Citation: NSW Crime Commission v O B & Anor [2002] NSWSC 633
Court: Supreme Court of New South Wales, Common Law Division
Date: 18 July 2002
Judge(s): Sperling J
Background
The first defendant (the applicant) was arrested in August 2001 and charged with multiple drug-related offences, including four counts of supplying cocaine in an indictable quantity, supplying amphetamine, and offences relating to drug premises. He had been held in custody since arrest, with bail refused, and committal proceedings were pending in the Wollongong Local Court.
On the day of his arrest, the NSW Crime Commission obtained a restraining order under the Criminal Assets Recovery Act 1990, freezing all of the applicant's property interests. The restrained property included funds held in two bank accounts, one with the Arab Bank of Australia and one with ANZ Bank.
The applicant applied to the Supreme Court to vary the restraining order to allow him to draw on those frozen funds to meet his legal defence costs. The Commission opposed the application, arguing that several statutory restrictions barred any such order. A non-publication order was made, so the parties are identified only by initials in the judgment.
Legal Issues
- Whether the restrained bank account funds constituted "illegally acquired property" under section 16A(1)(b) of the Criminal Assets Recovery Act 1990, which would prohibit any order releasing them for legal expenses
- Whether the applicant had demonstrated that he could not meet his legal expenses from unrestrained property, as required by section 16A(1)(a)
- Whether the applicant had taken all reasonable steps to bring his property within the Court's jurisdiction, as required by section 16A(1)(d)
Decision
The central question before Sperling J was whether the funds in the applicant's bank accounts were illegally acquired property. Under section 9 of the Act, property is illegally acquired if it was wholly or partly acquired using illegally obtained money. Critically, if any illicitly obtained funds had been contributed to a bank account, the entirety of that account constitutes illegally acquired property.
The Commission led evidence from police officers, intercepted telephone calls, and video recordings pointing to a drug dealing operation conducted at premises associated with the applicant. The applicant claimed the bank funds originated from money sent to him by family members in Lebanon and Syria. However, Sperling J found the applicant's credibility to be seriously undermined in cross-examination, and no independent evidence corroborated his account of the funds' origin.
Sperling J applied the principle from Jones v Dunkel: the failure to call witnesses who could have authenticated the applicant's explanation permitted the court to draw an adverse inference. The applicant's brother and other intermediaries who had allegedly transmitted the funds were within the applicant's knowledge and connections, yet were not called. The Commission, by contrast, had no realistic means of locating those overseas parties.
Sperling J was satisfied, on the evidence as a whole, that the funds in the bank accounts were substantially the product of illicit drug dealing and therefore constituted illegally acquired property within the meaning of section 16A(1)(b). That finding alone was sufficient to refuse the application, and it was unnecessary to resolve the other grounds relied upon by the Commission.
Orders Made
- The application to vary the restraining order to allow withdrawal of funds for legal defence costs was refused.
- The applicant was ordered to pay the Commission's costs.
Key Takeaways
- Under section 16A(1)(b) of the Criminal Assets Recovery Act 1990, a court cannot permit restrained property to be used for legal defence costs if it is satisfied that the relevant property is illegally acquired. This operates as an absolute bar, not a discretionary consideration.
- Where any illegally obtained funds have been deposited into a bank account, the entire account may constitute illegally acquired property under section 9 of the Act, not merely the tainted portion.
- The burden of proving that restrained property is illegally acquired rests on the Commission, but the evidentiary burden can shift to the applicant where the Commission establishes a sufficiently compelling prima facie case.
- The Jones v Dunkel principle applied against the applicant in these circumstances: his failure to call witnesses within his own sphere who could have corroborated his explanation for the funds entitled the court to draw an inference that the evidence, if called, would not have assisted him.
- A non-publication order under section 62 of the Act was available and was granted to protect the applicant's identity during proceedings that were separate from his criminal trial.
Legislation and Cases Referenced
Legislation
- Criminal Assets Recovery Act 1990 (NSW): ss 5, 9, 10, 16A, 62
- Drug Misuse and Trafficking Act 1985 (NSW): Schedule 1
Cases
- Briginshaw v Briginshaw (1938) 60 CLR 336
- Jones v Dunkel (1959) 101 CLR 298
- Sandford (1994) 72 A Crim R 160