Song & Ors v Commissioner of the Australian Federal Police [2019] VSCA 206

2 On 9 November 2018, on applications by the Commissioner of the Australian Federal Police ('the Commissioner'), a justice of the Trial Division of the Court made two orders, both under ss 18 and 19 of the Proceeds of Crime Act 2002 (Cth) ('the Act'), prohibiting certain specified property from being disposed of or dealt with, without the consent of the Commissioner.

3 The property, that was specified in the first order, consisted of four parcels of land located in Queensland and a motor vehicle. The property, that was specified in the second order, included three funds of money. The second order was subsequently varied by further orders of the Court made on 13 November 2018 and 6 March 2019. The variations to the original order are not relevant to the current applications.

4 The first applicant, Xueyue Song is the father of the second applicant, Jian Song. The latter is the sole director and shareholder of the third applicant company, AMG Aus Investment Unit Pty Ltd ('AMG').

5 The material before the primary judge was to the effect that, between January 2011 and December 2014, Xueyue Song and his wife Yuanyuan Zhao ('Zhao') are suspected to have collected deposits from approximately 17,953 members of the public in China in an amount of RMB 2,432,875,000, in contravention of Article 176 of the Criminal Law of the People's Republic of China. In May and June 2015, part of those monies were remitted to Australia (in an amount of approximately AUD $24 million). It is suspected that these funds were used in Australia to acquire the properties and other assets, that are the subject of the two restraining orders. Some of the properties are in the name of Jian Song and AMG.

6 Xueyue Song, Zhao and Jian Song arrived in Australia in 2014. Subsequently, in October and November 2015, Xueyue Song and Zhao left Australia and they now reside in the USA. Jian Song has remained in Australia on a higher education visa.

7 On 29 May 2019, Xueyue Song, Jian Song and AMG applied for an extension of time to file an application for leave to appeal the first order made on 9 November 2018. On 12 June 2019, Xueyue Song applied for an extension of time to file an application for leave to appeal the second order made on 9 November 2018.

8 Xueyue Song was not named as a party to the Commissioner's applications for the restraining orders. The applications for those orders were heard ex parte by the Court. Xueyue Song was not served with either restraining order that was made on 9 November 2018. It is common ground that he has standing to bring the applications.

9 The application, in each matter, was supported by an affidavit deposed by Mr John Kahn, the solicitor for each of the applicants. On 26 November 2018, his firm was engaged by Jian Song to represent him in respect of the restraining orders. In late March 2019, his firm was also contacted by Xueyue Song to represent him in relation to those orders. Mr Kahn deposed that he was instructed that, at the time of the restraining orders, the only sources of income in Australia of Jian Song and AMG were the rental incomes derived from the properties that were the subject of the restraining orders. As a result, their ability to provide funding for legal representation was 'limited'. However, subsequently Xueyue Song has provided funding to Mr Kahn's firm for the purposes of representation of each of the three applicants. Mr Kahn also deposed that although Xueyue Song had not been served with a copy of the restraining orders, he learned of them 'by other means'.

10 On 10 May 2019, Xueyue Song gave instructions to Mr Kahn's firm to seek advice from counsel concerning the orders. That advice was provided expeditiously on 15 May 2019. An application for extension of time, in the first proceeding, was filed with the Court on 27 May 2019, and, in the second proceeding, an application for extension of time was filed on 5 June 2019.

11 Counsel for the applicants submitted that there is a credible explanation for the delay in applying for leave to appeal in each matter. Further, it was submitted, the prospects of the applications for leave to appeal are 'strong', and the questions raised on the appeal relate to a fundamental issue whether the primary judge had power to make the disputed orders in the form in which his Honour did. It is contended that the respondent will suffer little prejudice if an extension of time is granted.

12 Counsel for the applicant submitted that the applicants had a reasonable excuse for their delay in filing applications for leave to appeal against the decision of the primary judge. In particular, Xueyue Song was not served with a copy of the restraining orders, and Jian Song and AMG did not have a source of income available to them to fund specialist legal advice in respect of their rights relating to the orders.

13 The principal focus of counsel's submissions was that the applicants each have 'strong' prospects of success in the substantive appeals. In essence, counsel submitted that, on a proper construction of the relevant provisions of the Act, a restraining order may only be made under one section of Part 2-1 of the Act. Counsel contended that s 27 of the Act, when construed in conjunction with its heading, contemplates that a proceeds of crime authority is required to select a single section of the Act under which it makes its application for a restraining order. Counsel contended that the other related provisions of the Act, concerning the exclusion and forfeiture applications, and the duration of restraining orders, are all premised on the assumption that a court will make a restraining order pursuant only to one section of the Act. Counsel further noted that the Act is penal legislation. If it was intended that a court should have power to make a restraining order pursuant to more than one section, with the procedural consequences that follow, that intention would have been required to be expressed in clear terms. Counsel further contended that the proper construction of s 27 has not been the subject of judicial authority, and the issue raised on the intended applications for leave to appeal is one of fundamental significance.

14 Counsel for the applicants submitted that, in the context of the proposed applications for an extension of time, the submissions made in respect of the validity of the restraining orders are of particular significance. For, they contended, the various processes under the Act which follow from the obtaining of a restraining order - the making of exclusion orders, and forfeiture orders - are all premised on the validity of the original restraining order. Further, counsel submitted, if the applicants were granted an extension of time, the respondent would not sustain any prejudice, because the related forfeiture provisions of the Act only become available when the restraining orders have been in force for a period of six months.

15 In response, counsel for the Commissioner submitted that the applicants have not provided a satisfactory explanation for their delay in filing their applications for leave to appeal in the substantive proceedings. She further contended that in each proceeding the application for leave to appeal is not sufficiently strong to outweigh the length of the delay by the applicants and the resultant prejudice to the respondent.

16 Counsel noted that the restraining orders were served personally on Jian Song on 14 November 2018. She submitted that the Court should infer that Jian Song would have notified his father, Xueyue Song, of the restraining orders immediately after he and AMG were served with them. Jian Song was legally represented in relation to the proceedings from 26 November 2018, AMG has been represented since February 2019, and Xueyue Song from March 2019. In those circumstances, it was submitted that no adequate explanation has been given for the failure of the three applicants to commence an application between 26 November 2018 and 15 May 2019.

17 It was further contended that the submissions made on behalf of the applicants, relating to the interpretation of s 27 of the Act, ignore the plain language of that provision, the effect of which is that a proceeds of crime authority is entitled to apply for a restraining order under more than one section of division 1 of the Act. Thus, it was submitted, the applications for leave to appeal against the restraining orders imposed by the primary judge would not have reasonable prospects of success.

18 Finally, counsel for the respondent contended that the Commissioner would suffer detriment if the applicants were granted an extension of time within which to bring the applications for leave to appeal. In particular, an extension of time would delay the proceedings, and specifically would impede the compulsory examination of persons, including Xueyue Song and Jian Song, pursuant to s 180 of the Act.

19 The applications, to review the determination by the Judicial Registrar, are made under Rule 64.42(8) of the Supreme Court (General Civil Procedure) Rules 2015 ('the Rules'). In undertaking that review, this Court considers the applications for an extension of time de novo.[1]

20 The applications for extension of time are made under Rule 64.08. The power to grant an order for an extension of time is discretionary. In determining such an application, the Court takes into account the length of the delay, the reasons for the delay, the extent of any prejudice to the respondent, and the prospects of success of the substantive application for leave to appeal.[2] Ordinarily, it is not appropriate that an appellate court enter into detail on the merits of the proposed appeal, because, at the stage of an application to extend time, it only has limited materials and arguments before it.[3] On the other hand, a Court will refuse leave to extend time, notwithstanding that there has been a satisfactory explanation for the delay, if it concludes that the proposed appeal is so devoid of merit that it would be futile to extend time.[4]

21 The first issue which must be considered is the actual length of the delay by each of the three applicants.

22 Jian Song was personally served with the restraining orders on 14 November 2018. AMG was served with the orders by express post on 15 November 2018.

