New South Wales Crime Commission v Cassar

Supreme Court of NSW|2012-09-28|Before: Rothman J

Judgment 1HIS HONOUR: The New South Wales Crime Commission (hereinafter "the Commission") moved on notice filed 21 July 2010 for orders under s 31A of the Criminal Assets Recovery Act 1990 (hereinafter "CARA"). The issue with which these reasons for judgment deals is the admissibility of evidence, to which objection is taken on the basis that the material is hearsay. 2Under s 31A of CARA, the Court is empowered to make orders that certain interests in property vest in the Crown where those interests were not disclosed by the person against whom the orders are sought. The Court must make the orders for which application is made, if the Court finds it more probable than not that the defendant's interests in property, sought to be vested in the Crown, were not disclosed by the defendant when earlier required to be disclosed.

3It is necessary to give some very brief outline of the structure of CARA, limited to understanding the purpose and effect of s 31A thereof. The principal objects of CARA are to provide for the confiscation of property of persons who have engaged in serious crime related activities; to enable the wealth of persons to be recovered as a debt, where there is a reasonable suspicion that the person has engaged in serious crime related activity (or has acquired the wealth from such activity by another); to enable the recovery as a debt of the proceeds of that illegal activity; and to enable law enforcement authorities to identify and to recover property effectively: s 3 of CARA. 4The Court may, and often must, on application, make various orders, including restraining orders (s 10A of CARA); assets forfeiture orders (s 22 of CARA); proceeds assessment orders (s 27 of CARA); and unexplained wealth orders (s 28A of CARA). 5Further, by operation of s 12 of CARA, the Court may make ancillary orders requiring an examination on oath of owners of property, the spouse or de facto of such an owner or requiring an owner to provide a statement, verified on oath, in each case, stating the nature and location of property (or dealings in property) in which the owner has an interest. 6Therefore, as a consequence of proceedings for assets forfeiture, proceeds assessment or unexplained wealth orders, available under CARA, or as a consequence of ancillary orders of the Court under CARA, many persons will give evidence outlining (or warrant, or represent) the nature and location of their interests in property. Where that evidence, warranty or representation fails to disclose property interests, which are held by the defendant, s 31A of CARA enables application to be made to the Court for an order forfeiting to the Crown the property that was not disclosed. 7The foregoing does not purport to detail each of the provisions. Rather, the foregoing analysis seeks to give context to the provisions and effect of s 31A of CARA. Having given that context, it is necessary to analyse s 31A of CARA in more detail. 8The provision is in the following terms: "31AAssets forfeiture orders after interests in property not disclosed (1)This section applies if: (a)an assets forfeiture order or proceeds assessment order or unexplained wealth order is made, and (b)evidence or a warranty or other representation was given or made in proceedings for the order, or examination proceedings under this Act, by a person against whom the order is made (the defendant) as to the defendant's interests in property. (2)The Commission may apply to the Supreme Court for an order forfeiting to, and vesting in, the Crown a specified interest in property of the defendant at the time the evidence, warranty or representation was given or made that was not disclosed in the evidence, warranty or representation. (3)The Supreme Court must make the order if the Court finds it more probable than not that the interest in property was an interest of the defendant at the time the evidence, warranty or representation was given or made. (4)An order may be made even if the interest in property was disposed of after the evidence, warranty or representation was given or made but may not extend to an interest in property if: (a)the whole or part of that interest was subsequently acquired by a person for sufficient consideration without knowing, and in circumstances that would not arouse a reasonable suspicion, that the interest was, at the time of acquisition, serious crime derived property or illegally acquired property, or (b)the whole or part of that interest subsequently vested in a person as a result of the distribution of the estate of a deceased person. (5)An order may be made despite the terms of any orders previously made by consent. (6)Notice of an application under this section is to be given to the defendant and any person having an interest in property to which the application relates and the defendant or person may appear, and adduce evidence, at the hearing of the application. (7)The absence of a person entitled to be given notice of an application for an order under this section does not prevent the Court from making the order. (8)This Act (other than sections 25 and 26) applies to an order made under this section in the same way that it applies to an order made under section 22. (9)An application under this section may be made together with an application under section 31B." 9As can be seen from the terms of s 31A of CARA recited above, the section applies in circumstances already outlined, in summary, where an assets forfeiture order, a proceeds order or an unexplained wealth order has been made and there has been evidence, a warranty or other representation (or examination proceedings under CARA) in which the defendant's interest in property is described (s 31A(1) of CARA). 10Where s 31A of CARA applies, the Commission may apply to the Court for an order forfeiting to the Crown any interest in property that was not disclosed in the evidence, warranty or representation as to the nature and location of the defendant's interest in property (s 31A(2) of CARA). Once the Commission has applied for orders, the Court must make the orders, if the Court finds that it is more probable than not that the defendant's interest in property was not previously disclosed at a time when the defendant held that interest and made such a representation or warranty or gave such evidence: s 31A(3) of CARA. It is unnecessary to describe the effect of the other provisions of s 31A of CARA.

