Commissioner of the Australian Federal Police v Hills Greenery Pty Ltd

1. [1]

   HIS HONOUR: This is the hearing of certain prayers in a notice of motion filed by the third defendant on 16 May 2023 (the Notice of Motion), concerning forfeiture orders made by Walton J on 27 March 2023 pursuant to the Proceeds of Crime Act 2002 (Cth) (POCA): Commissioner of the Australian Federal Police v Hills Greenery P/L [2023] NSWSC 288.

2. [2]

   The background to the matter is as follows. By an amended summons filed by the plaintiff on 29 May 2020, a restraining order was sought in respect of a rural property (the Bevendale property), which was owned by the third defendant, on the basis of a suspicion that it was an instrument of tobacco growing offences. On that date, pursuant to s 19 of POCA, Cavanagh J made a restraining order. On 27 June 2020, the third defendant was personally served with the restraining order, affidavit evidence, the amended summons and certain other material, including a covering letter addressed to him from a senior litigation lawyer with the Australian Federal Police (the AFP), which explained his rights under POCA, including a right to apply to the Court to revoke the order within 28 days of notice of it pursuant to s 42 of that Act.

3. [3]

   On 9 July 2020, a notice of appearance was filed by James Pope, the solicitor who was acting on behalf of the third defendant. On 22 April 2022, a notice of change of solicitor was filed by Steve Kassem, the new solicitor appointed by the third defendant.

4. [4]

   Examination orders were made on 3 November 2020. Pursuant to those orders, the third defendant was examined on four occasions, with legal representation each time: 22 November 2021, 4 February 2022, 13 April 2022 and 19 October 2022. On the first three dates, Mr Hogan of counsel appeared. Mr Hogan was instructed by Angelo Bilias, solicitor, on the first date, and by Mr Kassem on the second and third dates. On the fourth date, Steven Nazarian, solicitor, appeared for the third defendant.

5. [5]

   On 2 March 2023, a solicitor of the plaintiff’s legal representative MinterEllison (Rimma Miller), wrote to Mr Kassem, the third defendant’s solicitor on the record at that time, informing him that at the next directions hearing, on 27 March 2023, the plaintiff intended to request a referral to the Duty Judge to seek forfeiture of the Bevendale Property to the Commonwealth, pursuant to s 49 of POCA. Ms Miller delivered the letter by attaching it to an email to Mr Kassem.

6. [6]

   Between 2 March 2023 and 24 March 2023, Ms Miller took numerous steps to contact Mr Kassem, but did not receive any communication from him. On 15 March 2023 at about 12.15pm, she phoned Mr Kassem on the number indicated on his filed notice of change of solicitor form and had a conversation with his assistant, in which she requested that Mr Kassem contact her, concerning the matter of the third defendant. On 16 March 2023, at about 1pm, she phoned the same number and left a further message with his assistant to phone her back. She then phoned a mobile number for Mr Kassem that she obtained from his filed notice of change of solicitor form and left a voicemail, identifying herself and asking him to call her.

7. [7]

   On 21 March 2023, at about 11.50am, Ms Miller sent Mr Kassem an email which had a letter attached to it, in which she enclosed documents upon which the Commissioner intended to rely for his application for forfeiture of the Bevendale property, including a copy of the proposed orders. On the same date, Ms Miller caused to be sent from her office a copy of the letter and attachments to Mr Kassem’s address by registered post, as indicated on his filed notice of change of solicitor form. An email was received from Australia Post on 24 March 2023, advising that the letter had been returned to sender, and that the receiver was not known at the address. On the same date, Ms Miller took steps to arrange for the letter and its attachments to be delivered to an address listed for Mr Kassem on the Law Society website. At 2.30pm that day, a process server left them at Mr Kassem’s office with a person at that address, who informed the process server that Mr Kassem was “not in at the moment”.

8. [8]

   There was no appearance by or on behalf of the third defendant on 27 March 2023. Walton J expressed satisfaction that the third defendant had been properly served with the materials that were relevant to the application on the evidence before the Court, “including a supplementary statement after inquiry made by the legal representative for the Commissioner upon the request of the Court”. On 11 May 2023, Sam Abbas, solicitor, wrote to the plaintiff, advising that he now acted for the third defendant. The plaintiff replied the same day, attaching the forfeiture orders made by, and judgment of, Walton J.

9. [9]

   In an affidavit affirmed on 15 May 2023, Mr Abbas stated that on 11 May 2023, the third defendant handed him his file that he collected from James Pope. In the file was a letter addressed to Mr Kassem dated 2 March 2023, which I note is the same letter of that date sent by Ms Miller to Mr Kassem. Mr Abbas continued:

10. [10]

    I note that in an affidavit that was affirmed by the third defendant on the same date (15 May 2023), there is no reference at all by him as to the issue of his legal representation or his prior failure to prosecute his interest in the property. In written submissions on his behalf filed on 10 December 2023, his counsel, Greg Jones, said as to this aspect of the history:

The constitutional issue

1. [11]

   The orders sought in the notice of motion included the following.

2. [12]

   In the alternative to order 3, the third defendant sought compensation orders pursuant to s 77 of POCA. Those alternative orders are not the subject of this hearing.

3. [13]

   The notice of motion was listed for hearing on 25 May 2023 before Garling J, sitting as the Duty Judge. His Honour adjourned the hearing on the plaintiff’s application, which was unopposed, for the reason that the plaintiff sought time to consider whether order 2 raised a constitutional issue. The question of the constitutional issue arose because the plaintiff sought to rely upon the Uniform Civil Procedure Rules (UCPR), which are an instrument of NSW legislation, to set aside an order made by the Court in the exercise of its federal jurisdiction, thus enlivening s 79(1) of the Judiciary Act 1903 (Cth): Commissioner of the Australian Federal Police v Hills Greenery P/L [2023] NSWSC 559.

4. [14]

   On 3 July 2023, the plaintiff filed a notice of a constitutional matter in respect of prayer 2 of the notice of motion (the constitutional notice). The constitutional notice stated that the notice of motion raised a question of potential inconsistency between the operation of r 36.16(2)(b) of the UCPR and the procedural scheme contained in the POCA for the forfeiture of property; dealing with forfeited property; and the exclusion of an interest in property from forfeiture. It continued:

5. [15]

   A hearing date in respect of prayers 2 and 3 of the notice of motion was set down, with a timetable for the filing of evidence and submissions.

6. [16]

   At the outset of the hearing on 23 February 2024, the third defendant accepted that if the plaintiff succeeded on the constitutional issue, the motion was incompetent. Following the hearing of that aspect, the hearing was adjourned until 1 March 2024 for determination of that issue. The plaintiff’s contention is upheld and, accordingly, prayers 2 and 3 of the notice of motion are dismissed.

The relevant statutory provisions

1. [17]

   Rule 36.16 of the UCPR relevantly provides as follows.

2. [18]

   Section 14A of POCA states:

3. [19]

   The Judiciary Act, s 79(1), provides:

4. [20]

   Section 109 of the Commonwealth Constitution states:

5. [21]

   The plaintiff submitted that the issue for determination was whether r 36.16(2)(b) of the UCPR applies in this proceeding by operation of s 79(1) of the Judiciary Act, or whether the relevant provisions of the POCA ‘otherwise provide’. Succinctly stated, the plaintiff’s submission was:

6. [22]

   Alternatively, the plaintiff submitted that if r 36.16(2)(b) of the UCPR applies by its own force, and not by reason of the operation of s 79(1) of the Judiciary Act, it is inconsistent with the POCA for the purpose of s 109 of the Constitution and, consequently, is of no effect. In the further alternative, the plaintiff submitted that if it is found that r 36.16(2)(b) does apply, the Court ought not exercise its discretion to set aside the forfeiture order.

7. [23]

   The third defendant joined with the plaintiff as to the nature of the issue being whether the provisions of the POCA relevantly “otherwise provided”. It cited observations in Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51; [1996] HCA 24 by Gaudron J, at 102, concerning the integrated nature of the Australian judicial system; and International Finance Trust Company v NSW Crime Commission (2009) 240 CLR 319; [2009] HCA 49 by Heydon J at [159] concerning the repugnance of impugned legislative provisions of the Criminal Assets Recovery Act 1990 (NSW):

8. [24]

   The third defendant submitted that this gave rise to two propositions:

9. [25]

   The third defendant submitted that there is an “absence of any words in the Act that … evince any intention for the Act to be a complete and exhaustive provision” and relied upon s 14A of POCA, as to concurrency.

10. [26]

    The third defendant submitted that s 14A was “reinforced” by s 15A of the Acts Interpretation Act 1901 (Cth), which states that an interpretation that would “best achieve the purpose or object of the Act (whether or not that purpose or object is expressly stated in the Act) is to be preferred to each other interpretation”. He also submitted that s 14A is an “otherwise” provision for the purposes of the phrase “except as otherwise provided” in s 79(1) of the Judiciary Act. Accordingly, it was submitted, “the s 109 issue does not and, simply cannot, arise”.

11. [27]

    The third defendant also submitted that the plaintiff relies upon the UCPR, for example, by seeking a costs order against an impecunious and unrepresented defendant, in Commissioner of the Australian Federal Police v Pratten [2021] NSWSC 69 at [227].

Consideration

1. [28]

   The Act is titled: “An act to provide for confiscation of the proceeds of crime and for other purposes”. Its “principal objects”, identified at s 5, include depriving persons of the proceeds, instruments and benefits of crime and unexplained wealth. As well, at s 5(g):

2. [29]

   The provisions concerning the restraining and forfeiture of property are in Ch 2, which is titled “The confiscation scheme”. Part 2-1 is titled “Restraining Orders” and Part 2-2 is titled “Forfeiture orders”. The scheme places an onus upon a person who claims to have a legitimate interest in property which is the subject of restraint or forfeiture proceedings to satisfy a court that their interest is not tainted in the manner set out in the Act.

3. [30]

   Part 2-1, Div 1 is titled “Making restraining orders”. Sections 17 to 20 specify the circumstances in which a court with proceeds jurisdiction, as defined in ss 335 and 338 [1] (a court) must make a restraining order. Section 19, which is of interest in this application, is titled: “Restraining orders – property suspected of being proceeds of indictable offences etc”. It mandates a court to make a restraining order over property if there are reasonable grounds to suspect it is an instrument of one or more of certain types of criminal offences, pursuant to an affidavit by an authorised officer attesting to a suspicion to that effect.

4. [31]

   Section 29 mandates a court to exclude a specified interest in property which is subject to a restraining order, if the application for a restraining order has been applied for (s 30) or made (s 31) and the court is satisfied that there is a “relevant reason” to do so. In the case of property that is restrained by an order made pursuant to s 19, a “relevant reason” is that the interest is not the proceeds of certain classes of indictable or serious offences: ss 29(2) and (3). An application pursuant to s 31 requires leave if the applicant was notified of the application for the restraining order and did not appear at the hearing of the application but has “a good reason for not appearing”: ss 31(2)(a) and (3)(a); or if the applicant did appear and “now has evidence relevant to the person’s application that was not available to the person at the time of the hearing”: ss 31(2)(b) and (3)(b)). As well, in either case, there are other “special grounds” for granting leave: s 31(3)(c). Certain procedural measures are specified: s 31(4) to (6) and s 32.

5. [32]

   Part 2-1, Div 6 is titled “Duration of restraining orders”. Section 42 provides that a person who was not notified of the application for a restraining order may apply to the court to revoke the order. The application must be made within 28 days of the person being notified of the order or, if the person applies to the court within that period for an extension of time, within that longer period, not exceeding three months. The court may revoke the order if satisfied there were no grounds for making the order at the time the application was considered, or if it is in the interests of justice to do so: s 42(5). Sections 42 to 44 have procedural provisions concerning such applications.

6. [33]

   Part 2-2, Div 1 is titled “Making forfeiture orders”. Section 49 is concerned with the making of a forfeiture order in respect of property which is suspected of being the proceeds of one of certain classes of offences, that is, property that has been restrained pursuant to s 19 of POCA. It provides that a court must make an order forfeiting the property specified in the order to the Commonwealth if, inter alia, the restraining order has been in force for at least six months and the court is satisfied of certain specified matters. Section 61 stipulates notice requirements upon the “responsible authority” that seeks such an order, including to any person who claims an interest in the property or who the authority reasonably believes may have such an interest. Section 64 concerns procedural aspects of a hearing of a claim of an interest in property that is the subject of an application for a forfeiture order.

7. [34]

   Part 2-2, Div 5 is titled “Reducing the effect of forfeiture orders”. Subdivision B is titled “Excluding property from a forfeiture order”. Section 73 specifies the circumstances in which a court that made, is hearing or is to hear an application for, a forfeiture order, may order that a specified interest in property is excluded from forfeiture. Section 74 provides that a person may apply for an exclusion order in respect of property that is the subject of an application for a forfeiture order, in which the person claims an interest. An applicant for an exclusion order in respect of property the subject of an existing forfeiture order may apply “at any time” after the forfeiture order is made, although leave is required if the applicant was notified of the application for the forfeiture order and did not appear at the hearing of the application but has “a good reason for not appearing”: ss 74(3)(a) and (4)(a); or if the applicant did appear, “now has evidence relevant to the person’s application that was not available to the person at the time of the hearing”: ss 74(3)(b) and (4)(b); or, in either case, there are other “special grounds” for granting leave: s 74(4)(c). Certain procedural measures for such applications are specified: ss 75, 76.

8. [35]

   Div 5, Subdiv C is titled “Compensating for proportion of property not derived or realised from commission of any offence”. Section 77 provides that a court that made a forfeiture order, is hearing or is to hear an application for a forfeiture order, must make a compensation order if the court is satisfied that the applicant has an interest in the property specified in the forfeiture order or the application for the forfeiture order, and it is satisfied that the interest is not tainted in certain specified ways by criminal activity. Procedural matters concerning such an application are the subject of ss 77(2), 78 and 79.

9. [36]

   The purpose and scope of s 79 of the Judiciary Act was considered in Rizeq v Western Australia (2017) 262 CLR 1; [2017] HCA 23. Kiefel CJ said of s 79, at [32]:

10. [37]

    At [63], the plurality said:

11. [38]

    The meaning of the expression “otherwise provided” in s 79(1) of the Judiciary Act is to be equated with the concept of inconsistency in s 109 of the Constitution: Masson v Parsons (2019) 266 CLR 554; [2019] HCA 21 per the plurality at [43]. In Work Health Authority v Outback Ballooning Pty Ltd (2019) 266 CLR 428; [2019] HCA 2, the plurality referred to two approaches to the question of inconsistency between State and Commonwealth laws:

Determination

1. [39]

   As to the second approach in Work Health Authority v Outback Ballooning Pty Ltd, the substance of Ch 2, as reflected in its title, evidences an intention for it to comprise a legislative regime governing the making of restraining and forfeiture orders and challenges to them by affected persons. As noted, the scheme includes a legislative route for a person who claims a legitimate interest in forfeited property and who did not attend the hearing at which the forfeiture order was made, to set it aside, in whole or in part, or to claim an order for compensation for their legitimate interest. That being so, in my view, the State law remedy of r 36.16(2)(b) of the UCPR as a mechanism to consider setting aside a forfeiture order is, in the terms of s 79(1) of the Judiciary Act, “otherwise provided” for by the remedies in subdivs B and C of Div 5 of Pt 2-2 of Ch 2 of POCA.

2. [40]

   A forfeiture order for the Bevendale property was made by this Court, pursuant to s 49 of POCA, on 27 March 2023, that is, approximately seven weeks before the date of the filing of the notice of motion. There was no attendance by or on behalf of the third defendant. As noted, pursuant to ss 74(3)(a) and (4)(a), a person who claims an interest in a property that is specified in a forfeiture order and who was notified on the application for the forfeiture order but did not appear at the hearing, may seek leave to apply for an exclusion order or a compensation order. The Court may grant leave if the person has “a good reason” for not having made an application before the forfeiture order was made, or if “there are other special grounds for granting the leave”. The alternative order sought by the third defendant, which is a compensation order pursuant to s 77 of POCA, is some acknowledgement by him that this legislative route is open to persons in his position.

3. [41]

   In my view, prayers 2 and 3 of the notice of motion must be dismissed. Rule 36.16(2)(b) of the UCPR is an unavailable remedy, since subdivs B and C of Div 5 of Pt 2-2 of Ch 2 of POCA come within the term “otherwise provided” in s 79(1) of the Judiciary Act, so as to constitute exclusive avenues for the third defendant to seek to set aside the forfeiture order.

Orders

1. [42]

   I make the following orders: