Commissioner of the Australian Federal Police v Hills Greenery Pty Ltd

Supreme Court of NSW|2024-06-27|Before: Sweeney J

JUDGMENT

By prayers 1 and 3(e) of an Amended Notice of Motion filed on 8 May 2024 the third defendant, Bilal Allam, seeks leave, pursuant to ss 74 and 78 of the Proceeds of Crime Act 2002 (Cth) ("the Act") to apply for orders under ss 73 and 77 of the Act.
The Australian Federal Police ("AFP") opposes leave being granted to Mr Allam.
The statutory provisions applicable to the applications are relevantly as follows.
Section 73 provides: Making exclusion orders (1) A court that made a forfeiture order… must make an order excluding a specified interest in property from forfeiture (an exclusion order) if: (a) a person applies for the exclusion order; and (b) the forfeiture order, or the forfeiture application, specifies property in which the applicant has an interest; and (c) if the forfeiture order was… made under section 47 or 49 the court is satisfied that the applicant's interest in the property is neither of the following: (i) proceeds of unlawful activity; (ii) if an offence on which the order was… based is a serious offence an instrument of any serious offence; and (d) if the forfeiture order was… made under section 48 the court is satisfied that the applicant's interest in the property is neither proceeds nor an instrument of any of the offences to which the forfeiture order or forfeiture application relates. …
Section 74 provides: Applying for exclusion orders Before a forfeiture order has been made (1) A person may apply for an exclusion order if a forfeiture order that could specify property in which the person claims an interest has been applied for, but is yet to be made. After a forfeiture order has been made (2) A person who claims an interest in property specified in a forfeiture order may, at any time after the forfeiture order is made, apply to the court that made the forfeiture order for an exclusion order. (3) However, unless the court gives leave, the person cannot apply for an exclusion order if he or she: (a) was notified of the application for the forfeiture order, but did not appear at the hearing of that application; or (b) appeared at the hearing of that application. (4) The court may give the person leave to apply if the court is satisfied that: (a) if paragraph (3)(a) applies the person had a good reason for not appearing; or (b) if paragraph (3)(b) applies the person now has evidence relevant to the person's application that was not available to the person at the time of the hearing; or (c) in either case there are other special grounds for granting the leave.

Procedural background

On 29 May 2020 the plaintiff, the Commissioner of the AFP, commenced proceedings against Mr Allam as the third defendant. On that date, a restraining order, pursuant to s 19 of the Act, was made in respect of a property at Bevendale owned by Mr Allam.
On 27 March 2023, the plaintiff applied for, and was granted ex parte, forfeiture of the Bevendale property, pursuant to s 49 of the Act.
The circumstances of and around that event are one aspect of Mr Allam's application for leave. In order to obtain leave under s 74, Mr Allam must show that he had a good reason for not appearing at the hearing of the forfeiture application or there are other special grounds for granting the leave. In order to obtain leave under s 78 Mr Allam must show that he had a good reason for not making an application for a compensation order before the forfeiture order was made or there are other special grounds for granting leave.
The AFP contends that Mr Allam has not established that he had good reasons in either situation or there are special grounds for granting leave. The AFP further contends that granting leave to Mr Allam would be futile because the AFP asserts that Mr Allam cannot establish what he must in order to succeed in his applications for exclusion of his property from forfeiture or compensation.

Evidence

Mr Allam read and relied on the following affidavits:

Affidavit of Mr Allam affirmed on 15 May 2023
Affidavit of Sam Abbas affirmed on 15 May 2023
Affidavit of Sam Abbas affirmed on 23 May 2023
Affidavit of Mr Allam affirmed on 5 December 2023
Affidavit of Bachar Allam sworn on 4 December 2023
Affidavit of Awad Allam sworn on 4 December 2023
Affidavit of Harry Gribilas sworn 4 March 2024
Affidavit of Bilal Allam sworn 11 March 2024
Affidavit of Fatin Allam sworn 13 May 2024.

