Commissioner of the Australian Federal Police v Huang

1. [1]

   JOHNSON J: By Summons filed on 21 October 2015, the Plaintiff, the Commissioner of the Australian Federal Police (“the AFP Commissioner”), sought a restraining order pursuant to s.19(1)(b) Proceeds of Crime Act 2002 (Cth) (“POC Act”) in respect of real property known as Unit 625, 12 Grandstand Parade, Zetland (“the Zetland property”) held in the name of Shana Huang (“Ms Huang”).

2. [2]

   On 21 October 2015, restraining orders were made by Button J with respect to the Zetland property pursuant to s.19(1)(b) POC Act. A restraining order was sought and made on the basis of the AFP Commissioner’s suspicions that the Zetland property was wholly or partly the proceeds and/or instrument of a serious offence contrary to s.400.9(1) Criminal Code (Cth), namely dealing in property reasonably suspected to be the proceeds of crime in the sum of $A100,000.00 or more. That suspected offence included, in relation to the Zetland property, an intention to defraud the Australian and New Zealand Banking Group (“ANZ Bank”) by a false or misleading statement contrary to s.192G Crimes Act 1900 (NSW).

3. [3]

   In the Summons, the AFP Commissioner sought examination orders under s.180 POC Act with respect to Ms Huang and Yi Feng (“Mr Feng”). Ms Huang was examined on 26 April 2016 and Mr Feng was examined on 17 February 2017.

4. [4]

   The AFP Commissioner also sought in the Summons forfeiture orders concerning the Zetland property pursuant to s.49 POC Act. That aspect of the Summons is yet to be determined.

The Present Application

1. [5]

   The present application arises from a Notice of Motion filed 20 April 2016 by Ms Huang in which she seeks various orders, including an order that the Zetland property be excluded from restraint pursuant to s.29 POC Act.

2. [6]

   On 18 September 2017, Ms Huang filed a Further Amended Notice under s.31(4) POC Act setting out the grounds on which she relies in support of her application.

3. [7]

   By letter dated 8 November 2017, the AFP Commissioner gave notice, for the purpose of s.31(6) POC Act, of grounds upon which it was proposed to contest Ms Huang’s application.

Hearing of the Application

1. [8]

   The hearing of the Notice of Motion proceeded before me on 14 and 15 November 2017. Mr P English of counsel appeared for Ms Huang. Mr G O’Mahoney of counsel appeared for the AFP Commissioner.

2. [9]

   A Court Book containing affidavits and documents relied upon by Ms Huang and the AFP Commissioner was admitted into evidence (Exhibit A). Ms Huang relied upon the following affidavits:

3. [10]

   Ms Huang was cross-examined on her affidavits. Mr Bowe was not required for cross-examination.

4. [11]

   Counsel for the AFP Commissioner relied upon the affidavit of Glyn Evan Roberts sworn 20 October 2015 and affidavits of Scott Michael Mathews affirmed 11 November 2016 and 30 March 2017 (and associated exhibits and annexures). In addition, the AFP Commissioner relied upon a further affidavit of Mr Mathews affirmed on 14 November 2017.

5. [12]

   Mr Roberts and Mr Mathews were not required for cross-examination.

6. [13]

   Detailed written submissions had been provided by counsel in advance of the hearing and these were supplemented by additional written submissions and oral submissions (T55-100).

7. [14]

   After the Court reserved its decision on 15 November 2017, written submissions were furnished by the parties, with the permission of the Court, concerning a number of decisions of courts which bear significantly upon the issues to be determined on the present application.

8. [15]

   Submissions at the hearing were made by reference to a number of authorities, including single Judge decisions in Commissioner of the Australian Federal Police v Lordianto (2017) 324 FLR 237; [2017] NSWSC 1196 (Simpson J), Commissioner of the Australian Federal Police v Fernandez [2017] NSWSC 1197 (Simpson J) and Commissioner of Australian Federal Police v Kalimuthu (No 3) (2017) 338 FLR 241; [2017] WASC 108 (Allanson J).

9. [16]

   Written submissions made by counsel for the AFP Commissioner and Ms Huang in March 2018 addressed the decision of N Adams J in Commissioner of the Australian Federal Police v Tjongosutiono (2018) 329 FLR 103; [2018] NSWSC 48.

10. [17]

    Written submissions made in August 2018 by counsel for the AFP Commissioner addressed the decision of Rothman J in Commissioner of the Australian Federal Police v Gwe and Hoang [2018] NSWSC 992.

11. [18]

    Written submissions made in October 2018 by counsel for the AFP Commissioner addressed the important decisions of the New South Wales Court of Appeal in Lordianto v Commissioner of the Australian Federal Police (2018) 337 FLR 17; [2018] NSWCA 199 (“Lordianto (CA)”) and Commissioner of the Australian Federal Police v Fernandez (2018) 336 FLR 386; [2018] NSWCA 198 (“Fernandez (CA)”).

12. [19]

    The most recent written submissions made on behalf of the AFP Commissioner were dated 26 November 2018 and addressed the decision of the Court of Appeal of Western Australia in Commissioner of the Australian Federal Police v Kalimuthu (No. 2) (2018) 340 FLR 1; [2018] WASCA 192 (“Kalimuthu (No. 2)”). Put shortly, the Court of Appeal of Western Australia applied the reasoning in Lordianto (CA) with respect to the construction of relevant provisions of the POC Act. As will be seen, these decisions bear upon the proper construction of provisions in the POC Act which fall for determination in this application.

13. [20]

    I note that Ms Huang’s legal representatives indicated that no further submissions would be made on her behalf concerning these later judgments.

14. [21]

    On 2 April 2019, the Court was informed by the solicitors for the AFP Commissioner that, on 22 March 2019, the High Court of Australia granted special leave to appeal from the decisions in Lordianto (CA) and Kalimuthu (No. 2). The hearing of those appeals proceeded before the High Court on 7 and 8 August 2019 with the Court reserving its decision: Lordianto and Anor v Commissioner of the Australian Federal Police; Kalimuthu and Anor v Commissioner of the Australia Federal Police [2019] HCATrans 150 and 151.

15. [22]

    Given the period of time which has passed since the Court reserved its decision in this matter, it is not appropriate to delay further the giving of judgment on the application heard in November 2017 until the High Court of Australia has determined the appeals in Lordianto (CA) and Kalimuthu (No. 2). Whilst acknowledging the possibility that the decisions of the High Court of Australia may affect the outcome of these proceedings, it is appropriate to proceed to give judgment on the application. I note that the parties to the present application have not requested the Court to further delay the delivery of judgment pending the determination of the appeals by the High Court of Australia.

16. [23]

    For the purpose of preparation of this judgment, I have read the transcript of the hearing which proceeded in November 2017. In addition, I have had regard to contemporaneous notes and summaries which were prepared by me at that time. I have had regard, as well, to the documentary evidence and the submissions made by counsel for the AFP Commissioner and Ms Huang concerning findings and conclusions which should be reached by reference to her evidence.

Factual Background

1. [24]

   The following narrative is based largely upon the affidavits of Mr Roberts and Mr Mathews, which were not the subject of challenge at the hearing before me, and also parts of Ms Huang’s account which were not challenged in these proceedings.

2. [25]

   I will consider separately issues concerning the credibility and reliability of Ms Huang’s evidence, which came under strong challenge at the hearing.

3. [26]

   Ms Huang was born in June 1995 and is a citizen of the People’s Republic of China. She had been in Australia since 14 January 2014 on a TU573 visa, which allowed her to study as a full-time student at the University of New South Wales with limited working rights.

4. [27]

   In June 2014, members of the AFP commenced an investigation into suspected money laundering undertaken by a syndicate of Chinese students who were observed depositing large sums of cash in Australian financial institutions and remitting most of the funds overseas. Mr Feng was suspected of being involved in the syndicate.

5. [28]

   On 11 August 2014, Mr Feng made two deposits of large amounts of cash (totalling $108,000.00) into Ms Huang’s bank account at two bank branches in Sydney. In the period following these deposits, Mr Feng also made large cash deposits into other bank branches across Sydney.

6. [29]

   As will be seen, Ms Huang said that she does not know Mr Feng and has never met him.

7. [30]

   On 17 August 2015, Mr Feng was charged with offences including dealing with property reasonably suspected of being proceeds of crime contrary to s.400.9 Criminal Code (Cth). Mr Feng pleaded guilty and has been sentenced for that offence (affidavit, SM Mathews, 14 November 2017).

8. [31]

   From 14 January 2014 to 2 December 2014, Ms Huang had a bank account with the ANZ Bank. It was this account which received the deposits made by Mr Feng in August 2014 referred to at [28] above.

9. [32]

   Ms Huang stated that it was her belief that any funds over $5,000.00 which she received came from her father, Mr Jilong Huang.

10. [33]

    On 5 August 2014, Ms Huang signed a Citibank Package Application form provided by Citigroup Pty Limited stating that she was employed full time as a public relations officer by Guang Dong Jian Xin Construction with a gross monthly salary of $A3,000.00. On the same day, Ms Huang signed an income declaration form provided to Citibank stating that she had been employed by Guang Dong Jian Xin Construction for two-to-three months.

11. [34]

    These documents contained several representations which the AFP Commissioner contends were false in material respects. As will be seen, Ms Huang acknowledged signing these documents and accepted that various representations contained in them were false, but she stated that she did not prepare these forms.

12. [35]

    Citibank was also provided with a letter of employment with a handwritten translation in English that reads:

13. [36]

    Ms Huang has acknowledged that the information in this letter was untrue.

14. [37]

    Ms Huang stated that she bought the Zetland property through Auschain Investment Group (“Auschain”) which was recommended to her by a friend. She stated that on or around 11 August 2014, Emily Tan from Auschain recommended the Zetland property to her and said that, if she wanted to purchase that property, she would need to pay a deposit of $108,000.00 as soon as possible.

15. [38]

    On 11 August 2014, two cash deposits and one card entry from various branches around Sydney (Eastwood, Merrylands and Kingsford) were made into Ms Huang’s ANZ Bank account totalling $108,996.00. Mr Feng made these two cash deposits.

16. [39]

    On 11 August 2014, a cheque was drawn from Ms Huang’s ANZ Bank account in the amount of $A108,000.00 made payable to Meriton Property Services. This cheque was used by Ms Huang to pay the deposit on the Zetland property.

17. [40]

    On 13 August 2014, a contract for sale in respect of the Zetland property was entered into between Ms Huang as purchaser and Karimbla Properties (No. 2) Pty Limited as vendor. The purchase price was $A1,080,000.00 and a deposit was payable in the amount of $A108,000.00.

18. [41]

    On or about 3 October 2014, settlement occurred in relation to the purchase of the Zetland property. Ms Huang is the registered proprietor of the Zetland property which is subject to a registered mortgage in favour of Citigroup in respect of a loan to Ms Huang in an amount of $A445,000.00.

19. [42]

    Ms Huang does not now seek to challenge that the deposits made by Mr Feng into her ANZ Bank account were the proceeds and instrument of a money laundering offence. Rather, she contends that she had no knowledge of this at the time nor any basis to reasonably suspect that it was the position.

20. [43]

    Ms Huang stated that her father “paid the deposit” and stated, as well, that Sean Huang of Auschain recommended “a currency exchange service to facilitate the transfer of the deposit from China on short notice”.

21. [44]

    Ms Huang said initially that her father was in Australia in July/August 2014 when the deposits were made into her ANZ Bank account. She states that Emily Tan arranged for the transfer of the deposit with her father through the currency exchange service.

22. [45]

    Ms Huang did not adduce evidence from either Emily Tan or Sean Huang in support of her application. Nor did Ms Huang adduce evidence from her father. The AFP Commissioner submitted that the failure (and unexplained failure) to adduce evidence from any of these persons was significant to the resolution of the issues falling for determination on this application.

23. [46]

    Ms Huang said initially that the purchase price of the Zetland property was $A1,080,000.00 comprised of the deposit in the amount of $A108,000.00 and the loan from Citibank (of which $A70,000.00 was applied to acquire the Zetland property) with the balance coming from Ms Huang’s father. The balance of the loan from Citibank was used in an offset account ($A90,000.00) and to purchase units in financial products ($A380,000.00).

24. [47]

    However, Ms Huang later said that she borrowed $A445,000.00 from Citibank and “all of this money was used to pay” for the Zetland property (Ms Huang’s affidavit of 31 August 2016, paragraph 5(b)). Ms Huang stated that she spoke with her father who suggested that the deposit and balance (being sums in the amount of $A686,106.35 and $A350,896.89 transfer from Hong Kong) paid towards the Zetland property (as well as to make other investments) were sourced from his personal earnings (Ms Huang’s affidavit of 31 August 2016, paragraph 7).

25. [48]

    Counsel for the AFP Commissioner noted that the figures asserted by Ms Huang did not equate to the asserted price of the Zetland property and observed, as well, that Ms Huang’s father had not given evidence. In these circumstances, it was submitted that no weight should be given to Ms Huang’s account of her telephone conversation with her father.

Overview of Arguments of Ms Huang and the AFP Commissioner

1. [49]

   Ms Huang’s Further Amended Notice of Grounds under s.31(4) POC Act filed on 18 September 2017 stated that there were three sources of funds used by her to acquire the Zetland property:

2. [50]

   Put shortly, Ms Huang contended that her interest in the Zetland property should be excluded from the restraining order for the following reasons:

3. [51]

   The submissions advanced at [50](a)-(c) above require consideration to be given to the construction and application of s.330 POC Act.

4. [52]

   Put shortly, the AFP Commissioner opposed Ms Huang’s application and submits that it should be refused for the following reasons:

Some Provisions in the POC Act

1. [53]

   It is appropriate to mention various provisions in the POC Act which are important to the determination of this application.

2. [54]

   Section 29 POC Act relevantly provides:

3. [55]

   Section 31 POC Act states:

4. [56]

   Section 317 POC Act relevantly states:

5. [57]

   Section 330 POC Act relevantly provides:

6. [58]

   Several terms of significance to this application are defined in the POC Act.

7. [59]

   The term “derived” is defined in s.336 POC Act as follows:

8. [60]

   Section 338 contains the Dictionary of the POC Act which includes the following definitions:

Assessment of the Evidence of Ms Huang

1. [61]

   As would be clear from what has been said so far, the evidence of Ms Huang is central to the present application. Ms Huang bears the onus of proof on the balance of probabilities. She gave oral evidence and was cross-examined in a number of areas. It is submitted for the AFP Commissioner that her evidence is not credible or reliable in a number of significant respects. Apart from the evidence of Ms Huang, the evidence before the Court is entirely documentary in nature. The account of Ms Huang with respect to a number of significant documents in evidence is central to the determination of the questions arising on this application.

2. [62]

   A Mandarin interpreter attended the hearing to assist Ms Huang in evidence if assistance was required. In that respect, Mr English informed Ms Huang in examination-in-chief that the interpreter was present to assist if needed, although it was anticipated that Ms Huang would give her evidence in English unless the assistance of the interpreter was sought by her (T7.21-24). In the result, Ms Huang gave her evidence almost entirely without the assistance of the interpreter.

3. [63]

   Ms Huang was 22 years old at the time of the hearing. She was engaged in tertiary studies in Australia at the time when she was giving evidence. My impression was that her command of English was good, but that the attendance of the interpreter was appropriate in the event that there was any particular area of difficulty which, as it turned out, there was not.

4. [64]

   As noted earlier, Ms Huang made five affidavits which were read at the hearing.

5. [65]

   Ms Huang’s evidence occupied a substantial part of the hearing (T7-51). She explained that she had come to Australia in 2014 for the purpose of undertaking a course in aviation management at the University of New South Wales (T8). Prior to coming to Australia, Ms Huang had undertaken studies in Singapore where she completed her secondary education and also a course in the English language (T8-9). There was a requirement for a level of proficiency in the English language for the purpose of her tertiary studies in Australia and Ms Huang continued English studies whilst in Australia (T9).

6. [66]

   Ms Huang stated that she had never met Mr Feng and did not know him (T11-12). She said that she was not in a position to tell the Court what Mr Feng did for work (T12). Ms Huang said that she did not know Mr Feng’s associate, Shiyu Cong, and had never met him (T12). Ms Huang stated that she had no knowledge how it was that Mr Feng and Mr Cong were depositing large sums of cash in bank accounts in Sydney in 2014.

7. [67]

   It is appropriate to set out extracts from the evidence of Ms Huang to assist an understanding of conclusions reached concerning the credibility and reliability of important parts of her evidence.

8. [68]

   In cross-examination, counsel for the AFP Commissioner asked Ms Huang (T13.31-48):

9. [69]

   Ms Huang stated that she had not seen the Zetland property until settlement had occurred (T14).

10. [70]

    Ms Huang was asked in cross-examination concerning the deposit used for the purchase of the Zetland property (T14.33-15.3):

11. [71]

    Counsel for the AFP Commissioner asked Ms Huang concerning funds used for the balance of the purchase price for the Zetland property (T15.34-16.22):

12. [72]

    Ms Huang was asked about her own lack of assets and income in mid-2014 (T17):

13. [73]

    Ms Huang was asked about documents used in support of the loan application with Citibank which asserted that she was employed by her father’s company in China as a public relations officer. It was apparent that the document contained false information. Ms Huang was asked (T19.33-20.40):

14. [74]

    Ms Huang agreed that a document provided to Citibank was false and misleading in several respects (T21.16-50):

15. [75]

    Ms Huang agreed that she had signed documents before for banking purposes in Singapore and China. Although she was aware that the reason for signing the document was to verify the accuracy of its contents, Ms Huang said she did not read the document which contained false and misleading information before signing it.

16. [76]

    Ms Huang agreed that another document which formed part of the Citibank home loan application contained false information concerning her place of residence (T26-28).

17. [77]

    A further document signed by Ms Huang contained false or misleading statements concerning her employment and income position (T28-30).

18. [78]

    A further false and misleading statement acknowledged by Ms Huang was a statement that the property was an investment property and not her residence (T30).

19. [79]

    The difficulties confronting Ms Huang in her loan application were illustrated by the following part of the cross-examination (T31.31-32.9):

20. [80]

    Ms Huang was asked about the part of the application signed by her which confirmed the truth, accuracy and correctness of the information provided (T32.23-33.27):

21. [81]

    Soon after, counsel for the AFP Commissioner returned to the question whether Ms Huang was aware at the time of signing the document that it contained false information (T34.8-39):

22. [82]

    Ms Huang maintained in cross-examination that she had not read the document (T34.49-35.19):

23. [83]

    Counsel for the AFP Commissioner asked Ms Huang (T35.37-36.2):

24. [84]

    The cross-examination of Ms Huang proceeded in a similar pattern where the witness was taken to various documents which contained false information which she had signed as being correct, but with her response being that she had not read the documents and did not know at the time that the contents were false or misleading.

25. [85]

    Ms Huang asserted that she had not read a document which had been signed by her father which she had certified as being accurate. She was asked (T42.8-32):

26. [86]

    Counsel for the AFP Commissioner asked Ms Huang whether she had ever discussed with her father the false information which had been provided concerning her address and employment (T45):

27. [87]

    Ms Huang stated that she had last seen her father when she went to China for a holiday and she confirmed that he was not to give evidence in the proceedings (T46).

28. [88]

    Ms Huang agreed that her first affidavit (of 6 January 2016) contained the inaccurate statement that her father was in Australia at the time when the sums were placed in her bank account which were used for the deposit on the purchase of the Zetland property (T46-47).

29. [89]

    In re-examination, Ms Huang told Mr English that writing on part of the documentation signed by her had not been written by her (T48-51).

30. [90]

    I have considered submissions made by counsel concerning findings to be made with respect to Ms Huang’s evidence. In approaching this topic, I have had regard to the content of her evidence and her demeanour, together with the substantial contemporaneous documentary evidence about which she was questioned in some detail.

31. [91]

    Counsel for the AFP Commissioner submitted that the evidence of Ms Huang in significant areas was implausible and ought not be accepted. The areas referred to by counsel are illustrated by the extracts from Ms Huang’s evidence set out earlier in this judgment. Counsel challenged Ms Huang squarely concerning false statements contained in documents which she signed with her repeated explanation for this state of affairs being that she had not read the documents and a suggestion that parts of the documents had not been completed at the time when she signed them.

32. [92]

    I am satisfied that the evidence of Ms Huang strains credulity in a number of significant respects. She was an educated and intelligent young woman in 2014 at the time of these events. She had a more than reasonable command of English. To the extent that a number of the documents were written in Mandarin, Ms Huang, of course, had an excellent understanding of that language.

33. [93]

    The acquisition of the Zetland property by Ms Huang was itself a very significant event in her life. Even if the Court accepted her account that she deferred to her father with respect to aspects or this process, it still does not account for her certification of clearly false details about herself being true and correct. It was abundantly clear that the information which was being supplied, and which she was prepared to certify as being correct, was highly material to the process of the loan application to Citibank.

34. [94]

    I do not accept Ms Huang’s evidence that parts of the documents were not completed at the time when she signed them, but were, in some way, completed thereafter in circumstances which are not otherwise made clear in the evidence. I am satisfied that the documents which she signed as being true and correct were complete at that time and were, on their face, false in a number of serious and material respects.

35. [95]

    The unexplained failure of Ms Huang to call evidence from her father does not assist her with respect to findings of fact related to alleged activities of those persons. On Ms Huang’s account, her father was a critical participant in these events. In Vu v New South Wales Crime Commission [2013] NSWCA 282, McColl JA (Meagher and Emmett JJA agreeing) said at [83]-[85]:

36. [96]

    In approaching this aspect of the case, I am not purporting to draw a Jones v Dunkel inference that any evidence which Ms Huang’s father may have given would not have assisted her. Rather, I am taking into account the fact that her father was not called to give evidence in her case so that Ms Huang’s evidence stands alone in important areas. I have kept in mind Ms Huang’s account of a telephone conversation with her father on 2 June 2017, which appears in her affidavit affirmed on 7 June 2017. This account of statements made by Ms Huang’s father is hearsay, unsworn and cannot be tested. It does not provide support for Ms Huang’s case in a manner which deserves weight to be given to it.

37. [97]

    I observe, as well, that Ms Huang did not adduce evidence from other persons, including Sean Huang and Emily Tan. Those persons are said to have been participants in events affecting Ms Huang’s acquisition of the Zetland property. The absence of evidence from those persons does not assist Ms Huang in the discharge of the onus of proof which she bears on this application.

38. [98]

    Further, and most significantly, the evidence of Ms Huang does not sit comfortably with the contemporaneous documentation which contained clearly false and material statements which she had certified as being correct.

39. [99]

    The conclusion which I have reached with respect to Ms Huang’s evidence is that, in any area of controversy, I will not act upon Ms Huang’s evidence unless it is corroborated by some objective and independent evidence.

Onus and Standard of Proof

1. [100]

   Ms Huang bears the onus of proving all matters necessary to establish the grounds for a grant of the relief presently sought: s 317 POC Act. Accordingly, the Court’s assessment of the evidence of Ms Huang, and a decision as to whether her evidence ought be accepted or rejected, forms a very important part of the determination of this application.

2. [101]

   It will be apparent that this finding concerning Ms Huang’s evidence will have a significant bearing upon the question whether she has discharged the onus of proof which lies upon her on this application.

3. [102]

   I keep in mind that it is for Ms Huang to demonstrate, to the civil standard, a negative - that the Zetland property does not fall within these particular provisions. The enquiry is not whether Ms Huang can establish on the civil standard that she has not committed one of the relevant offences, or that she had not illegally acquired the Zetland property. The question is whether her interest in the Zetland property does not fall within any of the categories in s.29 POC Act. There is no onus on the AFP Commissioner to prove the contrary.

4. [103]

   If it is found that the Zetland property is the proceeds of an offence, or an instrument of an offence, it again falls to Ms Huang to demonstrate on the civil standard that the property ceases to be proceeds or an instrument of an offence.

5. [104]

   If Ms Huang’s evidence as to the source of the Zetland property is disbelieved or rejected, it is permissible for the Court to conclude that she has not discharged the onus which is placed upon her by the statute: Henderson v State of Queensland (2014) 255 CLR 1; [2014] HCA 52.

6. [105]

   I note that counsel for Ms Huang accepted as being correct the submission of the AFP Commissioner that in confiscation proceedings, a general presumption that persons do not engage in criminal activity cannot displace the burden of proof on an applicant for exclusion based upon Henderson v State of Queensland at 9 [15].

7. [106]

   Although the decision in Henderson v State of Queensland was dealing with the Criminal Proceeds Confiscation Act 2002 (Qld) and not the POC Act, I am satisfied that the reasoning in that decision operates by analogy to assist the proper construction and operation of s.330 POC Act in the circumstances of the present application.

The 2018 Decisions in Lordianto (CA), Fernandez (CA) and Kalimuthu (No. 2) Concerning the Construction and Operation of the POC Act

1. [107]

   As noted earlier, written submissions were made by counsel after the hearing (with the permission of the Court) with respect to a number of subsequent decisions of Courts. It is not necessary to refer to the submissions of counsel made by reference to single-Judge decisions addressed in written submissions up to August 2018, given that the law to be applied is now to be found in the appellate decisions in those cases.

2. [108]

   Those appellate decisions are, as previously mentioned, Lordianto (CA), Fernandez (CA) and Kalimuthu (No. 2).

3. [109]

   Those decisions were referenced in the submissions of the AFP Commissioner dated 10 October and 26 November 2018. The legal representatives for Ms Huang did not make further submissions concerning these decisions nor seek to challenge the arguments advanced by the AFP Commissioner with respect to them. Accordingly, it is appropriate that I set out here the approach which I have adopted concerning these decisions which is based largely upon an acceptance of written submissions made by counsel for the AFP Commissioner.

4. [110]

   In both Lordianto (CA) and Fernandez (CA), the New South Wales Court of Appeal considered the concepts of “property” and “interests” in property for the purpose of the POC Act in respect of funds in bank accounts.

5. [111]

   In Lordianto (CA), the Court addressed the meaning and operation of s.330(4)(a) POC Act in relation to a factual scenario broadly analogous to that which arises in the present case. Relevantly, the following matters fell for determination in Lordianto (CA):

6. [112]

   With respect to bank accounts and the acquisition of an “interest” in “property” for the purposes of the POC Act, in Lordianto (CA) and Fernandez (CA), a threshold issue arose as to whether the relevant bank account holders “acquired” an interest in the relevant property for the purposes of s.330(4)(a) upon deposits being made into their Australian bank accounts. Ultimately, the Court of Appeal in each case held that:

7. [113]

   Insofar as the AFP Commissioner contended at the hearing before me that each deposit into a bank account created a new chose of action against the bank in the hands of the relevant account holder, replacing the previous chose in action for a lesser amount, I accept the submission of the AFP Commissioner that the decisions in Lordianto (CA) and Fernandez (CA) arrive at the same conclusion by way of a different path of reasoning.

8. [114]

   I accept the further submission of the AFP Commissioner that the difference between those paths of reasoning is not significant for present purposes. Regardless of whether a bank account gives rise to a single inchoate chose in action or a series of choses in action as a matter of general law, the salient point is that property is derived and acquired upon each deposit under the expanded statutory definition of “property” in the POC Act.

9. [115]

   The meaning of “third party” for the purposes of s.330(4)(a) POC Act was addressed by Beazley P and Payne JA in Lordianto (CA) at [83]-[117]. Their Honours held that “third party” within s.330(4)(a) refers to a person who is not involved in the transactions by which the property in question becomes proceeds of an offence, but rather is wholly removed from that property at the time of the relevant criminal conduct: Lordianto (CA) at [106]-[107] and [110]-[117]. Their Honours reasoned to this conclusion on the basis of several factors, including the following:

10. [116]

    I accept the submission of the AFP Commissioner that the analysis contained in the preceding paragraph ought be accepted and that it supports the submissions made previously by the AFP Commissioner in these proceedings.

11. [117]

    Accordingly, I adopt and apply the reasoning of Beazley P and Payne JA concerning the meaning of “third party” for the purposes of s.330(4)(a) POC Act in determining the present application.

12. [118]

    In Lordianto (CA), the “sufficient consideration” requirement in s.330(4) was considered at [118]-[140]. After reiterating that the “property” acquired was a “right” or “power” with respect to the chose in action constituted by the appellants’ bank accounts, the Court of Appeal (at [137]) reasoned that:

13. [119]

    The Court held unanimously in Lordianto (CA) (at [138]) that the “sufficient consideration” requirement in s.330(4) could not be satisfied where:

14. [120]

    I accept the submission on behalf of the AFP Commissioner that the reasoning and conclusions in Lordianto (CA), as summarised in the last two paragraphs, apply with no less force to the present case.

15. [121]

    In Lordianto (CA) at [141]-[163], the Court of Appeal addressed the question whether the circumstances would have given rise to a “reasonable suspicion” on the part of the account holders that the property was proceeds of an offence or an instrument of an offence for the purpose of s.330(4)(a).

16. [122]

    The Court held unanimously that the relevant account holders had failed to discharge their onus of proof on this issue: Lordianto (CA) at [163]. In reasoning to this conclusion, the Court found, amongst other things:

17. [123]

    Whilst acknowledging that the question as to whether an applicant for exclusion orders has discharged the burden of establishing that the property was acquired in circumstances that would not arouse a reasonable suspicion for the purpose of s.330(4)(a) must be answered by reference to all of the factual circumstances in the particular case, it was submitted for the AFP Commissioner that the approach adopted unanimously on this issue in Lordianto (CA) is instructive. When applied to the facts of this case, it was submitted that Ms Huang had failed to discharge the same objective burden in circumstances where there were a range of matters that gave rise to a reasonable suspicion for the purpose of s.330(4)(a) POC Act.

18. [124]

    The written submissions of counsel for the AFP Commissioner dated 26 November 2018 noted the decision in Kalimuthu (No. 2), and the areas where that Court followed the reasoning in Lordianto (CA). It is sufficient to note that the decision in Kalimuthu (No. 2) did not depart materially from that in Lordianto (CA) so that the construction of the POC Act adopted in Lordianto (CA) and outlined above, remains to be applied by me, as a single Judge of this Court, in determining Ms Huang’s application.

Decision on the Application

1. [125]

   I have made a number of findings concerning aspects of the evidence including the credibility and reliability of Ms Huang.

2. [126]

   By her Notice of Motion filed 20 April 2016, Ms Huang sought an order pursuant to s.29 POC Act that her interest in the Zetland property be excluded from the restraining order. I note that the proceedings have been litigated upon the basis that it is Ms Huang’s interest in the Zetland property which is the subject of the application. It has not been contended, by reference to the evidence, that the subject of the application is Ms Huang’s father’s interest in the Zetland property whether by way of a trust or otherwise. The application should be determined upon the basis that it is Ms Huang who asserts the interest in the Zetland property.

3. [127]

   It is for Ms Huang to establish, on the balance of probabilities, that her interest in the Zetland property is neither the proceeds of an indictable offence nor an instrument of any serious offence: ss.29(2)(d) and 317 POC Act, and therefore excluded from the restraining order.

4. [128]

   As noted earlier (at [42]), counsel for Ms Huang did not contend that her interest in the Zetland property was not so affected. Rather, the submission was that Ms Huang did not know or reasonably suspect that the Zetland property was so affected.

5. [129]

   The terms “indictable offence” and “serious offence” are defined in s.338 POC Act. A “serious offence” includes a money laundering offence under s.400.9(1) Criminal Code (Cth). Section 329 POC Act provides for the meaning of “proceeds” and “instruments”.

6. [130]

   Section 338 POC Act contains a broad definition of “unlawful activity” as an act or omission that constitutes an offence against a law of the Commonwealth, a law of a State or Territory or a law of a foreign country.

7. [131]

   Section 330 POC Act is an important provision in this case. Section 330(1) and (2) provides for property to become “proceeds” of an offence or an “instrument of an offence”. Section 330(3) provides for circumstances where property remains proceeds of an offence or an instrument of an offence. Section 330(4) provides for circumstances where property caught by s.330(3) ceases to be proceeds of an offence or an instrument of an offence. The proper construction of s.330 POC Act was considered in Lordianto (CA) as mentioned earlier.

8. [132]

   The AFP Commissioner has pointed to various offences which may be raised for consideration in this case. In particular, reference is made to predicate offences under s.192E or s.192G Crimes Act 1900 (NSW). Reference is made, as well to money laundering offences contrary to s.400.9(1) Criminal Code (Cth).

9. [133]

   I am satisfied that the sum of $108,000.00 deposited by Mr Feng into Ms Huang’s ANZ Bank account involved a money laundering offence under s.400.9(1) Criminal Code (Cth). The definition of “proceeds of crime” in s.400.1 Criminal Code (Cth) included an offence against the law of New South Wales, in this case being an intention to defraud by false or misleading statement contrary to s.192G Crimes Act 1900 (NSW).

10. [134]

    I accept the submission of the AFP Commissioner that the funds which were the subject of the money laundering offence were used in connection with the commission of an offence in acquiring the Zetland property.

11. [135]

    There is a solid foundation for regarding the deposit money placed in Ms Huang’s ANZ Bank account by Mr Feng as being tainted. The chose in action advanced for Ms Huang does not provide material assistance to the resolution of these proceedings. In any event, as noted earlier, it was never contended by Ms Huang that such funds were not tainted.

12. [136]

    I am satisfied that the funds provided by Citibank for the purchase of the Zetland property followed Ms Huang’s false statements made in support of the loan application.

13. [137]

    A particularly damaging document (Exhibit A, Tab 15, page 79) is a false statement signed by Ms Huang’s father, and a further false statement signed by Ms Huang as to her place of residence at the time of the making of the application. As observed earlier, the approach of Ms Huang to the execution of these various documents, and her oral evidence concerning those matters on 14 November 2017, is especially troubling.

14. [138]

    As stated above at [94], I am satisfied that the Citibank Package application form was complete at that time and Ms Huang was aware of its contents. Even if this conclusion was not reached, an appropriate finding would be that Ms Huang was prepared to sign documents (thereby asserting the truth of the contents of the false documents) without any real concern as to their content, whilst knowing that her employment and income details, and her capacity to repay any loan, were material features for the purpose of any loan application. Such a finding would not, in any event, assist Ms Huang on the present application.

15. [139]

    As a result, these funds were the proceeds and instrument of a money laundering offence in combination with the s.192G offence as a predicate offence.

16. [140]

    I accept that the property obtained initially by Ms Huang, upon the opening of the ANZ Bank account, was a chose in action represented by the rights that she had against the bank concerning the amount standing to her credit in the bank account at that time. I am likewise satisfied that the series of successive choses in action, represented by the rights of Ms Huang had against the ANZ Bank concerning the amount standing in her account from time to time as a result of Mr Feng’s deposits, was property either wholly or partly derived from the commission of the money laundering offences.

17. [141]

    Property remains proceeds of an offence or an instrument of an offence even if it is credited to an account: s.330(3)(a) POC Act.

18. [142]

    In addition, the funds obtained by Ms Huang though the Citibank loan were also the proceeds and instrument of a money laundering offence, in combination with the s.192G Crimes Act 1900 (NSW) offence arising from the use of documents containing false information in support of the loan application.

19. [143]

    Accordingly, it follows that the Zetland property is the proceeds of an indictable offence or an instrument of a serious offence under s.29(2) POC Act upon the basis that it had been used in connection with an offence.

20. [144]

    Section 330(4)(a) provides for property ceasing to be proceeds of an offence or an instrument of an offence, if it is acquired by a third party for sufficient consideration without the third party knowing and in circumstances that would not arouse a reasonable suspicion that the Zetland property was proceeds of an offence or an instrument of an offence (as the case requires).

21. [145]

    Ms Huang must demonstrate each of the elements of s.330(4)(a) POC Act in order to establish that the Zetland property has ceased to be the proceeds of an offence or an instrument of an offence. These are cumulative requirements to be proved by Ms Huang on the balance of probabilities.

22. [146]

    I accept the submission of the AFP Commissioner that the property did not cease to be proceeds or an instrument under s.330(4)(a) POC Act.

23. [147]

    Firstly, I accept the submissions of the AFP Commissioner that Ms Huang is not a “third party” under s.330(4)(a) POC Act. Ms Huang cannot be characterised properly as a “third party” given her involvement in the arrangements between herself, her father and others. Ms Huang was the purchaser of the Zetland property. Money was deposited by Mr Feng and Mr Cong into her account with the ANZ Bank. It was Ms Huang who applied for a loan from Citibank for the purpose of the purchase of the Zetland property. The submissions made with respect to a chose in action by reference to a bank account, and the nature of a bank cheque, do not assist Ms Huang. The reasoning in Lordianto (CA) (at [115]-[117] above) supports this conclusion.

24. [148]

    Properly understood, the concept of a third party for the purpose of s.330(4)(a) POC Act does not include a person in the position of Ms Huang. There is force in the AFP Commissioner’s submission that the vendor of the Zetland property to Ms Huang may be described as a third party, but certainly not Ms Huang.

25. [149]

    Secondly, there was no “acquisition” for “sufficient consideration” in this case. There was no evidence in this case that Ms Huang provided any consideration to any other person, including her father, as part of the process of acquiring her interest in the Zetland property. To the contrary, the evidence points to the funds being in the nature of a gift without any (let alone sufficient) consideration.

26. [150]

    At the hearing, counsel for the AFP Commissioner relied upon the Explanatory Memorandum to the POC Act (page 111) is support of a submission concerning the proper construction of s.330(4)(a) POC Act. The Court is entitled to take into account extrinsic material such as the Explanatory Memorandum in construing s.330(4) POC Act. Section 15AB Acts Interpretation Act 1901 (Cth) is not confined to consideration of extrinsic material to determine the meaning of a provision when the provision is ambiguous or obscure. That is one permitted use (s.15AB(A)(b)(i)), but s.15AB permits the use of extrinsic material in the interpretation of a statute (inter alia) to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision, taking into account its context in the Act and the purpose of object underlying the Act: s.15AB(1)(a). Further, in interpreting a provision of an Act, the interpretation that would achieve the purpose or object of the Act, whether or not that purpose or object is expressly stated in the Act, is to be preferred to an alternative interpretation: s.15AA Acts Interpretation Act 1901 (Cth).

27. [151]

    The Explanatory Memorandum to the POC Act states expressly that “a person who receives the proceeds of an offence as a gift (and therefore does not supply any consideration for the property) will be liable to forfeit that property, whether or not they are aware of the property’s origin” and is consistent with what was said in Lordianto (CA).

28. [152]

    The submission of the AFP Commissioner that the evidence points to this being a form of gift by Ms Huang’s father to Ms Huang is sound. Accordingly, there was no acquisition for sufficient consideration.

29. [153]

    Thirdly, even if Ms Huang was a “third party” (and she is not) who provided “sufficient consideration” (and she did not), she has not established that the Zetland property ceased to be the proceeds of an offence or an instrument of a relevant offence by operation of s.330(4)(a) POC Act. The objective and subjective tests contained in this section pose further difficulties for Ms Huang.

30. [154]

    Ms Huang needed to establish that she acquired the Zetland property without her knowing (the subjective element) that the property was proceeds or instrument of an offence. “Knowledge” for the purpose of s.330(4)(a) includes wilful blindness such as deliberately refraining from making enquiries or wilfully shutting one’s eyes for fear that one may learn the truth.

31. [155]

    Further, s.330(4)(a) refers to “circumstances that would not arouse a reasonable suspicion”, the test is objective - would the circumstances arouse a suspicion in a reasonable person in the position of Ms Huang, knowing what she knew, that the property was the proceeds or an instrument of an offence?

32. [156]

    In my view, a reasonable person would be placed on inquiry in the circumstances of this case. Ms Huang demonstrated wilful blindness towards the circumstances in which funds were deposited into her ANZ Bank account by Mr Feng. In addition, Ms Huang provided (or adopted) false information in support of her Citibank loan application. The approach in Lordianto (CA) once again supports this conclusion.

33. [157]

    Ms Huang has failed to establish that she acquired an interest in the Zetland property (including the funds used to purchase it) without knowing, and in circumstances that would not arouse a reasonable suspicion that the property was the proceeds of or an instrument of an offence.

Conclusion

1. [158]

   Ms Huang has failed to establish that her interest in the Zetland property is neither the proceeds of an indictable offence nor an instrument of any serious offence. Ms Huang has also failed to establish that such an interest has ceased to be the proceeds or instrument of any offence.

2. [159]

   I make the following orders:-

   1. (1)

      The Defendant’s Notice of Motion filed on 20 April 2016 is dismissed;

   2. (2)

      The Defendant is to pay the Plaintiff’s costs of the Notice of Motion.