The Commissioner of the Australian Federal Police v Cranston (No 14)

By a notice of motion filed on 20 April 2021, the plaintiff, the Commissioner of the Australian Federal Police, seeks a declaration of forfeiture under s 95 of the Proceeds of Crime Act 2002 (Cth) (POC Act) in respect of property covered by restraining orders made under s 18 of the POC Act against the third defendant, Mr Simon Anquetil. The restraining orders in question were made by Fullerton J on 16 May 2017 (see The Commissioner of the Australian Federal Police v Cranston and Ors (No 1) [2017] NSWSC 624) and by subsequent orders of the Court made on 26 May 2017, 11 September 2017, 1 December 2017 and 17 April 2020.

The notice of motion relates to 155 items of property which are listed in schedule 1 to the notice of motion and in the table below (the Table of Properties). This table describes each item of property and identifies information as to the ownership of each item recorded in the relevant s 18 restraining order made against Mr Anquetil in respect of property suspected of being relevantly associated with him. Where the owner was a corporation, in some cases it is noted that the corporation has subsequently been deregistered.

The Table of Properties also identifies the relevant s 18 restraining order by reference to the date on which the orders were made, the relevant paragraph of the orders and the schedule in which the property is described, and, where appropriate, the additional bases for concluding that the property is covered by the order identified. In this latter regard, the Court has accepted the evidence in the affidavits sworn by the various officers of the Australian Federal Police which were relied upon at the time the orders were made. In addition, where it was not otherwise apparent how an item of property came to be covered by the orders, the Court has taken into account, and noted in the table:

In relation to items 41-71 in the Table of Properties it will be noted that the schedule identified is “sch 96*”. The asterisk indicates that although the plaintiff’s submissions referred to sch 98 as the relevant schedule, in fact the relevant schedule appeared to be sch 96. Schedule 98 to the orders made by Fullerton J on 16 May 2017 related to investments in the name of SPA Ventures Pty Ltd, whereas sch 96 referred to holdings in the name of Simon Paul Anquetil.

It follows from the making of the s 18 restraining orders referred to in the Table of Properties that, at the time the orders were made, the Court was satisfied, for the purposes of s 18(2) of the POC Act, that there were reasonable grounds to suspect that the items of property were one or more of the following:

The persons affected by the orders sought in the Commissioner’s notice of motion have been identified as follows:

Each of the affected persons was provided with a copy of the notice of motion and the affidavit of Rebekah Radic affirmed 20 April 2021 by personal service or by email, by service on their parent in the case of children, by service on their solicitors, or, in case of deregistered companies, by service on the Australian Securities and Investments Commission in its own right and as representing the Commonwealth. Strangely, in the covering letter in each case, the recipient was informed that the motion was listed for directions on 7 May 2021 before me. In fact, the motion was listed for directions on 6 May 2021.

On 6 May 2021, the directions hearing in relation to the motion took place as part of the general directions hearings in relation to all extant applications in these proceedings. On that occasion, counsel for the Commissioner mentioned the matter on behalf of the third defendant, Mr Anquetil. It was noted that the 46th defendant, Combined Legal Holdings Pty Ltd trading as Clamenz Lawyers, had not taken an active role in the proceedings. Indeed, Combined Legal Holdings Pty Ltd sent an email on 30 April 2021 to the Australian Federal Police stating that “[f]urther to our position in these proceedings to take no active role and submit to the orders of the Court, save as to costs, we have no submissions in respect of or objection to the orders proposed by the [plaintiff]”. The only affected person who had previously taken an active part in the aspect of the proceedings relating to Mr Anquetil was Ms Li Han. Counsel for the Commissioner also mentioned the matter on behalf of Ms Han’s solicitor, Mr Tim Sergeant. On 6 May 2021, the motion was listed for hearing on 12 August 2021. The Court was not contacted by any affected person in relation to a listing of the motion for directions on 7 May 2021.

Apart from the Commissioner and Ms Han, no other party or affected person appeared at the hearing on 12 August 2021, nor has the Court received any applications, notices of motion or correspondence from any other party or affected person in relation to the Commissioner’s notice of motion filed on 20 April 2021.

