Teresita Tan v (Cth) DPP

• 15 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

JUDGMENT 1 Shaw J: In this matter the Commonwealth Director of Public Prosecutions (the DPP) has initiated proceedings in this Court pursuant to the Proceeds of Crime Act 2002 (Cth) and has obtained from the Court restraining orders in respect of properties apparently owned by Mr Dante Tan or a company of which he is the only shareholder, director and officer. The order is that the property as specified must not be disposed of or otherwise interfered with by any person. 2 The Act provides, by s 42(5) for an application for the revocation of such orders in the following terms: "the Court may revoke the restraining order if satisfied that there are no grounds on which to make the order at the time of considering the application to revoke the order". 3 Such a general or global application for revocation was made to the Court and on 7 August 2003 in DPP (Cth) v Tan [2003] NSWSC 717 I dismissed the application in the following terms: 1 In this matter the Commonwealth Director of Public Prosecutions ("the DPP") has initiated proceedings pursuant to the Proceeds of Crime Act 2002 (Cth) ("the Act") to make restraining orders in respect of certain properties apparently owned by the defendant, Mr Tan, or Universal Lionshare Pty Ltd, of which the defendant is the only shareholder, director and officer. The nature of the order is that the property must not be disposed of or otherwise interfered with by any person.

2 The defendant applies by notice of motion to revoke those orders pursuant to s 42 of the Act.

3 The original restraint proceedings, granted ex parte, depended upon s 19 of the Act. That section provides that a restraining order 'must' be made if the Court is satisfied of certain pre-requisite conditions. The relevant statutory pre-requisite for the making of such an order is whether the Commonwealth DPP requests that an order be made (s 19(1)(c) of the Act), and there are 'reasonable grounds to suspect' that the property is, for relevant purposes, the proceeds of an indictable offence of the Commonwealth or a foreign indictable offence (s 19(1)(d) of the Act).

4 The section goes on to provide that the Court must be satisfied that the authorised officer holds the suspicion on 'reasonable grounds' (s 19(1)(f) of the Act). If the Court is so satisfied, then the Court must make the restraining order (s 19(1) of the Act) unless satisfied of an exception in s 19(3) of the Act, which does not apply here.

5 The emphasis in the Act upon holding a 'suspicion' is in contrast to the prior legislative regime (pursuant to the Proceeds of Crime Act 1987 (Cth)) which required that the officer hold a 'reasonable belief' as to the tainted origins of property.

6 Section 19(4) of the Act provides that the reasonable grounds 'need not be based on a finding as to the commission of a particular indictable offence' and, further, by subs (5) there is a requirement that the Court 'must' make a restraining order even if there is no risk of the property being disposed of or otherwise dealt with.

7 Mr Steirn, SC, for the applicant submitted to the Court that it should construe the legislation strictly, since it has drastic consequences for the applicant, and should apply any ambiguity that arises in favour of the applicant. So much is required by the rules of statutory construction: see Pearce and Geddes, Statutory Interpretation in Australia (4th Ed) Butterworths at [9.11]. However, it is increasingly common for the State and Commonwealth legislatures to pass these kinds of laws leaving nothing open to ambiguity and no discretionary provision in favour of the citizens they affect. Under the cover of being beneficially directed to crime reduction, there is the real possibility that the effect of removing discretion from the courts in the application such laws, may result in injustice.

8 It can reasonably be said that this is drastic legislation. Some might characterise it as Draconian. Nevertheless, this Court must give due recognition of and application to the prescriptions of the legislature, subject of course to a question as to whether the legislation is constitutionally valid. No such constitutional question has been raised in the present proceedings. Assuming that the legislation is not ultra vires the Parliament, then the Court must apply it in accordance with its text. This concept, it seems to me, gives effect to the separation of powers doctrine which is inherent, at least in relation to the Federal, constitutional scheme - although the doctrine does not strictly apply to State law: see Building & Construction Employees & Builders' Labourers Federation (NSW) v Minister for Industrial Relations (The BLF Case) (1986) 7 NSWLR 372; Union Steamship Co of Australia Pty Ltd v King (1988) 166 CLR 1; Durham Holdings Pty Ltd v State of New South Wales (1999) 47 NSWLR 340; Durham Holdings Pty Ltd v State of New South Wales (2001) 205 CLR 399; cf Kable v DPP (NSW) (1996) 189 CLR 51.

