HEADNOTE
[This headnote is not to be read as part of the judgment]
This case concerned an application for leave to appeal from the decision of Rothman J (the primary judge) who dismissed an application by Mr Yoo Tak Gwe and his wife Ms Tan Soi Hoang (Ms Hoang) (together, the Applicants) for orders pursuant to ss 29 and 31 of the Proceeds of Crime Act 2002 (Cth) (the Act) that certain property be excluded from freezing orders which had been made ex parte on 9 July 2015 following an application to the Supreme Court of New South Wales by the Commissioner of the Australian Federal Police (the Commissioner), pursuant to s 19 of the Act.
The relevant property was described in the freezing order as including five Westpac bank accounts and three parcels of real property located in Zetland, NSW, which were jointly purchased by the Applicants who were residents of Indonesia. The freezing orders included an order that the Applicants both be examined pursuant to s 180 of the Act, with those examinations taking place in July 2015.
The Applicants did not contest that there was a basis for the ex parte freezing orders because there had been deposits that disclosed "structured payments" contrary to s 142 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (the AML Act). As the primary judge found, deposits into the relevant Westpac accounts had been structured by two Indonesian money lenders in such a way as to avoid the $10,000 AUD limit on the deposit of cash before reporting requirements operated, and that the Zetland properties were purchased at least in part with money from those accounts. Those properties were thus purchased with money that was part of a scheme in which the Applicants received structured deposits.
However, the Applicants contended that the property the subject of the freezing orders should be excluded from the freezing orders as their interest in the property was neither "proceeds of an offence" nor an "instrument of an offence", pursuant to s 29(2)(b) of the Act. This was because, they contended, they had provided sufficient consideration for the property, and that they neither knew nor had any reasonable suspicion that the property was "proceeds of an offence", pursuant to s 330(4)(a) of the Act. Ms Hoang who could not read English gave evidence that she had sole responsibility over the Applicants' financial affairs, and that she did not look at any individual transactions disclosed within her Westpac bank statements, but only the total balance on her bank statements or on the internet banking platform to which she had electronic access.
The primary judge dismissed the Applicants' notice of motion with costs. Relevantly for present purposes, the primary judge held that the evidence was "uncontroverted and unchallenged' that the Applicants did not know that the property had been transferred in a manner which resulted in the funds being the proceeds or an instrument of an offence. However, the primary judge held that the Applicants (on whom the onus lay under s 317 of the Act) had not established that they had acquired the relevant property "in circumstances that would not arouse a reasonable suspicion", within the meaning of s 330(4)(a) of the Act.
The principal issue that arose on appeal was whether the primary judge erred in not holding that the frozen property was acquired by the Applicants in circumstances that would not arouse a reasonable suspicion that the property was proceeds of an offence.
The Court held (Bell P, Bathurst CJ and Emmett AJA agreeing), allowing the appeal:
1. The primary judge erred in holding that the Applicants had not acquired the relevant property in circumstances that would not arouse a reasonable suspicion within the meaning of s 330(4)(a) of the Act. It being accepted that Ms Hoang had no actual knowledge of the structured nature of payments made into the Westpac Choice account and, in the absence of cross-examination, there was no basis for the primary judge to reject the consistent evidence Ms Hoang had given that all she was ever aware of was the balance of the bank account, and not its underlying activity, or to find that she was aware of circumstances that would arouse a reasonable suspicion that the property was proceeds of an offence: [1] (Bathurst CJ); [76] (Bell P); [101] (Emmett AJA).
2. An assessment of whether or not, for the purposes of s 330(4)(a) of the Act, property is acquired by a third party in "circumstances that would not arouse a reasonable suspicion that the property was proceeds of an offence", whilst to be made objectively, must nevertheless be undertaken in light of the actual knowledge of the party seeking the exclusion order: [1] (Bathurst CJ); [67] (Bell P); [101] (Emmett AJA).
Director of Public Prosecutions v Le (2007) 17 VR 352; [2007] VSCA 18; Lordianto v Commissioner of the Australian Federal Police (2019) 266 CLR 273; [2019] HCA 39, applied.
1. Inferences from the evidence for which the Commission contended were required to be put to Ms Hoang in cross-examination as a matter of fairness: [1] (Bathurst CJ); [83] (Bell P); [101] (Emmett AJA).
Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361; [2011] HCA 11; Browne v Dunn (1893) 6 R 67; [1893] 1 WLUK 44; Precision Plastics Pty Limited v Demir (1975) 132 CLR 362; [1975] HCA 27; Allied Pastoral Holdings Pty Ltd v Commissioner of Taxation [1983] 1 NSWLR 1; (1983) 70 FLR 447, applied.
1. The basis on which the primary judge found that the Applicants had not discharged their onus involved an exercise in speculation based upon an example that had no foundation in the facts: [1] (Bathurst CJ); [87] (Bell P); [101] (Emmett AJA).
2. As the Applicants did not have actual knowledge that the property the subject of the freezing orders constituted "proceeds of an offence", and given that sufficient consideration had been provided in relation to the funds which were translated into the frozen property, an exclusion order should have been made in relation to the property: [1] (Bathurst CJ); [90]-[91] (Bell P); [101] (Emmett AJA).