The Commissioner of the Australian Federal Police v Bahmad

[2020] NSWSC 439

Supreme Court

New South Wales

Medium Neutral Citation:	The Commissioner of the Australian Federal Police v Bahmad [2020] NSWSC 439
Hearing dates:	21 April 2020
Decision date:	21 April 2020
Jurisdiction:	Common Law
Before:	R A Hulme J
Decision:	1. The first defendant is to comply with Order 18 of the orders made by this Court on 19 December 2019 by 19 May 2020. 2. These proceedings are stood over to join with a related proceeding that is before the Court on 28 May 2020. 3. Liberty to restore on three days' notice. 4. Costs of and incidental to today reserved.
Catchwords:	CRIME – proceeds of crime – extension of time to comply with orders under s 39(1) of Proceeds of Crime Act 2002 (Cth) – concern at tardiness and lack of good faith – lesser extension granted
Legislation Cited:	Proceeds of Crime Act 2002 (Cth), s 39(1)
Cases Cited:	Commissioner of the Australian Federal Police v Cranston and Ors (No. 2) [2017] NSWSC 673
Category:	Consequential orders (other than Costs)
Parties:	The Commissioner of the Australian Federal Police (Plaintiff) James Ali Bahmad (First Defendant) Assia Investments Pty Ltd (Second Defendant) Susan Bahmad (Fourth Defendant) Tony Antonios (Third Respondent) Jhonny Ayoub (Fourth Respondent)
Representation:	Counsel: Ms J Taylor (Plaintiff) Ms J Antonopoulos (First, Second & Fourth Defendants) Mr S Stanton (Third & Fourth Respondents)   Solicitors: Criminal Assets Litigation, Australian Federal Police (Plaintiff) One Group Legal (First, Second & Fourth Defendants) Yazbeck Law (Third & Fourth Respondents)
File Number(s):	2019/398879

Judgment

1. HIS HONOUR: Mr James Bahmad is the first defendant in proceedings brought by the Australian Federal Police under the Proceeds of Crime Act 2002 (Cth) (“the Act”). He is or was the sole director and shareholder of companies that are the second and third defendants. His wife is the fourth defendant. Receivers and managers had been appointed to the third defendant before the proceedings were instituted.

2. On 19 December 2019, Walton J made various restraining and ancillary orders on an ex parte basis. The orders were served personally upon Mr Bahmad the following day.

3. One of the orders his Honour made (Order 18) was pursuant to s 39(1) of the Act, namely that within 28 days of service of the orders, Mr Bahmad provide the plaintiff with a sworn statement as to his assets and liabilities in the form set out in Schedule Five to the orders. It is specified in the schedule that the information is required for the past six years (i.e. since 1 January 2014). Mr Bahmad was required to comply with Order 18 by 17 January 2020. He is yet to do so.

4. On 29 January 2020 the plaintiff's solicitors wrote in relation to the noncompliance and sought that there be compliance by 18 February 2020. That was a date when the matter was expected to be back before the Court. It was not back before the Court on that particular date for reasons that are presently irrelevant. It was next before the Court on 3 March 2020.

5. At 8.00am on 3 March 2020, the plaintiff received (for the first time) an indication that Mr Bahmad would be seeking an extension of time for compliance with Order 18. It was too late by that stage for the plaintiff's solicitors to obtain instructions as to that. The matter went before the Registrar who made an order extending the time for compliance to 14 April 2020.

6. Mr Bahmad had still not complied with Order 18 by that extended date. The matter was stood over for further directions today. It went before the Registrar this morning and she referred it to me as the duty judge.

7. The information I have is largely derived from an affidavit by Mr Bahmad and an oral history of the matter provided in submissions on behalf of the plaintiff.

8. The affidavit by Mr Bahmad was filed and served yesterday. It includes information as to his efforts to compile the statement and the frustrations he says he has experienced in that respect. One example is that his accountant was overseas when he contacted him in January 2020 and was thereby unable to assist with the collation of material to enable the preparation of the statement. Not only that, the accountant's firm then ceased acting for Mr Bahmad. The reason why that occurred is not disclosed.

9. Mr Bahmad engaged a new firm of accountants on 31 January 2020. By mid-February, they had received some but not all of the relevant files from the former accountants. They discovered that the former accountants had failed to prepare Mr Bahmad's personal and company tax returns, financial statements and BAS. Nothing is said as to how this could have occurred, or why, or as to how Mr Bahmad could have been unaware.

10. Mr Bahmad's solicitors have sought records from solicitors who acted in the past in relation to his conveyancing transactions. They wrote a letter to those solicitors on 20 January 2020. They sent a follow-up email on 27 February 2020. Nothing has been forthcoming and there has been no further follow-up. There is no explanation for this.

11. The new accountants have indicated to Mr Bahmad that they require information from the banks with which he held accounts. Without descending into the detail, I get the distinct impression from the history of this activity that is provided in the affidavit that it would have been well apparent to Mr Bahmad by mid-March or, at the latest, late-March, that he had no prospect of complying in the way he had says he had hoped by the due date of 14 April 2020.

12. The follow-up of the inquiries with the banks does not seem to have been prompt or vigorous. Citing an example, Commonwealth Bank staff at a particular branch were provided by Mr Bahmad with copies of his solicitors' letters setting out what they were seeking on 17 March 2020. He was told that the branch would forward the letters to its "operation centre" for action. Nothing has occurred since and there has been no follow-up. Another example concerns the ANZ. It indicated on 30 March 2020 that it would require a notice to produce for it to provide the information sought. It seems that nothing has been done as a consequence.

13. Mr Bahmad claims that his desire was to provide a full, complete, and accurate statement of assets and liabilities to the best of his ability. He was not minded to respond in a piecemeal fashion or with approximations or estimates, but was endeavouring to determine the various matters sought in the statement with as much accuracy as possible. That seems a laudable objective. The problem is that he appears to have done little, if anything, to keep the plaintiff advised as to his progress and to provide notice of a potential for him not to be able to comply by due dates.

14. Mr Bahmad now asks for an extension of time for three months to comply with Order 18, an order that was made just over four months ago. The application is opposed by the plaintiff.

15. On behalf of the plaintiff, it is submitted that there have been examples in the past where an attempt at compliance has been made by a person using their best endeavours with the information currently available with the prospect of there being some augmentation or clarification provided at a future time, if necessary. The example cited in that regard was Commissioner of the Australian Federal Police v Cranston and Ors (No. 2) [2017] NSWSC 673.

16. The importance of complying with an order requiring a sworn statement of assets and liabilities is uncontroversial. The plaintiff has sought and obtained restraining orders in respect of assets that it is aware of, but there are often in cases such as this further assets of which the plaintiff is unaware and which might also be the subject of a further application for restraint. The more time passes, the more likely the plaintiff will be impeded and perhaps prevented from taking steps to secure property that might come within the provisions of the Act.

17. I am concerned at Mr Bahmad's tardiness in what he has done to comply with his responsibilities to date. I am further concerned about the apparent lack of good faith displayed in his approach, particularly in failing to keep the plaintiff apprised of potential difficulties and of any potential inability to comply with due dates.

18. It would be overly generous in the extreme in these circumstances to provide an extension of three months, having regard to the way Mr Bahmad has conducted himself to date. He should be aware, at least now, that the plaintiff is prepared to accept, so it seems, his best attempt to provide the information sought. I take the plaintiff to accept that if what Mr Bahmad provides is not based upon all of the desired documentation, it might be subject to correction, clarification or augmentation at some future time. I take that acceptance to be on the basis that Mr Bahmad demonstrates that he is doing his best and in the most timely way. But the matter has come to the point where he has to do something. He cannot just let time pass and seek extensions only when forced to.

19. The orders I make are these:

1.   The first defendant is to comply with Order 18 of the orders made by this Court on 19 December 2019 by 19 May 2020.

2.   These proceedings are stood over to join with a related proceeding that is before the Court on 28 May 2020.

3.   Liberty to restore on three days' notice.

4.   Costs of and incidental to today reserved.

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Decision last updated: 23 April 2020