9 In Kable it was said that a State Court that was, or could be, a repository of Federal judicial power can only validly deal with matters in a way which is contemplated by, and not repugnant to, Chapter III of the Constitution, a provision guaranteeing judicial independence, a scheme of appellate and judicial review, and, perhaps, a minimum content of fairness in all proceedings. According to the doctrine of R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254, such power can only be exercised in a way truly characterised as judicial power.

10 On 12 June 2003, I granted a restraining order, on an ex parte basis, over certain specified property. On 2 July 2003 James J granted further restraining orders over other specified property. Such property included monies held in bank accounts, a motor vehicle and real estate.

11 The application in the present case is to set aside those orders pursuant to s 42 of the Act. Universal Lionshare Pty Limited seeks the revocation of the restraining orders granted by me and James J.

12 I do not feel any inhibition or embarrassment about reconsidering orders previously made ex parte. The Court has now had the benefit of hearing from senior counsel for the applicant on revocation and has heard argument on that procedural course.

13 The power to revoke is contained in s 42(5) of the Act which prescribes that: The Court may revoke the restraining order if satisfied that there are no grounds on which to make the order at the time of considering the application to revoke the order.

14 This is a tough test for the applicant to meet. It seems to me to mean there must be literally no grounds for the foundation of the order for it to be revoked. I leave open the question of whether irrational, improper or unlikely grounds for suspicion are sufficient to sustain an order.

15 It seems to me to be right to say that the applicant for revocation does bear some onus of persuading the court that it should exercise a discretion in his or her favour to revoke the restraining order. Since the section seems to confer a discretion on the Court to revoke the order, I would think that the applicant must persuade the Court on the balance of probabilities to exercise it in his or her favour. Whether, having done so, the Commonwealth would be required to discharge an onus in accordance with the observations of Dixon J in Briginshaw v Briginshaw (1938) 60 CLR 366 does not arise in this matter as the applicant has adduced no evidence to raise the issue.

16 I approach the matter on the basis that the only admitted and unchallenged evidence is that filed for the DPP, in the form of affidavit evidence of Noel James Scruton, which asserts that: I suspect that the property described…is the proceeds of a foreign indictable offence…committed within the past 6 years.

17 Mr Scruton then goes on to specify the grounds upon which he believed that the property had the providence asserted by the bald allegation contained in that affidavit. These grounds included reference to an extradition request from the Government of the Republic of the Philippines for the provisional arrest of Mr Tan for the purpose of extradition from Australia. That request included the assertion that Mr Tan is wanted to stand trial over 'the largest insider trading case in Philippine history'.

18 Mr Steirn, SC has submitted that these matters must be strictly proved by the Commonwealth, that is, that the 'reasonable' grounds for suspicion must be proved. He says that there is a 'glaring omission' in the evidence, namely that the evidence does not deal with how monies are said to have come into Mr Tan's branch account and the lack of any evidence as to the funds used to purchase the home unit. Senior counsel argues that on any fair reading of the material, his client came into the possession of the properties by legal means. He says that there is a lack of a demonstrated nexis between the alleged fraud in the Philippines and the money in the bank accounts the subject of the restraining order. It is further submitted that there is no real evidence that Mr Tan received money from insider trading or other illicit activities in the Philippines and that the evidence does not reveal anything suspicious in relation to the activities of the company.

19 The applicant submits that there is a deficiency in the evidence such that the two ex parte orders made by judges of this Court should be revoked.

20 The difficulty with accepting this submission is that the suggested 'glaring omission' in the evidence has not been resolved by the applicant by way of evidence. If the applicant has evidence that the property was not acquired as a result of an indictable offence then that would discharge the onus set upon him by s 42(5) of the Act and, prima facie, the Court would be in a position to revoke the restraining order. This would then raise the issue mentioned earlier of whether the Commonwealth could convince the Court (in accordance with the Briginshaw principle) to maintain the order.

21 On the other hand, the DPP refers to the unchallenged evidence that Mr Tan has filed no taxation returns in Australia and yet holds a large sum of money in back accounts. Reference has also been made to the application by the Philippine government, which includes the allegation that Mr Tan is considered a 'fugitive from justice having jumped bail'.

22 The material before the Court also indicates a series of criminal charges laid against Mr Tan in the Philippines that includes allegations of false and misleading market activity. There is evidence of an information laid by a panel of State Prosecutors in the Department of Justice of the Philippines accusing Mr Tan, and others, of the violation of statutory provisions including an allegation of: conspiracy, complicity and confabulation…for the purpose of creating a false and misleading appearing of active trading in stocks and securities…

23 I accept, of course, that the applicant has the presumption of innocence. Nevertheless, such allegations may arguably support a 'reasonable' ground of suspicion in the context of the legislative regime in which I am required to determine this matter.

24 The evidence indicates that an order of arrest was issued on 1 April 2002 in relation to Mr Tan by the Republic of the Philippines, National Capital Judicial Region, Regional Trial Court in the City of Pasic.

25 Thus, the question in this case is not whether the applicant for the restraining order, the Commonwealth, has a 'suspicion' that the identified property is the product of an indictable offence, which it obviously does, but whether the applicant to revoke the order has shown that there are 'no reasonable grounds' for that suspicion.

26 I emphasise that, at this stage of the proceedings, I am only concerned with whether the disposition of the property should be restrained (in that, the Court is asked to revoke such an order). I am not now asked to make a confiscation order. The Court is at an interlocutory stage of its consideration of this matter. Different considerations may well arise when and if the Court is asked to confiscate the property, at the request of the Commonwealth, which will again raise the issue of the standard of proof about which the Court must be satisfied to order such confiscation.

27 In the circumstances, I am not prepared to rule that the DPP lacked reasonable grounds for the suspicion which it has about the providence of this property. As I have emphasised the existence of unchallenged evidence, in affidavit form, about the suspicion, and the specification of grounds as to why that suspicion is reasonably based, in addition to the absence of evidence from the applicant for revocation seems to me to compel the conclusion that there were some reasonable grounds sufficient to raise a 'suspicion' about the origins of the property.

28 It is understandable that some may reasonably think that elements of this confiscation legislation both at a Commonwealth and State level are drastic and impose upon courts uncongenial, mandatory duties previously unknown to the judicial power and, arguably, alien to it. Nevertheless, the state of evidence in this case compels me to the conclusion that the orders that have been made by the Court should not be revoked and that further considerations may be raised at subsequent stages of the proceedings when, and if, confiscation is actually sought.

29 In these circumstances I dismiss the application for revocation and order that the costs of the proceedings should be reserved.

4 The application currently before the Court is one for a revocation of the restraining order in respect to some jewellery that was captured by the restraining order issued in July 2003. The applicant, the wife of Mr Dante Tan, is not a defendant in the substantive proceedings, and moves upon a notice of motion seeking to revoke the restraining order and also seeks certain consequential orders for damages and costs, however, the only issue before the Court presently is the partial revocation with respect to jewellery which is said to have been lawfully acquired by Mrs Tan. It is not a revisiting of the general application for revocation but a highly qualified, specified deletion from the otherwise general order which would continue to have force and effect if the present application were granted. 5 An interlocutory issue arose as to whether the applicant for partial revocation could adduce evidence in support in the notice of motion. On 8 September 2004 in DPP (Cth) v Tan & Anor [2004] NSWSC 856 I ruled that such evidence was permissible and could be received, subject to any particular objections to the former relevance of the evidence, in the following terms: 1 The case before the Court is an application to revoke a restraining order pursuant to s 42 of the Proceeds of Crime Act 2002 (Cth) (the Act). The critical test as to whether a pre-existing order for the restraint of what is alleged to be the proceeds of crime is whether, pursuant to s 42 (5), the court may revoke the restraining order: if satisfied that there are no grounds on which to make that the order at the time of considering the application to revoke the order.

