Re Application by the Commissioner of the Australian Federal Police
[2015] VSC 774
•15 DECEMBER 2015
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
S CI 2015 06308
IN THE MATTER of the Proceeds of Crime Act 2002 (Cth)
- and –
IN THE MATTER of property suspected of being proceeds of serious offences
- and –
IN THE MATTER of the suspect, MNO
- and –
| IN THE MATTER of an Application by the COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE | Applicant |
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JUDGE: | RIORDAN J |
WHERE HELD: | MELBOURNE |
DATE OF HEARING: | 15 DECEMBER 2015 |
DATE OF JUDGMENT: | 15 DECEMBER 2015 |
CASE MAY BE CITED AS: | Re Application by the Commissioner of the Australian Federal Police |
MEDIUM NEUTRAL CITATION: | [2015] VSC 774 |
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PROCEDURE — Confiscation of proceeds of crime – Application for restraining order, examination order and ancillary orders – Ex parte application for restraining order, ancillary order and examination order – Risk of disposal of funds sought to be restrained – Appropriateness of proceeding ex parte with respect to the examination order and ancillary order – Appropriateness of submission that ex parte orders for examination ‘routine’ – Examination and ancillary orders not granted.
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Ms A Duran, Principal Litigation Lawyer, Australian Federal Police |
HIS HONOUR:
By way of an application under s 25 of the Proceeds of Crime Act 2002 (Cth) (‘the Act’), the applicant applies, relevantly, for the following orders against MNO:
2.Pursuant to sections 18 and 19 of [the Act], the specified property not be disposed of or otherwise dealt with by any person, without the prior written consent of the Applicant or until further order.
3.Pursuant to section 39(1)(ca) of the Act, an order directing that MNO provide Federal Agent Joanne Hopkins with a sworn statement within 14 days of being served with the Restraining Order, such statement setting out all of her interests in property and any liabilities.
4.Pursuant to section 182 of the Act, an order under section 180 of the Act that MNO and QRS be examined about their affairs.
The application asserts that the Court has jurisdiction to make the orders sought on the basis of the following:
(a)the Court has "proceeds jurisdiction" as defined by and for the purposes of the Act;
(b)MNO has been charged with and is suspected of having committed indictable and serious offences as defined by and for the purposes of the Act, namely:
(i)Dealing with property worth $100,000 or more that is reasonably suspected of being proceeds of crime, contrary to section 400.9(1) of the Criminal Code Act 1995;
(ii)Conspiracy to dishonestly influence a Commonwealth public official contrary to section 135.4(7) of the Criminal Code Act 1995;
(iii)Possession of a forged document contrary to section 145.2(1) of the Criminal Code Act 1995;
(iv)Obtain property by deception contrary to section 81(1) of the Crimes Act 1958 (Vic), (2 counts);
(v)Possess false documents contrary to section 83A(5) of the Crimes Act 1958 (Vic), (3 counts).
(c)an authorised officer suspects on reasonable grounds that the property described in paragraph 3 is the proceeds of and an instrument of the offences set out in [paragraph (b) above].
The property sought to be restrained is as follows:
(a) real property A located in Victoria; and
(b) the proceeds of sale of property B located in Victoria.
The grounds upon which the applicant relies are as follows:
(a)the Commissioner of the Australian Federal Police, the Applicant, has applied for the order;
(b)there are reasonable grounds to suspect that MNO has committed the indictable and serious offences specified in [paragraph 2(b) above];
(c)there are reasonable grounds to suspect the real property sought to be restrained was acquired with the proceeds of crime and used as an instrument of serious offences within the meaning of the Act;
(d)there are reasonable grounds to suspect that the sale of [property B] was effected to circumvent the consequences of any order made under the Act and the dealings with the proceeds of sale constitute dealing with the proceeds of crime;
(e)there are reasonable grounds to suspect the property sought to be restrained is property of the suspect MNO and under her effective control;
(f)the application is supported by an affidavit of an authorised officer which addresses the requirements of subparagraph 18(3) and 19(1)(e) of the Act;
(g)the court may be satisfied that the authorised officer who made the affidavit in support of the application holds the suspicions stated in the affidavit on reasonable grounds.
The Court is required to make a restraining order in circumstances set out in ss 18(1) & 19(1) of the Act as follows:
(a) With respect to people suspected of committing serious offences, s 18(1) provides:
(1) A court with proceeds jurisdiction must order that:
(a)property must not be disposed of or otherwise dealt with by any person; or
(b)property must not be disposed of or otherwise dealt with by any person except in the manner and circumstances specified in the order;
if:
(c) a proceeds of crime authority applies for the order; and
(d)there are reasonable grounds to suspect that a person has committed a serious offence; and
(e)any affidavit requirements in subsection (3) for the application have been met; and
(f)the court is satisfied that the authorised officer who made the affidavit holds the suspicion or suspicions stated in the affidavit on reasonable grounds.