Mr Allam also relied on a Forensic Accounting Report of Jon Spark dated 6 December 2023.
The AFP read and relied on the following affidavits:

Affidavit of Joseph Khoury sworn 24 March 2023
Affidavit of Justin Veitch sworn 30 June 2020
Affidavit of Alexandra Navarrete sworn 29 May 2020
Affidavit of Rachel Meltser sworn 26 March 2023
Affidavit of Alexandra Navarrete sworn 24 May 2023.

No one was required for cross-examination.

Relevant asserted facts

The following facts relevant to the applications are derived from the evidence relied on by the parties.
Mr Allam acquired the property at Bevendale for $260,000, title passing on 23 May 2017.
On 7 May 2020, officers of the Australian Taxation Office ("ATO") and New South Wales police executed a search warrant at the Bevendale property and located a tobacco crop occupying just under 9 acres of the property. Mr Allam says the property consists of 455 acres. On the day of the search no person was present at the property.
Mr Allam has not been charged with any offence relating to the cultivation of tobacco on his property. He has no criminal convictions.
Mr Allam says that upon acquiring the property he leased it. He said he was not involved in and had no knowledge of the cultivation of tobacco at the Bevendale property, of which he was informed by his current solicitor.
On 27 June 2020 Mr Allam was served personally with the restraining order made in respect of his property, the affidavit evidence relied on by the AFP to obtain that order and the plaintiff's amended summons, among other relevant documents.
Mr Allam says he is a butcher and has so worked for his entire adult life. He said he completed high school in Lebanon and has had no other education. He says he relied on lawyers he instructed to seek relief from restraint and forfeiture of his property.
Mr Allam said in or about July 2020 he retained solicitor James Pope of Pope & Spinks, Solicitors to act for him in the proceeds of crime proceedings.
On 9 July 2020 James Pope of Pope & Spinks Lawyers filed a notice of appearance for Mr Allam.
Mr Allam said in his dealings with Pope & Spinks, he had contact with James Pope, solicitor and Mona Ayoub, paralegal.
From 22 November 2021 until 19 October 2022 Mr Allam was examined four times in relation to the proceedings. He said before the first examination James Pope told him he could not appear with Mr Allam at the examination because of a conflict. He said Mr Pope arranged for another solicitor, Angelo Bilias, and Paul Hogan of counsel to appear at the first examination. Mr Hogan appeared at the second and third examinations with Mona Ayoub. After the first examination, Mr Allam says Mr Pope told him that another solicitor, Steve Kassem, would appear with Mr Hogan of counsel at the second examination. Mr Allam said Mr Kassem did not appear at the second examination.
Mr Allam said he received Mr Kassem's contact details from Mona Ayoub on 21 March 2022, and she said she had sent his documents to Mr Kassem and would speak to him about Mr Allam's manner. Mr Allam said he made several calls to Mr Kassem's office contact numbers and mobile number, with no answer. He said he received a phone call from Mr Kassem about a week before his examination on 13 April 2022. He said Mr Kassem did not appear at the examination.
He said before the fourth examination in October 2022 Mona Ayoub told him she had organised for another solicitor to appear for him at that examination. He conferred with that solicitor, Steve Nazarian, with Mona Ayoub. Mr Nazarian appeared for him at the fourth examination.
Mr Allam said in January and February 2023 he and his wife made many calls to Mr Kassem's office and mobile numbers. None were answered. He said during this time he told Mona Ayoub that Steve Kassem had not answered his calls.
On 3 February 2023, at Mr Allam's request, his wife emailed Steve Kassem asking him to call her. Mr Kassem replied by email dated 7 February 2023. He said Mr Nazarian was instructed by Mr Allam, and to clarify, they should call Mona Ayoub.
