him on two or three occasions. All of the discussions concerning the arrangement took place between the applicant’s husband, Zhang, and Weng. Zhang had not himself undertaken any business dealings with Weng, but it would seem, at most, had known him for three years as an acquaintance or friend. While Zhang did attend the auction sale of Weng’s property in Balwyn, neither the applicant nor Zhang made any inquiry, nor had any knowledge at all, of the nett proceeds of that sale, or the sale of other properties by Weng, which would be available for the purposes of the arrangement that he proposed to Zhang.
The arrangement involved the applicant undertaking a significant degree of risk. At the time of the transaction the applicant had already borrowed RMB 8.5 million in China for her business in July 2017. In her evidence, she said that her ability to make the arrangement with Weng, and to effect the transmission of funds in China, depended on the cashflow from her business which would be available in China. The applicant did not seek to document, in any form, the arrangement that Zhang had entered into with Weng on her behalf. The fact that she did not do so increased the level of risk to her arising from the transaction.
Further, on her own evidence, there was no need for the applicant to undertake an arrangement which involved such a level of risk. The applicant had been remitting funds to Australia from China since 2008 for the purposes of maintaining the living expenses of her husband and daughter in Australia. She was not conducting any business in Australia, and had no evident need for the deposit of a significant amount into her bank accounts.
The level of risk, which the applicant was prepared to undertake, was increased by a number of circumstances that attended the payments made by her from her account in China to nominated payees. On the evidence given by the applicant, Weng conducted a significant amount of business in China. In those circumstances, the applicant’s claim, that she accepted that Weng did not have his own bank account in China, strained credulity. It was on that basis that the applicant explained that she made the various payments in China to persons who were unknown to her, without receiving any receipt or other acknowledgment of those payments. Based on those matters, the judge was fully justified in considering that it was evident that the transaction was structured to obscure the involvement of Weng in it.
In addition, it was quite evident that the complexity of the transactions, that were discussed by the judge, militated strongly against the acceptance of the account given by the applicant that she had been told, and understood, that the monies that she received had been the proceeds of the sale by Weng of his properties in Balwyn. The deposits were made in some thirteen different instalments over a period of five months. As we have already discussed, the deposits that were made in January, April and June, each have particular complexities. The deposits themselves, by their very nature, were entirely uncharacteristic of a deposit or deposits of funds which were the proceeds of the sale of real estate.
Further, for the reasons we have discussed, the judge was entitled, and indeed correct, to reject the evidence given by the applicant that when she perused the bank statements, she only paid attention to the amount that had been deposited. The bank statements, received by the applicant, recorded significant cash deposits into the St George account, as well as two deposits paid by an unknown person, Yuhong Zheng. Included in the cash deposits were an amount of $195,000 on 27 April 2018, an amount of $50,000 on 12 June 2018 and a further amount of $40,000 on the following day, 13 June 2018. As the judge correctly observed, the assertion that deposits of ‘hundreds of thousands of dollars’ were purportedly from a real estate transaction after the discharge of any mortgages, was of itself particularly dubious. Further, the fact that the applicant was prepared to remit RMB 980,000 in China on 9 June 2018 before she received the three cash deposits between 12 June and 19 June, was inconsistent with the applicant’s explanation of the arrangement that she had with Weng.
In those circumstances, the judge was entitled, and correct, to reject the explanation given by the applicant that she knew or believed that the deposits in question were made from the proceeds of the sale by Weng of his properties in Balwyn. The applicant’s account, to that account, was riddled with a number of improbabilities, and conundrums, which we have discussed, and which individually and collectively significantly undermined its credibility.
As we have noted, it is not in issue on this application that deposits 1 to 3 and 8 to 13, which were made by or on behalf of Weng, were the proceeds of a criminal offence. The applicant has failed to provide a credible explanation for her receipt of those deposits, which totalled $701,000. All of the objective circumstances weighed irresistibly against a conclusion that the applicant did not know that those deposits were the proceeds of crime. In summary, the applicant herself was an experienced and apparently accomplished businesswoman. There was a total lack of documentary record of the transaction, including of the deposits into her account, and the amounts that she remitted to nominated recipients in China. The transactions themselves were complex. No credible explanation was given as to why the monies were not remitted to Weng himself. The manner in which the deposits and transfers were undertaken, and the structure of them, all contradicted the proposition that the applicant did not know that the deposits were each the proceeds of an offence. For those reasons, the judge was correct to conclude that the applicant had failed to prove that she did not know that the deposits were the proceeds of an offence. Further, the circumstances which we have outlined, and which were considered by the judge, collectively precluded a conclusion that the deposits were not made in circumstances which would arouse a reasonable suspicion that they were the proceeds of crime.
Moreover, the judge was correct to conclude that the applicant had failed to demonstrate that she did not know that deposits 4 to 7 were the proceeds of an instrument of an offence, and that the applicant had failed to establish that those deposits were not made in circumstances which would give rise to a reasonable suspicion that they were the proceeds or instrument of an offence.
It is not in issue on this appeal that the judge correctly concluded that each of the four deposits did constitute structuring contrary to s 142 of AMLA; that is, the deposits were made in circumstances in which it would be reasonable to conclude that the sole or dominant purpose was to ensure that the money was transferred in a manner and a form that would not give rise to a threshold transaction that would have been required to be reported under s 43 of that Act.
Furthermore, it is not in issue, on this appeal, that it was open to the judge to reject the explanation given by the applicant for the four separate deposits of cash into the same account during a period of six consecutive days. The applicant’s explanation was highly improbable. Her claim, that the four separate amounts were contained in four separate envelopes, and that the source of them was cash that she and her husband had brought into Australia, strained credulity. The fact that it was retained in their home, rather than being deposited into their account, was at odds with the applicant’s desire to have funds credited to the St George account in order to reduce the interest payable on the mortgage of her Doncaster property. The applicant could not proffer any credible explanation why she had attended the same bank on four separate occasions, over a six day period, during a short period of stay in Australia, instead of attending the bank on one visit to do so. Further, the applicant’s account was not supported by any evidence from Zhang.
It was common ground, on this appeal, that the judge did not make a finding as to who in fact made the four deposits. It was not necessary for the judge to do so. It is clear from the evidence of the applicant that, at the least, she was aware of the deposits at the time at which they were made. Indeed, the judge appeared to accept that the applicant was not only aware of, but was in some way involved in, the deposits. His Honour stated:
There may be all sorts of reasons why … when she was seeking to deposit not insignificant sums of money she would structure those amounts to be below the reporting requirement in order not to cast any suspicion on her conduct just as she was about to leave Australia.[101]
[101]Reasons, [178].
Thus, at the least, the applicant was aware that four successive payments of cash were made into her account, each under an amount of $10,000 and three of which were for the sum of $9,000 or more. The amounts were paid into her account while she was in Australia, and also while Weng was in Australia. As we have noted, the applicant was an experienced businesswoman who had a ready understanding of the limits which existed concerning the transfer of monies from China, and the amounts of undeclared cash which she could bring into Australia. On their face, and as the judge concluded, the four deposits were made in amounts, and in a sequence, which gave rise to an inference that they were undertaken in that manner for the purposes of structuring. In those circumstances, the judge was correct to conclude that the applicant had not established that she did not know that the deposits were made in a manner, and in amounts, the sole or dominant purpose of which was to avoid the requisite reporting requirements in respect of deposits in an amount of, or in excess of, $10,000. For the same reasons, the judge was correct to conclude that the applicant had failed to establish that the deposits were not made in circumstances which would give rise to a reasonable suspicion to that effect.
For those reasons, the judge did not err in not finding that the applicant received the deposits without knowing that they were the proceeds or instrument of an offence (ground 3), and that the applicant received those deposits in circumstances that would not give rise to a reasonable suspicion that they were the proceeds or instrument of an offence (ground 4). It follows that grounds 3 and 4 must fail.

