International Finance Trust Co Ltd v New South Wales Crime Commission

EX TEMPORE Judgment 1HIS HONOUR: In this matter the plaintiff, who is the Commissioner of the Australian Federal Police, moves upon a summons that was filed in this Court on 23 January 2014. That summons seeks, in effect, six orders, but today order 5 is not sought and nor is order 6 (for costs) pressed today. 2In a nutshell what is sought is, first, a restraining order with regard to a very large amount of cash that was seized by the police by way of a search warrant. 3Secondly, a custody and control order that would simply permit that cash to be deposited in a place of security where it could earn interest. 4Thirdly and fourthly, examination orders against a Mr Ha and a lady who is known by two names, it seems, and to whom I shall refer as Ms Mu. 5The application has been brought ex parte, which is not unusual, in particular with regard to restraining orders. 6The chronological background of the matter can be succinctly summarised as follows, and I draw this summary from two affidavits of Michael Brian McNiven and also the very helpful submissions of the solicitor for the plaintiff, whose assertions about matters of fact and law I accept without reservation. 7In May 2013 the Australian Federal Police ("AFP") commenced an investigation into large-scale drug dealing. On 4 June 2013 a Mr Lam sought to obtain the possession of a package from overseas in highly suspicious circumstances. Mr Lam was arrested on 13 July 2013 and charged with drug offences. By that stage the package had been returned to its sender. 8Meanwhile, on 2 August 2013 the AFP executed a search warrant at various premises, including a home in Eastwood, and on a BMW that was located there. There the AFP found small pieces of foil, some small plastic wrappers, and also a collection of tools. It is well known that street deals of prohibited drugs are very often marketed in small foils and in small pieces of plastic. 9Persons were arrested at those premises, including a Mr Li, who said that he resided at an address in Abbotsford. The AFP executed a search warrant at that address as well, and present there was Mr Ha (who is the subject of orders 3 and 4) and also Ms Mu (who is the subject as well of orders 3 and 4). 10Police found, amongst other things, about $677,000 cash at those premises, most of which was concealed in a bed head; a noteworthy number of mobile phones (namely 28); a large number of SIM cards; a machine colloquially known as a "bug sweeper"; some electronic scales; some zip lock bags; a pipe that perhaps could be used for smoking amphetamines in their crystal form; some white crystals that turned out to be methylamphetamine and heroin; and a .22 semi-automatic handgun with a suppressor. The handgun had been modified or manufactured to receive a suppressor. 11Meanwhile, an individual by the name of Mr Hui turned up. Without going into the detail of what was found on his person, it included heroin and "ice", a reasonably substantial amount of cash, and eight mobile phones. 12It could be said, in short, that the home at Abbotsford was replete with evidence of dealing prohibited drugs on a large scale. 13It is also submitted that there is evidence to connect Mr Ha to the bedroom and indeed Ms Mu. 14It is also said that Mr Ha and Ms Mu have not filed income tax returns for many years, and it seems that they have no source of income that could remotely explain the presence of almost $680,000 cash in a bedroom with which they were associated. 15To complete the evidentiary background, it seems that Mr Ha is in custody in Victoria, that the plaintiff is well aware of the solicitor who appears for him, and that Ms Mu, if she has not disappeared, has certainly become difficult to locate. 16Finally, it is the case that, although Mr Ha was originally charged with an offence pursuant to s 400.4 of the Criminal Code Act 1995 (Cth) of dealing with proceeds of crime, along with a firearms offence, on 22 January 2014 all charges against him were discontinued. 17It is convenient to discuss the orders sought in their numerical order. First, order 1 seeks a restraining order with regard to the sum of cash which, to be clear, is not in the possession of Mr Ha or elsewhere in the community. It is completely in the possession of the plaintiff. The solicitor for the plaintiff has taken me to s 19 of the Proceeds of Crime Act 2002 (Cth) (to which I shall subsequently refer as "the Act"). She has invited my attention to the fact that, pursuant to s 19(1), Parliament has seen fit to create a situation whereby I must make an order if I am satisfied of certain things. 18The first is that a "proceeds of crime authority" has applied for the order. Without troubling myself with regard to the Dictionary in s 338 of the Act, I accept the assurance of the solicitor for the plaintiff that her client is indeed such an authority. 