Making the proceeds assessment order
35Mr Tran, who appeared for the appellant before the primary judge, accepted that the circumstances revealed in the evidence would disclose involvement by her in serious crime related activity if the respondent established that she knew that false documents were being supplied in support of her application for finance, but submitted that the Court should not make such a finding on all the evidence: primary judgment (at [16]).
36The first issue required the respondent to establish, on the balance of probabilities, that the appellant was knowingly engaged in serious crime related activity in the form of an offence that involved fraud, under s 178BB of the Crimes Act: primary judgment (at [31]). That required his Honour to determine the extent of her knowledge of the use of the false documents in support of her loan application: primary judgment (at [69]).
37The primary judge held that conduct constituting the s 178BB offence was capable of falling within the definition of a serious crime related activity involving fraud for the purposes of s 6(2)(d) of the CAR Act: primary judgment (at [32]). There is no challenge to that conclusion.
38His Honour took into account (at [33]) the gravity of the matters alleged against the appellant in assessing whether the respondent had discharged its civil standard of proof in accordance with the principles in Briginshaw v Briginshaw; see also s 140(2)(c) of the Evidence Act.
39The appellant did not contend at trial that either Ms Ling or Mr Ly produced the false documents. Her case was that she did not produce them and that she was completely unaware they had been furnished by Mr Ly to the lender in support of the loan application or that the loan application form which she signed, dated 17 March 2008, falsely described her occupation and salary: primary judgment (at [56], [58] - [60]).
40The primary judge made the following findings:
(1)The appellant arrived in Australia in 1994, had had little remunerative employment save, apparently, for working briefly in about 2008 at a nail beauty salon in Bondi Junction and, at an earlier time, probably in 2005, for about two days (as a trial period) at the Coogee Bay Tobacconist: (at [39], [43]);
(2)From the time of her arrival in Australia and during the subject period, she was in receipt of Centrelink benefits, whilst being involved in very little paid work: (at [40], [43], [44]);
(3)The appellant had been a regular gambler since at least 1998 and was registered as a Star Club patron at the Star City Casino with a card bearing a patron number assigned to her. There was substantial evidence that she was an active gambler throughout the subject period: (at [45] - [48]);
(4)During the subject period, the appellant made expensive purchases of luxury items at Louis Vuitton, House of K'dor and other retail outlets and departed from Australia on no fewer than nine occasions for periods usually of between one week and four weeks in duration: (at [49], [85]);
(5)The appellant was a worldly person, was not naïve in her knowledge of business affairs and had had substantial exposure to the English language: (at [53] - [54]);
(6)Between January and March 2008, the appellant came to understand that an essential part of the loan application was proof of employment and income: (at [52]);
(7)The appellant represented to Mr Ly that she was employed and had been for some time: (at [52]);
(8)Neither Mr Ly, nor any member of his staff, told the appellant, as she contended, that it did not matter that she was unemployed as she had a 20% deposit available for the loan: (at [52]);
(9)Mr Ly acknowledged he would receive a percentage of the loan amount if the application was successful (which on the evidence would amount to $1,288); however, it was the appellant who had the key financial interest in the loan application being granted. Mr Ly acted in accordance with proper broking practice and impressed as a careful and thorough mortgage broker with a firm understanding of his obligations: (at [61] - [62]); and
(10)Mr Ly's telephone records indicated that two telephone calls were made from Mr Ly's office to the appellant's mobile phone number on 28 March 2008, which was not consistent with the appellant being kept in the dark concerning the use of the false documents: (at [64]).
41The primary judge's reasoning to his critical conclusion should be set out in full:
"56 The Defendant was adamant at the examination on 26 August 2010, and in her evidence before me, that she was completely unaware that a letter dated 26 March 2008, and two payslips said to relate to Coogee Bay Tobacconist, had been furnished by Mr Ly to the lender in support of the loan application. Further, the Defendant stated that she was unaware that the loan application form (which bears the date '17 March 2008' and was signed by her) described her occupation as a supervisor employed by Coogee Bay Tobacconist since 17 August 2005 at an annual salary of $45,657.00. I do not accept the Defendant's evidence to this effect.
57 Ms Ling denied in evidence that she had prepared the letter of 26 March 2008, which stated (on its face) that it was signed by 'Michelle Ling' as 'Shop Owner' at the Coogee Bay Tobacconist. Mr Ly stated in evidence that he was provided with the letter of 26 March 2008 and the payslips by the Defendant, and that these documents were used as part of the application thereafter.
58 Ms Ling and Mr Ly were cross-examined by Mr Tran for the Defendant. Mr Tran did not put to Ms Ling that she had prepared this letter and had provided it to Mr Ly, without the knowledge of the Defendant.
59 Mr Tran did not put to Ms Ling that she had acted improperly. Although a possible scenario is that she provided the letter and payslips to the Defendant in support of the Defendant's application, and that this was done by her knowing that the contents were untrue, I do not make any finding to that effect. Firstly, such a proposition was not put to her by Mr Tran for the Defendant. The rule in Browne v Dunn (1894) 6 R 67 has been described as a 'principle of professional practice, of fair play and fair dealing' based on procedural fairness: Khamis v R [2010] NSWCCA 179; 203 A Crim R 121 at 123 [2]-[3] (Campbell JA) and 128-132 [29]-[45] (Whealy J). In written submissions, Mr Tran stated that the Defendant 'does not propose to allege any person in particular has produced the documents, only that it was not the Defendant who has produced the documents' (Defendant's written submissions, 1 February 2012, page 2).
60 Nor did Mr Tran put to Mr Ly that he had, in some improper way, furnished these documents in support of the application. The cross-examination of Mr Ly rose no higher than a suggestion by Mr Tran that Mr Ly had a financial interest in the loan application being approved. No further proposition was put by Mr Tran to Mr Ly as to what Mr Ly is said to have done with this financial motive in mind.
61 Mr Ly acknowledged readily that, as a broker, he would receive a percentage of the loan amount if the application was successful. In this case, on the figures provided in evidence, that sum would amount to $1,288.00 or (at the most) twice that amount. Although no direct allegation of impropriety was put to Mr Ly in cross-examination, I record my conclusion that Mr Ly acted in accordance with proper broking practice in this case. In evidence, Mr Ly impressed as a careful and thorough mortgage broker with a firm understanding of his obligations in that capacity, acting as the Defendant's agent (National Australia Bank Limited v Thirup [2011] NSWSC 911 at [43]).
62 It was the Defendant who had the key financial interest in the loan application being granted, with the consequence that the sum of $184,000.00 would be advanced to her. I am satisfied to the requisite standard that it was the Defendant who either furnished the letter of 26 March 2008 and the payslips to Mr Ly's office, or caused those false documents to be provided. There is no other plausible explanation for these false documents being deployed in the interests of the Defendant by some other person.
63 Certainly, in considering what inferences should be drawn from the totality of the evidence and, in particular, the contemporaneous documentary evidence, the Court should not place to one side the common sense which trial judges consistently invite juries to bring to bear in the resolution of factual issues involving alleged dishonesty. In my view, it is not to the point to determine whether telephone contact was made by Mr Ly's office on 27 March 2008 with Ms Ling to verify the Defendant's employment with Coogee Bay Tobacconist, this being an issue relied upon by Mr Tran in closing submissions. I bear in mind that the letter of 26 March 2008 was transmitted to Mr Ly's office by facsimile on 27 March 2008. That letter constituted a form of documentary verification of the Defendant's alleged employment and income.
64 Further, it is noteworthy that Mr Ly's telephone records (Exhibit D) indicate that telephone calls were made from Mr Ly's office to the Defendant's mobile phone number on 28 March 2008 (two calls) and again on 3 April 2008. Although the evidence does not disclose what was said in these telephone calls, what it demonstrates is that there was a direct line of communication from Mr Ly's office to the Defendant on important days, including the day following the receipt of the false employment letter. To my mind, telephone contact of this type is not consistent with the Defendant, in some way, being kept in the dark concerning the use of these false documents in support of her own loan application. The very clear inference is that the Defendant well knew that these statements were being made on her behalf in support of the application, even if the evidence does not permit a clear finding to be made that it was the Defendant herself who created the false documents."