Grounds 5 and 6

Ground 5 is that the judge erred by holding that a proportion, less than the whole, of the balance of a bank account may not be excluded from forfeiture under s 94 or the subject of a compensation order under s 94A. Ground 6 is that, accordingly, the judge should have found that at least $276,030.34 was not the proceeds or an instrument of an offence, and that that sum was either excluded from forfeiture or was ‘the specified proportion’ in a compensation order pursuant to s 94A of the Act.
The effect of our conclusions, in respect of grounds 1 to 4, is that the applicant has not demonstrated any error in the decision by the judge that the applicant had not established, pursuant to s 330(4)(a) of the Act, that the thirteen deposits to the St George account had ceased to be the proceeds or instrument of an offence. Those deposits amounted to the sum of $734,300. At the time at which the restraining order was obtained by the respondent, the balance of the account was $797,640.34. The opening balance of the account, before the first impugned deposit was made into it, was $56,030.74. During the period in which the thirteen deposits were made there were two additional deposits made to the account, each in the sum of $10,000, on 12 June 2018, which were not, themselves, alleged to be the proceeds of crime. On this application, an issue arises as to whether the judge ought to have provided relief to the applicant in respect of the amounts which were not alleged or concluded to be the proceeds of an offence.
In the hearing before the judge, the applicant’s principal application was for an order excluding the whole, or a portion, of the bank account from the restraining order pursuant to s 94 of the Act. Alternatively, the applicant also made an application for a compensation order under s 94A of the Act. As we have noted, by reason of the failure of the applicant to succeed on his application under s 94 of the Act at trial, the account balance in the St George account became forfeited pursuant to s 92 of the Act. For that reason, the respondent, by its notice of objection to competency, raised a threshold question as to whether the Court has the power to make the order sought in para 3(a) of the application for leave which we have set out earlier. Based on the authorities cited in support of that objection, the applicant, on this application, accepted that she could not obtain an order under s 94 of the Act, and thus did not press for the relief sought in para 3(a) of the application.
Under grounds 5 and 6, counsel for the applicant submitted that the applicant is nevertheless entitled to relief under s 94A. Alternatively, it was submitted that the applicant is entitled to relief by way of restitution, or pursuant to the undertaking for damages made on behalf of the Commonwealth for the purposes of the restraining order. Neither of those latter two forms of relief were sought by the applicant at trial.
In response, the respondent has relied on the principle that a credit balance in a bank account constitutes a single chose in action which is not divisible. That proposition was principally based on the decision of the New South Wales Court of Appeal in Commissioner of the Australian Federal Police v Fernandez.[102] Accordingly, the respondent submitted that the judge could not make an order under s 94A in respect of a portion of the balance of the bank account.
[102](2018) 100 NSWLR 610 (Beazley P, Payne and McColl JJA); [2018] NSWCA 198; see also Commissioner of the Australian Federal Police v Fitzroy All Pty Ltd (2015) 299 FLR 439, [26] (Mitchell J) (‘Fitzroy All Pty Ltd’); [2015] WASC 320.

The judge upheld that submission in the following terms:
The Commissioner’s argument was that the decision in Fernandez is authority that a bank account, being a chose in action, albeit with a fluctuating value, cannot be fragmented, to exclude the two deposits and the opening balance. Thus in the event that any amounts in the Account are “tainted” then the account becomes an instrument of an offence and earlier deposits cannot be the subject of a compensation order under section 94A.
The Commissioner’s submission is, I am satisfied, consistent with the extracts from Fitzroy All Pty Ltd endorsed in Fernandez above.
It follows that I am unable to accept the argument that where a bank account contains funds that are proceeds of crime or an instrument of an offence, then other funds not having that characterisation may be the subject of an order under section 94A. I have already found that the applicant does not succeed in her case under section 94. I have also found that each of the disputed deposits have ceased to be proceeds of an offence or an instrument of an offence under section 330 (4) (a) and the application must therefore fail. It follows that the application for a compensation order under section 94A also fails.[103]
[103]Reasons, [182]–[184].
Counsel for the applicant has submitted that the judge erred in his conclusion in relation to the application of s 94A. Alternatively, as we have noted, counsel submitted that the Court should make an order for restitution in accordance with the principle that where a litigant has paid monies to another party pursuant to the order of a court which has been subsequently overruled on appeal, the litigant is entitled to repayment of those monies pursuant to the principles of restitution. In support of that proposition, counsel relied on the decision of the High Court in Commonwealth of Australia v McCormack[104] and of the Full Court in Burke v Gillett.[105] Further, counsel also submitted that the amounts, which were not impugned as proceeds of an offence, were repayable pursuant to the undertaking for damages provided on behalf of the Commonwealth on the obtaining of the restraining order.
[104](1984) 155 CLR 273, 276–7 (Murphy Wilson , Brennan , Deane & Dawson JJ); [1984] HCA 57.
[105][1996] 1 VR 196, 201 (Tadgell J).
Pausing there, we doubt that the undertaking, provided by the respondent on the obtaining of the restraining order, would apply in the circumstances of this case. The undertaking was to pay damages should the Court determine that they had been sustained by reason of the restraining order. That order has not been set aside. Further, the applicant has not succeeded, under grounds 1 to 4, in establishing that interest in her bank account should have been excluded from it. However, for the reasons which follow, it is not necessary for us to express a concluded view on that issue.
On this application, the focus of submissions, on both sides, was on the effect of an individual deposit into a bank account, and whether, as contended by counsel for the applicant, each such deposit constituted a separate or severable interest of the depositor from the chose in action that is constituted by the balance of the account. In support of the proposition that each such deposit constituted a separate item of property, so that it may be the subject of a compensation order under s 94A, counsel for the applicant referred to a passage from the decision of the High Court in Lordianto, in which it was stated:
In the present appeals there was no dispute that the property the appellants sought to have excluded was their respective choses in action against the Australian banks, which entitled them “to require [the relevant bank] to pay to them all or part of whatever amount was credited to the accounts”.[106]
[106]Lordianto, 303 (Kiefel CJ, Bell, Keane and Gordon JJ).
In response, counsel for the respondent submitted that the authorities, including Fernandez and Fitzroy All Pty Ltd, make it clear that the chose in action, as constituted by the balance of a bank account, is not severable, and does not constitute a ‘fractional interest within property’ which may be the subject of a separate order for compensation under s 94A.
Counsel for the respondent further submitted that the principles relating to restitution, after a successful appeal, are confined to cases in which the appellant has paid sums pursuant to the decision of the trial court, which is set aside on appeal. In the present case, counsel noted that the balance of the St George account became forfeited automatically, albeit upon the applicant’s failure to succeed in seeking relief before the primary judge. Thus, it was submitted, the principles relating to restitution do not apply in a case such as this.
In order to determine ground 5 and 6, it is not necessary to express any concluded view in relation to the competing submissions concerning the application of the principles of restitutio in relation to the opening balance in the account, and the two deposits of $10,000 each in June 2018, which were not contended to be the proceeds of an offence. Nor is it necessary to enter upon the submissions relating to the precise nature of the chose in action constituted by the balance of the St George account that was the subject of the restraining order. For the reasons that follow, we consider that the applicant was entitled to a compensation order, under s 94A, in respect of the proportion of those amounts which constituted the balance of the account that was the subject of the restraining order.
In order to explain that conclusion, it is necessary to set out s 94A(1) and (2) in full:
Compensating for proportion of property not derived or realised from commission of any offence
(1)The court that made a restraining order referred to in paragraph 92(1)(b) must make an order that complies with subsection (2) if:
(a)a person (the applicant ) has applied for an order under this section; and
(b)the court is satisfied that the applicant has an interest in property covered, or that was at any time covered, by the restraining order; and
(c)a person has been convicted of a serious offence to which the restraining order relates; and
(d)the court is satisfied that a proportion of the value of the applicant’s interest was not derived or realised, directly or indirectly, from the commission of any offence; and
(e)the court is satisfied that the applicant’s interest is not an instrument of any offence.

(2) An order under this section must:
(a)specify the proportion found by the court under paragraph (1)(d); and
(b)direct the Commonwealth, once the property has vested absolutely in it, to:
(i)if the property has not been disposed of--dispose of the property; and
(ii)pay the applicant an amount equal to that proportion of the difference between the amount received from disposing of the property and the sum of any payments of the kind referred to in paragraph 100(1)(b) in connection with the forfeiture.

