Togias v New South Wales Crime Commission

[2019] NSWSC 1556

Supreme Court

New South Wales

Medium Neutral Citation:	Togias v New South Wales Crime Commission [2019] NSWSC 1556
Hearing dates:	22, 23 October 2019
Date of orders:	07 November 2019
Decision date:	07 November 2019
Jurisdiction:	Common Law
Before:	R A Hulme J
Decision:	(1) Application for payment of an amount of the proceeds of the sale of forfeited property on the basis of hardship pursuant to s 24 of the Criminal Assets Recovery Act 1990 (NSW) dismissed. (2) The plaintiff is to pay the defendant’s costs.
Catchwords:	CRIME – confiscation – forfeiture order – application to exclude interest in property from forfeiture order – application to exclude value of innocent interests from forfeiture order – whether plaintiff has “interest” in forfeited property – question of statutory construction – plaintiff’s “interest” in property has not been forfeited by forfeiture order – applications dismissed on the basis of incompetence   CRIME – confiscation – forfeiture order – application for payment of amount from proceeds of sale of interest on basis of hardship – whether plaintiff is a dependent of the person whose interest has been forfeited – neither plaintiff nor children were dependents at the time that forfeiture orders first sought and made – hardship that can be ameliorated by payment not made out on the evidence
Legislation Cited:	Criminal Assets Recovery Act 1990 (NSW), ss 3, 10A, 22, 22(4), 23, 24, 24(1)(a), 25, 25(1), 25(1)(b), 25(4), 26, 26(1), 26(4) Interpretation Act 1987 (NSW), ss 21C, 21C(3)
Cases Cited:	New South Wales Crime Commission v Keen (2005) 64 NSWLR 515; [2005] NSWSC 1151 New South Wales Crime Commission v Kelaita (2008) 75 NSWLR 564; [2008] NSWCA 284 New South Wales Crime Commission v Kelly and Ors (No 2) [2003] NSWSC 154 New South Wales Crime Commission v Kelly; Kelly v New South Wales Crime Commission (2003) 58 NSWLR 71; [2003] NSWCA 245 New South Wales Crime Commission v Subakti [2016] NSWSC 1421 New South Wales Crime Commission v Tran [2015] NSWSC 542 New South Wales Crime Commission v Young (Supreme Court (NSW), 10 August 1992, unrep) NSW Crime Commission v Greer [2000] NSWSC 363; (2000) 112 A Crim R 461
Category:	Principal judgment
Parties:	Nicolitsa Togias (Plaintiff) New South Wales Crime Commission (Defendant)
Representation:	Counsel: Mr K Averre (Plaintiff) Mr P Singleton (Defendant)   Solicitors: Bannisters Lawyers (Plaintiff) New South Wales Crime Commission (Defendant)
File Number(s):	2016/40493

Judgment

1. HIS HONOUR: The plaintiff, Ms Nicolitsa Togias, filed a summons in this Court on 8 February 2016 whereby she sought various orders under the Criminal Assets Recovery Act 1990 (NSW) (the Act).

2. The orders sought follow an order made by consent in this Court in proceedings 2010/41388 between the New South Wales Crime Commission and Mr Wayan Subakti pursuant to s 22 of the Act, whereby his interest in certain real property described in Schedule One of a summons filed on 15 February 2010 would be forfeited to, and vest in, the Crown. The property relevant to the present proceeding is a residential home at Glenwood and an industrial unit at Seven Hills.

3. Ms Togias was at one time the de facto partner of Mr Subakti. Pursuant to ss 25 and 26 of the Act, she applies for exclusion of an asserted interest she has in the property that has been forfeited, or that she receive a payment to the value of her asserted interest in that property. Leave is required to bring these applications: s 25(4) and s 26(4).

4. The standing of Ms Togias to bring these applications was, by agreement, determined as a threshold issue at the hearing on 22-23 October 2019. I determined that the applications were incompetent and on that basis they were dismissed. My reasons for this determination will follow. (By oversight, no formal order as to leave was made, but nothing now turns on that.)

5. In the alternative, Ms Togias applies for an order pursuant to s 24(1)(a) for the payment of an amount out of the proceeds of sale of the forfeited property on the basis of hardship.

Evidence

6. In about 1998, Ms Togias commenced a relationship with Mr Subakti when she was aged around 20. He moved in to live with her in her family's home at Sadleir. He purchased a home at Wentworthville in December 1999, using money from a workers' compensation payment. The couple lived at the Wentworthville home from about that time.

7. Their first daughter was born in January 2001.

8. From about 2000, Mr Subakti operated a business called Bio-Form Nutrition Australia. On 1 August 2005, it was incorporated as Bio-Form Nutrition Australia Pty Ltd. By way of loan, Mr Subakti effectively transferred his goodwill and assets from the sole trader operation to the company. [1]

   1. Affidavit, Nicolitsa Togias, 29 March 2018 at par 74.

9. In July 2003, Mr Subakti purchased a home at Glenwood and the family moved to live there. The purchase was partly financed by a loan of $552,000 from Perpetual Trustees Victoria Ltd. [2] Mr Subakti was the sole registered proprietor.

   2. Affidavit, Nicolitsa Togias, 29 March 2018 at par 50.

10. A second daughter was born to the couple in May 2005.

11. In May 2008, Mr Subakti bought an industrial unit at Seven Hills. It was initially used as a warehouse and storage facility for the Bio-Form business, but from about 2010 it was let out and it remains let to the same tenant to the present time.

12. Mr Subakti was arrested on 28 January 2010 in relation to drugs and prescribed restricted substance supply charges. Ms Togias deposed that "at around that time on 29 January 2010, our personal relationship had disintegrated and become the worst it had ever been and our communication had broken down irreparably". [3]

    3. Affidavit, Nicolitsa Togias, 29 March 2018 at par 110.

13. Mr Subakti was released on parole on 29 January 2014 and he returned to live at the Glenwood home. Ms Togias deposed that "from that time whilst we both lived at the Glenwood property we were separated and no longer in a relationship (as it had been since his arrest in 2010)". [4]

    4. Affidavit, Nicolitsa Togias, 29 March 2018 at par 20.

14. Prior to Mr Subakti's arrest in 2010, all of the home loan repayments in respect of the Glenwood property were made from his personal bank account or an account of the Bio-Form business. Thereafter, the repayments were made from Bio-Form accounts, Ms Togias’ personal account and, on one occasion, an account in the name of the older daughter. That arrangement has persisted until the current time, during both Mr Subakti's release on parole, and his subsequent re-incarceration in 2017. He is presently in custody serving a sentence for further offences. Ms Togias remained living with her two daughters at the Glenwood home to the present time. For the children, it has always been the family home. [5] The children attended a nearby school (and the younger daughter still does).

    5. Affidavit, Nicolitsa Togias, 29 March 2018 at par 52.

15. Since 2010, Ms Togias has had sole responsibility for maintaining the family home, looking after the children, and operating the Bio-Form business. She said that she has had a variety of sources of income enabling her to do this. [6]

    6. Affidavit, Nicolitsa Togias, 29 March 2018 at par 23.

16. In relation to the Bio-Form business, Ms Togias said that she helped Mr Subakti organise and manage it from its inception in 2000. [7] A retail outlet was opened in 2003 at Liverpool and still operates today. Ms Togias said that she managed the operation of the business and was involved in the accounts, purchasing, and daily operations. She did this in conjunction with caring for the children. She has continued in this alone during periods where Mr Subakti was absent, whether because of the overseas travel that he undertook, illness, or incarceration.

    7. Affidavit, Nicolitsa Togias, 29 March 2018 at par 25ff.

17. Bio-Form Sports Nutrition Australia Pty Ltd was incorporated on 22 February 2010, about a month after Mr Subakti was taken into custody. At about the same time, he conferred upon her an enduring power of attorney and directorship of the new company was transferred to her. [8]

    8. Affidavit, Nicolitsa Togias, 29 March 2018 at pars 40, 62-65.

18. Bio-Form Nutrition Australia Pty Ltd was deregistered on 23 October 2016. Ms Togias was not a shareholder of that company, but she is the 100% shareholder of the new company – Bio-Form Sports Nutrition Australia Pty Ltd.

19. On 2 March 2016, the Glenwood home was assessed to have a market value of $1,000,000. [9] When swearing her affidavit of 29 March 2018, Ms Togias said that the home loan repayments of about $1550 per fortnight were up to date. Payments from 29 January 2010 until 3 February 2018 amounted to about $403,000. Interest charges in that period were about $270,000. The balance outstanding had reduced to about $370,000 and the equity had increased. [10] She deposed that even during the period between Mr Subakti's release on parole in January 2014 and his return to custody in 2017, she "remained in charge of all finances and loan repayments and have maintained them through my personal sources of income". She said that she did not ask Mr Subakti to contribute financially and "he did not make any contributions to the home loan after his release on parole". She also continued to be responsible for living expenses as she had done during his incarceration. She was of the view that she "could not be reliant upon Mr Subakti for financial assistance". [11]

    9. Affidavit, Nicolitsa Togias, 29 March 2018 at Annexure Q.

    10. Affidavit, Nicolitsa Togias, 29 March 2018 at pars 55, 80, 82.

    11. Affidavit, Nicolitsa Togias, 29 March 2018 at pars 84, 86-88.

20. The Seven Hills industrial unit is positively geared. Monthly loan repayments on an interest only loan of about $1500 are more than offset by the rental income of $2300 per month. However, Ms Togias deposed that the balance is spent paying charges for water, rates, and strata levies. [12]

    12. Affidavit, Nicolitsa Togias, 29 March 2018 at pars 58, 60.

21. Ms Togias said that she paid the loan accounts of her own accord because that is what she always did; to make sure the bills were paid and manage the finances. She said she believed the Family Court "would protect the girls and I and our family law interests and rights". She lodged caveats over the Glenwood and Seven Hills properties in that belief. [13]

    13. Affidavit, Nicolitsa Togias, 29 March 2018 at par 89.

22. Family law proceedings were commenced in the Federal Circuit Court of Australia in respect of Ms Togias' interests and rights relating to property. However, given Mr Subakti's assets were the subject of orders in favour of the Crime Commission, they were futile and were discontinued. [14]

    14. Affidavit, Nicolitsa Togias, 29 March 2018 at par 91.

Further evidence specific to the question of hardship

23. In summary, the hardship claimed by Ms Togias in respect of herself and her children was summarised in her counsel's written submissions:

"The hardship to the Plaintiff is the loss of the family home and the investment property which would provide for the Plaintiff and her children into her future and their future. The [Glenwood] property has been their home for a considerable period and the loss of what might properly be described as family assets. … [T]he family home and what it represents and its forfeiture may well stem from the criminality of Mr Subakti but the forfeiture of those properties the subject of the application would cause a considerable hardship to the Plaintiff and her children.

There is [specific] hardship to the [younger daughter]. [This may have been intended to be a reference to the older daughter.]

