DPP (Cth) v Tan [2003] NSWSC 717

New South Wales Supreme Court

CITATION : DPP (Cth) v Tan [2003] NSWSC 717 HEARING DATE(S) : 30/07/03 JUDGMENT DATE : 7 August 2003

JUDGMENT OF : Shaw J DECISION : (1) Dismiss the application of the defendant; (2) Costs be reserved.

CATCHWORDS : Proceeds of crime - whether restraining orders granted ex parte should be revoked - applicable principles in relation to proof LEGISLATION CITED : Proceeds of Crime Act 2002 (Cth) ss 19, 42 Proceeds of Crime Act 1987 (Cth) Briginshaw v Briginshaw (1938) 60 CLR 366; Building Construction Employees and Builders' Labourers Federation of NSW v Minister for Industrial Relations (The BLF Case) (1986) 7 NSWLR 372; CASES CITED : Durham Holdings Pty Ltd v NSW (1999) 47 NSWLR 340; (2001) 205 CLR 399; Kable v DPP (NSW) (1997) 189 CLR 51; King v Union Steamship Co (1988) 166 CLR 1; R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254; PARTIES : Director of Public Prosecutions (Commonwealth) - Plaintiff Dante Tan - Defendant FILE NUMBER(S) : SC 11461/03 COUNSEL : T Muir - Plaintiff C Steirn, SC with C Jones - Defendant SOLICITORS : DPP (Cth) - Plaintiff CK Lawyers - Defendant

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

Shaw J

7 August 2003

11461 of 2003 Director of Public Prosecutions (Cth) (Plaintiff)

v

Dante Tan (Defendant);

