Citation: [2020] NSWSC 247
Court: Supreme Court of New South Wales
Date: 12 March 2020
Judge(s): Cavanagh J
Background
The NSW Crime Commission applied ex parte (without notifying the defendants) for restraining orders under the Criminal Assets Recovery Act 1990 (NSW) over property belonging to two individual defendants and a company associated with them. The application arose from allegations that the defendants had engaged in serious crime-related activity involving the cultivation and supply of cannabis.
Police executing a search warrant on a rural property at Marulan located 145 cannabis plants in a fenced paddock and a further 97 plants inside two rooms of the residence. Both individual defendants had been charged with offences under the Drug Misuse and Trafficking Act 1985 (NSW), including possession, cultivation and supply-related offences, and were said to have made admissions regarding ownership of the property and its contents.
The property sought to be restrained included a box trailer, motor vehicles, land, funds in a bank account, and a rural property at Wollondilly held by the corporate defendant, Innovative Flowers and Gifts Pty Limited.
Legal Issues
- Whether there were reasonable grounds for the authorised officer's suspicions that the defendants had engaged in serious crime-related activities within the meaning of the Criminal Assets Recovery Act 1990 (NSW), so as to enliven the obligation under s 10A(5) to make restraining orders
- Whether the application should proceed ex parte, without notice to the defendants
- Whether orders for examination on oath and for sworn statements of assets and liabilities should also be made
Decision
Issue 1: Reasonable grounds for suspicion under s 10A(5)
The application was supported by an affidavit from the Commission's Director Assessments, an authorised officer under the Act. She deposed to her suspicion that both individual defendants had engaged in serious crime-related activities constituting serious criminal offences under s 6(2)(b) of the Act, drawing on police facts sheets, COPS database records and searches of the RMS, LRS and SAI Global databases (at [7]-[13]). Cavanagh J was satisfied that reasonable grounds existed for those suspicions, and that s 10A(5) therefore required the making of the restraining orders (at [17]-[18]).
Issue 2: Proceeding ex parte
The authorised officer deposed to her belief that, in the absence of a restraining order, persons may attempt to dispose of property quickly to defeat the Act's operation. She stated that the defendants had not been given notice, having regard to the nature of their alleged activities (at [14]). Cavanagh J accepted those reasons as a proper basis for proceeding ex parte and declined to exercise the discretion under s 10A(4) to require notice to be given (at [15]-[16], [19]).
Issue 3: Ancillary examination and disclosure orders
The Court was also satisfied it was appropriate to make orders under ss 12(1)(b) and 12(1)(b1) requiring each individual defendant to be examined on oath before a Registrar concerning their own affairs and those of the corporate defendant. Orders were also made requiring all three defendants to furnish sworn statements setting out full particulars of their interests in property and liabilities (at [2]-[3], [19]).
Orders Made
- Restraining orders under s 10A prohibiting any person from disposing of or dealing with the interests in property of the first defendant, the second defendant, and the corporate defendant respectively, covering the property specified in Schedules One through Four
- Orders under ss 12(1)(b) and 12(1)(b1) requiring both individual defendants to be examined on oath before a Registrar concerning their own affairs, the affairs of the other individual defendant, and the affairs of the corporate defendant
- Leave granted to the Commission to obtain examination dates from the Registry
- Orders under s 12(1)(c1) requiring each defendant to furnish a sworn statement of property interests and liabilities within 21 days of service of the orders
- Proceedings listed for mention before the Common Law Registrar on 15 June 2020
- Commission directed to serve a copy of the judgment and short minutes of order
Key Takeaways
- Under s 10A(5) of the Criminal Assets Recovery Act 1990 (NSW), the Supreme Court is required to make a restraining order once it is satisfied that reasonable grounds exist for an authorised officer's suspicion of serious crime-related activity; the threshold is one of reasonable grounds for suspicion, not proof of the underlying offences (at [17]-[18]).
- An ex parte application will be appropriate where an authorised officer deposes to a genuine belief that prior notice could enable defendants to dissipate assets, particularly where the alleged activity involves serious drug offences (at [14]-[16]).
- Cannabis cultivation and supply offences under s 23 of the Drug Misuse and Trafficking Act 1985 (NSW) fall within the definition of "serious criminal offence" under s 6(2)(b) of the Criminal Assets Recovery Act 1990 (NSW), and can ground restraining orders over a wide range of property types (at [8], [11]-[12]).
- The corporate defendant's property was also restrained, with the court noting s 55 of the Act which addresses the state of mind attributable to a body corporate for the purposes of the confiscation regime (at [11]-[12]).
- Restraining orders under the Act do not prevent affected persons from seeking relief: s 10C preserves the right to apply to have an order set aside, and the orders also provided liberty to apply on three days' notice (at [20]).
Legislation and Cases Referenced
Legislation
- Criminal Assets Recovery Act 1990 (NSW), Pt 4, ss 4, 6, 7, 10A, 10C, 12, 55
- Drug Misuse and Trafficking Act 1985 (NSW), s 23
Cases
- Not stated