2 It is obviously a tough test, a high barrier for the applicant seeking revocation to meet but it focuses upon the time of considering the application to revoke. Accordingly, the court needs to take account of the facts and circumstances which are asserted as at the time of considering the revocation application.

3 The respondent to the notice of motion, the Commonwealth Director of Public Prosecutions (DPP), objected broadly to the right of the applicant on the notice of motion, Mrs Tan, to adduce any evidence upon the application. If correct, this submission would lead to an odd result. It is common ground, as I understand it, that the application is competent in the sense that we have a person (namely the wife of Mr Tan) who was not notified of the application for a restraining order and who has a right to apply to the court to revoke the order pursuant to s 42(1) of the Act. Locus standi is not in controversy. To say that Mrs Tan has a right to apply to revoke the order but has no right to adduce any evidence in support of that application seems to me to be anomalous. Of course, if it were required by the text of a legislative enactment or by necessary implication then this Court would be bound to accept it, whatever thoughts that the Court might have about the injustice of the situation. However, absent some express provision or some necessary implication, prima facie a person who has a right to bring a notice of motion before a superior court of record to revoke an earlier order in whole or in part would ordinarily have a right to produce some relevant evidence to support that application.

4 A person who has a right to bring an application before a court is presumptively to be regarded as a person who has a right to a hearing. As Isaacs J said in Thomas A Edison Ltd v Bullock (1912) 15 CLR 679 at 681 said: There is a primary precept governing the administration of justice, that no man is to be condemned unheard; and therefore as a general rule, no order should be made to the prejudice of a party unless he has the opportunity of being heard in defence.

5 (This observation was cited with approval by Mahoney AP in Garrard t/as Arthur Anderson & Co v Email Furniture Pty Ltd (1993) 32 NSWLR 662 at 677). To deny the right of a competent applicant to adduce relevant evidence would be a drastic step. Any "hearing" would be radically circumscribed.

6 Although in the ultimate disposition of this matter I am prepared to revisit the question as to the admissibility and weight of any evidence adduced by the applicant on the notice of motion, I am nonetheless of the prima facie view that the evidence should be entertained by the Court. It seems to me that it is right to say there is no express exclusion of evidence set out in the relevant Commonwealth legislation concerning confiscation of the proceeds of crime which would prevent an applicant for revocation, pursuant to s 42 of the Act, to adduce relevant and admissible evidence in support of the application. The legislative emphasis is on the set of facts or circumstances as at the time of considering the present application given that criterion it would seem to me to be unfair and almost perverse to preclude an applicant from updating the court as to the state of facts or circumstances which exist at the relevant time. Of course, if Parliament wanted to disallow evidence of this kind then it could have said so, but it has not.

7 Senior counsel for the DPP has ably put an argument based upon the scheme of the legislation as a whole. However, I think that applying the language of Studdert J in NSW Crime Commission v Davies [1999] NSWSC 354 at [14], the approach the court should take to legislation of this kind should be, in the absence of any clear prohibition, that the legislation should be construed favourably or beneficially to a person whose assets have been seized based upon the "reasonable suspicion" of a police officer.

8 I acknowledge that s 42 of the relevant legislation, and in particular sub-section (4) thereof expressly allows the DPP to adduce evidence additional to the evidence previously brought before the Court relating to the application in the event of a revocation application. Conceivably, there could be an expressio unius argument, but such a method of statutory interpretation should be used sparingly and with great caution: Houssein & Anor v Under Secretary, Department of Industrial Relations & Technology and Industrial Commission of NSW (1982) 148 CLR 88 at 94. The maxim is a valuable servant but a "dangerous master."

