Burnett v Director of Public Prosecutions
[2007] NTCA 7
•1 November 2007
Burnett & Ors v Director of Public Prosecutions [2007] NTCA 7
PARTIES:BURNETT, Martin John
AND
SPICECANE PTY LTD
(ACN 009 652 733)
v
DIRECTOR OF PUBLIC PROSECUTIONS
TITLE OF COURT: COURT OF APPEAL OF THE NORTHERN TERRITORY OF AUSTRALIA
JURISDICTION: APPELLATE JURISDICTION FROM THE SUPREME COURT OF THE NORTHERN TERRITORY OF AUSTRALIA
FILE NO:135 of 2006 (20628316)
DELIVERED: 1 NOVEMBER 2007
HEARING DATES: 28 – 31 MAY, 1 JUNE 2007
JUDGMENT OF: MARTIN (BR) CJ, MILDREN & SOUTHWOOD JJ
APPEAL FROM: JUSTICE RILEY 28 – 30 MARCH 2006
No 36 of 2006 (20609147) and No 37 of 2006 (20609172)
PARTIES:BURNETT, Martin John
AND
BURNETT, Dianne Maria
AND
BURNETT, James Mick
AND
SPICECANE PTY LTD
(ACN 009 652 733)
AND
EXECUTIVE BUSINESS STRATEGIES PTY LTD (ACN 107 862 000) AS TRUSTEE OF THE BURNETT FAMILY TRUST
AND
MONSOON HOMES PTY LTD
(ACN 104 438 766)
v
THE DIRECTOR OF PUBLIC PROSECUTIONS
AND
THE ATTORNEY-GENERAL OF THE NORTHERN TERRITORY OF AUSTRALIA (Intervener)
FILE NO:153 of 2006 (20631967)
TITLE OF COURT: FULL COURT OF THE SUPREME COURT OF THE NORTHERN TERRITORY
JURISDICTION: FULL COURT OF THE SUPREME COURT OF THE NORTHERN TERRITORY EXERCISING TERRITORY JURISDICTION PURSUANT TO S 21 OF THE SUPREME COURT ACT
DELIVERED: 1 NOVEMBER 2007
HEARING DATES: 28 – 31 MAY, 1 JUNE 2007
JUDGMENT OF: MARTIN (BR) CJ, MILDREN & SOUTHWOOD JJ
APPEAL FROM: RESERVATION OF A QUESTION OF LAW
CATCHWORDS:
CRIMINAL LAW
Referral of question of law - appeal - jurisdiction, practice and procedure – operation of the Criminal Property Forfeiture Act 2002 (NT) – whether conduct of proceedings and failure to provide reasons constituted a denial of procedural fairness – failure to provide reasons amounted to denial of procedural fairness – appeal allowed.
Referral of question of law -- Jurisdiction, practice and procedure -- operation of the Criminal Property Forfeiture Act 2002 (NT) – validity of legislation -- whether institutional integrity of the Court impaired – power to make allowance for legal expenses - legislation valid.
Criminal Property Forfeiture Act2002(NT), s 3, s 6, Pt 2, Pt 3, Pt 4 Div 1 and 2, Pt 5, Pt 6, s 92, s 121, s 135, s 136, and s 154; Interpretation Act 1980 (NT), s 17; Legal Aid Act 1990 (NT), s 5, s 7, s 12, s 26, Pt VI, s 43, s 44, s 45; Misuse of Drugs Act 1990 (NT), s 36A; Marriage Act 1961 (Cth), s 94(2); Supreme Court Act1979 (NT), s 21, s 51, s 53 and s 75; Supreme Court Rules (NT) r 23.01, r 92.06, r 92.08
Annetts v McCann (1990) 170 CLR 596; ASIC v Edensor Nominees Pty Ltd and Ors (2001) 204 CLR 559; Baker v The Queen (2005) 223 CLR 513; Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256; Black v Taylor [1993] 3 NZLR 403; Cameron v Cole (1944) 68 CLR 571; Campbelltown City Council v Vegan (2006) 67 NSWLR 372; Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1; Dietrich v The Queen (1992) 177 CLR 292; Electric Light and Power Supply Corporation Ltd v Electricity Commission (NSW) and Anor (1956) 94 CLR 554; Fardon v Attorney-General (Qld) (2004) 223 CLR 575; Fleming v The Queen (1998) 197 CLR 250; Forge v Australian Securities and Investments Commission (2006) 228 CLR 45; Gypsy Jokers Motorcycle Club Inc v Commissioner of Police (2007) 33 WAR 245; Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51; Leeth v The Commonwealth (1992) 174 CLR 455; McInnis v The Queen (1979) 143 CLR 575; Mansfield v Director of Public Prosecutions for Western Australia (2006) 226 CLR 486; Nichols v Queensland [1983] 1 Qd R 580; Nicholas v The Queen (1998) 193 CLR 173; Papps v Police (2000) 77 SASR 210; Plaintiff S157/ 2002 v The Commonwealth of Australia (2003) 211 CLR 476; R v Keyte (2000) 78 SASR 68; Sanders v Sanders (1967) 116 CLR 366; Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247; Tran v Claydon (2003) 40 MVR 506; Tringali v Stewardson Stubbs & Collett Ltd (1965) 66 SR (NSW) 335; Walton v Gardiner (1993) 177 CLR 378; Wentworth v NSW Bar Association (1992) 176 CLR 239; Woolf v Trebilco [1933] VLR 180, considered.
Alice Springs Town Council v Mpweteyerre Aboriginal Corporation and Others (1997) 115 NTR 25; Apollo Shower Screens Pty Ltd v Building and Construction Industry Long Service Payments Corp (1985) 1 NSWLR 561; Apps v Pilet (1987) 11 NSWLR 350; Asiatic Petroleum Co Ltd v Anglo-Persian Oil Co Ltd [1916] 1 KB 822; Attorney-General (Hong Kong) v Lee Kwong-kut [1993] AC 951; Australian National Airlines Commission v The Commonwealth of Australia & Anor (1975) 132 CLR 582; Barton v Walker [1979] 2 NSWLR 740; Blatch v Archer (1774) 98 ER 969; ChiefCommissioner of Pay-Roll Tax v Group Four Industries Pty Ltd [1984] 1 NSWLR 680; De Iacovo v Lacanale [1957] VR 553; Director of Public Prosecutions (Cth)v Saxon (1992) 28 NSWLR 263; Director of Public Prosecutions (SA) v Vella (1993) 61 SASR 379; Equiticorp Holdings Ltd v Hawkins [1993] 2 NZLR 737; Giannarelli v Wraith (1988) 165 CLR 543; Hampton Court Ltd v Crooks (1957) 97 CLR 367; Harris v Caladine (1991) 172 CLR 84; Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378; In re Racal Communications Ltd [1981] AC 374; In the Estate of Leahy (Dec’d); Earl v Moses & Anor [1975] 1 NSWLR 246; Jago v District Court (NSW) (1989) 168 CLR 23; John Fairfax Publications Pty Ltd v Attorney – General (NSW) (2000) 81 ALR 694; Knight v FP Special Assets Ltd (1992) 174 CLR 178; Kooky Garments Ltd v Charlton [1994] 1 NZLR 587; Lipohar v the Queen (1999) 200 CLR 485; Main Electrical Pty Ltd v Civil & Civic Pty Ltd (1978) 19 SASR 34; Mansfield v Director of Public Prosecutions (WA) (2005) 31 WAR 97; Moevao v Department of Labour [1980] 1 NZLR 464; Mobasa Pty Ltd v Nikic (1987) 47 NTR 48; Nationwide News Pty Ltd & Ors v Bradshaw & Anor (1986) 41 NTR 1; North Australian Aboriginal Legal Aid Service Inc v Bradley & Anor (2004) 218 CLR 146; Pasha v Edmonds & Anor (1998) 28 MVR 217; Pettitt v Dunkley [1971] 1 NSWLR 376; R v Moffatt [1998] 2 VR 229; R v Parker (1994) 75 A Crim R 437; Re Criminal Proceeds Confiscation Act 2002 [2004] 1 Qd R 40; Re Harrod [1978] 1 NSWLR 331; The State of New South Wales v Canellis & Ors (1994) 181 CLR 309; Silbert v Director of Public Prosecutions (WA) (2004) 217 CLR 181; Sypott v The Queen [2003] VSC 41; Western Australia v Ward (1997) 76 FCR 492; Wilson v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 189 CLR 1; Young v Quin & Ors (1985) 59 ALR 225, referred to.
Simpson, S D, Bailey, D L, and Evans, E K, Discovery and Interrogations, 2nd ed Butterworths, Sydney, 1990
REPRESENTATION:
Counsel:
First & Fourth Appellants/Plaintiffs: C McDonald QC with S Lee
Second Appellant/Plaintiff: R Webb QC with T Prichard
Third, Fifth & Sixth Appellants/Plaintiffs: D Greenwell
First Respondent/Defendant: A Silvester
Intervener:T Pauling QC with S Brownhill
Solicitors:
First, Second & Fourth Appellants/Plaintiffs: Maleys
Third, Fifth & Sixth Appellants/Plaintiffs: Grope Hamilton Lawyers
First Respondent/Defendant: Solicitor for the Northern Territory
Intervener:Attorney-General for the Northern Territory
Judgment category classification: A
Judgment ID Number: Mar0713
Number of pages: 155
IN THE COURT OF APPEAL
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWINBurnett & Ors v Director of Public Prosecutions [2007] NTCA 7
No. SC 135 of 2006 (20628316) & SC No 153 of 2006 (20631967)
No 135 of 2006 BETWEEN:
MARTIN JOHN BURNETT
First Appellant
SPICECANE PTY LTD
(ACN 009 652 733)
Second Appellant
AND
DIRECTOR OF PUBLIC PROSECUTIONS
Respondent
IN THE FULL COURT OF
THE SURPEME COURT OF
THE NORTHERN TERRITORY
OF AUSTRALIA AT DARWIN
No 153 of 2006 BETWEEN:
MARTIN JOHN BURNETT
First Plaintiff
DIANNE MARIA BURNETT
Second Plaintiff
JAMES MICK BURNETT
Third Plaintiff
SPICECANE PTY LTD
(ACN 009 652 733)
Fourth Plaintiff
EXECUTIVE BUSINESS STRATEGIES PTY LTD (ACN 107 862 000) AS TRUSTEE OF THE BURNETT FAMILY TRUST
Fifth Plaintiff
MONSOON HOMES PTY LTD
(ACN 104 438 766)
Sixth Plaintiff
AND
DIRECTOR OF PUBLIC PROSECUTIONS
Defendant
THE ATTORNEY-GENERAL OF THE NORTHERN TERRITORY OF AUSTRALIA
Intervener
CORAM: MARTIN (BR) CJ, MILDREN & SOUTHWOOD JJ
REASONS FOR JUDGMENT
(Delivered 1 November 2007)
Martin (BR) CJ:
Introduction
Questions of law arising out of the operation of the Criminal Property Forfeiture Act (“the Act”) have been referred to this Court.
On 28 March 2006 the Director of Public Prosecutions (“the Director”) filed in the Supreme Court two applications under the Act. In proceedings number 36 of 2006 the Director sought ex parte orders restraining identified real and personal property of a number of related persons and entities (“the plaintiffs”). The grounds advanced in support of the application were that all the property constituted unexplained wealth of the plaintiffs and that specified property was either crime-used or crime-derived property. Other incidental orders were sought including an order that six of the affidavits filed in support of the application not be provided to the plaintiffs on the grounds of public interest immunity and that disclosure might prejudice an ongoing investigation.
In proceedings number 37 of 2006 the Director sought a declaration that the plaintiff, Martin John Burnett, was at all times after 1 January 1999 taken to be involved in criminal activities. Declarations were sought that property identified in the application was crime-derived and crime-used property and constituted unexplained wealth for the purposes of the Act. Associated declarations were sought that none of the wealth was lawfully acquired. In substance a declaration was sought as to the amount of unexplained wealth together with either payment of the amount or forfeiture of the property.
On 29 March 2006 the Director filed an ex parte application seeking consolidation of the two proceedings.
All applications proceeded without notice to the plaintiffs. On 29 March 2006 a Judge of the Supreme Court ordered that the two sets of proceedings be consolidated. On 30 March 2006 his Honour made orders restraining all of the property identified in the application. The order specified that restraint was made on the grounds that some of the property was crime-derived property and all of the property constituted unexplained wealth of the plaintiffs.
On 30 March 2006 the learned Judge also ordered that information contained in six affidavits filed in support of the application for restraining orders not be provided to the plaintiffs (“confidential affidavits”). The formal order identifies that it was made on the grounds “of public interest immunity and that the Court is satisfied that the release of information contained in the … affidavits may materially prejudice an ongoing investigation …”. No written reasons were delivered.
A formal order was not made in respect of the applications for declarations. Consideration of those applications appears to have been adjourned.
The Judge ordered that the court be closed during the hearings. No transcript has been made available to the plaintiffs. His Honour did not give reasons for his decisions. A subsequent application by some of the plaintiffs for access to the confidential affidavits was refused. Brief oral extempore reasons were given.
In proceedings number 135 of 2006, the plaintiffs sought a declaration that the conduct of the proceedings before the judge constituted “a denial of procedural fairness” and were invalid. Further, and in the alternative, the plaintiffs sought a declaration that the failure of the Judge to give reasons constituted a denial of procedural fairness.
In proceedings number 153 of 2006, the plaintiffs sought declarations that sections 46(2), 49(4) and 154(1)(a) of the Act are invalid. In essence, the plaintiffs submitted that these provisions substantially impair the institutional integrity of the Supreme Court of the Northern Territory and amount to an impermissible direction to the Court as to the manner and/or outcome of the exercise of the Court’s jurisdiction under the Act.
A different Judge reserved for the consideration of the Full Court a number of questions arising from both sets of proceedings. Those questions are set out in paragraphs [19] and [20] of these reasons.
During submissions in this Court, no issue was taken as to the validity of either set of proceedings which have found their way to this Court through references of questions of law. In particular, in proceedings number 135 of 2006 the plaintiffs effectively sought a declaration from a Judge of the Supreme Court that proceedings before another Judge of the same Court constituted a denial of procedural fairness and were invalid. Neither party raised the question as to the power of a single Judge in the exercise of the Court’s original jurisdiction to issue prerogative relief against another Judge.
After this Court reserved its decision, the Court sought written submissions on this issue. In proceedings number 153 of 2006, both the Director and the Attorney-General who intervened in those proceedings submitted that as declarations were sought that various provisions of the Act were invalid and prerogative relief was not sought in respect of orders made by another Judge of the Court, the plaintiffs had standing and a Judge had jurisdiction to entertain the proceedings and power to make the orders sought.
In respect of proceedings number 135 of 2006, however, the Director submitted that there is considerable doubt that a single Judge had jurisdiction to entertain the proceedings because a declaration was sought that the conduct of another Judge of the Court constituted a denial of procedural fairness and, therefore, the orders of the Judge were invalid. The Director suggested that as the issues had been fully argued, rather than dismiss the proceedings, sitting as the Court of Appeal the Court should dispense with compliance with the Supreme Court Rules and treat the proceedings as an application for leave to appeal, grant leave to appeal and proceed on the basis that proceedings number 135 of 2006 constitute an appeal to the Court of Appeal. The plaintiffs did not object to that course.
In my opinion, it is unnecessary to canvass the submissions or authorities with respect to these questions. Proceedings number 153 of 2006 were valid and it is unnecessary to determine the validity of proceedings number 135 of 2006. Rather, in proceedings number 135 of 2006, sitting as the Court of Appeal the Court should dispense with compliance with the Rules, grant leave to appeal and treat the matter as having been heard as an appeal.
For ease of reference, these reasons proceed on the basis of the references of questions of law in both sets of proceedings. As will appear later in these reasons, however, in my view in proceedings number 135 of 2006 the appeal should be allowed.
Agreed Facts
For the purposes of both sets of proceedings, the following facts were agreed between the parties:
“(1)The defendant [the Director of Public Prosecutions] proceeded ex parte before Riley J in the Supreme Court of the Northern Territory on 28, 29 and 30 March 2006 in proceedings numbered 36 and 37 of 2006 seeking restraint of the property set out in the application. The application was made pursuant to the provisions of the Criminal Property Forfeiture Act (“the Act”).
(2)The defendant did not give notice to any of the plaintiffs or their servants or agents in respect of the ex parte applications made on 28 March 2006.
(3)The defendant relied upon some nine affidavits in the ex parte application. Six of the affidavits relied upon in the application were specified as confidential affidavits.
(4)The application in proceedings numbered 36 of 2006 stated in paragraph 9 thereof that the “facts, matters and circumstances supporting this application are as set out in the affidavits”. This reference included the six confidential affidavits.
(5)The defendant, in his ex parte application, sought that all the property specified in the application be restrained under the provisions of the Criminal Property Forfeiture Act.
(6)The property sought to be restrained was:
(a) Real property
(i)Residential property known as 10 Stasinowsky Street, Alawa, Northern Territory being all that land comprised in Certificate of Title Vol 689 Fol 495 being Lot 1890 Town of Nightcliff from Plan A 000385, the registered proprietor of which is Executive Business Strategies Pty Ltd as trustee of the Burnett Family Trust;
(ii)Residential property known as Unit 17, 7 Brewery Place, Woolner, Northern Territory being all that land comprised in Certificate of Title Vol 672 Fol 033 being Lot 7105 Town of Darwin Units Plan U2003/603, the registered proprietor of which is James Mick Burnett;
(iii)Residential property known as 30 Orchard Road, Coconut Grove, Northern Territory being all that land comprised in Certificate of Title Vol 689 Fol 492 being Lot 9164 Town of Nightcliff from Plan LTO 85/065 the registered proprietor of which is Executive Business Strategies Pty Ltd as trustee of the Burnett Family Trust;
(iv)Residential property known as 35 Flinders Drive, Stuart Park, Northern Territory being all that land comprised in Certificate of Title Vol 689 Fol 492 being Lot 4785 Town of Darwin from Plan OP 001415, the registered proprietor of which is Executive Business Strategies Pty Ltd as trustee of the Burnett Family Trust;
(v)Commercial property known as 110 Mitchell Street, Darwin, Northern Territory being all that land comprised in Certificate of Title Vol 689 Fol 492 being Lot 2443 Town of Darwin from Plan DIA 000388, the registered proprietor of which is Executive Business Strategies Pty Ltd as trustee of the Burnett Family Trust;
(vi)The net proceeds of the sale of the property known as 72 Archer Street, Woodford, Queensland 4514, the registered proprietor of which was Spicecane Pty Ltd.
(b)Personal property
(i)BMW 318i Sedan NT 662 589 owned by Spicecane Pty Ltd;
(ii)Holden Commodore SS VT Sedan NT 532 907 owned by Spicecane Pty Ltd;
(iii)Mazda B2600 4 x 2 Std Cab NT 429 603 owned by Spicecane Pty Ltd;
(iv)Ford Fairmont NT 647 197 owned by Martin John Burnett;
(v)Toyota Hilux NT 699 863 owned by James Mick Burnett.
(c)Accounts
(i)ANZ – Spicecane Pty Ltd – BSB 015 901 Acc No 1099-78264;
(ii)ANZ – Executive Business Strategies as Trustee of the Burnett Family Trust – BSB 015 901 Acc No 4967-14145;
(iii)CBA – Monsoon Homes Pty Ltd – Acc No 590310440725.
(d)Solicitors Trust Account – Priestleys Lawyers Pty Ltd Trust Account – monies held on behalf of Spicecane Pty Ltd or Martin John Burnett;
(e)Solicitors Trust Account – Smith & Stanton, Solicitors, 607 Robinson Road, Apsley, Queensland, 4034 – monies held on behalf of Spicecane Pty Ltd or Martin John Burnett.
The plaintiffs do not have any other real property, bank accounts or motor vehicles.
(7)The defendant did not direct Riley J’s attention to restraining less property than that restrained so that the plaintiffs could meet legal expenses in defending proceedings number 36 and 37 of 2006.
(8)Riley J did not inquire whether he should restrain less property than that sought to be restrained.
(9)An application was made ex parte on 29 March 2006 to consolidate proceeding number 37 of 2006 with proceeding number 36 of 2006.
(10)No notice of the ex parte application for consolidation of proceeding number 37 of 2006 with proceeding number 36 of 2006 was given to any of the plaintiffs, their servants or agents.
(11)On 30 March 2006 the defendant made further submissions ex parte in respect of seeking the restraining orders sought in proceedings number 36 of 2006.
(12)Riley J made orders ex parte on 30 March 2006 restraining all the property sought in the application pursuant to the provisions of the Act.
(13)Other than the formal orders made on 30 March 2006 Riley J did not give any reasons for his decision and/or decisions and orders made on 28, 29 and 30 March 2006.
(14)Riley J did not publish any reasons for his decision and/or decisions and orders made on 28, 29 and 30 March 2006.
(15)No transcript of the ex parte proceedings on 28, 29 and 30 March 2006 has been made available to the plaintiffs, their servants or agents.
(16)Some of the plaintiffs sought access to the confidential affidavits in or around May 2006.
(17)Riley J denied the plaintiffs access to the confidential affidavits referred to in the application made ex parte on 28 March 2006. His Honour did not give formal reasons for his refusal but they can be gleaned from a transcript dated 26 May 2006 provided to the plaintiffs on 7 October 2006.
(18)The plaintiffs’ interests in their property, livelihood and reputation were affected by the orders made on 28, 29 and 30 March 2006.”
Additional facts placed before the Court during the hearing are set out in the reasons of Mildren J in paras [196] and [198].
Questions Reserved
In proceedings number 135 of 2006 (“procedural fairness proceedings”), the following questions were reserved for the consideration of this Court:
“1.Whether the cumulative factors referred to in 1 to 17 amount to a denial of procedural fairness in the conduct of the proceedings numbered 36 and 37 of 2006.
2.Further and alternatively whether the failure of Justice Riley to give and publish reasons for his decision or decisions and orders of 28, 29 and 30 March 2006 constituted a denial of procedural fairness in the circumstances of an ex parte application made by the defendant under the provisions of the Act.
3.Whether in the context of an ex parte application for the restraint of the plaintiffs’ property the person is entitled to:
a)notice of the application;
b)reasons for making the restraining orders made on 28, 29 and 30 March 2006.”
In proceedings number 153 of 2006 (“validity proceedings”), the following questions were reserved;
“1.Whether s 46(2) of the Criminal Property Forfeiture Act (“the Act) is invalid on the basis that it imposes a limitation on the function of the Supreme Court which:
(a)comprises the institutional impartiality and appearance of impartiality of the Supreme Court;
(b)which is repugnant to the judicial process in a fundamental degree;
(c)inhibits the performance of the judicial function;
(d)imposes on the Supreme Court and the performance of the judicial function a rigid or inflexible rule;
(e)interferes with judicial discretion.
2.Whether ss 46(2), 49(4) and 154(1) of the Act are invalid on the basis that they direct the Supreme Court as to the manner and/or outcome of its exercise of jurisdiction under the Act.
3.Whether ss 46(2), 49(4) and 154(1) of the Act are invalid on the basis that they impose statutory procedures which:
(a)compromise the institutional impartiality and appearance of impartiality of the Supreme Court;
(b)are repugnant to the judicial process in a fundamental degree;
(c)inhibit the performance of the judicial function;
(d)impose on the Supreme Court and the performance of the judicial function a rigid or inflexible rule;
(e)interferes with a judicial discretion.”
The Legislative Scheme
The plaintiffs’ complaints require consideration of the legislative scheme introduced in 2002 by the Act which replaced the conviction based forfeiture scheme that had been in operation since 1998 through the Crimes (Forfeiture of Proceeds) Act. In his Second Reading Speech on 16 May 2002 when introducing the new scheme, the Attorney-General described the conviction based scheme as “ineffective and outdated” and “largely useless”. The Attorney-General described the new scheme as a “non-conviction based civil scheme” with three objectives:
“1.To deter those who may be contemplating criminal activity by reducing the possibility of gaining a profit from that activity;
2.To prevent crime by diminishing the capacity of the offenders to finance future criminal activities; and
3.To remedy the unjust enrichment of criminals who profit at society’s expense.”
The objectives identified by the Attorney-General in the Second Reading Speech are reflected in the preamble to the Act and in s 3:
“3. Objective
The objective of this Act is to target the proceeds of crime in general and drug-related crime in particular in order to prevent the unjust enrichment of persons involved in criminal activities.”
Section 136 of the Act provides that proceedings on an application under the Act “are taken to be civil proceedings for all purposes” and questions of fact in such proceedings are to be decided on the balance of probabilities. Subsection (2) of s 136 directs that other than in proceedings relating to an offence under the Act, rules of evidence applicable in civil proceedings apply and rules of evidence and construction applicable only in relation to the criminal law and criminal proceedings do not apply.
Part 3 of the Act is concerned with investigations and grants extensive powers to investigators. Division 5 of Part 3 is headed “Secrecy requirements” and is plainly aimed at preventing disclosure of the fact of investigation with a view to preventing dissipation and removal of assets that might be seized and forfeited under the Act.
As to property that is capable of being seized, restrained and forfeited, the Act is far reaching in its effect. Section 10 provides that the Act applies to property as follows:
“(a)to property –
(i)owned or effectively controlled; or
(ii)previously owned,
by persons who are involved in or taken to be involved in criminal activities;
(b)to property that is crime-used; and
(c)to property that is crime-derived.
(2) The property (real or personal) of a person who is involved or taken to be involved in criminal activities is forfeit to the Territory to the extent provided in this Act to compensate the Territory community for the costs of deterring, detecting and dealing with the criminal activities.
(3) Crime-used or crime-derived property (real or personal) is forfeit to the Territory to deter criminal activity and prevent the unjust enrichment of persons involved in criminal activities.”
Section 10(4) defines the circumstances in which a person is taken to be involved in criminal activities in wide terms. Similarly, broad definitions of crime-used and crime-derived property are found in s 11 and s 12.
Although the Local Court is given limited jurisdiction in proceedings under the Act, the primary jurisdiction is conferred upon the Supreme Court by s 135(1) which provides that the Supreme Court “has jurisdiction in any proceedings under this Act”.
Various powers are conferred upon the Supreme Court, and in limited circumstances upon the Local Court, to make restraining orders with respect to identified property or property of specified persons. The plaintiffs do not challenge the overall validity of the provisions conferring power to make restraining orders, but attack the validity of ss 46(2), 49(4) and 154(1)(a) which they contend effectively prevent a court making restraining orders from taking into account legal expenses incurred in connection with proceedings under the Act. These and other provisions relating to the seizure of property and restraining orders are found in Part 4 of the Act which is headed “Ensuring Property Remains Available For Forfeiture”. Sections 46(2) and 49(4) are in Division 2 of Part 4:
“Division 2 – Restraining orders in relation to property
41. Applications for restraining orders
(1) A member of the Police Force or the DPP may apply to the Local Court for a restraining order under section 43(1).
(2) The DPP may apply to the Supreme Court for a restraining order under this Division.
(3) An application under subsection (1) or (2) may be made ex parte.
42. Proceedings for restraining orders
In proceedings for a restraining order, the court that is hearing the application under section 41 may do any or all of the following:
(a)order that the whole or any part of the proceedings is to be heard in closed court;
(b)order that only persons or classes of persons specified by the court may be present during the whole or any part of the proceedings;
(c)make an order prohibiting the publication of a report of the whole or any part of the proceedings or of any information derived from the proceedings.
43. Restraining order in relation to specified property
(1) Subject to section 135, the Local Court may, on application by a member of the Police Force or the DPP, make a restraining order in relation to property specified in the application if there are reasonable grounds for suspecting that the property is crime-used or crime-derived.
