Commissioner of the Australian Federal Police

[2016] NSWSC 1522

Supreme Court

New South Wales

Medium Neutral Citation:	Commissioner of the Australian Federal Police [2016] NSWSC 1522
Hearing dates:	21 October 2016
Date of orders:	21 October 2016
Decision date:	21 October 2016
Jurisdiction:	Common Law
Before:	Beech-Jones J
Decision:	Restraining orders made in accordance with paras 3 to 6 of Short Minutes of Order. Balance of orders in the Short Minutes of Order made.
Catchwords:	PROCEEDS OF CRIME – restraining order – no question of principle
Legislation Cited:	Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) Proceeds of Crime Act 2002 (Cth)
Cases Cited:	Commissioner of Australian Federal Police v Minh Duc Pham [2015] NSWSC 1383
Category:	Procedural and other rulings
Parties:	Commissioner of the Australian Federal Police (Plaintiff)
Representation:	Counsel: M Short, solicitor (Plaintiff) Solicitors: Australian Federal Police (Plaintiff)
File Number(s):	2016/314751

EX TEMPORE Judgment

1. HIS HONOUR: This is an application for restraining orders under the Proceeds of Crime Act 2002 (Cth) ("the Act") in respect of four bank accounts, as well as for examination orders in respect of three persons who are connected to those accounts.

2. The Commissioner of the Australian Federal Police has requested that the Court consider the application without notice being given to the affected parties (see s 26(4) and 18(2)(ii)). On the basis of those requests I will consider the matter ex parte. For the sake of completeness, I note that given that the applications concern amounts standing in bank accounts which can be dissipated very quickly, I do not otherwise consider it is necessary that the affected persons be given notice. They will have the opportunity, if they so choose, to apply to the Court to set aside or vary any of the orders that will be made.

3. Section 19(1) of the Act obliges the Court with a proceeds jurisdiction to make a restraining order if four conditions are satisfied.

4. The first is that a proceeds of crime authority applies for the order. As I have stated, the application is made by the Commissioner of the Australian Federal Police, who is clearly such an authority.

5. The second is that there are reasonable grounds to suspect that the property the subject of the application is either the proceeds of a terrorism offence or any other indictable offence, a foreign indictable offence or an indictable offence of Commonwealth concern, or is otherwise an instrument of a serious offence. I will return to consider this condition shortly.

6. The third condition is that the application is supported by an affidavit of an authorised officer stating that the authorised officer suspects that the property is the proceeds of the offence and that the offence to which the order relates is a serious offence, the property is an instrument of the offence and includes the grounds on which the authorised officer holds the suspicion. In this case an affidavit has been sworn by Darren Burtenshaw who is a member of the Australian Federal Police and an authorised officer for this purpose. As I will explain, the affidavit sets out the grounds on which the authorised officer holds his suspicion.

7. The fourth condition is that the Court is satisfied that the authorised officer who made the affidavit holds the suspicion stated in the affidavit on reasonable grounds.

8. I will consider the second and fourth conditions together.

9. In his affidavit Mr Burtenshaw sets out the basis for his suspicion that the amounts standing in the four accounts which I will describe are wholly or partly the proceeds of an indictable offence.

10. The first two accounts are held in the name of Malcolm William Kerwin and Carole-Ann Kerwin. The third and fourth accounts are held in the name of Sherrel Kerwin. Based on tax return records and a coincidence in the addresses stated on the bank records that have been obtained, Officer Burtenshaw suspects, and does so on reasonable grounds, that Malcolm Kerwin and Carole-Ann Kerwin are spouses and that Sherrel Kerwin is a close family relation.

11. In relation to one of the accounts, the joint account owned by Malcolm and Carole-Ann Kerwin which number concludes with the "181", Officer Burtenshaw has obtained detailed banking records which reveal that between 2015 and 2016 numerous so-called non-threshold deposits, that is, deposits that appear to be just under the relevant reportable amount of $10,000 provided for in the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (“AMLCTFA Act”) were deposited into that account. In particular, he has identified ninety-four so-called “non-threshold deposits” totalling $724,681.65 deposited into that account between 9 March 2015 and 5 October 2016. Further, his investigation has revealed that, on or about 22 June 2016, $900,000 was transferred from that account to the other account held in the name of Malcolm William Kerwin and Carole-Ann Kerwin.

12. In Commissioner of Australian Federal Police v Minh Duc Pham [2015] NSWSC 1383, I held that property standing in a bank account which was deposited as part of a so-called structured transaction, that is, a transaction designed to avoid the reporting requirements of the AMLCTFA, constituted property that was either wholly or partly realised or derived, whether directly or indirectly, from the commission of an offence constituted by the structuring of transactions to avoid the reporting requirement (at [37]). The consequence of that conclusion was that the property constituted by the chose in action, being the amount standing in the bank account, was the proceeds of one or more indictable offences for the purposes of s 49(1)(c)(i) of the Act.

13. It follows that where the material indicates that deposits have been made in a structured manner designed to avoid the reporting requirement, that there are reasonable grounds to suspect the amount standing in that account is the proceeds of at least an indictable offence of Commonwealth concern and that Officer Burtenshaw's suspicions, as stated in the affidavit, are held on reasonable grounds.

14. Further, in relation to the second account held by Malcolm Kerwin and Carole-Ann Kerwin, the fact that it appears that the money standing in that account was derived from the money standing in the first account which I have described means that the same conclusion applies in relation to that account.

15. Accordingly, I will make restraining order in respect of those two accounts.

16. In relation to Sherrel Kerwin, Officer Burtenshaw has undertaken a similar analysis in relation to an account held by her that concludes with the number "058". In particular, he has identified one hundred and fifty non-threshold deposits totalling $841,000.98 made into that account between 18 November 2014 and 6 October 2016. An extract from the bank records indicates that on 30 March 2015, fourteen non-threshold deposits, the bulk of which were just under the reportable amount of $10,000, were made into that account.

17. Further, the officer has confirmed that on 22 June 2016 the sum of $1,000,000 was transferred from that account to the other account held in the name of Sherrel Kerwin that concludes with the numbers "989".

18. Otherwise, I note that Officer Burtenshaw has obtained the taxation records of each of Malcolm, Carole-Ann and Sherrel Kerwin, as well as the daughter of Malcolm and Carole-Ann Kerwin. It suffices to state that nothing in those tax records suggests that they could have legitimately acquired the amount of income that has been deposited into their accounts.

19. It follows that the suspicion held by Officer Burtenshaw that the money standing in the two accounts in the name of Sherrel Kerwin is the proceeds of at least an offence of Commonwealth concern is held on reasonable grounds. I will make a restraining order in respect of those accounts.

20. Section 38 of the Act empowers the Court to order the Official Trustee to take custody and control of property covered by a restraining order. I will make orders under that section in respect of the accounts.

21. Finally, s 180 of the Act empowers the Court, where a restraining order is in force, to make an order for the examination of any person whose property is, or who claims an interest in property that is, the subject of a restraining order or is otherwise the spouse or de facto partner of such a person about the affairs of a person. Given what I have already described, I will make an examination order in respect of each of Malcolm William Kerwin, Carole-Ann Kerwin and Sherrel Kerwin enabling them to be examined about the affairs of themselves and of each other.

22. Accordingly, upon the plaintiff providing on behalf of the Commonwealth the usual undertaking as to damages, I will make orders 3 to 6 in the short minutes. I will otherwise make the balance of the orders in the short minutes of order.

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