The Commissioner of the Australian Federal Police v Cranston (No 4)

[2017] NSWSC 716

Supreme Court

New South Wales

Medium Neutral Citation:	The Commissioner of the Australian Federal Police v Cranston and Ors (No 4) [2017] NSWSC 716
Hearing dates:	31 May 2017
Date of orders:	31 May 2017
Decision date:	05 June 2017
Jurisdiction:	Common Law
Before:	Fullerton J
Decision:	Orders made
Catchwords:	Application for orders under the Proceeds of Crime Act 2002 (Cth)
Legislation Cited:	Civil Procedure Act 2005 (NSW) Court Suppression and Non-Publication Orders Act 2010 (NSW) Criminal Code Act 1995 (Cth) Proceeds of Crime Act 2002 (Cth)
Cases Cited:	The Commissioner of the Australian Federal Police v Cranston and Ors [2017] NSWSC 624 The Commissioner of the Australian Federal Police v Cranston and Ors [2017] NSWSC 674
Category:	Procedural and other rulings
Parties:	The Commissioner of the Australian Federal Police (Plaintiff) Adam Michael Cranston and Ors (Defendants 1-58)
Representation:	Counsel: D Habashy (Plaintiff) Ex parte   Solicitors: Criminal Assets Litigation, Australian Federal Police (Plaintiff) Ex parte
File Number(s):	2017/146280

Judgment

1. HER HONOUR: On 16 May 2017 I heard an ex parte application by the Commissioner of the Australian Federal Police (“the Commissioner”) for orders under the Proceeds of Crime Act 2002 (Cth) (“the POCA”) in respect of the suspected involvement of a large number of people in an organised taxation fraud.

2. The orders sought in the Summons included orders restraining a number of individuals and entities from dealing with the property itemised in the Schedules to the Summons. A number of ancillary orders under the POCA were also sought, as were a number of procedural orders under the Civil Procedure Act 2005 (NSW) and the Court Suppression and Non-Publication Orders Act 2010 (NSW).

3. The orders sought were granted and ordered to be entered forthwith (The Commissioner of the Australian Federal Police v Cranston and Ors [2017] NSWSC 624).

4. On 24 May 2017 I heard a further ex parte application by the Commissioner. The orders sought in the notice of motion included orders restraining a number of individuals and entities from dealing with the property itemised in the Schedules to the notice of motion. A number of custody and control orders and forfeiture orders were also sought under the POCA, as were a number of procedural orders under the Civil Procedure Act 2005 (NSW) and the Court Suppression and Non-Publication Orders Act 2010 (NSW).

5. The orders were granted and ordered to be entered forthwith (The Commissioner of the Australian Federal Police v Cranston and Ors [2017] NSWSC 674).

6. By notice of motion filed instanter on 31 May 2017 pursuant to Rule 6.5 of the Uniform Civil Procedure Rules 2005 (NSW), the Commissioner sought restraining orders under ss 18 and 19 of the POCA, ancillary orders under s 39(1) of the POCA and custody and control orders under s 38 of the POCA against each of the three respondents to the notice of motion and the 19th defendant to the Summons, being respectively, Active Management Solutions Pty Ltd ACN 618 319 083, 004 488 408 Pty Ltd ACN 618 492 596, Glen Saikali, and G & T Holdings Pty Ltd ACN 601 755 202. The 2nd and 50th defendants to the Summons were also nominated in the notice of motion as persons (or entities) affected by the orders sought. The 1st and 9th defendants to the Summons were not nominated on the notice of motion as persons affected by the orders sought but, as indicated in the affidavit of Mr Burtenshaw of 31 May 2017, they are both suspected to have effective control over the property identified in Schedules 2 to 4 (the 9th defendant) and Schedules 5 and 6 (the 1st defendant).

7. It was the Commissioner’s case on the motion that the property identified in the Schedules is either (i) the proceeds or instrument of an indictable or serious offence (as defined in s 19 of the Act) committed by one or more of the defendants contrary to s 400.0(1) of Schedule 1 of the Criminal Code Act 1995 (Cth) (“the Criminal Code”) and/or an offence contrary to s 135.4(3) of the Criminal Code – the property in Schedules 1 to 6; and/or (ii) property under the effective control of the 2nd defendant within the meaning of s 18(2)(c) of the POCA – the property in Schedule 1; and/or (iii) property under the effective control of the 9th defendant within the meaning of s 18(2)(c) of the POCA – the property in Schedules 2, 3 and 4; and/or (iv) property under the effective control of the 1st defendant within the meaning of s 18(2)(c) of the POCA – the property in Schedules 5 and 6.

8. Procedural orders were sought under ss 71(a) and (b) of the Civil Procedure Act and ss 26(4) and 39(3A) of the POCA. Further, an order was sought pursuant to s 64 of the Civil Procedure Act and Rule 6.24 of the Uniform Civil Procedure Rules for leave to file a second further amended summons and that the first, second and third respondents to the notice of motion be joined as parties to the proceedings.

9. Orders were also sought pursuant to ss 7 and 8 of the Court Suppression and Non-Publication Orders Act 2010 (NSW) that there will be no access granted to any person, including to any defendant to the proceedings commenced by summons, to the non-redacted version of the first affidavit of Mr Burtenshaw sworn 15 May 2017.

10. The affidavit of Mr Burtenshaw sworn on 31 May 2017 was read in support of the notice of motion. A folder of documents was exhibited to the affidavit as Exhibit DJB-2. Mr Burtenshaw is a member of the Australian Federal Police (“the AFP”) performing duties in the Criminal Assets Confiscation Taskforce. He is an authorised officer within the meaning of s 338 of the POCA.

11. In his affidavit, Mr Burtenshaw referred to the affidavit sworn by him on 15 May 2017 and its accompanying exhibit, Exhibit DJB-1, and read in support of the orders I made on 16 May 2017. Mr Burtenshaw also referred to and adopted the affidavit of Federal Agent Scott James Murphy, sworn on 24 May 2017, and its accompanying exhibit, Exhibit SJM-1. Mr Murphy’s affidavit was read in support of the orders I made on 24 May 2017. Mr Murphy is also a member of the AFP performing duties in the Criminal Assets Confiscation Taskforce and an authorised officer within the meaning of s 338 of the POCA.

12. On 31 May 2017, the orders sought in the notice of motion were made in accordance with short minutes of order signed and dated by me. What follows are my reasons for making those orders.

13. Dealing first with the procedural orders: leave was granted to file and serve the second further amended summons. I was also satisfied that the application for the orders sought under ss 18, 19 and 38 of the POCA should be heard and determined without notice to any of the respondents to the notice of motion (or to any of the 2nd, 19th or 50th defendants to the summons) pursuant to ss 26(4) and 39(3A) of the POCA and in the absence of the public pursuant to s 71 of the Civil Procedure Act.

14. In light of the serious offences the 2nd defendant, among others, is suspected of having committed, and that the property identified in the Schedules to the notice of motion is reasonably suspected by Mr Burtenshaw to be under the effective control of each of the defendants listed above at [7] and susceptible to restraint either for that reason under s 18(3)(b)(i) of the POCA, and/or as the proceeds of one or more of the offences (see s 18(3)(b)(ii)), or both, I was satisfied that the statutory objects in s 5 of the POCA would be potentially frustrated were those individuals notified of the proceedings and the orders sought in advance of the notice of motion being heard. I am also satisfied that the public interest in the Commissioner pursuing the various outcomes provided for in the POCA outweighed the public interest in the otherwise abiding principle of open justice.

15. Dealing with the orders against access to the non-redacted version of Mr Burtenshaw’s affidavit of 15 May 2017: I was satisfied, for the reasons set out in my reasons for granting various orders made on return of the Summons that it is in the public interest that the paragraphs in Mr Burtenshaw’s affidavit nominated for redaction by the Commissioner be suppressed, both from publication or access, for the reasons I then gave (see The Commissioner of the Australian Federal Police v Cranston and Ors [2017] NSWSC 674 at [14]).

16. Dealing with the substantive orders sought: what follows is a brief summary of the information relied upon by Mr Burtenshaw as grounding the reasonable suspicions he deposes to, namely that the 2nd defendant, among others, has committed a serious offence; that the property in Schedules 1 to 6 is wholly or partly the proceeds of an indictable and/or serious offence or an instrument in the commission of those offences or is property under the effective control of the 2nd defendant (Schedule 1), the 9th defendant (Schedules 2 to 4) and the 1st defendant (Schedules 5 and 6).

The Active Westpac Account – the account nominated in the first schedule

17. Active Management Solutions Pty Ltd (“Active Management”), the 1st respondent to the notice of motion, is a company that was registered on 31 March 2017. Its sole director and shareholder is Matthew Wilson. In Mr Burtenshaw’s affidavit of 31 May 2017 he deposes to Federal Agents Polic and Franks having attended the registered office of Active Management on 24 May 2017 at which time Mr Wilson made a statement to the effect that he agreed to be the director of the company at the request of Onley, the 2nd defendant, in order to “hide money from ‘Bikies’”, and that he did not have control over the Active Management bank account held with Westpac (“Active Westpac account”). He said he had been involved in a similar arrangement with an individual by the name of Larcombe.