(2) The Supreme Court may, on application by the DPP, make a restraining order in relation to property specified in the application in any of the following cases:
(a)if there are reasonable grounds for suspecting that the property is crime-used or crime-derived;
(b)if the property is a subject of an examination order, whether or not the person to whom the examination order is directed owns or effectively controls the property;
(c)if the property is funds held in an account that is a subject of a monitoring order;
(d)if the property is funds held in an account to which a suspension order applies.
(3) Subsection (2) also applies to property where the court is advised that an application has been made, or it is intended that within 21 days after the application for the restraining order an application will be made, for the examination order, monitoring order or suspension order (as the case may be).
44. Restraining orders in relation to property of named persons
(1) The Supreme Court may, on application by the DPP, make a restraining order in relation to the property of a person named in the application if –
(a)the person has been charged, or it is intended that within 21 days after the application the person will be charged, with an offence that, if the person is convicted of the offence, could lead to the person being declared to be a drug trafficker under section 36A of the Misuse of Drugs Act;
(b)an application has been made, or it is intended that within 21 days after the application for the restraining order an application will be made, for one or more of the following in relation to the person:
(i)a production order;
(ii)an unexplained wealth declaration;
(iii)a criminal benefit declaration;
(iv)a crime-used property substitution declaration; or
(c)an order or declaration mentioned in paragraph (b) has been made in relation to the person.
(2) A restraining order under this section can apply to –
(a)all or any property that is owned or effectively controlled by the person at the time of the application for the restraining order, whether or not any of the property is described or identified in the application; and
(b)all property acquired –
(i)by the person; or
(ii)by another person at the request or direction of the person named in the application for the restraining order,
after the restraining order is issued.
(3) The court must not refuse to make a restraining order under subsection (1)(b)(ii), (iii) or (iv) only because the value of the property subject to the restraining order exceeds, or could exceed, the amount that the person could be liable to pay to the Territory if the relevant declaration is made.
45. Restraining order to specify grounds
(1) If an application is made under section 41 for a restraining order, the court that is hearing the application must –
(a)consider each matter that is alleged by the applicant, either in the application or in the course of the proceedings, as a ground for making the order; and
(b)if the order is made – set out in the order each ground that the court finds is a ground on which the order may be made.
(2) If the court that is hearing an application under section 41 is satisfied that the release of information contained in an affidavit in support of the application may materially prejudice an ongoing investigation, the court may order that the information is not to be provided when a copy of the restraining order is served on any person.
46. Scope of restraining order
(1) In a restraining order, the court that makes the order may do any or all of the following:
(a)direct that any income or other property derived from the property while the order is in force is to be treated as part of the property;
(b)if the property is moveable – direct that the property is not to be moved except in accordance with the order;
(c)appoint the Public Trustee or another person to manage the property while the order is in force;
(d)give any other directions necessary to provide for the security and management of the property while the order is in force;
(e)provide for meeting the reasonable living and business expenses of the owner of the property.
(2) In subsection (1)(e), reasonable living and business expenses does not include legal expenses referred to in section 154.
47. Service of restraining order
(1) As soon as practicable after a restraining order is made, the applicant in relation to the order must arrange for a copy of the order and a notice that complies with subsection (5) to be served personally on each of the following persons:
(a)if property that is subject to the order was taken from a person or is in the custody of a person – that person;
(b)any person known to the applicant at the time the order was made who has, may have or claims to have an interest in the property subject to the order.
(2) If property subject to the order is registrable under an Act other than the Land Title Act, the applicant must notify the appropriate registrar of the issue of the notice.
(3) If, as a result of a statutory declaration made in accordance with section 48 by a person who was served under subsection (1) with a copy of the restraining order, the applicant becomes aware of another person who has, may have or claims to have an interest in the property subject to the order, the applicant must arrange for personal service of a copy of the order on the other person as soon as practicable.
(4) Subsections (1) and (3) do not prevent the applicant from serving a copy of the restraining order and a notice at any time on any other person of whom the applicant becomes aware who has, may have or claims to have an interest in the property.
(5) The notice referred to in subsection (1) is to –
(a)summarise the effect of the order, including the period for which it applies; and
(b)advise the person on whom the order and the notice are served –
(i)that the property described in the order may be forfeited under this Act;
(ii)that he or she can, within 28 days after being served with the copy of the order, file in the court that made the order an objection to the restraint of the property; and
(iii)of the person's obligation to make and lodge a statutory declaration in accordance with section 48.
(6) The applicant in relation to the restraining order must ensure that –
(a)an affidavit of service is endorsed on a copy of each copy of the restraining order that is served on a person; and
(b)each endorsed copy is filed in the court that made the order.
48.Statutory declaration required from person served with restraining order
(1) A person who is served under section 47(1) or (3) with a copy of a restraining order must make a statutory declaration as to the matters set out in subsection (2) and file the declaration in the court that made the restraining order within 7 days after being served with the order.
(2) In a statutory declaration under this section, the declarant must –
(a)state the name and, if known, the address of any other person of whom the declarant is aware who has, may have or claims to have an interest in property that is subject to the restraining order; or
(b)if the declarant is not aware of any other person who has, may have or claims to have an interest in property that is subject to the restraining notice – make a statement to that effect.
Penalty: 2 000 penalty units or imprisonment for 2 years.
49. Effect of restraining order
(1) While a restraining order is in effect in relation to property –
(a)subject to Division 3, the property cannot be dealt with; and
(b)the applicant in relation to the restraining order may apply under this Act to the court that made the restraining order for an order that all or some of the property is forfeit to the Territory.
(2) Income or other property that is derived from property subject to a restraining order is taken to be part of the property and is also subject to the restraining order.
(3) A person may apply to the court that made a restraining order for the release of property that is subject to the order to meet reasonable living and business expenses of the owner of the property.
(4) In subsection (3), reasonable living and business expenses does not include legal expenses referred to in section 154.
50. Setting aside of restraining order
(1) The applicant in relation to a restraining order under section 43(1) or (2)(a) must request the court that made the order to set the order aside if the grounds for suspecting that the property is crime-used or crime-derived no longer exist.
(2) The applicant in relation to a restraining order under section 44(1)(a) must request the court that made the order to set the order aside if the person could not be declared to be a drug trafficker.
(3) The applicant in relation to a restraining order may request the court that made the order to set the order aside for any other reason.
(4) If a restraining order relating to property is set aside, the applicant in relation to the restraining order must ensure that –
(a)notice of the setting aside is served personally, as soon as practicable, on each person on whom a copy of the restraining order was served under section 47;
(b)any property subject to the restraining order that is being retained under section 39(2) is returned to the person from whom it was seized unless it is to be otherwise dealt with under this Act or another Act;
(c)any property subject to the restraining order that is being guarded under section 39(2) is released from guard; and
(d)if the applicant is aware that the person to whom property is to be returned under paragraph (b) is not the owner of the property – the owner is notified, where practicable, of the setting aside of the restraining order and the return of the property.
51. Duration of restraining order
(1) A restraining order under section 43 or 44 has effect for the period, not exceeding 3 months, set by the court when the order is made.
(2) On application, the court that made a restraining order may extend the duration of the order for a further period not exceeding 3 months.
(3) The court that made a restraining order may extend the duration of the order on as many occasions as the court sees fit.
(4) If the period of a restraining order is extended under this section, the applicant in relation to the order must serve a notice of the extension on each person on whom a notice was served under section 47.
52. Restraining order ceases to have effect
(1) If a restraining order has been made under section 43(1) or (2)(a) in relation to suspected crime-used or crime-derived property, the order ceases to have effect if within the period set (or extended) by the court under section 51 an application has not been made –
(a)if the property is crime-derived – either under section 73 for a criminal benefits declaration or under Part 7 for forfeiture of the property; or
(b)if the property is crime-used – under Part 7 for forfeiture of the property.
(2) If a restraining order has been made under section 44(1)(a) in relation to property of a person who was to be charged with an offence, the order ceases to have effect if within 21 days after the date of the order the person has not been charged with the offence indicated in the application for the order or an alternative offence.
(3) If a restraining order has been issued under section 44(1)(a) in relation to property of a person who has been charged, or who was to be charged and a charge has been laid within 21 days after the date of the order, the order ceases to have effect –
(a)if the charge is finally determined but the person is not declared under section 36A of the Misuse of Drugs Act to be a drug trafficker; or
(b)if the charge is disposed of without being determined.
(4) If a restraining order has been made under section 43 on the basis that an application had been made or was to be made for another order, the restraining order ceases to have effect if –
(a)within 21 days after the making of the restraining order an application has not been made for the other order;
(b)the application for the other order is withdrawn; or
(c)the application for the other order is finally determined but the court that heard the application does not make the other order.
(5) If a restraining order has been made under section 44(1)(b) on the basis that an application was to be made for a production order or a declaration, the restraining order ceases to have effect if –
(a)within 21 days after the making of the restraining order an application has not been made for the production order or the declaration;
(b)the application for the production order or declaration is withdrawn;
(c)the application for the production order or declaration is finally determined but the court that heard the application does not make the production order or declaration; or
(d)if a declaration is made – the respondent's liability to pay to the Territory the amount ordered by the court that made the declaration (including any costs awarded against the respondent) is satisfied, whether or not all or any of the property subject to the restraining order was transferred to the Territory to satisfy the liability.
(6) A restraining order made under section 43 or 44 ceases to have effect if the order is set aside under section 50 or Part 5.
(7) Despite anything in this section, a restraining order that was issued under both sections 43 and 44 or on more than one ground under either section –
(a)only ceases to have effect if set aside on all grounds; and
(b)if set aside on only some of the grounds – continues in effect on each remaining ground.
(8) A restraining order ceases to have effect in relation to property if the property is forfeited to the Territory under Part 7, Division 3.
53. Real property
(1) If a restraining order is issued in relation to land –
(a)the applicant in relation to the restraining order must lodge an instrument, together with a copy of the restraining order, with the Registrar-General;
(b)the instrument has effect as a memorandum referred to in section 35 of the Land Title Act and is taken to be lodged by the appropriate Minister; and
(c)the restraining order takes effect in relation to the land when the instrument is registered under the Land Title Act and the Registrar-General enters a statutory restrictions notice in the land register.
(2) If, in accordance with section 52, a restraining order ceases to have effect and the order relates wholly or in part to land –
(a)the DPP must lodge an instrument with the Registrar-General advising that the order has ceased to have effect; and
(b)despite section 52, the restraining order only ceases to have effect in relation to the land when the instrument referred to in paragraph (a) is registered under the Land Title Act and the statutory restrictions notice is removed from the land register.
54. Property may be restrained under more than one order
(1) Property may be restrained under this Act under more than one order at the same time on the same or different grounds.
(2) If a restraining order ceases to have effect in relation to property, the property remains restrained under any other restraining order in relation to the property while the other order remains in effect.”
It is necessary to identify a number of significant features of Part 4, but first it is appropriate to set out Part 5 which concerns objections to the restraint of property:
“PART 5 – OBJECTIONS TO RESTRAINT OF PROPERTY
59. Objections to restraining of property
(1) A person may file in the court that made the relevant restraining order an objection to the restraint of the property.
(2) An objection is to identify –
(a)the property to which the objection relates; and
(b)the grounds for objection against the property being restrained.
