Australian Agriculture and Property Development Corporation v DPP (C'th)

[2006] VSC 297

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

CRIMINAL DIVISION

No. 1530 of 2004

IN THE MATTER of the Proceeds of Crime Act 2002 (Cth)

and

IN THE MATTER of a suspect, Nicholas Corcoris

AUSTRALIAN AGRICULTURE AND PROPERTY DEVELOPMENT CORPORATION	Applicant
V
DIRECTOR OF PUBLIC PROSECUTIONS (COMMONWEALTH)	Respondent

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JUDGE:	HARGRAVE J
WHERE HELD:	Melbourne
DATE OF HEARING:	8 August 2006
DATE OF JUDGMENT:	8 August 2006
CASE MAY BE CITED AS:	Australian Agriculture and Property Development Corporation v DPP
MEDIUM NEUTRAL CITATION:	[2006] VSC 297

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Costs - substantive application not proceeded with because other matters made it unnecessary – application by one party for costs where no adjudication of the merits – relevant principles discussed – application for costs refused – substantive application dismissed with no order as to costs. 

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APPEARANCES:	Counsel	Solicitors
For the Applicants	Mr J. Simpson	Oakley Thompson & Co
For the Respondent	Mr N. Robinson	Director of Public Prosecutions (Cth)

HIS HONOUR:

1. By order made on 13 December 2004, as varied by further order made 17 December 2004, Hansen J made orders under s. 18 of the Proceeds of Crime Act 2002 (Cth) (“the Act”) restraining the disposition of specified property (“the restraining order”). The restraining order was made on the application of the Commonwealth Director of Public Prosecutions (“the DPP”).

1. The restraining order was made in circumstances where Hansen J was satisfied that there were reasonable grounds to suspect that Nicholas Corcoris (“Corcoris”) had committed a serious offence within the meaning of the Act. Further, Hansen J was satisfied that property owned by a number of companies was under the effective control of Corcoris. As a result, the restraining order prohibited those companies from dealing with any of their assets without the prior written consent of the DPP or the Official Trustee.

1. A number of the companies whose assets had been restrained by the restraining order made applications to the Court for their assets to be excluded from the restraining order. 

1. By application dated 18 May 2005, Australian Agriculture and Property Development Corporation, Australian Agricultural & Property Management Ltd, (No. 2) Holdings Pty Ltd and Victorian Land Development Pty Ltd (collectively “the applicants”) applied to have their assets excluded from the restraining order (“the exclusion application”). 

1. Significant costs were incurred by the parties to the exclusion application. 

1. Before the hearing of the exclusion application, it became futile to proceed with it.  After a lengthy period of negotiation between the DPP and Corcoris, Corcoris agreed to the making of a pecuniary penalty order against him and as to assets which could be used to satisfy the payment of that penalty.  Accordingly, it was no longer necessary for the DPP to maintain the restraining order in respect of the assets of the applicants and those assets were released from any restraint.

1. In these circumstances, the applicants applied to the Court for an order that the DPP pay their costs of the exclusion application (“the costs application”).  The DPP opposes the costs application, and submits that in accordance with established authority the proper order as to costs in circumstances such as this is that there be no order as to costs of the exclusion application.

1. The relevant principles are not in doubt.  In a similar context, McHugh J stated in Re The Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia;  ex parte Lai Qin:

“In most jurisdictions today, the power to order costs is a discretionary power.  Ordinarily, the power is exercised after a hearing on the merits and as a general rule the successful party is entitled to his or her costs.  Success in the action or on particular issues is the fact that usually controls the exercise of the discretion.  A successful party is prima facie entitled to a costs order.  When there has been no hearing on the merits, however, a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order.

In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action.  The court cannot try a hypothetical action between the parties.  To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided.  In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action.  ...

Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried.  This is perhaps the best explanation of the unreported decision of Pincus J in South East Queensland Electricity Board v Australian Telecommunications Commission where his Honour ordered the respondent to pay 80 per cent of the applicant’s taxed costs even though his Honour found that both parties had acted reasonably in respect of the litigation.  But such cases are likely to be rare.

