The Commissioner of the Australian Federal Police v Dickson

[2013] NSWSC 560

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:	The Commissioner of the Australian Federal Police v Dickson & Ors [2013] NSWSC 560
Hearing dates:	13 May 2013
Decision date:	13 May 2013
Jurisdiction:	Common Law
Before:	Beech-Jones J
Decision:	Ex parte orders made.
Catchwords:	No question of principle.
Legislation Cited:	- Court Suppression and Non-publication Orders Act 2010 - Proceeds of Crime Act 2002 - Uniform Civil Procedure Rules 2005
Cases Cited:	The Commissioner of the Australian Federal Police v Q (NSWSC, 11 April 2012, unreported)
Category:	Interlocutory applications
Parties:	- The Commissioner of the Australian Federal Police (Plaintiff) - Anthony James Dickson (First Defendant) - Michael John Issakidis (Second Defendant) - Prima Ultima Pty Ltd (Third Defendant) - Dagmar Maxianova (Fourth Defendant) - Dampier Finance FX Strategies Limited (NZ company 2433038) (Fifth Defendant) - McFrolick Pty Ltd (Sixth Defendant) -Sydney City Prestige Wholesale Pty Ltd (Seventh Defendant) - Blue Velvet Fashion Pty Ltd (Eighth Defendant) - Donrecka Issakidis (Ninth Defendant) - Hilldon Pty Ltd (Tenth Defendant) - Bristol Wattle Properties Pty Ltd (Eleventh Defendant) - Dampier Finance FX Solutions Limited (NZ company 2433960) (Twelfth Defendant) - Jodaway Pty Ltd (Thirteenth Defendant) - Robin Thomas Ross Harper (Fourteenth Defendant) - Wee Sleekit Pty Ltd (Fifteenth Defendant)
Representation:	Counsel: Ms E.A. Cheeseman SC, G. O'Mahoney (Plaintiff) Solicitors: Australian Federal Police (Plaintiff)
File Number(s):	2012/108692
Publication restriction:	Portions of judgment text have been redacted for the purpose of publication: see The Commissioner of the Australian Federal Police v Dickson & Ors (No 2) [2013] NSWSC 749.

EX TEMPORE Judgment

1. Before me is an amended notice of motion filed on behalf of the Commissioner of the Australian Federal Police (the "Commissioner") seeking various ex parte orders under the Proceeds of Crime Act 2002 (the "Act"), the Court Suppression and Non-publication Orders Act 2010 and certain ancillary orders under the Uniform Civil Procedure Rules.

1. On 11 April 2012 McCallum J published reasons for making orders under the Act against the various defendants to these proceedings (The Commissioner of the Australian Federal Police v Q (NSWSC 11 April 2012, unreported). The two principal defendants are the first and second defendants, Mr Dickson and Mr Issakidis. An affidavit from an AFP officer, Adam Thomas Sandon, sworn 4 April 2012 was read before her Honour and then again before me. Mr Sandon's affidavit records in considerable detail the basis for a suspicion held by him that Mr Dickson and Mr Issakidis, along with various associates including corporate entities controlled by them, had pursued a fraudulent scheme involving the claiming of tax losses by way of depreciation arising from the acquisition of intellectual property rights said to be bought from third parties overseas. It is alleged that, in truth and substance, the entire scheme involved a series of round robin transactions with related parties and inflated purchase prices. It was alleged that the falsely generated tax losses were then effectively on-sold to established corporate bodies for substantial amounts of money.

1. On 26 and 27 April 2012, I made further orders including orders joining additional corporate parties. As at that date Mr Issakidis had been charged with offences but Mr Dickson was still overseas. Mr Dickson subsequently returned to Australia and has since been charged. Both he and Mr Issakidis face committal proceedings in May 2013.

1. When the application was called on, Senior Counsel for the Commissioner sought an order that the Court be closed and that the Court make a temporary or interim suppression order under s 10 of the Court Suppression and Non-publication Orders Act 2010 to facilitate the hearing of the application. The Commissioner's notice of motion seeks more permanent orders under s 7 of that Act.

1. To enable that to occur I made the proposed order under s 10. The combination of that order and the order closing the Court is such that the hearing of this application has been undertaken in private.

1. The basis for the order sought under s 7 has been discussed with counsel and I will address it later in this judgment. For present purposes it suffices to state that the order I will make under s 7 in respect of some of the evidence and submissions is narrower than the interim order I have already made under s 10. The order closing the court also has a much wider operation than the order I will make under s 7. I propose to deal with this by providing these reasons and then giving the Commissioner an opportunity within a short space of time to submit what part, if any, of either these reasons or the transcript of this hearing should remain the subject of a suppression order in light of the findings that I will make.