18. Between 13 April 2017 and 16 May 2017, the Active Westpac account received five transfers of funds, totalling $218,520, from a Westpac bank account held in the name of BRW Services Pty Ltd (“BRW Services account”). The BRW Services account is suspected to hold funds which are the proceeds and/or instrument of a serious offence contrary to s 400.9(1) of the Criminal Code and/or an offence of conspiracy to defraud contrary to s 135.4(3) of the Criminal Code, being the recipient of several payments that appear to have originated from “Principal Companies” rather than through Plutus Payroll Pty Ltd, shows regular outgoing payments to some of the suspected offenders, was assessed by the Australian Taxation Office to have a PAYGW liability and has been issued with a garnishee notice.

The Cheques – the property identified in the second, third and fourth schedules

19. Between 1 February 2017 and 26 April 2017, funds (“the blackmail funds”) in excess of $24 million were received into the trust account of Lands Legal solicitors (“the trust account”) (see The Commissioner of the Australian Federal Police v Cranston and Ors [2017] NSWSC 674 at [14]). The trust account was used to hold some or all of the share of the blackmail funds of the 9th defendant. The account of Cedars Capital Pty Ltd (“Cedars Capital account”), the 50th defendant, was being used to launder those funds. The sole director and shareholder of Cedars Capital Pty Ltd is Glen Saikali, the 3rd respondent to the notice of motion.

The NAB Bank Cheque – the property identified in the second schedule

20. On 11 April 2017, $990,000 was transferred from the trust account to the Cedars Capital account. On 28 April 2017 a bank cheque in the amount of $320,000 was drawn on the Cedars Capital account payable to the bank account of the 2nd respondent, being 004488408 Pty Ltd (“0044 account”). That cheque was banked. The sole beneficial shareholder and director of 004488408 Pty Ltd is the 3rd respondent.

21. On 5 or 8 May 2017, a bank cheque in the amount of $290,000 was drawn on the 0044 account payable to the trust account. That cheque was not banked. On 17 May 2017 a handwritten note was seized by the Australian Federal Police from the 9th defendant’s residence which contained the notation: “NAB $290K – Not banked”.

The St George Bank Cheque – the property identified in the third schedule

22. On 28 April 2017, a bank cheque in the amount of $570,000 was drawn on the Cedars Capital account, payable to the trust account. That cheque was not banked. The handwritten note seized from the residence of the 9th defendant as described above at [21] contained a notation: “STG $5701 – Not banked”.

The ANZ Bank Cheque – the property identified in the fourth schedule

23. On 11 April 2013, $330,000 was transferred from the trust account to a bank account in Lebanon in the name of George Saikali, the brother of the 3rd respondent. On 27 or 28 April, $312,000 was transferred from George Saikali’s account to an account held by the 3rd respondent with ANZ. On 2 May 2017, a bank cheque in the amount of $300,000 was drawn on that account and made payable to the trust account. That cheque was not banked. The handwritten note seized from the residence of the 9th defendant as described above at [21] contained a notation: “ANZ $300k – Not banked”.

The Motor Vehicle Trailer and Go-Karts - the property identified in the fifth and sixth schedules

24. The trailer identified in Schedule 5 was located on 23 May 2017 at Velocity Kart Shop by Federal Agent Shane Forbes and AFP Special Member Alex Navarrete. A Roads and Maritime Services search dated 31 May 2017 shows that G & T Holdings, the 19th defendant, is the registered owner of the trailer. It is registered in NSW under the registration TB37QU. Four go-karts on dollies and miscellaneous spare parts, the property identified in Schedule 6, were in the trailer.

25. Invoices issued by Velocity Kart Shop between 15 July 2016 and 12 January 2017 show that G & T Holdings made payments of $87,000 on behalf of customer “Prescott Page Adam” for the go-karts and miscellaneous spare parts. Adam Cranston, the 1st defendant to the Summons, is identified as exercising effective control of G & T Holdings in Mr Burtenshaw’s affidavit of 15 May 2017. Further, he is the sole shareholder and director of the companies Prescott Page Advisory Pty Ltd and Prescott Page Recoveries Pty Ltd, respectively the 23rd and 24th defendants to the Summons.

Conclusion

26. I am well satisfied that the Commissioner has discharged the onus of establishing, on the balance of probabilities, that the restraining orders should be granted over the property specified in each of the Schedules to the notice of motion, that the ancillary orders should be granted over the property specified in the Schedules to the notice of motion and that custody and control orders should be granted over the property identified in the Schedules to the notice of motion.

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Decision last updated: 19 June 2017