This judgment resolves a notice of motion of 18 January 2021 filed by Mr Tony Antonios, Mr Jhonny Ayoub, and Ms Chaline Francis (hereafter, the applicants, unless discrimination between them is required) that seeks to reduce the ambit, in a number of ways, of an examination notice that calls upon them to produce a large number of documents. That notice had been provided by an approved examiner pursuant to s 183 and s 185(2) of the Proceeds of Crime Act 2002 (Cth) (POCA).
In a nutshell, there is no resistance by any applicant to an examination hearing being conducted at which each of them will be examined, pursuant to s 180 of POCA. Indeed, they consented months ago to such a hearing being ordered. But the submission is that an ancillary notice given by the examiner for the production of documents by each of them at that hearing are unlawfully broad, and should be "whittled down" by me.
The Commissioner of the Australian Federal Police (hereafter, the AFP) is the respondent to the motion. The AFP opposes the order sought, and indeed submits that I have no power to make it.
In general conformity with the submissions for the AFP, I do not propose to make the order sought, and shall dismiss the motion.
[2]
Chronological background
A sketch of the background is as follows.
The Commissioner of the Australian Federal Police v Bahmad [2021] NSWSC 954 | Case summary | Zoe
In December 2019, the AFP charged Mr James Bahmad with being part of the importation of a commercial quantity of a prohibited drug, possessing a pistol, and obtaining a benefit by deception. The first offence is against a law of the Commonwealth, and the latter two are contrary to State legislation.
Concomitant with those criminal proceedings, on 19 December 2019, the AFP obtained ex parte restraining orders from Walton J of this Court over a number of pieces of real property said to be associated directly or indirectly with Mr Bahmad. One of those was a property at Kerr Street, Appin, (hereafter simply Kerr Street) in the south west of Sydney. That was an interlocutory step towards the AFP seeking permanent forfeiture orders pursuant to POCA.
On 14 February 2020, I made orders by consent varying the restraining orders. One effect of that variation was to allow Mr Bahmad to deal with Kerr Street for the purpose of settlement of its sale. The idea was that the funds from that sale would be applied to pay out a mortgagee, and the surplus kept for safe keeping until the dispute between Mr Bahmad and the AFP as to whether he should forfeit any proceeds otherwise due to him was resolved.
At around that time, it was discovered that, in late 2018, Mr Antonios and Mr Ayoub had placed caveats on the certificate of title of Kerr Street.
On 27 March 2020, Mr Antonios and Mr Ayoub filed a notice of motion seeking orders pursuant to s 31 of POCA excluding from restraint or subsequent forfeiture their asserted interests in the net proceeds of the sale of Kerr Street. It seems that Mr Antonios sought to be paid over $424,000 plus interest, and Mr Ayoub sought to be paid over $211,000 plus interest (I express myself in that way because there is disjunction in the notice of motion in the identification of the parties).
The first order sought in that notice of motion asserts the basis of the exclusion as being "as repayment of loans (principal and interest) made by" Mr Antonios and Mr Ayoub to Mr Bahmad.
It is not disputed that that application by Mr Antonios and Mr Ayoub gave rise to a right on the part of the AFP to have them examined, pursuant to ss 32 and 180(1) of POCA. It also gave rise to a right to examine Ms Francis, the wife of Mr Ayoub, pursuant to the same sections.
Accordingly, on 27 May 2020, the AFP filed a notice of motion seeking orders pursuant to s 180 of POCA permitting examination of a number of persons, including Mr Bahmad and the three applicants, as well as two assertedly associated corporate entities.
There was no dispute about those orders being made, and indeed on 4 June 2020, Fagan J made examination orders against the three applicants by consent. The relevant orders entered on JusticeLink were:
3. Pursuant to section 180 of the Proceeds of Crime Act 2002 (Cth) Chaline Francis is to be examined in relation to her own affairs and in relation to the affairs of:
(a) James Ali Bahmad;
(b) Tony Antonios; and
(c) Jhonny Ayoub.
