Supreme Court New South Wales Medium Neutral Citation: Application by the Commissioner of the Australian Federal Police [2018] NSWSC 1563 Hearing dates: 16 October 2018 Date of orders: 16 October 2018 Decision date: 16 October 2018 Jurisdiction: Common Law Before: Johnson J Decision: 1. The Notice of Motion filed by CC&B International Pty Limited on 9 August 2016 is dismissed. 2. The Amended Notice of Motion filed by CC&B International Pty Limited on 26 July 2017 is dismissed. 3. The proceedings are listed for directions before the Common Law Registrar at 9.00 am on 31 October 2018. 4. Liberty to restore on three days written notice. 5. In the event that CC&B International Pty Limited is reinstated, it is to pay the Plaintiff's costs of the Notice of Motion filed on 21 June 2018. Catchwords: PROCEEDS OF CRIME - restraining order made over property under Proceeds of Crime Act 2002 (Cth) - application made by company for exclusion of company's alleged interest in property from restraint - company later deregistered by ASIC - applications for reinstatement of registration refused by ASIC - application by Plaintiff for dismissal of company's Notices of Motion given deregistration of company - application allowed - Notices of Motion dismissed Legislation Cited: Anti-Money Laundering and Counter Terrorism Financing Act 2006 (Cth) Civil Procedure Act 2005 Corporations Act 2001 (Cth) Criminal Code (Cth) Proceeds of Crime Act 2002 (Cth) Cases Cited: Amcus Pty Limited v Hurst Rentals Pty Ltd (No 2) [2010] NSWSC 239 Texts Cited: --- Category: Procedural and other rulings Parties: Commissioner of the Australian Federal Police (Plaintiff) Representation: Counsel: Mr L Livingston (Plaintiff) Mr MW Young SC (by leave for Ka Chun Leung and CC&B International Pty Limited) Solicitors: Australian Federal Police - Criminal Assets Litigation (Plaintiff) Dixon Holmes Lawyers (by leave for Ka Chun Leung and CC&B International Pty Limited) File Number(s): 2018/179724 Publication restriction: --- Judgment (on application by Plaintiff for dismissal of noticeS of motion filed by cc&b international pty limited) 1. JOHNSON J: By Notice of Motion filed on 21 June 2018, the Plaintiff, the Commissioner of the Australian Federal Police, seeks an order that a Notice of Motion filed by CC&B International Pty Limited ("the company") on 9 August 2016 and an Amended Notice of Motion filed by the company on 26 July 2017 be dismissed. Other orders are sought as well by the Plaintiff. 2. This litigation dates back to 26 August 2015 when McCallum J made an ex parte restraining order under s.19 Proceeds of Crime Act 2002 (Cth) in respect of property being funds standing to the credit of a Commonwealth Bank of Australia account number held in the name of the company together with any interest earned thereon. 3. The basis of the restraining order made by the Court was the suspicion that: 1. between 23 February 2014 and 8 July 2015, cash deposits totalling $4,138,862.00 (comprising 509 deposits each less than the reportable threshold of $10,000.00) were made into the subject bank account of the company; and 2. the restrained property is the proceeds and/or an instrument of offences contrary to s.400.9(1) Criminal Code (Cth) and s.142 Anti-Money Laundering and Counter Terrorism Financing Act 2006 (Cth). 1. On 26 February 2016, the company filed a Notice of Motion in the proceedings seeking an order excluding from forfeiture the company's interest in the restrained property. 2. On 9 August 2016, the company filed a Notice of Motion seeking that the proceedings commenced on 26 August 2015 be stayed until completion of criminal proceedings brought in the State of Victoria against Kit Lung Sony Tang and Yuen Lun Li. Mr Tang and Mr Li had been charged with offences contrary to s.400.9(1) Criminal Code (Cth), namely dealing with money reasonably suspected of being the proceeds of crime valued at $100,000.00 or more. The hearing of the criminal proceedings against Mr Tang and Mr Li, according to evidence before the Court today, is listed to proceed on 29 July 2019. 3. On 30 September 2016, a warrant issued out of Hornsby Local Court for the arrest of Ka Chun Leung with respect to money laundering offences under s.400.9(1) Criminal Code (Cth). That warrant remains outstanding and unexecuted. 4. On 26 July 2017, the company filed in the proceedings an Amended Notice of Motion. The Amended Notice of Motion sought orders under ss.29-31 Proceeds of Crime Act 2002 (Cth) that the interest of the company in the listed property be excluded from restraint or, in the alternative, that the interest of the company be excluded under s.73 Proceeds of Crime Act 2002 (Cth) from forfeiture, or alternatively that the Court make a compensation order under s.77 Proceeds of Crime Act 2002 (Cth) that a proportion of the interest of the company be excluded from forfeiture. 5. It appears from the evidence before the Court that, by early August 2017, Mr Leung had been arrested and charged in the People's Republic of China for what are described as "alleged serious driving offences". The evidence indicates that Mr Leung has been incarcerated in China since then. There have been varying predictions as to when his hearing may conclude, but as at today there is apparently an outstanding decision of the Court in China with respect to those charges. A prediction has been made that the decision in that respect may be handed down later this month, however, having regard to the inaccuracy of past predictions, it is simply speculative to attempt to predict when that decision may be handed down. 6. This Court knows nothing of the subject matter of the charges, their gravity beyond the description which I have outlined (which emerges from an affidavit filed for the company in the past) nor any possible outcome if Mr Leung happens to be found guilty of any of these offences. The fact is he remains in a Chinese prison as at the present time. 7. On 28 November 2017, the Plaintiff filed a Notice of Motion seeking dismissal of the 2016 Notice of Motion filed by the company for want of due despatch under Rule 12.7(1) Uniform Civil Procedure Rules 2005. That Notice of Motion proceeded to a hearing on the merits and, on 12 December 2017, N Adams J dismissed the application. 8. On 20 April 2018, the company was deregistered by ASIC under s.601AB Corporations Act 2001 (Cth). At the time of deregistration, Mr Leung was the sole director and secretary of the company. 9. On 21 June 2018, the Plaintiff filed the Notice of Motion which I am presently considering. The Notice of Motion seeks the dismissal of the 2016 and 2017 Notices of Motion filed on behalf of the company. The basis of the Plaintiff's application is identified as the deregistration of the company with the legal consequences that flow from deregistration. The position is materially different in that respect from that considered by N Adams J on 12 December 2017. 10. The Plaintiff's Notice of Motion of 21 June 2018 has come before the Court on a number of occasions. On 30 July 2018, the application came before Walton J and the proceedings were adjourned with an order being made that the company, if reregistered, should pay the costs of the Plaintiff of that application. 11. The approach adopted by the Plaintiff on 30 July 2018 was a practical one where it was accepted that application was being made to ASIC to reregister the company, and thus, the Plaintiff took a course which would allow an opportunity for that application to be progressed, as long as the Plaintiff's interests were protected with respect to costs to the extent the company ever become reregistered. Walton J stood the proceedings over. 12. On 26 June 2018, an application was made to ASIC to reregister the company. That application was not signed by Mr Leung. On or about 15 August 2018, ASIC refused that application on the ground that Mr Leung had not signed the application. 13. It appears that steps were taken to obtain the signature of Mr Leung (no doubt appended to the necessary piece of paper in his custodial location in China) so that, on 30 August 2018, a second application was made which was signed by him. That application was received by ASIC on 10 September 2018. There is evidence before the Court today, in the form of a letter from ASIC dated 11 October 2018, which indicates that the reinstatement application was refused as the supporting material did not provide sufficient cause to reinstate the registration of the company. There the matter rests at the present time. The company remains deregistered. 14. Mr Leung is still in custody in China and a warrant remains outstanding for his arrest in the State of New South Wales should he return to this jurisdiction. 15. Today, Mr Livingston of counsel appears for the Plaintiff, seeking that the Court proceed to hear and determine the Notice of Motion of 21 June 2018. 16. Mr MW Young SC has appeared by leave on behalf of the company. It is apparent that Mr Young SC, on the instructions of his present solicitor, has appeared for the company on past occasions and he did appear before Walton J on 30 July 2018 when the proceedings were adjourned. I granted leave to Mr Young SC to appear today, given that he was in a position to inform the Court of steps which were sought to be taken in the interests of Mr Leung. 17. The initial application by Mr Young SC was for the proceedings to be adjourned for a month. The basis of that application was that this would provide an opportunity for a further application for reinstatement of the registration of the company if it was considered that such an application was viable, including the possibility of an application to the Court for reinstatement of the company. 18. The Plaintiff opposed the further adjournment of the matter given the history of the proceedings and, in particular, what has happened (and not happened) in the period when this Notice of Motion has been on foot since 21 June 2018. 19. I took the course of allowing the Notice of Motion to proceed to hearing on the merits to assist the Court in reaching a conclusion with respect to the adjournment application. Having taken that course, I should indicate my position with respect to the adjournment application. In my view, to further adjourn this application for a month (or a longer period) would be a step taken based on hope and speculation rather than any objective foundation that there will be a change in circumstances. 20. There have been opportunities extended to allow so far two unsuccessful applications to be made for reregistration of the company. In my view, the most likely outcome, if the matter was stood over for a month, is yet another application of the type which came before Walton J and then before me today where the question would be whether more time should be extended. To keep adjourning the hearing of the current Notice of Motion on that basis is not consistent with the purpose and object of civil litigation under ss.56-60 Civil Procedure Act 2005. 21. I bear in mind, in this respect, that if the Court does proceed to make the orders sought by the Plaintiff, it is common ground that if the company does become reregistered at a future time, then it could make a fresh application. I decline to adjourn the application from today. It is appropriate to proceed to deal with the Plaintiff's application on the merits. 22. The position is that the deregistered company has two Notices of Motion on foot. The proceedings themselves commenced by the Plaintiff remain valid, but the applications made by the now deregistered company, in my view, have no legal effect. 23. Submissions were made by reference to a number of authorities. Mr Livingston took the Court to the decision of Slattery J in Amcus Pty Limited v Hurst Rentals Pty Ltd (No 2) [2010] NSWSC 239 and Mr Young SC made submissions as well by reference to that decision. It is not necessary to recite in any detail the nature of the submissions made. It is sufficient to record my view that there is not a legal requirement that there be some additional feature in existence at this point to effectively take the course which the Plaintiff seeks. 24. I do not consider that there is any legal difficulty with the relief sought by the Plaintiff. Indeed, having regard to the deregistered status of the company, the position is that it has ceased to exist and its property (other than any property held on trust) vests in ASIC: s.601AD Corporations Act 2001 (Cth). 25. Beyond that, one is left with the unhappy scenario which I have already summarised where Mr Leung is in prison in China, there is a warrant for his arrest in New South Wales, the company is deregistered and there is, at best, speculation that there would be a change in his circumstances which would see the company being reinstated with the prospect that the company's two Notices of Motion could be progressed in some meaningful way. 26. Added to that are the interests of the Plaintiff in having the litigation, which was commenced as long ago as 2015, progressed in this Court. Sections 56-60 Civil Procedure Act 2005 require the Court to attempt to progress this litigation in a reasonable fashion at this time. If the Court makes the orders as sought by the Plaintiff in its current Notice of Motion, and dismisses the 2016 and 2017 Notices of Motion of the company, it is accepted that the company would not be prevented from filing a fresh application seeking the same relief if the registration of the company was subsequently reinstated: s.91 Civil Procedure Act 2005. 27. In addition, if the Court makes these orders today, further steps would involve the listing of the Plaintiff's proceedings for directions later this month, with the need for the Plaintiff to file evidence to be relied upon at the final hearing, and with that hearing itself likely to take place not before some time significantly into 2019. 28. Accordingly, if Mr Leung finds himself liberated from his custody in China, and if he takes steps to have the company reinstated so that there is some meaningful purpose in the applications made by the company being pressed again, then it would be open to him and the reinstated company to make a fresh application. 29. As I have said, there are many qualifiers built into the propositions that would see such a situation arise. But the position of Mr Leung and the company are protected significantly by the capacity for a fresh application to be made. 30. There is a significant public interest in certainty with the progress of litigation of this type. 31. I note that the view which I have formed does not undermine any conclusion of N Adams J on 12 December 2017 when her Honour made findings with respect to a different Notice of Motion made in a significantly different context. 32. In the event that the Court determined to uphold the Plaintiff's application as contained in the Notice of Motion of 21 June 2018, the Court was provided with draft Short Minutes of Order to give effect to the decision of the Court and otherwise progress the litigation. 33. I am satisfied that it is appropriate to make the orders as sought by the Plaintiff in the Short Minutes of Order. I note that these will include an order that in the event that the company is reinstated, it is to pay the Plaintiff's costs of the Notice of Motion filed on 21 June 2018. That is an order similar to that made by Walton J on 30 July 2018. 34. Accordingly, I make the following orders: 1. The Notice of Motion filed by CC&B International Pty Limited on 9 August 2016 is dismissed. 2. The Amended Notice of Motion filed by CC&B International Pty Limited on 26 July 2017 is dismissed. 3. The proceedings are listed for directions before the Common Law Registrar at 9.00 am on 31 October 2018. 4. Liberty to restore on three days' written notice. 5. In the event that CC&B International Pty Limited is reinstated, it is to pay the Plaintiff's costs of the Notice of Motion filed on 21 June 2018. ********** 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: 18 October 2018