19I also need to be satisfied, before the mandatory order is made, that there are reasonable grounds to suspect that the property the subject of the restraining order is the proceeds of an indictable offence. In all of the circumstances that I have outlined I certainly have reached that point of satisfaction. 20It is also a requirement of the mandatory making of the order that the application must be supported by an affidavit of an "authorised officer", and again it is covered in the affidavit, and I accept, that Mr McNiven is indeed an authorised officer as defined. 21It is the case that Mr McNiven must state that he suspects either that the property is the proceeds of the offence in question or, if the offence to which the order relates is a serious offence, that the property is an instrument of that offence. Mr McNiven must include the grounds on which he holds that suspicion. It is clear from the last paragraph of the first affidavit that Mr McNiven has certainly done all of those things. 22Finally, I need to be satisfied that Mr McNiven holds that suspicion on reasonable grounds. Again, I would have thought that one would have little difficulty in coming to that view. 23I have referred to the mandatory aspect of s 19(1). It can be seen from s 19(3) that there is a discretion to refuse to make a restraining order, but only in relation to an offence that is not a "serious offence". Again, I accept the submission of the solicitor for the plaintiff that what is under discussion is indeed a serious offence, and accordingly the discretion in s 19(3) does not apply. 24It seems to me that the application for a restraining order is very soundly based, both in law and on the evidence, and it is not that that I have a concern about. Rather, it is the fact that the order is being sought ex parte. I emphasize that this is not the usual case in which the property to be restrained is in the possession of the putative defendant to any such application, with the result that he or she, if given notice of the application, could promptly dispose of it or otherwise defeat any restraining order made by this court. Rather, in stark contrast, the cash to which I have referred is completely in the possession of the AFP. 25The solicitor for the plaintiff has invited my attention to s 26 of the Act which is headed "Notice of Application" and, in particular, to the seemingly mandatory aspect of s 26(4): namely, I must consider the application even though notice has not been given to a person who may have an interest in the property, if the plaintiff requests me to do so. That has certainly occurred here. 26Having said that, one's mind turns immediately to s 26(5), which speaks in effect of, before final orders being made, the court directing the plaintiff to give notice of the application to a specified person or class of persons. 27So that it seems to me that the combined effect of those two subsections is that the matter must commence ex parte, but it may be that it need not conclude ex parte. 28As I have said, this is not a case where the property could be disposed of by a miscreant in order to defeat orders of the court. Although the plaintiff has had difficulty finding Ms Mu, that is not the case with regard to Mr Ha. It is perfectly clear where he is; namely, in a gaol in Victoria, and it is also well known that a solicitor based in Sydney acts for him. 29With regard to order 1, the solicitor for the plaintiff has said, that realistically, if the order were made today, if they wish to complain about it both Mr Ha or Ms Mu, or anyone else, could come to court and attack the order and have it varied or even dissolved. 30It is also said that the plaintiff has made efforts to find Ms Mu and simply has been unable to do so. 31It is also said that it is noteworthy that no one has seen fit, even though charges have been dropped against Mr Ha, to apply to the plaintiff in order to seek to have the cash returned to them. 32Finally it is said that, when one considers all of the evidence, one would have very little difficulty in being satisfied that this $680,000 cash is the proceeds of very substantial drug dealing or, at the very least, is an instrument of the crime of dealing in proceeds of crime. 33I think all of those arguments are soundly based and have force. Nevertheless, one has a natural reticence in making orders ex parte with regard to property in which a person may claim an interest, unless it is soundly necessary to proceed ex parte: International Finance Trust Co Ltd v New South Wales Crime Commission [2009] HCA 49; 84 ALJR 31. 34In the circumstances of this case, in light of the secure location of the money, and in light of the fact that no doubt if an application were made by any person to seek to establish ownership and have the money given to them by the AFP, the AFP would have the right to restore this matter to the list with great urgency, I am not inclined to make order one ex parte. 