1. The first substantive order sought in the notice of motion is an order pursuant to s 18(1) of the Act, being a restraining order, in respect of monies identified in various bank accounts in the United Arab Emirates ("UAE") that are listed in schedule 1 to the amended notice of motion. By the operation of s 18(1) the Court is required to make an order if the criteria in s 18(1)(c) to (f) are made out.

1. The first criterion is that specified in s 18(1)(c), namely, that a Proceeds of Crime Authority applies for the order. This is satisfied. The second criterion is that specified in s 18(1)(d), namely, that there are reasonable grounds to suspect that "a person" has committed a serious offence. In the context of order 2 sought in the notice of motion, that person is Mr Dickson. I have referred earlier to the affidavit of Adam Thomas Sandon which sets out in comprehensive detail the basis for his suspicion of the commission of a serious offence by Mr Dickson. In my view that material establishes that there are reasonable grounds to suspect that Mr Dickson has committed a serious offence. They include numerous business records, indicating his connection with the scheme that I identified earlier. In addition there are, as I understand it, various witnesses who place him at the heart of the corporate entities that were said to have carried out that scheme.

1. Third, s 18(1)(e) specifies a criterion that the affidavit requirements in ss 18(3) for the application have been met. The affidavit requirements in ss 18(3) are that the authorised officer suspects that the suspect committed the offence and, in respect of an application to restrain property other than that owned by the suspect, that the authorised person suspects that the property is subject to the effective control of the suspect. In this case the officer, Adam Sandon, has stated that he suspects that Mr Dickson has committed the offence. He also stated that he suspects that the bank accounts in question are subject to the effective control of Mr Dickson. He has included the grounds on which he holds those suspicions.

1. The fourth requirement in s 18(1)(f) is that the Court is satisfied that the authorised officer who made the affidavit holds the suspicion or suspicions stated in the affidavit on reasonable grounds. In this context I take that to be the suspicions that are referred to in s 18(3). The effect of the material referred to by Mr Sandon is that the bank accounts are in the name of three corporate entities whose sole director is Adrian John Compton. The material referred to by Mr Sandon provides a more than reasonable basis for suspecting Mr Compton was an associate of Mr Dickson and would act at his direction or behest, especially in dealing with the three corporate entities and their bank accounts in the UAE. The material indicates that Mr Compton has direct care and control over the bank accounts of two of the entities and that, by another person, he can control the third entity's bank account. I am satisfied that Mr Sandon holds the suspicion or suspicions stated in his affidavit on reasonable grounds.

1. It follows that I would make the order proposed in s 18(1) in relation to Mr Dickson, that is, the order stated in prayer 2 of the notice of motion.

1. Prayer 3 of the notice of motion seeks a similar order in relation to the UAE bank accounts in respect of the second defendant, Mr Issakidis. Section 22 of the Act specifies that a restraining order must only relate to one suspect. Thus it is not possible with a single restraining order to make both Mr Dickson and Mr Issakidis subject to it.

1. Mr Sandon's affidavits also address the position of Mr Issakidis and his dealings with Mr Compton. Without traversing the detail, they record Mr Sandon's suspicions and the material said to support the suggestion that Mr Issakidis was involved to the same extent as Mr Dickson. The observations and findings I have made in respect of Mr Dickson apply with equal force to Mr Issakidis. I will make order 3 sought in the amended notice of motion.

1. Prayers 4 to 7 seek orders under s 39(1) of the Act against Mr Compton. Subsection 39(1) specifies:

"The court that made a restraining order ... may make any ancillary orders that the Court considers appropriate and, without limiting the generality of this, the Court may make one or more of the following orders."

Thereafter a number of particular forms of orders are specified including, but not restricted to, the form of order in subs 39(1)(g) which is as follows:

"... an order requiring a person whose property is covered by a restraining order, or who has effective control of property covered by a restraining order, to do anything necessary or convenient to bring the property within the jurisdiction."

1. I have referred earlier to the position of Mr Dickson and Mr Issakidis vis a vis Mr Compton and the UAE bank accounts. The findings I have made include that there is a reasonable basis for believing that both Mr Dickson and Mr Issakidis have effective control of those accounts. The concept of effective control is referred to in s 337 of the Act. It suffices to state that a conclusion that there is a reasonable basis for believing that they have effective control of those accounts does not exclude Mr Compton from also having effective control of those accounts. Effective control is not necessarily exclusive control. The circumstances of this case are a classic example of why an order under s 39(1)(g) would be made directed to the person who can immediately cause funds to be transferred, even if they previously took instructions from others.

1. The position of Mr Compton is somewhat complicated. A search warrant was executed on his premises last year. However, he xxxxx has provided a statement which has been served on the defendants in the course of the criminal proceedings. He has also been the subject of an examination under s 180 of the Act, a matter which I will return to.

1. Proposed order 4 of the notice of motion seeks an order under s 39(1) that Mr Compton be directed to take all reasonable steps to obtain various bank statements from the banks in the UAE and provide them within a specified time-frame to the solicitor from the Commissioner's office.

1. Proposed order 5 seeks an order that Mr Compton take all reasonable steps within a period of seven days from the date of the orders to cause the transfer of the balance of all the accounts in the name of one of the entities to the Official Trustee in this country. Proposed order 6 seeks a similar order in respect of all of the accounts in the UAE concerning another of the corporate entities. Proposed order 7 seeks a similar order in respect of the third corporate entity except that, as its account is apparently controlled by a signatory in the UAE, the form of order directs Mr Compton to direct that person to take such steps as are necessary to transfer the balance.

1. A number of matters arise concerning these orders. First, I am satisfied that those orders fall within either the opening words of s 39(1) and, in the case of the orders for transfer, s 39(1)(g).

1. Second, there was a debate about whether Mr Compton was required to be made a party before orders of this kind could be made against him. xxxxxxx.

1. In my view it is inappropriate, on an urgent ex parte application of this kind, to finally determine whether or not the making of such an application by a notice of motion requires that person to be joined as a party to the principal proceedings. I will take the pragmatic course of not joining him at this stage, but I will direct that a form of letter be provided to him to make it clear that he has the right to seek to challenge this order in the same way he would if he was a party being notified that it was being made. If such a challenge is mounted and it is necessary to determine whether he should or should not be made a party, then that issue can be debated at that point in time.

1. The third matter concerning this order, as well as the orders I have already made, is their extraterritorial effect. I have been referred to s 13 of the Act which in my view makes it clear that the fact that any order may operate on events outside this country is not a reason to doubt its validity.

1. Fourth, the proposed regime for service of these orders is such that the Commissioner does not propose to serve Mr Dickson and Mr Issakidis until a time after Mr Compton has (hopefully) arranged the transfer of the relevant funds into this country. There is the obvious concern that their ability to be heard about an order which might potentially affect their interests will be frustrated by this course. Nevertheless, I consider that that course is justified. The nature of monies held in bank accounts is such that they can be disseminated in an instant. The material that is before me indicates that, at least at some point in the past, Mr Dickson and Mr Issakidis have had access to accounts in what are often described as tax havens. There is the obvious potential that if they were made aware that Mr Compton was required to transfer funds out of the UAE accounts into this country, they could frustrate that occurring. xxxxxxx.

1. In those circumstances the potential for the frustration of the scheme of the Act that would arise from the giving of advance notice of the transfer of the funds in my view is so significant that it outweighs the right of the first and second defendants to be heard on the limited issue as to whether an order for the transfer of the funds into this country should be made. It nevertheless needs to be remembered that they will ultimately have the opportunity to argue as to whether those funds should be forfeited and, if not, returned. In addition, the Commissioner offers an undertaking as to damages, so that if some form of irreparable financial harm is occasioned by the forced transfer of the monies then the Commissioner will bear the consequences of doing so if he is ultimately unsuccessful in the proceedings.

1. Accordingly, I will make orders 4, 5, 6 and 7 of the amended notice of motion with certain amendments to which I will return.

1. Proposed orders 8, 9 and 10 deal with what should occur with those monies from those accounts in the event that they are transferred to the Official Trustee. In short, under s 18(1) orders are sought requiring that they not be disposed of or dealt with and that under s 38 the Official Trustee take custody and control of those monies. I will make those orders.

1. Prayers 11 and 12 seek orders under the Court Suppression and Non-publication Orders Act 2010. Proposed order 13 seeks similar orders but in this case under s 28A of the Act. It was not suggested that, for the purposes of this application, anything turns upon the difference between the terms of s 7 of the Court Suppression and Non-publication Orders Act 2010 and s 28A.

1. It is appropriate that I identify what the Commissioner proposes to serve upon the parties and Mr Compton and the category of material that the Commissioner submits should be the subject of a suppression order. This is undertaken bearing in mind the comments that I made at the outset concerning the need to review the transcript of the hearing to determine what parts, if any, are to be the subject of a suppression order, and which parts, if any, of this judgment are to be the subject of such an order.

1. The Commissioner proposes that a set of redacted materials will be prepared based upon the orders I make. That common set of redacted material would then be first served on Mr Compton to enable him to consider his position in relation to whether he should apply to set aside the orders against him or comply and then subsequently be served upon Mr Dickson and Mr Issakidis.

1. The categories of information to which the suppression order is sought are as follows.

1. First, there is the information contained in exhibit AS-4 to the affidavit of Adam Sandon sworn 13 May 2013. AS-4 contains the transcript of Mr Compton's examination under s 180 of the Act. Mr Sandon's affidavit reveals that, at the conclusion of the examination, an order was made by the approved examiner restricting publication of the answers given to a narrow category of persons. In those circumstances and at this stage of the proceedings I do not consider that that regime should be interfered with by the service of the transcript upon Mr Dickson or Mr Issakidis, or anyone outside the ambit of the Commissioner's orders.

1. The second category of information was said to be that contained in exhibit AS-5 to the affidavit of Mr Sandon sworn 13 May 2013. Tabs 3 and 4 of that exhibit contain affidavits sworn by Mr Dickson and Mr Issakidis pursuant to orders made by this Court requiring them to disclose their assets. The point made by the Commissioner at this stage is that, given that those affidavits were required under compulsion, they should not be generally available for dissemination, including to Mr Compton as well as others. Again, I think it is appropriate at this stage to respect that they were produced under compulsion and it is not necessary at this stage that they be generally released. Nor do I consider there to be any particular interest of Mr Compton that I can identify that warrants him having access to the material. It will be apparent to Mr Dickson and Mr Issakidis, from those parts of Mr Sandon's affidavit that they do receive, that their affidavits were referred to and relied on.

1. Tab 2 of AS-5 consists of a three page note concerning the execution of the search warrant at Mr Compton's premises last year. The only matter in my view that could warrant a suppression order is the mobile phone number of Mr Compton's wife listed on page 3. The balance does not reveal anything that warrants the making of a suppression order.

1. Tab 1 of AS-5 contains an amended statement of facts in respect of the prosecution case. This document has already been served on Mr Dickson and Mr Issakidis in the course of their prosecution, with apparently no restraints placed upon its use. In those circumstances I cannot see why a suppression order should be made in respect of it.

1. The third category of information in respect of which a suppression order is sought is material identified in Schedule 2 of the notice of motion, being parts of the text of Mr Sandon's affidavit of 13 May 2013. A number of paragraphs are identified, but I consider that only two categories of information set out in the text can justify a suppression order. The first is that contained in sub-paragraph 21(m) which refers to xxxxx. The second is that contained in subparagraphs 26(a) to 26(f) and subparagraphs 30(a) to 30(i) which refers to the contents of Mr Compton's private examination.

1. The fourth category of information which is the subject of the suppression order is that set out in some written submissions that were filed in respect of this motion. The only parts of those submissions which will be the subject of a suppression order are those set out in paragraph 24(b) which refer to xxxxxxxx and subparagraph 38(b) of the written submissions xxxxxxxx.

1. Accordingly I will make an order in the form of paras 11 and 12 to which I will return. In those circumstances it is not necessary to make order 13.

1. Prayers 15, 16 and 17 seek orders for the joinder of the three entities which are the legal owners of the bank accounts in the UAE. The necessity to make those orders is obvious. Those entities will be the subject of claims for final relief.

1. Prayer 14 seeks an order for the service of the notice of motion, the affidavit of Mr Sandon and the orders I will make by service on Mr Compton at an e-mail address. The orders I make will require service by e-mail as soon as practical, but also service on him personally by sometime tomorrow.

1. Prayer 18A is an order which seeks to delay service upon the first and second defendants of the notice of motion, the orders and the affidavit of Mr Sandon until the orders for the transfer of funds have been given effect to. I have already referred to the justification proposed for that order and my reasons for accepting that justification. The making of such an order is authorised by s 33(3)(b) of the Act.

[His Honour then formulated and made orders appropriately - see the Record of Proceedings.]

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Amendments

27 August 2014 - Judgment withdrawn from publication on 27.05.2014 by order of Justice Beech-Jones.

Amended paragraphs: Cover sheet - publication restriction.

Decision last updated: 06 August 2018