Mr Allam said after receiving this email he called Mona Ayoub and asked if Steve Nazarian had taken over his matter. He said Ms Ayoub later called him and told him to call Steve Kassem. He made several attempts to call Steve Kassem that day and the following days. None of his calls were answered. A text message he sent to Mr Kassem's phone was not delivered.
Steve Kassem had filed a notice of change of solicitor on 22 April 2022.
By letter dated 2 March 2023 to Steve Kassem, sent by email, the solicitors for the AFP put him on notice that at the next directions hearing on 27 March 2023 they intended to seek a referral to the duty judge to seek forfeiture of the Bevendale property to the Commonwealth.
By email dated 17 March 2023 to steve@futurelegal (Steve Kassem) and popespinkslaw, a solicitor for the AFP advised that the Commissioner had not yet concluded examinations being conducted pursuant to the Act and proposed that the directions hearing listed for 27 March 2023 be vacated to allow the Commissioner to conduct and conclude examinations. The letter enclosed proposed consent orders signed by a solicitor for the Commissioner of the AFP. The draft consent orders were as advised in the email, that the directions hearing listed on 27 March 2023 be vacated and the matter be listed for directions hearing on 18 May 2023. Before sending that email to Mr Kassem Rachel Meltser, the solicitor for the AFP, had, on 15 and 16 March, made several phone calls to Mr Kassem's office and left messages for him, but did not receive a call back.
By email of 21 March 2023 Ms Meltser sent to Steve Kassem a letter which included a copy of the solicitor's letter of 2 March 2023, an affidavit of Alexandra Navarrete, sworn 29 May 2020, in support of the application for restraining orders, an affidavit of service and other documents, including draft consent orders for the forfeiture of Mr Allam's Bevendale property. Ms Meltser also arranged for the letter of 21 March 2023 to be sent by registered post to the address listed on Mr Kassem's notice of change of solicitor and on his website. The letter was returned to sender by Australia Post on the basis the receiver was not known at the address. On 24 March 2023 Ms Meltser arranged for a process server to deliver the letter and its enclosures to an address listed for Mr Kassem on the Law Society website. The affidavit of Joseph Khoury deposed that he served the documents at the nominated address and was told by a person at the address that Steve Kassem had an office there but was not in at the moment.
In Ms Meltser's affidavit of 26 March 2023 she stated she had not received any response from Mr Kassem by any form of communication, or from any other lawyer copied into the correspondence sent to him.
On 16 March 2023 Mona Ayoub sent to Mr and Mrs Allam the letter of 2 March 2023 sent to Steve Kassem by the solicitors for the AFP, which letter advised of the AFP's intention to seek forfeiture of the Bevendale property on 27 March 2023. Ms Ayoub said in her email to Mr Allam that Mr Nazarian was happy to assist him in the matter. Mr Allam said from that email and attachment he understood his matter was next in court on 27 March 2023.
Mr Allam says he spoke with Mr Nazarian about his appearing in court on 27 March, but they had a disagreement about the fees Mr Nazarian required Mr Allam to pay.
Mr Allam said on 20 March 2023 he spoke to Mona Ayoub and told her he could not afford Mr Nazarian's fees and Mr Kassem had still not answered his phone calls. He said Ms Ayoub said she would ring Mr Kassem. Mr Allam said on 21 March 2023 he sent Mona Ayoub a text message, a screenshot of which was attached to his affidavit. In the message he said he was going to go to court by himself (he said referring to the Supreme Court proceedings on 27 March 2023) and asked her what she thought.
