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[2026] NSWSC 861
Supreme Court of NSW
2026-07-21
Elkaim AJ
Original judgment source is linked above.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: New South Wales Crime Commission v Carnese (No 2) [2026] NSWSC 861
Hearing dates: 15 July 2026
Date of orders: 21 July 2026
Decision date: 21 July 2026
Jurisdiction: Common Law
Before: Elkaim AJ
Decision: 1. The individual persons listed in Order 1 of the orders sought in the notice of motion filed on 5 March 2026 are joined as defendants to the proceedings.
2. The person described as the Carnesi Family Trust may also be joined as a defendant provided it is properly described and acts through a trustee.
3. Orders (1) and (2) above are conditional upon the following:
(a) The defendants joined by Orders (1) and (2) are to file a cross-claim which includes the seeking of relief under s 25 of the Criminal Assets Recovery Act 1990 (NSW).
(b) The cross-claim is to be filed and served within 28 days of the date of these Orders.
4. The costs of the notice of motion filed on 5 March 2026 are to be costs in the cause.
Catchwords: CIVIL PROCEDURE — application to join third parties as defendants — where applicants assert a beneficial interest in seized gold and silver bullion — whether s 25 of the Criminal Assets Recovery Act 1990 (NSW) precludes joinder — necessity of joinder — whether forfeiture orders would directly affect the applicants’ rights or liabilities
Legislation Cited: Aboriginal Land Rights Act 1983 (NSW), s 36
Civil Procedure Act 2005 (NSW), s 56
Criminal Assets Recovery Act 1990 (NSW), ss 5, 24, 25, 26
Uniform Civil Procedure Rules 2005 (NSW), rr 6.24, 6.27
Cases Cited: Kelly v Mina [2014] NSWCA 9
New South Wales Crime Commission v Ollis (2006) 65 NSWLR 478; [2006] NSWCA 76
New South Wales Crime Commission v Tran [2015] NSWSC 542
News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410; [1996] FCA 870
Oliver v Renwick Street Pty Ltd; Scahill v Parker [2024] NSWSC 346
Seller v Jones [2014] NSWCA 19
Tweed Shire Council v Minister Administering the Crown Lands Act (1996) 92 LGERA 80
Category: Procedural rulings
Parties: New South Wales Crime Commission (Plaintiff)
Mario Carnese (First Defendant)
Jung Im Lee (Second Defendant)
Representation: Counsel:
M Pruscino (Plaintiff)
K Lloyd (Defendant)
Solicitors:
New South Wales Crime Commission (Plaintiff)
McGirr & Associates (Defendants)
William O'Brien & Ross Hudson Solicitors (Proposed Defendants)
File Number(s): 2020/284347
Publication restriction: No
These proceedings started with the filing of a summons on 1 October 2020. The plaintiff is the New South Wales Crime Commission. There are two defendants, Mario Carnese and Jung Im Lee.
In short, the summons seeks orders under the Criminal Assets Recovery Act 1990 (NSW) (the CAR Act), and in particular the forfeiture of certain property that had been seized or restrained by the plaintiff.
The two defendants were arrested in September 2020 in relation to drug offences. They were in possession of cash, and gold and silver bullion. The first defendant was convicted on 2 December 2022 of serious drug offences, as well as dealing with an amount of cash being the proceeds of crime. The first defendant was sentenced to a term of imprisonment.
The criminal proceedings against the second defendant were abandoned.
Despite the age of the proceedings, I was told that they do not yet have a hearing date. It is also apparent that the current defendants do not intend to defend the orders sought against them. They are not legally represented.
On 5 March 2026, a notice of motion was filed on behalf of 10 persons and one entity (a trust) seeking to be joined as defendants to the summons. All of the applicants are represented by the same solicitor.
The application for joinder is made pursuant to rr 6.24 and 6.27 of the Uniform Civil Procedure Rules 2005 (NSW) (the UCPR).
The orders are opposed by the plaintiff.
The applicants relied upon the following affidavits:
Christopher Cole dated 15 January 2026.
Rocco Carnesi dated 26 February 2025.
Maria Carnesi dated 26 February 2025.
Christopher Cole dated 14 July 2026.