35What I propose in the alternative, pursuant to s 26(5) of the Act, is to direct the plaintiff to take steps to inform Mr Ha and Ms Mu of these proceedings. As against the possibility that I would come to that view, the solicitor for the plaintiff kindly drafted an order that I propose to adopt with minor emendations. 36Turning to order 2, that is an order, as I have said, that is really in the interests of security of the sum, and also of course earning interest on it, which could be said is in the interests of whomever it is who actually "owns" that money. It seems to be an order based soundly in common sense, but I think that that order and its final determination should follow upon the determination of order 1. And in any event, as I understand the submission of the solicitor for the plaintiff, order 2 cannot be determined until order 1 is determined, in that the custody and control order is ancillary to a restraining order. In short, I propose to make the same order with regard to order 2. 37Finally, with regard to orders 3 and 4 it was explained to me today that in truth the AFP does not have a plan urgently to examine Mr Ha and Ms Mu about their affairs. In effect those orders are sought for abundant caution as against the possibility that the need to do that may arise in the future. It was also said that, if those orders were made by me today, again if Mr Ha or Ms Mu objected to them, they could come to court, seek to reagitate them and, if successful, have them dissolved. 38Finally, the point was made that, although there has been an important debate in the High Court of Australia recently in the cases of X7 v Australian Crime Commission [2013] HCA 29 and Lee v NSW Crime Commission [2013] HCA 39, that debate is really not apposite here. That is because neither Mr Ha or Ms Mu at this stage is facing a criminal offence, so that the difficult questions that arise with regard to balancing the rights of an authority to a compulsory examination with the rights of an accused person to a fair trial simply do not arise. 39Again I accept the force of those submissions. Nevertheless, I am very loath to make orders empowering the plaintiff to examine Mr Ha or Ms Mu compulsorily without hearing from either of those persons, unless it is soundly necessary to do so by proceeding ex parte. As I have said, the solicitor for the plaintiff has accepted that there is no great urgency about those aspects. Indeed, as things stand currently, Ms Mu cannot be located in the community and it is not actually the view of her client that an examination will be proceeded with, even with regard to Mr Ha. 40In all of those circumstances, and in particular my reticence about making significant orders ex parte against individuals unless it is absolutely essential to do so, I do not propose to make orders 3 and 4 today. 41As I have said, orders 5 and 6 are not pressed today, and do not need to be discussed further. 42In the alternative to making the orders sought, I think the appropriate course is that, pursuant to s 26(5) of the Act, I direct that the plaintiff give notice of the application to two specified persons; namely, Mr Ha and Ms Mu. 43With regard to Ms Mu, I am proposing that the plaintiff simply be required to demonstrate on the next occasion that reasonably practical steps have been taken to give her notice. With regard to Mr Ha, accepting as I do the assurance of the solicitor for the plaintiff that Mr Paul Hardin of Hardinlaw is his solicitor, I would simply propose that Mr Hardin be promptly given notice of the application. 44The proposal of the solicitor for the plaintiff is that the matter be stood over for two weeks. I respectfully accept that submission. And it should return in the first instance to the Registrar's list, because it may be that there has been some resolution of the matter, or that the matter is not ready on the next occasion to go immediately in front of the Duty Judge. 45In this matter, I make the following orders: (1)Pursuant to s 26(5) of the Proceeds of Crime Act 2002 (Cth), the Commissioner of the Australian Federal Police is directed to give notice of the current application to the specified person, Ken Khanh Phong Ha, by electronically serving a copy of the application and all affidavits filed in court on the following address: Mr Paul Hardin, solicitor, at Hardinlaw, Sydney within two days of today's date. (2)Pursuant to the same section, the Commissioner of the Australian Federal Police is directed to take all reasonably practical steps to give notice of the application to a specified person, namely, Ms Fei Mu. (3)The matter is stood over for hearing on Tuesday 25 February 2014. (4)The matter is to be initially in the Registrar's list. (5)The matter is not to be regarded as part heard before me.