In the matter of Rifai [2019] NSWSC 914
Brookfield Multiplex Ltd v International Litigation Funding Partners Pte Ltd (2009) 180 FCR 11
[2009] FCAFC 147
George v Rockett (1990) 170 CLR 104
Source
Original judgment source is linked above.
Catchwords
In the matter of Rifai [2019] NSWSC 914
Brookfield Multiplex Ltd v International Litigation Funding Partners Pte Ltd (2009) 180 FCR 11[2009] FCAFC 147
George v Rockett (1990) 170 CLR 104
Judgment (2 paragraphs)
[1]
Revised EX TEMPORE Judgment
By way of a summons filed on 28 February 2020, the Commissioner of the Australian Federal Police ("the plaintiff"), seeks orders pursuant to the Proceeds of Crime Act 2002 (Cth) ("the POC Act"), including restraining orders, custody and control orders, and ancillary orders in respect of three defendants, being John Louis Anthony Bigatton as first defendant, JB's Investment Management Pty Ltd as second defendant, and Madeline Bigatton as third defendant.
The matter relates to the alleged commission of criminal offences arising out of the trading/investment of bitcoin.
The plaintiff seeks orders on the basis that there are reasonable grounds to suspect that Mr Bigatton has committed offences under s 601ED(5) of the Corporations Act 2001 (Cth) ("the Corporations Act offence") and under s 400.9(1) of the schedule to the Criminal Code Act 1995 (Cth) ("the Criminal Code") ("the Money Laundering offence").
Although these types of applications are often dealt with on an ex parte basis, the first defendant, Mr Bigatton, appears in person today. The plaintiff is represented by Ms Patterson of counsel.
I am grateful for the clear and concise submissions made by Ms Patterson and for Ms Patterson's assistance to Mr Bigatton in explaining to him the orders that were sought by the plaintiff today. I should also add that Mr Bigatton plainly knows more about cryptocurrency than perhaps others and he was able to competently make his own submissions on the central issue.
At the commencement of the hearing, Mr Bigatton applied for an adjournment on the basis that he was seeking legal representation. I stood the matter down in the list so that he could speak to a solicitor to whom he had already spoken about whether Legal Aid (which he said he was seeking) would be forthcoming.
The matter comes before the Court today on an urgent basis because earlier asset preservation orders made by the Federal Court at the request of ASIC are due to expire on 13 March 2020.
I explained to Mr Bigatton that the application pursued by the plaintiff would need to be heard before then but that I would stand the matter over to be heard on a date suitable to him and any legal representatives between today and Friday if he could indicate that he would be legally represented at that time.
Mr Bigatton informed me subsequently that, having spoken to a solicitor, he was informed that "he had legal rights" but that there is no indication that he will be able to obtain Legal Aid or legal representation before this Friday, 13 March 2020. Thus, as I understand Mr Bigatton's position, he did not oppose the matter proceeding today rather than later in the week, although he generally opposed the matter proceeding.
Having heard Mr Bigatton's quite detailed but succinct submissions on his position, he plainly has an understanding of the proceedings and the issues involved.
The plaintiff relies on a number of affidavits, being two affidavits of Justin Veitch sworn on 3 March 2020, which deal with service issues (confirming service on Mr Biggaton and JB's Investment Management) and two affidavits of Alexandra Patricia Navarrete, affirmed on 28 February 2020 and 9 March 2020.
The plaintiff seeks:
1. Preliminary orders to the effect that the application for relief be heard and determined before 13 March 2020 and that the orders take effect from 5.00pm on 13 March 2020.
2. Restraining orders under ss 18(2)(a), (c) and 19 of the POC Act in respect of property set out in schedules one, two, three and four of the summons.
3. Custody and control orders pursuant to s 38 of the POC Act to the effect that the Official Trustee in Bankruptcy is to take custody and control of the property specified in the schedules.
4. Ancillary orders.
The plaintiff also seeks forfeiture and pecuniary penalty but does not ask that the Court make those orders today.
Section 18(1) of the POC Act is in the following terms:
18 Restraining orders - people suspected of committing serious offences
When a restraining order must be made
(1) A court with *proceeds jurisdiction must order that:
(a) property must not be disposed of or otherwise dealt with by any person; or
(b) property must not be disposed of or otherwise dealt with by any person except in the manner and circumstances specified in the order;
if:
(c) a proceeds of crime authority applies for the order; and
(d) there are reasonable grounds to suspect that a person has committed a serious offence; and
(e) any affidavit requirements in subsection (3) for the application have been met; and
(f) the court is satisfied that the * authorised officer who made the affidavit holds the suspicion or suspicions stated in the affidavit on reasonable grounds. …"
As set out in s 18(1) of the POC Act, a court with proceeds jurisdiction must order that the property the subject of the order must not be disposed of or otherwise dealt with by any person, except in the manner and circumstances specified in the order, if the circumstances set out in paras (c)-(f) are satisfied.
I am satisfied that this Court is a court with proceeds jurisdiction within the meaning of ss 18(1), 335 and 338 of the POC Act as it has jurisdiction over indictable offences.
The Court must make an order if the matters set out in ss 18(1)(c)-(f) are satisfied. That is:
1. a proceeds of crime authority applies for the order; and
2. there are reasonable grounds to suspect that a person has committed a serious offence; and
3. any affidavit requirements in sub-section (3) for the application have been met; and
4. the court is satisfied that the authorised officer who made the affidavit holds the suspicion or suspicions stated in the affidavit on reasonable grounds.
I am satisfied that the plaintiff is a proceeds of crime authority.
The affidavit requirements are set out in s 18(3) of the POC Act. Special Member Navarrete is a special member of the Australian Federal Police and an authorised officer within the meaning of s 338 of the POC Act.
In her affidavit of 28 February 2020, she sets out her experience and competencies and then summarises the nature of the proceedings, the background to her suspicion and provides information as to the property over which orders are sought. The affidavit requirements in s 18(3) of the POC Act have been met.
In order to further consider ss 18(1)(d) and (f) it is necessary to set out in some detail the background to this application.
I should emphasise that the threshold for suspicion on reasonable grounds as referred to in ss 18 and 19 of the POC Act is not high. It is not necessary that the plaintiff establish satisfaction beyond reasonable doubt or even satisfaction on the balance of probabilities: Application of the Commissioner of the Australian Federal Police; In the matter of Rifai [2019] NSWSC 914.
In George v Rockett (1990) 170 CLR 104; [1990] HCA 26, the Court (Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ) said, at 115-116:
"Suspicion, as Lord Devlin said in Hussien v Chong Fook Kam [1969] UKPC 26; (1970) AC 942, at p 948, 'in its ordinary meaning is a state of conjecture or surmise where proof is lacking: "I suspect but I cannot prove."' The facts which can reasonably ground a suspicion may be quite insufficient reasonably to ground a belief, yet some factual basis for the suspicion must be shown. In Queensland Bacon Pty Ltd v Rees [1966] HCA 21; (1966) 115 CLR 266, a question was raised as to whether a payee had reason to suspect that the payer, a debtor, 'was unable to pay (its) debts as they became due' as that phrase was used in s 95(4) of the Bankruptcy Act 1924 (Cth). Kitto J. said ((1966) 115 CLR 266 at p 303):
'A suspicion that something exists is more than a mere idle wondering whether it exists or not; it is a positive feeling of actual apprehension or mistrust, amounting to "a slight opinion, but without sufficient evidence", as Chambers's Dictionary expresses it. Consequently, a reason to suspect that a fact exists is more than a reason to consider or look into the possibility of its existence. The notion which "reason to suspect" expresses in sub-s.(4) is, I think, of something which in all the circumstances would create in the mind of a reasonable person in the position of the payee an actual apprehension or fear that the situation of the payer is in actual fact that which the sub-section describes - a mistrust of the payer's ability to pay his debts as they become due and of the effect which acceptance of the payment would have as between the payee and the other creditors.'"
The plaintiff alleges that Mr Bigatton was the Australian National Promoter of BitConnect, a virtual currency or cryptocurrency business. According to the plaintiff, BitConnect is a business that offered investment opportunities involving cryptocurrencies. It operated through various registered entities in the United Kingdom. BitConnect's Lending Program was the principal investment opportunity offered by BitConnect.
When the BitConnect Lending Program was closed down in January 2018, substantial financial losses were incurred.
Madeline Bigatton, Mr Bigatton's wife or former wife, was the sole shareholder, director and secretary of the second defendant, JB's Investment Management. Special Member Navarrete states that Ms Bigatton is listed as missing. Mr Bigatton says that she is now deceased. I have no reason to doubt what Mr Bigatton says but she remains listed as missing. No doubt that is something that will be clarified by the plaintiff sooner rather than later.
The second defendant, JB's Investment Management, is the trustee of the GAL Consultancy Trust. The beneficiaries of that trust include Mr Bigatton and Ms Bigatton. It appears to be under external administration.
Special Member Navarrete suspects that between August 2017 and January 2018, Mr Bigatton committed the Corporations Act offence, being the offence of operating in this jurisdiction a managed investment scheme that was required by s 601ED(1) of the Corporations Act to be registered but was not registered.
If Mr Bigatton was operating a managed investment scheme, it was not registered. The Corporations Act offence is both an indictable and serious offence for the purposes of the POC Act. The maximum penalty is imprisonment for five years or 200 penalty units. As Special Member Navarrete says, she suspects that the Corporations Act offence involved unlawful conduct which involved a benefit of at least $10,000 to John Bigatton, such that it is a serious offence within the definition of serious offence in s 338 of the POC Act.
Ms Navarrete sets out in her affidavit the grounds for her suspicion.
The other offence which Ms Navarrete suspects Mr Bigatton committed was to deal with money with a value in excess of $100,000 which was reasonably suspected of being the proceeds of crime, being the Money Laundering offence. Ms Navarrete sets out in paras 136 to 138 the basis of her suspicion.
The Money Laundering offence is both an indictable offence and a serious offence for the purposes of the POC Act.
I should say something about the nature of cryptocurrency. Cryptocurrencies are known as virtual currencies and may be considered a form of electronic money, although I understand that Mr Bigatton would dispute that. A unit of a cryptocurrency, such as a bitcoin, is created from code using an encrypted string of data blocks in the form of numbers known as blockchain. Cryptocurrencies can be bought and sold on exchange platforms and can be used to pay for goods and services from a person or entity that is willing to accept the particular cryptocurrency as payment. Mr Bigatton used as an example law firms apparently starting to use cryptocurrencies in some of their transactions.
People can earn or create units of cryptocurrency by solving complex puzzles to verify transactions, which is known as mining. Cryptocurrencies are kept in a digital wallet which has a public key and a private key, that is, a password or PIN number. As is well-known, virtual currencies allow users to remain relatively anonymous.
According to the plaintiff, one of the investment opportunities offered by BitConnect was the BitConnect Lending Program. This is an investment vehicle that allowed investors to profit from BitConnect trading bot and volatility software. Investors received a daily profit based on investment options.
There is an issue in these proceedings as to the involvement of Mr Bigatton in BitConnect and in the BitConnect Lending Program. The plaintiff asserts, based on the information contained in Ms Navarrete's affidavits, that on 18 August 2017 Mr Bigatton was appointed as the National Promoter or National Representative for BitConnect in Australia. The plaintiff refers to documents evidencing that Mr Bigatton appointed persons as Regional Promoters and determined percentages of a development fund assigned to them.
The plaintiff has adduced evidence that Mr Bigatton communicated and met with persons who were involved in operating BitConnect overseas. He was appointed as a director and shareholder of BitConnect International PLC, a UK company. The plaintiff asserts (and has adduced evidence in support) that he registered websites and business names for BitConnect in Australia; that he leased office space for BitConnect in Pyrmont; that he organised and hosted seminars in Australia to promote BitConnect and the BitConnect Lending Program; that he provided support to BitConnect members in relation to technical issues, and further that the trustee for the GAL Consultancy Trust declared total sales of $258,000 in the 2018 financial year.
The plaintiff submits that Mr Bigatton operated the BitConnect Lending Program in the jurisdiction (being Australia). It is not necessary that I further detail all of the evidence in support of that application.
As set out in s 601ED of the Corporations Act, a person must not operate in this jurisdiction a managed investment scheme which is required to be registered under s 601EB, unless the scheme is so registered.
For there to be an offence under s 601ED(5) it is thus necessary that:
1. There was a managed investment scheme.
2. Mr Bigatton operated the managed investment scheme.
3. Mr Bigatton undertook operation of the managed investment scheme in this jurisdiction.
4. The managed investment scheme was required to be registered.
5. The management investment scheme was not registered.
"Managed investment scheme" is defined in s 9 of the Corporations Act to mean, relevantly:
(a) a scheme that has the following features:
(i) people contribute money or money's worth as consideration to acquire rights (interests) to benefits produced by the scheme ...;
(ii) any of the contributions are to be pooled, or used in a common enterprise, to produce financial benefits, or benefits consisting of rights or interests in the property, for the people (the members) who hold interests in the scheme …;
(iii) the members do not have day-to-day control over the operation of the scheme ...
Special Member Navarrete identifies that the BitConnect Lending Program had more than twenty investors. Indeed, there are eleven witness statements exhibited to her affidavit and there is reference to potentially seventy-five investors. There is evidence that some of the investors suffered large losses, that is, greater than the statutory threshold of $10,000, and that Mr Bigatton gained a benefit significantly greater than $10,000.
As for the Money Laundering offence, Special Member Navarrete identifies that based on her inquiries and having regard to the documents exhibited to her affidavit Mr Bigatton converted amounts he received from his role as National Promoter of the BitConnect Lending Program into Australian dollars which he used to make mortgage repayments of over $576,000 for the Carss Park property owned by him and to purchase a motor vehicle, being a white Kia Stinger. The value of money and property converted is disproportionate to his income.
Having regard to the material set out in her affidavits, I would be satisfied, subject to Mr Bigatton's submissions, that there are reasonable grounds to suspect that Mr Bigatton has committed a serious offence and that Special Member Navarette holds the suspicions on a reasonable basis: POC Act ss 18(1)(d), (f).
I now come to the submissions of Mr Bigatton. Mr Bigatton has made extensive submissions in particular as to the reasons that I would not be satisfied that there are reasonable grounds to suspect that he has committed a serious offence. He submits as follows:
1. ASIC has been "on the case" for 15 months. He has cooperated with ASIC. He has allowed all extensions. ASIC did not uncover anything and ASIC is no longer pursuing the matter. This is a reference to the proceedings pursued in the Federal Court and the orders which are due to expire on 13 March 2020 (hence the current application by the plaintiff). Whilst I accept the essential proposition by Mr Bigatton that ASIC has been on the case, the question of whether I should make the orders sought by the plaintiff is not affected by ASIC's position.
2. There is a lot of inaccuracy in the submissions made on behalf of the plaintiff. He disputes that all of the bitcoin came from BitConnect. He says that his property was not obtained from the proceeds of bitcoin. He points out that the property at Carss Park had been owned by him for nine or ten years previously. I have already referred to the significant amount paid by way of mortgage payments on this property, which is not proportionate to Mr Biggaton's declared income.
3. He cannot access his online wallet to disprove some of the allegations that have been made and thus he is not in a position to adduce evidence today. Apparently the receiver controls access to that digital wallet.
4. The Independent Reserve is a leading independent currency exchange. However, as identified by Special Member Navarette, the GAL Consultancy Trust, which is the trustee of the second defendant, holds accounts with the Independent Reserve. The user name was his name.
5. Anything related to cryptocurrency or advice in relation to cryptocurrency is not a financial service within the meaning of the Corporations Act. He says as he was not providing a financial service then he cannot be guilty of an offence.
6. Dealing in cryptocurrency is not dealing in "money" within the Corporations Act. He makes the submission that ASIC itself has said that cryptocurrency does not meet the requirements of a financial product. He says that the only form of cryptocurrency which is a financial product is bitcoin futures.
7. He made it quite plain to the investors that they were engaged in a form of gambling.
8. He did not deal with the proceeds of crime.
He says that his bitcoin (being the bitcoin Special Member Navarette suspects was derived from the commission of the offences and was traded through the GAL Consultancy Trust) and the profits from the bitcoin came from what he describes as three different types of bitcoin trading.
Firstly, he engaged in what is known as "mining". Bitcoin is made from a number of multiple computers working together in a peer-to-peer network. He says that when bitcoin is sent out it goes out as a "problem" which must be "solved". Whoever solves the problem gets the bitcoin. This is consistent with the description of bitcoin trading to which I have already referred.
Secondly, he says that he was involved in "staking", which involved one computer putting the bitcoin into a digital wallet. It is called a staking wallet. Based on the percentage allocation of the pool, then persons are allocated bitcoin.
Thirdly, he refers to being engaged in "fausting". He says this is a bit like plain and simple gambling.
Whether Mr Biggaton derived personal profit in these ways is not the subject of evidence. On the evidence, his description of his methods of trading does not negate the effect of the evidence relied on by the plaintiff.
Mr Bigatton denies being the Promoter of the BitConnect Lending Program. He says that his role was as an educator and the persons who were promoted as regional promoters were in effect regional educators. The evidence relied on by the plaintiff does not support this submission.
Whilst Mr Bigatton was an expert in bitcoin trading and the various ways that that might take place, having regard to his submissions, the essential question is whether the plaintiff has established that there are reasonable grounds to suspect that Mr Bigatton has committed a serious offence, the plaintiff having identified two potential serious offences.
Having regard to s 9 of the Corporations Act, there is no requirement that Mr Bigatton be dealing in a financial product as that term is defined. Indeed, the definition of managed investment scheme refers to people contributing money or money's worth as consideration to acquire rights to benefits produced by the scheme.
Mr Bigatton says that bitcoin or any cryptocurrency is not money. As I have said, whether or not that be so, the definition of managed investment scheme refers to money's worth. There does not appear to be any case as yet which has been determined, or at least the parties have not referred me to any case which offers guidance on the submission made by Mr Bigatton that bitcoin is not money. He has not referred me to any case in support of his submission.
Further, having regard to the broad meaning which may be given to "money's worth" (see, for example, Brookfield Multiplex Ltd v International Litigation Funding Partners Pte Ltd (2009) 180 FCR 11; [2009] FCAFC 147 at [91], [207]-[210], [234]-[238]), the submission that bitcoin is not money again does not necessarily provide an answer to the suspicion relating to the Corporations Act offence.
Although Mr Bigatton says that he was only acting as some form of educator, I am satisfied on the evidence adduced through Special Member Navarrete's affidavits that there are reasonable grounds for suspecting that he was operating in the jurisdiction a managed investment scheme that was required to be registered as set out in s 601ED of the Corporations Act. On the evidence before me, it had more than twenty members and was promoted by Mr Bigatton. There was pooling of the funds and the investors did not have day-to-day control of their funds.
As for his submission that he made it quite clear to investors that they were involved in gambling and, indeed, he himself says that he has made bitcoin as a result of a form of gambling, that does not seem to me to be an answer to the suspicion that he has committed the particular offences.
I do not accept Mr Bigatton's submission that he has an answer to the Corporations Act offence (in effect that there is not a reasonable basis for suspicion that he has committed a serious offence).
Further, whilst it may be that the property was purchased some years ago, I am satisfied on the evidence adduced by Ms Navarrete that there are reasonable grounds to suspect that Mr Bigatton has been dealing with property reasonably suspected of being proceeds of crime contrary to s 400.9 of the Criminal Code. In this regard I note that Special Member Navarrete sets out in paras 86 and following the grounds on which she identifies that there was loss caused by and benefit obtained through the BitConnect Lending Program and then in paras 92 and following she sets out her detailed analysis of ATO reports on Mr Bigatton, the GAL Consultancy Trust, JB's Investment Management and Madeline Bigatton, as well as the financial reports. As she says in para 99, she suspects that the property set out in the schedule is the property of John Bigatton.
The plaintiff has provided an aide-mémoire which details the property set out in the schedule to the summons. I am satisfied that the property at Carss Park; the white Kia Stinger; the bitcoin owned by and in the wallet of Mr Bigatton; the chose in action enforceable against St George Bank and the chose in action enforceable against National Australia Bank as set out in the summons are all owned by Mr Bigatton. I am also satisfied that the other property identified in the schedules to the summons, being the black Kia Sportage motor vehicle; the chose in action enforceable against St George Bank in the name of JB's Investment Management atf GAL Consultancy Trust; the Ethereum held in an Independent Reserve account owned by and in the wallet of the trustee for the GAL Consultancy Trust and the bitcoin held in an Independent Reserve account owned by and in the wallet of the trustee for the GAL Consultancy Trust is under his effective control.
Again I have had regard to paras 99 to 149 of Special Member Navarrete's affidavit of 28 February 2020.
I am satisfied that having regard to the evidence adduced by the plaintiff there are reasonable grounds for the suspicions set out in the affidavits of Special Member Navarrete.
The plaintiff seeks orders both under s 18 and s 19 of the POC Act. It is necessary for a restraining order under s 19 that there are reasonable grounds to suspect that the property is the proceeds of an indictable offence or instrument of a serious offence. Proceeds and Instrument are defined terms: POC Act s 329. I have already considered the evidence which provides the reasonable basis for suspicion. In the circumstances, subject to some matters which I will refer to at the end of this judgment, I am satisfied that the orders under ss 18 and 19 sought by the plaintiff should be made.
The plaintiff also seeks custody and control orders pursuant to s 38 of the POC Act. That is, the Official Trustee is to take custody and control of the property. As set out in s 38, the court may order the Official Trustee to take custody and control of property or specified property covered by a restraining order of the Court if satisfied that it is required.
In my view, it is plainly required in the circumstances of this matter and in particular the circumstances of these s 18 and s 19 orders. For example, it is necessary that the Official Trustee take control of the accounts into which the Bitcoin profits trading through the Independent Reserve were paid.
The plaintiff also seeks ancillary orders pursuant to s 39(1) of the POC Act. In particular, the plaintiff seeks an order that Mr Bigatton provide a list of all passwords, passcodes, security codes and all necessary information to enable any storage facility or wallet containing cryptocurrency to be accessed. I am satisfied that such an order should be made.
Indeed, Ms Patterson explained to Mr Bigatton the nature of the orders sought as set out in paras 14, 15 and 16 of the summons. Mr Bigatton's response was that he would not oppose orders 14 and 15 if I intended making the other orders sought. Nor did he oppose order 16. Accordingly, I make order 16, which is to the effect that Mr Bigatton is directed to give the Commissioner of the Australian Federal Police or his nominated delegate within twenty-eight days a sworn statement setting out all of his interest in property world-wide and liabilities.
Mr Bigatton did oppose order 17, which is an examination order. He said he would like to seek legal advice about such an order. It does not seem necessary that that order be made at this time. The plaintiff accepted that it was not necessary that the order be made at this time and thus I will not make order 17.
I should also emphasise that during the course of argument the plaintiff identified the provisions in the POC Act which would enable Mr Bigatton to apply to vary the orders, for example for the purposes of obtaining additional money for living expenses, and that he could make an application to exclude property if he wished to do so.
Further, the plaintiff accepted and indicated to the Court that should Mr Bigatton wish to make an application excluding property or for any variation of the orders, the plaintiff would not insist that he apply for leave (as required by s 31 of the POC Act) but would consent to leave being granted.
The plaintiff emphasised that she was not consenting to any orders that might be sought but merely agreeing that it would not oppose leave being granted to Mr Bigatton to pursue the application.
I am dealing with this application on an urgent basis. I have explained to Mr Bigatton that I will give an oral judgment so that he can understand the orders make and take what course he wishes.
At the end of this ex tempore judgment, Mr Bigatton reminded me that he had made a submission opposing the orders sought in respect of the property set out in schedule two, being the chose in action enforceable against National Australia Bank in respect of the account held in the name of John L Bigatton, BSB xxx057, account number xxx014.
Mr Bigatton submitted that this was the account from which he obtained his living expenses, that this was the account into which the social security payments he received were made and this was the account into which the receiver paid money on his application for additional living expenses.
Ms Patterson accepted that the evidence did not establish that there is money in this account resulting from the money laundering offence but maintained the plaintiff's position that it was still property which could be the subject of an order under s 19 of the POC Act. She suggested that that property should not be excluded from the orders and that the solution was for Mr Bigatton to open a new bank account into which his social security payments could be made.
I am not sure it would necessarily be easy for Mr Bigatton simply to open a new bank account in the circumstances. Mr Bigatton would be placed in a difficult position in the short term if he did not have access to a bank account.
However, Ms Patterson points out that having been satisfied of the matters set out in ss 18 and 19 of the POC Act, I must make the restraining orders. I do not have a discretion to exclude from the orders any item of property based on hardship grounds.
The legislation sets out a process whereby a person such as Mr Bigatton may apply, particularly under s 24 of the POC Act for a variation of the order for reasonable living expenses. This has been identified to Mr Biggaton. Having found that the elements of the sections are satisfied, I must make the orders.
Upon the plaintiff giving the usual undertaking as to costs and damages on behalf of the Commonwealth, the Court makes the following orders:
1. I make Order 1 (having substituted the words 'orders 2 to 17' in the original orders sought with the words 'orders 2 to 16', as agreed to by the plaintiff).
2. I make Orders 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13.
3. I make Orders 14, 15 and 16, 18, 19 and 20.
4. The form of the Orders is attached by way of a Schedule.
5. The orders will take effect from 5.00pm on Friday 13 March 2020.
6. The proceedings are adjourned for directions before the Common Law Registrar at 9.00am on 29 April 2020.
7. The parties have liberty to restore on three days' written notice.
SCHEDULE TO REVISED EX TEMPORE JUDGMENT
1. The application for relief in orders 2 to 16 inclusive be heard and determined before 13 March 2020, with such orders to be specified, pursuant to rule 36.4(3) of the Uniform Civil Procedure Rules (NSW) (UCPR), to take effect from 5:00pm on 13 March 2020.
Section 18 Restraining Orders
1. Pursuant to section 18(2)(a) of the Proceeds of Crime Act 2002 (Cth) (Act), the property specified in Schedule One, being property of the suspect John Bigatton, must not be disposed of or otherwise dealt with by any person except in the manner and circumstances specified in these orders.
2. Pursuant to section 18(2)(a) of the Act, the property specified in Schedule Two, being the property of the suspect John Bigatton, must not be disposed of or otherwise dealt with by any person except in the manner and circumstances specified in these orders.
3. Pursuant to section 18(2)(c) of the Act, the property specified in Schedule Three, being property of Madeline Bigatton that is subject to the effective control of the suspect John Bigatton, must not be disposed of or otherwise dealt with by any person except in the manner and circumstances specified in these orders.
4. Pursuant to section 18(2)(c) of the Act, the property specified in Schedule Four, being property of JB's Investment Management Pty Ltd as trustee for G.A.L Consultancy Trust, that is the subject of the effective control of the suspect John Bigatton, must not be disposed of or otherwise dealt with by any person except in the manner and circumstances specified in these orders.
Section 19 Restraining Orders
1. Pursuant to section 19 of the Act, the property specified as item 1 of Schedule One must not be disposed of or otherwise dealt with by any person except in the manner and circumstances specified in these orders.
2. Pursuant to section 19 of the Act, the property specified as item 3 of Schedule Two must not be disposed of or otherwise dealt with by any person except in the manner and circumstances specified in these orders.
3. Pursuant to section 19 of the Act, the property specified as item 4 of Schedule Two must not be disposed of or otherwise dealt with by any person except in the manner and circumstances specified in these orders.
Third Parties Registered Interests in Restrained Property
1. Notwithstanding orders 2 and 6, Pepper Finance Corporation Limited ACN 094 317 647 as registered mortgagee in relation to the property specified as item 1 of Schedule One (pursuant to mortgage number xxx), may deal with the property in accordance with the terms of the registered mortgage.
Custody and Control Orders
1. Pursuant to section 38 of the Act, the Official Trustee (Official Trustee) is to take custody and control of the property specified in Schedule One below.
2. Pursuant to section 38 of the Act, the Official Trustee is to take custody and control of the property specified in Schedule Two below.
3. Pursuant to section 38 of the Act, the Official Trustee is to take custody and control of the property specified in Schedule Three below.
4. Pursuant to section 38 of the Act, the Official Trustee is to take custody and control of the property specified in Schedule Four below.
Ancillary Orders
1. Pursuant to section 39(1) of the Act, John Bigatton is to provide to Special Member Alexandra Patricia Navarrete of the Australian Federal Police immediately on being served with this order:
1. A list of all passwords, passcodes, keys and/or security codes relating to any wallet or any other storage facility storing cryptocurrency;
2. All necessary information to enable her to access any storage facility that holds the passwords, passcodes, keys and/or security codes which are in his effective control; and
3. All the necessary information in relation to any storage facility or wallet containing cryptocurrency which is in his effective control.
1. Pursuant to section 39(1)(e)(iii) of the Act:
1. The Receiver with custody of the property listed in item 3 of Schedule Two is authorised to undertake whatever acts are necessary to effect transfer of the property to the Official Trustee;
2. Independent Reserve Pty Ltd is authorised to undertake whatever acts are necessary to effect transfer of the property listed in items 1 and 2 of Schedule Four to the Official Trustee; and
3. Any or both the Receiver and/or the Independent Reserve Pty Ltd is authorised to incur any fees or charges necessarily incurred in connection with or ancillary to effecting transfer of the property listed in item 3 of Schedule 2 and items 1 and 2 of Schedule Four to the Official Trustee, such fees and charges being deducted from the property during the process of effecting transfer.
Provision of Statement
1. Pursuant to section 39(1) of the Act, John Bigatton is directed to give the Commissioner of the Australian Federal Police or his nominated delegate within 28 days of the date of service of these orders an affirmed or sworn statement, in the form set out in Schedule Five below relating to:
1. all interests in property within the meaning of the Act, worldwide, not including any asset or interest in the property with a value of less than AUD 5,000 as at the date of these orders; and
2. all liabilities, worldwide, not including any liability with a value of less than AUD 5,000 as at the date of these orders.
Other orders
(18) The orders will take effect from 5.00pm on Friday 13 March 2020.
(19) The proceedings are adjourned for directions before the Common Law Registrar at 9:00am on 29 April 2020.
(20) The parties have liberty to restore on three days' written notice.
SCHEDULE ONE
In the name of John Bigatton and Madeline Bigatton
1. The real property located at xxx, Carss Park, New South Wales 2221, being Lot xxx in Deposited Plan xxx
2. The chose in action enforceable against St George Bank in respect of the balance held in the name of John L Bigatton and Madeline Bigatton under BSB xxx879 and account number xxx549, together with any interest earned thereon.
SCHEDULE TWO
In the name of John Bigatton
1. The chose in action enforceable against National Australia Bank in respect of the account held in the name of John L Bigatton, with BSB xxx057 and account number xxx014, together with any interest earned thereon.
2. The chose in action enforceable against National Australia Bank in respect of the account held in the name of John L Bigatton, with BSB xxx057 and account number xxx906, together with any interest earned thereon.
3. Bitcoin held in a digital wallet in the name of John Louis Anthony Bigatton (currently in the possession and control of receivers George Georges and John Lindholm of Ferrier Hodgson (now KPMG) pursuant to Court order).
4. White Kia Stinger (2017) Vehicle Identification Number xxx bearing New South Wales registration xxx.
SCHEDULE THREE
In the name of Madeline Bigatton
Black Kia Sportage (2017) Vehicle Identification Number xxx bearing New South Wales registration xxx.
SCHEDULE FOUR
In the name of The Trustee for G.A.L Consultancy Trust
1. Ethereum held in a digital wallet in the name of The Trustee for GAL Consultancy Trust (account name: xxx)
2. Bitcoin held in a digital wallet in the name of The Trustee for GAL Consultancy Trust (account name: xxx)
3. The chose in action enforceable against St George Bank in respect of the balance held in the name of JB's Investment Management Pty Ltd ATF GAL Consultancy Trust under BSB xxx879 and account number xxx055, together with any interest earned thereon.
SCHEDULE FIVE
1. Provide full particulars of the nature and extent of your property or where applicable, the property of the company or trust of which you have an interest, including in relation to each item of property:
1. A description of the property, including the nature of your interest in it and, where possible, the estimated value;
2. The location of the property;
3. The name of the person or entity who is believed to have custody of the title documents of the relevant property;
4. The approximate date of acquisition of the relevant property;
5. Any income earned from the property and the amount;
6. A full description of any liability, and the amount of the liability (including name of the person or entity);
7. The amount and date of payment made to discharge any liability regarding the relevant property; and
8. The source of the payments referred to in subparagraph 1(g) above; and
9. The name of the person or institution to which the liability is owed.
1. Provide full particulars of your current liabilities or where applicable the liabilities of any company or trust of which you have an interest, including, in relation to each liability:
1. Full particulars of your current liability including the nature of the liability and the amount of the liability;
2. The name of the person or institution to which the liability is owed.
1. Provide full particulars of any disposition or dealing with the property since 1 July 2017 to the date on which the statement is executed, including:
1. Description of the property disposed of or dealt with, including the nature of the disposition or dealing and any proceeds received as a result of the disposition or dealing;
2. The location of the property;
3. the date of the disposition or dealing;
4. the name of the person or institution to which the property was transferred;
5. the amount and date of payments made to discharge any liability in relation to the property; and
6. the source of the payments referred to in subparagraph 3.e above.
[2]
Amendments
29 April 2020 - Wording of paragraph 15(b) of Schedule to decision amended in accordance with orders made by Cavanagh J on 29 April 2020.
Numbering in Schedule to decision.
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Decision last updated: 29 April 2020