Commissioner of the Australian Federal Police v Wu

1. [1]

   HIS HONOUR: An interested party, Ms Qiao Wan Wu (hereinafter “the applicant”), by motion seeks that the net proceeds of sale of real property located at 50 Godfrey Street, Hurstville Grove (hereinafter “the Property”) be excluded from the operation of an order made under the Proceeds of Crime Act 2002 (Cth) (hereinafter “the Act”). Initially, the motion sought a number of orders, only the last of which is extant under the amended motion filed 7 February 2018. It is necessary to set out some background facts.

Background Facts

1. [2]

   The applicant is married to Zhang Yi (also known as Michael). The applicant’s mother-in-law is Ning Ling Li and her father-in-law is Zumin Zhang. On 21 January 2016, Ms Li was arrested and charged with a number of drug offences. It is the plaintiff's submission that monies from the proceeds of these offences were used in the purchase of the Property.

2. [3]

   On 26 April 2016, the Australian Federal Police (hereinafter “the AFP”) applied for and were granted an ex parte order restraining any dealings, or enjoining any party from dealing with the Property, pursuant to s 19(1)(b) of the Act.

3. [4]

   On 23 May 2016, the applicant filed a notice of the original motion seeking, as earlier stated, an exclusion application and, relevantly, a revocation application.

4. [5]

   On 19 July 2016, consent orders were made to permit the sale of the Property and for the net proceeds of the sale to be subject to the terms of the restraining order.

5. [6]

   As attested to in the affidavit of Angus Lee, sworn 22 April 2016, in 2009 and 2010, the AFP were conducting Operation Hixon, an investigation into the importation of commercial quantities of methamphetamine into Australia facilitated, it is said, by Taiwanese organised crime syndicates. During the course of that investigation, Ms Li, Mr Zhang and Mr Yi each came to the attention of authorities.

6. [7]

   On 3 January 2016, three sea freight consignments from China arrived in Sydney. One consignment, said to contain furniture, was consigned to Lucky Import and Export Pty Ltd (hereinafter “Lucky”) in Peakhurst. The second and third consignments, said to contain furniture and foodstuffs respectively, were consigned to Star East Group Pty Ltd (hereinafter “Star East”).

7. [8]

   Operation Hixon, in conjunction with the Australian Border Force and Department of Immigration and Border Protection, then organised a controlled operation pursuant to the Crimes Act 1914 (Cth), allowing the AFP to conduct a controlled delivery of the consignments to the intended recipients. The consignments were delivered and a number of people were arrested including Ms Li, Mr Zhang and Mr Yi.

8. [9]

   ASIC searches of the relevant companies show that Star East was registered on 20 May 2008 and its directors and shareholders included Mr Zhang, Ms Li and Mr Yi, together with Qiao Wan Wu, the applicant.

9. [10]

   The applicant was born in China on 11 January 1983, arrived in Australia on 4 November 2000 and became an Australian citizen on 19 April 2011. She first registered for income tax on 7 January 2008 and listed as her residential address the same address as the registered office of Star East. The applicant did not lodge, or it was unnecessary for her to lodge, an income tax return in the financial years ending 30 June 2008 through to 30 June 2015, inclusive. The applicant never declared any income from employment, nor rental income, nor capital gains in the financial years ending 2008 through to 2015 inclusive. Further, the applicant received Commonwealth benefits in the financial years ending 2012, 2013 and 2014 in the amounts of $7,581, $4,768 and $3,542 respectively.

10. [11]

    Ms Li registered for income tax on 16 May 1990, but did not lodge an income tax return in financial years ending 30 June 2011 through to 30 June 2015, inclusive. Ms Li did lodge an income tax in the financial year ending 30 June 2005 and received New Start Allowance in the financial years ending 2011, 2012 and 2013 in the amounts of $3,202, $10,222 and $7,982 respectively.

11. [12]

    Records of the Land and Property Information database show that the applicant acquired three properties: the Pemulwuy property, the Greystanes property and the Property (being the relevant property in these proceedings). The Pemulwuy property was purchased, on the material before the Court for $300,000 in June 2011 by the applicant. Subsequently it was sold for $980,000 on 8 April 2015. The Greystanes property was purchased by the applicant for $569,800 in October 2013. Subsequently, in March 2014, the applicant sold the Greystanes property for $633,000.

12. [13]

    The relevant Property was purchased by the applicant for $939,900 in December 2014. In other words, the relevant Property was purchased after the sale of the Greystanes property, but before the sale of the Pemulwuy property.

13. [14]

    The applicant and Ms Li are now the registered owners of that Property, as tenants in common with a 9/10 and 1/10 share respectively. The Property is mortgaged with National Australia Bank (hereinafter “NAB”). The Property records show that the 1/10 share of the Property was transferred to Ms Li by the Applicant for the consideration of $100,000 and that transfer was lodged on 12 February 2016.

14. [15]

    On 12 February 2016, the Property was advertised for sale with a real estate agent at $1,250,000, but the price was lowered on 1 March 2016 to a price of between $1,150,000 and $1,190,000. The property has development approval for a double storey house.

15. [16]

    In order to obtain the home loan associated with the mortgage over the Property, the applicant completed supporting documentation with NAB, which claimed that she owned $252,000 in cash assets; 14 Carrick Street, Pemulwuy (the Pemulwuy property), worth $1 million; a motor vehicle worth $45,000; and home contents worth $65,000.

16. [17]

    The ANZ records also show a facsimile of a Residential Tenancy Agreement for the Pemulwuy property between the applicant and Mr Yi, dated 9 May 2014, which discloses that the applicant was to be paid $950 in cash per week in rental income for 12 months; and that Mr Yi was the witness to the Residential Tenancy Agreement.

17. [18]

    The ANZ records also disclose that the applicant made monthly repayments of $3,910.13 on the mortgage and also shows that on 31 July 2015 two large deposits of $10,000 and $200,000 respectively were made into accounts. The address on the applicant’s ANZ bank records was changed to the address earlier recorded for the Lucky Consignment.

18. [19]

    The Affidavit of Angus Lee, to which earlier reference has been made, sets out the suspicions based upon the foregoing facts to which Mr Lee attested. The applicant filed an Affidavit affirmed 26 May 2016 which sought to trace the funds used in the purchase of the Property. In short, after explaining that an “aunt” in Chinese culture does not necessarily mean an older female relative, but rather an older female who has the respect of the person describing them, the applicant recalled having a conversation with Ms Li in which Ms Li told her that an aunt from China had sent to Australia around $85,000 and they could use that money to look for a property, because it was a gift. The money, according to the applicant was not the money of Ms Li or Mr Zhang but, rather, money gifted to Mr Yi and the applicant from their aunt in China.

19. [20]

    Further, the applicant explains that the Hurstville Grove Property was purchased for $939,000, of which $751,920 was borrowed from the ANZ Bank and she was required to pay the balance of the purchase price which was $187,080, being the deposit monies.

20. [21]

    The 10% deposit was paid for the purchase of the Property with the funds from Ms Li and Mr Zhang, who in turn received it from relatives in China, as earlier stated. Moreover, the applicant “believed” that the money obtained from China as a gift was not sufficient to cover the whole 10% deposit, which is the reason she contributed $5,000 from her own funds towards the expression of interest or holding deposit. An amount of approximately $95,000 was paid by the applicant, or caused to be paid by the applicant, from her Westpac accounts.

21. [22]

    Regardless of the source of the funds, which I suspect, without proof, are the funds from drug importation, the plaintiff, the Commissioner of the AFP (hereinafter “the Commissioner”), submits that the money used for the purchase of the Property is, in any event, tainted. The applicant has admitted that she made false declarations in various bank loan applications in order to obtain finance to purchase various properties, including the Property.

22. [23]

    The aforementioned admission means that the obtaining of the loans (which are a financial advantage) was dishonestly by deception, an offence contrary to s 192E(1) of the Crimes Act 1900 (NSW) (hereinafter “the Crimes Act”). Further, the provision of false information to obtain financial advantage is also an offence, contrary to s 192G of the Crimes Act.

23. [24]

    As a consequence, at least, the loan moneys, which were the substantial amounts utilised for the purchase of each of the properties, were provided by virtue of the commission of an offence and are “the proceeds of an offence”.

24. [25]

    Further, the Commissioner submits that the net proceeds of sale is the proceeds of an offence committed by the applicant, contrary to s 400.9(1) of the Schedule to the Criminal Code Act 1995 (Cth) (hereinafter “the Criminal Code”), by dealing with money or property reasonably suspected to be proceeds of crime, which has a value of $100,000, as the finance obtained by the applicant referred to in the preceding paragraph was over $100,000.

Applicant’s submissions

1. [26]

   Essentially, the applicant submits that the evidence establishes that the money paid by Ms Li to the applicant, which the applicant used for the purposes of obtaining a loan from the relevant financial institution, was a loan. The applicant accepts that, pursuant to s 317 of the Act, the interested party bears the onus of proving, on the evidence before the Court, the facts necessary for the exclusion application to succeed.

2. [27]

   The applicant submits that:

3. [28]

   The applicant submits that the principles in Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 do not assist in the determination of facts, because, amongst other things, Ms Li has a right to silence or a privilege against self-incrimination and each would explain the absence of evidence from Ms Li.

4. [29]

   Lastly, the applicant seeks costs and refers to the principles in the determination of costs underpinning s 323 of the Act. The applicant seeks indemnity costs.

Principles on Revocation

1. [30]

   The Court, as presently constituted, dealt at length with the application of the Proceeds of Crime Act in the judgment of the Court in Commissioner of the Australian Federal Police v Gwe & Hoang [2018] NSWSC 992 at [25] and following. As a matter of completeness, rather than simply adopting the analysis by reference, I repeat that analysis:

Consideration

1. [31]

   The foregoing construction of the statute is adopted and applied, without further comment.

2. [32]

   Essentially, the applicant submits that the evidence before the Court is to the effect that the monies received and utilised for the purpose of the purchase of the real estate was a gift. That proposition depends, fundamentally, on the acceptance of the evidence of Ms Li. Further, the submission limits the proceeds of crime or the instrument of serious crime to the monies received from China.

3. [33]

   The Court has serious doubts as to the proposition that the monies received from China were by way of gift. Part of the doubt stems from the fact that each of the actors is a director of at least one of the aforementioned companies involved in the handling of the amounts of money.

4. [34]

   Further, the applicant submits that, if it were not a gift, it was a loan and repayable. I have even more doubt as to the veracity of a claim that the amounts received were by way of loan.

5. [35]

   If it were a loan, there is no documentation to support such a proposition or to govern the terms and conditions upon which such repayment would be effected. Further again, if the amounts received were a loan and repayable, no such repayment has been made, since the monies were advanced.

6. [36]

   Ultimately, as the plaintiff, the Commissioner, puts its case, it does not matter whether the cash amounts received were by way of loan or by gift or the direct proceeds of crime that involved or related to Ms Li. The Commissioner refers to the manner in which the loan from the financial institution or institutions was obtained.

7. [37]

   The Commissioner refers to the provisions in ss 192E(1) and 192G of the Crimes Act, which provide, in the case of s 192E(1), that it is an offence to obtain dishonestly a financial advantage by deception; and, in the case of s 192G, that it is an offence to provide false or misleading information to obtain a financial advantage.

8. [38]

   The applicant was questioned during an examination, undertaken pursuant to the interlocutory orders made by the Court and under s 180 of the Act, which is summarised in the second Lee Affidavit at [14]-[55]. Apart from the examination demonstrating that the applicant is unreliable (to say the least), it discloses that the applicant made false declarations to obtain significant financial benefits, being the loans.

9. [39]

   The applicant admitted that she made various false declarations in the home loan application she signed and provided to the ANZ Bank in respect of the Hurstville Grove Property in December 2014. Those false declarations included that she earned $87,000 per annum at a company called T & F Group and the address at which she was living when she made the application. The applicant has never worked for T & F Group.

10. [40]

    It matters not that the applicant suggests she signed the application because the broker told her, or asked her, to sign it. Ultimately, she made the declaration, which is a false declaration and is misleading information to obtain financial advantage.

11. [41]

    Further, I do not accept that the applicant was unaware that the information was false and I accept, on the material before the Court, that the deception that obtained a financial advantage was done “dishonestly”.

12. [42]

    Moreover, the applicant's home loan application for the Hurstville Grove Property was supported by a payroll advice, addressed to the applicant, purporting to be from T & F Group. The applicant maintained she has never worked for T & F Group. Nevertheless, the applicant admitted that she provided the name of that company to the broker but suggested that it was the broker who forged the document.

13. [43]

    Over and above the false information relating to the ANZ loans, the applicant also admitted, during the course of the examination, to the making of numerous false declarations in an application she signed and provided to the NAB to refinance the loan for the Hurstville Grove Property in November 2015.

14. [44]

    In that NAB documentation, the applicant falsely declared that: she was working full-time as a marketing manager in China; she had worked full-time as a manager at a company called Bob Power Tech Pty Ltd; her home address was in China; she owned a Toyota Camry worth $24,000; and her gross monthly income was HK$51,369.83. None of the foregoing declarations were true.

15. [45]

    Despite her signature on the document, the applicant says she never saw the document. The company at which she declared she was working was a company owned by her father.

16. [46]

    Further again, there were similar false declarations made in relation to a Westpac loan offer signed by her and dated 14 June 2013. That loan related to the Pemulwuy property and contained similarly false declarations for the purpose of obtaining that loan.

17. [47]

    Part of the evidence on the examination of the applicant related to a Residential Tenancy Agreement, which is in evidence adduced by the plaintiff, in which the applicant admitted that it was she, who provided the false information to the broker to include in the Residential Tenancy Agreement.

18. [48]

    Generally, the applicant's evidence during the course of the examination was unsatisfactory. Overall, the applicant ought not to be believed.

19. [49]

    Further, only three months after affirming the third Wu Affidavit in which she purportedly particularised her assets over $5,000 and confirmed that she had no other property, on 12 December 2016, she, on oath, revealed that she had further interest in property being: a 10% share in real property located at 48 Burwood Road, Burwood worth approximately $500,000 and purchased in 2015; an interest in property at 37 Delhi Road, North Ryde worth approximately $590,000; and funds standing to the credit of a China Agricultural Bank account of about $15,000.

20. [50]

    The applicant then asserted that she had, in fact, told her solicitor about the North Ryde property, but nevertheless signed the Affidavit and swore to its truth, without mentioning that (and other) property and she does not know why she did that.

21. [51]

    Over and above all of the foregoing, the evidence of the applicant on examination was, to say the least, obfuscatory. According to her tax returns, it would be impossible to have purchased the properties that stand to her credit. The proposition that an unidentified older female to whom she shows respect has provided $85,000 via Ms Li and Mr Zhang is fanciful.

22. [52]

    If it were necessary so to do, I would draw the inference, on the balance of probabilities, that the applicant was an agent of, or a party to, the purchase of real property by Ms Li and Mr Zhang, using the proceeds of crime derived from their serious criminal activity. It is unnecessary to come to that finding.

23. [53]

    It is sufficient for present purposes to conclude that it is beyond doubt, or any reasonable doubt, that the applicant made false declarations and obtained a loan or loans fraudulently. As a consequence, the loans and amounts she received from the ANZ and NAB were the proceeds of her unlawful activity; the proceeds of crime and an instrument of serious crime.

24. [54]

    In coming to those findings, it is unnecessary to utilise any Jones v Dunkel, supra, inference. The inferences otherwise available, and the direct evidence, are irrefragable.

25. [55]

    As earlier stated, it is for the applicant to satisfy the Court. The applicant bears the onus of establishing that there are “no grounds” on which the restraining order could have been or can be made. The Court has not been satisfied, even on the lower standard of proof.

26. [56]

    Further, the Court does not consider it is in the public interest to revoke the restraining orders. In my view, the restraining orders were properly made and are appropriate.

27. [57]

    The revocation of the restraining order is not a means by which one can circumvent the limitations on the exclusion of property from a restraining order: MA v Commissioner of the Australian Federal Police [2016] VSC 553 at [12]; Lee v Director of Public Prosecutions (NSW) (2009) 75 NSWLR 581

28. [58]

    The Court is satisfied that the property held by the applicant is, at least in part, the proceeds of criminal activity and no exclusion or revocation order should be made. For the foregoing reasons, the Court makes the following orders:

    1. (1)

       Motion dismissed;

    2. (2)

       The applicant on the motion shall pay the plaintiff's costs of and incidental to the proceedings.