42The primary judge concluded (at [65]):
"I am comfortably satisfied that the Defendant was aware that false documents were relied upon in support of her loan application and that the lender was deceived into acting upon these false documents in extending the loan of $184,000.00 to the Defendant. I am comfortably satisfied that the Defendant, with the intention of obtaining for herself a financial advantage, made or published (or concurred in making or publishing) a statement which she knew was false in a material particular, so as to constitute conduct within s 178BB Crimes Act 1900."
43In reaching his conclusions, the primary judge had regard (see [52]) to the totality of the evidence, including the oral evidence of Ms Ling, Mr Ly and the appellant as well (see [66]) as to the appellant's "demeanour (she gave evidence largely through an interpreter)", the probabilities and "other incontrovertible facts, facts that are not in dispute and other relevant evidence".
44Therefore, his Honour concluded (at [67]) that a proceeds assessment order under s 27 should be made.
45Although the appellant does not challenge the quantum of the proceeds assessment order, I set out aspects of his Honour's consideration of this issue as, in my view, his rejection of the appellant's evidence in this context assists in the determination of the appeal. As the primary judge observed (at [79]), to satisfy s 28(3) of the CAR Act the respondent had to establish, on the civil standard, the appellant's expenditure during the subject period, the onus then lay upon her to satisfy the Court that all or any part of that expenditure was funded from income or money from sources unrelated to any illegal activity or activities.
46The primary judge observed (at [81]) that given the finding he had made "rejecting the truthfulness of the evidence of the Defendant on ... her knowledge of the use of false documents in support of her loan application", her evidence on the s 28 issue needed to be approached with great care and should not be accepted on any material issue without independent corroboration. As will be apparent his Honour did not accept the appellant's evidence concerning the source of her expenditure. Accordingly the appellant comes to this appeal as a person who has been disbelieved on all critical issues.
47The unchallenged affidavit evidence of Mr Seagrave, who conducted an analysis of the appellant's financial records to seek to determine her total expenditure and income unrelated to any illegal activity or activities during the subject period, demonstrated that the appellant's total expenditure was $1,263,988. He concluded that income unrelated to any illegal activity or activities amounted to $341,250: primary judgment (at [71] - [77]). Therefore, the respondent sought a proceeds assessment order in the net sum of $922,738: primary judgment (at [78]).
48The appellant sought to justify her expenditure during the subject period by claiming she was a regular and highly successful gambler at various facilities, including Star City Casino, clubs and hotels which was a "very large source of her income which was legally obtained" and also by saying sums of money were provided to her by relatives by way of gift or otherwise: primary judgment (at [80], [97], [101]).
49The primary judge did not accept the appellant's uncorroborated evidence concerning sums of money she said had been provided to her by relatives. Indeed, he drew (at [82]) an adverse Jones v Dunkel ([1959] HCA 8; (1959) 101 CLR 298) inference from her unexplained failure to call her relatives to give evidence in support of her case that either they had provided large sums of money to her, or had direct knowledge of legitimate sources of such sums.
50The primary judge also accepted evidence that, in short, the appellant incurred net losses at Star City Casino during the subject period, such evidence "point[ing] to her being a loser and not a winner": primary judgment (at [87] - [90], [98]). His Honour was also not persuaded by the appellant's evidence that she was a regular and highly successful gambler at various other hotels and clubs. His Honour accepted evidence, albeit generalised, from an employee of the NSW Office of Liquor, Gaming & Racing to the effect that players at such venues do not have a high rate of return as demonstrating that "[t]he statistical prospect of the Defendant being a heavy and regular winner whilst gambling at clubs and hotels has an air of improbability about it": primary judgment (at [93] - [96], [99]).
51Accordingly, his Honour concluded that a proper foundation had been demonstrated by the respondent for a proceeds assessment order assessed in accordance with s 28(3) and that the appellant had not discharged her onus of establishing that her expenditure during the subject period was funded from sources unrelated to an illegal activity or activities: primary judgment (at [105]).