9 In the absence of any clear prohibition or necessary implication that the applicant cannot adduce relevant evidence in support of its case, I decline to rule in an umbrella or universal way that the evidence should be excluded. Of course, I would entertain applications with respect to particular aspects of the admissibility of the evidence. Accordingly, on an interlocutory basis, I allow the applicant for revocation to read the affidavits that she has filed and served, and to adduce other relevant evidence which she may seek to tender. 6 Once Mrs Tan's evidence was put before the Court, it became clear that she had a formidable case that the jewellery, if lawfully acquired by her, should not be the subject of some global confiscation order. I accept the applicant, Mrs Tan, as a witness of credibility and I note that no criminality is alleged against her or attributed to her. Accordingly, there seems to be great weight in the submissions of the applicant to the effect that it is really uncontested that the jewellery was lawfully acquired by her, was obtained by her as a third party for value and is not the proceeds of crime (at least to the best of her knowledge and belief). 7 The question of revocation is a discretionary remedy vested in the Court. However, there is an onus upon the applicant to persuade the Court on the balance of probabilities that the discretion should be exercised in favour of the applicant. It is as I have said in the interlocutory judgment a "tough test" and, in my view, the principles of Briginshaw v Briginshaw (1938) 60 CLR 366 are applicable: see also R v Mok [2003] NSWSC 424 (22 May 2003) per Sully J. Hence, the applicant needs to demonstrate that there is a negative in the sense that there are no grounds for the existence of a restraining order. It is well established that in what some might consider a Draconian regime in both the Federal and State jurisdictions doubts as to construction of the statute should be resolved in favour of an applicant for relief or amelioration from the otherwise radical consequences of the legislation: see, for example, DPP v Logan Park Investments Pty Ltd (1995) 37 NSWLR 118 at 130 per Powell J. 8 The evidence of the applicant can be summarised in the following terms: ¤ The jewellery (noted as Items 1-21 in her affidavit) was acquired by herself either as gifts from her husband, gifts from other family members or direct purchases by herself.

¤ The jewellery was lawfully acquired by the applicant.

¤ With the possible exception of Items 6, 12 and 13 all jewellery was acquired between 1974 and November 1998.

¤ Whilst it is not alleged that the applicant herself has been involved in any crime related activity, the applicant denie4d having any knowledge of her husband being in any alleged criminal activity.

¤ The applicant stated that she had been married to Dante Tan for thirty years, furthermore she had given birth to and raised his six children.

¤ The applicant stated that she understood her husband in the Philippines to have been a businessman and she had no reason to suspect he was involved in any alleged criminal activity.

¤ The applicant stated that she loved her husband and believe that the loved her. Other that the above reasons (ie loyal mother, love and wife) and the fact that she worked lawfully for her husband in the Philippines, the applicant know of no other reasons why her husband would give her jewellery.

¤ The applicant stated that she had been robbed of jewellery in the Philippines in 1998 and after coming to Australia secured the jewellery in a safe deposit box held in both her name and her husband's.

¤ The applicant and her husband accessed the safe deposit box to obtain jewellery for her wear on special occasions and the jewellery was then returned to safe deposit.

¤ Her husband Dante Tan, has a Chinese name, which is Shaoghi Chen.

¤ The value of the jewellery was less than that of the valuation received by the Police. 9 These facts were not substantially in contest in the proceedings before me. 10 I note also as being of some, perhaps marginal, relevance the fact that recent court decisions from the Philippines dealing with charges against Mr Tan, and which have formed the basis of the restraining order, have been dismissed. In relation to one charge, the Philippine court characterised it as being "politically motivated". Other charges remain alive, although apparently applications are on foot to have them dismissed as well. 11 On the other hand, the DPP says, via a federal agent (an officer of the Australian Federal Police) that there is some suspicion that the jewellery in question is the proceeds of a foreign indictable offence. In essence, the offence is said to be that Mr Tan artificially inflated the price of stock, although there is a question mark as to whether he received any proceeds from that alleged offence. What is clear from all of the evidence is that the present applicant has been married to Mr Tan for about 30 years and is the mother of his six children. There were fairly frequent visits by Mr Tan to Australia between 1998 and 2003, although it was conceded that this was "unremarkable" as Mr Tan had sporting and business interests in Australia during the relevant period. He brought and declared money he was carrying when coming into Australia. 12 I accept the submission of the applicant that the fact that Mr Tan was known by a Chinese name is unremarkable, indeed he had declared that other name to the Australian government. Although Mr Tan has not filed a taxation return in Australia, there is no evidence that he was obliged to do so because of any income personally earned in this country. 13 I also accept that there is nothing particularly untoward about the fact that the jewellery was placed in a safe deposit box held in the name of the applicant and her husband, listing the home address in Australia as the contact point, and likewise the fact that the company operated by Mr Tan owns a home unit at Strathfield and a motor vehicle does not of itself raise any particular suspicion. The evidence suggests a significant level of robbery of jewellery of this kind, and that culture may well have inclined Mrs Tan towards the use of a safe deposit box. 14 In these circumstances, I accept the proposition that the jewellery was acquired by the applicant prior to the alleged offences, was acquired outside of Australia and that the applicant believes that it was not bought from the proceeds of crime. The value of the jewellery in question is said to be $509,700. In these circumstances, it seems to me that the applicant has discharged the onus of proof which lies upon her and that there are no grounds upon which to continue the restraining order in respect of the jewellery as at the time of hearing of this application. 15 I would respectfully apply the observation of Adams J in relation to the broadly equivalent, but in some respects different, state legislation where his Honour said that a restraining order which restrains the property of a person is a most serious interference with their civil rights…accordingly, one should not approach the exercise of the jurisdiction given to this Court…on the basis that the order is of trivial significance, to be looked at only as a trigger for setting the procedure of the Act in motion: NSW Crime Commission v Gardiner [1999] NSWSC 1210 (3 December 1999) at [11]. 16 I accept the submissions of the DPP to the effect that: The 2002 Act covers the field and there is no residual "common law" inherent power or other statutory power to revoke a Restraining Order. It is the test in section 42(5) that the Applicant must satisfy. The submissions in paragraph 30-33 are irrelevant matters when considering section 42(5). The suggestion that the Plaintiff has not acted with the highest professional standards or with complete propriety and fairly, is not supported by any evidential material and an unsubstantiated allegation at best. Section 42(5) is discretionary in its terms. Teresita Tan, as the Applicant, bears the onus of persuading the Court that it should exercise discretion in its favour to revoke the restraining order. The Plaintiff contends that the Applicant bears the (i) legal (section 317(1)), (ii) evidentiary (the Applicant is the moving party) and (iii) persuasive onus. The standard of proof is the civil standard and any question of fact to be decided is to be decided on the balance of probabilities: (section 317(2)).

17 I also accept that "suspicion" or reasonable suspicion is the leitmotiv of this legislative regime. Property can be confiscated without charge, proof behind reasonable doubt and conviction. Suspicion is a state of conjecture or surmise: Williams v Keelty [2001] FCA 1301 at [165-166] per Hely J. 18 However, as I have indicated, I accept the applicant's evidence as truthful. The DPP has been unable to prove the location of purchase of the jewellery. Discrepancies in the applicant's evidence as to the precise date of purchase of the items do not, in my view, loom large in the disposition of this matter. In balancing the competing considerations in this discretionary adjudication, I accept that some items of jewellery could have been purchased during the period of the offences Mr Tan is alleged to have committed in the Philippines. 19 Although there is an understandable lack of documentation, I accept that the applicant wore items of the jewellery in dispute over the years. I do not believe that the partial revocation with respect to Mrs Tan's jewellery has the effect of defeating the more general purpose of the restraining order. 20 I would therefore conclude that the restraining order made on 2 July 2003 in so far as it relates to the jewellery specified in annexure A to the affidavit of the applicant sworn 11 September 2003 should be revoked, pro tanto, and that consequential orders for the revocation of the order permitting the Official Trustee taking custody and control should also be made. 21 I make orders accordingly and reserve the costs of these proceedings. **********

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