4. Pursuant to section 180 of the Proceeds of Crime Act 2002 (Cth) Tony Antonios is to be examined in relation to his own affairs and in relation to the affairs of:
(a) James Ali Bahmad; and
(b) Jhonny Ayoub.
5. Pursuant to section 180 of the Proceeds of Crime Act 2002 (Cth) Jhonny Ayoub is to be examined in relation to his own affairs and in relation to the affairs of:
(a) James Ali Bahmad;
(b) Chaline Francis; and
(c) Tony Antonios.
The examination hearings were duly set down for January and February 2021.
Separately, the examiner had sought from the applicants sworn statements of assets and liabilities, pursuant to s 39 of POCA. That order is not impugned, and has been the subject of compliance by each of the applicants.
Mr Antonios and Mr Ayoub have filed affidavits explaining how it is that they claim to have a lawful interest in the sale proceeds of Kerr Street that should be excluded from restraint or forfeiture. In short, the position of both Mr Ayoub and Mr Antonios is that they lent significant sums of money to Mr Bahmad, secured against Kerr Street, in entirely lawful and unexceptionable ways. That security is said to be expressed by two documents entitled Loan Agreement, both dated 14 June 2018.
In his affidavit of 24 March 2020, Mr Ayoub has used the term "private lending" to describe his activities, and those of Mr Antonios. He has spoken of having known Mr Bahmad since approximately March 2013, and Mr Antonios since approximately March 2014. He explains how it was that he came to lend significant sums of money to Mr Bahmad. He also explains that, at one stage, Mr Antonios purported to lend Mr Bahmad money, when in fact it was a further loan from Mr Ayoub. That approach was adopted so that Mr Bahmad would not think that Mr Ayoub was his "private bank". Mr Ayoub goes on to explain the difficulties that later developed in receiving repayment from Mr Bahmad.
Mr Antonios swore an affidavit on the same date, 24 March 2020. He explains that he owns a business that also engaged in "private lending". He speaks of having been involved in that business since March 2015. He deposes to having enjoyed a personal and business relationship with Mr Ayoub since approximately March 2014. He also speaks of Mr Ayoub not wishing to be thought of by Mr Bahmad as "his personal bank". He explains the steps whereby Mr Antonios advanced a significant sum to Mr Bahmad that was in fact sourced from Mr Ayoub. He also speaks of the difficulties in repayment that developed.
I interpolate that counsel for the applicants explained at the hearing before me that, to the extent the application of Mr Antonios for exclusion relates to that sum, Mr Antonios must be thought of as a de facto trustee of it, on behalf of the true creditor, Mr Ayoub.
Ms Francis has filed an affidavit of 18 January 2021 to the effect that she was not involved in any business dealings between her husband and Mr Bahmad, cannot take the matter further, and that complying with the examination notice with regard to the production of documents would be very onerous for her.
Mr Bahmad has filed some affidavits about his own financial affairs. In an affidavit of 20 May 2020, at [43] to [51], he deposes to the purchase of Kerr Street. In those paragraphs, he does not mention any loans from Mr Antonios or Mr Ayoub secured against Kerr Street. On the other hand, near the conclusion of that affidavit, he provides a table of liabilities that includes a loan from Mr Antonios estimated to be about $424,000. He also speaks of a loan from Mr Ayoub estimated to be about $211,000.
Furthermore, in a later affidavit of 24 July 2020, he speaks of his memory having been affected "as a result of my history of drug use". That affidavit repeats the tabular evidence about the loans from the two male applicants.
As I have said, quite apart from the sworn statements of assets and liabilities, the examiner also sought the provision of a large body of documents from each applicant. The details of the documents sought are provided in Schedule 1 of each examination notice (hereafter, the Schedule; I shall largely refer to it in the singular for convenience). For example, in the Schedule as it relates to Mr Ayoub, the following documents are sought: passports issued in the last 10 years; educational certificates; certificates of marriage and divorce; wills and trust deeds; evidence of income; documents recording communications between Mr Ayoub, Mr Bahmad, his wife, and Mr Antonios; and all documents to do with domestic and interstate travel.