In considering those provisions, it is important to keep in mind that s 94(1)(d) provides that, provided that the pre-conditions specified in sub-paras (a), (b), (c) and (e) are complied with, sub-s 1 applies where the court is satisfied that ‘a proportion of the value of the applicant’s interest’ was not derived (directly or indirectly) from the commission of any offence. Section 94A(2)(a) provides that, in such a circumstance, the order must specify the ‘proportion found’ by the court under (1)(d), and pay the applicant an amount equal to ‘that proportion’. Relevantly, s 94A(1)(d) does not require the court to be satisfied that a proportion of the applicant’s interest has not been derived from the commission of an offence; the condition is satisfied where ‘a proportion of the value’ of the applicant’s interest was not so derived.
In the present case, at the time of the restraining order, the value of the applicant’s interest — that is, the chose in action comprising the balance of the bank account — was $797,640.34. It was common ground that a proportion of that value — consisting of the opening balance of $56,030.74, and the two deposits each of $10,000 — was not derived from the commission of any offence. In those circumstances, the pre-condition prescribed by s 94A(1)(d) was satisfied. Although, it would appear, some of the impugned deposits into the bank account may themselves have constituted an instrument of an offence, it was not the case of the respondent, as we understand it, that the bank account — that is, the applicant’s chose in action — was itself an instrument of an offence.
For those reasons, the applicant was entitled to a compensation order under s 94A to the extent of the amount of the three sums — the opening balance and the two unimpeached deposits of $10,000 — that remained in the account at the time of the restraining order.
At that time, the difference between the balance of the account ($797,640.34) and the 13 impugned deposits ($734,300) amounts to $63,340.34. That amount was some $12,690.40 less than the sum of the opening balance and the two unimpeached deposits of $10,000 each. Applying the principle that is known as the rule in Claytons Case,[107] that difference would be accounted for by debits to the account which had the effect of reducing the amount of the opening balance available to a compensation order.
[107]Devaynes v Noble (1816) 1 Mer 572 608 (Sir William Grant MR); (1816) 35 ER 781.
Accordingly, it follows that the applicant is and was entitled to an order for compensation, pursuant to s 94A, in the amount of $63,340.34.
On the hearing of this application, there was an issue as to whether, on the hearing before the judge, counsel for the applicant had made an application for compensation based on s 94A(1)(d) of the Act. Counsel for the respondent noted that the submissions made by the applicant, both at trial and on this appeal, focussed significantly on the proposition that, notwithstanding the principles stated by the New South Wales Court of Appeal in Fernandez, nevertheless each individual deposit into a bank account constituted a severable item of property which may be the subject of an order for compensation.
While that proposition was certainly at the forefront of the submissions made by counsel for the applicant, both at trial and on this application, nevertheless it is evident that, in the hearing before the trial judge, counsel did rely on the line of reasoning to which we have just referred. In the applicant’s amended application for exclusion and compensation under ss 94 and 94A of the Act, the applicant specifically based her claim on the proposition that ‘a proportion of the value’ of her interest was not derived or realised directly or indirectly from the commission of any offence, thus replicating s 94A(1)(d) of the Act. On this application, we were informed that a submission to that effect was made on behalf of the applicant in the written outline submissions provided to the primary judge.
For those reasons, grounds 5 and 6 must succeed, to the extent of a conclusion that the judge erred in failing to determine that the applicant was entitled to a compensation order, pursuant to s 94A, in the sum of $63,340.34.

Summary of conclusions

In summary, for the foregoing reasons, we have concluded that the applicant has not succeeded on each of grounds 1 to 4. The judge gave adequate reasons, his Honour did not address and determine the wrong questions, and his Honour did not err by not finding that the applicant received the thirteen deposits into the St George account without knowing, and in circumstances that would not arouse a reasonable suspicion that they were the proceeds or an instrument of an offence.
Further, we have concluded, under grounds 5 and 6, that the judge erred to the extent that his Honour did not find that the applicant was entitled to compensation in the sum of $63,340.34 in accordance with s 94A of the Act.
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#	CB Ref	Transaction Date	Bank Statement Narration	Deposit Amount $
1	284	25 Jan 2018	QUEENIE HU QUEENIE HU	10,000.00
2	284	29 Jan 2018	QUEENIE HU QUEENIE HU	10,000.00
3	280	26 Feb 2018	QUEENIE HU	180,000.00
4	280	18 Apr 2018	CASH DEPOSIT	9,000.00
5	280	21 Apr 2018	CASH DEPOSIT	9,500.00
6	280	23 Apr 2018	CASH DEPOSIT	9,800.00
7	280	24 Apr 2108	CASH DEPOSIT	5,000.00
8	280	27 Apr 2018	CASH DEPOSIT	195,000.00
9	280	30 Apr 2018	YUHONG ZENG queenie HU	100,000.00
10	280	30 Apr 2018	YUHONG ZENG queenie HU	100,000.00
11	278	12 Jun 2018	CASH DEPOSIT	50,000.00
12	278	13 Jun 2018	CASH DEPOSIT	40,000.00
13	278	19 Jun 2018	CASH DEPOSIT	16,000.00
TOTAL	$734,300.00

[2023] VSCA 32

28 February 2023