11Proceedings under CARA were commenced against Mr Cassar, the first defendant, on or about 12 December 2007, seeking a restraining order under s 10 and a proceeds assessment order under s 27 of CARA. A restraining order was issued that applied to all of Mr Cassar's interests in property. 12On 7 April 2008, Gregory Goold, Solicitor, entered an appearance for Mr Cassar and, on 21 April 2008, the proceedings were concluded by the making of orders as a result of purported consent orders signed by Mr Goold. 13The consent order of 21 April 2008, in part, noted that the first defendant, Mr Cassar, warranted that his only interests in property were those set out in the orders and schedules thereto (paragraph 3 of the consent order). 14As a result of certain information obtained by the Commission, the Notice of Motion of 21 July 2010 was filed seeking an order under s 31A of CARA. On 10 March 2011, an affidavit of Mr Davis, sworn 9 March 2011, was filed for the Commission. 15On 29 April 2011, a second affidavit of Mr Davis, sworn on that day, was filed, and on 16 May 2011, the Registrar issued directions for the service of evidence in reply by Mr Cassar on or before 1 July 2011. The Registrar granted the Commission the right to serve their evidence in reply by 22 July 2011. Further directions issued prescribing 19 August 2011 and 2 September 2011 as the date for filing submissions for the Commission and Mr Cassar respectively. On 22 July 2011, further directions were made that varied the above timetabling. 16On 1 July 2011, Mr Cassar advised that he would be adducing no evidence and on 4 October 2011 (in accordance with the varied timetable), Mr Cassar served submissions objecting to much of the evidence upon which the Commission relied, mainly on the basis that the evidence was hearsay. 17On 10 October 2011, at the hearing of the Motion, the Commission sought to file in Court and rely upon further affidavits, which, in part at least, seek to address some of the objections. Mr Cassar opposed that course. 18The Court, ex tempore, granted leave to file the affidavits in Court and to rely upon same in the proceedings. The Court reserved to Mr Cassar any objection to any part of those affidavits. Short reasons issued, which also reserved to Mr Cassar any adjournment required for adducing of further evidence or for cross-examination. (The short reasons to which reference has been made will, for the purposes of these reasons, be referred to as "the earlier reasons" and the leave to file and rely upon the further affidavits will be referred to as "the earlier leave".) 19The parties sought and obtained time for the filing of additional submissions, the filing of which was further delayed. By reason of an error in the understanding of certain consent orders, and the date thereof, the Court, as presently constituted, was informed that the issues between the parties had been resolved. This was a mistaken appreciation of orders issued in relation to the third defendant under s 31A of CARA, and not the issues relating to the first defendant. 20Pursuant to the aforementioned reservation, Mr Cassar objects to the admission into evidence of a number of the paragraphs to various affidavits as well as a number of documents. Some of those objections were resolved either because the objected portions were not read or were read and utilised for a particular use (either by agreement or by ruling of the Court). 21The remaining objections relate to material in two general categories. The categories are correspondence from Australian authorities to Switzerland; replies thereto; and documents attached to the replies. There are corresponding paragraphs in the affidavits that are also the subject of objection. In particular, objection was taken to the affidavits earlier filed and the affidavits filed pursuant to the earlier leave. 22These objections can be dealt with together as they involve the same issues. To understand the place of the evidentiary issues in the scheme of the proceedings that are before the Court, it is necessary to make clear that the orders sought in the Notice of Motion are opposed by Mr Cassar on the basis that: (i)there is no evidence that Mr Cassar himself (or through an agent) gave the warranty upon which the Commission's application depends; and (ii)alternatively, there is no admissible evidence as to the existence of a specified interest in property that was not disclosed in April 2008, contrary to the purported warranty upon which the Commission relies. 23The latter argument in the foregoing synopsis depends upon a determination as to the exclusion from evidence of certain documents obtained by the Commission from the Australian Federal Police (hereinafter "the AFP"). Those documents were, in turn, said to have been provided by the Swiss Federal Justice Department to the Commonwealth Attorney General who, thereafter, provided it to the AFP.

24The primary submission that Mr Cassar makes is that, for a variety of reasons associated with the proper construction of CARA, there is no warranty upon which an order under s 31A of CARA can be made and, secondly, there is no evidence of property beyond that for which the Commission contends. The ruling on evidence is necessary to determine the material upon which the Court can rely for the purpose of the evidentiary aspect of the submissions of Mr Cassar. 25It is unnecessary to deal with each of the paragraphs to which objection is taken. Essentially, the objections are in or to the same effect and seek to persuade the Court that it can have no regard to the documents from Switzerland (hereinafter "the Swiss Documents"). 26Mr Cassar submits that the documents (found in Exhibit A [being Exhibit RD-1 to the affidavit of Robert Davis of 9 March 2011] at tabs C - N) must be relied upon by the Commission as evidence of the truth of the representations contained therein, in order to be relevant. As a consequence, the documents are relied upon for a hearsay purpose. Therefore, Mr Cassar submits, in order to be admissible in evidence the documents must fall within one of the exceptions to the hearsay rule. 27Mr Cassar submits that the only apparent exceptions to the hearsay rule are those that relate to business records (s 69 of the Evidence Act 1995), but there is no evidence, other than hearsay, that the records are business records. In other words, there needs to be, it is submitted, non-hearsay evidence authenticating the documents as business records: see National Australia Bank Ltd v Rusu (1999) 47 NSWLR 309; Australian Securities and Investments Commission v Rich [2005] NSWSC 417; 216 ALR 320. 28The Commission, for its part, submits that the proceedings before the Court are interlocutory in nature and that, therefore, s 75 of the Evidence Act applies. The Commission submits that it has adduced evidence as to the source of the documents as a consequence of which, pursuant to the terms of s 75 of the Evidence Act, the hearsay rule does not apply. In response to that submission, Mr Cassar submits that s 75 and the provisions of Part 3.2 do not apply to anything other than first-hand hearsay.

29The Evidence Act defines relevant evidence (s 55) and renders all relevant evidence admissible (s 56) subject to exceptions that are prescribed in the Act. By operation of s 59 of the Evidence Act, "evidence of a previous representation made by a person" (i.e. hearsay) is rendered inadmissible to prove the existence of the fact represented (i.e. its truth). To that exception, there are specific exclusions to the operation of the hearsay rule. Two of those exclusions render the hearsay rule inapplicable to business records (s 69) and, to the extent that the source of the evidence is adduced, to interlocutory proceedings (s 75).

