Citation: New South Wales Crime Commission v Shamaileh [2013] NSWSC 258
Court: Supreme Court of New South Wales
Date: 26 March 2013
Judge(s): Latham J
Background
The New South Wales Crime Commission obtained a restraining order in 2006 over funds held by the first defendant in an Arab Bank Australia account. The restrained funds traced back through a series of transfers originating from a $400,000 NAB loan obtained by the second defendant using a fraudulent loan application, including false payslips and false claims of employment.
The first defendant, an Australian-based account holder who resided in Jordan, brought a notice of motion seeking to vary the restraining order. She sought release of funds to cover reasonable legal expenses and $20,000 for travel and living expenses so she could attend the Australian proceedings.
The central question was whether the restrained funds met the statutory criteria permitting release under the Criminal Assets Recovery Act 1990 (the Act), and whether the restrictions in that Act barred the defendant's claims.
Legal Issues
- Whether the restrained funds in the Arab Bank Australia account constituted "illegally acquired property" under the Act
- Whether the court was satisfied the defendant could not meet legal expenses from unrestrained property, as required by s 16A(1)(a)
- Whether the defendant had taken all reasonable steps to bring her interests in property within the court's jurisdiction, as required by s 16A(1)(d)
- Whether the defendant had established an entitlement to reasonable living and travel expenses under s 10B(3)(a)
Decision
Issue 1: Whether the funds are illegally acquired property
Latham J rejected a threshold submission by the defendant that the Commission had to show she personally illegally acquired the Lansvale property before the restrained funds could be characterised as illegally acquired. The court drew a clear distinction between the Lansvale property (the subject of the original fraudulent loan) and the funds in the ABA account (the subject of the restraining order). Under s 7(2) of the Act, an interest in property includes money, and under s 9(4), an interest is illegally acquired if it constitutes all or part of the proceeds of illegal activity. The fraudulent NAB loan application constituted an offence under s 178BB of the Crimes Act 1900, and the successive transfers of funds derived from that loan carried the character of illegally acquired property. Latham J was satisfied the restrained funds fell squarely within that definition, which independently barred any provision for legal expenses under s 16A(1)(b).
Issue 2: Whether the defendant could meet legal expenses from unrestrained property (s 16A(1)(a))
Even setting aside the illegally acquired property finding, the court was not satisfied the defendant had established she could not access other funds for legal expenses. Evidence from the defendant's own affidavits disclosed that her family held jointly owned lands, cash exceeding US$100,000 in the family home, and other financial assets of indeterminate value. No satisfactory explanation was provided as to why those assets could not be liquidated, or used as security for a loan, to fund legal expenses. The court noted that inconvenience alone is not a sufficient justification for failure to access unrestrained property.
Issue 3: Whether all reasonable steps had been taken to bring assets within jurisdiction (s 16A(1)(d))
The court found no evidence that the defendant had taken any reasonable steps to bring her assets within the court's jurisdiction. Reluctance to liquidate assets due to potential loss of capital gain did not establish that doing so would be unreasonable. This provided a further basis for refusing any allowance for legal expenses.
Issue 4: Living and travel expenses
The Act does not recognise a claim for reasonable travel expenses, which disposed of that component of the application. On living expenses, the court noted the discretionary nature of any allowance under s 10B(3)(a) and found the defendant had not established on the balance of probabilities that she was unable to meet her living expenses from her income and assets in Jordan. The financial information before the court dated from 2009, which was of limited relevance to the application heard in 2013.
Orders Made
- Notice of motion dismissed
Key Takeaways
- Under the Criminal Assets Recovery Act 1990, an interest in property includes money, and restrained funds constitute illegally acquired property where they are traceable as proceeds of illegal activity, regardless of whether the defendant personally committed the underlying offence.
- Section 16A(1)(b) independently bars any court provision for legal expenses where the interest in the restrained property is illegally acquired property.
- A defendant seeking release of funds for legal expenses under s 16A(1)(a) must satisfy the court they cannot access unrestrained property; the existence of jointly held family assets of indeterminate value, without explanation of why they cannot be accessed or liquidated, is insufficient to meet that threshold.
- Inconvenience and reluctance to liquidate assets due to potential capital loss do not constitute reasonable grounds for failing to bring assets within the court's jurisdiction under s 16A(1)(d).
- The Act does not recognise a claim for reasonable travel expenses as a category of allowable expenditure under s 10B(3), and stale financial evidence (here, four years old) carries limited weight in establishing an inability to meet living expenses at the time of the application.
Legislation and Cases Referenced
Legislation
- Criminal Assets Recovery Act 1990
- Crimes Act 1990
Cases
- Not stated