If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings.  This approach has been adopted in a large number of cases.” [1]  (Citations omitted.)

[1](1997) 186 CLR 626 at 624-5.

1. Further, the principles were summarised by Redlich J (as he then was) in Jeruth Pty Ltd v Haybale Pty Ltd & Ors: 

“If a supervening event or compromise so removes or modifies the issues in dispute that it cannot be said that one side has won, the Court should not attempt to assess the merits of the case.  This is particularly so where the issues are complex or questions of credit are involved.  If it is clear on the undisputed facts that one party would almost certainly have succeeded if the matter had been fully tried, the Court may make an order in favour of that party.

Where it is not clearly discernible that a party would have won and it appears that both parties have acted reasonably in commencing and defending the proceedings until the litigation was compromised or became futile, the Court would usually make no order as to costs.  But where the Court concludes that a party has acted unreasonably prior to or during the course of the litigation the making of a costs order against it may be justified.

It is not in doubt that a party may rely upon matters of undisputed fact disclosed by the pleadings, affidavits, discovered documents or interlocutory relief granted in the course of proceedings to establish that the party acted reasonably and would have succeeded had the matter been tried...  Such a course is appropriate where the hearing can be of relatively short compass and those matters that are not in dispute readily identified.  The boundaries of such an inquiry must be strictly observed to ensure that an inappropriate use of Court resources does not occur.” [2]  (Citations omitted.)

[2][2004] VSC 319 at [4]-[6].

1. It was submitted on behalf of the applicants that the DPP had acted unreasonably by maintaining a suspicion that Mr Corcoris had effective control of all of the specified property belonging to the applicants from at least 31 March 2005 when negotiations between the applicants and the DPP commenced.  It was submitted that, from this time, the DPP was put on notice of the contentions made by the applicants, which were supported by Corcoris, and these contentions ought to have led the DPP to cease having any suspicion that Corcoris was in effective control of the applicants and the property owned by them which was the subject of the restraining order.

1. I reject the submissions made on behalf of the applicants.  They were made in great detail in writing, by reference to a substantial proportion of the evidence filed in the exclusion application, and orally.  In my view, the submissions made on behalf of the applicants seek to have me look at the merits of the exclusion application in an impermissible way.  This is not a case where there are undisputed facts which can lead to a result which the Court can feel sure of as to the merits of the exclusion application.  The exclusion application raises complex questions of fact and would have required a full hearing, with cross-examination of the deponents of affidavits and findings as to credit, in order to resolve it.

1. I made reference in argument to some of the matters which, in my opinion, are well capable of giving rise to a reasonable suspicion on the part of the DPP that Corcoris remained in effective control of the applicants and the specified property owned by them.  I have read all of the material filed in support of the exclusion application and in opposition to it.  I am satisfied that it was reasonable for the DPP to maintain its suspicion that Corcoris remained in effective control of the applicants. 

1. It was also submitted on behalf of the applicants that the DPP acted unreasonably in insisting that the applicants’ property remained subject to the restraining order, in circumstances where the pecuniary penalty ultimately agreed to was far less than the total of all of the assets which were the subject of the restraining order.  I reject this submission.  It would require me to examine the whole of the conduct of the DPP in and about the exclusion application, other exclusion applications made in respect of other property the subject of the restraining order and the application by the DPP for a pecuniary penalty order and related forfeiture orders.  This would require me to consider matters concerning all of the assets which were the subject of the restraining order, who owned them, their value, whether there was an arguable case for exclusion in respect of any of them and what advice the DPP had received and when.  In my view, it is wholly inappropriate that the costs application involve a consideration of these matters.  The DPP was entitled, in a complex matter such as this, to rely upon the restraining order until it was set aside or varied or became unnecessary as in this case.

1. The costs application will be dismissed.  I will order that the exclusion application be dismissed with no order as to costs.

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