23 The affidavit of Mr Kahn is silent as to when Xueyue Song knew of the existence of the restraining orders. In particular, in paragraph 10 of the affidavit, Mr Kahn deposed:

The Applicant [Xueyue Song] has instructed our firm, and I believe, that he has never been served with a copy of the [restraining orders] but learned of their existence by other means.

24 As mentioned, Xueyue Song is the father of Jian Song, and Xueyue Song, Jian Song, and Zhao all arrived in Australia at the same time. In light of their relationship, it might be inferred, on the balance of probabilities, that Jian Song told his father of the restraining orders at least by late November 2016, when he consulted solicitors. In view of the silence of the affidavit of Mr Kahn in relation to that matter, that inference may be more readily drawn in favour of the respondent.[5]

25 It follows that, in the case of each of the three applicants, the relevant period of delay, in commencing the applications for leave to appeal against the restraining orders, was in excess of five months. That delay was, self-evidently, most substantial, particularly in light of the overarching purpose in s 7 of the Civil Procedure Act 2010, namely, to 'facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute'.

26 I am not satisfied that the applicants have provided an appropriate excuse or reason for the inordinate delay by them in filing their applications for leave to appeal in the substantive matter. As I have mentioned, Mr Kahn, in his affidavit, stated that the only sources of income of Jian Song and AMG, in Australia, were the rental incomes derived from the properties which were the subject of the restraining orders. Mr Kahn then stated that the ability of those two applicants to provide funding for legal representation and to obtain advice from counsel 'was limited'. It is significant that Mr Kahn did not state that they could not afford to obtain funding for legal representation. His affidavit did not provide any evidence as to the financial assets and means of Jian Song and AMG. Nor did it indicate whether an application had been made to Victoria Legal Aid for funding. In those circumstances, it must be concluded that neither Jian Song nor AMG have provided an appropriate excuse for their lengthy delay in making an application for leave to appeal against the restraining orders.

27 Mr Kahn's affidavit does not proffer any excuse by Xueyue Song, for the delay by him in commencing an application for leave to appeal the restraining orders. As I have noted, Xueyue Song instructed his solicitor that he had not been served with the restraining orders, but that he had 'learned of their existence by other means'. In light of my conclusion, that it may be inferred, on the balance of probabilities, that he knew of the restraining orders shortly after they were made, he is unable to rely on ignorance of those orders as an excuse for the delay. Mr Kahn does not suggest that Xueyue Song did not, and does not, have the financial means to have commenced an application for leave to appeal within the time prescribed by the Rules.

28 It follows that there has been inordinate delay by each of the three applicants in commencing their applications for leave to appeal the restraining orders, and that that delay, by each of the applicants, is without any appropriate excuse. Those considerations, without more, would ordinarily warrant the refusal of the applications for an extension of time, in the absence of any compelling reason to otherwise grant such an application.

29 As I have mentioned, the applicants have contended that, if they were granted an extension of time, they would have strong prospects of success on the substantive applications for leave to appeal.

30 The argument, on which the substantive applications would be based, concerns the correct construction of s 27 of the Act, which provides:

Proceeds of crime authority may choose under which section it applies for a restraining order

To avoid doubt, the fact that a proceeds of crime authority may apply for a restraining order under a section of Division 1 against property in relation to an offence does not prevent a proceeds of crime authority from applying for a restraining order under a different section of Division 1 against that property in relation to that offence.

31 In support of that argument, counsel for the applicants placed particular reliance on the heading to the section which, he contended, has the effect that, on its correct construction, s 27 requires a proceeds of crime authority to select one section only upon which to base an application for a restraining order. Counsel submitted that that construction is supported by the fact that the provisions of the Act dealing with exclusion orders, forfeiture of restrained property, and the duration of restraining orders, are premised on the assumption that a court will make a restraining order pursuant to only one section. In that respect, counsel pointed out that the test for exclusion orders applicable to orders made under s 18 and s 19 are set out in ss 29(2)(c) and (d) respectively, in terms which are materially different. Similarly, the forfeiture provisions in relation to orders made under s 18 and s 19 are set out in s 47 and s 49 respectively, in terms which are also materially different. Further, the duration of a restraining order made under s 18 and s 19 are provided for by s 45(1) and s 45(3) respectively, in terms which are materially different.[6]

32 In assessing, at this preliminary stage, the prospects of success of the applications for leave to appeal, the starting point is, of course, the text of s 27 of the Act. The submission advanced on behalf of the applicants is that s 27 should be construed to enable a proceeds of crime authority to apply for a restraining order under a particular section of Division 1, notwithstanding that the authority would have been able to apply for a restraining order under a different section in that Division.

33 That construction, of s 27, would deprive it of any meaningful content. If, in a particular case, a proceeds of crime authority were in a position that it could seek a restraining order under more than one section of Division 1 - and, in particular, under more than one of s 17 to s 20A inclusive - it would not have been necessary for the legislature to have included a provision such as s 27, in order to validate a choice made by the authority as to one of those provisions, to the exclusion of the other possible provisions on which the authority might have relied, but did not rely. In other words, if, for example, the authority chose to proceed under s 18, when it might equally have been able to have proceeded under s 20, it would not be necessary to rely on a provision such as s 27 to validate its choice.

34 Contrary to the submission advanced on behalf of the applicants, the plain, unambiguous, meaning of the text of s 27 is that a proceeds of crime authority may apply for a restraining order under more than one section of that Division. The heading to the section forms part of the provision pursuant to s 13(1) of the Acts Interpretation Act 1901 (Cth). However, that section does not mandate that the proceeds of crime authority must choose under which section it applies for a restraining order; rather, as pointed out by counsel for the respondent, s 27 is facilitative, and not restrictive.

35 Counsel for the applicants pointed out that, by its express terms, s 27 only applies to the power of a proceeds of crime authority to apply for a restraining order; it does not expressly refer to or describe the power of a court to make a restraining order. Nevertheless, the fact that the Act makes specific provision for a proceeds of crime authority to apply for a restraining order under more than one section of Division 1 of the Act, by implication, lends cogent support to the proposition that, in granting such an application, the court may make an order for a restraining order based on more than one provision of that Division.

36 In order to meet that proposition, counsel for the applicants relied on the contention, to which I have referred, that the provisions of the Act relating to exclusion orders, forfeiture of restrained property, and the duration of restraining orders, are premised on an assumption that a court will make a restraining order pursuant to only one section, because the test for each of those outcomes necessarily depends on the terms of the section in Division 1 on which the original restraining order was granted.

37 In my view, the fact that various provisions in the Act may require an applicant for an exclusion order to meet different tests, in respect of a restraining order granted under more than one section, does not necessarily militate in favour of the construction of s 27 contended for on behalf of the applicants.

38 If, as in this case, the authority were granted a restraining order under two sections, then, ipso facto, the success of an application for an exclusion order would depend upon the effect of the provisions of the Act applicable to it. The circumstance, that different tests might apply when a court is considering the two branches of the application under the exclusion order, would not result in conflicting consequences as contended for on behalf of the applicants. It is quite possible that, while an exclusion order might be granted in respect of the restraining order insofar as it was made under one provision of Division 1 (for example s 18), an application to exclude the operation of the restraining order that was made under another provision (for example s 19) might be unsuccessful. There is, in my view, no necessary inconsistency or conflict involved in such an outcome.

39 Equally, in the case of a restraining order that is made under two or more provisions of Division 1, the consequence might be that, ultimately, a forfeiture order might only be able to be made in respect of the restraining order insofar as it was made under one of those provisions. That consequence, however, does not involve an inconsistency or conflict as contended for on behalf of the applicants.

40 As submitted on behalf of the respondent, the ability of a proceeds of crime authority to apply for a restraining order under each available section of Part 2-1 of the Act is important, in order to prevent property, that might be the subject of forfeiture, from being dissipated, and the objects of the Act being frustrated. In order to achieve that objective, it is often necessary for a proceeds of crime authority to make an application for a restraining order at a relatively early stage of an investigation. As counsel for the respondent has noted, at the time that a restraining order is applied for, the authority may not necessarily have sufficient information to enable it to determine whether or not charges will be laid, so as to be able to determine pursuant to which provision of Division 1 a restraining order should be sought. Thus, if, the construction of s 27 contended for on behalf of the applicants were accepted, it would have the tendency to frustrate the intended purposes of the legislation.

41 It is not necessary, nor desirable, at this stage for me to express a concluded view on this issue of statutory construction. However, the arguments relied on on behalf of the respondent are, I consider, cogent. While I would not conclude that the applications for leave to appeal the restraining orders would be devoid of merit, nevertheless I do not consider that they would have strong prospects of success. On the basis of the arguments put to me, and bearing in mind the limitations in forming a concluded view on such an application, I would regard the prospects of success of such appeals as, at best, limited.

42 The applicants have contended that the Commissioner would not suffer any prejudice if they were granted an extension of time, because the scheme of the Act requires six months to have passed between the making of the restraining orders and the hearing of any application for forfeiture. On the other hand, it was submitted that the Commissioner has derived a procedural advantage - and thus the applicants have suffered a disadvantage - resulting from the restraining orders being made under s 19 of the Act, because those orders required the applicants to lodge an application for an exclusion order which must be heard before any application by the proceeds of crime authority for the forfeiture of the property. In that way, it was submitted, the Commissioner would have a 'first run' of the applicants' witnesses if the restraining orders that were made under s 19 of the Act remained in place.

43 The respondent has contended that delay would cause prejudice to it, and to the administration of justice, because it would delay the compulsory examination of Xueyue Song and Jian Song. In particular, that delay would affect the capacity of the Commissioner to obtain important evidence and information relevant to its investigative powers under the Act.

44 As the Judicial Registrar has correctly noted, the relevant test in relation to the Court's discretion, on an application for extension of time, concerns the prejudice that would be occasioned to the respondent if time is extended. In that regard, undue delay would have the capacity, at least to a material degree, to impede the proper and timely administration of the scheme, for the recovery of the proceeds of crime, that is specified in the Act. If an extension of time was granted to the applicants, after such a long and inexcusable period of delay, it would, I consider, impede the proper administration of the processes prescribed by the Act, and could detract from the capacity of the Commissioner to conduct meaningful examinations of relevant persons, including Xueyue Song and Jian Song. To that extent, the Commissioner would suffer some prejudice if the applications for an extension of time were granted.

45 For the foregoing reasons, there has been inordinate delay by the applicants in making their applications for leave to appeal against the restraining orders in question. The applicants have not proffered an acceptable excuse for that delay. The prospects of success of the substantive applications for leave to appeal are not such as to outweigh the length of the delay and the lack of excuse for that delay. On the other hand, the Commissioner would suffer some prejudice if an extension of time were now granted to the applicants.

46 For those reasons, I refuse the applications by each applicant to set aside the decision of the Judicial Registrar, by which he refused the applications by each applicant for an extension of time.

[1] Hewitt v Count Financial Ltd [2017] VSCA 354 [1].

[2] Gippsreal Ltd v Kenny [2016] VSCA 65 [21]; Hewitt v Count Financial Ltd [2017] VSCA 354 [20].

[3] Jackamarra v Krakouer (1998) 195 CLR 516, 521-2 (Brennan CJ and McHugh J). See also Kambouris v Kiatos [2016] VSCA 266 [34].

[4] Slaveski v State of Victoria [2009] VSCA 6 [77].

[5] Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298, 308 (Kitto J), 312 (Menzies J); O'Donnell v Reichard [1975] VicRp 89; [1975] VR 916, 929 (Newton and Norris JJ); Transport Industries Insurance Co Ltd v Longmuir [1997] 1 VR 125, 131 (Winneke P).

[6] AFP v Thasthahir (2016) 313 FLR 358, 367-8 [33], [36]-[37](J.Forrest J).