Safadi v Commissioner of the Australian Federal Police (Ruling)
[2018] VCC 1145
•1 August 2018
tr
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMON LAW DIVISION | Revised Not Restricted Suitable for Publication |
CONFISCATION LIST
Case No. CI-12-06210
IN THE MATTER of the Proceeds of Crime Act 2002 of the Commonwealth
and
IN THE MATTER of the property suspected to be the proceeds of a serious offence
and
IN THE MATTER of an Application by Sami Ghazi Safadi and Randa Safadi
between
| SAMI GHAZI SAFADI (aka AL-SAFADI) | |
| and | |
| RANDA SAFADI (aka AL-SAFADI) | Applicants |
| and | |
| THE COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE | Respondent |
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JUDGE: | HIS HONOUR JUDGE MISSO | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 20 and 21 June 2018 | |
DATE OF RULING: | 1 August 2018 | |
CASE MAY BE CITED AS: | Safadi & Anor v Commissioner of the Australian Federal Police (Ruling) | |
MEDIUM NEUTRAL CITATION: | [2018] VCC 1145 | |
RULING
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Subject: CRIMES CONFISCATION
Catchwords: Proceeds of crime – application for compensation – whether an amended notice of grounds of opposition sufficiently particularised – whether it disclosed an assertion that the property was an “instrument” of a serious offence – whether the findings in the principal proceeding were determinative of the issue that the property was such an “instrument” – application to admit further evidence – whether the evidence was in substitution for evidence in the principal proceeding on the subject of orders made pursuant to s56 of the Proceeds of Crime Act 2002
Legislation Cited: Proceeds of Crime Act 2002 (Cth); Criminal Code Act 1995 (Cth); County Court Miscellaneous Rules 2009; County Court Civil Procedure Rules 2008
Cases Cited:Commissioner of the Australian Federal Police v Safadi & Ors (Ruling) [2017] VCC 1913; Commissioner of the Australian Federal Police v Nguyen [2016] NSWSC 883; Commissioner of the Australian Federal Police v Courtenay Investments Ltd (No 4) [2015] WASC 101; Commissioner of the Australian Federal Police v Hart [2018] HCA 1
Ruling: The applications for compensation made pursuant to s78 of the Proceeds of Crime Act 2002 are dismissed.
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APPEARANCES: | Counsel | Solicitors |
| For the Respondent | Ms R Burton | Proceeds of Crime Litigation Australian Federal Police |
| For the Applicants | Mr C J Juebner | Madison Branson Lawyers Pty Ltd |
HIS HONOUR:
Introduction
1 At the commencement of the trial which resulted in my Ruling delivered 21 December 2017,[1] I debated with counsel the order in which the many applications should be heard. Essentially, I left it to counsel to determine that order.
[1]Commissioner of the Australian Federal Police v Safadi & Ors (Ruling) [2017] VCC 1913
2 The sum of that debate was that applications for exclusion of Sami Safadi (“Sami”) and Randa Safadi (“Randa”) would go first, followed by the Commissioner of the Australian Federal Police’s (“the Commissioner”) application for forfeiture.
3 Part of that debate included whether Sami and Randa’s applications for compensation would be heard at the same time as the other two applications. Counsel for Sami and Randa submitted that the applications for compensation should await the outcome of the first two applications. That seemed to be a sensible course, because if Sami and Randa succeeded on their application for exclusion, then their application for compensation would become unnecessary.
The compensation applications
4 Sami and Randa’s applications for compensation are identical. The grounds upon which they based their applications are as follows:
“1) that the above named Applicant has an interest in the Property as a joint registered proprietor;
2) that the proportion of the value of the applicant’s interest in the Property was not derived or realised, directly or indirectly, from the commission of any offence; and
3) that the applicant’s interest is not an instrument of any offence.”[2]
[2]Randa’s application is at Court Book (“CB”) 36-38. Both applications are dated 24 June 2013.
5 The Commissioner filed an Amended Notice of Grounds of Opposition (“the grounds”) to the orders sought by Sami and Randa pursuant to s31, s74, s78, s94 and s94A of the Proceeds of Crime Act 2002 (“the Act”).[3] The applications for compensation are brought pursuant to s78 of the Act.
[3]CB 97-99. The notice is dated 18 August 2017.
6 The grounds upon which the Commissioner opposed Sami and Randa’s application for compensation are as follows:
“1.The Third, Fourth, Fifth, Sixth and Seventh Applicants do not have an interest in the restraint property.
2.There is insufficient evidence to satisfy the court that the Applicants’ interest in the restrained property sought to be excluded is neither proceeds of unlawful activity nor an instrument of any serious offence.
3.There is insufficient evidence to satisfy the court that the Applicants’ interest in the restrained property sought to be excluded is neither proceeds of an indictable offence, an indictable offence of Commonwealth concern nor an instrument of any serious offence.
4.There is insufficient evidence to satisfy the court that a proportion of the value of the Applicant’s interest in the restrained property in respect of which compensation is sought, was not derived or realised, directly or indirectly, from the commission of any offence.
5.The offences relied upon by the Respondent are the offences relied upon in the applications for restraining order dated 17 December 2012 and forfeiture order dated 21 December 2012, in alleging that the restrained property is the proceeds of the commission of indictable and serious offences, namely:
(i) Attempt to import a marketable quantity of a border controlled drug, namely heroin, contrary to sections 307.2 and 11.1 of the Criminal Code(Cth);
(ii) Attempt to possess a marketable quantity of an unlawfully imported border controlled drug, namely heroin, contrary to sections 307.6 and 11.1 of the Criminal Code(Cth);
(iii) Dealing with property, valued at $100,000 or more, which is reasonably suspected of being the proceeds of crime, contrary to section 400.9 of the Criminal Code(Cth);
(iv) By deception, dishonestly obtaining a financial advantage from a Commonwealth entity, namely Centrelink, contrary to section 134.2 of the Criminal Code(Cth); and
(v) Dishonestly causing a loss or a risk of a loss to a Commonwealth entity, namely the Australian Taxation Office, with the knowledge or belief that the loss will occur or that there is a substantial risk of the loss occurring, contrary to section 135(5) of the Criminal Code(Cth).”
7 Counsel for Sami and Randa addressed me at some length regarding the requirement for the Commissioner to provide particulars of the grounds.
8 Counsel referred me to the requirements of s79(3) of the Act as authority for that proposition, but I note that rather than referring to “particulars”, it requires the Commissioner to give “notice of any grounds on which it proposes to contest the application”. There is an obvious distinction between grounds which are something like a pleading as opposed to particulars which are often required of a pleading.
9 Counsel also referred me to a number of authorities which doubtless stand for the proposition that there should be clarity in defining alleged facts and an identification of the facts and matters relied upon by the Commissioner.[4]
[4]Commissioner of the Australian Federal Police v Nguyen [2016] NSWSC 883; Commissioner of the Australian Federal Police v Courtenay Investments Ltd (No 4) [2015] WASC 101 and Commissioner of the Australian Federal Police v Hart [2018] HCA 1
10 Counsel also referred me to Rule 10.22 (2) of the County Court Miscellaneous Rules 2009 which requires that where a person, in this case the Commissioner, intends to contest an application, then notice using a particular form must be given to the applicant “of the grounds on which the application is to be contested”.
11 Both counsel acknowledged that an application for compensation and its grounds do not carry a requirement to plead the substance of the application or the grounds as is the expected convention with a statement of claim and a defence. For example Rule 13 of the County Court Civil Procedure Rules 2008 governs the formal requirements of a pleading, and Rule 13.10 (1) requires that every pleading shall contain necessary particulars of any fact or matter pleaded.
12 There are no similar provisions in the Act requiring something akin to the formal requirements referred to in the Rule just referred to. However, it is clear from the authorities to which counsel took me that particulars are necessary where they will permit the parties to understand the grounds upon which an application will be made and opposed. Essentially, whether the requirements are contained in rules or in judicial pronouncements, the requirement for particulars serves the purpose of affording fairness to parties who then know what the battleground is to be, and for the proper and expeditious conduct of a trial.
13 Neither Sami nor Randa made a request for particulars, and nor did the Commissioner provide any beyond what is contained in the grounds. However, the clarity giving definition to the alleged facts and an identification of the facts and matters occurred during the opening addresses of counsel, through cross-examination, and were then very well crystallised during final addresses.
14 I do not accept that Sami and Randa were in some way kept in the dark regarding the grounds and what they amounted to. I think that the extent which I went to in summarising then analysing each and every relevant financial transaction in the reasons was derived from the depth of the testing of the evidence by both counsel.
15 I will now turn to the statutory onus borne by Sami and Randa before turning to the central issue raised by counsel for them.
Sami and Randa’s onus
16 Section 78(1) of the Act provides for the making of an application for compensation. It is in the following terms:
“(1) A person may apply to a court for a compensation order if an application for a forfeiture order that could specify property in which the person claims an interest has been made to the court, but the forfeiture order is yet to be made.”
17 Section 77 of the Act refers to circumstances, which, if satisfied, must result in a compensation order being made. It is in the following terms:
“(1) A court that made a *forfeiture order, or that is hearing, or is to hear, an application for a forfeiture order, must make an order under subsection (2) (a compensation order ) if:
(a) a person (the applicant) has applied for a compensation order; and
(b) the court is satisfied that the applicant has an *interest in property specified in the forfeiture order or in the application for the forfeiture order; and
(c) 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
(d) the court is satisfied that the applicant’s interest is not an instrument of any offence; and
(e) in the case of a court that is hearing or is to hear an application for a forfeiture order—the court makes the forfeiture order.
(2) A *compensation order must:
(a) specify the proportion found by the court under paragraph (1)(c); 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 70(1)(b) in connection with the *forfeiture order.”
18 Counsel for Sami and Randa submitted that I have no discretion but to make an order under ss(1) where I am satisfied of each of the requirements in subparagraphs (a) to (e). It is clear enough that the use of the conjunction “and” means that I must be satisfied of each of those requirements.
19 Counsel for the Sami and Randa concentrated his attention on subparagraphs (c) and (d). The requirements of the other subparagraphs have been satisfied.
20 The definitions of “proceeds” and “instrument” became relevant to the ultimate submission made by counsel for Sami and Randa. The definition of each word is contained in s329 and s330 of the Act. The effect of the definitions is that if the interest of Sami and Randa in the relevant property is an “instrument”, then clearly s77(1)(d) precludes the making of a compensation order in their favour.
21 In paragraph 168 I dealt with the issue of whether Sami and Randa had discharged the onus they bore relevant to whether, among other things, the restrained property was an instrument of a serious offence:
“168I am not satisfied that Sami and Randa have discharged the onus they bear to satisfy me that their interest in the restrained property is neither the proceeds of unlawful activity nor related to a serious offence and is not an instrument of a serious offence.”[5]
[5]Section 29(2)(c)(i) and (ii)
22 The conclusion was based on a very detailed analysis of Sami and Randa’s evidence, paying very particular attention to the source of the monies they secured which were applied to the acquisition of property. I think it is inherent in the conclusion I reached that I specifically turned my attention to the question of “proceeds” and “instrument”. What I did not do was to identify each and every transaction by adding whether I considered it to be properly categorised as “proceeds” or an “instrument”. I did not do so because neither Sami nor Randa called on me to do so. Their case was conducted on the footing that all of the monies acquired by them came from legitimate sources. They did not conduct their case on the basis that if I was against them that I should nonetheless find that the property was not an “instrument”.
23 Counsel for the Sami and Randa submitted, therefore, that the conclusion I reached by what I said in paragraph 168 is not determinative of their application for compensation. In his written submissions, counsel made six points, in essence, submitting that the Reasons did not provide any reasoning for the “apparent conclusion” at paragraph 168. He added that the Commissioner did not put a positive case during the trial.
24 In conclusion, counsel for Sami and Randa submitted that it is for me to now reconsider the evidence and the Reasons to determine whether a “characterisation of the property” is an “instrument”.
25 If that was an invitation for me to reconsider all of the evidence, that was put before me at the trial and to reconsider the conclusions I reached then I will not do that, because the parties are bound by the conclusions I reached and the orders which followed.
26 All I propose to say is that I identified the definitions of the words “proceeds” and “instrument” in paragraph 15 of the Reasons which I did because of the relevance of those two words in the broader context of all of the applications that were before me even though the application for compensation was to be determined at another time for reasons I have already adverted to.
27 Counsel for the Commissioner submitted that the onus is borne by Sami and Randa to demonstrate that the characterisation of the property is not an “instrument”. Furthermore, that the parties essentially agreed that the evidence in the trial was to be the evidence in this application for compensation. As I have already observed, neither Sami nor Randa chose to argue whether any particular transaction or transactions were to be characterised as “proceeds” or an “instrument”.
Conclusions
28 I have gone to the effort of reading sufficient of the transcript of the trial and the final submissions made by counsel for the parties relevant to the conclusions I reached contained in the Reasons.
29 I think it is inherent in the manner in which the parties adduced the evidence and analysed it in the trial that the question of “proceeds” and “instrument” was always alive. I do not see that what I said in paragraph 168 was any more that what I needed to say in determining whether Sami and Randa had discharged the onus which they bore.
30 Both counsel in this application expended a great deal of time undertaking analyses of some of the evidence. Counsel for the Commissioner expended a great deal of time reminding me of the manner in which the parties conducted the trial. I do not consider that I need to deal with each and every submission which they made. I think it is sufficient for me to deal with the issue in the manner in which I have.
31 I should add to what I have just said that I have found it very disquieting that the parties set a course for the trial and for the subsequent hearing of this application which appears to have changed. I do not accept the submission made by counsel for Sami and Randa in this application that in some way the trial and the evidence adduced during it is in some way disconnected from this application. It was always to be the case that the evidence in the trial would be evidence in this application.
32 It is for these reasons that I have concluded that there is no reason why I should depart from the conclusion I reached in paragraph 168 of the Reasons. Therefore, Sami and Randa’s application fails and it must be dismissed.
Further evidence
33 Counsel for Sami and Randa tendered an affidavit sworn by Mr Paul Snowden, certified practising valuer, on 5 June 2018. It values the property at 57-59 Rade Macut Court, Narre Warren (“the property”) as follows:
· Land $870,000
· Improvements $630,000
34 This gives a current market value of land and improvements of $1,500,000.
35 If the question of the market value of the property became an issue then I would have ruled that Sami and Randa could not rely upon the valuation of Mr Snowden.
36 The market value was agreed by the parties at $1,175,000. The Orders made on 30 January 2018 declared, pursuant to s56 of the Act, the value of the property at $1,175,000. Therefore, the parties are bound by the evidence, the findings I made on the evidence and the final Orders I made. I do not see how this is further evidence in Sami and Randa’s application for compensation, but rather an attempt to substitute evidence on which the Order is based which I considered to be impermissible.
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