New South Wales Crime Commission v Vu [2009] NSWCA 349 (22 October 2009)

Last Updated: 23 October 2009

NEW SOUTH WALES COURT OF APPEAL

CITATION:
New South Wales Crime Commission v Vu [2009] NSWCA 349


FILE NUMBER(S):
40101/09

HEARING DATE(S):
8 September 2009

JUDGMENT DATE:
22 October 2009

PARTIES:
New South Wales Crime Commission (Appellant)
Quoc Hoi Vu (First respondent)
Sinh Thi Tran (Second respondent)


JUDGMENT OF:
Spigelman CJ Allsop P Hodgson JA

LOWER COURT JURISDICTION:
Supreme Court

LOWER COURT FILE NUMBER(S):
16814/08

LOWER COURT JUDICIAL OFFICER:
Adams J

LOWER COURT DATE OF DECISION:
23 December 2008


COUNSEL:
I Temby QC with P Singleton (Appellant)
N/A (First respondent)
N/A (Second respondent)


SOLICITORS:
New South Wales Crime Commission (Appellant)
N/A (First respondent)
N/A (Second respondent)


CATCHWORDS:
APPEAL - nature of appeal indicated by whether first instance decision best characterised as an exercise of ‘discretion’ or ‘judgment’ - ex parte nature indicates first instance determination should be treated in the same way as an inference from facts - principles in Warren v Coombes applicable
CRIMINAL LAW - procedure - confiscation of proceeds of crime and related matters - restraining or freezing order - evidence and procedure - requirements of affidavit under s 10 Criminal Assets Recovery Act 1990
CRIMINAL LAW - procedure - confiscation of proceeds of crime and related matters - restraining or freezing order - evidence and procedure - police officer issuing charge not sufficient to establish reasonable grounds for suspicion under s 10 Criminal Assets Recovery Act 1990
EVIDENCE - admissibility and relevancy - hearsay - interlocutory proceedings - need not identify the ultimate source of the statement
WORDS & PHRASES - “reasonable grounds for suspicion”.

LEGISLATION CITED:
Criminal Assets Recovery Act 1990
Drug Misuse and Trafficking Act 1985
Evidence Act 1995
Uniform Civil Procedure Rules 2005


CASES CITED:
Certain Lloyds Underwriters v Giannopoulos [2009] NSWCA 56
Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47; (2000) 203 CLR 194
Costa v Public Trustee of NSW [2008] NSWCA 223; (2008) 1 ASTLR 56
Deputy Commissioner of Taxation v Ahern (No 2) (1988) 2 Qd R 158
Director of Public Prosecutions v El Mawas [2006] NSWCA 154; (2006) 66 NSWLR 93
Dwyer v Calco Timbers Pty Ltd [2008] HCA 13; (2008) 234 CLR 124
Elfar v New South Wales Crime Commission [2009] NSWCA 348
George v Rockett [1990] HCA 26; (1990) 170 CLR 104
Goodman v Windeyer [1980] HCA 31; (1980) 144 CLR 490
Hardie Rubber Co Pty Ltd v General Tyre & Rubber Co [1973] HCA 66; (1971) 129 CLR 521
House v The King [1936] HCA 40; (1936) 55 CLR 499
International Finance Trust Company Limited v New South Wales Crime Commission [2008] NSWCA 291; (2008) 251 ALR 479
New South Wales Crime Commission v Ollis [2006] NSWCA 76; (2006) 65 NSWLR 478
New South Wales Crime Commission v Sun [2009] NSWSC 6
New South Wales Crime Commission v Tucker [2009] NSWSC 1049
Norbis v Norbis [1986] HCA 17; (1985) 161 CLR 513
Perpetual Trustee Company Ltd v Khoshaba [2006] NSWCA 41
Proctor Gamble Australia Pty Ltd v Medical Research Pty Ltd [2001] NSWSC 183
Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201
Warren v Coombes [1979] HCA 9; (1979) 142 CLR 531
Wily v Terra Cresta Business Solutions Pty Ltd [2006] NSWSC 949

TEXTS CITED:


DECISION:
1 Leave to appeal is granted and the appeal allowed.
2 Pursuant to s 10 of the Criminal Assets Recovery Act 1990 no person (other than any registered mortgagee dealing with its right to do so under the registered mortgage) is to dispose of, or attempt to dispose of, or otherwise deal with or attempt to otherwise deal with any interest in property (within the meaning of “interest in property” as defined in s 7 of the Criminal Assets Recovery Act 1990) of Quoc Hoi Vu, including the interest in property in the property described in Schedule 1 hereto.
3 Pursuant to s 10 of the Criminal Assets Recovery Act 1990 no person (other than any registered mortgagee dealing with its right to do so under the registered mortgage) is to dispose of, or attempt to dispose of, or otherwise deal with or attempt to otherwise deal with any interest in property (within the meaning of “interest in property” as defined in s 7 of the Criminal Assets Recovery Act 1990) of Sinh Thi Tran, including the interest in property in the property described in Schedule 1 hereto.
4 Pursuant to s 12(1) of the Criminal Assets Recovery Act 1990 there shall be an examination on oath of the following persons before a Registrar concerning their own affairs and the affairs of each other including the nature and location of any property in which any of them have any interest:
(a) Quoc Hoi Vu; and
(b) Sinh Thi Tran.
5 Leave be granted to the Plaintiff to approach the Court to appoint a time and date for the examinations ordered in Order 5 above.
6 Pursuant to s 12(1)(c1) of the Criminal Assets Recovery Act 1990 Quoc Hoi Vu shall furnish to the plaintiff, within 21 days after service of a sealed copy of these orders on Quoc Hoi Vu, a statement verified by oath of Quoc Hoi Vu setting out the particulars in Schedule 2 hereto.
7 Pursuant to s 12(1)(c1) of the Criminal Assets Recovery Act 1990 Sinh Thi Tran shall furnish to the plaintiff, within 21 days after service of a sealed copy of these orders on Sinh Thi Tran, a statement verified by oath of Sinh Thi Tran setting out the particulars in Schedule 2 hereto.
8 Liberty is granted to the appellant, the first respondent and the second respondent to apply to a judge of the Common Law Division of the Supreme Court of New South Wales on three days notice which liberty can be exercised to seek an order varying orders 2-7 hereof.
9 Pursuant to r 36.4(3) of the Uniform Civil Procedure Rules 2005 these orders are to take effect as of the date hereof.
10 Pursuant to s 6 of the Suitors’ Fund Act 1951 an indemnity certificate be granted to the first respondent and the second respondent in respect of this appeal, if otherwise entitled.
Schedule One
The whole of the property described as Lot B in Deposited Plan 354450, Parish of St George, County of Cumberland also known as 30A Victoria Road, Punchbowl, New South Wales and registered in the names of Quoc Hoi Vu and Sinh Thi Tran as tenants in common in equal shares.
Schedule Two
1. Provide full particulars of the nature and extent of all your interests in property (within the meaning of “interest in property” as defined in s 7 of the Criminal Assets Recovery Act 1990), including in relation to each item of property:
(a) a full description of your interest in the property, including the nature of that interest and, where possible, the estimated value, or in the case of bank accounts or deposits – the estimated balance, of that interest;
(b) the location of the interest;
(c) the name of the person or institution in whose custody title documents in respect of the interest are believed to be;
(d) the approximate date of acquisition of the interest;
(e) the source of funds used to acquire the interest.
2. Provide full particulars of your liabilities on both a capital and recurring basis, including, in relation to each liability:
(a) a full description of the liability including the nature of that liability and the amount of that liability;
(b) the name of the person or institution to which the liability is owed.



JUDGMENT:

- 16 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40101/09

SPIGELMAN CJ

ALLSOP P

HODGSON JA

Thursday 22 October 2009

NEW SOUTH WALES CRIME COMMISSION v Quoc Hui VU & Sinh Thi TRAN

FACTS

On 12 November 2008 the respondents were charged with cultivation of prohibited plants under s 23 Drug Misuse and Trafficking Act 1985. The NSW Crime Commission made an application under s 10 Criminal Assets Recovery Act 1990 for a restraining order against, particularly, the house in which it was alleged some 84 cannabis plants were cultivated.

An order under s 10 must be made where an application is supported by an affidavit of an authorised officer stating, relevantly, that the officer has a suspicion that the person has engaged in a serious crime related activity and the Court considers that there are reasonable grounds for that suspicion. In this case, the application was supported by an affidavit of an authorised officer stating that he had the relevant suspicion based on police Facts Sheets, a conversation with the investigating officer who wrote the Facts Sheets, and a search of the NSW COPS system.

Justice Adams declined to make the order. The Commission seeks leave to appeal. The issue before this Court was whether his Honour erred in failing to come to the conclusion that there were reasonable grounds for suspicion.

HELD

(Spigelman CJ, Allsop P and Hodgson JA agreeing)

The nature of the appeal

1 The determination to be made by this Court is equivalent to the exercise of a judgment based on inference. The word ‘consider’ in s 10 (3) is akin to the word ‘satisfied’, which has been held to require an appellate court to adopt the approach in House v The King. However, the ex parte nature of the application indicates that an appeal is the only occasion on which a person can be heard regarding the interference with their property rights. As such, the determination made by the first instance judge should be treated in the same way as an inference from facts. Furthermore, in the context of the statutory scheme, which involves only a one-step determination with no discretion as to the final issuance of the order (the order “must” be made), the decision is best characterised as a judgment rather than as the exercise of a discretion. Therefore, the principles in Warren v Coombes apply. [5] [8]-[9] [12] [14]-[18] [55] [59]

Warren v Coombes [1979] HCA 9; (1979) 142 CLR 531, applied.

House v The King [1936] HCA 40; (1936) 55 CLR 499; Perpetual Trustee Company Ltd v Khoshaba [2006] NSWCA 41, Certain Lloyds Underwriters v Giannopoulos [2009] NSWCA 56, Dwyer v Calco Timbers Pty Ltd [2008] HCA 13; (2008) 234 CLR 124, Director of Public Prosecutions v El Mawas [2006] NSWCA 154; (2006) 66 NSWLR 93, Norbis v Norbis [1986] HCA 17; (1985) 161 CLR 513, Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201, Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47; (2000) 203 CLR 194, New South Wales Crime Commission v Ollis [2006] NSWCA 76; (2006) 65 NSWLR 478, Goodman v Windeyer [1980] HCA 31; (1980) 144 CLR 490, considered.

Reasonable grounds for suspicion

2 The affidavit disclosed reasonable grounds. It was based on information from an identified police officer who was involved in the investigation, who had access to all the relevant information, and who accepted responsibility for the basic facts upon which the suspicion was based. [28]-[29] [51] [55] [59]

Elfar v New South Wales Crime Commission [2009] NSWCA 348, International Finance Trust Company Ltd v New South Wales Crime Commission [2008] NSWCA 291; (2008) 251 ALR 479, New South Wales Crime Commission v Sun [2009] NSWSC 6, New South Wales Crime Commission v Tucker [2009] NSWSC 1049, considered.

2 It is not necessary, when adducing evidence in the course of a hearsay statement, to identify the ultimate source of the information contained in that statement. As such, it is not necessary that the deponent of the affidavit identify the persons who supplied information in the police Facts Sheet, as long as the author of the Facts Sheet is adequately identified. However, the extent of any failure to identify ultimate sources will affect the determination of whether reasonable grounds for the suspicion have been made out by the deponent. [34] [36]-[38] [42] [48] [55] [59]

New South Wales Crime Commission v Sun [2009] NSWSC 6, New South Wales Crime Commission v Tucker [2009] NSWSC 1049, approved.

International Finance Trust Company Ltd v New South Wales Crime Commission [2008] NSWCA 291; (2008) 251 ALR 479, explained.

George v Rockett (1990) 170 CLR 204, Hardie Rubber Co Pty Ltd v General Tyre & Rubber Co [1973] HCA 66; (1971) 129 CLR 521, Proctor Gamble Australia Pty Ltd v Medical Research Pty Ltd [2001] NSWSC 183, Deputy Commissioner of Taxation v Ahern (No 2) (1988) 2 Qd R 158, Wily v Terra Cresta Business Solutions Pty Ltd [2006] NSWSC 949, considered.

3 The mere fact that a police officer charges a person with an offence is not a basis for a reasonable suspicion of serious criminal activity, it is merely evidence that some other person had such a suspicion or belief. [39] [55] [58] [59]

International Finance Trust Company Ltd v New South Wales Crime Commission [2008] NSWCA 291; (2008) 251 ALR 479, explained.

ORDERS

1 Leave to appeal is granted and the appeal allowed.

2 Pursuant to s 10 of the Criminal Assets Recovery Act 1990 no person (other than any registered mortgagee dealing with its right to do so under the registered mortgage) is to dispose of, or attempt to dispose of, or otherwise deal with or attempt to otherwise deal with any interest in property (within the meaning of “interest in property” as defined in s 7 of the Criminal Assets Recovery Act 1990) of Quoc Hoi Vu, including the interest in property in the property described in Schedule 1 hereto.

3 Pursuant to s 10 of the Criminal Assets Recovery Act 1990 no person (other than any registered mortgagee dealing with its right to do so under the registered mortgage) is to dispose of, or attempt to dispose of, or otherwise deal with or attempt to otherwise deal with any interest in property (within the meaning of “interest in property” as defined in s 7 of the Criminal Assets Recovery Act 1990) of Sinh Thi Tran, including the interest in property in the property described in Schedule 1 hereto.

4 Pursuant to s 12(1) of the Criminal Assets Recovery Act 1990 there shall be an examination on oath of the following persons before a Registrar concerning their own affairs and the affairs of each other including the nature and location of any property in which any of them have any interest:

(a) Quoc Hoi Vu; and

(b) Sinh Thi Tran.

5 Leave be granted to the Plaintiff to approach the Court to appoint a time and date for the examinations ordered in Order 5 above.

6 Pursuant to s 12(1)(c1) of the Criminal Assets Recovery Act 1990 Quoc Hoi Vu shall furnish to the plaintiff, within 21 days after service of a sealed copy of these orders on Quoc Hoi Vu, a statement verified by oath of Quoc Hoi Vu setting out the particulars in Schedule 2 hereto.

7 Pursuant to s 12(1)(c1) of the Criminal Assets Recovery Act 1990 Sinh Thi Tran shall furnish to the plaintiff, within 21 days after service of a sealed copy of these orders on Sinh Thi Tran, a statement verified by oath of Sinh Thi Tran setting out the particulars in Schedule 2 hereto.

8 Liberty is granted to the appellant, the first respondent and the second respondent to apply to a judge of the Common Law Division of the Supreme Court of New South Wales on three days notice which liberty can be exercised to seek an order varying orders 2-7 hereof.

9 Pursuant to r 36.4(3) of the Uniform Civil Procedure Rules 2005 these orders are to take effect as of the date hereof.

10 Pursuant to s 6 of the Suitors’ Fund Act 1951 an indemnity certificate be granted to the first respondent and the second respondent in respect of this appeal, if otherwise entitled.

Schedule One

The whole of the property described as Lot B in Deposited Plan 354450, Parish of St George, County of Cumberland also known as 30A Victoria Road, Punchbowl, New South Wales and registered in the names of Quoc Hoi Vu and Sinh Thi Tran as tenants in common in equal shares.

Schedule Two

1 Provide full particulars of the nature and extent of all your interests in property (within the meaning of “interest in property” as defined in s 7 of the Criminal Assets Recovery Act 1990), including in relation to each item of property:

(a) a full description of your interest in the property, including the nature of that interest and, where possible, the estimated value, or in the case of bank accounts or deposits – the estimated balance, of that interest;

(b) the location of the interest;

(c) the name of the person or institution in whose custody title documents in respect of the interest are believed to be;

(d) the approximate date of acquisition of the interest;

(e) the source of funds used to acquire the interest.

2 Provide full particulars of your liabilities on both a capital and recurring basis, including, in relation to each liability:

(a) a full description of the liability including the nature of that liability and the amount of that liability;

(b) the name of the person or institution to which the liability is owed.

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40101/09

SPIGELMAN CJ

ALLSOP P

HODGSON JA

Thursday 22 October 2009

NEW SOUTH WALES CRIME COMMISSION v Quoc Hui VU & Sinh Thi TRAN

Judgment

1 SPIGELMAN CJ: The respondents have been charged with offences, relevantly pursuant to s 23 of the Drug Misuse and Trafficking Act 1985, being offences with respect to cultivation of prohibited plants. These offences constitute serious crime related activity by force of the provisions of s 6(1), (2)(b) and (3)(a) of the Criminal Assets Recovery Act 1990 (“the Act”).

2 Pursuant to s 10 of the Act the appellant Commission made an application to the Court for a restraining order pending the determination of a confiscation order pursuant to the Act. The restraining order sought is in large measure directed to the house which, according to the material presented to the Court, was used extensively for the purposes of cultivation of cannabis plants, some 84 of which were found at different parts of the house.

3 Section 10 of the Act relevantly provides:

“10(1) A restraining order is an order that no person is to dispose of or attempt to dispose of, or to otherwise deal with or attempt to otherwise deal with, an interest in property to which the order applies except in such manner or in such circumstances (if any) as are specified in the order.

(2) The Commission may apply to the Supreme Court, ex parte, for a restraining order in respect of:

(a) specified interests, a specified class of interests or all the interests, in property of a person suspected of having engaged in a serious crime related activity or serious crime related activities, including interests acquired after the making of the order and before the making of an assets forfeiture order affecting the interests that are subject to the restraining order, or

...

(3) The Supreme Court must make the order applied for under subsection (2) if the application is supported by an affidavit of an authorised officer stating that:

(a) in the case of an application in respect of an interest referred to in subsection (2) (a)—the authorised officer suspects that the person has engaged in a serious crime related activity or serious crime related activities and stating the grounds on which that suspicion is based, and

...

and the Court considers that having regard to the matters contained in any such affidavit there are reasonable grounds for any such suspicion.”

4 The application was heard by Adams J who rejected it. The Commission seeks leave to appeal on the basis that his Honour erred in failing to come to the conclusion that there were reasonable grounds for suspicion. The respondents did not appear on the appeal. Mr I Temby QC appeared, with Mr P Singleton, for the appellant. The application for leave and the appeal were heard together.

The Test of Error

5 The first matter that falls to be determined is whether the judgment which the Court must make, pursuant to the concluding clause of s 10(3), is equivalent to the exercise of a discretion, to which the approach of House v The King [1936] HCA 40; (1936) 55 CLR 499 applies, or the formulation of a judgment based on inference of the character to which the principles in Warren v Coombes [1979] HCA 9; (1979) 142 CLR 531 apply. (See Perpetual Trustee Company Ltd v Khoshaba [2006] NSWCA 41 at [34]- [40].) In my opinion, the latter is the case.

6 Although in practice there may be little difference between the two, it is important to proceed on the correct principles. (See Khoshaba supra at [40]; Certain Lloyds Underwriters v Giannopoulos [2009] NSWCA 56 at [111].)

7 The word ‘discretion’ is used in a range of different senses. (See Dwyer v Calco Timbers Pty Ltd [2008] HCA 13; (2008) 234 CLR 124 at [37]- [40] and the earlier authorities set out by McColl JA in Director of Public Prosecutions v El Mawas [2006] NSWCA 154; (2006) 66 NSWLR 93 at [64]- [70].) The stricter approach of House v The King is not necessarily applicable because a decision can reasonably be so described. There is a distinction between ‘judgment’ and ‘discretion’ although the differentiation occurs over a spectrum. (See Francis Bennion “Distinguishing Judgment and Discretion” (2000) Public Law 368; Francis Bennion “Judgment and Discretion Revisited: Pedantry or Substance?” (2005) Public Law 20.)

8 The focal word in s 10(3), in this respect, is ‘consider’. It is what the Court “considers” to be “reasonable grounds for ... suspicion” that constitutes the statutory precondition for the mandatory order.

9 The word ‘consider’ is the equivalent of the word ‘satisfied’ that has, in a number of statutory contexts, been held to require an appellate court to apply the approach in House v The King. (See eg Norbis v Norbis [1986] HCA 17; (1985) 161 CLR 513 esp at 517-520, 530-541; Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 at 208, 226; Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47; (2000) 203 CLR 194 at [2], [18]-[21].) However, a protean word such as ‘satisfied’ must take its meaning from its context.

10 Each statutory regime must be considered by the application of the basic principle of statutory interpretation that regard must always be had to context. (See, eg, Khoshaba supra at [32]; Certain Lloyds Underwriters supra at [104].)

11 As Ipp JA said in Costa v Public Trustee of NSW [2008] NSWCA 223; (2008) 1 ASTLR 56 at [32]:

“[32] Judicial error requiring the intervention of an appellate court is a protean concept. Examples of the form that it can take are manifold. The tests for determining judicial error depend on the nature of the decision under appellate challenge. The judicial constraint required before appellate intervention can occur differs depending on the nature of the decision under appeal.”

12 In contrast with other legislative regimes considered in the cases referred to at [9] above, as subsequently applied, a distinguishing feature of the statute under consideration is that there is no two stage process where the formulation of the jurisdictional judgment is stage one and there is a second stage invoking terminology of discretion with respect to the making of an order. (See, eg, Khoshaba supra at [36]-[39].) Here the statute states that the order “must” be made.

13 Such a legislative structure does not involve a substantial overlap between the jurisdictional ‘satisfaction’ and the discretionary power to make an order, which renders a distinction between the two stages ‘artificial’. (See Goodman v Windeyer [1980] HCA 31; (1980) 144 CLR 490 at 502.)

14 An application under s 10 is expressly ex parte and is directed to preserving assets for an ultimate confiscation order under Pt 3 of the Act. An order under Pt 3 does not turn on any judgment on the part of the first instance judge, of the kind indicated by the word ‘considers’ in s 10(3). An order leading to confiscation of property requires that the judge ‘finds it more probable than not’ that the person engaged in serious crime related activity. (See s 22(2) regarding an assets forfeiture order and s 27(2) regarding a proceeds assessment order.) Furthermore, applications under Pt 3 are not expressed to be made ex parte.

15 The ex parte nature of the application is, in my opinion, the decisive consideration. Although provision is made in the Act for excluding assets and for allowing access to frozen assets for specific purposes, an appeal is the only occasion on which a person subjected to so significant an interference with property rights can be heard on the validity and appropriateness of the process. (See New South Wales Crime Commission v Ollis [2006] NSWCA 76; (2006) 65 NSWLR 478 at [9]- [10], [34].)

16 In such a context the judgment made by the first instance judge – “considers ... there are reasonable grounds for ... suspicion” – should be treated in the same way as an inference from primary facts. The word “Court” in s 10(3) of the Act, includes this Court on appeal.

17 As the High Court said in Warren v Coombes supra at 552:

“ ... The duty of the appellate court is to decide the case - the facts as well as the law - for itself. In so doing it must recognize the advantages enjoyed by the judge who conducted the trial. But if the judges of appeal consider that in the circumstances the trial judge was in no better position to decide the particular question than they are themselves, or if, after giving full weight to his decision, they consider that it was wrong, they must discharge their duty and give effect to their own judgment. Further there is, in our opinion, no reason in logic or policy to regard the question whether the facts found do or do not give rise to the inference that a party was negligent as one which should be treated as peculiarly within the province of the trial judge. On the contrary we should have thought that the trial judge can enjoy no significant advantage in deciding such a question.”

This analysis applies to a decision under s 10(3) of the Act.

The Evidence before Adams J

18 Adams J admitted into evidence an affidavit of Jonathan Lee Spark who is the Assistant Director of Financial Investigations at the New South Wales Crime Commission. Mr Spark annexed two Facts Sheets, in the case of each of Mr Vu and Ms Tran. The Facts Sheets were, relevantly, in substantially similar terms. They outlined the police discovery of the cannabis plants in the house, to which I have referred above.

19 Mr Spark stated that he had formed a suspicion that Mr Vu had engaged in serious criminal related activities, relevantly, offences under s 23(1A) and s 23(2)(a) of the Drug Misuse and Trafficking Act. He went on to say:

“4 The suspicion ... is held by me on the following grounds:

(1) On 16 December 2008 I contacted Leading Senior Constable James Taylor of the NSW Police Force (‘Taylor’) via Eaglenet and had a conversation in which Taylor agreed to send in by facsimile the Facts Sheet relating to the arrest of Vu (‘the Vu Facts Sheet’) and the Facts Sheet relating to the arrest of Sinh Thi Tran (‘Tran’) (‘the Tran Facts Sheet’).

(2) On 16 December 2008 Taylor sent to me by facsimile transmission copies the Vu Facts Sheet and a copy of the Tran Facts Sheet. A copy of the facsimile is annexed hereto and marked ‘A’.

(3) I have had regard to the Vu Facts sheet and the Tran Facts sheet.

(4) On 22 December 2008 I telephoned Taylor via Eaglenet and he transferred me to Constable Daniel Lovell of the NSW Police Force (‘Lovell’), with whom I had a conversation in which:

(a) I said: ‘Are you aware that on 16 December 2008 Leading Senior Constable James Taylor forwarded a copy of the Facts Sheet in relation to the arrest of Quoc Hoi Vu and the Facts Sheet in relation to the arrest of Sinh Thi Tran?’;

(b) Lovell said: ‘Yes’;

(c) I said: ‘Were you involved in the police investigation described in those Facts Sheets?’;

(d) Lovell said: ‘Yes’.

(e) I said: ‘Did you assist in drafting the Facts Sheets?’;

(f) Lovell said: ‘Yes’;

(g) I said: ‘To the best of your knowledge and belief are the contents of the Facts Sheets true?’;

(h) Lovell said: ‘Yes’;

(i) I said: ‘Were the Facts sheets prepared on the basis of information obtained by police as a result of the investigation described in the Facts Sheets?’;

(j) Lovell said: ‘Yes’,

and I believe each of Lovell’s responses to my questions to be true.

(5) On 22 December 2008 I, operating a computer located at the Commission, conducted a search of the records of COPS and located a record that revealed that on 12 November 2008 Vu was charged with the offences described in the Vu Facts Sheets. A true copy of this record is annexed hereto and marked ‘B’.

(6) I take the reference to ‘section 23(1a)’ and ‘section 23(2)(A)’ where they appear on page 1 of the Tran Facts Sheet (being page 8 of this affidavit) and page 1 of the Vu Facts Sheet (being page 12 of this affidavit) to be typographical errors that should read ‘section 23(1A)’ and ‘section 23(2)(a)’ respectively.”

20 Mr Spark indicated that he had also formed a similar suspicion with respect to Ms Tran for the same offences. In this regard he said:

“6 The suspicion ... is held by me on the following grounds:

(1) I have had regard to paragraphs 4(1) to 4(4) inclusive and paragraph 4(6) above.

(2) On 22 December 2008 I, operating a computer located at the Commission, conducted a search of the records of COPS and located a record that revealed that on 12 November 2008 Tran was charged with the offences described in the second Facts Sheet. A true copy of this record is annexed hereto and marked ‘C’.”

21 The Fact Sheets identified in some detail what the police observed at the premises, specifically the discovery of the cannabis plants and the presence of equipment for their cultivation. It also referred to the fact that the respondents were arrested and charged.

The Decision of Adams J

22 In his judgment Adams J summarised the affidavit of Mr Sparks. His Honour referred to the then recent judgment of the Court of Appeal in International Finance Trust Company Limited v New South Wales Crime Commission [2008] NSWCA 291; (2008) 251 ALR 479 (“the IFTC case”). His Honour identified the issue before him as: “Whether the link between the Fact Sheets and Mr Sparks’ suspicion is sufficient to justify if”. His Honour identified the features of the affidavit considered in the IFTC case.

23 His Honour accepted the observations by Allsop P at par [23] that it was not necessary to prove the underlying facts constituting the elements of the serious crime or criminal activity and referred to the following passage from the judgment:

“[24] ... [The suspicion] may be held because of information received from a third party; it may be held because of what a colleague has said; it may be held because of observations that had been made by the deponent ...”

24 His Honour then posed for himself a question as to whether “when the information is received from a third party or from a colleague, that third party or colleague must be identified”.

25 Adams J referred to the evidence in the affidavit of Mr Spark before him, particularly at par [4] set out at [19] above, being information conveyed to Mr Spark by Constable Lovell. Adams J posed the issue as to whether or not Constable Lovell had to, in turn, identify persons from whom he obtained the information.

26 His Honour referred to a submission that it was not necessary to do so and concluded:

“[6] I regret, however, that I am unable to see the validity of this distinction. It seems to me to be artificial in the extreme. Ultimately, it seems to me to follow from what was said by the majority in the Court of Appeal that even though information may well be received from a third party and even though it may be held because of what a colleague has said, the third party must be identified or the colleague identified.

[7] Here it is said that the source of the information is Constable Lovell and that Constable Lovell is reporting what others unnamed and unidentified have told him and that there is no need to identify those persons. This is but to take the point made by the Court of Appeal one step back with no advance on the point in principle. Although, it is true, I am dealing with a reference in an affidavit to a facts sheet which has been ‘verified’ by an intervening police officer who was involved in the investigation. It does not seem to me that this mode of proving the information received satisfies the Act.

[8] Accordingly I must refuse to make the orders.”

27 As can be seen from the extract from Mr Spark’s affidavit set out at [19] above, Mr Lovell stated that he had been involved in the police investigation; that, to the best of his knowledge and belief, the contents of the Facts Sheets were true and that the Facts Sheets were prepared on the basis of information obtained by police as a result of all the information. Mr Spark went on to say that he believed each of Mr Lovell’s responses. However, the absence of any reference by Constable Lovell to the sources of the specific information to which he referred was seen by Justice Adams to be a critical defect.

28 These proceedings were heard on the same day, and before the same Bench, as the appeal in the case of Elfar v New South Wales Crime Commission [2009] NSWCA 348. The nature of the affidavit evidence in the present case is a considerable improvement on the affidavit and Facts Sheet considered in that case, and on that considered in the IFTC case. Specifically, Mr Spark’s affidavit in these proceedings is based on information from an identified police officer, who was involved in the investigation and who, either directly or as part of a team, had access to all of the relevant information. That officer has accepted responsibility for the statements as to the basic facts upon which the suspicion of criminal conduct held by Mr Spark was said to be based.

The Issue of Leave

29 In two subsequent judgments, other judges of the Court have reached a different conclusion to that expressed by Adams J. Harrison J in New South Wales Crime Commission v Sun [2009] NSWSC 6 and Fullerton J in New South Wales Crime Commission v Tucker [2009] NSWSC 1049 each granted the application for a restraining order. This Court has before it the judgments in those cases and also the affidavits upon which the Commission relied in each case.

30 Relevantly, the affidavits in both Sun and Tucker had the identical structure to that which existed in the present case, namely, the suspicion of the deponent was based, in each case, on a Facts Sheet to which the deponent of the affidavit had regard. Furthermore, in each case the deponent had a conversation with an officer involved in the relevant police investigation who stated that, to the best of his or her knowledge and belief, the contents of the Facts Sheet were true and that the Facts Sheet was prepared on the basis of information obtained by police as a result of the investigation. In the present case the deponent went on to say that he believed the police officer’s statements in each respect.

31 Both Harrison J and Fullerton J did not proceed on the basis of the reasons given by Adams J, to the effect that the informing officer ought to have identified the persons who supplied the information in the Facts Sheet to him or her, insofar as the officer did not have direct knowledge of any such matter.

32 In Tucker supra Fullerton J noted that she did not have a copy of the affidavit tendered before Adams J in the case presently under appeal and that she would not comment on his Honour’s assessment of the evidence. Her Honour did, however, say:

“[18] ... Suffice for me to note that the evidence in the present case (and, it would appear, the evidence tendered before Harrison J in Sun) does not suffer from the defect identified by Adams J in Vu & Tran. Nestorovic was one of a number of named police officers who together comprised the task force that investigated the defendant’s criminal activities and the facts sheet was prepared by him on the basis of his shared involvement with those police as distinct from it being simply verified by him without his colleagues being named or identified. For my part, I wish only to add that I would consider it a rare case where a police officer who prepares a facts sheet or other report of an investigation is not in a position to identify, by name, the police officers and/or other third party sources from whom information is gathered such as would have addressed what Adams J regarded as a deficiency in the evidence relied upon by the plaintiff in the case before him.”

33 In Tucker Constable Nestorovic made the same statements as Constable Lovell made in the present case. The Facts Sheet was, however, much more detailed and included a list of officers who had been involved in the investigation.

34 In the present case there was no such list. However, three arresting officers were identified in each Facts Sheet, one of whom was Constable Lovell. It does appear from the Facts Sheets that they were the only three officers involved. There was, at first, no detailed investigation. Rather police attended at the premises with respect to an unrelated matter and it was during the course of that attendance that they discovered the cannabis plants. More detailed investigation followed in execution of a search warrant. It appears that in this case, as in Tucker, the Facts Sheet was prepared by one officer, as Fullerton J put it, “on the basis of his shared involvement” with the other police involved in the discovery of the offence. No doubt some of the information in the Facts Sheet was not based on his own observation. However, that was also the case in Tucker.

35 It does appear that there are conflicting judgments in this Court on the important question of the evidentiary requirements for an application under s 10 of the Act. The issue arises frequently. On the evidence before the Court, about three applications for restraining orders are made each week to the Court. Leave to appeal should be granted.

Conclusion

36 In pars [6] and [7] of his reasons, set out in par [26] above, Adams J purported to apply the views of the majority in the IFTC case. He interpreted that case as requiring that the source of information must be identified and that it was insufficient for a police officer, even one who was involved in the investigation, to verify it if some of the information was provided to him by other officers. In my opinion, his Honour’s reasoning in this respect was wrong.

37 The issue in the IFTC case, determined by majority, was concerned with the admissibility of hearsay statements in proceeding under s 10. The judgment of Allsop P, with whom Beazley JA agreed:

affirmed earlier authority that an application under s 10 is interlocutory in character (at [4]);

identified the need to apply the rules of evidence to such an application, by reason of the provisions of s 5(2)(b) of the Act (at [9]-[11]);

referred to common law principles for admission of evidence in an interlocutory proceeding (at [13]-[14]);

identified the particular relevance of s 75 of the Evidence Act 1995 (at [15]) which provides:

“In an interlocutory proceeding, the hearsay rule does not apply to evidence if the party who adduces it also adduces evidence of its source.”

identified the requirement of s 10(3) for the supporting affidavit to state the grounds on which a suspicion is based (at [21]-[24]).

38 The crucial matter in the decision of the majority in IFTC was the failure of the deponent of the affidavit in that case to give any evidence as to the source of knowledge or the basis of his suspicion (see [27]-[32]). Accordingly, the majority concluded that the relevant paragraphs of the affidavit were not admissible under s 75 of the Evidence Act or otherwise and did not, contrary to the requirements s 10(3), state grounds of suspicion (at [33]).

39 I note that Allsop P went on to say (at [38]) that the mere fact that a charge had been laid did not provide reasonable grounds for suspicion. His Honour also noted that such a submission was not put by the New South Wales Crime Commission in that case. Accordingly, it is necessary for this Court to decide the issue rather than to simply apply Allsop P’s conclusion. Such a submission was put in this case by Mr Temby on behalf of the Commission. It should be rejected. The mere fact that the police charge somebody is not a basis for a suspicion of serious criminal activity. It is merely evidence that some other person had such a suspicion or belief. It is not capable, of itself, of establishing that there is a proper basis for any suspicion.

40 Allsop P’s ultimate conclusion was that the primary judge erred by making orders in circumstances where there was no admissible evidence before him which could be the basis of a finding that there were reasonable grounds for the suspicion.

41 The IFTC case, on the majority reasoning, turned and turned only on a question of admissibility. The dissenter in that case, McClellan CJ at CL, went on to conclude that, notwithstanding the absence of any identification of the source of information to the deponent, the affidavit did disclose reasonable grounds for the suspicion which the deponent expressed to hold (see at [133]-[135]). Allsop P expressly stated that, if he had not been of the opinion that the evidence was inadmissible, he would have agreed with McClellan CJ at CL’s analysis in this respect (see at [51]).

42 It is clear, in my opinion, that Adams J proceeded on a mistaken understanding of the reasoning of this Court in the IFTC case. Indeed, even if the House v The King test applied, it appears that his Honour implicitly proceeded on the basis of a misinterpretation of s 75 of the Evidence Act. Nothing in that section, nor the IFTC case itself, suggests that it is necessary, when adducing evidence in the course of a hearsay statement, to identify the ultimate source of the information contained in that statement.

43 Section 75 of the Evidence Act, which is expressly directed to interlocutory proceedings, is based on a recognition that interlocutory applications frequently need to be made on an urgent basis, when direct evidence may not be able to be gathered in sufficient time or where it is undesirable to alert the other party. The scheme of Pt 2 of the Act presently under consideration is quintessentially of that character.

44 As Thomas J said in Deputy Commissioner of Taxation v Ahern (No 2) (1988) 2 Qd R 158 at 163; with respect to a cognate provision:

“The object of the disclosure is to provide some specified source which can, if necessary, be followed up by the adversary or the court. In a case such as the present a broad reference may suffice such as to a bundle of documents so long as they are somehow identified and can be produced if necessary, or there is a proper explanation for their absence.”

45 Furthermore, as Palmer J said in Wily v Terra Cresta Business Solutions Pty Ltd [2006] NSWSC 949 at [11]:

“ ... [T]he requirement of the section [s 75 Evidence Act] that the source of the information be revealed goes some way to assisting the Court in assessing the reliability of that evidence. Without any indication of the source of the evidence proffered on information and belief, the Court is unable to assess its weight nor can the opponent test the evidence or make any sensible submission as to its weight .”

46 The identification of a particular source, who is reasonably likely to have knowledge of the relevant fact, will ordinarily be sufficient to permit the Court to assess the weight to be given to the basis of the expressed suspicion and, therefore, to determine that reasonable grounds for the suspicion exist.

47 There is authority for the proposition that, where hearsay evidence is admissible, it is not necessary to name an informant with respect to every source of information. (See Hardie Rubber Co Pty Ltd v General Tyre & Rubber Co [1973] HCA 66; (1971) 129 CLR 521 at 536; Proctor Gamble Australia Pty Ltd v Medical Research Pty Ltd [2001] NSWSC 183 at [54]- [56].)

48 However, the extent of any failure to do so will affect the determination of whether reasonable grounds for the suspicion have been made out by the deponent. As Thomas J said, on the facts in Ahern supra at 167:

“The question as to what is a sufficient disclosure of sources must be decided according to the exigencies of each particular case, and the court’s discretion is not to be fettered. In the present case there were no apparent circumstances of urgency justifying the absence of disclosure of sources, and the bulk of the material may fairly be described as oppressive and embarrassing.”

49 The form of the affidavit in the present case, unlike the form considered in the IFTC case, served the purpose of enabling the Court to assess the reasonableness of the grounds on which the suspicion was based.

50 As the joint judgment of the High Court put it in a frequently cited passage in George v Rockett [1990] HCA 26; (1990) 170 CLR 104 at 112:

“When a statute prescribes that there must be ‘reasonable grounds’ for a state of mind – including suspicion and belief – it requires the existence of facts which are sufficient to induce that state of mind in a reasonable person.”

51 The evidence contained in the Facts Sheets presently under consideration satisfies me that the suspicion expressed by Mr Spark could reasonably be held. As I have indicated above, an officer who was involved in the investigation who, either directly or as part of a team, had access to all the information contained in the Facts Sheets, accepted responsibility for the statement of the facts which could constitute the relevant offence.

Orders

52 The appellant sought costs of the appeal. The respondents played no role on the appeal, although they may have incurred some costs unknown to the Court. In those circumstances a costs order is not appropriate.

53 The Court could allow the appeal and remit the matter for further determination. However, the whole of the evidence is before the Court. There is a clear basis for a finding that reasonable grounds exist. The interests of the respondents can be protected by granting them liberty to apply to a judge of the Common Law Division to vary the order. The ancillary orders sought by the appellant, pursuant to s 12 of the Act, should be made, also subject to liberty to apply.

54 The orders I propose are:

The Court notes that the appellant has given the usual undertaking as to damages and orders.

1 Leave to appeal is granted and the appeal allowed.

2 Pursuant to s 10 of the Criminal Assets Recovery Act 1990 no person (other than any registered mortgagee dealing with its right to do so under the registered mortgage) is to dispose of, or attempt to dispose of, or otherwise deal with or attempt to otherwise deal with any interest in property (within the meaning of “interest in property” as defined in s 7 of the Criminal Assets Recovery Act 1990) of Quoc Hoi Vu, including the interest in property in the property described in Schedule 1 hereto.

3 Pursuant to s 10 of the Criminal Assets Recovery Act 1990 no person (other than any registered mortgagee dealing with its right to do so under the registered mortgage) is to dispose of, or attempt to dispose of, or otherwise deal with or attempt to otherwise deal with any interest in property (within the meaning of “interest in property” as defined in s 7 of the Criminal Assets Recovery Act 1990) of Sinh Thi Tran, including the interest in property in the property described in Schedule 1 hereto.

4 Pursuant to s 12(1) of the Criminal Assets Recovery Act 1990 there shall be an examination on oath of the following persons before a Registrar concerning their own affairs and the affairs of each other including the nature and location of any property in which any of them have any interest:

(a) Quoc Hoi Vu; and

(b) Sinh Thi Tran.

5 Leave be granted to the Plaintiff to approach the Court to appoint a time and date for the examinations ordered in Order 5 above.

6 Pursuant to s 12(1)(c1) of the Criminal Assets Recovery Act 1990 Quoc Hoi Vu shall furnish to the plaintiff, within 21 days after service of a sealed copy of these orders on Quoc Hoi Vu, a statement verified by oath of Quoc Hoi Vu setting out the particulars in Schedule 2 hereto.

7 Pursuant to s 12(1)(c1) of the Criminal Assets Recovery Act 1990 Sinh Thi Tran shall furnish to the plaintiff, within 21 days after service of a sealed copy of these orders on Sinh Thi Tran, a statement verified by oath of Sinh Thi Tran setting out the particulars in Schedule 2 hereto.

8 Liberty is granted to the appellant, the first respondent and the second respondent to apply to a judge of the Common Law Division of the Supreme Court of New South Wales on three days notice which liberty can be exercised to seek an order varying orders 2-7 hereof.

9 Pursuant to r 36.4(3) of the Uniform Civil Procedure Rules 2005 these orders are to take effect as of the date hereof.

10 Pursuant to s 6 of the Suitors’ Fund Act 1951 an indemnity certificate be granted to the first respondent and the second respondent in respect of this appeal, if otherwise entitled.

Schedule One

The whole of the property described as Lot B in Deposited Plan 354450, Parish of St George, County of Cumberland also known as 30A Victoria Road, Punchbowl, New South Wales and registered in the names of Quoc Hoi Vu and Sinh Thi Tran as tenants in common in equal shares.

Schedule Two

1 Provide full particulars of the nature and extent of all your interests in property (within the meaning of “interest in property” as defined in s 7 of the Criminal Assets Recovery Act 1990), including in relation to each item of property:

(a) a full description of your interest in the property, including the nature of that interest and, where possible, the estimated value, or in the case of bank accounts or deposits – the estimated balance, of that interest;

(b) the location of the interest;

(c) the name of the person or institution in whose custody title documents in respect of the interest are believed to be;

(d) the approximate date of acquisition of the interest;

(e) the source of funds used to acquire the interest.

2 Provide full particulars of your liabilities on both a capital and recurring basis, including, in relation to each liability:

(a) a full description of the liability including the nature of that liability and the amount of that liability;

(b) the name of the person or institution to which the liability is owed.

55 ALLSOP P: I have had the opportunity of reading the reasons of the Chief Justice in draft. I agree with the orders that his Honour proposes and with his reasons. I wish to add one matter.

56 In International Finance Trust Company v New South Wales Crime Commission [2008] NSWCA 291 at [38] I said the following:

The fact (without more) that Mr Moerman arrested Mr Agius on a first instance warrant on the Commonwealth charges set out in [3] of his affidavit does not provide reasonable grounds for the suspicions in [17] and [19] of his affidavit. No submission was put by the respondent that it did.”

57 Mr Temby QC submitted in this matter that the laying of the relevant charges here was a legitimate basis for concluding the reasonableness of the relevant suspicion. He appeared to call in aid what I said in the ITFC case at [38] in this respect.

58 I agree with the Chief Justice in his reasons that the laying of the charge is not an legitimate basis to ground a reasonable suspicion of the committal of the offences charged. Nothing I said in [38] in my reasons in the ITFC case was intended as sustenance or support for any such argument. Nor was I intending to draw any particular distinction between the first instance warrant on the Commonwealth charge and any other charge.

59 HODGSON JA: I agree with Spigelman CJ.

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LAST UPDATED:
22 October 2009