Commissioner of the Australian Federal Police v Tradieh

1. [1]

   By Amended Notice of Motion filed on 28 February 2023, the applicant Mr Ammar Tradieh, who is the defendant in the substantive proceedings, seeks orders pursuant to ss 29 and 31 of the Proceeds of Crime Act 2002 (Cth) (the POC Act) that the following property be excluded from the restraining order made by Davies J on 3 June 2022:-

2. [2]

   Mr Tradieh bears the onus of satisfying the court on the balance of probabilities that the property sought to be excluded from restraint, individually, is not the proceeds of a serious offence, is not an instrument of unlawful activity and that a pecuniary penalty order (PPO) could not be made against him: see ss 29 and 317 of the POC Act.

3. [3]

   The Commissioner, the respondent to the motion and the plaintiff in the substantive proceedings, opposes the application. His primary submission is that the applicant cannot satisfy the threshold issue in s 29(4) of the POC Act, and in any event has not discharged his onus, so that the motion should be dismissed.

4. [4]

   For the following reasons, I dismiss the applicant’s Amended Notice of Motion.

Background

1. [5]

   The plaintiff filed a Summons on 3 June 2022. On that day, Davies J made inter alia the restraining orders sought by the Commissioner pursuant to ss 17 and 19 of the POC Act concerning the property of Mr Tradieh. The Summons was filed consequent upon Mr Tradieh’s plea of guilty to an offence of produce tobacco contrary to s 308-125 of Schedule 1 to the Taxation Administration Act 1953 (Cth). He was convicted on 22 July 2022, and was sentenced to a two year Intensive Correction Order by Latham ADCJ.

2. [6]

   The Statement of Agreed Facts that Mr Tradieh signed on 11 October 2021 and to which he pleaded was included as evidence in his case on this application, annexed to the affidavit of a paralegal Robert Hedderman (see below). The Statement of Agreed Facts discloses the following. Between 16 August 2020 and 13 January 2021, Mr Tradieh produced on his property at Bulga, a tobacco plant weighing 70,871.7185 kg, being above the threshold of 500kg, and that he knew that the plants being produced were tobacco plants. The offender spent considerable time at the property, which totalled approximately 57 acres. He purchased it in July 2017.

3. [7]

   A police drone fly over of the property in 2020 revealed a pulled crop and remnants of a tobacco crop. A shipping container had been converted to a kiln. Cultivation of tobacco without a licence is illegal, and there are no valid licenses in Australia. Mr Tradieh did not have a licence.

4. [8]

   On 13 January 2021, NSW Police executed a warrant at the property. The offender and his family were present. At the rear of the property, officers located mature tobacco plant and unviable seedlings. Infrastructure and machinery consistent with the agricultural cultivation of a tobacco crop and a “significant investment” by Mr Tradieh including a dam, greenhouses and a shed, a HiAce van, a tractor, pipes, fertiliser chemicals, plastic bags, keys and a box containing dried tobacco leaves were also found. No other crop was grown at the property.

5. [9]

   A search of the HiAce van revealed uncut tobacco which had been dried, and seedling trays.

6. [10]

   The estimated gross weight of the tobacco was 70,871.7185kg. The excise value which would have been payable in January 2021 was approximately $9,478,762.00. The retail value was approximately $3,315,766.00.

7. [11]

   Between 16 August 2020 and 13 January 2021, the offender was the principal responsible for the production of the tobacco plant at the Bulga property. No evidence of other people being involved was identified by police. Upon questioning by police, Mr Tradieh denied responsibility for the tobacco crop.

8. [12]

   These facts were signed by the applicant, and were the basis upon which he was sentenced.

9. [13]

   On 14 February 2023, Garling J made orders pursuant to s 180 of the POC Act that Mr Tradieh, his wife and his cousin were to be examined about affairs pertaining to Mr Tradieh’s conviction. The applicant was examined on 18 April 2023 and 15 June 2023 before two Members of the Administrative Appeals Tribunal. A transcript of the examinations was annexed to an affidavit that was read in these proceedings.

Statutory framework

1. [14]

   The POC Act sets out its principal objects at s 5:-

2. [15]

   Section 317 of the POC Act provides that the onus of proof is on an applicant and that any question of fact to be decided by a court on an application is to be decided on the balance of probabilities. This onus was described as “uncompromising and unable to be ameliorated by any conventional perception that members of society do not ordinarily engage in criminal conduct” by French CJ in Henderson v Queensland (2014) 255 CLR 1; [2014] HCA 52 at [15], citing Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170 at 171; 110 ALR 449 at 450; [1992] HCA 66.

3. [16]

   Mr Tradieh seeks orders pursuant to ss 29 and 31 of the POC Act. Those sections provide:

4. [17]

   Several terms in s 29 have definitions which are found at s 338 of the POC Act. First, “interest” in relation to property or a thing, means:

5. [18]

   Second, “serious offence” means, relevantly:

6. [19]

   “Proceeds” and “instrument” are defined at ss 329 and 330:

7. [20]

   “Unlawful activity”, defined in s 338 of the POC Act, means an act or omission that constitutes:-

8. [21]

   “Indictable offence”, defined in s 338, means “an offence against a law of the Commonwealth, or a non-governing Territory, which may be dealt with was an indictable offence (even if it may also be dealt with as a summary offence in some circumstances).” It was not in issue that Mr Tradieh’s conviction was for an indictable offence.

A threshold issue

1. [22]

   Mr Short, who appeared for the Commissioner, submitted that s 29(4) is a threshold issue because it requires the court to not exclude a specified interest in property from a restraining order unless it also satisfied that a PPO could not be made against Mr Tradieh. The court’s power to make a PPO is found at s 116 of the POC Act, which provides:-

2. [23]

   Mr Short said that on the evidence before me, I would easily be satisfied that a PPO could be made at a later date and therefore this application must be dismissed without considering the matter further. Mr Walker, who appeared on behalf of Mr Tradieh, submitted that I could not be satisfied that a PPO could be made.

Evidence

1. [24]

   The following were tendered as exhibits:-

   1. (1)

      Notice to Admit Facts (exhibit 1);

   2. (2)

      Response to Notice to Admit Facts (exhibit 2);

   3. (3)

      Extract from ATO website (exhibit 3);

   4. (4)

      Spreadsheet from ATO website of “chop chop” prices (exhibit 4); and

   5. (5)

      Three screenshots of an aerial map of the Bulga Property (exhibit 5).

2. [25]

   The following affidavits were read by the applicant:

   1. (1)

      An affidavit of Robert Hedderman affirmed on 6 February 2023. Mr Hedderman is a paralegal assisting Mr Walker. His affidavit annexed the Statement of Agreed Facts in Mr Tradieh’s criminal proceedings and several screenshots of maps.

   2. (2)

      An affidavit of Mr Tradieh affirmed on 14 July 2023. His affidavit sets out how he says that he purchased the Bulga Property, and the HiAce van. He says that his CBA account was not used in connection with the commission of an offence. He also sets out his work history. Mr Tradieh annexes several documents concerning the purchase of the Bulga Property and the van, as well as a statement of account for the CBA account for the period 1 April 2022 – 30 June 2022.

3. [26]

   The respondent read the following affidavits without objection:-

   1. (1)

      An affidavit of Matthew Greenaway sworn on 14 August 2023. Mr Greenaway is a member of the Australian Federal Police (AFP) and has carriage of this matter. His affidavit exhibited a great deal of material which included the certificate of conviction with respect to Mr Tradieh’s conviction on 22 July 2022, bank records, home loan documents, tax return documents, and the transcripts of Mr Tradieh’s, his wife’s and his cousin’s examinations before the Administrative Appeals Tribunal.

   2. (2)

      An affidavit of David Parnell sworn on 11 August 2023. Mr Parnell is a tobacco consultant who provided evidence about the excise tax for tobacco at the material time, and his opinion as to the value of the profit generated from the crop and the value of the excise that would have been payable on it. Mr Parnell also gave evidence at the hearing (see below).

   3. (3)

      An affidavit of Katie Platt sworn on 14 August 2023. Ms Platt is a Rural Crime Investigator with the NSW Police. Her affidavit annexes several documents related to the investigation, including screenshots of the covert drone footage, CCTV and a copy of ATO property seizure records.

   4. (4)

      An affidavit of Mark Gallucci sworn on 15 August 2023. Mr Gallucci is a NSW Police Sergeant who flew a drone to take photographs of Mr Tradieh’s property. He annexes several photographs that were taken from that fly over.

   5. (5)

      An affidavit of Jarrod Martin sworn on 10 August 2023. Mr Martin is an employee of the ATO who assisted in executing the search warrant on Mr Tradieh’s property. In his affidavit, Mr Martin described what he observed during the search and annexed a mud map of the property that he drew, and a photo of tobacco which was found in the HiAce van. He was briefly cross-examined by Mr Walker (see below).

   6. (6)

      An affidavit of Derek McLaren affirmed on 9 August 2023. He is a senior intelligence analyst at the ATO. Mr McLaren sets out what procedures were undertaken to investigate Mr Tradieh. He annexed to his affidavit an ATO profile report, which contains several pieces of protected information with respect to Mr Tradieh.

   7. (7)

      An affidavit of Julie Tan affirmed on 11 August 2023. Ms Tan is an employee of Westpac Bank. Annexed to her affidavit are several documents with respect to Westpac loans and accounts held by Mr Tradieh.

   8. (8)

      An affidavit of Yu Hsuan affirmed on 24 August 2023. Ms Hsuan is an employee of CBA. Annexed to this affidavit are bank statements of Mr Tradieh’s CBA account from 1 January 2016 – 30 June 2023.

   9. (9)

      An affidavit of Ritika Puri affirmed on 11 September 2023. This affidavit annexes several documents with respect to a National Australia Bank home loan and transaction reports for two accounts held by Mr Tradieh.

4. [27]

   The following people gave evidence at the hearing:-

5. [28]

   Mr Purnell was called as an expert witness with respect to the value of the tobacco crop and excise tax on tobacco. He was briefly cross-examined by Mr Walker. I observe that his opinion as to value and excise were contained in the Statement of Agreed Facts.

6. [29]

   Mr Walker briefly cross-examined Mr Greenaway about the location of the tobacco crop at the Bulga Property. He did not know the location of the crop.

7. [30]

   Mr Martin was briefly cross-examined by Mr Walker about his observations of the contents of the HiAce van during a search of it in February 2021, about a month after the search warrant of the Bulga Property was executed. Mr Martin agreed that it was possible that the tobacco found in the van could have been blown in by the wind as there was a smashed window on the van. He also agreed that there was no fingerprint or DNA evidence linking Mr Tradieh to the tobacco leaf found in the van.

8. [31]

   In re-examination, Mr Martin described some of the items found during the initial search of the van in January 2021. They included bottles of fertiliser and seedling trays consistent with those found in the greenhouses on the property. He also said that the reason for the February search of the van was because Mr Tradieh had been asking to have it returned to him.

9. [32]

   The applicant gave brief evidence-in-chief and was cross examined by Mr Short. His evidence was that he did not know that the tobacco crop was being cultivated. He said that he rented the back part of his property to another person, Mr Taleb, who grew the crop. When asked about this account, which traversed his plea of guilty, Mr Tradieh said that he pleaded guilty to take advantage of the early appropriate plea of guilty scheme and because he had no evidence to defend the charge.

10. [33]

    Mr Tradieh said that the income that he derived from his arrangement with Mr Taleb went toward the mortgage of the Bulga Property.

11. [34]

    I observe that the Statement of Agreed Facts, which I have summarised above, was tendered by Mr Tradieh on this application. They were signed by him. Mr Tradieh is bound by those facts in these proceedings irrespective of his evidence in this court.

Could a PPO be made?

1. [35]

   I will first consider the s 29(4) threshold issue.

2. [36]

   Section 116 of the POC Act provides that before making a PPO, the court must be satisfied that either Mr Tradieh has been convicted of an indictable offence and has derived benefits from the commission of the offence, or that he has committed a serious offence.

3. [37]

   Mr Short submitted the evidence demonstrates that is likely that a PPO could be made against Mr Tradieh. He submitted that s 116(1)(a) was easily satisfied because the plaintiff is a “proceeds of crime authority” as defined at s 338 of the POC Act, and has applied for a PPO in the Summons. With respect to s 116(1)(b)(i), whether or not there was a “benefit” obtained was the only real issue. Mr Short submitted that the “benefit” was the avoidance of excise tax. In my opinion, this is clearly correct, as on the evidence before me, he obtained benefits from unlawful activity, being the production of tobacco without a licence.

4. [38]

   With respect to s 116(1)(b)(ii) and the definition of “serious offence”, Mr Short submitted that this is a higher bar, but takes away the need to find that Mr Tradieh obtained a benefit. Taking into account that the value of the loss to the Commonwealth was over $10,000 (the lost excise tax revenue), Mr Short submitted that I could be satisfied s 116(1)(b)(ii) was also made out. I accept this submission.

5. [39]

   Mr Walker submitted that it is not likely that a PPO could be made because although Mr Tradieh has been convicted of an indictable offence, the benefit that was obtained was rental income, which was not derived from the commission of an offence. If I accepted that the benefit derived was rental income, the definition of “serious offence” could not be met. However, there was no evidence adduced of what the alleged rental income was, when it was paid, or how Mr Tradieh came into the large sums of money that his bank statements reveal he received, which exceeded $10,000 and might be rental income. The onus was on him to explain that evidence, which he did not discharge. Mr Walker also submitted that the applicant was not actually responsible for the cultivation of the tobacco crop, and if I accepted that, I could not find it likely that a PPO could be made. As I have said, I reject this submission based on the Statement of Agreed Facts tendered in Mr Tradieh’s own case.

6. [40]

   Mr Walker’s submissions traversed Mr Tradieh’s signed Statement of Agreed Facts to a large degree, which included that Mr Tradieh was the principal in producing the tobacco crop. Indeed, Mr Walker conceded that the applicant “essentially traverses a lot of things in the Statement of the Agreed Facts.” As I indicated to Mr Walker during the hearing, I reject any submission that traverses the Statement that Mr Tradieh voluntarily signed in his criminal proceedings, included in his own evidence. They are admissions. Further, Mr Walker adduced no evidence to the contrary in support of his submissions despite bearing the onus.

7. [41]

   In my opinion, both limbs of s 116(1)(b) are comfortably made out. It is not in dispute that Mr Tradieh was convicted of an indictable offence. I am also satisfied, having not been provided with any evidence to the contrary which would discharge the applicant’s burden, that Mr Tradieh obtained a benefit from the commission of the offence. This benefit was, at least, the value of excise tax that he avoided. Alternatively, it is rental income in excess of $10,000. This satisfies s 116(1)(b)(i). As to s 116(1)(b)(ii), in my opinion, the offence that Mr Tradieh was convicted of is a serious offence as it caused both a benefit to Mr Tradieh and a loss of revenue to the Commonwealth. As the Attorney-General is the AFP Minister, so s 116(1)(a) is also made out.

8. [42]

   In the premises, I am satisfied that a PPO could be made against Mr Tradieh. I dismiss the application. For completeness, in the event that I am wrong about the s 29(4) threshold being met, I now turn to consider other matters.

