[2010] FCA 1434
McKinnon v Secretary, Department of the Treasury (2006) 208 CLR 423
Source
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Catchwords
[2010] FCA 1434
McKinnon v Secretary, Department of the Treasury (2006) 208 CLR 423
Judgment (2 paragraphs)
[1]
Judgment
HIS HONOUR: The Commissioner of the Australian Federal Police seeks an order pursuant to UCPR 33.4 setting aside a subpoena to produce issued by Shana Huang. The subpoena calls for the production of:
"The transcript of any examination of Yi Feng conducted pursuant to s 180 of the Proceeds of Crime Act 2002 which refers to either Shana Huang and/or Auschain Investment Group Pty Ltd."
Despite originally seeking to set aside the subpoena on a series of different bases, the Commissioner now relies only upon the proposition that the transcript in question is not relevant to any issue in the present proceedings.
These proceedings were commenced by summons filed in court on 21 October 2015. In what may be described as the usual form, the Commissioner seeks a suite of orders, including an order that Ms Huang be examined about her own affairs and the affairs of Mr Feng, and vice versa, and an order that a certain property in Grandstand Parade, Zetland, of which Ms Huang is the registered proprietor, be forfeited to the Commonwealth. The Commissioner contends that the property was acquired by Ms Huang utilising moneys for the deposit that are reasonably suspected to be the proceeds of crime.
On 24 November 2015, Hall J made an order pursuant to s 180 of the Proceeds of Crime Act 2002 that Mr Feng be examined about his own affairs and the affairs of two other people. Pursuant to that order, Mr Feng was examined and the transcript of that examination is the subject of the subpoena issued by Ms Huang. A similar order made by Hall J that Mr Feng be examined about his own affairs and those of Ms Huang has not so far been put into effect.
In support of the original application, Federal Agent Glyn Roberts swore an affidavit on 20 October 2015. Ms Huang tendered certain paragraphs of that affidavit in the present application. That material indicates that Mr Feng deposited two amounts of $70,000 and $36,896 respectively into Ms Huang's ANZ bank account on 11 August 2014. It also establishes that Mr Feng deposited $50,500 into an account in the name of Auschain Investment Group Pty Ltd on the same day. That company was the co-agent on sale of the property to Ms Huang, named as such in the contract of sale, signed by her and dated 13 August 2014. The Commissioner contends that the money deposited into Ms Huang's account and Auschain's account by Mr Feng on 11 August 2014 was used by her on 13 August 2014 to pay the deposit on the property purchased through Auschain.
Ms Huang has not been charged with any criminal offence. She has never met Mr Feng. The New South Wales Crime Commission has reported other property purchasers being unwittingly implicated in money laundering activities in connection with the transfer of funds for legitimate property transactions in Australia. Auschain has also claimed that it too has been unwittingly caught up in the alleged activities of Mr Feng.
Federal Agent Roberts also deposes to the fact that the suspicion upon which the restraining order was originally sought in relation to Ms Huang's property was based upon s 400.9 of the Criminal Code. That is the offence provision pursuant to which the Commissioner alleges that the monies used to pay the deposit for the property became the proceeds of crime. That section is in these terms:
"400.9 Dealing with property reasonably suspected of being proceeds of crime etc.
(1) A person commits an offence if:
(a) the person deals with money or other property; and
(b) it is reasonable to suspect that the money or property is proceeds of crime; and
(c) at the time of the dealing, the value of the money and other property is $100,000 or more."
Element (b) of the offence requires the court to make an objective assessment of whether, on the basis of the evidence before it, it is reasonable to suspect that the monies used to pay the deposit on Ms Huang's apartment were the proceeds of crime. This does not require the court to embark upon a hypothetical examination. It is a question to be answered in the light of all of the available evidence and prevailing circumstances: McKinnon v Secretary, Department of Treasury (2006) 208 CLR 423; [2006] HCA 45 at [12]; Denlay v Federal Commissioner of Taxation (2010) 276 ALR 675; [2010] FCA 1434 at [20]. This extends to and includes any evidence that Ms Huang is able to adduce, and may include evidence of the acts performed by, and the circumstances known to, Mr Feng.
By s 318(2) of the Proceeds of Crime Act, in any proceedings for an order under the Act, the transcript of any examination is evidence of the answers given by a person to a question put to the person in the course of the examination. In these proceedings, in which the Commissioner presses for the forfeiture of her property, Ms Huang could theoretically tender portions of Mr Feng's examination transcript in her own case in support of her claim that the money used to pay the deposit on her property was not the proceeds of crime or any serious offence. She could also legitimately use the transcript of Mr Feng's examination in the cross-examination of the Commissioner's witnesses if appropriate.
With the agreement of the parties, I examined the transcript in question. Although there is no reference to Ms Huang, Auschain Investment Group Pty Ltd is mentioned. Ms Huang contends that the fact that the Commissioner has not questioned Mr Feng about her affairs supports the proposition that there is no link between them and that the answers given by Mr Feng will be of forensic assistance to her in establishing that it is not reasonable to suspect that the money which she alleges her father provided to pay for the deposit on her apartment, and which Mr Feng is said to have deposited into her account, is the proceeds of crime.
It seems clear that Mr Feng was not asked about Ms Huang for the reason that the examination in question did not, in accordance with the orders made by Hall J, authorise questions about her. The separate examination of Mr Feng directed to his knowledge of her, or concerning any relationship between them, has not yet taken place. I am presently unable upon the information available to understand the suggestion that anything said by Mr Feng in his examination could or even might support the contention that money apparently deposited into Ms Huang's account by Mr Feng in fact came legitimately from her father.
The Commissioner argues that the transcript of Mr Feng's examination has no apparent relevance to Ms Huang or these proceedings. In that respect it should be noted that Ms Huang has made an application that her property be excluded from restraint or forfeiture. In my view, the transcript of Mr Feng's examination does not upon my reading of it have any relevance to that application at all. It does not relate to deposits into her account. It does not deal with the relationship, if any, between Ms Huang and Mr Feng. The only reference to Auschain Investment Group Pty Ltd is completely neutral in the context of Ms Huang's current situation. The transcript of the examination of Mr Feng throws no light at all upon any of the likely issues that will need to be addressed by Ms Huang in the prosecution of her exclusion application pursuant to s 29 and s 73 of the Proceeds of Crime Act. That is not to say that evidence that Mr Feng might be able in due course to give would not be relevant to Ms Huang's application. It is just that nothing contained in the transcript of his examination meets that description.
A party who issues a subpoena to produce documents carries the onus of establishing that the documents that are the subject of the subpoena are sufficiently relevant to justify production in the sense that they are "reasonably likely to add, in the end, in some way or other, to the relevant evidence in the case": Seven Network Limited v News Limited (No 11) [2006] FCA 174 at [6]-[7]. Ms Huang has failed to discharge that onus. In my view, having examined the transcript, it is apparent that the subpoena lacks the "sufficient apparent connection" with the issues likely to arise in Ms Huang's exclusion application: see White v Tulloch (1995) 19 Fam LR 696; Re VBN and Australian Prudential Regulation Authority (2006) 92 ALD 455.
The Commissioner has sought an order for the costs of this application. In the normal course, costs would follow the event. In this case, that event is the Commissioner's success in having the subpoena set aside. However, in my view, there should be no order as to costs. This is for the following reasons.
The transcript of Mr Feng's examination is entirely uncontroversial. There is no obvious or apparent sensitivity attaching to anything referred to or revealed by Mr Feng in answer to the questions asked of him. Nor does the form or content of the questions themselves reveal or expose any sensitive material or operational techniques. Indeed, there does not appear to me to be any reason why the transcript could not, and on one view should not, have been produced in answer to the subpoena. It is not without significance that the Commissioner, who originally sought to oppose production of the transcript upon the additional grounds that it (a) related to a third party, (b) was not in his possession, (c) was a privileged document containing privileged information or (d) had the potential to "undermine the objects of the Proceeds of Crime Act", ultimately relied only upon the single ground of relevance. This application has therefore occupied the valuable time of the Court in circumstances that could have been avoided by a reasonable adherence to the common sense exhortation enshrined in the overriding purpose contained in s 56 of the Civil Procedure Act 2005. I am not satisfied in such circumstances that the Commissioner should have the costs of the application.
Accordingly, I make the following orders:
1. Set aside the subpoena filed on 1 August 2016 by Shana Huang.
2. Make no order as to costs.
[2]
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Decision last updated: 03 November 2016