As referred to above, a form of consent orders was signed by or on behalf of many of the persons affected by the present application at about the time of Mr Anquetil’s sentence hearing. This document was exhibited to Ms Radic’s affidavit. Those persons indicated that they consented to the forfeiture under ss 47 and 49 of the POC Act of various items of property which are the subject of the present proceedings. In addition, that form of consent orders contained notations of undertakings by a number of the affected persons not to make any claim or take other specified action in relation to some of the items of property. Notwithstanding the signed form of consent orders, it appears that those orders were not actually made at that time or subsequently. In addition to the admissions inherent in the document, it provides some confirmation that many of the affected parties do not seek to contest the forfeiture of the items of property which are referred to in that form of orders and which are also the subject of the present application.

In all the circumstances, I am satisfied that each party and affected person was given notice of, and a reasonable opportunity to be heard in relation to, the present notice of motion.

At this point, it is necessary to deal with Ms Han’s position. Her claim is in relation to an item of property which falls within item 38 in the Table of Properties and was part of the property described as item 38 in schedule 1 to the Commissioner’s notice of motion. The item of property which Ms Han effectively claims should be excluded from forfeiture was described in the ledger for the trust account of Clamenz Lawyers, being the 46th defendant Combined Legal Holdings Pty Ltd, as follows:

This $150,000 claimed by Ms Han was part of the property referred to in par 120 of the orders made by Fullerton J on 16 May 2017, which stated:

Schedule 74 of those orders relevantly contained the following:

Ms Han’s position was in effect:

It was in issue, however, whether Ms Han’s applications have been overtaken by events because the $150,000 had been forfeited to the Commonwealth by operation of s 92 of the POC Act, as a result of the s 18 restraining order made in respect of that property and Mr Anquetil’s conviction for a serious offence, within the meaning of s 92. If Ms Han’s outstanding applications have been overtaken by events, she might nonetheless seek to have the $150,000 transferred to her under s 102 of the POC Act by making an application under s 104.

Mr Latham of counsel who appeared for Ms Han, indicated that she wished to make an application under s 104, to deal with the situation if the $150,000 had already been forfeited by operation of s 92. Mr O’Mahoney of counsel, who appeared with Mr Habashy for the Commissioner, did not oppose Ms Han being given that opportunity, in the particular circumstances of the present matter. Since, however, the factual and legal issues that arise under s 102 of the POC Act are not identical to those that arise in relation to the making of a declaration under s 95 of forfeiture under s 92 of the POC Act, it was accepted by both the Commissioner and Ms Han that any s 104 application for an order under s 102 could not be heard on 12 August 2021 and the Commissioner would have to be given the opportunity to consider whether Ms Han should be examined in this regard, as well as the opportunity to file evidence.

To deal with this situation in relation to Ms Han and the $150,000 referred to above, on 12 August 2021 I made orders in the following terms:

In relation to the remainder of the property — that is, each of the 155 items of property identified by the Commissioner in his notice of motion, except for the $150,000 claimed by Ms Han being part of item 38 in the Table of Properties (the Remaining Property) — the hearing of the Commissioner’s notice of motion for a declaration under s 95 of the POC Act proceeded before me on 12 August 2021. As has been noted above, there was no appearance by, or opposition from, any of the defendants or affected persons other than Ms Han.

A court may, under s 95 of the POC Act, make a declaration that property has been forfeited under Pt 2-3, which includes ss 92 to 114, of the POC Act. Property is forfeited under Pt 2-3 by operation of s 92.

Before property is forfeited under s 92, the responsible authority is required by s 92A to take reasonable steps to give notice of the forfeiture to any person who has or may have an interest in the property.

Sections 92 and 92A relevantly provide:

The evidence of Ms Radic in pars 54 to 69 of her affidavit of 20 April 2021, which I accept, establishes that the required notices under s 92A have been given. Furthermore, there has been no application under s 94 to exclude any item of the Remaining Property from forfeiture under Pt 2-3. Nor has there been any application made under s 93 of the POC Act for an extension of the period before the Remaining Property is forfeited.

Section 95 empowers the Court to declare that property has been forfeited under s 92 and, relevantly for present purposes, provides as follows:

In the present case, all the relevant restraining orders referred to in s 92(1)(b), which have been identified in the table above, were made by this Court. Thus, the Court’s power to declare that the items of Remaining Property have been forfeited under Pt 2-3 of the POC Act will be enlivened if the requirements of each of pars (a) and (b) of s 95 are satisfied.

Section 95(a) requires that the application for a declaration under that section be made by the “responsible authority”. That expression is defined in s 338 as follows:

“Principal order” is relevantly defined in the same section as including a restraining order.

Since the applications for the restraining orders, out of which the application for a declaration of forfeiture under s 95 has arisen, were made by the Commissioner, he is the responsible authority for the purposes of the present application.

The s 95 application has been made by the Commissioner and, accordingly, the requirement in s 95(a) has been satisfied.

The requirement in s 95(b) is met if the Court is satisfied that the Remaining Property has been forfeited under Pt 2-3 — that is, relevantly under s 92 of the POC Act.

By virtue of s 92(1) and (3), property is relevantly forfeited to the Commonwealth at the end of the period of six months after the “conviction day” if the following requirements are satisfied:

The “conviction day” for the purposes of the POC Act is relevantly defined in s 333(a) as:

Under s 92(1)(a), there must be:

In the present case, the relevant person was Mr Anquetil.

For the purposes of the POC Act, a person is relevantly taken to have been convicted of an offence if “the person is convicted, whether summarily or on indictment, of the offence”: s 331(1)(a). Following pleas of guilty to all counts on the indictment before Payne J on 24 February 2020, Mr Anquetil was sentenced on 31 July 2020 in respect of the following two offences:

Whether and when Mr Anquetil was convicted of those offences, within the meaning of s 331(1)(a) of the POC Act, depends on the proper construction of “convicted” in that paragraph. There is no definition of “convicted” in the POC Act. In Maxwell v The Queen (1996) 184 CLR 501; [1996] HCA 46, Dawson and McHugh JJ observed at 507 as follows:

In the context of the POC Act, and in particular the definition of “conviction day” in s 333(a) as “the day on which a court passes sentence for the offence”, “convicted” in s 331(1)(a) should be construed as referring to when the court has passed sentence following a plea or verdict of guilty.

Thus, Mr Anquetil was convicted of the offences referred to above, within the meaning of the POC Act, when sentence was passed on 31 July 2020.

The definition of “serious offence” in s 338(1) of the POC Act includes:

The offences of which Mr Anquetil was convicted under s 135.4(3) and s 400.3(1) of the Criminal Code carry maximum penalties of 10 years and 25 years respectively and were offences against the law of the Commonwealth that may be dealt with as indictable offences by virtue of s 4G of the Crimes Act 1914 (Cth). Thus, they were “serious offences” within the meaning of the POC Act.

On these bases, the requirements of s 92(1)(a) are satisfied.

The requirements of s 92(1)(b)(i) are that:

“[T]hat period” is “the period applying under subs (3)”, as identified in the chapeau to s 92(1). Subsection (3) establishes that the period is “the 6 month period starting on the *conviction day”, since in the present case there was no extension order sought under s 93.

As has been explained above, Mr Anquetil was taken to have been convicted because of s 331(1)(a). Consequently, the conviction day in this case is the day on which the Court passed sentence for the two offences, namely 31 July 2020. Thus, the end of “the period applying under subs (3)” of s 92 was the end of 30 January 2021.

As at 30 January 2021, disposing or dealing with each of the items of Remaining Property was restrained by at least one of the s 18 restraining orders identified in the Table of Properties. On the ordinary meaning of “covered”, in the context of s 92(1)(b)(i) of the POC Act, property is “covered by a restraining order” if the property is the subject of, and dealing with it is restrained under, such an order. On this basis, I am satisfied that each of the items of Remaining Property was covered by a restraining order for the purposes of s 92(1)(b)(i).

Those restraining orders were against Mr Anquetil in that he was the third defendant named in the proceedings in which the orders were made and his connection with the relevant orders was identified in the order itself or in the evidence upon which the order was based.

The final requirement of s 92(1)(b)(i) is that each of the s 18 restraining orders against Mr Anquetil “relates to the offence”. The words “the offence” refer back to the “serious offence” of which the person was convicted in s 92(1)(a), that is, in this case, the offence contrary to s 135.4(3) and the offence contrary to s 400.3(1) of the Criminal Code.

