The Commissioner of the Australian Federal Police v Higgins

1. [1]

   In 2015 Bellew J made ex parte orders under the Proceeds of Crime Act 2002 (NSW), restraining various property belonging to Ms Higgins, including real property and a motor vehicle, as well as that of certain companies. That application was advanced by the Commissioner by way of an amended statement of claim, supported by an affidavit sworn on 1 April 2015, by Mr Hedley, a member of the Australian Federal Police, then working in the Criminal Assets Confiscation Taskforce.

2. [2]

   There Mr Hedley deposed, amongst other things, to suspecting that funds in various accounts standing to the credit of Ms Higgins and the companies, were wholly or partly the proceeds of crime and that Ms Higgins had committed a serious offence under s 400.9(1) of the schedule to the Criminal Code Act 1995 (Cth). Mr Hedley also deposed to the basis on which he suspected that other of Ms Higgins’ property, both real property and a motor vehicle, were also proceeds of the suspected offence.

3. [3]

   There is no issue that Ms Higgins was the sole director and shareholder of the child care centre which one of the companies the subject of the restraining order, Aussie Giggles Pty Ltd, then operated at Albury. Her activities in the conduct of that centre and Government grants obtained for its operation, had become the subject of an Australian Federal Police investigation. One result of that investigation had been that in March 2015, the Local Court had made freezing orders in respect of some of the accounts which were the subject of the application which Bellew J dealt with.

4. [4]

   On her case Ms Higgins was later convicted of offences under s 134.1(1) of the Criminal Code Act, of having obtained property by deception and under s 135.1(1), of having dishonestly intended to obtain a gain, committed between 1 December 2012 and 13 November 2014, as well as offences under s 400.3, of dealing in the proceeds of crime. Those offences appear to have related to payments totalling some $2.8 million made to Aussie Giggles Pty Ltd.

5. [5]

   Ms Higgins is now in custody serving the sentences imposed upon her in the District Court for that offending. On her case, she has been advised that she has grounds for appealing those convictions, but no appeal has as yet been lodged. Ms Higgins believes that such a filing is imminent, but there was no evidence about that.

6. [6]

   The restraining orders which Bellew J made in 2015 have also not been challenged on appeal. Rather, they have been twice extended by consent under s 93 of the Proceeds of Crime Act.

7. [7]

   The property the subject of the 2015 restraining orders vested in the Commonwealth on Sunday 25 February 2018 under s 92 of the Proceeds of Crime Act, that being the date on which the second extension order expired, I having refused to make any of the orders which Ms Higgins pressed at the hearing on 22 and 23 February.

8. [8]

   These are the reasons for that refusal.

Procedural history

1. [9]

   As the result of the extension orders, the statutory forfeiture took effect after the expiry of the 6 month period since Ms Higgins’ conviction date, fixed by s 92(3).

2. [10]

   The second order was made after Ms Higgins applied by motion filed in November 2017, for orders under ss 29 and 31 of the Proceeds of Crime Act, to have excluded from the restraining order the real property located at East Albury and Albury; a motor vehicle; a credit union account in the name of Childcare Landmark Australia Pty Limited; and funds in Ms Higgins’ Westpac and Hume Bank accounts. That motion also sought orders under ss 92A, 93 and 94 of the Act, in the alternative.

3. [11]

   The hearing on 22 February proceeded after Ms Higgins’ legal representative was given leave to file a notice of intention of ceasing to act. The Registrar also ordered Ms Higgins to file any application which she wished to press, at the hearing on 22 February. It was only on the morning of the hearing that Ms Higgins faxed some of a number of documents on which she sought to rely to the Court. They contained written submissions and evidence, but none of them had been served.

4. [12]

   Ms Higgins, being unrepresented and in custody, undoubtedly faced practical difficulties in advancing her case. Her problems were sought to be accommodated over the course of the day, given the impending forfeiture. Steps were taken, so that all the documents she wished to rely on were before the Court and so that the Commissioner could have some limited opportunity to consider that material.

5. [13]

   The hearing was then adjourned to 23 February, in order to give Ms Higgins an opportunity to respond to the submissions which had been advanced for the Commissioner. During that adjournment Ms Higgins took steps by which she sought to advance other applications and to provide even further evidence, to support the case which she finally pressed.

Stay

1. [14]

   Ms Higgins initially pressed a stay of the pending statutory forfeiture of the restrained property, until the appeal against her conviction had been heard, even though no notice of appeal has yet been filed.

2. [15]

   Given the provisions of s 92 of the Proceeds of Crime Act, that was not an order which the Court could make, it providing as it does:

3. [16]

   Section 92 gives the Court no power to stay the statutory forfeiture for which it provides. Accordingly, the application for a stay had to fail.

4. [17]

   In the event that the foreshadowed appeal is pursued and upheld, with the result that Ms Higgins’ convictions are quashed, however, Division 4 – the effect on forfeiture of conviction being quashed of Part 2-3 of the Proceeds of Crime Act, will take effect and she will then have available an opportunity to seek to recover the forfeited property.

A further extension order

1. [18]

   During the course of her oral submissions Ms Higgins sought a third extension order under s 93. That application was opposed and refused. It was renewed in her reply submissions and then again refused.

2. [19]

   Those applications could not justly be granted, in part because of the requirements imposed on the Court and the parties by s 56 of the Civil Procedure Act 2005 (NSW). It requires that the Court’s discretions be exercised in order to facilitate the overriding purpose of the Act and of the Rules of court, namely, to facilitate the just, quick and cheap resolution of the real issues in the proceedings.

3. [20]

   When that obligation was considered together with the obligation to act in accordance with what the dictates of justice require: s 58; to take into account considerations of the elimination of delay: s 59; the proportionality of costs: s 60; the course which these proceedings have taken; the fact that Ms Higgins’ convictions have even yet not been appealed; the basis of the case which she otherwise advanced; and the statutory mechanisms by which Ms Higgins may seek to have her property restored to her, if she ever files an appeal and succeeds in having her convictions quashed, I concluded that justice did not permit the applications for a further extension order to be granted.

Jurisdiction

1. [21]

   Ms Higgins initially advanced a submission based on s 53(1) of the Proceeds of Crime Act, that the Court had had no jurisdiction to make the forfeiture order which Bellew J had made in 2015. That section provides that the Court cannot make a forfeiture order in respect of property, if it does not have jurisdiction with respect to the recovery of the property.

2. [22]

   Ms Higgins’ case was, in short, that there was no such jurisdiction because even though she has not only been charged and convicted of offences under the Criminal Code Act, the conduct which was the subject of those charges had been regulated by the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth); that she ought to have been charged with offences created by that legislative scheme, not offences under the Criminal Code Act; that the money which Aussie Giggles had obtained as the result of her conduct was a debt for which she was responsible under s 68A of the A New Tax System (Family Assistance) (Administration) Act; and that such a debt could only be recovered from her under that legislative scheme and not by way of forfeiture under the Proceeds of Crime Act.

3. [23]

   Ms Higgins’ argument was advanced on the basis of various provisions of the A New Tax System (Family Assistance) (Administration) Act, even though the overwhelming difficulty with her case was that the forfeiture which she sought to prevent resulted from the operation of the statutory mechanism established by s 92, not the Commissioner’s pursuit of any forfeiture order made by the Court.

4. [24]

   Essentially, Ms Higgins’ case was misconceived.

5. [25]

   Section 66(1) of the A New Tax System (Family Assistance) (Administration) Act makes identified payments made under that part of the Act “absolutely inalienable, whether by way of, or in consequence of, sale, assignment, charge, execution, bankruptcy or otherwise”, subject to statutory provisions identified in s 66(2).

6. [26]

   The effect of s 66 for which Ms Higgins contended, was inconsistent with recovery of debts in accordance with other provisions of this Act, including overpayments under the provisions of Part 4 – Overpayments and debt recovery, provided for in ss68 to 81, on which Ms Higgins also relied. None of those sections are referred to in s 66(2).

7. [27]

   Section s 66(2) also does not refer either to any of the offences created by the A New Tax System (Family Assistance) (Administration) Act, or to those created by any other Act. It is Division 3 of Part 6 Provisions relating to information, for example, which creates offences in relation to the making of false and misleading statements: ss 172-176.

8. [28]

   It is Division 2 of Part 4 which deals with amounts recoverable under the Act, s 70 specifying what payments will amount to a debt due to the Commonwealth. Sections 71A to 75 identify how particular debts can arise, including in the case of false or misleading statements: s 71E. Section 75 deals with debts arising from conviction for involvement in contravention of “family assistance law” by a debtor. None of these provisions are referred to in s 66(2).

9. [29]

   “Family assistance law " is defined in s 3 to mean any one or more of the following:

10. [30]

    It is Division 3 of Part 4 of the A New Tax System (Family Assistance) (Administration) Act which deals with methods of recovery of debts, they being identified in s 82. That section is also not referred to in s66(2), but Ms Higgins also relied on s 82 to submit that the property the subject of the restraining order could not be subject to forfeiture orders brought under the Proceeds of Crime Act, because the payments which Aussie Giggles had received were “inalienable” under s 66.

11. [31]

    On Ms Higgins’ case, the payments Aussie Giggles received as the result of the conduct which became the subject of the criminal charges of which she was convicted, had been made under s 71E. Accordingly, Aussie Giggles’ owed the Commonwealth a debt, for which she became liable under s 68A and could be recovered from her, but such a debt could not be recovered from her under the Proceeds of Crime Act.

12. [32]

    Section 82 provides:

13. [33]

    The case which Ms Higgins advanced could not be accepted because the protections provided by s 66 are directed to payments to which a recipient, in this case Aussie Giggles, is entitled to receive under this statutory scheme, not those which have come into the hands of the recipient, or anyone else, either as the result of overpayments, or of any criminal conduct. In any event, these proceedings are not concerned with the recovery of any debt.

14. [34]

    Despite the case Ms Higgins advanced in respect of the proper construction of the A New Tax System (Family Assistance) (Administration) Act and of the offences under that Act which she believed that she should have been charged with, nothing advanced by Ms Higgins by way of evidence or submissions sought to establish that in 2015 Bellew J had been wrong in arriving at the conclusions which resulted in the restraining orders made under s 18 of the Proceeds of Crime Act, on the evidence of Mr Hedley.

15. [35]

    There is no question that in 2015 this Court had “proceeds jurisdiction” in respect of the conduct which constituted Ms Higgins’ offending, given the circumstances of that offending in this State: s 335 of the Proceeds of Crime Act. The Commissioner was a “proceeds of crime authority” as defined in the Dictionary to that Act and so entitled to bring the proceedings. The property which became the subject of the restraining order, also fell within the definition of that word in the Dictionary.

16. [36]

    Before making the order sought, Bellew J had to be satisfied of the matters specified in s 18. The Commissioner relied on what was disclosed in Mr Hedley’s affidavit, to establish a basis for that satisfaction. On such satisfaction being reached, the restraining orders had to be made, s 18(1) providing as it does:

17. [37]

    In the result, any challenge to the validity of the 2015 restraining orders could only be pursued on appeal. These being civil proceedings, until set aside by the Court of Appeal, they bind Ms Higgins.

18. [38]

    Nor could Ms Higgins’ convictions be called into question in these proceedings, as she sought to do. Whether she has been wrongly convicted of those offences will be a matter for the Court of Criminal Appeal to determine, in the event that an appeal against her convictions is ever filed.

19. [39]

    Further, while the A New Tax System (Family Assistance) (Administration) Act does create a number of offences, despite Ms Higgins’ views as to the offences with which she should have been charged under that Act, the fact is that not only was she suspected in 2015 of having committed an offence under the Criminal Code Act, for the reasons Mr Hedley disclosed, she was later actually charged and convicted of offences created by that Act. The laying of such charges was a matter for the prosecutor, not Ms Higgins or this Court. Determination of the question of whether the offences had been committed was a matter for the jury.

20. [40]

    It is thus not necessary to consider whether other charges could have either been suspected or laid, or indeed whether if suspected, could have provided the basis for an application under the Proceeds of Crime Act. The offending which was suspected and acted on by the Commissioner, both in these proceedings and the prosecutions which resulted in Ms Higgins’ convictions, was offending contrary to the Criminal Code Act.

21. [41]

    In any event, it cannot be accepted that the provisions of the A New Tax System (Family Assistance) (Administration) Act on which Ms Higgins relied, had the effect for which she contended, as I have explained.

22. [42]

    The conduct which resulted in Ms Higgins’ convictions, had led to payments being made to Aussie Giggles, the owner of the child care centre of which she was the operator. Those payments no doubt resulted in debts for which she was made responsible by s 68A of A New Tax System (Family Assistance) (Administration) Act. They could thus have been recovered in accordance with the provisions of s 82.

23. [43]

    That did not preclude Ms Higgins being charged with or convicted of any offences which she had committed. The A New Tax System (Family Assistance) (Administration) Act does not evince any intention to relieve Ms Higgins, or anyone else, of the consequences of any of her criminal acts, whether that be Ms Higgins’ conviction for her offending, or steps taken under the Proceeds of Crime Act, to relieve her, or whoever else may have received the proceeds of her offending, of those proceeds.

24. [44]

    The Proceeds of Crime Act is not concerned with the recovery of debts. It is are rather concerned with people being deprived of the proceeds of offences committed against the laws of the Commonwealth, whether that be under the provisions of the Criminal Code Act or any other legislation, to which the provisions of the Act attach: s 5 of the Proceeds of Crime Act.

25. [45]

    The Proceeds of Crime Act establishes a variety of mechanisms by which that statutory intent can be achieved. In 2015, the Commissioner having established a proper basis for the suspicions to which Ms Higgins deposed, the 2015 restraining orders were made, as s 18 of the Proceeds of Crime Act then required.

26. [46]

    In the circumstances, those orders were within the Court’s jurisdiction.

Section 29 application

1. [47]

   In her written submissions Ms Higgins explained that she had received advice as to the merits of her conviction appeal and how it might be advanced, in respect of various payments received in respect of the childcare centre, by reference to various provisions of the A New Tax System (Family Assistance) (Administration) Act. It is not necessary to outline these arguments.

2. [48]

   Tendered were various business records which evidenced claims and payments which had been made to Aussie Giggles, as well as various correspondence and other documents.

3. [49]

   Submissions were also made as to how Ms Higgins had set fees for the childcare service, which she argued had been justified, but there was no evidence led about such matters. Reference was also made to the case which the Crown had successfully advanced against her on the various charges of which she has been convicted.

4. [50]

   In respect of the charges brought under s 134.2 of the Criminal Code Act, Ms Higgins submitted that the Crown had alleged that false claims had been made in respect of children who had not attended the childcare centre; in respect of false hours of attendance; and claims made at a rate higher than that which Aussie Giggles was entitled to claim.

5. [51]

   Ms Higgins’ case was somewhat difficult to understand, but it included the submission that the information the Crown had relied on in the criminal proceedings had been taken out of context and that she ought to have been charged with offences under the A New Tax System (Family Assistance) (Administration) Act, in respect of these matters. The evidentiary basis for this submission was not apparent.

6. [52]

   In respect of the s 145.1 of the Criminal Code Act charges, Ms Higgins submitted that the Crown had contended in the criminal proceedings that she had submitted false documents. She claimed that those documents had, in fact, been submitted by an employee of Aussie Giggles and that it had not been her liability to ensure that the documents were verified, but that of employees of the Commonwealth. There was also no evidentiary basis for this submission.

7. [53]

   The case which Ms Higgins so advanced was thus incapable of satisfying the onus which fell upon her, given that s 29(2)(c) of the Proceeds of Crime Act prescribes the reasons for which the orders Ms Higgins sought could be made. They are:

8. [54]

   Section 30(6) specifies the matters which must be established, before such orders can be made. It provides:

9. [55]

   The evidence relied on and the submissions which Ms Higgins advanced did not establish either that her interest in any of the restrained property was neither the proceeds of any unlawful activity, nor an instrument of any of the serious offences of which she has been convicted. Nor did she establish an evidentiary basis for satisfaction as to the matters specified in s 30(6).

10. [56]

    In the result, the orders sought under s 29 could not be made.

Section 94 application

1. [57]

   In her reply submissions Ms Higgins pressed for orders under s 94 of the Act.

2. [58]

   Section 94 provides:

3. [59]

   Even though Ms Higgins had not complied with the requirements of s 94(3) and that in the result, the Commissioner had not had the opportunity to respond or to conduct the examinations contemplated by s 94(5), the Commissioner responded to the application so pressed. Ms Higgins relied on the same submissions and evidence which she had relied on for her s 29 application, to advance her case under s 94.

4. [60]

   So advanced, this application also could not succeed.

5. [61]

   Ms Higgins’ case essentially depended on this Court coming to a different conclusion to that reached in her criminal trial. Without putting before the Court the evidence necessary to establish the case which s 94 required her to prove, namely, that her interest in the property the subject of her application was not the proceeds of her unlawful activity; nor an instrument of her unlawful activity; and that it had been lawfully acquired, the application could not succeed.

6. [62]

   These concepts had to be approached in the way prescribed in s 329 of the Proceeds of Crime Act, which provides:

7. [63]

   Ms Higgins did not attempt to establish an evidentiary case which could satisfy these statutory requirements.

8. [64]

   She did claim that in the case of one of the properties, she had used $150,000 of savings which she had acquired prior to the period of her offending. That was not established by the evidence. Nor was the source of those funds established.

9. [65]

   Otherwise, her case depended on an acceptance that she had not been involved in any unlawful activity at all; that all payments had been made to her lawfully; and even if she had been involved in any unlawful activity, that her offending had involved offences other than those of which she had been convicted.

10. [66]

    In order to establish a basis for the orders Ms Higgins sought, in the case of the real property and the motor vehicle, she had to establish not only what funds she had used to acquire that property, but that those funds were not the proceeds or instrument of any unlawful activity. Given the offences of which she had been convicted, the evidence relied on and the case which she advanced, was incapable of meeting this requirement.

11. [67]

    In the case of the bank accounts, Ms Higgins also had to establish that the funds in the accounts were not the proceeds or instrument of any unlawful activity. That was also not established by evidence she relied on, namely a bundle of business records which established, for example, that certain payments had been received in various accounts. Those documents did not establish that they were not the result of any unlawful activity.

12. [68]

    In the case of one account, Ms Higgins claimed that all of the payments received had been made by her mother. That this was established by the documents relied on, was not apparent. Simply tendering the documents and making that submission, could not establish that which was claimed, nor that the statutory requirements had been satisfied.

13. [69]

    The case which Ms Higgins so advanced, was thus also incapable of establishing the matters which fell to her to establish under s 94.

Orders

1. [70]

   In the result Ms Higgins’ application was dismissed with an order for costs in favour of the Commissioner.