The Commissioner of the Australian Federal Police v Adam Michael Cranston

By a notice of motion filed on 20 September 2021, the plaintiff, the Commissioner of the Australian Federal Police, has sought restraining orders pursuant to ss 18 and 19 of the Proceeds of Crime Act 2002 (Cth) (the POC Act) in relation to certain property of a number of individuals and corporations, as described in the table set out below at [7] of this judgment.

The present application concerns the suspected involvement of a large number of people in an organised taxation fraud involving Plutus Payroll Pty Ltd. There are presently 69 defendants named in these proceedings and, in addition, a number of persons have been identified in the notice of motion filed on 20 September 2021 and other notices of motion as being affected or potentially affected by the orders sought in those notices of motion. These affected parties have been referred to as respondents to the various notices of motion.

At the hearing on 23 February 2022, Mr O’Mahoney of counsel, who appeared for the plaintiff, clarified that the only orders sought on this occasion were those in prayers 1 to 6, 12 to 14, and 21 to 24 of the notion of motion filed on 20 September 2021.

The defendants and respondents affected or potentially affected by the orders sought in these prayers for relief are the first defendant (Adam Cranston), the second defendant (Jason Onley), the fifth defendant (Lauren Cranston), the eighth defendant (Christopher Guillan), the tenth defendant (Elizabeth Cranston), the eleventh defendant (Rachel Keary), the fourteenth defendant (Sutherland Shire Property 2 Pty Ltd (in liquidation)), the thirty-ninth defendant (Fiona Wing-Shan Mak), and the fourth respondent to the notice of motion (the Australian Securities and Investments Commission or ASIC). ASIC has been included as a person affected because one of the items of property is funds in an account in the name of AI Advertising Pty Ltd which was deregistered on 14 June 2020 and any property not held on trust by that company has vested in ASIC by operation of s 601AD(2) of the Corporations Act 2001 (Cth).

In addition, the following three companies, which are all in liquidation, were mentioned in the evidence and may potentially have had an interest in at least one item of property in question:

The plaintiff has given reasonable notice of this application to each of the relevant defendants and the fourth respondent as well as to the solicitors for the liquidators of each of companies. None of these has sought to appear or to oppose the granting of the relevant relief sought in 1 to 6, 12 to 14, and 21 to 24 of the notice of motion filed on 20 September 2021.

The application relates to 108 items of property identified in Schedule 1, Schedule 2, Schedule 3, Schedule 4, Schedule 5, Schedule 9, Schedule 10, Schedule 11, Schedule 17, and Schedule 18 to the notice of motion filed on 20 September 2021. Those items are described in the table below together with the relevant prayer for relief, schedule to the notice of motion, defendant or respondent and section of the POC Act.

In various cases, the items of property are grouped under a heading which indicates that those items of property were seized when a search warrant was executed at a particular location. For example, the items in schedules 1 and 2 to the notice of motion were seized when a search warrant was executed at the Bondi residence of the first and tenth defendants and the items in schedule 9 were seized when a search warrant was executed at the Picton residence of the fifth respondent.

The Commissioner relied on the affidavit of Alexander Lachlan Archibald Drummond, affirmed on 10 September 2021 and the affidavit of Darren James Burtenshaw, sworn on 15 May 2017, and the exhibits to those affidavits. As noted above, no defendant, respondent or other person appeared to oppose the making of the orders sought by the Commissioner and, consequently, there were no objections to these affidavits. The affidavits provided detailed reasoning and information supported by relevant documentation in relation to the matters to be determined on this application. I accepted the evidence of Mr Drummond and Mr Burtenshaw.

The statutory provisions which are relevant to the present application are ss 18, 19 and 38 of the POC Act. Both ss 18 and 19 set out circumstances in which a court is required to make a restraining order in relation to certain property and, more generally, the nature and form that any application made under those provisions must take. Generally, s 18 relates to property of persons suspected of committing a serious offence, while s 19 relates to property suspected of being proceeds of an indictable offence or an instrument of a serious offence.

Section 18 relevantly provides as follows:

Section 19 is relevantly in the following terms:

There are, therefore, a number of statutory requirements that must be satisfied for the Court to be required to make an order of the nature set out in ss 18(1) and 19(1).

The Commissioner’s application for restraining orders under s 18 relates to the items of property listed in Schedules 1, 2, 3, 4, 5, 9, 10, 11, and 17 to the notice of motion.

First, the terms of s18(1) require that in order for a court to make an order it must be “a court with proceeds jurisdiction”. The phrase “proceeds jurisdiction” is relevantly defined in s 335 of the POC Act. Section 335 provides, in part, that:

I am satisfied that “all or part” of the conduct constituting the offence to which any restraining order would relate occurred in New South Wales, or is, at least is suspected of having occurred in New South Wales. In these circumstances, this Court has proceeds jurisdiction as it is a court that has jurisdiction to deal with criminal matters on indictment in New South Wales.

Under s 18(1)(c), the application for the restraining order must be made by a “proceeds of crime authority”. A “proceeds of crime authority” is defined in s 338 of the POC Act and includes “the Commissioner of the Australian Federal Police”: s 338(a). The Commissioner of the Australian Federal Police is the applicant for the orders sought in this case, and thus s 18(1)(c) is satisfied.

The requirements in s 18(1)(d), (e) and (f) are that there must be reasonable grounds to suspect that a person has committed a “serious offence”, the affidavit requirements of s 18(3) must have been met and the authorised officer who made the affidavit must hold the suspicions stated on reasonable grounds. The “reasonable grounds” referred to in s 18(1)(d) need not, however, be based on a finding as to the commission of a particular serious offence: s 18(4).

The phrase “serious offence” is defined in s 338 of the POC Act and includes, relevantly:

In determining whether these requirements have been met, I have had regard to the evidence in the affidavits of Mr Drummond and Mr Burtenshaw, who are Australian Federal Police (AFP) officers as well as being “authorised officers” within the meaning of that term in s 338 of the POC Act.

The affidavit of Mr Drummond stated, among other things, that he suspects that the following persons, including parties whom these proceedings concern, including Adam Cranston, Lauren Cranston, Jason Onley, Daniel Hausman, and Christopher Guillan, have committed the offences specified in the affidavit, all of which are indictable and serious offences for the purposes of the POC Act. Mr Drummond’s affidavit also provided the grounds for these suspicions. In a number of cases, the persons have pleaded guilty to the charges and in others the evidence establishes that there are reasonable grounds for suspecting that the relevant persons have committed one or more relevant serious offences. In the circumstances disclosed in the evidence, I am satisfied that there are reasonable grounds for suspecting that all the relevant persons have committed one or more serious offences.

On the detailed bases set out in his affidavit, Mr Drummond suspects that each of the items of property in the table is the property of one of those persons, or is subject to the effective control of that person, or is proceeds of a relevant offence, or is an instrument of a relevant serious offence. In this regard, Mr Drummond also relied to an extent on Mr Burtenshaw’s affidavit and statements of other AFP officers, including Federal Agents Basford, Miller, Knighton, Walter, Vasquez, Coles, Morrison and Anderson, as well as the documents which are referred to in, and which are exhibits to, Mr Drummond’s affidavit. The relevant conclusions, which I accept, are explained at pars 52-54, 67-68, 79-81, 94-96, 105-107, 124, 144-148 and 219-221 of Mr Drummond’s affidavit, and the evidence in support of those conclusions is detailed in the paragraphs preceding each conclusion.

I am satisfied that Mr Drummond and, to the extent necessary, Mr Burtenshaw held each of the relevant suspicions on reasonable grounds.

Accordingly, in my view, the requirements in 18(1)(d), (e) and (f) have been satisfied.

Therefore, I am satisfied that the Commissioner has discharged his onus, on the balance of probabilities, and that I must make orders restraining the property specified in the table above. By operation of s 18(5), I must make the orders even in circumstances where there was no risk of the property being disposed of or otherwise dealt with.

Under s 18(2), the order must specify the property in the application that must not be disposed of to the extent that the court is satisfied that there are reasonable grounds that the property falls into one of the relevant paragraphs, s 18(2)(a), (c) and (d).

The reasoning set out above in relation to s 18 applies to the similar requirements of s 19 of the POC Act. The Supreme Court is a court with proceeds jurisdiction and the Commissioner of the AFP is a proceeds of crime authority. Once again, the Burtenshaw affidavit and Drummond affidavit adequately set out the relevant suspicions held by each authorised officer and the grounds upon which they held their suspicions. In addition to the paragraphs of Mr Drummond’s affidavit referred to in relation to the property to be the subject of orders under s 18, the relevant conclusion, which I accept, in relation to the AI Advertising Bank Account is explained at par 226 of Mr Drummond’s affidavit, and the evidence in support of that conclusion is detailed in the paragraphs preceding the conclusion . On these bases, I was satisfied that the requirements in s 19(1)(c), (e), (f) were met.

Similarly, having regard to the evidence of Mr Burtenshaw and Mr Drummond, I accepted that there were reasonable grounds to suspect that the property to be made the subject of orders under s 19 was the proceeds of “any other indictable offence” or an instrument of a serious offence. Thus, the requirement in s 19(1)(d) was also satisfied.

Once again, in these circumstances, an order under s 19 must be made even if there is no risk of the property being disposed of or otherwise dealt with: s 19(5).

In prayer 24, the Commissioner has sought custody and control orders pursuant to s 38 of the POC Act in relation to the items of property identified in the table.

Section 38 states:

The items of property in relation to which restraining orders are to be made are numerous. There are a number of persons affected by the orders. The items have, except in one case, been seized as a result of the execution of search warrants and, in the other case, the property is funds in a Westpac bank account. In all the circumstances, it appears to me that the most practicable and effective means of securing custody and control of the items of property that are to be the subject of the restraining orders is to make an order pursuant to s 38.

In formulating the orders relevant to prayers 1 to 6, 12 to 14, and 21 to 24 of the notion of motion filed on 20 September 2021, I have maintained the schedule numbers used in the notice of motion, even though not all of schedules are referred to in the orders.

For all of the reasons set out above, the Court makes the following orders: