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Supreme Court 5 March 2015

NSW Crime Commission v Christopher Mihelic

[2015] NSWSC 166

Drugs
CRIMINAL LAW CONFISCATION OF PROCEEDS OF CRIME QUESTION OF REASONABLE SUSPICION RESTRAINING ORDERS MADE EX PARTE

Citation: [2015] NSWSC 166
Court: Supreme Court of New South Wales
Date: 5 March 2015
Judge(s): Wilson J

Background

The NSW Crime Commission applied by summons for restraining orders over property belonging to a defendant suspected of serious drug-related offences. The application was brought under s 10A of the Criminal Assets Recovery Act 1990 (NSW), which permits such applications to be heard without notice to the affected person (that is, on an ex parte basis).

The Commission's application was supported by an affidavit from a forensic accountant employed by the Commission, who held the status of an "authorised officer" under the Act. She deposed that, based on material obtained through a NSW Police investigation, she suspected the defendant of supplying prohibited drugs, including in commercial and large commercial quantities, contrary to ss 25(1) and 25(2) of the Drug Misuse and Trafficking Act 1985 (NSW).

The property subject to the application included a residential strata unit held jointly with another person, and funds held across four bank accounts.

  • Whether the suspicions held by the authorised officer were reasonably held, satisfying the threshold under s 10A(5) of the Act for the grant of a restraining order.
  • Whether it was appropriate to make the restraining order without first giving notice to the defendant under s 10A(4) of the Act.

Decision

Wilson J reviewed the evidentiary material placed before the Court, including charge details and a statement of facts relating to the defendant's alleged drug activity. Her Honour was satisfied that the suspicions held by the authorised officer were reasonably held. Under s 10A(5), satisfaction of that threshold obliges the Court to make a restraining order.

On the question of notice, s 10A(4) raises the question of whether the defendant should be informed before any order is made. The Court accepted evidence that property of the kind listed in the schedules can be rapidly disposed of by those with an inclination to do so. In those circumstances, the Court was satisfied it was appropriate to proceed without giving prior notice to the defendant.

The Court also confirmed that the defendant was a resident of New South Wales and that the relevant property was located in New South Wales, both of which were necessary preconditions to the exercise of the power.

Orders Made

  • Pursuant to s 10A of the Criminal Assets Recovery Act 1990, no person (other than a registered mortgagee acting within its rights) is to dispose of, attempt to dispose of, or otherwise deal with any interest in property belonging to the defendant, including a strata unit in Ramsgate and funds held in four ANZ bank accounts.
  • The defendant is to be examined on oath before a Registrar of the Court concerning his affairs, including the nature and location of any property in which he has an interest (s 12(1)(b)(i)).
  • A named associated person is also to be examined on oath before a Registrar concerning the defendant's affairs (s 12(1)(b)(ii)).
  • Leave granted to the Commission to obtain examination dates from the Registry.
  • The defendant is to furnish a sworn statement to the Commission within 21 days of being served with the orders, setting out full particulars of his property interests and liabilities (s 12(1)(c1)).
  • Liberty granted to both parties to apply on three days' notice.

Key Takeaways

  • Under s 10A(5) of the Criminal Assets Recovery Act 1990, once a court is satisfied that an authorised officer's suspicion is reasonably held, the court is required to make a restraining order. There is no discretion to refuse.
  • Reasonable suspicion may be established through an authorised officer's affidavit deposing to their review of police investigation material, charge details, and a statement of facts, without requiring a higher standard of proof.
  • The threshold is suspicion, not proof of guilt. The Act operates at a preliminary stage, well before any criminal conviction.
  • Where evidence establishes that assets of the kind in question can be rapidly disposed of, the Supreme Court may dispense with the requirement to give prior notice to the defendant and make the restraining order immediately.
  • Ancillary orders requiring the defendant and associated persons to submit to examination and to furnish sworn statements of property interests and liabilities are available alongside the primary restraining order.

Legislation and Cases Referenced

Legislation:
- Criminal Assets Recovery Act 1990 (NSW), ss 4(1), 6, 6(2)(d), 7, 10A, 10A(4), 10A(5), 12(1)(b)(i), 12(1)(b)(ii), 12(1)(c1)
- Drug Misuse and Trafficking Act 1985 (NSW), ss 25(1), 25(2)

Cases cited: No cases were cited in the judgment.