Supreme Court New South Wales Medium Neutral Citation: Application by the Commissioner of the Australian Federal Police [2015] NSWSC 1817 Hearing dates: 1 December 2015 Decision date: 01 December 2015 Jurisdiction: Common Law Before: Adamson J Decision: See paragraph 28 Catchwords: CRIMINAL LAW – proceeds of crime – application for restraining order – reasonable grounds for suspicion that funds are proceeds of indictable offence - custody and control orders – examination orders – orders for sworn statements Legislation Cited: Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth), s 53 Criminal Code Act (Cth), Sch 1, Pt 10.2, s 400.9 Proceeds of Crime Act 2002 (Cth), ss 19, 21, 38, 39, 49, 180, 332, 338 Category: Principal judgment Parties: The Commissioner of the Australian Federal Police (Plaintiff) Representation: Counsel: J Millington (solicitor) (Plaintiff) J Xu (solicitor) (Interested parties, Weili Cui and Shushan Li) Solicitors: HW Legal (Interested parties, Weili Cui and Shushan Li) File Number(s): 2015/288541 Judgment (EX TEMPORE – REVISED) Introduction 1. By summons filed on 2 October 2015, the Commissioner of the Australian Federal Police (the Commissioner) seeks various orders under the Proceeds of Crime Act 2002 (Cth) (the Act), including a restraining order pursuant to s 19; an order for custody and control pursuant to s 38; orders for examination under s 80; and an ancillary order pursuant to s 39(1) that sworn statements be provided. 2. In support of the summons, the Commissioner, for whom Ms Millington appears, relies on the affidavit of Darren Burtenshaw sworn 1 October 2015. Federal Agent Burtenshaw deposes in paragraph one of his affidavit that he is a member of the Australian Federal Police (AFP). 3. Two of the persons interested in these orders, Weili Cui and Shushan Li, appeared at today's hearing by their solicitor, Ms Xu. They did not oppose the orders sought but foreshadowed an application for an exclusion order, which is addressed further below. Background 1. On 11 March 2015 Ms Cui was endeavouring to deposit an amount of $200,000 in cash at the World Square branch of the National Australia Bank in Sydney. She was questioned. AFP officers seized the cash as they suspected it to be proceeds of crime. The evidence reveals details of the bank accounts in the names of Ms Cui and other associates as well as declarations made when Ms Cui and others were entering Australia as to the amount of cash they were bringing into Australia. It is not necessary for present purposes to set out this evidence, which is contained in the unchallenged affidavit of Federal Agent Burtenshaw and the exhibit thereto. Legislative requirements Section 19 of the Act 1. The legislative requirements for a restraining order are set out in s 19 of the Act, which provides that a court with proceeds jurisdiction, which includes this Court, must, if certain conditions are fulfilled, make an order that property not be disposed of or otherwise dealt with by any person. The Court's obligation to make an order with respect to serious offences is subject to its satisfaction that an appropriate undertaking has been given: s 21 of the Act. 2. I note that Ms Millington is instructed to provide the usual undertaking on behalf of the Commonwealth as to costs and damages arising from the restraining order. I regard this as an appropriate undertaking for the purposes of s 21 of the Act. 3. Section 19 provides: "Restraining orders—property suspected of being proceeds of indictable offences etc. When a restraining order must be made (1) A court with *proceeds jurisdiction must order that: (a) property must not be disposed of or otherwise dealt with by any person; or (b) property must not be disposed of or otherwise dealt with by any person except in the manner and circumstances specified in the order; if: (c) a *proceeds of crime authority applies for the order; and (d) there are reasonable grounds to suspect that the property is: (i) the *proceeds of a *terrorism offence or any other *indictable offence, a *foreign indictable offence or an *indictable offence of Commonwealth concern (whether or not the identity of the person who committed the offence is known); or (ii) an *instrument of a *serious offence; and (e) the application for the order is supported by an affidavit of an *authorised officer stating that the authorised officer suspects that: (i) in any case—the property is proceeds of the offence; or (ii) if the offence to which the order relates is a serious offence—the property is an *instrument of the offence; and including the grounds on which the authorised officer holds the suspicion; and (f) the court is satisfied that the *authorised officer who made the affidavit holds the suspicion stated in the affidavit on reasonable grounds. Property that a restraining order may cover (2) The order must specify, as property that must not be disposed of or otherwise dealt with, the property specified in the application for the order, to the extent that the court is satisfied that there are