Mr Tradieh’s application pursuant to s 29 of the POC Act

1. [43]

   The real questions to be decided in Mr Tradieh’s application are whether or not the interests in the property sought to be excluded are the proceeds of, or an instrument of unlawful activity and whether or not the interests are proceeds of an indictable offence or an instrument of any serious offence: ss 29(2) – (3).

2. [44]

   I note that I am already satisfied that the definition of “serious offence” is met. As to “unlawful activity,” this is a much lower bar and only requires the offence for which Mr Tradieh was convicted to be an offence against the law of the Commonwealth, which is also met.

3. [45]

   Section 329(1) of the POC Act provides that property is proceeds of an offence if it is wholly or partly derived or realised directly or indirectly from the commission of an offence. Section 330(1)(c) relevantly states that property becomes proceeds of an offence if an encumbrance or security over property is wholly or partly discharged using proceeds of an offence.

4. [46]

   As to the Bulga Property, Mr Walker contended that both lots were not derived or realised from the commission of an offence. Mr Tradieh’s evidence was that he purchased and serviced the mortgage for the Bulga Property with the assistance of a loan from Mr Ali Taleb, his own savings, surplus funds from the sale of a property in Tarago and income from various jobs that he had, which included selling his own produce at markets. Mr Walker submitted that the quantum of money entering the applicant’s accounts averaged out as about $80,000 per annum. He said that this is consistent with the income of a small business owner in Sydney. However there was no evidence in support of this contention. There was also no evidence adduced to support Mr Tradieh’s evidence that the money entering his accounts was not the proceeds of the offence. Mr Tradieh fails on his onus.

5. [47]

   Mr Short submitted that “derivation” is a broad concept which may be constituted by a non-trivial connection between the offence and the continued holding of the property. It can be proved by an act or omission resulting in money or other property being dealt with so as to make a non-trivial contribution to payment for the thing or an interest in it. Again, it is the applicant who bears the onus or proving that the property sought to be excluded is not the proceeds of an offence: Commissioner of Australian Federal Police v Hart (2018) 262 CLR 76; [2018] HCA 1 at [16] per Kiefel CJ, Bell, Gageler and Edelman JJ.

6. [48]

   Mr Short submitted that Mr Tradieh has not discharged his onus of proving that he did not service the mortgage of the Bulga Property with the proceeds of crime. Neither has the applicant adduced any evidence that the funds going in and out of the CBA account were not the proceeds of crime. He submitted that if I accept that the large sums of money entering the account were proceeds of crime, notwithstanding other money from “clean” sources were also received, that I would find the CBA account to be proceeds of crime. As to the HiAce van, Mr Short submitted that the money used to purchase and service the loan for it was from the proceeds of crime, so it is of itself the proceeds of crime.

7. [49]

   In my opinion, all of the property sought to be excluded are proceeds of an offence. With respect to the Bulga Property, there was no evidence adduced by the applicant to suggest that payments servicing his mortgage were used with anything but the profits generated by his offending, in the context of him earning very little money from apparently legitimate sources.

8. [50]

   As to the CBA account, as the applicant has left the large deposits unexplained by evidence, I cannot infer anything other than that they were sourced from the proceeds of his offending. He has not discharged his onus.

9. [51]

   I accept that the HiAce van is also proceeds of crime as the applicant has not proven that the money used to service his loan for the van was derived from sources other than the proceeds of crime.

10. [52]

    As set out above, s 329(2) of the POC Act states that for property to be an instrument of an offence, it must have been used in, or in connection with, or intended to be used in or in connection with the commission of an offence. Section 330(2) is in the same terms as s 330(1) referred to above but with respect to an instrument rather than proceeds of an offence.

11. [53]

    Mr Walker submitted that as only 10% of the total acreage of the property was used to cultivate the crop, the application to restrain and have forfeited the whole of the two lots was disproportionate to the offence. He relied on the comments of Ierace J in New South Wales Crime Commission v Pettit (2021) 292 A Crim R 89; [2021] NSWSC 980 (Pettit) where his Honour, considering the Criminal Assets Recovery Act 1990 (NSW), which contains a similar requirement that property be “used…in connection with”, held that a “substantial connection” is required to exist between the property and the offence in circumstances where the court is not given wide discretion by that Act to avoid an injustice, such as the scale of a forfeiture being disproportionate to the offending.

12. [54]

    Further, Mr Walker submitted that while the Bulga Property comprises two separate lots, the tobacco crop was grown on one lot only. However, there is no evidence before me (including in the Statement of Agreed Facts) that supports this contention. Mr Tradieh also confirmed in his evidence-in-chief that he treated the two lots as one, as did the local council for the purposes of issuing rates notices and water bills. Mr Walker maintained that it was Mr Tradieh’s position that he did not plant or cultivate the crop. Again, this traverses the applicant’s plea of guilty and the Statement of Agreed Facts.

13. [55]

    Mr Short submitted that the decision of the Victorian Court of Appeal in Cini v The Commissioner of the Australian Federal Police (2016) 312 FCR 432; [2016] VSCA 227 (Cini) binds this court, and that to follow the reasoning in Pettit would require a finding that Cini is plainly wrong. In Cini, which dealt with a similar, but not identical application under the POC Act, the court held that the POC Act does not require there to be a substantial connection between the property and the offence. To do so would add gloss to the statutory language: Cini at [48]. Mr Short submitted that the absence of a discretion in the POC Act to give relief from forfeiture cannot affect the plain meaning of the legislation. Mr Short submitted that in any event, the applicant has not discharged his onus of proving that the property that he seeks to be excluded is not an instrument of the offence, a submission with which I agree.

14. [56]

    Mr Short submitted that I should find the Bulga Property and HiAce Van to both be instruments. As to the CBA account, it was Mr Short’s submission that this too can be considered an instrument of the offending as the money in the bank was the account holder’s chose in action used in connection with an offence.

15. [57]

    In my opinion, taking into account the evidence before me, the Bulga Property is plainly an instrument of the offence. I reject the submission advanced by Mr Walker that the Bulga property comprised two distinct properties and that the tobacco was cultivated on one lot only. No such evidence was before me and Mr Tradieh’s own evidence during the hearing was that he treated the two lots as one farm, as did the local council. There was no fence dividing the lots. There being no evidence to the contrary, I do not find that the two lots were used in anything but as one parcel of land.

16. [58]

    The van was clearly an instrument as tobacco and seedlings were found inside.

17. [59]

    As to the CBA account, I accept that it too is an instrument for the reasons advanced by Mr Short.

Conclusion and orders

1. [60]

   The applicant has not discharged his onus to prove the matters at ss 29(2) and (3) of the POC Act. The motion must therefore be dismissed.

2. [61]

   The Commissioner provided draft orders in the event that I dismissed the motion.

3. [62]

   I make the following orders:-

   1. (1)

      The Amended Notice of Motion filed by the Defendant on 28 February 2023 is dismissed.

   2. (2)

      Pursuant to section 95 of the Proceeds of Crime Act 2002 (Cth) (Act), the Court declares that the property set out in Schedule One to these orders has been forfeited to the Commonwealth by operation of Part 2-3 of the Act.

   3. (3)

      Pursuant to section 69(2) of the Act, the Commonwealth be given leave to dispose of, or otherwise deal with, the property forfeited by operation of Part 2-3 of the Act, immediately.

   4. (4)

      Prayer 16 of the Summons be stood over for a directions hearing before the Common Law Registrar on 30 November 2023

   5. (5)

      I stand the matter over to 9:30am on 16 November 2023 for the parties to make submissions on costs.

   6. (6)

      Note that the Plaintiff on behalf of Commonwealth are released from the undertaking as to costs and damages given in these proceedings on 3 June 2022.

   7. (7)

      Liberty to apply by contacting my Associate.