Citation: Commissioner of the Australian Federal Police v Bigatton [2020] NSWSC 245
Court: Supreme Court of New South Wales
Date: 10 March 2020
Judge: Cavanagh J
Background
The Commissioner of the Australian Federal Police applied to the Supreme Court for restraining orders, custody and control orders, and ancillary orders under the Proceeds of Crime Act 2002 (Cth) against three defendants: a named individual (the first defendant), a company he was associated with (the second defendant), and a second individual (the third defendant). The proceedings arose from alleged criminal conduct connected to the trading and investment of bitcoin through a scheme known as BitConnect, with the first defendant said to have acted as the Australian National Promoter of that platform.
The plaintiff alleged two categories of offending. The first was a Corporations Act offence under s 601ED(5), relating to the operation of an unregistered managed investment scheme. The second was a money laundering offence under s 400.9(1) of the Criminal Code schedule.
The matter came before the Court urgently because asset preservation orders made by the Federal Court at ASIC's request were set to expire on 13 March 2020. The first defendant appeared in person, applied for an adjournment to obtain legal representation, but was ultimately unable to confirm representation before the expiry date. The Court proceeded to hear the matter with the first defendant self-represented.
Legal Issues
- Whether the statutory preconditions under s 18(1) of the Proceeds of Crime Act 2002 (Cth) were satisfied, in particular whether there were reasonable grounds to suspect that the first defendant had committed a serious offence
- Whether the affidavit requirements under s 18(3) of the Act had been met by the authorised officer's affidavit
- Whether the Court had proceeds jurisdiction to make the orders sought
- Whether the adjournment application by the first defendant should be granted in the circumstances
Decision
Cavanagh J confirmed that the Supreme Court held proceeds jurisdiction within the meaning of ss 18(1), 335, and 338 of the Proceeds of Crime Act 2002 (Cth), given its jurisdiction over indictable offences. His Honour also confirmed that the plaintiff qualified as a proceeds of crime authority, and that the relevant affidavit was sworn by an authorised officer as required under the Act.
On the central question of the suspicion threshold, the Court applied the well-established principles from George v Rockett (1990) 170 CLR 104. Suspicion, as that decision explains, requires more than idle wondering but does not require proof on the balance of probabilities or beyond reasonable doubt. A factual basis must exist that would create in the mind of a reasonable person an actual apprehension or mistrust. The Court emphasised that this threshold is not high.
The Court was satisfied that the affidavit filed by the AFP special member met the requirements of s 18(3), and that the authorised officer held the stated suspicions on reasonable grounds. On that basis, the Court was obliged by s 18(1) to make the restraining orders sought. The adjournment application was refused given the urgency created by the imminent expiry of the Federal Court preservation orders and the first defendant's inability to confirm that legal representation would be available within the relevant timeframe.
Orders Made
- Restraining orders under ss 18(2)(a), (c) and 19 of the Proceeds of Crime Act 2002 (Cth) in respect of property specified in Schedules 1 to 4 of the summons, taking effect from 5:00pm on Friday 13 March 2020
- Custody and control orders under s 38 of the Act vesting custody and control of specified property in the Official Trustee in Bankruptcy
- Ancillary orders, including orders requiring the defendants to provide particulars of their property, liabilities, and dealings with property since 1 July 2017
- Proceedings adjourned for directions before the Common Law Registrar at 9:00am on 29 April 2020
- Liberty to restore on three days' written notice
Key Takeaways
- Under s 18(1) of the Proceeds of Crime Act 2002 (Cth), a court with proceeds jurisdiction is obliged to make restraining orders once the statutory preconditions are satisfied; the court has no residual discretion to refuse.
- The threshold of "reasonable grounds to suspect" is materially lower than proof on the balance of probabilities, requiring only a factual basis sufficient to create an actual apprehension or mistrust in the mind of a reasonable person, consistent with George v Rockett.
- Suspicion, as confirmed by the High Court in George v Rockett, is distinct from belief: the facts grounding a suspicion may be wholly insufficient to ground a belief, yet the suspicion remains valid if there is some objective factual basis for it.
- Urgency created by an imminent expiry of existing preservation orders was a material factor in the Court's refusal to adjourn, even where the respondent was unrepresented and seeking legal aid.
- Restraining orders made under the Proceeds of Crime Act 2002 (Cth) can extend to property held by associated companies and individuals, not only the person directly suspected of the offence.
Legislation and Cases Referenced
Legislation
- Proceeds of Crime Act 2002 (Cth), ss 18, 19, 24, 31, 38, 39, 329, 335, 338
- Corporations Act 2001 (Cth), ss 9, 601EB, 601ED
- Criminal Code Act 1995 (Cth), Sch 1 s 400.9
Cases
- George v Rockett (1990) 170 CLR 104; [1990] HCA 26
- Application of the Commissioner of the Australian Federal Police; In the matter of Rifai [2019] NSWSC 914
- Brookfield Multiplex Ltd v International Litigation Funding Partners Pte Ltd (2009) 180 FCR 11; [2009] FCAFC 147