Commissioner of the Australian Federal Police v Kanjo & Ors [2019] QDC 6

DISTRICT COURT OF QUEENSLAND CITATION: Commissioner of the Australian Federal Police v Kanjo & Ors [2019] QDC 6 PARTIES: COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE (applicant) V NICOLE ANN KANJO (first respondent) and FAIRGRANGE HEALTH SERVICES (ACN 162296380) (second respondent) and SAM KANJO (third respondent) FILE NO/S: 937/2018 DIVISION: Civil PROCEEDING: Application ORIGINATING COURT: District Court, Brisbane DELIVERED ON: 5 February 2019 DELIVERED AT: Brisbane HEARING DATE: 31 January 2019 JUDGE: Sheridan DCJ ORDER: 1. The application is dismissed. 2. The costs of the application are reserved. CATCHWORDS: CRIMINAL LAW – PROCEDURE – CONFISCATION OF PROCEEDS OF CRIME AND RELATED MATTERS – RESTRAINING OR FREEZING ORDER – ALLOWANCE FOR EXPENSES – where the first respondent in the proceedings applied pursuant to s 24 of the Proceeds of Crime Act 2002 (Cth) for the payment out of the property restrained of reasonable living expenses -- 1 of 5 -- 2 Proceeds of Crime Act 2002 (Cth), s 24 COUNSEL: The 3rd respondent appeared on behalf of the applicant/first respondent P Kelly for the respondent/applicant SOLICITORS: The 3rd respondent appeared on behalf of the applicant/first respondent Australian Federal Police for the respondent/applicant [1] This is an application by the first respondent, Ms Kanjo, pursuant to s 24(1) of the Proceeds of Crime Act 2002 (Cth) (the Act). The application sought an order from the court for: (a) the payment to Ms Kanjo of her reasonable living expenses; and (b) the repayment to the parents of Ms Kanjo of the monies said to have been loaned by her parents to Ms Kanjo. [2] At the hearing, Ms Kanjo did not press her application for the repayment of the loan to her parents. [3] In support of her application for her reasonable living expenses, Ms Kanjo filed affidavits sworn by herself dated 24 January 2019 and 30 January 2019, both of which were sworn in her maiden name. [4] In the submissions made on her behalf, it was confirmed that an amount of $6,000 per month starting from 1 January 2019 was being sought for living expenses made up as follows: Rent $2800 Electricity $150 Food $1000 Personal $300 Medical/health insurance $400 Phone $70 Maintenance of William Flick, slashing $400 Rates William Flick $200. An amount of $15,000 was sought for the purchase of a car, with an additional amount of $650 sought for car expenses, once a car was purchased. [5] Certain property of Ms Kanjo is currently the subject of restraining orders made by his Honour Judge Smith on 14 March 2018 pursuant to s 18 and s 19 of the Act. The restraining orders extend to certain property of the second respondent, Fairgrange Health Services, that was under Ms Kanjo’s effective control. -- 2 of 5 -- 3 [6] The first respondent, Ms Kanjo, was suspected of having engaged in money laundering in breach of the Criminal Code 1997 (Cth). She was also suspected of breaching provisions of the Anti-Money Laundering and Counter Terrorism Financing Act 2006, and the Crimes Act 1958 (Vic). [7] Ms Kanjo has not been charged with any offence. The Commissioner of Australian Federal Police obtained an order on 26 April 2018 from her Honour Judge Clare QC that the Commissioner be entitled to examine Ms Kanjo about her affairs and the third respondent, Mr Kanjo, about his affairs and the affairs of Ms Kanjo, but the Commissioner has not taken any steps to do so. Ms Kanjo filed an application in September 2018 to discharge the restraining orders. That application is due to come before the court for directions in February 2019. [8] The circumstances relied upon by the Commissioner in support of the making of the orders are set out in the affidavit of Mr Reynold Smith. The circumstances involve suspected offences by the first respondent including providing false income and employment details and using various aliases in applications for loans and other financial transactions. [9] The property, the subject of the restraining order, was property acquired from loans obtained as a result of that alleged fraudulent illegal conduct. The property restrained included real property located at Etna Street, Surfers Paradise, real property located at William Flick Lane, Byron Bay, bank accounts in the name of Nicole Lawrence and in the name of the second respondent held with Suncorp-Metway Ltd and a Porsche motor vehicle. [10] At the time of the making of the restraining order, the Etna Street property was in the process of being sold and was subject to two registered mortgages. The restraining order allowed for the two registered mortgages over the Ethna Street property to be paid out. The official trustee took custody and control of the balance of the proceeds of sale and the Porsche motor vehicle. [11] On 29 May 2018, Ms Kanjo filed an application seeking a variation of the restraining orders made by his Honour Judge Smith pursuant to s 39(1) of the Act. On 8 June 2018, an order was made by her Honour Judge Rosengren allowing a variation to remove an amount of $404,000 out of the proceeds of the property restrained, and directing the Official Trustee to pay to Ms Kanjo that amount. [12] The decision of her Honour Judge Rosengren has been appealed. An order was made by his Honour Judge Porter on 21 June 2018 which had the effect of staying the payment of an amount of $350,000 pending determination of the appeal. The appeal was heard by the Court of Appeal in October 2018 and that court’s decision is pending. [13] The order of his Honour Judge Porter QC resulted in an amount of $54,000 being paid by the Official Trustee to Ms Kanjo. [14] Section 24 of the Act prescribes the circumstances in which the court may allow for expenses to be paid out of restrained property. The exercise by the court of the power pursuant to s 24 is subject to two important limitations that are relevant in this case. One of these limitations is that created by s 24(2)(c) which provides that the court may only make an order if it is satisfied that “the person has disclosed all of his or -- 3 of 5 -- 4 her interest in property, and his or her liabilities, in a statement on oath that has been filed in court”. [15] A further limitation is contained in s 24(2)(d) requiring that the court may only make an order if it is satisfied “that the person cannot meet the expense or debt out of the property that is not covered by… a restraining order”. [16] Ms Kanjo has filed an affidavit dated 24 January 2019 attaching a statement of assets and liabilities. In a further affidavit dated 30 January 2019 the statement of assets and liabilities was amended to include an amount of $34,294.69 being ATO held superannuation. [17] In her affidavit of 24 January 2019, Ms Kanjo has attached as exhibit M what appears to be a copy of an extract from Commbank electronic records of a CDIA bank account with a one line entry recording the account balance of the stated account as zero. The account holder is not apparent on the face of the document except that the extract says “Welcome Nicole”. The statement also does not disclose the transaction history of the account. In referring to this exhibit in her affidavit, Ms Kanjo says that she “does not have any money other than whats restrained” and that “this is her only bank account”. The bank accounts restrained were accounts held with Suncorp-Metway Ltd, not the Commonwealth Bank. [18] Ms Kanjo does not give any explanation in either of her affidavits as to the receipt of a payment of $54,000 from the Official Trustee in June 2018, let alone provide any bank statement showing payments made from those funds. At the hearing, Mr Kanjo in speaking on behalf of Ms Kanjo, said that the monies had been used to pay back various people who had loaned Mr and Ms Kanjo money. However, no detail was provided of the debts or the payments. [19] The court was provided with a copy of an email from Bangalow Real Estate to Mr Kanjo requiring the immediate payment of outstanding rental monies owing in respect of a property situated at 847 Friday Hut Road, Brooklet. In his submissions, Mr Kanjo said he and Ms Kanjo both currently reside at the property. Mr Kanjo said that they did not have the money to make the rental payment and anticipated that they would be evicted from the property. [20] No details were provided as to the owner of the property, nor the terms of any lease. Exhibit L to the affidavit of Ms Kanjo is a communication from Bangalow Real Estate to Mr Kanjo. It refers to a commencement date of 1 September 2018 and a monthly rental of $5,800. There is no evidence as to why it was considered reasonable to rent a property for $5,800 a month in circumstances where Ms Kanjo and Mr Kanjo say they owe considerable debt and have done so for some time, and Ms Kanjo says she has been unable to work since the sale of her business and has applied for and been refused Centrelink. [21] Given the present state of the evidence, the court cannot be satisfied that Ms Kanjo has disclosed all of her interests in property nor that she cannot meet her reasonable living expenses. [22] Even if satisfied, on the basis of the material before the court an issue arises as to the reasonableness of the quantum of the living expenses sought. The rental of $5,800 per month (of which Ms Kanjo claims in this application her share to be $2,800) is very large, as is a claim of $1,000 per month for food for one person. At the hearing, -- 4 of 5 -- 5 counsel for the Commissioner submitted that the other expenses claimed for electricity, personal, medical and telephone all appeared reasonable. It was submitted no allowance should be made for the purchase or operation of a motor vehicle. [23] In referring to the inclusion in the claim for rates and slashing of the real property at Byron Bay, counsel for the Commissioner submitted that this property is subject to the custody and control of the Official Trustee and no payments should be being made by Ms Kanjo in relation to that property. However, the terms of the order made by his Honour Judge Smith do not place that property under the custody and control of the Official Trustee but rather prevent it being disposed of or otherwise dealt by any person except in the manner and circumstances specified in the order. The order does not contain any further specifications. In those circumstances, Ms Kanjo would appear to have continuing obligations with respect to that property and it could not be said that the incurrence by her of some expenses in relation to that property is not reasonable; though there is insufficient evidence as to the expenses claimed. [24] If the court had sufficient evidence so it could be satisfied in the terms required by s 24 of the Act, an amount in the vicinity of $3,000 per month would appear reasonable, subject to proof as to the expenses incurred in relation to the Byron Bay property. However, on the present state of the evidence, the court cannot be satisfied and the application pursuant to s 24(1) of the Act for the payment of reasonable living expenses must be dismissed. [25] No submissions were made in respect of the costs of the application. At the hearing, directions were made to progress both the examination by the Commissioner and Ms Kanjo’s application to discharge the restraining order. In these circumstances, subject to any submissions that may be made, it would seem appropriate that the costs of the application be reserved. -- 5 of 5 --