Re The Matter of Specified Property of Universal Lionshare Pty Limited

JUDGMENT 1 Shaw J: In this matter the Commonwealth Director of Public Prosecutions ("the DPP") has initiated proceedings pursuant to the Proceeds of Crime Act 2002 (Cth) ("the Act") to make restraining orders in respect of certain properties apparently owned by the defendant, Mr Tan, or Universal Lionshare Pty Ltd, of which the defendant is the only shareholder, director and officer. The nature of the order is that the property must not be disposed of or otherwise interfered with by any person. 2 The defendant applies by notice of motion to revoke those orders pursuant to s 42 of the Act. 3 The original restraint proceedings, granted ex parte, depended upon s 19 of the Act. That section provides that a restraining order 'must' be made if the Court is satisfied of certain pre-requisite conditions. The relevant statutory pre-requisite for the making of such an order is whether the Commonwealth DPP requests that an order be made (s 19(1)(c) of the Act), and there are 'reasonable grounds to suspect' that the property is, for relevant purposes, the proceeds of an indictable offence of the Commonwealth or a foreign indictable offence (s 19(d) of the Act). 4 The section goes on to provide that the Court must be satisfied that the authorised officer holds the suspicion on 'reasonable grounds' (s 19(1)(f) of the Act). If the Court is so satisfied, then the Court must make the restraining order (s 19(1) of the Act) unless satisfied of an exception in s 19(3) of the Act, which does not apply here. 5 The emphasis in the Act upon holding a 'suspicion' is in contrast to the prior legislative regime (pursuant to the Proceeds of Crime Act 1987 (Cth)) which required that the officer hold a 'reasonable belief' as to the tainted origins of property. 6 Section 19(4) of the Act provides that the reasonable grounds 'need not be based on a finding as to the commission of a particular indictable offence' and, further, by subs (5) there is a requirement that the Court 'must' make a restraining order even if there is no risk of the property being disposed of or otherwise dealt with. 7 Mr Steirn, SC, for the applicant submitted to the Court that it should construe the legislation strictly, since it has drastic consequences for the applicant, and should apply any ambiguity that arises in favour of the applicant. So much is required by the rules of statutory construction: see Pearce and Geddes, Statutory Interpretation in Australia (4th Ed) Butterworths at [9.11]. However, it is increasingly common for the State and Commonwealth legislatures to pass these kinds of laws leaving nothing open to ambiguity and no discretionary provision in favour of the citizens they affect. Under the cover of being beneficially directed to crime reduction, there is the real possibility that the effect of removing discretion from the courts in the application such laws, may result in injustice. 8 It can reasonably be said that this is drastic legislation. Some might characterise it as Draconian. Nevertheless, this Court must give due recognition of and application to the prescriptions of the legislature, subject of course to a question as to whether the legislation is constitutionally valid. No such constitutional question has been raised in the present proceedings. Assuming that the legislation is not ultra vires the Parliament, then the Court must apply it in accordance with its text. This concept, it seems to me, gives effect to the separation of powers doctrine which is inherent, at least in relation to the Federal, constitutional scheme – although the doctrine does not strictly apply to State law: see Building Construction Employees and Builders' Labourers Federation of NSW v Minister for Industrial Relations (The BLF Case) (1986) 7 NSWLR 372; King v Union Steamship Co (1988) 166 CLR 1; Durham Holdings Pty Ltd v NSW (1999) 47 NSWLR 340; (2001) 205 CLR 399; cf Kable v DPP (NSW) (1997) 189 CLR 51. 9 In Kable it was said that a State Court that was, or could be, a repository of Federal judicial power can only validly deal with matters in a way which is contemplated by, and not repugnant to, Chapter III of the Constitution, a provision guaranteeing judicial independence, a scheme of appellate and judicial review, and, perhaps, a minimum content of fairness in all proceedings. According to the doctrine of R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254, such power can only be exercised in a way truly characterised as judicial power. 10 On 12 June 2003, I granted a restraining order, on an ex parte basis, over certain specified property. On 2 July 2003 James J granted further restraining orders over other specified property. Such property included monies held in bank accounts, a motor vehicle and real estate. 11 The application in the present case is to set aside those orders pursuant to s 42 of the Act. Universal Lionshare Pty Limited seeks the revocation of the restraining orders granted by me and James J. 12 I do not feel any inhibition or embarrassment about reconsidering orders previously made ex parte. The Court has now had the benefit of hearing from senior counsel for the applicant on revocation and has heard argument on that procedural course. 13 The power to revoke is contained in s 42(5) of the Act which prescribes that: The Court may revoke the restraining order if satisfied that there are no grounds on which to make the order at the time of considering the application to revoke the order. 14 This is a tough test for the applicant to meet. It seems to me to mean there must be literally no grounds for the foundation of the order for it to be revoked. I leave open the question of whether irrational, improper or unlikely grounds for suspicion are sufficient to sustain an order. 15 It seems to me to be right to say that the applicant for revocation does bear some onus of persuading the court that it should exercise a discretion in his or her favour to revoke the restraining order. Since the section seems to confer a discretion on the Court to revoke the order, I would think that the applicant must persuade the Court on the balance of probabilities to exercise it in his or her favour. Whether, having done so, the Commonwealth would be required to discharge an onus in accordance with the observations of Dixon J in Briginshaw v Briginshaw (1938) 60 CLR 366 does not arise in this matter as the applicant has adduced no evidence to raise the issue. 16 I approach the matter on the basis that the only admitted and unchallenged evidence is that filed for the DPP, in the form of affidavit evidence of Noel James Scruton, which asserts that: I suspect that the property described…is the proceeds of a foreign indictable offence…committed within the past 6 years. 17 Mr Scruton then goes on to specify the grounds upon which he believed that the property had the providence asserted by the bald allegation contained in that affidavit. These grounds included reference to an extradition request from the Government of the Republic of the Philippines for the provisional arrest of Mr Tan for the purpose of extradition from Australia. That request included the assertion that Mr Tan is wanted to stand trial over 'the largest insider trading case in Philippine history'. 18 Mr Steirn, SC has submitted that these matters must be strictly proved by the Commonwealth, that is, that the 'reasonable' grounds for suspicion must be proved. He says that there is a 'glaring omission' in the evidence, namely that the evidence does not deal with how monies are said to have come into Mr Tan's branch account and the lack of any evidence as to the funds used to purchase the home unit. Senior counsel argues that on any fair reading of the material, his client came into the possession of the properties by legal means. He says that there is a lack of a demonstrated nexis between the alleged fraud in the Philippines and the money in the bank accounts the subject of the restraining order. It is further submitted that there is no real evidence that Mr Tan received money from insider trading or other illicit activities in the Philippines and that the evidence does not reveal anything suspicious in relation to the activities of the company. 19 The applicant submits that there is a deficiency in the evidence such that the two ex parte orders made by judges of this Court should be revoked. 20 The difficulty with accepting this submission is that the suggested 'glaring omission' in the evidence has not been resolved by the applicant by way of evidence. If the applicant has evidence that the property was not acquired as a result of an indictable offence then that would discharge the onus set upon him by s 42(5) of the Act and, prima facie, the Court would be in a position to revoke the restraining order. This would then raise the issue mentioned earlier of whether the Commonwealth could convince the Court (in accordance with the Briginshaw principle) to maintain the order. 21 On the other hand, the DPP refers to the unchallenged evidence that Mr Tan has filed no taxation returns in Australia and yet holds a large sum of money in back accounts. Reference has also been made to the application by the Philippine government, which includes the allegation that Mr Tan is considered a 'fugitive from justice having jumped bail'. 22 The material before the Court also indicates a series of criminal charges laid against Mr Tan in the Philippines that includes allegations of false and misleading market activity. There is evidence of an information laid by a panel of State Prosecutors in the Department of Justice of the Philippines accusing Mr Tan, and others, of the violation of statutory provisions including an allegation of: conspiracy, complicity and confabulation…for the purpose of creating a false and misleading appearing of active trading in stocks and securities… pertaining to certain specified corporations. 23 I accept, of course, that the applicant has the presumption of innocence. Nevertheless, such allegations may arguably support a 'reasonable' ground of suspicion in the context of the legislative regime in which I am required to determine this matter. 24 The evidence indicates that an order of arrest was issued on 1 April 2002 in relation to Mr Tan by the Republic of the Philippines, National Capital Judicial Region, Regional Trial Court in the City of Pasic. 25 Thus, the question in this case is not whether the applicant for the restraining order, the Commonwealth, has a 'suspicion' that the identified property is the product of an indictable offence, which it obviously does, but whether the applicant to revoke the order has shown that there are 'no reasonable grounds' for that suspicion. 26 I emphasise that, at this stage of the proceedings, I am only concerned with whether the disposition of the property should be restrained (in that, the Court is asked to revoke such an order). I am not now asked to make a confiscation order. The Court is at an interlocutory stage of its consideration of this matter. Different considerations may well arise when and if the Court is asked to confiscate the property, at the request of the Commonwealth, which will again raise the issue of the standard of proof about which the Court must be satisfied to order such confiscation. 27 In the circumstances, I am not prepared to rule that the DPP lacked reasonable grounds for the suspicion which it has about the providence of this property. As I have emphasised the existence of unchallenged evidence, in affidavit form, about the suspicion, and the specification of grounds as to why that suspicion is reasonably based, in addition to the absence of evidence from the applicant for revocation seems to me to compel the conclusion that there were some reasonable grounds sufficient to raise a 'suspicion' about the origins of the property. 28 It is understandable that some may reasonably think that elements of this confiscation legislation both at a Commonwealth and State level are drastic and impose upon courts uncongenial, mandatory duties previously unknown to the judicial power and, arguably, alien to it. Nevertheless, the state of evidence in this case compels me to the conclusion that the orders that have been made by the Court should not be revoked and that further considerations may be raised at subsequent stages of the proceedings when, and if, confiscation is actually sought. 29 In these circumstances I dismiss the application for revocation and order that the costs of the proceedings should be reserved. *********