Mr Allam said on 24 March 2023, he received an email from the office of Pope & Spinks, which forwarded the email from Rachel Meltser of 17 March 2023, that being the email which advised that the Commissioner proposed that the directions hearing on 27 March 2023 be vacated. Mr Allam said on that day or the following day he had a telephone conversation with Mona Ayoub, in which he said to her if she or James Pope could not come with him to court on 27 March, he would have to go by himself, because Steve Nazarian wanted a lot of money which he could not afford and Steve Kassem was not answering his calls. He said Ms Ayoub said to him "Did you not read the email that I sent you? It's going to be adjourned, you don't have to go." He asked her if she was sure, what did James Pope think, and should he go by himself just in case. He said Ms Ayoub told him "They're going to adjourn it. The lawyers for the police sent us an email. Don't worry. I will tell Mr Kassem to call you when they get the new date. You don't have to go, it will be adjourned by consent. They sent us consent orders." Mr Allam said he understood from that conversation that he did not need to attend the proceedings on 27 March 2023, and for that reason he did not attend the proceedings on that date.
On 27 March 2023 the AFP appeared by counsel in an ex parte hearing before Walton J. The transcript of the hearing was tendered on this application. There was no appearance by or on behalf of Mr Allam, as the third defendant to the proceedings. Counsel for the Commissioner of the AFP told his Honour that she had made a telephone call to Mr Kassem to let him know the matter had been referred to his Honour and had not had a response. She said there was evidence she relied on that the third defendant was on notice of the application. Counsel told his Honour that there had been many attempts to obtain a response from Mr Kassem by correspondence, email, telephone calls and sending the process server to his office. His Honour stood the matter in the list, after which counsel for the Commissioner told his Honour that she had had no response from the solicitor for the third defendant. Counsel advised his Honour of the AFP's wish to proceed ex parte against the defendant with respect to the forfeiture of property application. In support of the application counsel for the Commissioner of the AFP relied on the affidavit of Rachel Meltser of 26 March 2023, the affidavits of service of Justin Veitch and Joseph Khoury and the affidavit of Alexandra Navarrete of 29 May 2020.
The affidavit of Rachel Meltser of 26 March 2023, which was put before me on this application, referred to sending correspondence to Mr Kassem of 2 March 2023 advising of the intention to move for forfeiture of the Bevendale property on 27 March 2023. It referred to the attempts to contact Mr Kassem by phone calls on 15 and 16 March 2023. It referred to the letter of 21 March 2023 sent to Mr Kassem. It made no reference to the correspondence sent between those two pieces of correspondence, being the email of 17 March 2003 indicating the AFP's intention to have the directions hearing of 27 March 2023 vacated.
In the hearing before Walton J counsel referred to Ms Meltser's email to Mr Kassem on 2 March putting the third defendant on notice of the AFP's intention to make application to forfeit the property, to Ms Meltser's attempted phone calls to Mr Kassem on 15 and 16 March, and to the letter of 21 March sent to Mr Kassem. Counsel did not refer to the correspondence of 17 March, indicating an intention to seek vacation of the 27 March listing.
Walton J made the order forfeiting the Bevendale property to the Commonwealth, as requested by counsel for the Commissioner of the AFP. In his judgment his Honour said: "[3] The matter has proceeded as against the third defendant ex parte as a result of the non-appearance of the third defendant or his legal representative in the proceedings today. [4] I have formed the view that the matter should proceed in that fashion as, in my view, on the evidence before the Court, including a supplementary statement after inquiry made by the legal representative for the Commissioner upon the request of the Court, there was proper service of materials relevant to the application and notice of the proceedings, in particular, the intention of the Commissioner to move for forfeiture orders in the matter described in the application to which I have referred earlier in this judgment."
Mr Allam concedes that between 29 May 2020 and 27 March 2023 no challenge was made to the restraint of his Bevendale property.
On 11 May 2023 Mr Allam briefed Sam Abbas, solicitor, in respect of the proceedings. On that day Mr Abbas sent an email to the AFP's solicitors, noting the matter was listed on 18 May 2023 for directions hearing, asking was the matter to be listed for hearing on that day, and asking for a copy of a recent letter sent to Mr Allam's former solicitors. Later that day Mr Abbas received an email from a solicitor for the AFP, sending him a copy of the orders made by Walton J and his Honour's judgment in relation to the forfeiture of the Bevendale property. Mr Abbas says on the evening of 11 May, Mr Allam collected his file from James Pope, solicitor, and delivered it to Mr Abbas. Mr Abbas said in the file was a letter addressed to Steve Kassem dated 2 March 2023 from the solicitor for the AFP. Mr Abbas said in his affidavit of 15 May 2023 that he had been instructed by Mr Allam that that letter was never brought to Mr Allam's attention. However I note from Mr Allam's affidavit of 11 March 2024 his wife did receive that letter under cover of an email from Mona Ayoub on 16 March 2023.
Mr Abbas sent correspondence to Mr Kassem seeking his advice about the events which had occurred. On 15 May 2023 he filed a Notice of Motion seeking to have the orders made by Walton J set aside pursuant to the UCPR. He wrote to the Australian Financial Security Authority, who replied that although they were not a party to the proceedings and did not have power to stay the forfeiture order in respect of the property, they would consent to not listing the property until after a decision on the Notice of Motion was heard. At that stage, the Notice of Motion was listed for 25 May 2023. When the matter came before Garling J on 25 May 2023 the AFP sought time to consider whether a constitutional issue arose, as to whether the provisions of the Proceeds of Crime Act applied rather than the UCPR provisions. Ierace J so held on 1 March 2024. His Honour gave leave to Mr Allam to file an Amended Notice of Motion, which has led to this hearing.
Mr Allam seeks to rely on some further evidence in relation to what he asserts were the sources of funds for him to buy the subject property. He says of the $260,000 purchase price, the deposit of $26,000 came from his butcher business cheque account, $70,000 was a loan from his wife's father, Awad Allam, $50,000 was a loan from his cousin Bachar Allam, and the balance was derived from his savings and business income as a butcher. In support there was an affidavit from Awad Allam stating that on 5 September 2016 he loaned $70,000 to Bilal Allam. There was a copy of a statement of an account of Mr Bilal Allam, showing a $70,000 credit on 6 September 2016. There was an affidavit from Bachar Allam in which he stated that on 30 August 2016 his company loaned $50,000 to Bilal Allam. There was a bank statement from Mr Allam's business account recording a $50,000 credit on 30 August from "Allam Haul", Bachar Allam having stated that his company was Allam Haulage Pty Ltd. Mr Allam said on two dates in July and September 2016 he deposited, in two amounts, $108,000 cash into his accounts, being cash deposits derived from his business, income accumulated in cash between about 15 September 2015 and 15 September 2016. He stated that in December 2023 he attended the office of his accountant and provided to him copies of his Notices of Assessment and individual tax returns for the financial years 2015-2016 and 2016-2017. He said his accountant advised him that the income of $108,000 had not been declared to the Australian Taxation Office. He instructed his accountant to declare the income and subsequently received amended tax returns for those years.
Mr Allam also seeks to rely on the report of forensic accountant Jon Spark as to the source of funds used by Mr Allam to purchase the Bevendale property. Mr Allam seeks to rely on the opinion of Mr Spark that at the time he acquired the Bevendale property he had not failed to declare any of the income that provided the source of funds used to acquire the Bevendale property.

Applicant's submissions

The applicant accepted that no challenge to the restraining order was made between the date of the restraining order and the forfeiture order, but submitted that the Act makes provision for post-forfeiture relief.
He submitted that he has a good reason for not appearing on the hearing of the forfeiture application, which is that he had been told by Mona Ayoub that he did not have to attend court on 27 March because the matter was going to be adjourned, consistent with the plaintiff's solicitor's email to that effect of 17 March. He received no communication from Steve Kassem, the solicitor on the record, or from the plaintiff's solicitors directly, about the hearing proceeding on 27 March 2023 (as advised in the plaintiff's solicitor's letter of 21 March sent only to Steve Kassem). The applicant accepts there was no obligation on the plaintiff to personally serve him.
In response to the AFP's submission that there was no evidence from Steve Kassem or Mona Ayoub in support of the applicant's evidence on this topic, the applicant submitted that the AFP had been unable to serve Steve Kassem or Mona Ayoub (and counsel for the AFP did not contradict that).
The plaintiff submits that he has a good reason for not making a compensation application before the forfeiture order, being that as a man of limited English language skills and a lack of education, he at all material times had retained lawyers and relied on them to seek relief from restraint and forfeiture of his property, and the solicitors failed to make the necessary applications. In response to the AFP's submission that if his solicitors did not make the appropriate applications, he has a remedy of a claim against them, he submitted that that he may have a claim against his former solicitors does not prevent him making these applications under the Act.
The applicant relies on the same circumstances which constitute his reasons for not appearing on the hearing of the forfeiture application and not making a compensation application as special grounds for the granting of leave, and in addition, relies on the failure of the AFP to inform Walton J of the email of 17 March 2023 seeking an adjournment of the 27 March date.
In response to the AFP's submission that to grant leave for the applicant to make his exclusion and compensation applications would be futile, the applicant submits that he has an arguable case on the applications and there are triable issues. The applicant accepts that he bears the onus of establishing that his interest in the Bevendale property was neither proceeds of an unlawful activity or an instrument of a serious offence. The applicant does not concede the Bevendale property is an instrument of a serious offence. His case is that the property was lawfully acquired using his income and loans from family members. In response to the AFP's argument that the property was unlawfully acquired because it was acquired in part using funds on which he had not paid income tax, he relies on his evidence as to when the income was earned and the opinion of forensic accountant Jon Spark that at the time he acquired the property, he had not failed to declare any of the income or attracted an ATO liability on the income which was used as part of the funds to buy the property. The applicant submits that if it is determined that some proportion of his interest in the property was unlawfully acquired, the court could make a compensation order in respect of the balance of the property.
In respect of the applicant's "interest" in the property, the term used in ss 73 and 77, the applicant submits that he leased the whole of the property and had no knowledge the lessee would cultivate tobacco on the property. He submits he lost his rights, powers and privileges to the property upon leasing it, that he did not exercise his rights over the property to use it as an instrument of an offence.
The applicant submitted that the plaintiff suffers no prejudice if the applicant is granted leave to make his applications, as there has been no excessive delay since the proceedings were commenced against him in 2020.