…

[T]here is significant equity in each of the properties and the amount should reflect the contributions made by the Plaintiff in the period from the acquisition of the properties to the date of the determination. Those contributions are those made in raising the children as well as servicing the repayments on the properties through her own efforts." [15]

15. Plaintiff's written submissions (PWS), 21 October 2019, pars 38-39, 41.

24. Ms Togias deposed that if the property were forfeited, she could not afford to purchase a home in Glenwood or another suburb and she does not have enough money for a deposit. She has used all of her potential savings in legal expenses, servicing the home loan, and looking after the children's needs. She believes she would be unable to obtain a loan in any event, given she is a single mother of two with little in cash savings, no assets aside from an old used car, and an income derived from a business of which she is a director. [16]

    16. Affidavit, Nicolitsa Togias, 29 March 2018 at par 99-100.

25. In these circumstances, Ms Togias would have to rent a property for her and her children to live in. But she has no rental history. In addition, she claims that "there is no security in renting which I think is very important for my children who have been through a lot". Her mother lives an hour away and is a foster carer of two children, so they could not go to live with her.

26. Ms Togias is concerned for her eldest daughter. Evidence of a psychologist, Ms Anne Marie de Santa Brigida, was tendered in relation to this issue. Ms Santa de Brigida was cross-examined at the hearing. I will refrain from discussing much of the content of her evidence for privacy reasons, but will allude to essential aspects.

27. The younger daughter has the potential to become a skilled tennis player. She has a busy tennis training schedule. Coaching and attendance at weekly tournaments costs about $3000 per school term. She would like to attend a private high school at Strathfield where there is a program for talented tennis players, but it costs about $25,000 per year in fees. [17]

    17. Affidavit, Nicolitsa Togias, 29 March 2018 at par 106; Affidavit, Nicolitsa Togias, 21 October 2019 at par 5.

28. Ms Togias also provided details of a physical health issue with which she was diagnosed in late 2017, and is still dealing with. [18]

    18. Affidavit, Nicolitsa Togias, 29 March 2018 at par 107.

29. Alternative forms of employment are also problematic for Ms Togias. She has no experience outside of the small family retail business. She has no financial capacity to return to complete her university studies. She says that her prospects of gaining well paid employment are limited in the absence of a professional degree. [19]

    19. Affidavit, Nicolitsa Togias, 29 March 2018 at par 108.

30. As to Mr Subakti's criminal activities, Ms Togias deposed that she had no knowledge of them until he was arrested in January 2010, aside from being aware of his conviction for possession of steroids, for which a good behaviour bond was imposed. She was not in the business' store when he was involved in any criminal activity prior to his arrest in 2010. She was not charged, or even questioned, by police in relation to his activities. [20]

    20. Affidavit, Nicolitsa Togias, 29 March 2018 at par 111-112.

31. In the report of Ms Santa de Brigida, there was a sentence that stated that Mr Subakti was using the Bio-Form business as a channel to supply steroids. Ms Togias denied that she was the source of this information. She maintained that she was completely ignorant, prior to his arrest, of his involvement with illicit drugs. [21] The cross-examination of Ms De Brigida did not shed light on whether she was reporting an actual statement made by Ms Togias, as opposed to it being an inference she had drawn from her history. It was also unclear whether it indicated that Ms Togias had acquired knowledge of Mr Subakti's activities before or after his arrest.

    21. Tcpt, 23 October 2019, pp 46-47.

32. In an affidavit sworn on 17 April 2018, Ms Togias said she had a personal loan and a credit card, the outstanding balances of which were $14,423.95 and $24,313.81.

33. A final affidavit sworn on 21 October 2019 provided an updated account of Ms Togias' financial situation and the hardship she claims.

34. Although Ms Togias said, in her affidavit of 29 March 2018, she was drawing about $5000 - $6000 per month as income from the Bio-Form business, it has not been operating at a profit for about 12 months and, despite working 6-7 days per week, she has not paid herself any wages for the past 9 months. The business owes about $22,500 in rent and overheads to Westfield Liverpool for the past three months. She has been supported through a combination of loans from people and through credit cards. For example, her mother had loaned her about $80,000 over the last three years. [22]

    22. Affidavit, Nicolitsa Togias, 21 October 2019 at pars 6-8.

35. Ms Togias currently has about $16,000 outstanding on her loan account and still has about $24,000 outstanding on her credit card. [23]

    23. Affidavit, Nicolitsa Togias, 21 October 2019 at par 9; Exhibit C.

36. Mr Subakti was injured in a motor vehicle accident while on work release in May 2019. He is receiving a fortnightly payment of $1400 from a compulsory third party (CTP) claim. Ms Togias is authorised to access his bank account and is using it to pay for items such as petrol, groceries, and household items. She said that she is not drawing cash. [24]

    24. Affidavit, Nicolitsa Togias, 21 October 2019 at pars 11-12.

37. The loan repayments for the Glenwood home have become irregular. The last payment was of $9000 on 29 April 2019. The current outstanding balance is $397,874, up from the $370,000 that was outstanding at the time of her 29 March 2018 affidavit. [25]

    25. Affidavit, Nicolitsa Togias, 21 October 2019 at pars 14-15 and Annex D.

38. By way of a spreadsheet annexed to her affidavit of 21 October 2019, Ms Togias has calculated that since the arrest of Mr Subakti in January 2010 until the present time, a total of $432,011.49 had been paid by way of home loan repayments. [26]

    26. Affidavit, Nicolitsa Togias, 21 October 2019 at Annex F.

39. The Seven Hills industrial unit was purchased in 2008 for $342,000 plus GST. [27] The latest bank statement for the interest-only loan account was tendered during Ms Togias' evidence – and did not make the current situation at all clear. [28] Nothing appears to turn on this because this item of property is a neutral factor; the loan repayments and other outgoings seem to be completely taken care of by the rental income. There is no evidence as to what the current value is. There was an initial loan of $239,400 and presumably a sum of approximately that remains due.

    27. Tcpt, 23 October 2019, pp 31(50).

    28. Exh B.

40. Ms Togias underwent further surgery in relation to her medical condition on 26 September 2019. She endures a constant level of significant pain on a daily basis, which is debilitating at times. [29]

    29. Affidavit, Nicolitsa Togias, 21 October 2019 at pars 17-18.

41. Finally, Ms Santa de Brigida's opinion was that the loss of the family home would cause hardship to Ms Togias’ two daughters, rather than upon Ms Togias herself. [30] She was, of course, speaking from a psychological perspective. She agreed that the hardship caused to the daughters would have three components: having to leave the home with which they are familiar; having to leave the area with which they were familiar and in which they had social connections and support; and having to change schools. [31] The latter was applicable only to the younger daughter as her sister has now left school. In relation to each of them, Ms Santa de Brigida appeared to be more concerned about the loss of the family home. [32]

    30. Tcpt, 23 October 2019, pp 54(5).

    31. Tcpt, 23 October 2019, pp 54(7).

    32. Tcpt, 23 October 2019, pp 54(49)–57(11).

42. Ms Santa de Brigida said that the detrimental psychological impact would affect the older daughter to a greater extent because of factors specific to her. She had to acknowledge the practical reality put to her that the home would be lost and the family would have to move whatever the outcome of this proceeding. She was unable to suggest anything that could relieve the hardship she perceived would result. Counselling for the older daughter was unlikely to be beneficial in the immediate future and was not called for in relation to the younger daughter. [33]

The Criminal Assets Recovery Act

33. Tcpt, 23 October 2019, pp 57-58.

43. To assist in the construction of relevant provisions of the Criminal Assets Recovery Act, it is useful to have regard to the long title and the "Principal objects" set out in s 3. I will not set out the latter but the long title is in the following terms:

An Act to provide for the confiscation of interests in property that are interests of a person engaged in serious crime related activities; to enable proceeds of serious crime related activities to be recovered as a debt due to the Crown; and for other purposes.

44. A broad overview of the provisions of the Act is to be found in New South Wales Crime Commission v Kelly; Kelly v New South Wales Crime Commission (2003) 58 NSWLR 71; [2003] NSWCA 245 at [2]-[5]. A more extensive overview and discussion about the approach to construction is to be found in New South Wales Crime Commission v Kelaita (2008) 75 NSWLR 564; [2008] NSWCA 284 at [6]-[28].

The applications for exclusion of property or of the value of innocent interests

45. On 15 February 2010, the Crime Commission obtained restraining orders pursuant to s 10A of the Act in relation to Mr Subakti, including in respect of his interests in the Glenwood home and the Seven Hills industrial unit.

46. On 5 May 2014, by consent, the Court made orders, including inter alia an assets forfeiture order pursuant to s 22 of the Act, with the effect that Mr Subakti's interests in the two properties would be forfeited to, and vest in, the Crown.

47. Mr Subakti subsequently made an application for an order under s 25(1) of the Act for the exclusion of his interests in the two properties from the assets forfeiture order. The application was dismissed by Hall J on 6 October 2016: New South Wales Crime Commission v Subakti [2016] NSWSC 1421.

48. On 8 February 2016, immediately prior to the hearing commencing before Hall J, Ms Togias filed her summons seeking exclusion orders under ss 25 and 26 (and hardship relief under s 24).

49. Section 25 of the Act provides for the exclusion of property from a restraining order or an assets forfeiture order. Relevantly, it states:

25 Exclusion of property from restraining order and assets forfeiture order

(1) If an assets forfeiture order:

…

(b) has been made—a person whose interest in property was forfeited by the order,

may apply to the Supreme Court for an order (in this section called an “exclusion order”) excluding the interest from the operation of the assets forfeiture order or any relevant restraining order.

50. Section 26 of the Act provides for the exclusion of the value of innocent interests from an assets forfeiture order. Relevantly, it states:

26 Exclusion of the value of innocent interests from assets forfeiture order

(1) If it is proved that it is more probable than not that a specified proportion of the value of an interest in property that has been forfeited under an assets forfeiture order is not attributable to the proceeds of an illegal activity, the Supreme Court may:

(a) make a declaration to that effect, and

(b) order that the person who has forfeited the interest is entitled to be paid the proportion of the proceeds of sale of the interest that is specified in the declaration.

51. In written submissions by Mr Averre, counsel for Ms Togias, it is said that she "claims a beneficial interest in properties which were forfeited … . It is contended that the properties were held on constructive trust for the Plaintiff". [34] Various authorities are then cited in support of that proposition.

    34. PWS, par 11.

52. Mr Averre identified the "threshold" question under ss 25 and 26 as whether Ms Togias is "a person whose interest in property was forfeited" (s 25) or "a person who has forfeited the interest" (s 26).

53. It was accepted that the assets forfeiture order, by its terms, concerned the "interest in property of the Defendant [Mr Subakti] in the property", the property including the Glenwood home and the Seven Hills industrial unit. [35] But it was submitted that Ms Togias "is a person whose interest in the property is forfeited by virtue of the orders made in that her "interests in the property are indivisible from the interests of Mr Subakti whose interests have been forfeited". [36] In other words, she is not just a person whose interest in property has been affected by the forfeiture order; "her interest in the property has been forfeited". [37]

    35. PWS, par 26; Tcpt, 22 October 2019, pp 3-4.

    36. PWS, pars 27-28; Tcpt, 22 October 2019, p 5(16).

    37. Tcpt, 22 October 2019, p 6(40).

54. Reliance was placed upon an observation of Campbell J in New South Wales Crime Commission v Tran [2015] NSWSC 542 at [35].

55. The statutory provisions that fall for consideration are quite explicit in their terms.

56. Pursuant to s 22 of the Act, an assets forfeiture order was made in the proceedings against Mr Subakti. It was necessary for such an order to "be made so as to apply to specific interests in property": s 22(4). In this case it was "the interest in property of the Defendant [Mr Subakti] in the property specified in Schedule One hereto". The latter included a formal description of the Glenwood home and the Seven Hills industrial unit.

57. Persons and entities may hold interests in real property in a variety of capacities. A person may have the freehold title interest, but someone else may have a mortgage interest and another may have a leasehold interest. As Mr Singleton, counsel for the Crime Commission, pointed out, the order did not operate to forfeit interests other than those of Mr Subakti. Thus, for example, the mortgage interest of Perpetual Trustees Victoria Ltd in the Glenwood home was not caught by the order. Similarly, if Ms Togias had an interest in the property, as she claims, the order did not operate to forfeit that interest.

58. In NSW Crime Commission v Greer [2000] NSWSC 363; (2000) 112 A Crim R 461, George Greer sought exclusion from an assets forfeiture order that had been made in respect of property of John Duffy. He claimed that he had advanced funds to Mr Duffy to purchase the property many years before. The first of a number of "difficulties" Simpson J (as her Honour then was) identified (at [13]) was derived from the terms of s 25(1); Mr Greer was not "a person whose interest in property was forfeited by the order". Another of the "difficulties" was that the evidence was insufficient to establish any interest of Mr Greer in the subject motor vehicle or land. There was also the question of the application being made out of time, but for the first two reasons her Honour determined that Mr Greer had no standing to make the exclusion application.

59. In New South Wales Crime Commission v Keen (2005) 64 NSWLR 515; [2005] NSWSC 1151, an assets forfeiture had been made, forfeiting and vesting in the Crown the interest of Lloyd Norman Keen in, inter alia, a motor cruiser. Sam Masri sought exclusion orders under ss 25 and 26 in respect of the motor cruiser, claiming that his interest in it was to the value of $64,000. The Crime Commission sought that his standing to make the application be dealt with as a separate question and its motion came before Hall J for determination.

60. Hall J noted the provision in s 22(4) required an assets forfeiture order be in respect of "specified interests in property" and observed that such an order is "not made in respect of identified property". Moreover, when an assets forfeiture order takes effect, pursuant to s 23 of the Act, it is the interest in property [in other words, not the property itself] that is forfeited to the Crown, and vests in the NSW Trustee and Guardian on behalf of the Crown. [38]

    38. New South Wales Crime Commission v Keen at [27]-[29].

61. Hall J accepted that the construction of s 25(1) was as explained by Badgery-Parker J in New South Wales Crime Commission v Young (Supreme Court (NSW), 10 August 1992, unrep) and said that the contention of Mr Masri was to, in effect, construe the words in s 25(1)(b), "a person whose interest in property was forfeited by the order", as being equivalent to "a person whose interest in property has been affected by the order". [39] His Honour rejected that contention and held that Mr Masri did not have standing to make the applications under either ss 25 or 26. [40]

    39. Above at [36].

    40. Above at [38].

62. New South Wales Crime Commission v Tran, supra, concerned an objection by one defendant to an asset forfeiture order being made by consent in respect of a co-defendant. Mr Tran was consenting to an asset forfeiture order being made in respect of certain property, but Ms Tran claimed an interest in some of it. Campbell J referred to cases which had followed New South Wales Crime Commission v Young and accepted in relation to s 25(1)(a) that persons "whose interest in property might be subject to" an assets forfeiture order does not mean persons "whose interest in property may be affected" by such an order.

63. Campbell J continued by discussing a pertinent aspect of that case which distinguishes it from the present. Ms Tran was a defendant who he held was entitled to be heard before a consent order was made in respect of a co-defendant. His Honour made orders adjourning the proceedings to permit Ms Tran to file "a cross-claim" [sic].

64. The passage upon which counsel for Ms Togias relied appeared later in his Honour's judgment. Counsel for the Crime Commission contended that it was obiter and wrong. I do not need to decide that, although the implication is that if correct parties with common interests in property, such as banks with mortgages over real estate, would have to bring exclusion applications whenever forfeiture orders are made. This tends to indicate that the construction favoured by his Honour is problematic. For present purposes, there is sufficient analysis in the other cases mentioned above to make it clear that the proper construction of ss 25(1) and 26(1) is as the ordinary meaning of the terms, plainly read, suggests.

65. The Crime Commission did not take issue with the characterisation of the type of interest that Ms Togias may have in the property. But it was submitted (correctly) that this was not an issue that needs to be determined in this proceeding. It was a matter for Ms Togias to make good her claim in some other proceeding, perhaps in the Equity Division.

66. Whatever the nature of Ms Togias' interest in the Glenwood home and the Seven Hills industrial unit may be (assuming without deciding that there is an interest), it is not an interest in property that was forfeited by the assets forfeiture order made by this Court on 5 May 2014.

67. In short, Ms Togias sought to exclude from an assets forfeiture order an interest that (assuming it exists) has not been forfeited.

68. The foregoing are my reasons for dismissing the applications under ss 25 and 26 on the basis that they were incompetent.

Application for relief from hardship

69. Section 24 of the Act makes provision for the Court to make orders to relieve hardship experienced spouses and dependents of the person who will forfeit an interest in property:

24 Relief from hardship—spouses and dependants

(1) If the Supreme Court is satisfied that an assets forfeiture order will operate to cause hardship to any dependant of the person who will forfeit an interest in property under the order, the Court:

(a)   may order that the dependant is entitled to be paid a specified amount out of the proceeds of sale of the interest, being an amount that the Court thinks is necessary to prevent hardship to the dependant, and

(b)   may make ancillary orders for the purpose of ensuring the proper application of an amount so paid to a person who is under 18 years of age.

(2) The Court is not to make an order under this section in favour of the dependant of a person whose serious crime related activity or illegal activity formed the basis for the assets forfeiture order concerned unless the Court is satisfied that the dependant had no knowledge of any serious crime related activities or illegal activities of the person.

(3) Subsection (2) does not apply if the dependant concerned is under 18 years of age.

(4) In this section:

dependant, in relation to a person, means:

(a)   a spouse or a de facto partner of the person, or

(b)   a child of the person, or a member of the household of the person, dependent for support on the person.

70. Counsel for both parties agreed that there was little or no authority to guide the determination of Ms Togias' application for hardship relief. To their knowledge (and mine), there has been no previous consideration of the construction of critical terms used in s 24. The only known cases dealing with s 24 are of little assistance.

71. It was held in New South Wales Crime Commission v Kelly & Ors; Kelly & Ors v New South Wales Crime Commission at [19]-[24] that the word "will" in the term "will operate to cause hardship" is used to emphasise the degree of satisfaction to be reached by the Court before making an order. Where the same word is used in "will forfeit an interest in property", it should not be read in the future tense so as to require an application under s 24 to be made before an assets forfeiture order is made.

72. One of a number of first instance judgments given in a series of proceedings that were ultimately concluded in the Court of Appeal was that of Shaw J in New South Wales Crime Commission v Kelly and Ors (No 2) [2003] NSWSC 154. The appeal was not concerned with the part of the judgment in which Shaw J made an order under s 24 in respect of three children, aged 6, 8, and 13, who were dependant on the defendants. The hardship related to the prospect of the family home at Boggabri being sold. Alternative rental accommodation in that region was limited and prices in Gunnedah were said to be much higher. His Honour determined (at [73]) that in the event the home was sold, an amount of $20,000 be paid out of the proceeds for the children's "welfare in terms of their future education and progress". It is notable that there was no issue as to whether the children were dependent upon the defendants.

73. There are number of questions that arise in relation to Ms Togias' claim for relief under s 24:

1.   Was Ms Togias a "de facto partner" or a "member of the household" of Mr Subakti?

2.   At what time must she be shown to have been a de facto partner or member of the household of Mr Subakti?

3.   In relation to each of the children, were they "dependant for support" on Mr Subakti?

4.   At what time must they be shown to have been dependent on him for support?

5.   Did Ms Togias have no knowledge of any serious crime related activities or illegal activities of Mr Subakti?

6.   If Ms Togias or the children are "dependants" of Mr Subakti, will the assets forfeiture order operate to cause hardship to any of them?

7.   If so, how much is necessary to prevent such hardship to Ms Togias or the children and should be ordered to be paid out of the proceeds of the sale of Mr Subakti's forfeited interest in the property?

74. Aside from the questions concerned with Ms Togias’ knowledge of Mr Subakti's serious crime-related, or illegal, activities, and the questions related to hardship, it was submitted by Mr Averre: [41]

1.   Ms Togias and Mr Subakti had a relationship as a couple, albeit that they were separated but still lived together in the relevant period.

2.   Ms Togias and her children were dependent on Mr Subakti at the time when the properties were acquired and were dependent upon him at the time the assets forfeiture order was made given the Glenwood home was registered in his sole name.

3.   Ms Togias and her children were dependent on Mr Subakti at the time the assets forfeiture order was made because of Ms Togias' involvement in Bio-Form, which was in the name of Mr Subakti and was for all intents and purposes his enterprise.

41. PWS, par 37.

75. Mr Singleton for the Crime Commission submitted: [42]

1.   Any dependency that Ms Togias had on Mr Subakti ended when their relationship ended in January 2010, if not before. Before that time, he was more reliant on her than she was on him. Further, after that time she was not dependent on him at all. She was permitted by him to reside in the Glenwood home, but that does not evince any dependency as she was funding his home loan repayments.

2.   At least from 2010 onwards, that is four years before the assets forfeiture order was made, the plaintiff was funding the relevant loan repayments and also the family and business expenses.

42. Defendant's written submissions (DWS), 21 October 2019, par 16.

76. It was common ground that Ms Togias bears the onus of establishing on the balance of probabilities that an order pursuant to s 24 should be made. [43]

    43. Tcpt, 23 October 2019, p 65(45); p 75(37).

Was Ms Togias a de facto partner of or member of the household of Mr Subakti? If so, when?

77. Section 21C of the Interpretation Act 1987 (NSW) provides, relevantly:

21C References to de facto partners and de facto relationships

(1) Meaning of “de facto partner” For the purposes of any Act or instrument, a person is the de facto partner of another person (whether of the same sex or a different sex) if:

…

(b) the person is in a de facto relationship with the other person.

(2) Meaning of “de facto relationship” For the purposes of any Act or instrument, a person is in a de facto relationship with another person if:

(a) they have a relationship as a couple living together, and

(b) they are not married to one another or related by family.

…

(3) Determination of “relationship as a couple” In determining whether 2 persons have a relationship as a couple for the purposes of subsection (2), all the circumstances of the relationship are to be taken into account, including any of the following matters that are relevant in a particular case:

(a) the duration of the relationship,

(b) the nature and extent of their common residence,

(c) whether a sexual relationship exists,

(d) the degree of financial dependence or interdependence, and any arrangements for financial support, between them,

(e) the ownership, use and acquisition of property,

(f) the degree of mutual commitment to a shared life,

(g) the care and support of children,

(h) the performance of household duties,

(i) the reputation and public aspects of the relationship.

No particular finding in relation to any of those matters is necessary in determining whether 2 persons have a relationship as a couple.

78. Mr Averre’s primary submission relied upon his client being a "de facto partner", more so than upon her being a "member of the household" of Mr Subakti. [44] He submitted that Ms Togias was a de facto partner within the definition in the Interpretation Act at the time "the process was first engaged in relation to the assets forfeiture order"; this was a reference to the commencement of the proceedings against Mr Subakti on 15 February 2010. Mr Singleton submitted that she had to be shown to be a de facto partner at the time the assets forfeiture order was made but Mr Averre submitted that this would not be the correct interpretation. He pointed to the fact that there is "no real temporal provision in relation to s 24". [45]

    44. Tcpt, 23 October 2019, p 66(17).

    45. DWS, par 18; Tcpt, 23 October 2019, pp 66(50)-67(8).

79. In the course of submissions, Mr Singleton pointed out that the assets forfeiture order was not in fact sought in the summons filed on 15 February 2010. Leave to amend the summons was sought by way of a Notice of Motion filed on 28 April 2014 to add a prayer for relief by way of an assets forfeiture order. Order 5 made on 5 May 2014 was the grant of leave for the sought amendment, and Order 6 was the assets forfeiture order itself. [46]

    46. Tcpt, 23 October 2019, p 79(41); Exh MWS-1, tabs 3 and 4.

80. The judgment of Allsop P (as his Honour then was) in New South Wales Crime Commission v Kelaita provides broad guidance on the issue of the construction of the Act. However, in that judgment, no attention was paid to the construction of the provision presently under consideration, s 24. It seems to me that the construction advanced by the Crime Commission must be accepted. That is, the relevant time at which a person needs to be shown to be a dependent must be the time the assets forfeiture order was made.

78. It would be illogical to provide that a person who was a dependant at some anterior time, but who no longer was at the time of the making of an assets forfeiture order, may apply for relief from its operation. It would be similarly illogical that someone who was not a dependant at the time of the order, but became one at some subsequent time may apply for relief from its operation. If a person was a dependant at the time the order was made, but ceased to be so by the time an application came to be determined, that would be a matter for the Court to consider in deciding whether to make an order. (The term "may order" suggests enlivenment of a discretionary power, rather than mandating the making of an order if the requirements of the section are met.)

79. The evidence relied upon by Ms Togias clearly indicates that she was a de facto partner of Mr Subakti up until his arrest in early 2010, at the latest. She was unambiguously of the view that by that stage, their relationship was over. Some of the indicia of a "relationship as a couple" in s 21C(3) of the Interpretation Act persisted beyond that time (e.g. "common residence" (when Mr Subakti was not in gaol) and "care and support of children"). However, her evidence that they were "separated and no longer in a relationship" when he returned to the Glenwood home after being released on parole on 29 January 2014 unequivocally indicates that she was no longer a de facto partner when the assets forfeiture order was first sought on 28 April 2014 and subsequently made on 5 May 2014.

80. It is doubtful that the alternative submission relied upon, that Ms Togias was a "member of the household" of Mr Subakti, can be made out either. At the time the order was made, they were living under the one roof in a home of which he was the sole registered proprietor. But assuming a broad construction may be given to that term, it remains for Ms Togias to establish that she was "dependent for support" on Mr Subakti. The evidence strongly points to the proposition that she was financially independent from him. The only "support" she might be said to have received was permission to live in the Glenwood home, but she did so in circumstances where she was responsible for the expenses, including the loan repayments, that enabled that to occur. Ironically, it could be said that he was more dependent for support on her than she was on him. Without her financial support, no doubt the mortgagee would have moved to take possession of the home from him.

81. The same applies in respect of the children. They were dependent upon their mother for support, not upon their father.

Other issues

85. If I am in error in reaching the conclusion that the application must fail for the above reasons, I should say something about the other issues.

Hardship arising from the operation of the assets forfeiture order

86. The issue as to whether the assets forfeiture order has operated to cause hardship to Ms Togias and the children is problematic. The Act gives no specific guidance on what is meant by "hardship". Mr Averre referred to a definition contained in the Macquarie Dictionary: "A condition that bears hard upon one; severe toil, trial, oppression, or need". [47] Mr Singleton sought to distinguish "hardship" from "detriment" or "inconvenience"; he characterised it as "something that will cause the person's life, that is the way they live, to become hard". [48]

    47. Tcpt, 23 October 2019, p 68(44).

    48. Tcpt, 23 October 2019, p 76(40).

87. One matter that is clear is that there is a distinct difference between this Court determining an application for relief from hardship under s 24 of the Act and a court determining a property settlement in a family law context. It is also necessary to focus upon hardship caused by the operation of the assets forfeiture order. It was accepted by Mr Averre in his submissions that it is inevitable that the order will operate so as to bring about the sale of the home, leading to the need for Ms Togias and the children to find alternative accommodation. [49]

    49. Tcpt, 23 October 2019, p 70(1).

88. Ms Togias has paid a substantial sum of money by way of repaying Mr Subakti's loan in order for the property at Glenwood to continue to be a family home for her and the children. In the almost 10 years in which this has occurred, the home has appreciated considerably in value. The available equity would now be in the vicinity of $550,000 to $600,000. Whether Ms Togias would have an entitlement to a share in that equity, and if so, to what extent, is not a matter for this Court to determine. If she has such an entitlement, the assets forfeiture order does not take that away. As Mr Singleton submitted, "the plaintiff's loss of wealth was caused not by the [assets forfeiture order] but by her decision to assign her funds to repaying Subakti's loan". [50]

    50. DWS, par 19 (3)(a).

89. Ms Togias has caveats in place in respect of both the Glenwood home and the Seven Hills industrial unit. Her asserted interest in them is protected to that extent, but it remains a matter for her in proceedings other than this to make good her claim.

90. There was evidence as to how much Ms Togias had outlaid in making loan repayments on Mr Subakti's behalf so as to enable her and the children to remain living in the Glenwood home. I have no doubt that it has been financially challenging for her. However, there was no claim that she should be reimbursed the difference between that outlay and the cost of some other form of accommodation she could have chosen to move herself and the children to. No evidence was tendered to enable such a comparison to be made.

91. There was evidence, primarily from the report and evidence of Ms Santa de Brigida, directed to the psychological impact that having to move house would have, especially in relation to the children who are now aged 18 and 14. The older daughter, who finished high school last year, has experienced particular difficulties, the cause of which lies elsewhere, but which may be exacerbated by having to move from the family home on account of the operation of the assets forfeiture order. However, nothing was put forward in relation to any monetary sum that might assist in some way to alleviate that concern.

92. The loss of the Seven Hills industrial unit is also inevitable. There was evidence as to its purchase price and the amount borrowed to fund the purchase, but there was no evidence as to its current value. It has not been a financial burden which Ms Togias has had to bear because the rental income has covered all of the costs including loan repayments. Mr Averre indicated that emphasis was not placed upon this property; the focus was upon the Glenwood home. [51] In my view, the Seven Hills industrial unit is not significant in relation to the issue of hardship.

    51. Tcpt, 23 October 2019, p 69(40).

93. Ms Togias' evidence was to the effect that she had not derived any income from the Bio-Form business for the past nine months and it has been unable to pay its debts. She has been reliant upon "loans from people and through credit cards". I note that the current outstanding balances of a personal loan and her credit card are not greatly different from what they were at the time of her 17 April 2018 affidavit. [52] Aside from her mother, she has not disclosed who the other "people" are who have lent her money, or how much they have lent her. [53]

    52. See above at [32].

    53. Affidavit, Nicolitsa Togias, 21 October 2019, par [8].

94. There was no evidence as to why the Bio-Form business has not been profitable for the past 12 months. It is not possible to know whether this will persist or improve. In any event, the financial hardship that Ms Togias is now experiencing because of a lack of income from the business is not something that arises from the operation of the assets forfeiture order. Mr Averre made clear in his reply submissions that it was not asserted that hardship arises because of a loss of income resulting from the forfeiture order. [54]

    54. Tcpt, 23 October 2019, p 85(5).

95. The evidence was insufficient to enable a conclusion to be drawn that any alternative accommodation Ms Togias may be able to find for herself and her two daughters, inevitably by renting rather than by purchasing, would be inferior to the Glenwood home to any appreciable extent. No submission was made that this would be so. The only evidence in relation to the prospect of renting was Ms Togias' reference to having no rental history. I appreciate that this might make it difficult, but there is no evidence that this will prevent her from securing rental accommodation.

96. With the evidence being in the state it is, I am left with significant uncertainty as to what hardship has been caused to Ms Togias and the children that could be ameliorated by ordering the payment of a specific amount out of the proceeds of sale of the property. It is necessary to bear in mind that she bears the onus in this respect.

Prior knowledge of Mr Subakti's criminality

97. I am satisfied that Ms Togias had no prior knowledge of any serious crime-related activities or illegal activities of Mr Subakti. She bears the onus on this issue and relies upon her own assertion. I am satisfied that her assertion should be accepted.

98. To contradict Ms Togias, the Crime Commission relied upon her conviction for the offence of importing the drug known as "ecstasy" from Bali in 1999 (20 years ago), and her awareness of Mr Subakti's conviction in 2007 for possession of a prescribed restricted substance for which he received a good behaviour bond. Ms Togias readily acknowledged both of these matters. They provide no basis on which to reject her evidence.

99. The Crime Commission also relied upon a passage in the report of Ms Santa de Brigida, which states that Mr Subakti was using the Bio-Form business as a channel to supply steroids. Assuming that Ms Santa de Brigida derived that from Ms Togias, it is not clear how accurately she summarised what Ms Togias told her. More importantly, it does not compel the inference she had prior knowledge of Mr Subakti's involvement in the supply of cocaine in 2009-2010, as opposed to – as Ms Togias said – learning about it after he had been arrested.

Orders

100. The order made on 22 October 2019 was that the applications pursuant to ss 25 and 26 of the Criminal Assets Recovery Act 1990 (NSW) were dismissed.

101. The following orders are now made:

(1) Application for payment of an amount of the proceeds of the sale of forfeited property on the basis of hardship pursuant to s 24 of the Criminal Assets Recovery Act1990 (NSW) dismissed.

(2)   The plaintiff is to pay the defendant’s costs.

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Endnotes

Decision last updated: 07 November 2019