Karout v New South Wales Crime Commission

1. [1]

   KIRK JA: I agree with Adamson JA.

2. [2]

   ADAMSON JA: Kaldon Karout (the appellant) appeals against the proceeds assessment order made by Fagan J (the primary judge) in the Supreme Court (the Court below) on 27 May 2025 pursuant to s 27 of the Criminal Assets Recovery Act 1990 (NSW) (the Act) that the appellant pay to the NSW Treasurer $4,602,659.91: New South Wales Crime Commission v Karout [2025] NSWSC 538.

3. [3]

   This amount was the primary judge’s assessment of the value of the proceeds derived from the appellant’s illegal activities during the period 21 November 2012 to 27 October 2015 (the relevant period) and included the figure of $546,095, which was found to be the value of the drugs found in the appellant’s possession. The balance was derived by deducting from the appellant’s total expenditure during the relevant period ($10,916,264.79) the expenditure which had been established was legitimate, as provided for by s 28(3) of the Act.

4. [4]

   The primary judge allowed each of the amounts for which the respondent, the NSW Crime Commission (the Commission), contended, in full, except for a single adjustment which was made to the figure for maintenance payments alleged to have been made by the appellant to his former partner Bernadette Taylor (now deceased), who was the mother of two children of whom the appellant is the father, the younger of whom was born in 2015.

5. [5]

   The appellant challenged each of the figures (except the amount of $17,000 which related to Faraj Issa) which are included in the amount of the proceeds assessment order and maintained, as he did in the Court below, that the order should be in the amount of $1,883,911.91. He submitted that:

   1. (1)

      the market value of the drugs, $546,095, ought not be included in the amount of the proceeds assessment order as it had not been shown that the appellant owned the drugs outright, as opposed to having merely a possessory interest in them;

   2. (2)

      the figure allowed by the primary judge of $627,653 ought not to have been allowed because it which was based on the appellant’s admission in his compulsory examination that he gave Ms Taylor about $23,000 per month which was inadmissible to prove the truth of the contents; and

   3. (3)

      the transfers of funds which had been made to the appellant by John Barton, Joseph Samia, Hanan Elgammal ought not be included in the amount of the proceeds assessment order as they were loans which were legitimate transactions and therefore constituted money which was unrelated to an illegal activity or activities within the meaning of s 28(3) of the Act.

6. [6]

   Ground 4b, which relates to transactions involving Mr Issa, was abandoned at the hearing of the appeal.

7. [7]

   All references to legislation in these reasons are to the Act unless otherwise stated. All references to paragraphs in the judgment in the Court below will be prefixed with “J”.

Background

1. [8]

   The Commission filed a summons in the Supreme Court on 27 October 2015 seeking orders, including for an examination of the appellant pursuant to s 12(1)(b) and a proceeds assessment order pursuant to s 27. On that date, the Court made a restraining order against the appellant’s property pursuant to s 10A and ordered that the appellant be examined.

2. [9]

   It was common ground, and the primary judge found, that the conditions for a proceeds assessment order in s 27(2)(a) had been fulfilled as the appellant had, during the 6 years before the Commission filed the summons, engaged in serious crime-related activity involving an indictable quantity of prohibited drugs. This was established by a certificate of conviction which proved that on 1 June 2018, the appellant was convicted of two offences committed on 27 July 2015 contrary to s 25(2) of the Drug Misuse and Trafficking Act 1985 (NSW) (the DMTA): the supply of prohibited drugs (heroin for the first offence and cocaine for the second offence) not less than a large commercial quantity.

3. [10]

   The facts on sentence (which the appellant acknowledged were agreed and accepted by him for the purposes of these proceedings) were to the effect that the appellant participated in a large commercial drug supply operation from his factory located in Kogarah on property of which he was the registered proprietor and which was not subject to a registered mortgage. The processes involved included the breaking down of blocks of prohibited drugs using a grinder and blender and then combining them with other substances and re-pressing the new composite drugs into a block.

4. [11]

   For the offence of supply of heroin, the appellant was sentenced to 7 years imprisonment with a non-parole period of 5 years and for the offence of supply of cocaine, to a term of imprisonment of 8 years with a non-parole period of 5 years and 4 months. The total effective sentence was 8 years and 3 months, commencing on 11 March 2016 and expiring on 10 June 2024, with a non-parole period of 5 years and 7 months. The appellant was first eligible for parole on 10 October 2021.

5. [12]

   On 4 February 2020 (while the appellant was still in custody), the appellant was examined by the Commission before Senior Deputy Registrar Hedge of the Supreme Court pursuant to the order made on 27 October 2015.

6. [13]

   In the course of that examination the appellant said that he had paid the expenses of Ms Taylor and their two children both before and after he was remanded in custody from 11 September 2015. The appellant said that payments of about $23,500 or $23,000 per month were made to Ms Taylor, either directly by him prior to 2015 or afterwards by his current partner (Nariman Karout). Of Ms Karout, the appellant said, “she has … more access than I do to the bank accounts, my bank accounts, company accounts and all …”. The appellant also said that during the relevant period he “[a]lways operate[d] in cash” and “always had cash in [his] pocket”. He said that he “[n]ever used tap-and-go. Wouldn’t know how to use it. Never had a credit card”.

7. [14]

   The appellant was also asked about various amounts which he had received during the relevant period. When asked whether he had received money by way of loans in that period, the appellant confirmed he had received loans from friends. When pressed for details, he could name only “Joe Harp and John Barton”. The appellant said that there was documentation available to support these transactions, but that, because he was in gaol, it was not available to him at the time of the examination. The appellant could not explain why he received a payment in the order of $130,000 from Mr Barton. Nor could he provide any explanation for receiving a total of $250,000 from Ezra 1 Pty Ltd and Styletech Pty Ltd or any information as to these company’s principals. He volunteered that he believed that Ezra 1 Pty Ltd was linked to Joe Harp (which was incorrect as these companies were associated with Mr Issa). He could not provide any information as to who he believed was linked to Auto Motori Pty Ltd.

The statutory regime

1. [15]

   The provisions of the Act which bear on the appeal are as follows.

2. [16]

   Section 4 relevantly defines “proceeds, in relation to an activity” as including “any interest in property, and any … advantage or benefit (including, without limitation, an increase in the value of an interest in property), that is derived or realised, directly or indirectly, as a result of the activity … by the person engaged in the activity”.

3. [17]

   Section 5(1) provides that proceedings on an application for a confiscation order (which is defined by s 4 to include a proceeds assessment order) are not criminal proceedings. The rules of evidence applicable in civil proceedings apply to proceedings such as the present: s 5(2)(b).

4. [18]

   Section 10A provides that the Court must, in certain circumstances, make a restraining order in relation to property of any person.

5. [19]

   Pursuant to s 12(1)(b), the Court may make an order for the examination on oath before the Court concerning the affairs of the owner of an interest in property that is subject to a restraining order.

6. [20]

   Section 13(2) relevantly provides that a statement or disclosure made in answer to a question put in the course of an examination under s 12 is not admissible in civil proceedings, except proceedings on an application under the Act (which includes the present proceedings).

7. [21]

   Section 13A provides:

8. [22]

   Pursuant to s 27(1), the Commission may apply to the Court for a proceeds assessment order in respect of the proceeds derived by a person from an illegal activity or activities, that took place not more than six years before the making of the application for the order. Such an order requires the person against whom it is made to pay to the Treasurer the amount assessed by the Court.

9. [23]

   Section 27(2)(a) requires the Court to make a proceeds assessment order if it finds it to be more probable than not that the person against whom the order is sought was, at any time not more than 6 years before the making of the application for the order, engaged in, relevantly, a serious crime related activity involving an indictable quantity (which is relevantly defined in s 4 as an indictable quantity of a prohibited drug that is an indictable quantity under the DMTA).

10. [24]

    Section 28(1) relevantly requires the Court to have regard to the following matters for the purposes of making a proceeds assessment order under s 27:

11. [25]

    Section 28(3) provides:

12. [26]

    Section 28(4) provides:

13. [27]

    Section 28C(12) was relied on by the appellant in support of his construction of s 54(5) (see below) that, had the legislature wanted to displace the Evidence Act 1995 (NSW), it would have done so expressly. Section 28C(12) provides that opinion evidence may be given by certain office holders about certain matters and begins with the following words:

14. [28]

    Section 31D provides that, in certain circumstances, the Court may make an order for examination of an “affected person” or spouse in relation to that person’s affairs, including the nature and location of property in which the affected person has an interest.

15. [29]

    Section 54 makes provision for proof of certain matters, including the following:

16. [30]

    Ground 2 challenges the primary judge’s ruling that the transcript of the appellant’s examination was admissible to prove the admissions he made in it. The following provisions of the Evidence Act 1995 (NSW) are relevant to that ground.

17. [31]

    The Dictionary to the Evidence Act defines “admission” as meaning a previous representation by a party which is “adverse to the person’s interest in the outcome of the proceeding.”

18. [32]

    The Dictionary defines “representation” as including “an express … representation (whether oral or in writing)”. It also defines “previous representation” as meaning “a representation made otherwise than in the course of giving evidence in the proceeding in which evidence of the representation is sought to be adduced.”

19. [33]

    Clause 6 of Pt 2 of the Dictionary provides:

20. [34]

    Section 59(1) of the Evidence Act contains the hearsay rule (that evidence of a previous representation is not admissible to prove the truth of its contents).

21. [35]

    Section 60(1) provides that “[t]he hearsay rule does not apply to evidence of a previous representation that is admitted because it is relevant for a purpose other than proof of an asserted fact.”

22. [36]

    Division 2 (entitled “First-hand hearsay”) of Pt 3.2 (entitled “Hearsay”) of the Evidence Act provides that the Division applies to previous representations that were made by a person who had personal knowledge of an asserted fact. The headings (being headings of Parts and Divisions), which are part of the Act (s 35(1) of the Interpretation Act 1987 (NSW)), indicate that such representations constitute “first-hand hearsay”.

23. [37]

    Division 2 of Pt 3.2 provides for various exceptions to the hearsay rule for first-hand hearsay. These include where a person who made a previous representation is not available to give evidence about an asserted fact (s 63); or in civil proceedings where a person who made a previous representation is available to give evidence but it would not be reasonably practical to call that person to give evidence or if the person does give evidence (s 64).

24. [38]

    Part 3.4 of the Evidence Act, entitled “Admissions” provides, in s 81(1), that the hearsay rule does not apply to evidence of an admission or to a previous representation that was made in relation to the admission at, or shortly before or after, the time the admission was made and to which it is necessary to refer to understand the admission.

25. [39]

    Section 82 provides:

26. [40]

    The heading of s 82 is not part of the Act: s 35 of the Interpretation Act. However, it is extrinsic evidence which can be considered in its interpretation: s 34 of the Interpretation Act. Its effect is to confirm that s 81 applies to first-hand hearsay but not to second-hand hearsay. This is significant to ground 2, which concerns the interrelationship between s 54(5) of the Act and s 81 of the Evidence Act. For the reasons given below with respect to ground 2, I consider that the effect of s 54(5) of the Act is to render the transcript of an examination under the Act first-hand hearsay, with the consequence that an admission in a transcript is admissible to prove the truth of the contents under s 81 of the Evidence Act.

27. [41]

    Section 135 confers a general discretion on the court to refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might be, relevantly, unfairly prejudicial to a party.

28. [42]

    Section 136 provides that the court may limit the use to be made of evidence if there is a danger that a particular use of the evidence might be, relevantly, unfairly prejudicial to a party.

29. [43]

    Section 144(1) provides:

The proceedings before the primary judge

1. [44]

   The Commission relied on evidence given by affidavit which annexed relevant documents. It also qualified an expert forensic accountant, Ryan Bull, to analyse the figures in the documentary material. Mr Bull calculated the appellant’s total expenditure during the relevant period, as established by the evidence and deducted an amount which he considered to be referable to sources unrelated to his illegal activity.

2. [45]

   Mr Bull’s final figures, at the conclusion of the hearing, were:

3. [46]

   Mr Bull’s figure for total expenditure included a figure of $546,095, which was based on Detective Inspector Paul O’Neill’s evidence of the value of the drugs found in the appellant’s possession at the time of his arrest. The Commission adduced evidence from Detective Inspector O’Neill, who gave a range of figures for 1kg of each of heroin and cocaine. He adopted the lower end of each of the two ranges and applied the figure per kilogram to the precise quantities which were found in the appellant’s factory at the time of his arrest, which gave rise to a figure of $546,095. In cross-examination, Detective Inspector O’Neill accepted that there was no evidence that the appellant had paid for the drugs which were found in his possession.

4. [47]

   Before the primary judge, the appellant argued that the presumption in s 28(2) did not create a presumption that the drugs in his possession were owned by him or constituted part of his property. He submitted that, accordingly, the figure of $546,095 was overstated because it was based on the assumption that he owned the drugs when his interest had not been shown to be more than a possessory interest.

5. [48]

   In ground 2, the appellant challenged the primary judge’s ruling on two bases: that his Honour had not included reasons in the final judgment for the ruling and that the ruling was premised on an incorrect interpretation of s 54(5) of the Act and ss 59, 81 and 82 of the Evidence Act. Although ultimately the appellant did not press the challenge that no reasons had been given, it is useful to summarise how the question was dealt with in the Court below.

6. [49]

   The Commission tendered the transcript of the compulsory examination of the appellant which was conducted on 4 February 2020 pursuant to an order made under s 12(1)(b). It relied on certain answers given by the appellant to the effect that he had paid, either directly or through Ms Karout, about $23,000 per month to Ms Taylor. The Commission submitted that the transcript was admissible under s 54(5), as the appellant’s statements about what he had paid Ms Taylor were admissions and therefore admissible under s 81 of the Evidence Act as an exception to the hearsay rule. The Commission also relied on the transcript for what it alleged were the appellant’s implied admissions as to the “loans”. It relied on the appellant’s inability to give any detail about the loans in his compulsory examination, which was inconsistent with the evidence he adduced from witnesses in his case about the transactions and therefore amounted to implied admissions in the sense considered in Woon v The Queen (1964) 109 CLR 529; [1964] HCA 23.

7. [50]

   Mr Lange SC, who appeared on behalf of the appellant in the Court below and with Mr James KC in this Court, accepted that the answers given by the appellant which were recorded in the transcript were admissions as they were against interest but relied on s 59(1) of the Evidence Act, which contains the hearsay rule (that evidence of a previous representation is not admissible to prove the truth of its contents).

8. [51]

   However, he objected on the basis that the transcript was “second-hand hearsay” under s 82 of the Evidence Act and that, accordingly, s 81 of the Evidence Act, which provides that admissions are an exception to the hearsay rule, does not apply. Mr Lange submitted that, putting aside s 54(5), the transcript would not be admissible against the appellant and that s 54(5) did not remedy the problem because it could not be established that the appellant wrote the transcript and therefore his answers are second-hand hearsay.

9. [52]

   The discussion between Mr Lange and the primary judge over the admissibility of the transcript to prove the truth of the admissions made by the appellant was recorded over ten pages of transcript.

10. [53]

    Mr Lange submitted that the answers given by the appellant in the transcript of the examination were representations “contained in a document”. He relied on cl 6 of Pt 2 of the Dictionary to the Evidence Act to submit that a representation contained in a document is only “taken to have been made by the person if the document was written, made, or otherwise produced by the person”. Mr Lange further submitted that the only effect of s 54(5) was to enable the transcript to be tendered to prove that the words were said but that it was a separate question whether the representations were admissible to prove the truth of the contents.

11. [54]

    In answering Mr Lange’s submission that the transcript was second-hand hearsay of the admissions, the primary judge said:

12. [55]

    Mr Lange raised the issue of second-hand hearsay under s 82 of the Evidence Act in the following exchange:

13. [56]

    Mr Lange pressed the submission that the answers given on transcript were second-hand hearsay. His Honour said that he did not follow why the admissions on transcript were second-hand hearsay. Mr Lange submitted further:

14. [57]

    Mr Lange continued:

15. [58]

    The following exchange then ensued:

16. [59]

    Mr Lange then submitted that the evidence ought be excluded under s 135 of the Evidence Act (on the basis that its probative value was substantially outweighed by the danger that it might be unfairly prejudicial to the appellant). The basis for the submission was that because the appellant was in custody, he did not have access to his records. The primary judge ruled that the evidence was admissible and observed that the matters raised by Mr Lange would be matters of weight.

17. [60]

    The Commission’s evidence of the payments made to Ms Taylor during the relevant period substantially derived from the appellant’s admissions in the transcript of his examination. Mr Bull also performed a calculation in which he deducted any bank transfer or cheque made in favour of Ms Taylor, all of which were made in the year ended 30 June 2016 (which included only 119 days of the relevant period which expired on 27 October 2015) as summarised in the table below. All of the payments were made after the appellant’s arrest on 11 September 2015 and before 27 October 2015 when the Supreme Court made a restraining order in respect of the appellant’s assets.

18. [61]

    The appellant’s case was that a total of $1,443,000 (excluding the amount of $17,000 in respect of Mr Issa, which is not pressed on appeal) should be deducted from Mr Bull’s assessment of the appellant’s income during the relevant period on the basis that the following amounts, which had been advanced to him by third parties as loans, were not derived from an illegal activity or activities.

19. [62]

    The appellant did not give evidence in the proceedings before Fagan J. He relied on evidence from Mr Barton, Mr Samia, Ms Elgammal as to these amounts. The appellant also relied on the evidence of Ms Karout (as to expenditure incurred by the appellant during the relevant period relating to maintenance payments made to Ms Taylor). Each of these witnesses was cross-examined.

20. [63]

    The appellant also qualified an expert forensic accountant, Owain Stone, who prepared a joint report with Mr Bull and gave concurrent evidence.

21. [64]

    Mr Stone recorded at paragraph 2.5.5 of his report that he had been provided with a draft affidavit of Ms Elgammal dated 7 March 2025. This was significant in the context of her evidence as to when she was first contacted by the appellant’s solicitors about giving an affidavit in the proceedings (see below).

22. [65]

    Ms Karout gave evidence that she met the appellant in 2011. They married in February 2012 and had three children. From early 2012, she was the book-keeper for KK Industries Pty Ltd and was the appellant’s personal assistant. She had access to the books and records of the company and provided documents to the accountant for the preparation of the company’s tax returns. She said that she had no knowledge of the appellant’s commission of the offences of possession of border-controlled drugs (until after his arrest).

23. [66]

    Ms Karout was asked about the payments to Ms Taylor in the following exchange:

24. [67]

    She said of transfers made from accounts in the name of the appellant or his company made after his arrest (on 11 September 2015) that she was making the payments because the appellant was in prison at the time. She agreed that, after the relevant period, she transferred $3,500 to Ms Taylor on the first of every month, as evident from the bank statements from 3 December 2016 to 1 April 2018, when the appellant was in custody.

25. [68]

    Ms Karout was not asked whether she was authorised to operate the joint account held by the appellant and Ms Taylor at ANZ Bank or whether she had made the transfers in the period from 14 September 2015 to 2 October 2016 from that joint account or the Westpac bank account in the appellant’s name.

26. [69]

    The appellant also tendered paragraphs 37-57 of an affidavit sworn on 14 June 2019 by Ms Taylor (who identified herself in that affidavit as Bernadette Karout) in Family Court proceedings against the appellant in which she deposed to the spousal maintenance that the appellant had paid her. The Commission was a party to those proceedings, which were commenced in 2019, because of the restraining order over the appellant’s property, which had been made on 27 October 2015.

27. [70]

    In that affidavit, Ms Taylor deposed in paragraph 37:

28. [71]

    This is the only part of Ms Taylor’s affidavit that was in evidence before the primary judge which related to the relevant period.

29. [72]

    Ms Taylor also deposed that in late 2016, early 2017, she told the appellant (who was then in custody) that she was running out of money. She deposed:

30. [73]

    Ms Taylor was not available to give evidence as she had died before the hearing. Mr Bull said of the portion of Ms Taylor’s affidavit that had been tendered:

31. [74]

    Before the primary judge reserved his decision, there was a discussion about written submissions and what was in dispute. His Honour raised with Mr Lange what he was seeking to derive from the affidavit of Ms Taylor. The following exchange ensued:

32. [75]

    Ms Elgammal’s affidavit was a short, typed document which included the typed date “7 March 2025” (being the date of the draft which was provided to Mr Stone). This date was struck through by hand and “7 April 2025” written in hand beside it.

33. [76]

    Ms Elgammal deposed that she had known the appellant for about 20 years and that he was a family friend whom she met through her son. She deposed in the balance of her affidavit (which comprised her entire evidence in chief) as follows:

34. [77]

    In cross-examination, Ms Elgammal corrected the spelling of her name as it appeared in her affidavit (and said it was “Hanan”, not “Hannan”). She was asked when she was first asked to swear an affidavit in the proceedings, to which she answered that she did not know. She then said that it was “two weeks ago”. She then said that she was looking for her “notebook” (she was giving evidence remotely) to see what she had written and then said that she had been asked at “the beginning of March”. It was revealed that the “notebook” to which she was referring appeared to be the affidavit itself.

35. [78]

    Also in cross-examination, Ms Elgammal said that she was a director of a company called Beppercorn, which develops properties. Her children were involved in the companies. She said that in 2014 and 2015 she was working as a driver and had “a school run” for which she was paid a wage but said that she could not remember, even approximately, how much she earned. She said that in 2014, she and her husband, who worked as a taxi driver, owned their own home which was subject to a mortgage which her husband paid. She later said that the house was solely in her husband’s name and that he bought it 50 years ago when he first came to Australia.

36. [79]

    She agreed that $1 million would have been enough to pay off her mortgage. Ms Elgammal said that she knew that her son was working with the appellant but said that she did not know “what happened between them”. She confirmed that she did not write anything down to record the loan she made to the appellant. She also said that she did not know whether any interest was going to be charged, but that the appellant said that he would pay interest to her when he repaid the loan in a year. She said that the loan had still not been repaid and that she did not know how much the interest was because she had not been repaid.

37. [80]

    Ms Elgammal declined when she was asked whether there was anything she wanted to correct in her affidavit. However, she agreed that it contained a mistake in that she had advanced the funds to the appellant on 22 August 2014 rather than, as stated in her affidavit, August 2015. She admitted that she had purchased property with the appellant before but said that she had difficulty remembering the details of what it was sold for or for how long it had been held. She said that the money for the purchase of the Hurstville property came from the bank but then said that it came from her husband and her children. Ms Elgammal said that the loan to the appellant had nothing to do with her niece and that she did not tell her about the loan. She said that her niece was not involved in the negotiations, although she had owned the Hurstville property with her niece. She said she could not remember in what proportions she and the niece had owned the property.

38. [81]

    Ms Elgammal said first that she had never discussed the loan to the appellant with her husband although she had discussed it with her son. Shortly after she had given these answers, the following exchange occurred:

39. [82]

    Mr Lange made the following submission to the primary judge as to this transfer:

40. [83]

    Mr Samia deposed, in his affidavit sworn on 28 September 2022, that in about June 2015 he caused Ezra Pty Ltd, a company of which he and his wife, Zena, are directors, to pay $50,000 to the appellant and also caused Styletech Pty Ltd of which he was a shareholder to make payments totalling $200,000 to the appellant. These amounts are still owing. He said that the money he paid the applicant came from dividends which his company owed him. Mr Samia said that the appellant told him that he would pay him back when he had sold one of his “projects”. He said that there was no written agreement but “[t]he cheque is the record”. Mr Samia said that he did not lend the money to him on “the interest basis”.

41. [84]

    Mr Barton deposed, in his affidavit sworn 26 September 2022, that in early 2014, the appellant asked him to lend him some money. He said that he advanced a total of $79,500 to the appellant in April 2014 and $43,500 in August 2014. Mr Barton described the appellant as a friend whom he had known since he was about 13 (in about 1984). In cross-examination, Mr Barton said that the appellant told him that he would repay him “as soon as he could”. However, he subsequently said that the appellant had told him that “it could be up to five years”. Mr Barton said that he did not ask for any interest to be paid because the appellant was “like a brother”.

The reasons of the primary judge

1. [85]

   The primary judge listed the issues which remained outstanding on Mr Bull’s final calculation as follows at J [17]:

2. [86]

   The appellant challenged each of the primary judge’s findings on these issues except D.

3. [87]

   The primary judge rejected the argument that the full amount of $546,095 (being the value of the drugs) ought not be included as proceeds. His Honour said at J [22]:

4. [88]

   The primary judge said at J [26]:

5. [89]

   His Honour did not otherwise give reasons for the ruling, which is challenged in ground 2.

6. [90]

   The primary judge accepted these admissions as reliable. His Honour found that Mr Bull’s assessment of the appellant’s expenditure related to Ms Taylor’s maintenance ought be accepted with an adjustment for the amount by which it exceeded $23,000 per month. The primary judge allowed an amount of $627,653 (Mr Bull’s figure of $719,832 for the appellant’s expenditure on Ms Taylor less the adjustment made by the primary judge of $92,179: J [39]). The appellant did not challenge this adjustment although he challenged the global figure.

7. [91]

   The primary judge reviewed Ms Karout’s evidence about the payments to Ms Taylor. His Honour noted that Ms Karout was the book-keeper for KK Industries Pty Ltd (the company through which the appellant carried on a building business) and remained in that role after she commenced a relationship with the appellant in early 2012. She continued to manage his affairs after he went into custody following his arrest on 11 September 2015.

8. [92]

   His Honour summarised the effect of her evidence and why he accepted the appellant’s admissions, as follows:

9. [93]

   The primary judge did not expressly address the affidavit evidence of Ms Taylor from the Family Court proceedings which the appellant had tendered.

10. [94]

    The primary judge also drew a Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 inference against the appellant as he did not give evidence. His Honour rejected the submission made by Mr Lange on behalf of the appellant that his failure to give evidence was explained by the circumstance that, by subjecting himself to cross-examination, he would be exposed to self-incrimination. No challenge is made to that finding in the notice of appeal. However, the appellant now seeks (by an amended notice of appeal) to contend that the appellant did give evidence in the hearing before the primary judge because his admissions were tendered.

11. [95]

    The primary judge said that he could not accept that a person in Ms Elgammal’s “modest financial circumstances” would have been able to lend $1,070,000 of her own money with neither interest nor security and with no specified date for repayment: J [45]. His Honour said further at J [47]:

12. [96]

    The primary judge addressed the appellant’s submission that the Court ought be satisfied that the money came from a legitimate source since it was the proceeds of the Hurstville property. His Honour said at J [48]-[49]:

13. [97]

    The primary judge said, at J [49] that the inference that the appellant owned the property was more readily drawn in circumstances where he had not given evidence. This observation is also the subject of challenge in ground 5.

14. [98]

    The primary judge rejected Mr Samia’s evidence that he had advanced a total of $250,000 by way of loan to the appellant and said at J [66]:

15. [99]

    The primary judge found Mr Barton’s evidence to be “inherently improbable, affected by internal inconsistencies and generally unconvincing”: J [86]. His Honour noted that his affidavit said nothing about when the appellant required the $130,000, when the loan would be repaid, whether interest would be paid or security given, or the purpose for which the loan was required: J [78]. The primary judge also noted the “contradiction and uncertainty” in Mr Barton’s answers during cross-examination as to the purpose for which the appellant had asked him for money: J [79]. His Honour observed that in cross-examination, Mr Barton said that the period of the loan could have been up to five years although nothing to that effect had been included in his affidavit: J [81]. Mr Barton has neither asked for interest or security for the loan, although it has now been outstanding for 11 years: J [82]. He agreed to lend the money to the appellant although he was in no financial position to do so: J [82]-[85].

The grounds of appeal

1. [100]

   On appeal, the appellant submitted that the primary judge was in error in allowing the full value of the drugs in the appellant’s possession since there was no evidence that he actually owned, rather than merely possessed, them. He submitted that the primary judge’s reliance on s 28(1)(a) was misplaced because the value of an interest in property depends on the nature of the interest and that it ought not be assumed from possession that the appellant owned the drugs. Further, he submitted that the only effect of s 28(1)(c) was to facilitate proof of value by permitting the value to be proved by evidence of the value of a “similar” drug and that s 28(1)(c) did not authorise a finding that the value of a drug was its full market value in circumstances where the Commission could not show that the appellant actually owned it.

2. [101]

   The appellant also argued that it was significant that the primary judge focussed on s 28(1)(a)-(c), rather than s 28(3) because it indicated that the primary judge rejected the suggestion that the appellant must have expended monies equivalent to the value of the prohibited drugs in order to gain possession. He argued that the value of the appellant’s interest in the drugs depended on whether the drugs were owned outright, had been received on consignment or as part of a bailment arrangement. He submitted that the Commission had failed to prove the extent of the appellant’s interest in the drugs and that, accordingly, the primary judge was in error in taking into account the $546,095 in the assessment.

3. [102]

   The appellant pleaded guilty to two offences of supply. His conviction was established by a certificate of conviction pursuant to ss 178 and 92(2) of the Evidence Act and s 54(2) of the Act. This also established the elements of the offences: The Prothonotary of the Supreme Court of New South Wales v Sukkar [2007] NSWCA 341 at [9] (Hodgson JA, Tobias JA agreeing). The appellant accepted that he possessed the drugs for the purposes of supply.

4. [103]

   Ownership of personal property can be proved to a prima facie level by proof of possession: Russell v Wilson (1923) 33 CLR 538 at 546 (Isaacs and Rich JJ); [1923] HCA 60; Cross on Evidence (9th ed, 2012, LexisNexis Australia) at [41125]; Gatward v Alley (1940) 40 SR (NSW) 174 at 179; Hocking v Director-General of the National Archives of Australia (2020) 271 CLR 1; [2020] HCA 19 at [91] (Edelman J). As the appellant’s possession of the drugs was proved by the certificate of conviction, it was for him to establish that someone else owned them since possession, in this context, is sufficient, without more, to prove ownership.

5. [104]

   The appellant adduced no evidence to displace the presumption (which operates in the proceedings for a proceeds assessment order, which are civil proceedings) that, as the person in possession of the prohibited drugs, he was also their owner. Accordingly, the submission that his interest in the drugs amounted to less than full ownership was devoid of evidentiary foundation and, therefore, entirely speculative. Further, such evidence as was available tended to bolster the inference of ownership arising from possession since the drugs were found in a factory which the appellant owned and controlled which had been constructed on land of which he was the sole registered proprietor.

6. [105]

   The Commission raised in argument the proposition that it is not possible to have a legal title to property, such as prohibited drugs, which is unlawful. It is not necessary for the purposes of the present case, to address that question.

7. [106]

   For these reasons, I consider that the primary judge was correct to include the full market value of the drugs in the appellant’s possession in his assessment for the purposes of a proceeds assessment order. Ground 1 has not been made out.

8. [107]

   The appellant submitted that the primary judge was in error in admitting the appellant’s admissions in the transcript as truth of their contents and also that his Honour had failed to give reasons for the ruling, despite indicating that he would do so in the final judgment.

9. [108]

   I understood the appellant to accept in oral argument in this Court that, since the correctness standard applies to the admissibility of the transcript to prove the content of the admissions made by the appellant which were recorded in it, it is not to the point that the primary judge did not give reasons in the final judgment for the ruling that the transcript was admissible for that purpose. Further, the primary judge was not obliged to give separate reasons for the ruling in the final judgment, since his Honour was entitled to say, as is a not uncommon practice, that the reasons for the ruling sufficiently appear from the transcript of argument. The extracts from the transcript of the hearing in the Court below which are reproduced above indicate that the primary judge put to Mr Lange each of the matters on the basis of which he considered the evidence admissible to prove the truth of the admissions and that Mr Lange’s submissions were insufficient to persuade the primary judge to the contrary.

10. [109]

    The importance of the transcript of the examination to the Commission’s case and the length of the argument as to its admissibility was such that the primary judge was, in my view, required to give reasons for the ruling: cf. Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 279 (McHugh JA). However, his Honour sufficiently exposed the reasoning in the transcript of the proceedings and it was not necessary for his Honour to repeat these reasons in the final judgment. Ultimately, the appellant indicated that he did not press his complaint about lack of reasons.

11. [110]

    The appellant argued that the transcript could only be tendered to prove that the statement was made but could not be tendered to prove the truth of its contents because, although the transcript contained admissions, s 82 prohibited its use to prove the truth of the contents of the appellant’s admissions because the transcript was, at best, second-hand hearsay. The appellant also argued that, if the legislature had intended to displace the Evidence Act, it would have used express language, as was used in s 28C(12) of the Act.

12. [111]

    It is for this Court to determine whether the primary judge was in error in ruling that the transcript of the admissions made by the appellant in his examination was admissible to prove the truth of their contents. For the reasons which follow, I consider that the primary judge was correct to rule that the admissions in the transcript of the examination were admissible, substantially for the reasons his Honour gave in the course of debate, extracted above. My reasons for agreeing with, and finding no error in, the primary judge’s ruling are as follows.

13. [112]

    The starting point is that the answers in the examination were previous representations by the appellant, which were prima facie inadmissible in so far as they were used for a hearsay purpose: s 59 of the Evidence Act. However, as they were statements against his interest, they fell within the exception to the hearsay rule because they constituted admissions: s 81 of the Evidence Act. This exception does not apply if the evidence is not first-hand hearsay: s 82 of the Evidence Act.

14. [113]

    The distinction between first-hand hearsay and second-hand hearsay, which was important in the common law, has been maintained in the Evidence Act. The meaning of these terms can be illustrated by the following example. If X tells Y that she heard Z admitting to killing A, X’s evidence of what she heard is first-hand hearsay of Z’s admission and Y’s evidence of what X told her is second-hand hearsay of the admission. X’s evidence of what Z said is admissible to prove that Z said that he killed A. Y’s evidence of what X said is only admissible to prove that X told Y what she heard Z say. At common law, X’s evidence of Z’s admission would be admissible to prove the truth of its contents (that Z killed A) because first-hand hearsay of an admission was an exception to the rule against hearsay: Cross on Evidence, [33430]. The same position would apply under the Evidence Act because of s 81. Y’s evidence of what X told her would not be admissible to prove the truth of the contents of the admission as it would be second-hand hearsay and therefore excluded by s 82 of the Evidence Act.

15. [114]

    Section 82(b) of the Evidence Act does not apply since the transcript is not “a document in which the admission is made” for the purposes of that section: Australian Securities and Investments Commission v Fortescue Metals Group Ltd (No 2) (2009) 176 FCR 529; [2009] FCA 424 at [32] (Gilmour J). Rather, it is a document in which the admission was recorded: Daniel v State of Western Australia [2001] FCA 223; (2001) 186 ALR 369 (Daniel) at [8] (R D Nicholson J). In Daniel, it was held that field notes recording communications made to an anthropologist by members of an appellant group were not documents in which the admissions were made. Therefore, it is not to the point that the requirements in s 82(b) have not been met in the present case, as they would need to be if the representation was made (as distinct from recorded) in a document: Caterpillar Inc v John Deere Ltd (No 2) [2000] FCA 1903; (2000) 181 ALR 108 at [22] (Heerey J); cited with approval in Nichia Corporation v Arrow Electronics Australia Pty Ltd (No 3) (2016) 240 FCR 13; [2016] FCA 466 at [19] (Yates J).

16. [115]

    As the appellant’s admissions were oral, it would have been necessary, but for s 54(5) of the Act, for evidence of the answers which the appellant gave to be given by a person who saw, heard or otherwise perceived the admission being made (s 82(a)), since the transcript would amount to no more than second-hand hearsay.

17. [116]

    The effect of s 54(5) of the Act, according to its express words, is to permit the transcript of a compulsory examination to be tendered to prove, in the present case, what the appellant said (that he paid Ms Taylor about $23,000 per month). Thus s 54(5) makes the transcript first-hand hearsay evidence of what the appellant actually said. Thus the transcript can be tendered to prove the truth of admissions made by an examinee, such as the appellant.

18. [117]

    This construction tends to promote the legislative purpose of the provision. This Court is required, by s 33 of the Interpretation Act, to prefer a construction that would promote the purpose or object underlying the Act to one which would not promote that purpose or object. The appellant accepted that the purpose of s 54(5) was to facilitate the proof of what was said in a compulsory examination under the Act, whether pursuant to s 12 or s 31D. Thus, it was submitted, it was not necessary for the Commission to call the stenographer who took the transcript, to tender the tape of the recording or to adduce evidence from those otherwise present at the examination. However the appellant submitted that, although s 54(5) was facultative, it did not convert what was second-hand hearsay into first-hand hearsay for the purposes of the Evidence Act. The consequence of the construction for which the appellant contended would be that the transcript could be tendered in proceedings to prove that the statement was made but it could not be used to prove the truth of its contents under ss 63, 64 or 81, each of which is confined to “first-hand hearsay”. Thus, if the legislative intention was to facilitate proof (that a statement was made), it did not achieve this intention in any meaningful way (because the truth of the contents of the statement could not be proved by the tender of the transcript).

19. [118]

    It is difficult to conceive of a legislative intention whereby proof that a statement was made could be achieved by the tender of a transcript and yet proof of the truth of the statement, even if it were an admission under s 81 or a prior representation under ss 63 or 64, would require a person who heard the statement being made to be called or the recording of the statement to be played. I reject the construction for which the appellant contended.

20. [119]

    The argument that the method used in s 28C(12) would have been used if the Evidence Act was sought to be displaced must also be rejected. Section 54(5) does not displace the Evidence Act. Its effect is to elevate the transcript to first-hand hearsay evidence of a statement made in a compulsory examination. The admissibility of such evidence to prove the truth of the contents of the statement depends on the provisions of the Evidence Act, including those referred to above. As such, if the transcript contains admissions, they are admissible under s 81 of the Evidence Act.

21. [120]

    For these reasons, the primary judge was correct to rule the transcript of the examination admissible.

22. [121]

    I note for completeness that the Commission accepted that s 135 of the Evidence Act provided an important overriding safeguard against unfairness, including in the context of proceedings under the Act such as the present, and that s 136, which permitted a judge to limit the use to which evidence could be put, would also apply, in an appropriate case, to prevent any unfairness which might otherwise arise. As no challenge was made by the appellant to the primary judge’s rejection of the appellant’s objection under s 135 of the Evidence Act to the appellant’s admissions in the transcript on the basis that the evidence might be “unfairly prejudicial” to him, it is not necessary to address these provisions further.

23. [122]

    The Commission’s submission in writing to this Court – that the statements made by the appellant in his examination did not constitute “previous representations” within the meaning of the Evidence Act because they were made in the course of giving evidence in the proceeding, being the proceeding in which the proceeds assessment order was sought – was expressly abandoned at the commencement of the hearing of the appeal in this Court. Mr English, who appeared on behalf of the Commission in the Court below and in this Court with Ms Dunlop, indicated that the Commission accepted the correctness of authorities to the contrary, including Hoy Mobile Pty Ltd v Allphones Retail Pty Ltd (2008) 167 FCR 314; [2008] FCA 369 (Hoy Mobile).

24. [123]

    However, the appellant chose to adopt the submission and filed an amended notice of appeal which included three new grounds as follows:

25. [124]

    The appellant relied, in part, on the circumstance that the summons filed by the Commission on 27 October 2015 was allocated proceedings number 2015/316308 and that this file number appeared on the examination conducted by Senior Deputy Registrar Hedge on 4 February 2020.

26. [125]

    I reject the submission that the appellant gave evidence in the proceedings before the primary judge. The circumstance that a person is examined before a Registrar pursuant to an order made under ss 12 or 31D in proceedings does not make the answers given, evidence in the proceedings for a proceeds assessment order before the primary judge. Nor does it have the effect that, by answering questions put to him in the examination, the appellant has become a witness in the proceedings before the primary judge. My reasons for this conclusion are as follows.

27. [126]

    The question whether the appellant’s answers in the examination are “previous representations” turns on whether his being examined had the effect that he gave evidence in the proceeding, being the proceeding in which the proceeds assessment order was sought.

28. [127]

    The word “proceedings” is capable of various meanings. As Kirk JA said in Attorney General for New South Wales v Haines (BHT Barbara Ramjan) [2025] NSWCA 231:

29. [128]

    Thus, for example, it was held in Rodden v R (2023) 112 NSWLR 162; [2023] NSWCCA 202 that an application for a costs certificate under the Costs in Criminal Cases Act 1967 (NSW) fell within the description of a “method permitted by law for moving a Court or judicial officer to some authorized act” but that the order to dismiss the application was one that was given or made in the proceedings for the prosecution of the offender on indictment: [86] and [97].

30. [129]

    While the examination was, in a broad sense, conducted in the same proceeding as the application for the proceeds assessment order, the answers given by the appellant in the course of the examination did not amount to his giving evidence in the proceeding in which evidence of the representation was sought to be adduced. His answers were given in a compulsory examination ordered by the Court under s 12 in which he was required to answer questions put to him by counsel for the Commission.

31. [130]

    Even if the appellant had given evidence in an interlocutory hearing in the same proceedings, representations made by him in evidence given on that interlocutory application would not be a representation made in the course of giving evidence in the proceeding in which evidence of the representation is sought to be adduced.

32. [131]

    In Hoy Mobile, Rares J was required to determine whether an affidavit read in an interlocutory hearing would be a previous representation within the definition in the Evidence Act. His Honour found at [27] that it would be:

33. [132]

    Similarly, McKerracher J held in Commissioner of Taxation v Bosanac (No 7) [2021] FCA 249; (2021) 390 ALR 74 at [35] that:

34. [133]

    It follows that the appellant did not give evidence in the proceedings before the primary judge. Accordingly, the admissions he made in the compulsory examination were “previous representations” for the purposes of the Evidence Act, with the consequence that ground 9 has not been made out. There was no error in the primary judge’s ruling the admissions admissible to prove the truth of their contents.

35. [134]

    Grounds 10 and 11 appear to be premised on the assumption that if the admissions in the transcript of the appellant’s compulsory examination were admissible, it had the effect that the appellant had actually given evidence in the proceedings before his Honour and, in that event, no Jones v Dunkel inference (that his evidence would not have assisted his case) was available against him. That the Commission tendered the transcript which contained sworn admissions by the appellant (made in his capacity as an examinee in a compulsory examination ordered by the Court) in support of its application did not make the appellant a witness in the proceedings or constitute his giving evidence in the proceedings before the primary judge. As the appellant was not a witness in the proceedings before the primary judge, his Honour was entitled to draw a Jones v Dunkel inference against him. It was open to his Honour to draw the inference in his consideration of the evidence as a whole, including the evidence adduced by the appellant through witnesses he called. For these reasons, grounds 10 and 11 have not been made out.

36. [135]

    Somewhat curiously, the appellant also submitted in his reply submissions that if the statements in the examination were admissible, this would be a reason why the appellant chose not to give evidence before the primary judge. He sought to rely on Chairman, National Crime Authority & Anor v Flack (1998) 86 FCR 16 (Flack) in circumstances where the National Crime Authority (NCA) had tendered a transcript of Ms Flack’s compulsory examination at first instance, and had sought to have a Jones v Dunkel inference drawn against her because she had not given evidence.

37. [136]

    In Flack, the sum of $433,000 in cash was found secreted in Ms Flack’s residence during the execution of a search warrant. At the time of the discovery of the cash, Ms Flack said that she knew nothing about the money. She was subjected to compulsory examination by the NCA at which she repeated that she knew nothing about the money. A direction was made under s 25(9) of the National Crime Authority Act 1984 (Cth) that the compulsory examination was not to be published. The direction was varied without Ms Flack’s consent and without her having been informed of the proposed variation. Ms Flack commenced civil proceedings against the Chairman of the NCA to establish that, as the money was found in her residence, she had a possessory interest in it which was superior to that of the NCA. To prove her case, Ms Flack tendered her tenancy agreement of her residence and read an affidavit sworn by her solicitor which exhibited the warrant and correspondence with the NCA. It was no part of her case that she had prior knowledge of the presence of the cash in her residence prior to its discovery by the NCA. She did not give evidence in her case.

38. [137]

    When the NCA sought to tender the transcript of her compulsory examination in its defence, Ms Flack objected. The trial judge rejected the tender. The Full Federal Court dismissed an appeal by the Chairman of the NCA against the ruling.

39. [138]

    Heerey J (Tamberlin J agreeing) said at 28:

40. [139]

    Flack is distinguishable from the present case in several respects. First, the present case is a proceeding under the Act, whereas Ms Flack’s proceeding was a civil proceeding in which she was the plaintiff. Secondly, the tender of the transcript in proceedings under the Act, such as the present case, was expressly authorised by s 54(5), whereas the tender of the transcript of Ms Flack’s examination was, at best, questionable, if not illegal. In Flack, there were significant limitations on the use that could be made of any information which was revealed in the course of an examination conducted under the National Crime Authority Act (s 25), breach of which amounted to a criminal offence: s 25(12). Thirdly, in Flack there was no relevant inference sought to be drawn in any event which made Jones v Dunkel academic. By contrast, in the present case, the Jones v Dunkel inference arose in circumstances where the appellant adduced evidence from Ms Karout, with a view to contradicting the effect of his admissions in the transcript. The appellant also called evidence from witnesses in his case as to transactions to which he was the counterparty, which was inconsistent with the answers he had given in his compulsory examination.

41. [140]

    Further, Flack turned on its particular facts and does not establish any limitation on Jones v Dunkel. In El-Debel v Micheletto (Trustee) [2021] FCAFC 117; (2021) 153 ASCR 15, the Full Federal Court (Markovic, Derrington and Colvin JJ), at [216], considered, in the context of bankruptcy proceedings, that while the observations made by Heerey J in Flack were “understandable”, any “absolute” limitation on the application of Jones v Dunkel would be inconsistent with principle.

42. [141]

    I do not regard Flack as providing any reason why a Jones v Dunkel inference was not available in the present case. I reject the appellant’s submission that the effect of the Commission’s examination of him resulted in its not being entitled to invite the primary judge to draw a Jones v Dunkel inference against him for not giving evidence in the proceedings for a proceeds assessment order.

43. [142]

    The appellant sought to argue orally on appeal that no Jones v Dunkel inference was available against him because he had a reason not to give evidence as he would have subjected himself to the risk of self-incrimination. The primary judge rejected that submission. There is no ground of appeal which challenges this finding. Accordingly, it does not arise for the consideration of this Court.

44. [143]

    The appellant submitted that the primary judge’s reasoning amounted to the following: because the appellant admitted to having Ms Karout transfer about $23,000 to Ms Taylor every month, he must have paid her an average amount in that order in cash every month, with some smaller amounts being transferred by Ms Karout. The appellant submitted that, given the absence of evidence of regular cash payments, and given the evidence to the contrary, the primary judge should not have accepted the appellant’s admissions as to the amounts paid to Ms Taylor. The appellant also submitted that the errors in the appellant’s recollection (referred to by the primary judge in J [31]) affected the weight which could be given to the appellant’s alleged admissions in his examination, particularly when he was being asked in 2020 (the time of his examination) about what took place between 2012 and 2015, without resort to his records. He submitted further that the appellant’s suggestion that Ms Karout had transferred about $23,000 to Ms Taylor (after the appellant was taken into custody) was contradicted by Ms Karout and not supported by banking records.

45. [144]

    The appellant also submitted that the primary judge’s view that the appellant was, and could afford to be, generous to, Ms Taylor ought to have been affected by the circumstance that three out of the four transfers referred to in J [32] took place within a matter of days of the appellant’s arrest. He submitted that the inference was open that these transactions were carried out by Ms Taylor herself (this proposition could not be put to Ms Taylor, who died before the hearing and could, therefore, not give evidence). Further, he submitted that the appellant’s admissions were contrary to the sworn affidavit evidence given by Ms Taylor in Family Court proceedings (to which the primary judge did not refer in his Honour’s reasons) which he submitted was consistent with Ms Karout’s evidence. The appellant submitted that the evidence of what Ms Karout was paying Ms Taylor from 2016 onwards (after the relevant period) of $3,500 per month was an indication of what Ms Taylor’s expenses were and that there was no reason to suppose that they were greater when the appellant was at liberty (tr 25).

46. [145]

    It has long been recognised that the probative value of admissions derives from the circumstance that they are, by definition, statements against the interest of their maker. Parke B said in Slatterie v Pooley (1840) 6 M & W 664 at 669; 151 ER 579 at 580–1 (Exch) (approved in Hart v MacDonald (1910) 10 CLR 417 at 432; [1910] HCA 13):

47. [146]

    The primary judge was, in my view, correct to accept the appellant’s admission that he paid Ms Taylor in the order of $23,000 a month. It was “volunteered” in the sense that, in answering questions in the compulsory examination, he could have said that he needed access to records to determine how much he paid her, but, rather, he was the source of the figure. Therefore the figure of about $23,000 per month had the probative force of being given by the only survivor of the two people who were in a position to know and also being against the interests of that person in the context of the proceedings. Further as, prior to his arrest on 11 September 2015, the appellant dealt almost exclusively in cash (as he admitted in his examination), no one else was in a position to say how much he had paid Ms Taylor in the relevant period.

48. [147]

    Importantly, as the primary judge noted in the exchange with Mr Lange shortly prior to the Court adjourning after the close of evidence (set out above), Ms Taylor’s affidavit evidence in the Family Court proceedings that the appellant would give her $1,000 in cash whenever she needed it for the period from 2004 to 2015 did not advance the position since it was consistent, or not inconsistent, with his admission that he paid her about $23,000 per month. In so far as she purported to specify the monthly amount that he paid to her, this post-dated the relevant period. Although the primary judge did not expressly address Ms Taylor’s affidavit in the reasons, it is plain from the transcript that his Honour regarded it as irrelevant. I agree that it was largely irrelevant: it corroborated the appellant’s admission that he paid her in cash until his arrest but did not quantify the payments in the relevant period, saying only that they were paid in amounts of $1,000 at a time.

49. [148]

    The figure of $23,000 also derived some support from the fact that a total of $181,905 (comprising $12,500, $1,500, $117,900 and $50,005) was paid to Ms Taylor from 14 September 2015 to 2 October 2015 in that these payments tended to show the appellant’s concern for Ms Taylor’s and his children’s financial position following his arrest. That they were made by electronic transfer and bank cheque can be explained by the circumstance that, as he was in custody, he could not continue the system of paying Ms Taylor from cash in his possession.

50. [149]

    It is not reasonable to draw the inference that Ms Taylor herself effected these transfers since there was no evidence that she could operate the joint account but there was evidence (through the appellant’s admissions at the compulsory examination) that Ms Karout (who was not only his partner but also his book-keeper) had access to all of his accounts. Although Ms Karout denied making payments to Ms Taylor other than the payments of $3,500 a month to her from late 2016 to 2018, her evidence (“I never – I transferred money to her, but I don’t think so, because if he would have, then why would I be transferring money”) was equivocal. Further, the appellant’s statement in his compulsory examination that Ms Karout transferred money to Ms Taylor was somewhat ambiguous and inconsistent with his other statements that he always dealt in cash and Ms Taylor’s affidavit evidence that he had always given her money in cash (until his arrest which rendered that method impossible).

51. [150]

    It is also significant that the appellant failed to tender Ms Karout’s bank accounts for the relevant period but limited his tender to bank accounts which post-dated this period. It was in the appellant’s power to prove that Ms Karout had transferred money to Ms Taylor during the relevant period and he chose not to tender the documents which might have established such payments had they been made. This can be taken into account in weighing Ms Karout’s evidence in so far as she deposed to the contrary: Blatch v Archer (1774) 1 Cowp 63 at 65 (evidence is to be weighed according to the proof which was in the power of one side to have produced, and in the power of the other to have contradicted) and Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 (the inference arises that these documents were not tendered because they would not have assisted the appellant’s case).

52. [151]

    Further, if Ms Taylor had been authorised to operate the joint account, it would have been odd for her not to make a withdrawal when she needed money. The appellant did not suggest that this ever occurred.

53. [152]

    I reject the appellant’s submission that it ought be inferred that Ms Taylor received the same amount from Ms Karout while the appellant was in custody as she had received from him in cash while he was at liberty. This submission is wholly at odds with the appellant’s admissions in his compulsory examination and fails to take account of the fact that Ms Karout was not, according to the evidence, involved in the payments to Ms Taylor before the appellant was incarcerated but was the agent through which payments were made to Ms Taylor after his arrest.

54. [153]

    There was no challenge to the deduction which the primary judge made from the calculations made by Mr Bull as to the appellant’s expenditure on Ms Taylor and their two children.

55. [154]

    Having regard to the whole of the evidence as to the appellant’s expenditure on Ms Taylor and their children, I am satisfied that the appellant made payments in cash of about $23,000 per month to Ms Taylor. Ms Taylor’s evidence in the Family Court proceedings was not inconsistent with the appellant’s admissions and Ms Karout was not in a position to know how much the appellant paid Ms Taylor. Further, as the primary judge pointed out, there was plenty of cash available to the appellant, which permitted him to make these payments.

56. [155]

    For these reasons, ground 3 has not been made out. As no error has been established, it is not necessary to address whether a House v The King (1936) 55 CLR 499; [1936] HCA 40 error is required to be shown for this ground to be made out.

57. [156]

    Grounds 4-8 can be dealt with together because they each relate to the primary judge’s findings relating to transfers of funds to the appellant by the named individuals.

58. [157]

    The grounds are:

59. [158]

    The appellant submitted that the primary judge imposed too great a burden on the appellant by requiring him to prove, on the balance of probabilities, the purposes of the various transfers to him. He submitted that the effect of s 28(3) was more limited and required him only to prove the source of the income or money. The appellant submitted that he had discharged this onus by calling the persons who had made the payments to him and showing that that those sources were unrelated to “illegal activity or activities.” Further, the appellant relied on the circumstance that Mr English did not suggest to any of the witnesses that the monies they had transferred to the appellant were in some way related to illegal activity. The appellant submitted that, in those circumstances, the primary judge ought to have accepted that they were not related to any illegal activity.

60. [159]

    The effect of s 28(3) is that the Commission’s evidence of a defendant’s expenditure must be treated as proceeds derived from a defendant’s expenditure unless a defendant proves to the Court’s satisfaction that the expenditure was funded from sources unrelated to illegal activity: New South Wales Crime Commission v Vu [2012] NSWSC 129; (2012) 221 A Crim R 445 at [75], [79] (Johnson J); upheld on appeal in Vu v New South Wales Crime Commission [2013] NSWCA 282 (McColl JA, Meagher and Emmett JJA agreeing). In New South Wales Crime Commission v Kelaita (2008) 75 NSWLR 564; [2008] NSWCA 284 at [38], this Court (Allsop P, Giles and Bell JJA agreeing) said:

61. [160]

    Allsop P further observed, at [40], that the terms and structure of Parts 2 and 3 of the Act (including ss 27 and 28) do not evince an intention that they be applied or interpreted fairly in favour of a defendant, except where this is provided for expressly.

62. [161]

    The question of onus was addressed in Henderson v State of Queensland (2014) 255 CLR 1; [2014] HCA 52 (Henderson). The High Court considered s 68(2)(b) of the Criminal Proceeds Confiscation Act 2002 (Qld) (the Qld Act), which is an equivalent provision to s 25 of the Act, which provides that the Court must not make an exclusion order (excluding property from forfeiture) unless it was satisfied that it was more probable than not that the property was not illegally acquired property. Section 22 of the Qld Act provided that property is “illegally acquired property” if it is “all or part of the proceeds of an illegal activity” or “part of the proceeds or dealing with illegally acquired property” or “all or part of it was acquired using illegally acquired property”.

63. [162]

    The State applied for a forfeiture order in respect of money found in the possession of Mr Henderson, who had previously engaged in a serious crime related activity. He applied for the exclusion of that money from forfeiture on the basis that it comprised the proceeds of the sale of jewellery that his deceased father had given him and was therefore not illegally acquired property. The issue was whether it was enough for him to show that he had not illegally acquired the property or whether he had to show that it was more probable than not that the jewellery was not illegally acquired property in his father’s hands and, if the latter, whether he had discharged that onus. Although the first instance judge accepted that Mr Henderson’s father had given him the proceeds of sale of the jewellery, his Honour did not accept the evidence given by Mr Henderson and his siblings as to the provenance of the jewellery (that the jewellery constituted “longstanding family heirlooms”: [26]).

64. [163]

    The High Court found that the latter was the applicable test. Their Honours found, by majority (French CJ, Kiefel, Bell, Keane JJ, Gageler J dissenting), that there was no evidence of how the jewellery had been acquired (since the primary judge did not accept the evidence which was given), with the result that Mr Henderson could not discharge the burden of proving that it was not illegally acquired property: [15] (French CJ); [28] (Bell J, Kiefel J agreeing); and [170] (Keane J). As Bell J said, at [28]:

65. [164]

    To have posed the question thus would have reversed the onus in s 68(2)(b) of the Qld Act.

66. [165]

    The appellant sought to distinguish Henderson in oral submissions on the basis that evidence called by Mr Henderson as to the provenance of the jewellery had been found to be a lie. I reject this submission. In Henderson, the first instance judge did not accept Mr Henderson’s father’s evidence as to provenance, which meant that there was no evidence of how his father had come into possession of jewellery worth a substantial sum. It was only this basis that the first instance judge considered that Mr Henderson had failed to discharge the onus that s 68(2) of the Qld Act imposed on him.

67. [166]

    The appellant also sought to distinguish Henderson on the basis that s 22 of the Qld Act was worded differently to the definition in the Act. While the wording is different, I do not consider that this affects the outcome. As in the Qld Act, the Act casts the burden of proving that the particular amount was not derived from an illegal activity or activities on the person seeking the exclusion, in this case, the appellant.

68. [167]

    Further, it was not necessary for Mr English to put to the relevant witnesses that the monies they had transferred to the appellant were in some way related to illegal activity since this was not the Commission’s case. The rule in Browne v Dunn (1893) 6 R 67 did not require it to be put. The Commission’s case was that the appellant had not proved, to use the statutory words, that “the expenditure was funded from income, or money from other sources, unrelated to an illegal activity or activities”: s 28(3). The Commission did not need to take on an onus which was not its to discharge.

69. [168]

    In oral submissions, the appellant sought to argue that the Commission had not complied with the rule in Browne v Dunn because it had not put squarely or in express terms to any of the appellant’s witnesses that the transfers were not in fact loans. This was neither raised as an objection in the Court below nor has it been alleged as a ground of appeal. Accordingly, it does not arise for consideration. In any event, Mr English put to the witnesses, in substance, that their evidence was not credible and that, had the transfers actually been loans, there would have been some documentation, agreement as to the time of repayment, interest rate or demand for repayment. I regard this as sufficient compliance: Oneflare Pty Ltd v Chernih [2017] NSWCA 195 at [39]-[42] (Meagher JA, Gleeson and Leeming JJA agreeing).

70. [169]

    In the present case, the primary judge was not persuaded that the monies paid to the appellant by Ms Elgammal, Mr Sami and Mr Barton were loans. None of these witnesses addressed the source of the money that they had transferred to the appellant and therefore there was no evidence that the funds were not illegally acquired property in their hands. In these circumstances, the primary judge was correct to find that the appellant had not discharged his onus of proof under s 28(3) of the Act that “the expenditure was funded from income, or money from other sources, unrelated to an illegal activity or activities.”

71. [170]

    For these reasons, ground 7 has not been made out.

72. [171]

    The appellant’s submissions in support of this ground merely repeat his submissions in support of grounds 4-7. It is, accordingly, not necessary to address this ground separately, which has not been made out. In any event, there was nothing that assisted the appellant in his examination. Rather, his answers to questions about particular transactions either lacked any detail of the transaction or did not accord with the evidence of witnesses he called to establish the provenance of the payments to his accounts. In these circumstances, I reject the appellant’s submission that these statements were “exculpatory”.

73. [172]

    Ground 8 has not been made out.

74. [173]

    The appellant submitted that each of the transactions on which the appellant relied for a deduction in his expenditure was “proven by banking records”. He submitted that, in these circumstances, his Honour was in error to find, for example, with respect to Ms Elgammal, at J [47]:

75. [174]

    The appellant also relied on what his Honour said at J [66] (with respect to Mr Samia); and J [83] (with respect to Mr Barton). Each of these paragraphs are reproduced above in the summary of the primary judge’s reasons.

76. [175]

    The appellant submitted that “the primary judge brought to bear his own understanding of how commercial transactions would be conducted, irrespective of any friendship that might have existed between Mr. Samia and the appellant. In determining that the transactions were ‘highly improbable’, his Honour must have employed his own esoteric knowledge or understanding of what was commercially probable, since there was no evidence from any witness about the improbability, or otherwise, of the transactions”.

77. [176]

    The appellant submitted that the primary judge’s reasoning on this basis was in breach of the common law pre-conditions for judicial notice as outlined in Holland v Jones (1917) 23 CLR 149 at 153 (Isaacs J); [2017] HCA 26 and s 144(1) of the Evidence Act:

78. [177]

    The appellant further submitted:

79. [178]

    There are various categories and sub-categories of judicial notice: see the discussion in Cross on Evidence, [3010] and [3020]. The category which is presently relevant is notorious facts and the relevant sub-categories, according to the analysis in Cross on Evidence ([3020]) are “ordinary human behaviour” and “economics and business”.

80. [179]

    Judicial notice has been taken of “general knowledge of dealings and of what takes place which Judges judicially possess and take notice of”: Bowes v Shand (1877) 2 App Cas 455 at 481 per Lord Blackburn. An example of this is that judicial notice was taken of the fact that it is not consistent with the “habits of people in this country [the United Kingdom]” to contract to sell a complicated estate on half a sheet of note paper in informal terms: Clifton v Palumbo [1944] 2 All ER 497 at 502.

81. [180]

    However, as was also said in Cross on Evidence at [3200]:

82. [181]

    Thus, a court may bring to bear “the knowledge which every one has of the ordinary transactions of business”: Speight, In re; Speight v Gaunt (1883) 22 Ch D 727 (Speight) at 758 (Lindley LJ, Bowen LJ agreeing at 766). The relevant passage is:

83. [182]

    In Speight, it was also held that a trustee may follow the ordinary course of business by using an agent in circumstances where it involves no delegation of trust. This was said to be based on “reason and common sense”, at 763 (Bowen LJ).

84. [183]

    The primary judge’s reasoning as to the character of the transfers to the appellant was based on general experience and common sense rather than resort to the concepts of judicial notice. However this reasoning processes is characterised, the question for this Court is whether the primary judge went beyond the boundaries of what was open to him in terms of inferential reasoning. For the reasons that follow, I am not satisfied that there was any error in the primary judge’s processes of fact-finding as alleged in ground 6.

85. [184]

    In substance, the primary judge was required, as a part of his Honour’s consideration of whether the appellant had discharged his onus of proof, to assess the credibility of the witnesses. This, in turn, required the primary judge to have regard to the “objective probabilities” of the transactions of which they gave evidence. So much has been established by authority. In the process of assessing credibility, “contemporary documents and admitted or incontrovertible facts and probabilities must play their proper part”: Onassis v Vergottis [1968] 2 Lloyds Rep 403 at 431 (Lord Pearce).

86. [185]

    In Effem Foods Pty Limited v Lake Cumbeline Pty Limited [1999] HCA 15; (1999) 161 ALR 599 at [16], the High Court (Gleeson CJ, Gaudron, Kirby and Hayne JJ) described the trial judge’s approach of considering “the objective factual surrounding material and the inherent commercial probabilities, together with the documentation tendered in evidence” as “an orthodox and sensible approach to the matter”: see also the discussion in Et-China.com International Holdings Ltd v Cheung [2021] NSWCA 24; (2021) 388 ALR 128 at [25]-[29] (Bell P, Bathurst CJ and Leeming JA agreeing).

87. [186]

    In Fox v Percy (2003) 214 CLR 118; [2003] HCA 22, Gleeson CJ, Gummow and Kirby JJ said at [31], that “[c]onsiderations such as these [the difficulty of discerning truthful evidence on the basis of demeanour] have encouraged judges, both at trial and on appeal, to limit their reliance on the appearances of witnesses and to reason to their conclusions, as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events.” (Emphasis added.)

88. [187]

    In Wilcox v Chapple [2025] NSWCA 155, this Court (Leeming and Ball JJA, Griffiths AJA), citing Fox v Percy at [31], described the trial judge’s preference for contemporaneous objective evidence over testimonial evidence as “orthodox”: [110]. The Court also referred to the use by trial judges of “‘any evidence independent of the parties which is apt to cast light on the probabilities of the situation’ to resolve an issue involving the credibility of witnesses”, quoting Keane JA in Camden v McKenzie [2008] 1 Qd R 39; [2007] QCA 136 at [34].

89. [188]

    I consider that, properly analysed, the primary judge had regard to the objective probabilities, as his Honour was entitled to do. There has been no unauthorised taking judicial notice of a matter which does not fall within s 144 of the Evidence Act. His Honour was entitled to reason, for example, that it was objectively improbable that Ms Elgammal, whose own home was still subject to a mortgage which was being paid from her husband’s earnings as a taxi driver would sell a property; hand over $1,070,000 of the proceeds to the appellant, whose only connection to her was that he was associated with her son; fail to agree on an interest rate; and have no document setting out any agreement between them as to receipt or the terms of the loan.

90. [189]

    His Honour was entitled to regard her evidence that there was a legitimate loan which was entirely undocumented as having more than an air of unreality about it. The absence of loan documentation was, to say the least, curious in circumstances where, as his Honour noted at J [45], where the solicitor, who acted for Ms Elgammal on the sale of the Hurstville property, transferred the funds (which constituted the alleged loan) from his trust account to the appellant, who was also a client of the firm. To add to the air of unreality, the solicitor also acted for the appellant in the proceedings before Fagan J.

91. [190]

    The primary judge used similar reasoning in the analysis of the alleged loans to Mr Samia (at J [66]) and to Mr Barton (at J [83]). Each of the passages relied on by the appellant falls into this category. His Honour’s reasoning was orthodox and, in my view, unassailable. In these circumstances, it is not necessary to address the limits of judicial notice since, if that concept arises at all, the matters taken into account by his Honour fell well within the limits. Ground 6 has not been made out.

92. [191]

    As to the appellant’s submission that there was a difference between the ethnicity of the judge on the one hand and that of the appellant and the persons who advanced money to the appellant on the other, this submission was without evidentiary foundation. The appellant said in his compulsory transcript that he had migrated from Lebanon when he was 10 years old (a matter which was not referred to in the Court below). Ms Elgammal’s husband had come to Australia 50 years ago. No evidence was given as to any factor which may have given rise to a practice which did not accord with general commercial practice. The appellant was plainly on notice from the cross-examination of his witnesses that the Commission would submit that the purported loans or credit arrangements were not the subject of credible evidence.

93. [192]

    In any event, the appellant made no attempt to prove that the monies which had been transferred to him had not been derived from unlawful activity or activities. His case appears to have been conducted without regard for what Henderson established as to the onus in this context.

94. [193]

    Ground 5 relates to the transfer by Ms Elgammal and the primary judge’s statements in J [48]-[49] that “the evidence tends towards a probability that the property was the [appellant’s] beneficially, at least as to $1,070,000 of its value” and that the inference that the appellant beneficially owned the Hurstville property was more readily drawn as he did not give evidence.

95. [194]

    The appellant submitted that this finding revealed error and amounted to a breach of the rule in Browne v Dunn since the Commission’s counsel had not suggested to Ms Elgammal that the appellant had an interest in the Hurstville property, nor was there any evidence that he did have such an interest.

96. [195]

    The rule in Browne v Dunn is, primarily a rule of fairness. Hunt J in Allied Pastoral Holdings Pty Ltd v Federal Commissioner of Taxation [1983] 1 NSWLR 1 described it, at 16, as follows:

97. [196]

    To similar effect, in MWJ v The Queen (2005) 80 ALJR 329; [2005] HCA 74 (MJW), Gummow, Kirby and Callinan JJ said at [38]:

98. [197]

    In MWJ, their Honours also addressed the consequences for the trial judge of a matter not having been put to the relevant witness, at [39] as follows:

99. [198]

    It is necessary to read the primary judge’s reasons fairly and as a whole. The operative finding made by his Honour was that “[w]ithout credible evidence of the asserted character of the transfer it is unexplained and the Court cannot be satisfied on the balance of probabilities that the money came from sources other than illegal activity”: J [47]. In addressing the appellant’s submission that, because the money came from the proceeds of the Hurstville property which was owned by Ms Elgammal and her niece, his Honour postulated the hypothesis that the appellant had a beneficial interest in the property, at least to the extent of $1,070,000 of its value and said that the evidence “tends towards the probability” of that being so.

100. [199]

     This observation was unnecessary since the finding that the appellant had not proved that the $1,070,000 was not derived from unlawful activity was sufficient to dispose of the matter. The possibility that the appellant had an interest in the Hurstville property was open on the evidence although it had not been put as such by the Commission (that being unnecessary having regard to the onus of proof). The Commission’s counsel had no interest in asking a question, the answer to which had at least the potential to assist the appellant to discharge his onus of proof. His decision not to cross-examine on that topic may well have been “tactical” and “shrewd”: see the discussion in Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361; [2011] HCA 11 (Kuhl) at [74] (Heydon, Crennan and Bell JJ).

101. [200]

     In the present case, there has been no breach of the rule in Browne v Dunn by the Commission because it was no part of its case that the appellant had a beneficial interest in the Hurstville property: its case was that the appellant had not proved that the proceeds of the property which were advanced to the appellant were not derived from unlawful activity or activities. The Commission relied on the apparent impecuniosity of Ms Elgammal; her modest financial circumstances; the fact that the house in which she lived which her husband owned was still subject to a mortgage; and the lack of documentation of the loan or agreement about a specified repayment date or rate of interest. All of these matters were canvassed with Ms Elgammal in cross-examination. The Commission had no interest in propounding a hypothesis as to how or in what way the $1,070,000 was derived from unlawful activity or activities since the onus was on the appellant to prove that it was not.

102. [201]

     The hypothesis which was postulated by the trial judge was not put by the Commission and was not explored with Ms Elgammal. In that sense, there was an arguable denial of procedural fairness since the appellant’s witness, Ms Elgammal, was not given the opportunity to address this hypothesis in her evidence. The corollary referred to in MWJ at [39] (that judges should refrain from making findings where a proposition has not been put to a witness) has been arguably breached.

103. [202]

     However, procedural fairness is no mere technical requirement. The requirements of procedural fairness depend on the particular factual and, in this case, statutory context and are flexible: SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 228 CLR 152; [2006] HCA 63 at [26] (Gleeson CJ, Kirby, Hayne, Callinan and Heydon JJ). Whether there has been a denial of procedural fairness is a question of “practical injustice”: Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1; [2003] HCA 6 at [38] (Gleeson CJ).

104. [203]

     In the present case, had Ms Elgammal been asked whether the appellant had provided funds for the purchase of the Hurstville property, she would have said “yes”, “no”, “I can’t remember” or “I don’t know”. Each of these answers are possible, having regard to the way in which she gave her evidence. None of these answers had any capacity to affect the result since the circumstances of the alleged loan were so unsatisfactory that it was open to his Honour, and his Honour was, in my view, correct, to find that the appellant had not shown that the $1,070,000 alleged to have been advanced as a loan from Ms Elgammal was not derived by unlawful activity or activities. The hypothesis raised by his Honour was, in these circumstances, superfluous to his reasoning and had no material bearing on the result: see also Larkis v Larkis [2018] NSWCA 113 at [47]-[48] and [57]-[61] (Meagher JA, Macfarlan and White JJA agreeing). This is to be contrasted with the finding in Kuhl, where the trial judge made an adverse finding about a witness’ credit where it had not been challenged in cross-examination: see [75]-[76].

105. [204]

     For these reasons, ground 5 has not been made out.

106. [205]

     For the reasons given above, no error has been shown in the primary judge’s rejection of the evidence of Ms Elgammal. That the transfer of $1,070,000 has been proved by bank records does not, having regard to the objective probabilities, corroborate her evidence that there was a loan to the appellant in this amount, much less that the proceeds of sale of the Hurstville property were not derived from unlawful activity or activities.

107. [206]

     It is not necessary to repeat what I have said regarding the alleged credit arrangement the alleged loan from Ms Elgammal. Similar considerations apply to his Honour’s rejection of Mr Samia’s and Mr Barton’s evidence, in respect of which no error by the primary judge has been shown.

Conclusion

1. [207]

   For the reasons given above, I propose the following orders:

   1. (1)

      Dismiss the appeal.

   2. (2)

      Order the appellant to pay the respondent’s costs.

2. [208]

   GRIFFITHS AJA: I agree with Adamson JA.