The Schedule served upon the other two applicants is similar, if not identical.
In due course, the examination hearing was postponed when it became clear that the applicants were objecting to the breadth of the Schedule. It is that objection that came before me for hearing.
[3]
In writing
In support of the orders sought, counsel spoke of the Schedule as being so wide as to be contrary to the interests of justice.
He also submitted that they were so lacking in relevance to the question of whether any applicant had a lawful interest in Kerr Street as bordering on the oppressive.
He engaged in a detailed analysis of the clauses of the Schedule, in order to show that they could have nothing to do with either the alleged criminality of Mr Bahmad, or the transactions regarding Kerr Street. It was emphasised that none of the applicants has ever been charged, or questioned, even a person of interest, in connection with that alleged criminality.
He submitted that the "Relevant Period" spoken of in the Schedule (a term that I shall discuss in more detail shortly) had no contemporaneous connection with the subject matter of the examination hearings.
He submitted that parts of the Schedule that sought documents to do with education, personal relationships, testamentary instruments, and powers of attorney were "clearly on their face utterly irrelevant".
A clause calling for bank accounts extending back many years was said to be both oppressive and either irrelevant, or of negligible relevance. The same general complaint was made about documents sought to do with income.
As for the category of documents concerning travel, it was said to be "so utterly wide" and "nebulous" as to be not only oppressive but also contrary to the interests of justice.
It was made clear that all of these criticisms were on behalf of all three applicants. Particular emphasis was placed on the position of Ms Francis, and her asserted complete lack of direct connection with Mr Bahmad.
Onley v Commissioner of the Australian Federal Police [2019] NSWCA 101 (Onley v AFP) was referred to, in which Bathurst CJ had referred at [317] to the "undoubted power" to stay the operation of an examination order made pursuant to s 180 of POCA.
The inclusive definition of "affairs of a person" in s 338 of POCA was noted, and it was said that that must necessarily be interpreted as meaning the affairs of an examinee as they related to "the person of interest"; here, Mr Bahmad.
It was said that Commissioner of the Australian Federal Police v Elzein [2017] NSWCA 142 could be thought of as authority for the proposition that I am empowered to "redraw" the examination notice and more particularly the Schedule. Guo v Commissioner of Australian Federal Police [2017] VSC 269 (Guo v AFP) was relied upon to similar effect. So was Lam v Commissioner of the Australian Federal Police [2017] VSCA 9 (Lam v AFP).
Finally, counsel submitted that the phrase "the interest of justice" must be interpreted "generously"; I understood him to mean that it should be given due weight, and not applied in any parsimonious way.
[4]
Orally
In oral submissions, it was conceded that no authority could be found from anywhere in Australia whereby a judge had "whittled down" an examination notice provided pursuant to s 183, in contrast to staying (pursuant to s 319) the operation, or clarifying the scope of, an examination order made pursuant to s 180.
It was also submitted that the ambit of a Schedule such as this must be measured to ensure that the objects of any examination are clearly within what POCA requires, and not beyond the objects and purposes of that Act, as was said to be the case here.
It was said that the restraining orders and putative forfeiture were based upon alleged criminality of Mr Bahmad within a confined period of time. And yet the Schedule goes far beyond that.
It was said that the affairs about which a person can be examined must have "a finite nature to them, they can't be at large".
Counsel emphasised that failure to comply with the Schedule could give rise to criminal liability, even the possibility of imprisonment.
Counsel submitted that there must be a mechanism whereby a manifestly unreasonably broad demand for production of documents - by way of hypothetical example, birthday cards received by one's children when they were five years old - can be corrected by this Court.
It was accepted that none of the judgments relied upon were directly on point, in that they were not examples of examination notice as having been "whittled down". But by analogy, it was said, it would be irrational for Parliament to have intended an examination order to be able to be stayed, and for an examination order to be able to be clarified, but not for an examination notice given pursuant to such an order to be able to be narrowed.
Counsel conceded that information gathering is a legitimate part of POCA; his proposition simply was that that could not be "at large".
In reply, counsel suggested that there may be a tension between the judgments in Onley v AFP that may need reflection and attempted resolution in any judgment of mine.
He returned to the inclusive definition of "affairs of a person", and submitted that the reference to "unlawful activity" must constitute an anchor in terms of the breadth of an examination notice issued pursuant to an examination order.
He submitted that an asserted gap in the affidavit evidence of one or more of the applicants was neither here nor there, not least because it did not pertain to the loans that found the application for exclusion, and in any event all applicants will certainly be able to be examined about their financial and personal connections with Mr Bahmad.
Finally, counsel emphasised that the applicants are seeking to achieve nothing more than having funds excluded from restraint and forfeiture to which they assert they are lawfully entitled. And yet, concomitant with that process, they are to be subject to an invasive compulsory examination, which includes the production of a vast number of documents, many of them said to be simply irrelevant, on pain of criminal sanction in the absence of compliance. The concluding submission was that I could and should stand in the way of that.
[5]
Determination
For the following reasons, I decline to make the orders sought.
[6]
Power to make the orders?
My primary determination is that I accept the submission of the AFP that I have no power to make the orders sought, for the following reasons.
First, it is well known that POCA is a remarkably rigorous and intrusive regime that alters the rights of citizens in significant ways. The purposes of the legislation set out in s 5 set out what the Commonwealth Parliament seeks to achieve by way of that rigour. That is the overarching statutory context in which I reflect on the application.
Secondly, it is important to make clear what is and is not being impugned, and what I am and am not being asked to do. The examination order made pursuant to s 180 is not under attack. I am not being asked to set it aside, nor to clarify it, as occurred in Lam v AFP, nor to stay it pursuant to s 319, as was discussed in Onley v AFP. The subject matter of the application is the examination notice, not the examination order. It is that that I am being asked to "whittle down".
And yet, it is clear that Parliament has declined to provide me with an explicit statutory power to do so. And the rest of POCA, in my opinion, argues against me being satisfied that I have an implicit power to do so.
Thirdly, not only is there no provision within POCA that empowers me to do that, but also, as I have said, no judgment from any court in Australia could be found in which another judge had done so. The closest that one can come to it is in the latter part of the judgment in Guo v AFP, in which a similar application was considered and rejected: at [44] - [49]. But I infer that, in that case, it was simply assumed that there may be a power, in the context of ready rejection. The judgment does not discuss the anterior question of the existence of that power.
The fact that I am being asked to make an order that seemingly has never been made by an Australian court before, with regard to a piece of legislation that has been in existence for almost two decades, for obvious reasons gives me pause for thought.
Fourthly, the distinction to be drawn between examination orders and examination notices means that cases about clarifying or staying an examination order are not directly on point.
Fifthly, counsel for the applicants sought to rely upon the "stay power" in s 319 as indirectly supporting the proposition that I have an implied power to interfere with the examination notice. But if anything I respectfully think that the existence of s 319 argues to the contrary: That is because Parliament has permitted this Court to take a certain step with regard to examination orders, but has not said anything analogous about examination notices.
Sixthly, counsel for the applicants did not gainsay the following proposition of senior counsel for the AFP. Despite the fact that the Commonwealth Parliament has involved this Court in the adjudication and administration of POCA in various ways, I have no jurisdiction to interfere with administrative orders of the examiner made pursuant to that Commonwealth legislation by way of judicial review.
Seventhly, in contrast to the absence of any statutory power having been conferred upon me to do what I am asked to do, s 192 of POCA does permit an approved examiner to "refer a question of law arising at the examination to" this Court. In other words, there is a statutory mechanism whereby the applicants can seek to persuade the examiner to refer an assertion of unlawful breadth, or irrelevance, or oppression in the Schedule for judicial determination.
Yet again, the presence of that mechanism in the legislation supports the proposition that I have no underlying power to make the orders sought in the notice of motion.
For all of those reasons, I do not believe that, as a matter of statutory interpretation, I am entitled to make the orders that the notice of motion asks me to make. I do not believe that the mechanism of review prayed in aid by the applicants exists.
As against the possibility that I am wrong, I turn contingently to the question of whether the Schedule goes beyond the orders made by consent by Fagan J and should therefore be quashed, or amended with the aim of compliance. For the following reasons, I do not believe that it does go beyond those orders.
First, it can be seen that the orders made by consent were not limited to examinations merely about alleged crimes of Mr Bahmad, nor required any close temporal or other connection between the affairs of the applicants and those alleged crimes. Without repeating them, the orders were drawn far more broadly than that.
Secondly, that is orthodox, because the sections of POCA upon which those consent orders were based - not least the inclusive definition to be found in s 338 - are similarly not confined in that way. Contrary to the underlying assumption of the submissions for the applicants, POCA is far more broad in its concerns then merely investigating matters that are directly or indirectly to do with alleged criminality, whether of an examinee or a third party.
To give one example, Chapter 3 of POCA is headed "Information gathering", not (for example) "Investigating crimes".
To give another, as soon as one makes an application pursuant to s 31, one is liable to be subject to an examination; indeed, the application for exclusion cannot be heard until there has been a reasonable opportunity to conduct that examination, pursuant to s 32 of POCA.
To give yet another, the inclusive definition in the Dictionary of "affairs" about which one can be examined is not limited to those touching upon alleged criminality.
Thirdly and relatedly, if one relies upon a particular asserted transaction or transactions in support of an application for exclusion, that does not mean that the resultant examination must focus upon it or them. In my opinion, the objective intention of Parliament manifested in POCA is not that examination hearings be so specific or limited with regard to the financial and personal affairs of an examinee.
In short, there is nothing exceptionable about the breadth of the Schedule, when seen in light of the examination orders pursuant to which the examination notice was issued, and in light of the examination orders themselves being consonant with the broad definitions and evident purposes of the Act.
For those reasons, even if I did have the power to interfere with the Schedules, I would not do so, because I believe they are consonant with orders of this Court.
[8]
Further contingent analysis - interference on the facts of this case?
As a further contingent analysis, even if I were wrong in that determination, I would not interfere with the Schedule. That is so for the following further reasons.
First, using the version of the Schedule served upon Mr Antonios (and appreciating that it is virtually identical to that imposed upon the other two applicants), it has the following temporal structure.
It seeks production of "documents during the Relevant Period (unless otherwise stated)" in the possession or control of the applicant. The Relevant Period is defined as between 1 January 2015 and the date upon which the examination hearing is conducted.
In other words, unless any clause is stated to extend back beyond 1 January 2015, no document more than six years older than the initial proposed examination hearing date is sought.
There are some clauses that do extend back further, as follows.
Clause 1 seeks any passport issued in the past ten years. In accordance with the date of the examination notice, that means any passports issued since October 2010.
Clause 2 seeks "certificates or degrees in relation to further education undertaken by you at any time". Clearly enough, that has no chronological fetter. On the other hand, it is limited to "further education", which is surely to be understood as that engaged in after departure from high school.
Clause 3 speaks of certificates of marriage or divorce "issued by any country at any time". Again, it clearly goes beyond the Relevant Period.
In accordance with the structure of the Schedule that I have summarised above, that is the extent of the compulsory production of documents that may predate 1 January 2015: passports since late 2010, documents showing marriage or divorce at any time, and any education engaged in subsequent to high school at any time.
In other words, the extent to which the Schedule captures documents outside the Relevant Period is limited indeed. It is largely focused upon a limited class of documents that would be readily available to many people: a decade's worth of passports, and documents evidencing matrimonial status.
I accept that the provision of a large number of other documents pertaining to a six year period will not be easy. But my first point is that the Schedule is not as burdensome as it may appear at first blush. In particular, it does not purport to capture all documents that may have been created throughout a long life to do with personal and financial matters; quite the contrary.
Secondly, both Mr Ayoub and Mr Antonios have spoken of their loans to Mr Bahmad having been part of a broader context of "private lending". In other words, the transactions upon which they rely are not asserted to be unique or even rare; rather, they are said to be part of their ongoing business practices. That means in my opinion that it is appropriate for the examination to be broad in its subject matter, orally and with regard to supporting documents to be produced.
Thirdly, as I have said, both male applicants depose to ongoing contact between themselves and Mr Bahmad extending over quite some years, as I have shown. Again, that is appropriate for exploration at an examination hearing, including by way of provision of documents.
Fourthly, the procedure whereby one applicant lent money on behalf of another, without its true provenance being known to the debtor, is, in my opinion, at the least unorthodox. Again, I believe it makes broader examination of the business practices of the two applicants, and the wife of one of them, appropriate.
Fifthly, and contrary to the oral submission in reply of counsel for the applicants, I regard it as significant that Mr Ayoub has neglected to mention in any of his affidavits the seemingly uncontradicted assertion of the AFP that, on 23 March 2018, Mr Ayoub received the very substantial sum of $300,000 from Mr Bahmad as a result of the latter selling a service station in Texas, Queensland. Yet again, the absence of sworn evidence about that topic by that applicant tends generally toward a broad enquiry, not a narrow one. And because of the relationship between Mr Ayoub and Mr Antonios, the effect on my thinking of the absence of reference to the receipt of that sum is not limited to the former applicant only.
Sixthly, it is certainly true that the documents ordered to be produced could be voluminous. It is also true that they go back quite some years, are broad in subject matter, and it could be quite demanding for the applicants to provide them. And it is also true that failure to comply with the Schedule can give rise to criminal sanction, pursuant to s 195 and following of POCA. But s 196(2) and its note make it clear that the required compliance is that which is practical, not absolute.
In other words, I do not believe that the legislation is so draconian as to criminalise a failure to produce a document that one simply does not possess. That approach of the legislation to criminal liability also argues against interference.
Seventhly and finally, the only authority placed before me dealing directly with an application to adjust an examination notice was, as I have said, the decision of Guo v AFP commencing at [44]. But the application there did not find favour. On the contrary, Forrest J said at [46] - [47]:
"I think it inappropriate, on an application such as this (made on the papers and with the primary purpose of clarifying the scope of the earlier orders), to endeavour to interfere with the examiner carrying out her functions as provided by Part 3.1 of the Act. The order of the Court in relation to the scope of the examination has now been rectified. The examiner will, undoubtedly, consider the terms of the notice and the scope of the inquiry in light of these orders.
In any event (and in the hope that it may assist the parties and the examiner), I reject the proposition that the notice is to be read in the blinkered fashion suggested by Mr Guo." …
In other words, the only judgment that is directly on point is of no assistance to the applicants.
For those reasons, even if I had a power to interfere, and even if I were satisfied that the Schedule was not explicitly consonant with the examination order, even so I would be disinclined to "redraw" it.
[9]
Conclusion
To summarise: I do not believe that I am empowered to "whittle down" an examination notice made pursuant to s 183 of POCA.
If I am wrong about that, I would not do so, because the examination notice is within the ambit of the consent orders made by Fagan J, themselves within the ambit of POCA.
If I am wrong about that as well, I would not do so, because I believe that, on the evidence placed before me, the breadth of the examination notices is consistent with the text, context and purposes of POCA, and otherwise appropriate.
[10]
Costs
It was agreed at the conclusion of the hearing that costs should be determined separately, rather than me receiving submissions about them contingently at that time. I was content with that course.
Accordingly, my Associate will be in touch with the parties in due course to provide a timetable and other logistical aspects for the provision of written submissions about the question, with the intention that I shall resolve it in Chambers. An oral hearing will only be conducted if, after the provision of all of those written submissions, a party successfully moves on a notice of motion seeking that mode of resolution.
[11]
Orders
Accordingly, I make the following orders:
1. The notice of motion of 18 January 2021 is dismissed.
2. Costs reserved.
[12]
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Decision last updated: 06 August 2021