First-hand hearsay 30The provisions of s 62 of the Evidence Act confine hearsay to a representation made by a person who had personal knowledge of an asserted fact: s 62(1) of the Evidence Act. A person has such personal knowledge if that person's knowledge might reasonably be supposed to have been based on something that the person saw, heard or otherwise perceived, other than a previous representation made by another person: s 62(2) of the Evidence Act. As a consequence, s 62 restricts the meaning of a previous representation in Division 2 of Part 3.2 of the Evidence Act to what is generally called "first-hand hearsay". 31However the limitation in s 62 of the Evidence Act, described above, is a limitation confined to the provisions of Division 2 of Part 3.2. The exceptions, more generally available, under s 69 and s 75 of the Evidence Act are exceptions found in Division 3 of Part 3.2 of the Evidence Act. As a consequence, at least on its express provisions, the limitation or qualification that hearsay evidence is and must be confined to first-hand hearsay, does not apply to either ss 69 or 75. 32To some extent, this is to be expected. A business record will, in a number of cases, comprise representations from a number of people. The example in these proceedings of a bank statement exemplifies that fact. 33Nevertheless, Mr Cassar's submissions rely, not only on the express provisions of the Evidence Act, but, on the general unreliability of hearsay that is beyond first-hand hearsay, and the policy that it should generally be inadmissible. 34The provisions of ss 69 and 75 of the Evidence Act, as has been stated, are within Division 3 of Part 3.2 of the Evidence Act. As a consequence, the definition of hearsay in s 62 of the Evidence Act does not apply to ss 69 and 75. If there be an overriding discretion to exclude otherwise relevant evidence on the basis of unreliability, it must arise from the provisions of s 135 of the Evidence Act, namely, that the unfair prejudice to the defendant outweighs its probative value. On the other hand, if material is so unreliable, e.g. a rumour to prove the truth of the assertion therein, it may not meet the standards imposed by s 55 of the Evidence Act that the material could rationally affect (directly or indirectly) the assessment of the probability of the existence of the "rumoured" fact. 35I accept the view expressed that second-hand, or subsequent, hearsay is generally unreliable and should be admitted only when some fact or circumstance exists which renders the material sufficiently reliable to outweigh the unfairness from which the party against which it is tendered would otherwise suffer. Hearsay is difficult, if not impossible, to test and particularly so where testing would require cross-examination. 36Nevertheless, as a general proposition, I take the view and rely upon the proposition that the exceptions in ss 69 and 75 of the Evidence Act are not confined to first-hand hearsay and the material is not inadmissible on that basis. 37I am comforted in the foregoing analysis by the reasons for judgment of Merkel J in Bray v F Hoffman-La Roche Ltd (2002) 118 FCR 1, in which his Honour held that the provisions of s 75 of the Evidence Act applied not only to first-hand hearsay, but also to more remote forms of hearsay. Further as Spigelman CJ said in New South Wales Crime Commission v Vu [2009] NSWCA 349, nothing in s 75 of the Evidence Act "suggests that it is necessary, when adducing evidence in the course of a hearsay statement, to identify the ultimate source of the information contained in that statement": at [42].

38The exception upon which the Commission relies under s 75 of the Evidence Act relates to interlocutory proceedings and only in circumstances where the party adducing the evidence also adduces evidence of its source. The submission on behalf of Mr Cassar points out that a ruling on evidence may be interlocutory, but that s 75 cannot be utilised to render admissible in non-interlocutory proceedings material that would otherwise be inadmissible, simply because the proceedings which determines its admissibility is on the voir dire and therefore interlocutory in nature. 39In general, the submission put on behalf of Mr Cassar is correct. The mere fact, if it be the fact, that a voir dire is an interlocutory proceeding does not entitle a court to admit, in the substantive proceeding, evidence on the basis that the evidence becomes admissible in the voir dire. Nevertheless, the submission on behalf of Mr Cassar misses the point. 40These proceedings relate to the admissibility of business records, or alleged business records. It is now trite, and if it were not trite, would be self evident, that a document does not become a business record merely because the document looks like a business record. There must be evidence from which the Court can infer that the document is a business record: National Australia Bank v Rusu, supra. In other words, as stated by Bryson J in Rusu, the Court must be satisfied that the document is that which it purports to be, namely, a business record. In this case the document looks like a bank statement, or a series of statements, and otherwise looks like a summary of bank records. Is it a business record? 41As Austin J held in ASIC v Rich [2005] NSWSC 417, while evidence of the authenticity or authentication of a document cannot be achieved solely by drawing inferences on the face of the document and something more is necessary, the nature of the document may mean that only a small amount of evidence is necessary in order to draw the inference as to the document's authenticity. Nevertheless, authenticity cannot be achieved solely from the document itself. In this case, authenticity is shown by the establishment, by hearsay, of the ultimate source of the documents and, having been authenticated by hearsay, the documents are admitted as business records pursuant to the terms of s 69 of the Evidence Act. 42For the purpose of determining whether the document, to be tendered in substantive proceedings, is a business record, the Court, technically, conducts a voir dire. The voir dire is an interlocutory proceeding in that it is a proceeding that does not conclude the rights of the parties inter se. Interestingly, s 75 of the Evidence Act exempts from the hearsay rule evidence "in an interlocutory proceeding", not evidence that will give rise to "an interlocutory order or judgment". 43As a consequence of the foregoing distinction, it would seem that a proceeding for interlocutory injunction or a proceeding for directions, or, as here, proceedings in the nature of a voir dire, are interlocutory proceedings. However, proceedings determining liability in a cause of action, leaving to another day the determination of damages, while it technically may give rise to an interlocutory order, would not necessarily be interlocutory proceedings. 44The submission of Mr Cassar is misplaced, because it mistakes the admissibility of the business records with the admissibility of evidence to prove that the records are business records. In the substantive proceedings, if the voir dire were determined in accordance with the submission of the Commission, it is the business records that are admitted as evidence. On the voir dire, the evidence (in this case the correspondence and affidavit material) that proves the documents are business records (and the source of the documents) is admitted only for the interlocutory purpose of proving the admissibility, in the substantive proceedings, of the business records. 45Put into the circumstances of the current proceedings, the material, being the Swiss Documents, emanating from UBS (being documents described as a basic document for accounts/custody account relationship formation; a current statement of account; and a document for the opening of an account/custody account; etc.), are all documents sought to be tendered in the "substantive" proceedings, being the proceedings for orders under s 31A of CARA. On the other hand, the correspondence between the Crime Commission and the AFP and the AFP and the Commonwealth Attorney General, are documents tendered solely for the purpose of the interlocutory proceedings to prove that the Swiss Documents are business records, or to allow the Court to draw that inference, and to prove the source of those documents. 46As a consequence, the hearsay material relating to the source of the documents and the fact that they are business records is material that is tendered in an interlocutory proceeding for an interlocutory purpose and not for the substantive purpose. Once that evidence is tendered in the interlocutory proceeding, it allows the Court to draw the inference, albeit on second-hand hearsay, that the UBS documents are either a business record or a summary of a document that is a business record (see s 48 of the Evidence Act). 47As a consequence of the foregoing, the correspondence and material relating to the source of the documents and their description, being UBS bank records provided by UBS to the Swiss authorities and subsequently to the Commonwealth Attorney General and the AFP, and from them to the Commission, are admissible in the interlocutory proceeding to prove the admissibility of the substantive documents in the substantive proceedings. The correspondence between the Commission and other parties is admissible in the interlocutory proceedings, being the voir dire. The UBS records are admissible as business records in the substantive proceedings, being the proceedings for orders under s 31A of CARA. 48Further, while hearsay that is not first-hand hearsay will generally be unreliable, in this case the source of the documentation and the means by which they were obtained render the general unreliability less applicable. I am satisfied that the correspondence rationally affects the probability that the documents are business records and, as a consequence, the correspondence is relevant on the voir dire. Further, the nature of that correspondence satisfies me that the probative value of the material outweighs any unfair prejudice associated with its hearsay nature. 49For the foregoing reasons, the Court rules that the correspondence is admissible on the voir dire to prove the authenticity and provenance of the Swiss Documents, and the Swiss Documents are admissible as business records in the substantive proceedings, being proceedings for orders under s 31A of CARA. 50It is therefore unnecessary to determine whether the s 31A proceedings are, themselves, interlocutory, such as to permit the operation of s 75 of the Evidence Act in those substantive proceedings.

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