AFP v
Courtenay
Investments
Pty Ltd [No 4]
[2015] WASC
101
ASSET CONFISCATION UPDATE
12
Februar
y 2015
30 MARCH 2015
Forfeiture application under
s.49 of the Proceeds of
Crime Act 2002 (Cth)
Juebner
allowing proxy
AFP v Courtenay Investments Pty Ltd
On 27 March 2015, Edelman J (in a carefully
reasoned 121 page judgment) dismissed the AFP’s
application for a forfeiture order under s.49 of the
Proceeds of Crime Act 2002 (Cth) (POCA).
The facts
In short, the AFP alleged that Mr Corp, as a
director of a company, had knowingly
contravened section 232(2) of the Corporations
Law, which provided that “An officer of a
corporation shall at all times act honestly in the
exercise of his or her powers and the discharge of
the duties of his or her office”.
The specific circumstances of the offending were
said to be that Mr Corp acted dishonestly in
votes to be counted in
circumstances where he knew that his relevant
interest in shares held on behalf of certain entities
had not been disclosed, thereby deceiving the
company and its shareholders.
Mr Corp had been convicted in his criminal trial,
but the conviction was quashed on appeal and a
re-trial was ordered. The Commonwealth DPP
(CDPP) then determined not to proceed with the
further criminal trial against Mr Corp.
Instead, the CDPP applied for and obtained a civil
forfeiture restraining order over shares and
money under s.19 of the POCA (which permits the
restraint of property absent any charging or
conviction).
2
It was not alleged that any of the restrained
property was “proceeds” of the alleged offence.
Instead, the CDPP (which handed over the
litigation to the AFP) asserted that the restrained
shares and cash constituted an “instrument” of a
“serious offence”.
Hence, the issues to be determined were, inter
alia:
 whether the cash or shares were an
“instrument” as alleged;
 whether a “serious offence” had been
committed.
Result
Edelman J found that the relevant shares were an
“instrument” of the offence, but that the offence
was not a “serious offence” under the POCA.
It followed that the forfeiture application failed.
Issues arising
The case provides a further example of the wide
reach of the POCA, which is now commonly
deployed by the AFP to target white collar
(particularly tax related and money laundering)
crime.
In the course of his detailed reasons, Edelman J
traversed many areas of the POCA which had not
previously been the subject of any significant
analysis. Some of these matters are touched on
below.
Was an exclusion application made?
Section 49 of the POCA permits the Court to make
a forfeiture order if it is satisfied that the property
in respect of which forfeiture is sought is either
proceeds of a specified offence or an instrument
of a serious offence. However, if no exclusion
application is made under s.31 of the POCA in
respect of restrained property, the Court may
make a forfeiture order even without being
satisfied that the restrained property constitutes
proceeds or an instrument (s.49(3)).
The AFP contended that no application for
exclusion had been made because, although such
a document had been filed, it had not been
intended to be prosecuted. The AFP contended
that the application for exclusion had merely been
filed so as to force the AFP to have to demonstrate
that the restrained property amounted to
proceeds or an instrument. It followed, so it was
contended by the AFP, that no application for
exclusion had been made and the Court could
consequently make the forfeiture order without
being satisfied about the status of restrained
property as an instrument of a serious offence.
The argument can be described as novel and was
rejected by Edelman J. Edelman J recognized (at
[138]) that the contention resembled an argument
that there was an abuse of process, referring to
Williams v Spautz (1992) 174 CLR 509. However,
the facts and contentions in this case did not make
out such abuse.
It follows from the reasoning that, where an
application for exclusion is made without the
intention to prosecute it but so as to merely place
a higher onus on the AFP, it could potentially be
regarded as an abuse of process.
Transcripts from criminal trial
No party called any witnesses at the trial. The AFP
relied upon transcripts form the criminal trial,
which could be tendered pursuant to s.64 of the
POCA.
Edelman J observed that, although the Court is
required to consider the transcript of the criminal
trial if tendered in the POA proceeding, it is not
obliged to give any weight to the transcript or
evidence, particularly if it involves matters of
inadmissible evidence (at [160]).
Edelman J discussed the limitations arising from
the “shortcut” approach of tendering evidence
3
from the criminal trial. These limitations are
similar to the limitations faced by an appeal court,
which does not have the opportunity to observe
the demeanor of a witness. Edelman J stated (at
[165]-[166]):
The absence of seeing and hearing Ms Wickerson give evidence places an
extremely significant constraint upon this Court in drawing conclusions,
based upon her evidence, about the alleged dishonesty of Mr Corp. Not only
was Ms Wickerson a person who was central to the proof of the offence
against Mr Corp but her credibility was central to the trial. Ms Wickerson
was a person who had admitted to preparing false documents and
destroying and backdating documents which she said was on Mr Corp's
instructions. She had also refused to provide information to the ASC until
she had received a letter from the ASC informing her that she was not a
target of its investigation.
For these reasons, I have approached the transcript of Ms Wickerson's
evidence with extreme circumspection
Jones v Dunkel
Having regard to the fact that the AFP was
seeking to make out its case in reliance on the
transcripts from the criminal trial, Edelman J
observed that the court would be slower to draw
any adverse inferences in reliance on Jones v
Dunkel (at [172]) arising from Mr Corp’s failure to
call a witness.
Briginshaw v Briginshaw
Edleman J found (on the civil standard) that Mr
Corp had committed the s.232 offence under the
Corporations Law (being the predecessor to the
Corporations Act).
His Honour observed (at [237]) that such a finding
was made having regard to the principles in
Briginshaw v Briginshaw (1938) 60 CLR 336, and
stated:
I reach this conclusion, and all my conclusions adverse to Mr Corp, with
regard to the principles set out by the High Court in Briginshaw v
Briginshaw. In broad terms, people are generally taken to be of good
character and unlikely to commit crimes or wrongdoing. The more serious
the allegation against a person, the more care ought to be taken before
reaching a conclusion on the balance of probabilities which is adverse to
that person.
The reasons reaffirm the need of the AFP to
establish the commission of an offence by the
suspect, albeit on the civil Briginshaw standard, if
it is to succeed with a forfeiture application.
Serious Offence
In order to establish that a serious offence had
been committed, the AFP was required to show
that the unlawful conduct caused, or was intended
to cause, a benefit to the value of $10,000 for Mr
Corp or someone else (s.338).
This was the threshold issue upon which the AFP
failed. Edelman J found (at [466]):
The definition of serious offence in s 338 of the Proceeds of Crime Act has
not been satisfied because Mr Corp's failure to disclose his interest in WSM
through the defendant companies has not been shown to have made any
difference to the outcome of the vote and any benefits that arose from it.
Instrument
The final issue considered by Edelman J was
whether the shares were used in, or in connection
with, the commission of an offence (at [478]).
Whilst not determining whether a substantial
connection between the object and the offence
was required, Edelman J made an important
observation which is often overlooked in
preparing applications for exclusion; that it is
paramount to have clarity of the facts said to
constitute the alleged offence in order to be able
to determine whether an object was used in, or in
connection, with that offence. His Honour stated
(at [492]):
The requirement that property be used 'in' or 'in connection with' the
commission of an offence requires clarity in defining the alleged facts
involved in the commission of the offence. This permits the relevant
conduct to be assessed to determine whether it involves a use of the
property 'in' or 'in connection with' the commission of that offence.
Similar considerations must apply in making a
determination about whether something
amounts to “proceeds”; relevantly, whether it has
been derived (wholly or partly) from an offence.
4
These are matters that ought to be carefully
considered before affidavit material is prepared
by an applicant for an exclusion order. It may
warrant the service of a request for particulars on
the AFP at an early stage.
About the author
Christian Juebner is a barrister at the Victorian Bar and practices
extensively in proceeds of crime litigation in various Australian
jurisdictions.
He was admitted to practice in 1996 and, prior to coming to the
Bar 10 years ago, was a partner with Deacons (now Norton Rose
Fulbright).
He can be contacted as follows:

by email on [email protected]

by phone on (o3) 9640 3216 or 0410 657 177.
Christian is available to advise on proceeds of crime issues in all
Australian jurisdictions and appear in proceeds of crime litigation
throughout Australia.
For more information about proceeds of crime litigation in
Australia visit www.confiscation.com.au