Mr Cole is the applicants’ solicitor. Rocco Carnesi and Maria Carnesi are two of the applicants. I understand Rocco Carnesi is the brother of the first defendant (Mario Carnese). Maria Carnesi is their mother.
Rocco and Maria Carnesi’s affidavits say that in March 2020 the first defendant purchased gold bullion on behalf of the family for $100,000. This was during the COVID-19 pandemic and was seen as a protection against uncertain times. A further $10,000 came later from another of the applicants, Antonina Spinella (or perhaps from her daughter Zoe).
In giving the money to Mario, the donors of the funds requested that the gold bullion be purchased on behalf of family members (children and grandchildren). The applicants all fall within this category.
Gold and silver bullion was purchased in Sydney and apparently kept by the current defendants in home safes. Rocco, who lived in Darwin, could not collect the bullion because of COVID-19 travel restrictions.
All of the bullion was seized by the police and is now held by the NSW Trustee and Guardian pending the outcome of the summons (the forfeiture proceedings).
In short, the applicants assert they have a beneficial interest in the bullion.
The plaintiff does not reject or concede the existence of a beneficial interest being held by the applicants. Rather the plaintiff says rr 6.24 and 6.27 are not available to the applicants because these rules have been ousted by the CAR Act, and in particular by s 25. Section 25 states:
25 Exclusion of property from restraining order and assets forfeiture order
(1) If an assets forfeiture order—
(a) has been applied for but not made—a person whose interest in property might be subject to the order if made, or
(b) has been made—a person whose interest in property was forfeited by the order,
may apply to the Supreme Court for an order (in this section called an (exclusion order) excluding the interest from the operation of the assets forfeiture order or any relevant restraining order.
(2) The Supreme Court must not make the exclusion order applied for unless it is proved that it is more probable than not that—
(a) in the case of an order relating to fraudulently acquired property—the interest in property to which the application relates is not fraudulently acquired property or is not illegally acquired property, or
(b) in any other case—the interest in property to which the application relates is not illegally acquired property.
(3) An exclusion order must declare the nature and extent of the interest in property to which it relates and—
(a) if the interest has been forfeited to the Crown, but not disposed of—must require the Crown to vest the interest in the claimant, or
(b) if the interest has been disposed of—must require payment by the Crown to the claimant of an amount declared by the Supreme Court to be the value, as at the date of the order, of the former interest of the claimant.
(3A) Despite subsections (1)–(3), the Supreme Court is not to make an exclusion order if the Supreme Court finds that it is more probable than not that the property to which the application for the assets forfeiture order, or the assets forfeiture order, relates is serious crime use property or an interest in property that is capable of being the subject of a substituted serious crime use property declaration.
(4) After an assets forfeiture order has been made, an application for an exclusion order may not be made by a person—
(a) if the person was given notice of the proceedings that led to the relevant restraining order or assets forfeiture order—unless it is made within 6 months after the assets forfeiture order took effect and leave to apply has been granted by the Supreme Court, or
(b) in any other case—unless it is made within 6 months after the assets forfeiture order took effect or the Supreme Court has granted leave to apply after that time.
(5) Notice of an application for an exclusion order is to be given to the Commission and any other person required by the regulations to be given notice and a person entitled to be given notice may appear, and adduce evidence, at the hearing of the application.
(6) The applicant for an exclusion order must give the Commission notice of the grounds on which the exclusion order is sought.
(7) If the Commission proposes to contest an application for an exclusion order, it must give the applicant notice of the grounds on which the application is to be contested.
In such a case, the Commission is not required to give the applicant notice of those grounds, and the application must not be heard, until the Commission has had a reasonable opportunity to conduct an examination of the applicant under section 12 or 31D.
(8) An application may be made by a person under this section whether or not the person has also made an application under section 10C and whether or not any such application is successful.
Section 25(1)(a) is applicable here. There is no dispute that the applicants have not made a s 25 application. However the applicants say they are content to make such an application, but it should not be a bar to the present application to have them joined as defendants to the summons. To the contrary being joined to the proceedings will facilitate the making of a s 25 application.
My initial reaction was to give them leave to be joined but made conditional on them making a s 25 application within a specified time. The applicants seemed content with this course, but the plaintiff opposed such an order because it said joinder under the UCPR was not available to the applicants. They were restricted to their rights under s 25. This then became the determinative question in the motion.
The plaintiff submitted that the UCPR rules were ousted by s 25, and that s 25 removed the applicants’ standing to rely upon the rules. I will return to the standing issue below.
The plaintiff started with the submission that the general rule permitting joinder does not apply if the statute prescribes permissible parties to the proceedings, directing me to Tweed Shire Council v Minister A**dministering the Crown Lands Act (1996) 92 LGERA 80 at 83:
“There are many reasons, in my opinion, why this sub-rule does not apply in the present case. The primary one is that if, as I think, the statute provides that there are only two parties to an appeal under the Land Rights Act, the statute itself makes the sub-rule inapplicable. Whilst there is a general rule that all interested parties should be joined in proceedings (Montgomery v Foy, Morgan & Co [1895] 2 QB 321 at 324; John Cooke & Co Pty Ltd v Commonwealth (1922) 31 CLR 394 at 411) that is not a universal rule. Otherwise the role [sic] in Tasker v Small (1837) 3 My and Cr 63, would not exist. In the present case, not only is the sub-rule ousted by an Act of Parliament, but also the appellant has no proprietary right which could be affected, no order is sought against it, its intervention could not be said to be ‘necessary’ in order to obtain a result, and no suggestion has been made that any non-proprietary right of the appellant would be affected, or that it would suffer any disadvantage if it were not joined.”
“The statutory scheme contained in s 36(5), (5A), (6) and (7) – which I have endeavoured to summarise envisages a gladiatorial combat between two contestants, the land council and the Minister, nobody else.”
The just quoted passage immediately raises the distinction between the legislation in Tweed (relating to the ability of Aboriginal Land Councils to make land claims under s 36 of the Aboriginal Land R**ights Act 1983 (NSW)) and the CAR Act, in that the latter Act, through s 25, is an invitation at large to any person to make an application if that person believes that he or she falls within the bounds of s 25. The CAR Act is not restricted to combat between only two contestants. Theoretically there could be any number of contestants.
The next case relied upon by the plaintiff was New South Wales Crime Commission v Ollis (2006) 65 NSWLR 478; [2006] NSWCA 76, in particular at [35]:
“It is also not consistent with the scheme of the Act that the defendants can apply, relying on s 12(1)(a), for variation of the restraining orders in the alternative to applying for exclusion orders. If the deletions in orders 4 and 7 of their amended notice of motion amount to exclusion from the restraining orders of some of their interests in property, the regime of s 25 of the Act requires that they give notice to the Commission of the application and of the grounds on which the order is sought, and the application must not be heard until the Commission has had a reasonable opportunity to conduct examinations of the defendants under s 12(1); and it must be proved that the interests in property were not illegally acquired property. This may be thought to bear hard on the defendants, but the Act is drastic in its operation, see as to the analogous Proceeds of Crime Ac**t (Cth), Director of Public Prosecutions v Toro-Martinez (1993) 33 NSWLR 82 esp at 85-88. Section 25 cannot be circumvented by resort to the ancillary s 12(1)(a).”
The plaintiff pointed to the exclusionary nature of s 25 which cannot be circumvented through s 12. The “drastic” operation of the CAR Act supported the submission that s 25 was the only path available to the applicants. I note that in Ollis the defendants were already parties to the litigation.
Both parties referred me to the decision of Campbell J in New South Wales Crime Commission v Tran [2015] NSWSC 542. The plaintiff thought [17] was important:
“Section 62 (in its present form) was inserted on the enactment of the Crime Commission Act 2012 (NSW) (Schedule 5.2 [13]), the key phrase ‘all persons whose interests in property will be subject to an order’ employs language broadly similar to s 25(1)(a): ‘a persons whose interests in property might be subject to the order if made’ (s 25 deals with exclusion orders). This phrase and the expression ‘a person whose interest in property was forfeited by the order’ in s 25(1)(b) have been given a surprisingly narrow meaning by a series of cases in the Common Law Division, all decided before the significant amendments made by the Criminal Assets Recovery Amendment Act 2009. The various decisions were examined by Hall J in New South Wales Crime Commission v Keen [2005] NSWSC 1151; 64 NSWLR 515, discussed by Basten JA in New South Wales Crime Commission v Ollis [2006] NSWCA 76; 65 NSWLR 478 at 467 [26]; 497 [80] and 499 [88] (the other members of the Court Mason P and Giles JA did not refer to the issue). The issue is a significant one, for as Basten JA said in Liu v New South Wales Crime Commission [2007] NSWCA 347; 179 A Crime R 58 (in a judgment with which Mason P and Tobias JA agreed), (at [15]):
Whether there is any scope for the innocent owner to recover his or her property absent an application under s 25 … was the subject of consideration in [Ollis], which rejected the availability of such a process: at [35] (Giles JA, Mason P agreeing).
When Ollis was decided, the power to make an assets forfeiture order under s 22 of the Act was limited to ‘interest in property that is, or proposed to be, subject to a restraining order’. Section 22 was freed from that constraint by the 2009 amendments: s 22(1B).”
“Mr Bhalla also argued that the making of orders, perhaps with a deferral, would enable Mrs Tran to take proceedings in equity to establish whatever interest in the disputed property she claims to have. However, I am not convinced that is the appropriate procedure. That would suggest that anyone could circumvent the ‘drastic’ requirements of s 25 (Ollis 487 [35]). Where s 25 applies it is not enough that a person seeking an exclusion order establishes a competing interest in the property. Section 25(2) requires the applicant to prove, relevantly in the present case, that ‘the interest in property to which the application relates is not illegally acquired property’. The purposes of the Act would be, if not defeated, substantially undermined, if orders made could be challenged on general law principles that avoided rather faced up to the stringent requirements of the Act for excluding interests from the reach of forfeiture orders. In my view the only path available to Mrs Tran is to bring herself, if she can, within the exceptions created by the Act itself.”
“I do not wish to be taken as expressing any view on the strength of any application that Mrs Tran may bring: Cox v Journeaux [No2*]* [1935] HCA 48; 52 CLR 713 at 720. The matter came up for hearing before me relatively quickly and she has not had the opportunity of filing evidence to demonstrate that she has a fairly arguable case. As I have said, she should be given the opportunity of formulating one and doubtless those advising her will bear in mind the provisions of s 25(3) in formulating any cross-claim she proposes to bring.”
The significance of [40], and confirmed in the orders later made, is that the relevant defendant was directed to file a cross-claim seeking orders under ss 24, 25 or 26 of the CAR Act, suggesting that it was within the scope of the proceedings for the defendant to be both a defendant to the forfeiture proceedings and to have the capacity to bring a cross-claim.
It is to be noted that in Tran the person directed to file a cross-claim was already a defendant. This is a point of distinction with the present case. Nevertheless, Campbell J’s orders do provide a pathway for the applicants to first become defendants and then move on to file a s 25 cross-claim.
To some extent the fact that the defendant in Tran was already a party undermines the plaintiff’s reliance on Tran as being an obstacle to joinder.
I made a suggestion consistent with Campbell J’s approach to the parties which would involve the applicants being joined to the forfeiture proceedings and then being directed to file a cross-claim which included a s 25 application. As with my earlier suggestion, the plaintiff was content to follow the proposal, but the defendant resisted on the basis that the s 25 application could not arise from a joinder under the UCPR.
The applicants also referred me to Oliver v Renwick Street Pty Ltd; Scahill v Parker [2024] NSWSC 346 where Hmelnitsky J made a declaration that a defendant had an equitable interest in certain property notwithstanding that the property was the subject of a restraining order. The plaintiff said that little account should be taken of this judgment because the NSW Crime Commission was not a party and the issues were quite different. However, the relevant property was subject to restraining orders under the CAR Act and I do not see the absence of the plaintiff as a party as negating the value of his Honour’s decision.
The applicants also handed up a notice of motion and a number of consent judgments in which the plaintiff had consented to the joinder of a party under the UCPR. In the absence of background to each of the consent orders it is difficult to place a great deal of weight on the documents. Nevertheless, I note that no objection was taken to them being placed before me and they certainly contradict the plaintiff’s assertion that s 25 does not permit the use of the UCPR for the joinder of an extra party. I have marked the documents as MFI 1.
In my view the cases relied upon by the plaintiff do not oust the availability of the UCPR for the joinder of a party. Section 25 may well limit the avenues for relief open to a party once joined but that does not prevent a joinder.
The main point against my allowing a joinder is that the applicants will come into the proceedings without any standing because their only option is to proceed under s 25. I will deal with this point below but emphasise here that even if s 25 is the only avenue of relief open to the applicants, there is no reason why it should not be pursued by them as defendants.
The plaintiff’s point in relation to standing was, as I understood it, that if the applicants were joined as parties they would effectively be in a ‘no-man’s land’ where they would not have any basis to, for example, seek discovery or access to examinations of the current defendants, because absent a s 25 application they had no basis upon which to take part in the proceedings.
I think the point has some weight, and it is precisely the reason why I suggested that any joinder carry with it conditions as to the making of a s 25 application or, probably preferably, adopting the course taken by Campbell J, requiring the filing of a cross-claim which included a s 25 application.
I therefore intend to follow the path taken by Campbell J and make orders which will accommodate both the joinder of the applicants, and the requirement that they file cross-claims which include s 25 applications.
If the applicants extend the relief they seek beyond the s 25 applications, for example to include declarations such as those sought in Oliver, it will be up to the court deciding the matter to rule on the availability of any such relief.
I first of all note the following:
Section 5 of the CAR Act says that proceedings under the Act are civil and not criminal proceedings.
The Supreme Court has jurisdiction in respect of CAR Act proceedings. It follows that the procedural rules relevant to Supreme Court proceedings are applicable to CAR Act proceedings.
Proceedings under s 25 are for substantive relief. They do not purport to deal with procedural rules which would otherwise fall under the UCPR.
With this background, turning to r 6.24, the primary question dictating the applicability of the rule in this matter is whether the joinder of a party “is necessary to the determination of all matters in dispute in any proceedings.”
The forfeiture proceedings brought by the plaintiff are already on foot. If a s 25 application is made, the issues that arise will be intricately involved in the resolution of the forfeiture proceedings. One might speculate as to whether, if a s 25 application was made separately, it would logically need to be consolidated, or at least heard together with, the forfeiture proceedings.
The use of a cross-claim by Campbell J in Tran is consistent with the forfeiture and s 25 proceedings being heard together and is also consistent with the overriding purposes dictated by s 56 of the Civil Procedure Act 2005 (NSW).
There would be a substantial waste of costs to have separate proceedings, there would also be a waste of time as the s 25 proceedings catch up to the forfeiture proceedings, and then there would be a case management dilemma in having separate sets of proceedings in which there is an overlap of issues.
Sections 25(1)(b) and 25(4) both provide for a s 25 application being made after a forfeiture order, but it needs to be made within six months of the order and requires leave of the Supreme Court, another expensive and time-consuming exercise.
I am therefore of the view that, on the assumption I am correct about s 25 not ousting r 6.24, there should be a joinder of the applicants to the proceedings, although, as I have said, on specific conditions.
In reaching my conclusion I do not suggest that the applicants have a strong case under s 25, or otherwise, but only that they have passed the bar of establishing that they have an arguable case for the establishment of an interest within the bounds of s 25, and perhaps an entitlement to a declaration of the type made in Oliver.
The plaintiff submitted the exercise of the discretion should not involve an assessment of an arguable case. It said the correct test was that described in News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410 at 525:
“In our opinion, the question should be decided according to the test proposed by Lord Diplock. The test involves matters of degree, and ultimately judgment, having regard to the practical realities of the case, and the nature and value of the rights and liabilities of the third party which might be directly affected. The requirement that a third party's rights against, or liability to, any party to the proceedings be directly affected is an important qualification that recognises that many orders of a court are likely to affect other people to a greater or lesser extent. This is particularly so with remedies in the nature of an injunction: see Silktone Pty Ltd v Devreal Capital Pty Ltd (1990) 21 NSWLR 317, at 322, per Kirby P. The requirement of a direct effect on rights or liabilities differentiates the case where a person ought to be joined, from other cases where the effect of the order on non-parties can be characterised as only indirect or consequential.