(b) With respect to people suspected of committing indictable offences, s 19(1) provides:
(1) A court with proceeds jurisdiction must order that:
(a)property must not be disposed of or otherwise dealt with by any person; or
(b)property must not be disposed of or otherwise dealt with by any person except in the manner and circumstances specified in the order;
if:
(c) a proceeds of crime authority applies for the order; and
(d) there are reasonable grounds to suspect that the property is:
(i)the proceeds of a terrorism offence or any other indictable offence, a foreign indictable offence or an indictable offence of Commonwealth concern (whether or not the identity of the person who committed the offence is known); or
(ii) an instrument of a serious offence; and
(e)the application for the order is supported by an affidavit of an authorised officer stating that the authorised officer suspects that:
(i) in any case—the property is proceeds of the offence; or
(ii)if the offence to which the order relates is a serious offence—the property is an instrument of the offence;
and including the grounds on which the authorised officer holds the suspicion; and
(f)the court is satisfied that the authorised officer who made the affidavit holds the suspicion stated in the affidavit on reasonable grounds.
In compliance with ss 18(3) & 19(3), the applicant has filed an affidavit in support of the application for a restraining order of Federal Agent Joanne Hopkins who deposes as to the following matters:
(a) MNO has been charged with the following serious and indictable offences:
(i)conspiracy to dishonestly influence a Commonwealth public official contrary to s 135.4(7) of the Criminal Code Act 1995 (Cth);
(ii)possession a forged document contrary to s 145.2(1) of the Criminal Code Act 1995 (Cth);
(iii)deal with money or other property reasonably suspected of being the proceeds of crime, and at the time of dealing the value of money or property was $100,000 or more contrary to s 400.9(1) of the Criminal Code Act 1995 (Cth);
(iv)obtain property by deception contrary to s 81(1) of the Crimes Act 1958 (Vic) (2 counts);
(v)possess false documents contrary to s 83A(5) of the Crimes Act (3 counts).
(b)Her suspicion, and the grounds for that suspicion, that MNO has committed the offences with which she has been charged.
(c)Her suspicion, and the grounds for that suspicion, that MNO and QRS have disposed of [property B] to avoid the consequences of any orders made under the Act.
(d)[Property A] is currently listed for sale and there is a mortgage secured on the title and, accordingly, there is a possibility that the property could be sold immediately or the mortgage further drawn down, thereby extinguishing any equity in the property.
Sub-sections 26(1) and (2) of the Act require that, in effect, the responsible authority must give written notice of an application for a restraining order to certain affected persons with respect to the relevant property. However, sub-ss 26(3), 26(4) and 26(5) provide as follows:
(3)The court must not (unless subsection (4) applies) hear the application unless it is satisfied that the owner of the property to which the application relates has received reasonable notice of the application.
(4)The court must consider the application without notice having been given if the responsible authority requests the court to do so.
(5) The court may, at any time before finally determining the application, direct the responsible authority to give or publish notice of the application to a specified person or class of persons. The court may also specify the time and manner in which the notice is to be given or published.
After considering the affidavit in support, I have made the orders sought by the applicant on the application without notice on the basis that I am satisfied that there is a real risk, if MNO is given notice, that she may dispose of the relevant property. In making these orders, I am mindful that under s 31 of the Act, MNO may apply without leave for an order excluding her interest in the property; or an order under s 42 of the Act for revocation of the restraining order.
The examination and ancillary orders
As noted above, the applicant seeks the following further ex parte orders:
(a) Pursuant to s 39(1)(ca) of the Act, MNO provide Federal Agent Joanne Hopkins with a sworn statement within 14 days of being served with the restraining order, such statement setting out all of her interests in property and any liabilities.
(b) Pursuant to s 180 of the Act, MNO and QRS be examined about their affairs.
On behalf of the applicant, it was submitted as follows:
(a) Restraining orders are ‘routinely made on an ex parte basis’ and examination orders are ‘routinely obtained at the time of the making of the restraining order’.
(b) In response to my request for authorities dealing with the question of the appropriateness of making examination orders on an ex parte basis, I was referred to Ruzehaji v Commissioner of the Australian Federal Police,[1] where the judge at first instance appears to have made the orders for the provision of a sworn statement and an examination with the ex parte restraining order.
[1][2015] SASCFC 182.
(c) Section 182(2) of the Act provides that ‘The Court must consider an application for an examination order without notice having been given to any person if the responsible authority requests the Court to do so’.
(d) Although there was no provision for revocation of the examination order, s 180(2) provides that ‘The examination order ceases to have effect if the restraining order to which it relates ceases to have effect’.