reasonable grounds to suspect that that property is: (a) in any case—*proceeds of the offence; or (b) if the offence to which the order relates is a *serious offence—an *instrument of the offence. Refusal to make a restraining order (3) Despite subsection (1), the court may refuse to make a *restraining order in relation to an *indictable offence that is not a *serious offence if the court is satisfied that it is not in the public interest to make the order. Note: A court can also refuse to make a restraining order if the Commonwealth refuses to give an undertaking: see section 21. Restraining order need not be based on commission of a particular offence (4) The reasonable grounds referred to in paragraph (1)(d) need not be based on a finding as to the commission of a particular offence. Risk of property being disposed of etc. (5) The court must make a *restraining order even if there is no risk of the property being disposed of or otherwise dealt with." 1. The conditions the fulfilment of which entitles the Commissioner to an order under s 19(1)(a) or (b) are set out in 19(1)(c), (d), (e) and (f) of the Act. These will be considered in turn. Section 19(1)(c): application made by a proceeds of crime authority 1. The Commissioner is a proceeds of crime authority by reason of the definition in s 338 of the Act. Accordingly s 19(1)(c) is fulfilled. Section 19(1)(d): reasonable grounds for suspicion 1. Section 19(1)(d) requires that there be reasonable grounds to suspect that the property is relevantly the proceeds of an indictable offence of the Commonwealth or an instrument of a serious offence. The relevant offences are offences against s 53 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth), and offences contrary to 400.9 of the schedule to the Criminal Code Act 1995 (Cth) (the Criminal Code). Section 400.9 is contained in Part 10.2 of the Criminal Code. 2. These are both serious offences within the meaning of s 338 of the Act, which relevantly includes: 1. unlawful conduct constituted by or relating to a breach of Part 10.2 of the Criminal Code (money-laundering): paragraph (a)(ii) of the definition of "serious offence" in s 338; and 2. an offence against s 53 of the Anti-Money Laundering and Counter-Terrorism Financing Act (reports about movements of physical currency into or out of Australia): paragraph (ea)(i) of the definition of serious offence in s 338. 1. Having read the affidavit of Federal Agent Burtenshaw, I am satisfied that there are reasonable grounds to suspect that the property referred to in schedule 1 (to the summons and to the minute of order) is the proceeds of an indictable offence, or indictable offences, within the meaning of s 19(1)(d)(i) and (ii). Section 19(1)(e): the application is supported by an affidavit of an authorised officer 1. Section 19(1)(e) of the Act provides that it is a condition of the making of an order that the application is supported by an affidavit of an authorised officer, which states that the authorised officer suspects that the property is proceeds of the offence; or, if the offence to which the order relates is a serious offence, the property is an instrument of the offence; and which includes the grounds on which the authorised officer holds the suspicion. 2. The definition of authorised officer in 338 of the Act includes an AFP member, if authorised by the Commissioner. The evidence establishes that Commissioner Negus, by authorisation dated 26 August 2013, authorised all AFP members to be authorised officers under the Act. Accordingly, Federal Agent Burtenshaw is an authorised officer. 3. I am satisfied that the condition in s 19(1)(e) is fulfilled by the affidavit of Federal Agent Burtenshaw affirmed on 1 October 2015. He sets out the basis for his suspicion in paragraphs 11 to 87 of the affidavit, and summarises those grounds in paragraph 88 of the affidavit. Section 19(1)(f): reasonable grounds 1. I am also required, by reason of s 19(1)(f), to be satisfied that the authorised officer who made the affidavit holds the suspicion stated in the affidavit on reasonable grounds. I am satisfied that the matters set out in paragraphs 11 to 87 of Federal Agent Burtenshaw's affidavit and summarised in paragraph 88 of that affidavit provide sufficient basis by way of reasonable grounds for the suspicion to which Federal Agent Burtenshaw deposes. Conclusions Conclusion regarding a restraining order 1. For the reasons given above, I am persuaded that I am obliged to make an order under s 19(1)(b) of the Act with respect to the cash sum of $199,990 seized by the members of the Australian Federal Police on 11 March 2015 and banked in the AFP Reserve Bank trust account, together with any interest earned on that amount. Other orders sought Custody and control order: s 38 of the Act 1. The Commissioner, as I have referred to above, also seeks a custody and control order of those funds. I am satisfied that it is appropriate to make an order under s 38 of the Act that the official trustee in bankruptcy is to take custody and control of