Citation: Commissioner of the Australian Federal Police v Yuan [2026] NSWSC 1050
Court: Supreme Court of New South Wales
Date: 4 September 2026 (reasons published; orders made 19 December 2025)
Judge(s): McGuire J
Background
The Commissioner of the Australian Federal Police applied urgently and without notice for asset preservation orders over bank accounts held in the names of two corporate defendants. The first defendant had been arrested and charged with recklessly dealing with proceeds of crime valued at $1,000,000 or more, contrary to s 400.3(2A) of the Criminal Code (Cth). He was also suspected of a further money laundering offence under s 400.9(1) of the Code.
The Commissioner alleged that the first defendant effectively controlled both corporate entities and their associated bank accounts, and that those accounts held funds suspected to be proceeds of the charged offences. Because the companies were connected to the first defendant, they were also considered likely to be on notice of the proceedings.
At the time of the application, the relevant banks had voluntarily frozen the accounts at their own discretion. The Commissioner sought formal restraining orders, along with custody and control orders vesting management of the frozen assets in the NSW Trustee and Guardian, before the banks could unfreeze the accounts without notice to the AFP.
Legal Issues
- Whether the application could properly proceed on an urgent ex parte basis (that is, without prior notice to the defendants)
- Whether the procedural prerequisites under the Proceeds of Crime Act 2002 (Cth) were satisfied to justify dispensing with the usual notice requirement under s 26(1)
- Whether the statutory criteria under s 18 of the Act for a restraining order in respect of persons suspected of committing serious offences were satisfied
- Whether the statutory criteria under s 19 of the Act for a restraining order in respect of property suspected to be proceeds or an instrument of an offence were satisfied
- Whether it was appropriate to make custody and control orders under s 38 of the Act vesting the property in the Official Trustee
Decision
Issue 1: Urgency and ex parte basis
McGuire J was satisfied that the matter warranted both urgent and ex parte treatment. All three defendants were likely already on notice of the criminal investigation and the Commissioner's steps to freeze assets. More critically, the bank freezes were entirely discretionary and could be lifted at any time, with little or no notice to the AFP. That combination created a genuine and immediate risk that funds would be dissipated if the defendants became aware of the application before orders were made. The Commissioner offered the usual undertaking as to damages, which the court noted was of particular importance given the potential interference with the defendants' property rights.
Issue 2: Dispensing with notice under s 26
Section 26(1) of the Act ordinarily requires a responsible authority to give written notice of a restraining order application to the property owner. Section 26(4), however, requires the court to consider an application without notice if the responsible authority so requests. The Commissioner, as a proceeds of crime authority and responsible authority within the meaning of the Act, made that request. McGuire J made the order accordingly.
Issue 3: Restraining orders under s 18 (persons suspected of serious offences)
Section 18(1) obliges the court to make a restraining order when the specified criteria are met. There is no residual discretion once those criteria are satisfied. McGuire J found each criterion was made out: the Commissioner is a proceeds of crime authority; there were reasonable grounds to suspect the defendants had committed serious offences; the affidavit requirements were satisfied; and the authorised officer held the relevant suspicions on reasonable grounds. The court applied the well-established standard from R v Rondo, which requires more than a mere possibility but less than a belief, grounded in some factual basis with probative value.
Issue 4: Restraining orders under s 19 (property suspected to be proceeds or instrument)
The threshold for s 19 mirrors the low standard applicable under s 18, as confirmed in The Commissioner of the Australian Federal Police v Tjongosutiono [2018] NSWSC 48. If reasonable grounds for suspicion exist, the order must be made and no discretion arises. McGuire J applied the same reasoning and evidence as under s 18 and made the further restraining orders over the property listed in Schedules 1 and 2 of the Summons, being the chose in action (the debt owed by each bank to the relevant account holder) held in the names of the two corporate defendants.
Issue 5: Custody and control orders under s 38
Section 38 permits the court to order the Official Trustee to take custody and control of property covered by a restraining order. Having made the restraining orders and finding no reason in the material before it to decline, McGuire J made the custody and control orders in respect of the Schedules 1 and 2 property.
Orders Made
No orders were made in this decision.
The judgment records that orders were made on 19 December 2025 in terms of draft short minutes of order, signed, dated, sealed, and provided to the Commissioner's solicitor. The specific terms of those orders are not reproduced in the provided text.
Key Takeaways
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Under ss 18 and 19 of the Proceeds of Crime Act 2002 (Cth), once the statutory criteria are satisfied the court has no residual discretion: a restraining order must be made. The threshold is a "reasonable suspicion," which requires more than a possibility but less than a belief, and must rest on material with some probative value.
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Section 26(4) of the Act provides a mandatory exception to the usual notice requirement: where the responsible authority requests that the application be heard without notice, the court must consider it on that basis without requiring the authority to separately justify the departure from s 26(1).
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Voluntary bank freezes do not constitute adequate protection of suspected proceeds, because those freezes can be lifted at the bank's discretion and without notice to the AFP. That vulnerability can ground a finding of dissipation risk sufficient to support urgent ex parte treatment.
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Effective control of corporate accounts, even in the absence of a formal legal or equitable interest, can satisfy the definition of control under s 337 of the Act, and property held in corporate names may be included within the scope of a restraining order on that basis.
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The Supreme Court confirmed that the approach to "reasonable grounds to suspect" articulated in R v Rondo applies to the s 18 and s 19 inquiries, and that suspicion may be founded on hearsay or otherwise inadmissible material, provided that material carries some probative weight.
Legislation and Cases Referenced
Legislation
- Criminal Code (Cth) , ss 400.3(2A), 400.9(1)
- Proceeds of Crime Act 2002 (Cth), ss 18, 19, 26, 38, 329, 330, Pt 6-2
- Uniform Civil Procedure Rules 2005 (NSW) , r 6.15
Cases
- George v Rockett (1990) 170 CLR 104; [1990] HCA 26
- Hussien v Chong Fook Kam (1970) AC 942
- R v Rondo [2001] NSWCCA 540; (2001) A Crim R 562
- The Commissioner of the Australian Federal Police v Tjongosutiono [2018] NSWSC 48