The relevant restraining orders were made on the basis that there were reasonable grounds to suspect that Mr Anquetil had committed the serious offences identified in par 9 of Mr Burtenshaw’s affidavit of 15 May 2017, which included:

In these circumstances, it can be concluded that the restraining orders against Mr Anquetil were “related” to the offences contrary to ss 135.4(3) and 400.9(1) of the Criminal Code.

Mr Anquetil was convicted of the offence contrary to s 135.4(3) and the restraining orders were related to that offence for the purposes of s 92(1)(b)(i).

In addition, the offence contrary to s 400.9(1) of the Criminal Code, which Mr Anquetil was suspected of having committed and which was an additional basis for making the restraining orders, was a “related offence” of the offence contrary to s 400.3(1) of which Mr Anquetil was convicted. This follows from the fact that both offences involved the same acts or omissions and from the definition of “related offence” in s 338 of the POC Act which provides that:

Further, by virtue of s 92(5), “a *restraining order in relation to a *related offence” is taken, for the purposes of s 92, to be a restraining order in relation to the offence of which the person was convicted. Consequently, since the restraining orders against Mr Anquetil were related to the offence contrary to s 400.9(1) and the offence for which Mr Anquetil was convicted was a related offence of that offence, the restraining orders are taken to be related to the offence contrary to s 400.3(1) of which Mr Anquetil was convicted.

In these ways, the requirements of s 92(1)(b)(i) are satisfied in the present case.

As has been noted above, there has been no application, and thus no order made, under s 94 of the POC Act for any of the Remaining Property to be excluded from forfeiture under Pt 2-3. Consequently, the requirement in s 92(1)(c) has been satisfied.

It can be observed here that the provisions of the POC Act in relation to restraining orders under s 18 and their consequences do not require, as a pre-condition of forfeiture under s 92, that the responsible authority establish at any point before forfeiture that the property to be forfeited was, in fact, the property of the person who was convicted of the serious offence or property under his or her effective control or otherwise relevantly connected with the person. All that is required in this regard is that the court which makes the s 18 restraining order was satisfied that there were reasonable grounds to suspect that that property had one or more of the types of connection with the person or the offence listed in s 18(2) and no exclusion orders or other relevant order had been made in relation to the property.

For the reasons set out above, all of the applicable requirements in s 92(1) of the POC Act have been satisfied in this case so that, by operation of that section, the Remaining Property was forfeited to the Commonwealth at the end of 30 January 2021.

Thus, the requirement in s 95(b) has been met.

For the reasons given above, I am of the view that all the relevant requirements under s 95(a) and (b) have been satisfied in respect of the Remaining Property. Consequently, it is necessary to consider whether the Court should make the declaration sought.

Section 95 provides that if the Court is satisfied of the matters in pars (a) and (b) of that section, the Court “may” declare that particular property has been forfeited under Pt 2-3, that is, under s 92. The use of “may” indicates that the Court has a discretion whether or not to make the declaration.

Although forfeiture under s 92 is effected by operation of the statute and does not depend upon a court making a forfeiture order, there will generally be utility in the Court making a declaration under s 95 in order to record formally the fact and time of forfeiture of the property. Such a declaration, supported by the other provisions of Pt 2-3 of the POC Act, establishes authoritatively the legal and equitable ownership of the property for all persons who may previously have had or claimed an interest in the property and for all persons who are considering dealing with or acquiring an interest in the property. Absent such a declaration, it would be open to persons to contest whether the requirements in s 92 had been satisfied and there could be significant uncertainty as to whether items of property had in fact been forfeited and when.

A declaration under s 95 also serves the useful function of:

Finally, there does not appear to me to be any substantial prejudice to any person if a declaration is made under s 95. If, for any reason, a person wishes to contend in effect that a particular item of property was not, or should not have been, forfeited under s 92 and a declaration under s 95 should not have been made in respect of that property, there are safeguards in the POC Act to protect such a person’s position, even if a s 95 declaration is made. These safeguards include applications that may, in some cases with leave, be made:

In all the circumstances, I am of the view that a declaration under s 95 of the POC Act should be made in respect of the Remaining Property.

For all of these reasons: