The Commissioner of the Australian Federal Police v Cranston (No 16)

The present application relates principally to whether the relief sought in prayer 208 of the fourth further amended summons filed on 6 July 2018 by the plaintiff, the Commissioner of the Australian Federal Police, should be granted.

By prayer 208, the plaintiff seeks an order under s 49(1) of the Proceeds of Crime Act 2002 (Cth) (POC Act) that the items of property, being the funds listed in Schedules 61, 69, 78, 79, 81, 85, 102 and 106 to that summons, be forfeited to the Commonwealth. If successful in that regard, the plaintiff also seeks leave of the Court pursuant to s 69(2) of the POC Act to deal immediately with the forfeited property.

The funds in question were, and remain, subject to various restraining orders made by Fullerton J, on 16 May 2017, 24 May 2017 and 31 May 2017, under s 19 of the POC Act: see The Commissioner of the Australian Federal Police v Cranston and Ors (No 1) [2017] NSWSC 624; The Commissioner of the Australian Federal Police v Cranston (No 3) [2017] NSWSC 674; The Commissioner of the Australian Federal Police v Cranston (No 4) [2017] NSWSC 716.

The items of property which are the subject of the present application are identified more specifically in the table of restrained property below, together with the relevant schedule of the fourth further amended summons, the names of those persons whom the plaintiff has identified as possibly having an interest in the property, the amount of the funds in each account [1] and the details of the relevant restraining order made in respect of each of the items of property.

The natural persons identified in the table as possibly having an interest in respect of each item of property have been given notice of this application by the plaintiff. In addition, the Australian Securities and Investments Commission (ASIC) has been identified in the table in some cases as an entity having a relevant potential interest. This is because each of the companies identified in a relevant schedule has now been deregistered and any property not held on trust by that company has vested in ASIC by operation of s 601AD(2) of the Corporations Act 2001 (Cth). The plaintiff has given notice of the application to ASIC.

Furthermore, each of the following 11 companies was identified as possibly having an interest in one or more of the items of property in the table: [2]

The plaintiff has also given notice of the present application to the solicitors for the liquidators of these companies.

Section 49 of the POC Act relates to the forfeiture of property which is subject to a restraining order under s 19 of that Act. The section requires the Court, in the circumstances set out in the section, to make a forfeiture order subject to a power in certain cases not to make such an order if the Court is satisfied that it is not in the public interest to do so. Section 49 is in the following terms:

Whether this Court is a “court with proceeds jurisdiction” for the purposes of s 49(1) depends on s 335 of the POC Act, which relevantly provides:

In the present case, it was beyond dispute that at least part of the conduct constituting offences to which the original restraining orders and the proposed forfeiture orders related occurred in New South Wales. Consequently, this Court, having jurisdiction to deal with criminal matters on indictment, is a “court with proceeds jurisdiction” in the present case.

Whether the plaintiff in this matter is “the *responsible authority for a *restraining order under section 19” depends on the definition of “responsible authority” in s 338 of the POC Act which is in the following terms:

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

Since the applications for the restraining orders under s 19, out of which this application for forfeiture orders under s 49 has arisen, were made by the plaintiff, he is the “responsible authority” for the purposes of the present application.

Any applications for property to be excluded from a restraining order made under Div 3 of Pt 2‑1 of the POC Act, as referred to in s 49(3), are applications made under ss 30 or 31.

Other, general provisions concerning applications for forfeiture orders are contained in ss 59 to 65 of the POC Act. In this regard, it can be noted that the present application is under s 49 of the POC Act and thus is not an application for a forfeiture order relating to a person’s conviction of an offence, which would be made under s 48. So far as the general provisions are potentially relevant in the present case, they provide:

In addition, the Court which is hearing a forfeiture application is required to make an exclusion order in respect of specified property if an application for such an order is made under s 74 and the requirements of s 73 of the POC Act are met. Those sections relevantly provide:

No such applications under s 74(1) for exclusion orders under s 73 have been made in the present case.

Furthermore, by operation of s 317 of the POC Act, the plaintiff as the applicant in the present application bears the onus of proving the matters necessary to establish the grounds for make the orders sought and the relevant standard of proof is on the balance of probabilities.

The Commissioner submits that this Court can be satisfied that each of the requirements in s 49(1) is presently met in respect of each item of property identified in the table above. The matters will be considered in turn.

As explained above, this Court has “proceeds jurisdiction” and the plaintiff is the “responsible authority” in respect of each of the restraining orders under s 19 that cover each relevant item of property sought to be forfeited. Thus, the preliminary requirements in the chapeau to s 49(1) and in s 49(1)(a) are satisfied.

As set out in the table above, all of the relevant restraining orders were made in 2017. These orders have not been revoked or set aside and remain operative. Consequently, they have been in force for well over the minimum 6‑month period and the requirement in s 49(1)(b) is met.

Next, s 49(1)(c) requires that the Court must be satisfied that the property to be forfeited is either:

By virtue of s 49(3), however, this requirement in s 49(1)(c) does not apply if the Court is satisfied either that:

The plaintiff adduced evidence, which I accept, that no exclusion applications under ss 30 or 31, being the only relevant provisions of Div 3 of Pt 2-1 of the POC Act, had been filed in these proceedings in respect of any of the items of property identified in the table set out above.

Nonetheless, the plaintiff properly drew the Court’s attention to the fact that on 23 June 2017, Glen Saikali, the 65th defendant in these proceedings, and Cedars Capital Pty Ltd, the 50th defendant, filed a notice of motion relevantly seeking the following relief:

The orders of which revocation was sought in that notion of motion included the restraining orders concerning the property referred to in sch 79 of the fourth further amended summons. Such revocation order may be sought under s 42 of the POC Act, which is found in Div 6 of Pt 2-1 and not in Div 3 of Pt 2-1. Proceedings may be stayed under s 319 of the POC Act and an order prohibiting a person from taking any further action to enforce an order of the Court may be made under s 135(2)(c) of the Civil Procedure Act 2005 (NSW).

On 11 September 2017, however, Fullerton J made orders by consent which relevantly stated:

Thus, even if the reference to an “application … for the property to be excluded from the *restraining order” in s 49(3)(a) could be construed as including the revocation or “stay” applications in the notice of motion of 23 June 2017:

Accordingly, the Court is satisfied of the matters set out in s 49(3) and, as a result, par (1)(c) of s 49 does not apply in this case.

The final requirement in s 49(1)(e) is that the Court must be satisfied that the plaintiff has taken reasonable steps to identify and notify persons with an interest in each item of property. This requirement should be considered together with, and in light of, the relevant obligation found in s 61(1) of the POC Act on the plaintiff to give written notice of an application for a forfeiture order to:

Based on the evidence in pars 14 to 69 of the affidavit of Adrian Edwards sworn on 23 August 2021 and the evidence of Darren Burtenshaw referred to in those paragraphs, which I accept, I am satisfied that the plaintiff has taken reasonable steps to identify persons with an interest in each of the items of property identified in the table set out above. Apart from the persons identified, no other person has claimed an interest in any of the items of property.

Furthermore, the evidence of Emilia Cvetanovski in pars 4 to 65 of her affidavit affirmed on 16 September 2021 establishes that the plaintiff has taken steps to notify the natural persons whom the plaintiff reasonably believes may have an interest in any of the items of property set out in the table, as well as ASIC in respect of the property of the deregistered companies and the solicitors of the liquidators of the other companies identified as having a possible interest in the items of property.

As indicated above, I am also satisfied that the plaintiff has given notice in accordance with s 61(1) of the POC Act.

It can be noted here that none of the persons identified as having a possible interest in any of the items of property appeared at the hearing of this application on 3 November 2021. This was so, notwithstanding that some of those persons had appeared previously in these proceedings generally or in relation to other applications in these proceedings and even though notice of the present application has been given to each person relevantly identified.

For the reasons set out above, each of the applicable requirements of s 49(1) of the POC Act has been satisfied. In these circumstances, the Court must make an order that the property specified is forfeited to the Commonwealth, subject only to consideration of s 49(4).

The power conferred by s 49(4) to refuse to make a forfeiture order under s 49(1) is only enlivened, however, if the preconditions specified in s 49(4)(a) and (b) are met. If so, the exercise of that power is conditioned upon the Court’s satisfaction that it is not in the public interest to make the order. This type of power appears to me to be analogous to the powers considered by the High Court in Hogan v Hinch (2011) 243 CLR 506; [2011] HCA 4 at [68] (French CJ, Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ) and Hogan v Australian Crime Commission (2010) 240 CLR 651; [2010] HCA 21 at [32]‑[33] (French CJ, Gummow, Hayne, Heydon and Kiefel JJ). If the Court is satisfied that a forfeiture order is not in the public interest, then the Court is to implement that satisfaction by not making the order. The phrase “the court may refuse to make an order under [subs (1)]” is accordingly to be read as not conferring a further discretion to make a forfeiture order in those circumstances.

On the material available, however, I am not satisfied that the property in the present case is not the proceeds of an offence. As a result, s 49(4) is not engaged in this case. Further, on that material I would also not be satisfied that it is not in the public interest to make the order.

For all these reasons, I am of the view that the forfeiture orders sought in the present case should be made.

It can be noted here that s 56 of the POC Act imposes a general requirement in relation to any forfeiture order, including one under s 49, that it specify a value for forfeited property. Section 56 is in the following terms:

In the present case, however, the forfeiture orders sought all related to funds held in, or credited to, specified accounts with various Australian banks. In The Commissioner of Australian Federal Police v Omar [2020] NSWSC 418, Beech‑Jones J (as his Honour then was) held, at [23], that funds held in bank accounts were “clearly not caught by s 56”, presumably on the basis that they were “money” within the meaning of that section. “Money” is not defined in the POC Act. Nonetheless, it is well established that “money” may, depending on the context in which it is used, denote more than mere cash or notes which are legal tender and may include credit balances at a bank, whether in a current account or a deposit account: Conley v Commissioner of Taxation (1998) 81 FCR 24 at 27; [1998] FCA 110 (Davies J) citing Manning v Purcell (1855) 7 De MG&G 55; 44 ER 21; In re Collings [1933] Ch 920 at 927. In the context of s 56 of the POC Act, in my view “money” includes funds standing to the credit of the specified bank accounts. Accordingly, s 56 does not in the present case apply since all of the property sought to be forfeited falls within the description “money”.

When a forfeiture order is made, s 69(1) of the POC Act prevents the Commonwealth dealing with forfeited property for certain periods. That section relevantly provides:

Consequently, one of the orders sought on the present application was an order under s 69(2) to the effect of allowing the plaintiff to deal with the property immediately.

Since there has been no opposition to the making of the orders in the present case and they involve only sums of money which could be refunded, should circumstances make that necessary and appropriate, it appears to me that the Commonwealth should be given leave under s 69(2) to deal with the forfeited property immediately upon the making of the orders.

For all the reasons set out above, the Court makes the following orders: