Court of Appeal Supreme Court New South Wales

• Medium Neutral Citation: Toksoz v Westpac Banking Corporation (No 2) [2012] NSWCA 288
• Hearing dates: On the papers
• Decision date: 20 September 2012
• Before: Allsop P at [1]; Hoeben JA at [29]; Sackville AJA at [30]

Decision

Rescind any effect of orders 5 and 7 made on 3 July 2012 and in their place:

"Direct the Registrar of the Court of Appeal to forward the judgment delivered on 3 July 2012, this judgment and the judgment of the primary judge to the Secretary of the Commonwealth Department of Human Resources and to the Australian Taxation Office";

and

"Order that publication of any matter relating to these proceedings to the extent that it might tend to identify persons who are or were customers of the respondent bank by name or unique identifiers in relation to such persons be prohibited."

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

• Legislation Cited: Australian Crime Commission Act 2002 (Cth) ss 7A and 7C; Civil Procedure Act 2005 (NSW); New South Wales Crime Commission Act 1985 (NSW) s 3A; Supreme Court Act 1970 (NSW) ss 23, 63, 75A, 91
• Cases Cited: Reid v Howard [1995] HCA 40; 184 CLR 1; Toksoz v Westpac Banking Corporation [2012] NSWCA 199
• Category: Consequential orders
• Parties: Gulay Toksoz (Appellant)Westpac Banking Corporation (Respondent)
• Representation: G C Lindsay SC, P G Bolster (Appellant)A G Bell SC, P Kulevski (Respondent); Allied Lawyers (Appellant)Henry Davis York (Respondent)
• File Number(s): 2008/277888

Decision under appeal

• Citation: [2010] NSWSC 1509
• Date of Decision: 2010-12-23 00:00:00
• Before: Palmer J
• File Number(s): 2008/277888

Judgment

1 ALLSOP P: On 3 July 2012, the Court made orders substantially dismissing the appeal, only allowing it in order to vary the judgment sums in a manner agreed by the respondent: see Toksoz v Westpac Banking Corporation [2012] NSWCA 199. Included in the orders was order 5, which was in the following terms:

"Subject to rescission or variation upon receipt of any submissions by the appellant to the Court (such submissions and any affidavit in support to be filed and served within seven days) and the subsequent reconsideration of the question by the Court, direct the Registrar of the Court of Appeal to forward this judgment and the judgment of the primary judge to the relevant Minister of the Commonwealth of Australia administering social service benefits for single parents, to the Australian Taxation Office and to the Crime Commissions of New South Wales and the Commonwealth."

2 On 10 July 2012, within the time provided for, the appellant by her counsel put submissions on the matters referred to in order 5.

3 It was first submitted that the Court had no power to make an order directing the judgments of the primary judge and this Court to agencies of the executive government. It was submitted that none of ss 23, 63, 75A or 91 of the Supreme Court Act 1970 (NSW), nor any provision of the Civil Procedure Act 2005 (NSW), nor the inherent jurisdiction of the Court permits by way of grant of authority such a direction to the Registrar of the Court of Appeal. Support by analogy was sought to be drawn from Reid v Howard [1995] HCA 40; 184 CLR 1 at 16-17.

4 This Court is part of the judicial branch of government of this State. The judicial branch is separate from the executive. It forms part of the integrated legal and judicial system in the nation. It is a vehicle for the exercise of federal judicial power pursuant to legislation enacted by the Commonwealth Parliament: the Constitution, s 77(iii). The primary and central function of the Court is to resolve disputes brought to it by those seeking to obtain redress. It is not a mere dispute resolution service; it is a central act of government in the just and fair resolution of disputes according to law. One background element to that exercise of public power to resolve private disputes is the expectation of the courts that those who come before them (whether as plaintiffs or defendants) will have acted lawfully.

5 It is no part of the function of the Court (unless specifically and validly authorised) to deny persons their rights, civil, human or common law. Thus, in Reid v Howard, there was no power in the Court to compel self-incriminatory disclosures. Such was inimical to the administration of justice.

6 So much can be readily accepted as fundamental. That, however, does not disentitle or disempower a court from bringing to the attention of relevant agencies of the executive matters that concern the conduct of litigants.

7 Subject to what I say below, it might be thought that if a court could not direct to an agency of another branch of government questions about matters of significant importance raised before it, the public confidence in the Court in seeing laws upheld may be impugned.

8 Here, Mr Toksoz stole hundreds of thousands of dollars from Westpac in a systematic and organised fraud. On the findings made by the primary judge upheld on the appeal, Mrs Toksoz received with knowledge the product of those thefts. On those findings, she also received into the accounts other large sums of money, wholly unexplained, while receiving social security benefits. There was also a finding by the primary judge (again, upheld on appeal) that it could be inferred that Mrs Toksoz made one of the calls posing as a customer.

9 Mr Toksoz's mode of operating was not one that was specific to any one bank. His thefts were organised and systematic.

10 The findings in this case raise serious questions as to the source of very large unexplained deposits into accounts apparently maintained for Mrs Toksoz's benefit at a time when, on the evidence, she was apparently in receipt of means-tested social security benefits. Such large accretions of unexplained wealth, in the context of a proven systematic fraud carried out by Mr Toksoz, lead inexorably to questions warranting further investigation.

11 Such is not to say that this Court draws any conclusion of wrong-doing by Mrs Toksoz beyond that which has been proven in these proceedings. There may be entirely innocent explanations for the receipt by her of such large sums of money (other than those proved to have been stolen). The receipt of those funds, in the context of findings that she knowingly received stolen funds, raises questions as to whether:

(a) any social security benefit that was means tested was rightfully received while such moneys were being received;

(b)the funds knowingly received as the product of fraud, or other unexplained deposits apparently for Mrs Toksoz's benefit should have been and were declared to the Australian Taxation Office;

(c)any offences have been committed, referable to the unexplained receipt of such large amounts of money, known to be the product of thefts and involving the use of telephonic communication systems.

12 I make no comment on whether there is or may be an innocent explanation of these matters. I draw no conclusion about them or about Mrs Toksoz, beyond the findings were upheld and made on the appeal.

13 The appellant also contended that the decision to make order 5 was oppressive. It was submitted that the order was not necessary for the purposes of determination of any matter in controversy between the parties and that it was in the nature of an executive act. What I have already said deals with these matters.

14 It was also said that the order was inconsistent with the findings of the Court. The order is not inconsistent. The reference in [28] to the sums of moneys received not being the product of fraud were the submissions of her counsel. There was no explanation for the receipt of such large sums of money. The order is not an attempt to punish the appellant for any crime for which she has not been convicted or for her exercise of the right to silence. As I have said above, the findings made in these proceedings raise serious questions as to the receipt of these funds (both those proved to be the product of the fraud and the additional large sums of money).

15 There was reference during the appeal hearing to the taking of some criminal proceedings against Mr Toksoz. That, however, does not remove the significant questions about the matters I have identified that affect Mrs Toksoz.

16 Complaint is made that specific possible offences have not been identified. The question is not one of an identified offence, but of legitimate questions for investigation relating to: (a) large amounts of stolen funds knowingly received; and (b) large amounts of otherwise unexplained sums received.

17 It is said that the order was made based on speculation. No findings of fact have been made by this Court about anything other than the dispute between the parties. What I have said above about my concern as to legitimate questions for investigation is sufficient to deal with the assertion made in submissions that this is based on speculation.

18 It was submitted that there was a manifest error in the Court's approach to questions of onus and standard in that the order reflects a requirement for an onus of proof on the defendant in the proceedings.

19 My earlier reasons made clear that in my view the primary judge was correct in his assessment of the evidence and the prima facie case. What I have said above makes clear that the totality of the evidence raises serious questions for investigation.

20 It is said that the order raises an imposition by the Court on the appellant of an onus to disprove a prima facie case of fraud. This is not so. The appellant was free not to give evidence. She could not be forced to give evidence. She did not give evidence. In those circumstances the Court was left with the facts as they were proved which in my view and in the primary judge's view amount to a body of facts capable of supporting the inferences drawn in the absence of explanation.

21 Order 5 does not demand an explanation. The matter was not raised during argument but an opportunity was given (and taken) to argue why the matter should not be so referred. Nothing in the earlier judgment amounts to any conclusion or finding of any wrongdoing by Mrs Toksoz (other than the findings made by the primary judge which were upheld on appeal). For the avoidance of doubt it should be made clear that the making of order 5 and these reasons does not embody a conclusion of wrongdoing by Mrs Toksoz. What arises are questions for investigation by relevant authorities raised by the findings made in the exercise of judicial power by the primary judge and this Court.

22 Bearing in mind, however, the statutory purposes and functions of the New South Wales Crimes Commission and the Australian Crimes Commission in the New South Wales Crime Commission Act 1985 (NSW), s 3A, and the Australian Crime Commission Act 2002 (Cth), ss 7A and 7C, it is not appropriate to direct that the judgments be forwarded to those bodies.

23 Order 5 should be varied accordingly.

24 In the same orders the Court asked the parties whether there should be an order protecting the unique identifiers and personal identifiers of various parties. No issue was taken with order 7 and that order will be made in unqualified terms.

25 In order 6 made on 3 July leave was granted to the parties to apply within 14 days (that is by 17 July 2012) for any special costs order or any order regarding the freezing of any property of the appellant. On 17 July my associate received an email communication at 4.54 pm (with apparent enclosures by cc to solicitors for the appellant) that discussed and dealt with a number of matters including freezing orders, the primary judgment and the Court's judgment. It contained amongst other things the following:

"Paragraph 30 of the Court's judgment provides that 'subject to the existing terms of the freezing order, I would restrain any use of frozen accounts until any costs order has been paid.'

For the avoidance of doubt, the respondent formally seeks an order that the appellant be restrained from disposing of, dealing with or diminishing the value of her assets in Australia until the judgment referred to in the orders made on 25 February 2011 (as varied by the Court) is satisfied and until the costs of these proceedings, as agreed or assessed, have been paid.

In the event that there is any residue of the proceeds of sale after the payments referred to in orders 7(a) and 7(b) of the orders made on 25 February 2011, it would be unjust if that residue was not frozen until the respondent had been given an opportunity to have its costs assessed and paid."

26 With due respect to the solicitor involved, this was an entirely inappropriate way of taking advantage of leave given by an order of the Court. It was not an application to the Court but a communication by email to the associate of the President. Applications to the Court are made by motion on notice. The Court does not regard any application under order 6 has having been made within the time provided.

27 After that time a notice of motion was filed and without opposition a freezing order was made.

28 For the above reasons, the following orders should be made:

Rescind any effect of orders 5 and 7 made on 3 July 2012 and in their place:

"Direct the Registrar of the Court of Appeal to forward the judgment delivered on 3 July 2012, this judgment and the judgment of the primary judge to the Secretary of the Commonwealth Department of Human Resources and to the Australian Taxation Office";

and

"Order that publication of any matter relating to these proceedings to the extent that it might tend to identify persons who are or were customers of the respondent bank by name or unique identifiers in relation to such persons be prohibited."

29 HOEBEN JA: I agree with Allsop P.

30 SACKVILLE AJA: I agree with Allsop P.

Decision last updated: 20 September 2012