the property specified in schedule one being that capital sum together with interest. Examination order: s 180 of the Act 1. Having regard to the matters in Federal Agent Burtenshaw's affidavit, I am also satisfied that it is appropriate to make an examination order under s 180 of the Act which permits the following persons to be examined about the affairs of Weili Cui: Weili Cui; Shushan Li; Bei Jiang; and Junguo Wang. I am also satisfied that it is appropriate to make an order pursuant to s 180 of the Act that those four persons be examined about the affairs of Shushan Li. Ancillary orders to provide sworn statements: s 39(1) of the Act 1. The Commissioner also seeks an order pursuant to s 39(1) of the Act which empowers me to make orders ancillary to a restraining order. Ms Millington seeks orders under ss 39(1) (including (ca) and (da)) directing certain persons to give a sworn statement to a specified person within a specified period setting out particulars of or dealings with the property or interests in property and his or her liabilities. 2. I am satisfied that it is appropriate, having regard to the apparently suspicious provenance of funds available to Ms Cui and Mr Li, that orders under s 39(1) of the Act be made in accordance with the prayers in the summons. 3. Shushan Li is the sole director of Golden Forest International Pty Ltd and a director of Golden Forest Group Pty Ltd. In all the circumstances, I am satisfied that the dubious provenance of the substantial cash funds makes it desirable to make an order under s 39(1) that Mr Li, in his capacity as the sole director of Golden Forest International Pty Ltd and as a director of Golden Forest Group Pty Ltd, be directed to provide a sworn statement, the details of which are set out in the minute of order provided by Ms Millington on behalf of the Commissioner. 4. Ms Cui is also a director of Golden Forest Group Pty Ltd. I am satisfied that, for the same reasons, she ought be required pursuant to s 39(1) of the Act to provide to the Commissioner a sworn statement setting out the matters which will be detailed in the orders which I shall shortly make. Potential application for an exclusion order 1. Ms Xu has foreshadowed that her clients (Ms Cui and Mr Li) wish to seek an exclusion order under ss 29 and 31 of the Act in respect of the property the subject of the restraining order. 2. Ms Xu has recently served two affidavits on the Commissioner in support of the proposed application for an exclusion order. However, she acknowledged that her clients were not in a position to proceed with an application for an exclusion order. Further, because of the late notice, the Commissioner would not have been in a position to deal with them today. 3. It is desirable that directions be made about any application for an exclusion order, having regard to the Commissioner's intention to apply in due course for a forfeiture order pursuant to s 49 of the Act. As there is some doubt as to when the proposed applicants, Ms Cui and Mr Li, will be ready to make such an exclusion order, I propose to allow them until 28 February 2016 to put on any such application, together with any evidence on which they wish to rely in support of that application. 4. If such an application is filed, it will be given a return date by the Registry. If no such application is filed, this matter will come back before the Common Law Registrar for directions at 9am on 18 May 2016. Orders 1. For those reasons, and noting the undertaking given by Ms Millington on behalf of the plaintiff, I make orders in terms of paragraphs 1, 2, 3, 4, 5, 6, 7, 8, and 9 of the minute of order as follows: UPON THE PLAINTIFF PROVIDING, ON BEHALF OF THE COMMONWEALTH, THE USUAL UNDERTAKING AS TO COSTS AND DAMAGES, THE COURT ORDERS THAT: 1. Pursuant to s 19(1)(b) of the Proceeds of Crime Act 2002 (Cth) (the Act) the property specified in Schedule 1 to these orders must not be disposed of or otherwise dealt with by any person except in the manner and circumstances specified in these orders. 2. Pursuant to s 38 of the Act the Official Trustee in Bankruptcy is to take custody and control of the property specified in Schedule 1 to these orders. 3. Pursuant to s 180 of the Act the following persons be examined about the affairs of Weili Cui: 1. Weili Cui; 2. Shushan Li; 3. Bei Jiang; and 4. Junguo Wang. 1. Pursuant to s 180 of the Act the following persons be examined about the affairs of Shushan Li: 1. Weili Cui; 2. Shushan Li; 3. Bei Jiang; and 4. Junguo Wang. 1. Pursuant to s 39(1) of the Act, Weili Cui is directed to provide to the Commissioner of the Australian Federal Police or his delegate, within 28 days of the making of these orders, a sworn statement setting out: 1. All of her interests in property valued at or over $5,000; 2. All of her liabilities valued at or over $5,000; and 3. All her dealings in property valued at or over $5,000 since 12 August 2011 to date, In the form set out in Schedule 2 to these orders. 1. Pursuant to s 39(1) of the Act, Shushan Li is directed to provide to the Commissioner of the Australian Federal Police or his delegate, within 28 days of the making of these orders, a sworn statement setting out: 1. All of his interests in property valued at or over $5,000; 2. All of his liabilities valued at or over $5,000; and 3. All his dealings in property valued at or over $5,000 since 12 August 2011 to date, In the form set out in Schedule 2 to these orders. 1. Pursuant to s 39(1) of the Act, Shushan Li, in his capacity as the sole director of Golden Forest International Pty Ltd (ACN 603 559 388) is directed to provide to the Commissioner of the Australian Federal Police or his delegate, within 28 days of the making of these orders, a sworn statement setting out: 1. All of his interests in property valued at or over $5,000; 2. All of his liabilities valued at or over $5,000; and 3. All his dealings in property valued at or over $5,000 since 6 January 2015 to date. In the form set out in Schedule 2 to these orders. 1. Pursuant to s 39(1) of the Act, Shushan Li, in his capacity as a director of Golden Forest Group Pty Ltd (ACN 605 582 732) is directed to provide to the Commissioner of the Australian Federal Police or his delegate, within 28 days of the making of these orders, a sworn statement setting out: 1. All of Golden Forest Group Pty Ltd's interests in property valued at or over $5,000; 2. All of Golden Forest Group Pty Ltd's liabilities valued at or over $5,000; and 3. All Golden Forest Group Pty Ltd's dealings in property valued at or over $5,000 since 30 April 2015 to date, In the form set out in Schedule 2 to these orders. 1. Pursuant to s 39(1) of the Act, Weili Cui, in her capacity as a director of Golden Forest Group Pty Ltd (ACN 605 582 732) is directed to provide to the Commissioner of the Australian Federal Police or his delegate, within 28 days of the making of these orders, a sworn statement setting out: 1. All of Golden Forest Group Pty Ltd's interests in property valued at or over $5,000; 2. All of Golden Forest Group Pty Ltd's liabilities valued at or over $5,000; and 3. All Golden Forest Group Pty Ltd's dealings in property valued at or over $5,000 since 30 April 2015 to date, In the form set out in Schedule 2 to these orders. 1. I direct Ms Cui and Mr Li to file and serve any application for exclusion from the restraining order, together with all evidence to be relied upon in support, on or before 28 February 2016. In the event that such an application is filed, it is to be given a return date by the registry within 14 days of the filing of the application in order that further directions can be made by the Registrar. If no such application is filed, the matter will be listed before the Common Law Registrar for directions at 9am on 18 May 2016. 2. I grant liberty to the parties to apply to restore the matter to the list before the Registrar on three days' notice. SCHEDULE 1 The cash sum of AUD$199,990.00 seized by members of the Australian Federal Police on 11 March 2015 and banked in the AFP Reserve Bank Trust Account, together with any interest earned on that amount. SCHEDULE 2 1.Provide full particulars of the nature and extent of your property or where applicable, the property of the company of which you are a director, including in relation to each item of property: a. description of the property, including the nature of your interest in it and, where possible, the estimated value; b. the location of the property; c. the name of the person or institution in whose custody title documents in respect of the property are believed to be; d. the approximate date of acquisition of the property; e. income earned from the property; f. a full description of any liability in relation to the property and the amount of the liability; g. the amount and date of payments made to discharge any liability in relation to the property; h. the source of the payments referred to in subparagraph 1(g) above; and i. the name of the person or institution to which the liability is owed. 2. Provide full particulars of your current liabilities or where applicable, the liabilities of the company of which you are a director, including, in relation to each liability: a. full description of each liability including the nature of the liability and the amount of the liability; and b. the name of the person or institution to which the liability is owed. 3. Provide full particulars of any dispositions or dealing with property between the relevant dates (inclusive) including: a. description of the property disposed of or dealt with, including the nature of the disposition or dealing and any proceeds received as a result of the disposition or dealing; b. the location of the property; c. the date of the disposition or dealing; d. the name of the person or institution to which the property was transferred; e. the amount and date of payments made to discharge any liability in relation to the property; and f. the source of the payments referred to in subparagraph 3(e) above. *********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 04 December 2015