Respondent's submissions

The AFP submits that the applicant has not established that he has a good reason for not appearing on the hearing of the forfeiture application, has not established that he has a good reason for not making a compensation application before the forfeiture order was made, and has not established that there are special grounds for the granting of leave.
The AFP submitted that the applicant did not, between the restraining order and the forfeiture order, make an application for revocation of the restraining order or an exclusion application or compensation application. The AFP submitted there is no evidence from the applicant that he was not advised to make exclusion or compensation applications earlier.
The AFP submits that the applicant had been put on notice of the hearing of the forfeiture application on 27 March. The AFP submitted there is no evidence from Mona Ayoub of Steve Kassem as to what they did with the email and letter of 21 March 2023 (although I note it was not sent to Ms Ayoub or her firm, but only to Steve Kassem).
The AFP submitted that the non-disclosure to Walton J of the email of 17 March 2023, advising of an intention to vacate the 27 March date, was not significant to the forfeiture application.
The AFP submits that if the court finds the applicant has good reasons as required by ss 74 and 78, the court should not exercise the discretion to grant leave to the applicant because there is futility in the applicant making his applications. The AFP submitted that the applicant bears the onus of establishing, on the balance of probabilities, that his interest in the property was lawfully acquired and that it is neither the proceeds of unlawful activity nor an instrument of unlawful activity. The AFP submitted that the applicant's interest in the property is in the whole of the property that, as defined in s 338 of the Act, the applicant had a legal interest in the property and rights, powers and privileges in connection with the property. The AFP submitted that if the property is not an instrument of crime, on which it submitted the applicant had no case, or at best a weak case, then it is the proceeds of an indictable offence, being an offence contrary to s 135.1 of the Criminal Code Act 1995 (NSW), of dishonestly causing a loss to a Commonwealth entity, the ATO.
The AFP relied on the decision of Weinstein J in Commissioner of the Australian Federal Police v Tradieh [2023] NSWSC 1259, and the decision of the Supreme Court of Victoria, Court of Appeal, in Cini v The Commissioner of the Australian Federal Police [2016] VSCA 227. I consider that the Tradieh decision is distinguishable from the circumstances of this application in that Mr Tradieh had pleaded guilty to producing tobacco and been convicted of such, and there were agreed facts that he had produced on his property a substantial quantity of tobacco, whereas in this case the applicant says he did not know that his lessee had cultivated tobacco on his leased property.
The AFP relied on the Victorian Court of Appeal's consideration in Cini of the concept in the Act of an interest in land as "a bundle of rights exerciseable with respect to the land": at [46]. The Court in Cini considered the decisions of Director of Public Prosecutions (SA) v George (2008) 102 SAR 246 and Chalmers v The Queen (2011) 37 VR 464, that the statutory definition in the Act is not qualified by requiring a "substantial connection" between the interest in property and the unlawful activity.
In George Doyle CJ (with whom White J agreed) said, at [63]: "I also approach the issue of interpretation on the basis that the statutory definition should not be read as referring to or requiring a causal link between the property and the offence. Something less than that may suffice. Nor is it necessary that the property be something that is essential or necessary for the commission of the offence, or something that makes a unique contribution to the commission of the offence. Nor is it appropriate, when the instrument is land, to assign to the land a single or dominant use. There is no reason why land cannot be used in, or in connection with, the commission of an offence when it is also used for other purposes, and when on the objective circumstances, it would be described as being used in another manner...".
Doyle CJ also said, at [65]: "…As a matter of ordinary language… I consider that the definition refers to a use of property that facilitates, assists or contributes to the commission of an offence. That is a starting point, not a conclusion. The use of the property must be sufficiently significant (I realise that this is question begging) to warrant a conclusion (especially when the property is the place where the offence is committed) that the property is used in connection with the commission of the offence. This invites attention to the role that the property plays in the commission of the offence, to the extent to which the property is so used, and to how much of the property, or what part of it, is used. I doubt whether one can usefully go any further than that."
In Chalmers, the Court said, at [77]: "… 3. Whether there is a connection between the use of the property and the commission of the crime is a question of fact and degree. It is not necessary for it to be established that there was a "'substantial' connection, or that the crime could not have been committed without using the property. 4. The nature, extent and significance of use of the property in connection with the commission of the crime will be matters which go to the court's discretion whether or not to order forfeiture of the property."
In response to a submission by the applicant that the forfeiture of his property in the circumstances of this case would lead to a harsh result, the AFP submitted that if the Act operates harshly, that is the operation of the Act, relying on Henderson v State of Queensland (2014) 255 CLR 1; [2014] HCA 52, per Keane J at [166].
The AFP submitted that the plaintiff is prejudiced if the applicant is allowed to proceed with his applications, based on his assertions as to the source of the funds to purchase the property, because seven years have passed since the transactions occurred, and banks only keep records of transactions for seven years, so the plaintiff is unable to test the applicant's evidence.
The AFP submitted that if the applicant did not make the applications in time because of the fault of his solicitors, he has the remedy of a claim against them.