Where, before trial, a question arises whether a necessary party has been joined, attention should be directed to the orders sought in the proceedings. It is the effect of the orders upon the third party that must be determined. The test is not whether the conduct of the third party is raised in the pleadings between the existing parties, or whether the third party is a party to a contract, the meaning or effect of which is pleaded as a matter relevant to the ascertainment of the rights between those parties. Where the question arises after final orders have been made in the proceedings, the inquiry must be directed to the orders actually made, or which, on appeal it is contended should be made: cf. Associated Grocers Co-operative Limited v. Hubbard Properties Pty Ltd (1986) 42 SASR 321 (S Ct SA/FC), at 341.”
Looked at on the basis of a “direct effect on the rights and liabilities” leads to the same result as the establishment of an arguable case. If the bullion is forfeited so that the applicants lose their right to share in the bullion that will amount to a direct effect on them.
As to the applicable test, to the extent that the parties differed, the Court of Appeal said in Seller v Jones [2014] NSWCA 19 at [49]-[50]:
“A person or entity should be joined as a party to litigation where orders might be made directly affecting that person or entity's rights and liabilities: State of Victoria v Sutton [1998] HCA 56; (1998) 195 CLR 291 (at [76] - [81]) per McHugh J; John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd [2010] HCA 19; (2010) 241 CLR 1 (at [131]); Australian Securities and Investments Commission (ASIC) v Lanepoint Enterprises Pty Ltd (recs and mgrs apptd) [2011] HCA 18; (2011) 244 CLR 1 (at [49]).
The threshold as to whether orders may have the effect referred to in [49] is not high. In State of Victoria v Sutton (at [77]) McHugh J said it was ‘the invariable practice of the courts to require a person [whose rights or interests may be affected by an order a court was asked to make] to be joined as a party if there is an arguable possibility that he or she may be affected’. The reason for that ‘practice’ is, at minimum, observance of the rules of natural justice and the desirability of avoiding a multiplicity of suits (cf s 63 Supreme Court Act 1970 (NSW), s 56 Civil Procedure Act) and inconsistent decisions: State of Victoria v Sutton (at [77]); Associated Grocers Co-operative Ltd v Hubbard Properties Pty Ltd (1986) 42 SASR 321 (at 341).”
I am satisfied that all of the individual applicants fall within the family on whose behalf the bullion was purchased.
As for the Carnesi Family Trust, I assume this is the trust mentioned by Mr Rocco Carnesi in para [11] of his affidavit dated 26 February 2025, and by Maria Carnesi in paras [5] and [7] of her affidavit of the same date. On this information I cannot see a basis to include the Carnesi Family Trust as a party without more specificity. As stated by Leeming JA in Kelly v Mina [2014] NSWCA 9 at [103]:
“A trust is not a legal person; a private trust is a relationship comprising various rights and obligations, personal and proprietary, between trustee, beneficiaries and trust property.”
I will give leave for the trust to be joined as a party but require it to be properly identified and to act through a trustee.
In relation to costs, although the applicants have succeeded on the motion, they required the leave of the court to be joined. I think the most just order is that costs of the motion be costs in the cause. I note that this is the order sought in the notice of motion.
I make the following orders:
The individual persons listed in Order 1 of the orders sought in the notice of motion filed on 5 March 2026 are joined as defendants to the proceedings.
The person described as the Carnesi Family Trust may also be joined as a defendant provided it is properly described and acts through a trustee.
Orders (1) and (2) above are conditional upon the following:
(a) The defendants joined by Orders (1) and (2) are to file a cross-claim which includes the seeking of relief under s 25 of the Criminal Assets Recovery Act 1990 (NSW). (b) The cross-claim is to be filed and served within 28 days of the date of these Orders.
**********
New South Wales Crime Commission
Carnese (No 2)
[1935] HCA 48
[2010] HCA 19
(2006) 65 NSWLR 478
(1996) 64 FCR 410
(1996) 92 LGERA 80
(1922) 31 CLR 394
(1993) 33 NSWLR 82
(1990) 21 NSWLR 317
(1986) 42 SASR 321
(1998) 195 CLR 291
(2010) 241 CLR 1
(2011) 244 CLR 1