HRISS v NEW SOUTH WALES CRIME COMMISSION

• 4 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION BROWNIE AJ Monday, 4 February 2002 70670/92 EMMANUEL HRISS v NEW SOUTH WALES CRIME COMMISSION JUDGMENT 1 HIS HONOUR: By Notice of Motion dated 23 August 1993, filed the next day, Mr Emmanuel Hriss sought certain orders under the Criminal Assets Recovery Act 1990. That motion is still pending and the New South Wales Crime Commission, by Amended Notice of Motion filed in Court today, seeks an order under Pt 13 r 5 dismissing Mr Hriss' motion. It is not in dispute that in order to succeed on this motion the Commission needs to establish its case to the standard discussed in such cases as General Steel Industries Inc v Commissioner for Railways, New South Wales (1964) 112 CLR 125. 2 There are two separate transactions involved, which raise distinct questions. One transaction concerns some land at Fine Flower near Grafton. This was a rural property apparently owned by a company called Texas Stud Pty Limited. 3 The Commission brought the present proceedings against Mr Hriss' son Michael Goldstein and the latter's wife. On 25 February 1993 orders were made, by consent, for the forfeiture of various items of property. Of immediate relevance, an order was made by consent as between the Commission and Mr and Mrs Goldstein, and with the concurrence of Texas Stud Pty Limited, for the forfeiture of the interest of Texas Stud Pty Limited in the property in question. 4 Mr Hriss now seeks the making of an exclusion order within the meaning of s25 of the Act. The Commission contends, firstly, that Mr Hriss has not shown that he has any interest in the property and, secondly, that even if he did have an interest in the property, he has no standing to make the application he has made, because the forfeiture order was not an order for the forfeiture of his interest, as distinct from an order for the forfeiture of the interest of Texas Stud Pty Limited. 5 Mr Hriss contends that, at least arguably, for the purposes of the Commission's present motion, he had an equitable interest in the land. What evidence there is on this question comes from para 5 of the affidavit of Mr Hriss of 19 August 1993. 6 Mr Hriss says that his son told him of the son's plans to purchase a farm to grow olive trees. Mr Hriss went to Greece and there spoke to a nephew, Mr Konstantoudakis, who offered to assist "you" (Mr Hriss) with a loan. Later on Mr Goldstein located the property in question and told Mr Hriss that he wanted to go ahead and buy it. Mr Hriss went back to Greece again and spoke to Mr Konstantoudakis again. The latter then agreed to lend Mr Hriss $210,000. 7 Next, Mr Hriss entered into a further loan agreement with his son, the son acting by an attorney in Greece. This latter loan agreement was reduced to writing. It is in the Greek language but a translation is in evidence as exhibit 1. It is a simple loan agreement providing for the loan of $210,000 and some odd cents, the loan to be repaid in a year's time. It does not mention the property in question at all. 8 Mr Hriss said that Mr Konstantoudakis gave him (Mr Hriss) three cheques totalling $210,000. Mr Hriss brought those cheques back to Australia and gave them to his son. He says that he believes that his son deposited the cheques into the son's bank account and that the son used the proceeds to complete the purchase of the land in question. Then Mr Hriss says:- "After completion, I instructed my solicitor to lodge a caveat on the title in order to protect my interest and my obligations to my nephew." 9 The hearing proceeded on the convention that a caveat was lodged but later withdrawn. 10 Mr Hriss also said that his son told him that he would be able to plant 20,000 to 30,000 olive trees on the property and that he (Mr Hriss) visited the property on two occasions, once before and once after the purchase. 11 On this evidence the Commission contends that there is no evidence that Mr Hriss had any interest in the property. Section 7 of the Act defines the expression "interest in property". Perhaps the most significant part of that definition for present purposes is that set out in sub-s (4). That sub-section reads:- "(4) In this section: interest , in relation to property, means: (a) a legal or equitable estate or interest in the property, or (b) a right, power or privilege in connection with the property, whether present or future and whether vested or contingent." 12 It seems to me that there is no evidence in the material now before me that Mr Hriss had any interest in the property as defined in s 7. Assuming that he lodged a caveat claiming some interest, and assuming that he thought he had some interest, the evidence does not establish that he did have such an interest. At best from his perspective, he borrowed money from his nephew and then lent the same amount of money to his son and his son used the money to buy the land, but that does not mean that Mr Hriss had an interest in the land. It would, of course, have been quite different if the evidence disclosed that the son gave, or agreed to give a mortgage or some other form of security for the land but there is just no evidence of that. 13 The Commission takes a second point. It says that Mr Hriss has no standing to make the application under s 25, because the order made for the forfeiture of the interest was an order for the forfeiture of the interest held by Texas Stud Pty Limited and not the interest of Mr Hriss. Decisions such as New South Wales Crime Commission v Young (10 August 1992 Badgery-Parker J, unreported) and Black Yhlans Inc v State of New South Wales (5 December 1996 McInerney J, unreported) seem to me to support that proposition. 14 That is both grounds of attack made by the Commission upon Mr Hriss' application in relation to the property at Fine Flower succeed. 15 Mr Hriss moves separately for an order setting aside two orders made in proceedings No 70562/90. This is procedurally irregular but no point was taken about this and I proceed on the basis that s 81 of the Supreme Court Act covers the situation. 16 Mr Goldstein was apparently arrested but an order was made for his release on bail on terms that a surety pay $200,000 into court. Mr Hriss contacted Mr Konstantoudakis again and Mr Konstantoudakis offered to assist. In the meantime, it seems that a Mr Thomakakis agreed to act as surety. 17 It was then arranged between Mr Hriss and Mr Thomakakis that if Mr Thomakakis paid the $200,000 in question into court, Mr Hriss would pay the same amount of money into Mr Thomakakis' bank account. Mr Hriss said that he told Mr Thomakakis that he would do this "so that you can draw on same to live off until the bail is refunded." The grammar used was imperfect but the meaning is plain. 18 After that, Mr Hriss arranged for Mr Konstantoudakis to pay $200,000 direct into the bank account of Mr Thomakakis and his wife. I was told, without objection, that Mr Goldstein absconded and the money paid by Mr Thomakakis by way of security was forfeited. The position now appears to be that Mr Konstantoudakis, at the request of Mr Hriss, lent $200,000 to Mr Thomakakis. 19 In his affidavit Mr Hriss says: "I say that this sum of $200,000 is owed by me to my nephew Michael Goldstein." That was not objected to, except that the Commission said that the whole affidavit was irrelevant, and Mr Hriss now relies on the statement being evidence. In truth, it seems to me it is no more than an assertion, i.e. an assertion of a conclusion of law, or mixed fact and law that can rise no higher than the supporting evidence. 20 Mr Hriss may well owe Mr Konstantoudakis the money at law or in honour, but the critical question is whether Mr Hriss had an interest in the money forfeited, and the precise order made was that:- "The interest in property (within the meaning of 'interest in property' defined in s 7 of the Act) of Mario Thomakakis in the property described in [a particular schedule] be forfeited to and vest in the Crown."

21 That schedule referred to said:- "$200,000 which was deposited into a term deposit account in the St George Building Society Limited in the names of M and T Thomakakis on 13 February 1992 by way of a bank cheque No 116610 drawn on 6 February 1992 on the Drapetsona Branch No 651 of the National Bank of Greece in favour of Mario Thomakakis."

22 If one analyses the transaction, Mr Hriss requested Mr Konstantoudakis to pay the money into the bank account of Mr Thomakakis in circumstances where Mr Thomakakis had already paid the same amount of money into court. Mr Hriss and Mr Konstantoudakis acted as they did in order that Mr Thomakakis might have funds to live on, replacing the funds that he had used to enable Mr Goldstein to be released on bail. It was apparently regarded by all concerned as a loan to Mr Thomakakis, the expectation of all concerned being that Mr Goldstein would answer his bail, the money paid by way of security would be repaid to Mr Thomakakis and Mr Thomakakis would then repay Mr Konstantoudakis either directly or indirectly through Mr Hriss; but, in the meantime, it seems quite clear the money in the bank account of Mr and Mrs Thomakakis was their money - they and only they had an interest in the money. 23 I consider that the Commission succeeds on this basis in respect of this money. Equally, for the reasons given in relation to the Fine Flower property, the Commission succeeds in relation to the money in the bank account on the question of standing, i.e. Mr Hriss lacks the necessary standing to make an application under s 25. The forfeiture order in question related to the forfeiture of an interest other than the interest of Mr Hriss. 24 Also, in relation to the question of the money, the Commission takes a third point. It says that Mr Hriss was a stranger to the proceedings where the order was made and that he has not demonstrated any basis upon which he, a stranger to that litigation, is entitled to have an order of the Court duly and formally entered set aside. In the circumstances, I need not consider this contention. 25 I make orders in terms of paras 1 and 2 of the amended notice of motion filed today.

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