Consideration

I am satisfied to the requisite standard that the applicant had a good reason for not appearing at the forfeiture hearing. That reason was that he was told by Mona Ayoub, a paralegal at Pope & Spinks Lawyers, that the hearing on 27 March was to be adjourned. I am satisfied that she told him that, in reliance on the 17 March email from the plaintiff's solicitors indicating their intention to seek such. I am satisfied that Pope & Spinks received the letters of 2 March and 17 March, and relayed the effects and contents of them to the applicant. The third letter of 21 March, which indicated that the AFP intended to pursue forfeiture of the applicant's property at the hearing on 27 March, was sent to Steve Kassem only, he having filed a notice that he was the solicitor on the record. That letter of 21 March was not sent to Pope Spinks Law, where Mona Ayoub worked. Nor was the letter of 21 March sent to the applicant personally, although I accept that the AFP's solicitors were not obliged to do so. I am satisfied that the applicant was not told by Steve Kassem of the letter of 21 March. I do not draw any adverse inference against the applicant by reason of there being no evidence adduced in this application from Steve Kassem or Mona Ayoub, since I was told by the applicant's counsel, without contradiction by counsel for the AFP, that the AFP could not serve Steve Kassem or Mona Ayoub with subpoenas.
I am also satisfied that Walton J not having been informed of the email of 17 March, indicating an intention to vacate the hearing on 27 March, was a significant omission by the legal representatives of the AFP.
I am satisfied, as required by s 78(4), that the applicant had a good reason for not making a compensation application before the forfeiture order was made. I am satisfied to the requisite standard that the applicant, by reason of his occupation, his level of education and his English language skills, and he having retained lawyers shortly after the restraining order was made in respect of his property, relied on his solicitors to make the necessary applications. It is apparent that the solicitors did not make such applications.
I am also of the view that the applicant has an arguable case, and there are triable issues, in respect of his satisfying the court that his interest in the property was neither the proceeds of unlawful activity or an instrument of a serious offence. As the Court said in Chalmers and Cini, it is a question of fact and degree whether a property was an instrument of an offence, and the Court said in Chalmers that the "nature, extent and significance of the use of the property in connection with the commission of the crime will be matters which go towards the court's discretion whether or not to order forfeiture of the property." In my view, there are triable issues in respect of the matters raised by the applicant, that he had leased the whole of the property and thus asserts he had lost his rights to control the property to the lessee. He also raises the issue that a small area of the property was used by the lessee in cultivating tobacco.
He also asserts that the acquisition of the property was in part funded by loans from family members. Section 77 of the Act empowers a court to make a compensation order if satisfied that a proportion of the value of the applicant's interest was not derived or realised from the commission of an offence and the court is satisfied that the applicant's interest is not an instrument of an offence. If a court, on the applications, was to decide that the portion of the property acquired with the cash income from the applicant's business was unlawfully acquired (which I am unable to determine on the evidence in this application), then a compensation order may be made.
Obviously, the applicant will have to present his evidence in support of an exclusion application and a compensation application, but I cannot say, on the basis of the material before me, that such applications are futile and lack any prospect of success.
As to the AFP's submission that the AFP is prejudiced by the applicant being granted leave to pursue his applications by reason of the seven years which have passed since the financial transactions relating to the applicant acquiring the property, preventing the AFP from being able to test the evidence, I note there are some bank records which had been produced in evidence. I accept that the AFP's ability to test the evidence around those transactions may be imperfect, but I am not persuaded that that would be so unfair to the AFP that the applicant should not be granted leave to pursue his applications.
I am not persuaded that because the applicant may have a claim in negligence against his previous solicitors, that he should not be granted leave to pursue the relief provided under the Act.
Therefore I make the following orders: 1. Pursuant to s 74 of the Proceeds of Crime Act 2002 (Cth) I give leave to Bilal Allam to apply for an order under s 73 of the Act. 2. Pursuant to s 78 of the Act I give leave to Bilal Allam to make an application under s 77 of the Act. 3. The parties' costs of the application are costs in the cause.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 15 July 2024

Criminal Code Act 1995(NSW)

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (8 paragraphs)

Parties

Legislation Cited (2)

Cases Cited (5)