(e) Rule 46.08 of the Supreme Court (General Civil Procedure) Rules 2015, provides for applications to set aside ex parte orders. Further, in DPP v Loo & Ors,[2] the DPP conceded that the plaintiff was entitled to reopen the question of the appropriateness of the impugned order ex debito justitiae.[3] This right to apply to set aside the order was consistent with the orders being interlocutory in nature.[4]
[2][2007] VSC 343 (Osborn J).
[3]Ibid [27] citing Taylor v Taylor (1979) 143 CLR 1; Savcor Pty Ltd v Cathodic Protection International APS (2005) 12 VR 639; Duck Boo International Co Ltd v Mizzan Pty Ltd [2006] VSCA 241.
[4]Ruzehaji v Commissioner of Australian Federal Police [2015] SASCFC 182, [65].
In my opinion, it is not appropriate that orders be made ex parte for the purpose of preserving property from dissipation (other than the restraining orders pursuant to ss 18 & 19 of the Act) for the following reasons:
(a) The only decisions I have been able to find where a judge has considered the appropriateness of an examination and ancillary orders on an ex parte basis are as follows:
(i) In Ex parte Application of Commissioner of the Australian Federal Police, Button J stated:
I am very loath to make orders empowering the plaintiff to examine [the proposed respondents to the orders] compulsorily without hearing from either of those persons, unless it is soundly necessary to do so by proceeding ex parte. As I have said, the solicitor for the plaintiff has accepted that there is no great urgency about those aspects.[5]
[5][2014] NSWSC 130, [39].
(ii) In Director of Public Prosecutions v Wayne Cleveland, McDougall J stated:
The other question relates to the ancillary orders that are sought. They are orders that various people, including Mr Cleveland, be examined about certain matters. The people who are sought to be examined include Mr Cleveland's partner, his stepfather (who is a co-accused as I have said), his mother and, someone who I think is a real estate agent. None of those persons, apart from Mr Cleveland, are parties to the proceedings.
There is no doubt that the Act empowers examination orders of the kind sought: see s 180. However, as is apparent from the terms of s 180, the examination is in effect in aid of, or ancillary to, the restraining order. That follows from the fact that an examination order can only be made if a restraining order is in force, and that an examination order ceases to have effect if the restraining order to which it relates ceases to have effect. See, respectively, sub-ss (1) and (2) of s 180.
Given that the application for the restraining orders is made ex parte, and given, as I have said, that Mr Cleveland has the right to apply for revocation of those orders, it is my view that ancillary orders should not be made, including orders for examination under s 180, at least until the time within which Mr Cleveland may apply to revoke the restraining orders has expired.[6]
(b)I note that in Lee v New South Wales Crime Commission,[7] the New South Wales Crimes Commission sought and obtained restraining orders on an ex parte basis but applied on notice to the respondents for an order for an examination.[8]
(c)Although, if the restraining order ceases to have effect, the examination order likewise ceases to have effect, it may be that the examination order should not be made regardless of the propriety of the restraining order.
(d)Although s 182(2) of the Act requires the Court to consider an application for an examination order without notice on the request of the responsible authority, the subsection does not require that the application be determined prior to notice being given.[9]
(e)The fact that the respondents are entitled to make application to set aside the order for examination, in my opinion, places the burden unfairly on the respondents and does not overcome the Court’s natural reluctance to make significant orders ex parte unless it is necessary to do so.[10]
(f)Critically, the applicant was unable to point to any prejudice resulting from the adjournment of the application for the examination and ancillary orders pending notification to the respondents, other than the need to attend court on a further occasion. In my opinion, that is a totally insufficient reason to make an order without notification to the respondents.
[6][2010] NSWSC 67, [14] – [16].
[7](2013) 251 CLR 196.
[8]Ibid 197-8.
[9]Ex parte Application of the Commissioner of the Australian Federal Police [2014] NSWSC 130, [25]-[26].
[10]International Finance Trust Company Limited v New South Wales Crime Commission (2009) 240 CLR 319.
I accept that the solicitor for the applicant was not aware of the decisions referred to in paragraph 11(a) above; but, if there are sufficient authorities (which were not brought to my attention) to support a submission that examination orders are ‘routinely’ made on an ex parte basis, the authorities referred to in paragraph 11(a) should also have been brought to the Court’s attention.
Accordingly, on the basis of the usual undertaking as to damages by the applicant, I have ordered as follows:
(a) Pursuant to sss 18 and 19 of the Proceeds of Crime Act (Cth), the property specified in the Schedule of this order not be disposed of or otherwise dealt with by any person, without the prior written consent of the Applicant, or until further order.
(b) The application, pursuant to s 39(1)(ca) of the Act, that MNO provide Federal Agent Joanne Hopkins with a sworn statement within 14 days of being served with this Restraining Order, such statement setting out all of her interests in property and any liabilities, be adjourned to a date to be fixed.
(c) The application for the examination of MNO and QRS, pursuant to s 180 of the Act be adjourned to a date to be fixed.
(d) Liberty to apply.
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