New South Wales Crime Commission v Shamaileh

Judgment 1By notice of motion filed on 6 March 2013, the defendant, Maisoun Shamaileh, seeks an order pursuant to s 10 B (3) (a) and (b) of the Criminal Assets Recovery Act 1990 (the Act) allowing for the variation of a restraining order over funds held in the Arab Bank account (ABA account) of the first defendant. The variation of the order is sought in order to allow for the release of funds for the payment of reasonable legal expenses together with the sum of $20,000 for the purposes of the reasonable travel and living expenses incurred by the first defendant, so that she might travel from Jordan to Australia to attend the hearing of the matter. 2A restraining order under s 10 of the Act was made on 11 January 2006 in the following terms :- No person is to dispose of, or attempt to dispose of, or otherwise deal with or attempt to deal with the interest in the property of [the first defendant] in the property specified in the schedule hereto. 3The schedule to the order refers to "funds in Arab Bank Australia account number 330089600 (BSB 917115) in the name of [the first defendant]." 4Section 10B(3) provides :- A restraining order may, at the time it is made or a later time, provide for meeting out of the property, or a specified part of the property, to which the order applies all or any of the following: (a) the reasonable living expenses of any person whose interests in property are subject to the restraining order (including the reasonable living expenses of any dependants), (b) subject to section 16A, the reasonable legal expenses of any person whose interests in property are subject to the restraining order, being expenses incurred in connection with the application for the restraining order or an application for a confiscation order, or incurred in defending a criminal charge. 5The history of the proceedings taken by the plaintiff require some brief reference. 6In 2002, a property at 38A Knight Street, Lansvale was legitimately purchased by the defendant. Later that year it was transferred to her brother for $295,000. On 11 November 2002, the defendant's brother changed his name by deed poll to Philip Green. In 2003 the property was transferred by the defendant's brother to Philip Green (that is to himself) for the consideration of $500,000. 7On 9 August 2004, the property was transferred by the defendant's brother in the name of Green to the second defendant (Abed El Waheb Alrefai) for the consideration of $500,000. This purchase was effected by a loan taken out by the second defendant with NAB in the sum of $400,000. 8The loan application made by the second defendant to the NAB falsely stated that he had a second job with a company known as Best Technical Pty Limited. The second defendant (or an agent who filled out the form on his behalf) claimed a monthly salary of $6370 from that employment. False payslips were supplied for the purposes of the loan application. The second defendant has never been employed by a company of that name. No company of that name has ever conducted business from the stated address. 9The provision of false documents in the course of a loan application constitutes an offence under s 178 BB of the Crimes Act 1900, namely making or publishing a statement knowing that it is false or misleading with the intent to obtain a financial advantage. That offence qualifies as "illegal activity" under the Act. It follows that the sum of $400,000 advanced by the NAB, and the amounts subsequently transferred set out below, constitute the proceeds of illegal activity, for the purposes of the Act : s 4. 10On 16 August 2004, $400,000 was transferred from an account in the name of Green to an account in the name of Alan Morris Bailey. On 19 August 2004, $494,000 was transferred from that account to an account in the name of Alan Morris Baley. 11On 27 October 2004, $495,000 was transferred from the Baley account to the first defendant's ABA account. On 3 November 2004, $500,000 was transferred from the first defendant's ABA account to an account in her name with the Arab Bank of Jordan (ABJ). 12On 6 January 2006, $541,543 was transferred from the first defendant's ABJ account to the second defendant's ABA account and on the same day $394,400 was paid towards the discharge of the second defendant's mortgage with the NAB. The balance of those funds, being $147,139 was transferred to the first defendant's ABA account. These are the funds restrained by the order. Evidence from the first defendant's brother confirms this latter transfer. 13As a threshold issue, the defendant's counsel submitted that, in the absence of demonstrating that the first defendant illegally acquired the Lansvale property, the plaintiff could not demonstrate that her interest in the funds now restrained by the order arose out of illegal activity. The submission proceeded upon a fundamental confusion between "the property" the subject of the original loan from the NAB (the Lansvale property) and "the property" being that restrained under the Schedule to the order (the funds in the ABA account). 14In any event, an interest in property includes a reference to money : s 7(2). An interest in property is "illegally acquired property" if it is all or part of the proceeds of illegal activity : s 9(4). 15It will be immediately apparent that, in view of the history related above (which was not disputed by the defendant), and the statutory scheme, the terms of s 16A(1)(b) of the Act represent an impediment to the first defendant's claim for legal expenses. Section 16A(1) provides :- The following restrictions apply to a restraining order making provision for the payment of any legal expenses of a person: (a) no provision is to be made except to the extent (if any) that the Supreme Court is satisfied that the person cannot meet the expenses concerned out of the person's unrestrained property, (b) no provision is to be made in relation to any particular interest in property if the Supreme Court is satisfied that the interest is illegally acquired property, (c) no provision is to be made unless a Statement of Affairs disclosing all the person's interests in property and liabilities and verified on oath by the person has been filed with the Supreme Court, (d) no provision is to be made unless the Supreme Court is satisfied that the person has taken all reasonable steps to bring all of the person's interests in property within the jurisdiction of the Court, (e) any such provision must specify the particular interest in property out of which the expenses concerned may be met. 16I am satisfied on the basis of the evidence relating to the successive transfers of amounts that derived from the loan obtained by the fraudulent application to the NAB that the first defendant's interest in the funds held in the ABA account constitute illegally acquired property. 17Even if I am mistaken in that regard, it is doubtful in my view that the first defendant has satisfied the terms of s 16A(1)(a) and (d). For the purposes of s 16A(1)(a), a person's "unrestrained property" is relevantly :- any interest in property of the person: (a) that is not subject to a restraining order under this Act, or (b) that the Supreme Court is satisfied is not within the Court's jurisdiction (whether or not it is subject to a restraining order under this Act), 18The evidence filed on behalf of the first defendant, set out in her affidavit of 10 October 2009 and supplemented by her affidavit of 11 October 2012, establishes that she has lived in Jordan all her life, is 46 years of age, married with four children and resides with her husband who is a retired General in the Jordanian police. The first defendant is employed by a local government authority in a senior position in Jordan and has been so employed for the past 18 years. The first defendant and her husband's combined income in 2009 was said to be $3000 a month. In addition, in 2009 the first defendant had approximately $500 in a bank in Jordan. 19Her liabilities in 2009 amounted to $3000 per month which effectively exhausted her and her husband's joint income. In the first defendant's affidavit of 10 October 2009, she maintains that she has "no other assets from which to access to pay for my legal expenses". 20In the first defendant's affidavit of 11 October 2012, she states that she comes from a very large family in Jordan and "our family has extended assets and lands. Through my father inheritance and work, he left us assets and money to be managed." The first defendant goes on to say that there was cash in the sum of more than US$100,000 in the family home in Jordan. There was "other money tied up with relatives (who shared land settlement and family loans and money owed to the family) and financial investment coming back to the family at a later stage in the future". Furthermore, the first defendant states that "as a family [we] also have lands owned commonly with cousins and relatives as inheritance through my father." The first defendant was not available for cross examination, having maintained that she could not afford to travel to Australia for these proceedings. 21The first defendant's brother, in his affidavit of 11 October 2012 states that the family in Jordan "were well off financially, the money having accumulated from both inheritance and my father's working life. The family owns numerous land titles and many properties." His understanding was that cash was held in a safe in his parent's house in Jordan before his father's death. In 1996, when the first defendant's brother travelled to Jordan there was more than US$100,000 available to him as the eldest son to manage or invest. He also refers to other monies which were tied up with either family relatives or business investments, but which have since been returned to the family. He agreed in cross examination that monies are still owed to the family through land investments, although he is ignorant of the value of those assets. 22The first defendant in her affidavit of 11 October 2012 and her brother in the course of his affidavit of 11 October 2012 both give a detailed explanation of the circumstances under which they came to purchase the Lansvale property and their limited knowledge of the loan application to the NAB bank. However, as the scheme of the Act makes clear, it matters not whether the fraud was perpetrated by the first defendant, or anyone associated with her, without their knowledge. Any part of the proceeds of the $400,000 originally fraudulently acquired have the character of illegally acquired property for the purposes of the restraining order. 23The effect of this evidence is that there are assets of an indeterminate value jointly owned by the first defendant and other members of her family which are available for liquidation. There is no evidence before the Court that satisfactorily explains why the first defendant cannot access, either by way of a loan secured against her share of those assets, or by way of sale of all or part of those assets, the funds necessary to meet her legal expenses. Inconvenience does not provide a sufficient justification. 24Nor is there any evidence of any reasonable steps having been taken to bring all of the first defendant's assets within the jurisdiction. Once again, inconvenience or reluctance to liquidate assets because of a loss of capital gain does not establish that the sale and/or removal of the assets would be unreasonable in the circumstances. 25Accordingly, the Court is precluded from making any allowance by virtue of s16A(1)(a) and (d). 26Leaving that matter to one side, the first defendant's claim to reasonable living expenses is at the discretion of the Court. The Act does not recognise a claim for reasonable travel expenses. For the reasons that I have canvassed above, the first defendant has not established on the balance of probabilities that she has been in the past, or is unable presently, to meet her reasonable living expenses from her income and/or assets in Jordan. There is no current information with respect to her income and expenditure. Her financial position in 2009 is of limited relevance to the present application. 27The notice of motion is dismissed. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 28 March 2013