60. Time for filing objection
(1) If a copy of the restraining order was served on the objector under section 47, the objection is to be filed –
(a)within 28 days after the day on which the copy of the order was served on the objector; or
(b)within any further time allowed by the court in which the objection is filed.
(2) If a copy of the restraining order was not served on the objector under section 47, the objection is to be filed –
(a)within 28 days after the day on which the objector becomes aware, or could reasonably be expected to have become aware, that the property has been restrained; or
(b)within any further time allowed by the court in which the objection is filed.
(3) The court may allow further time under subsection (2) or (3) despite that the time for filing the objection has expired.
61. Parties to objection proceedings
The Territory is a party to proceedings on an objection.
62. Setting aside restraining order
(1) The court that is hearing an objection to the restraint of property may set aside the relevant restraining order to the extent provided by section 63, 64 or 65.
(2) Despite subsection (1), if the property was restrained on 2 or more grounds but the court does not set aside the restraining order in relation to all the grounds, the restraining order continues in force on each remaining ground.
(3) If a court sets aside a restraining order under this Part, the court may make any necessary or convenient ancillary orders.
63. Setting aside restraining order – crime-used property
(1) The court that is hearing an objection to the restraint of property on the ground that the property is crime-used may set aside the restraining order if –
(a) the objector establishes that –
(i)the objector is a spouse, de facto partner or dependant of an owner of the property;
(ii)the objector is an innocent party or is less than 18 years old;
(iii)the objector was usually resident on the property at the time the relevant forfeiture offence was committed or is most likely to have been committed;
(iv)the objector was usually resident on the property at the time the objection was filed;
(v)the objector has no other residence at the time of hearing the objection;
(vi)the objector would suffer undue hardship if the property is forfeited; and
(vii)it is not practicable to make adequate provision for the objector by some other means;
(b) the objector establishes that –
(i)the objector is the owner of the property or is one of 2 or more owners of the property;
(ii)the property is not effectively controlled by a person who made criminal use of the property;
(iii)the objector is an innocent party in relation to the property; and
(iv)each other owner (if there are more than one) is an innocent party in relation to the property; or
(c)the objector establishes that it is more likely than not that the property is not crime-used.
(2) If the objector fails to establish for the purposes of subsection (1)(b) that each other owner is an innocent party, the court that is hearing the objection may –
(a)order that, when the property is sold after forfeiture, the objector is to be paid an amount from the proceeds of the sale that is in proportion to the objector's share of the property; or
(b)set aside the restraining order in relation to the property if it also orders the objector to pay to the Territory the value of the share of the property that the court finds is attributable to the owner or owners who are not established to be innocent parties.
(3) In an order under subsection (2), the court must specify –
(a)the proportion that it finds to be the objector's share of the property; and
(b)the proportion that it finds to be the share of any owner who is not established to be an innocent party.
(4) On application by the DPP or an owner of the property, the court that made a restraining order on the ground that the relevant property is crime-used may set the order aside if the court also orders the objector to pay to the Territory the value of the property.
(5) For the purposes of this section, the court that is hearing the objection or application must assess the value of property –
(a)for subsection (2)(b) – at the time of hearing the objection; and
(b)for subsection (4) – at the time of hearing the application,
and must specify the assessed value in the order.
64. Setting aside restraining order – crime-derived property
(1) The court that is hearing an objection to the restraint of property on the ground that the property is crime-derived may set aside the restraining order if –
(a) the objector establishes that –
(i)the objector is the owner of the property or is one of 2 or more owners of the property;
(ii)the property is not effectively controlled by a person who wholly or partly derived or realised the property, directly or indirectly, from the commission of a forfeiture offence;
(iii)the objector is an innocent party in relation to the property; and
(iv)each other owner (if there are more than one) is an innocent party in relation to the property; or
(b)the objector establishes that it is more likely than not that the property is not crime-derived.
(2) If the objector fails to establish for the purposes of subsection (1)(a) that each other owner is an innocent party, the court that is hearing the objection may –
(a)order that, when the property is sold after forfeiture, the objector is to be paid an amount from the proceeds of the sale that is in proportion to the objector's share of the property; or
(b)set aside the restraining order in relation to the property if it also orders the objector to pay to the Territory the value of the share of the property that the court finds is attributable to the owner or owners who are not established to be innocent parties.
(3) In an order under subsection (2), the court must specify –
(a)the proportion that it finds to be the objector's share of the property; and
(b)the proportion that it finds to be the share of any owner who is not established to be an innocent party.
(4) On application by the DPP or an owner of the property, the court that made a restraining order on the ground that the relevant property is crime-derived may set the order aside if the court also orders the objector to pay to the Territory the value of the property.
(5) For the purposes of this section, the court that is hearing the objection or application must assess the value of property –
(a)for subsection (2)(b) – at the time of hearing the objection; and
(b)for subsection (4) – at the time of hearing the application,
and must specify the assessed value in the order.
65. Setting aside restraining order – other property
(1) The court that made a restraining order under section 44(1)(a) may set the order aside if the court finds that it is more likely than not that the person who is or will be charged with the offence does not own or effectively control the property, and has not at any time given it away.
(2) The court that made a restraining order under section 44(1)(b) or (c) may set the order aside if the court finds that it is more likely than not that the person who is or will be the respondent to the unexplained wealth declaration, criminal benefits declaration or crime-used property substitution declaration does not own or effectively control the property, and has not at any time given it away.
66. Innocent party
(1) A person is an innocent party in relation to crime-used property if –
(a)he or she did not know and had no reasonable grounds for suspecting –
(i)that the relevant forfeiture offence was being or would be committed; or
(ii)that the property was being or would be used in or in connection with the commission of a forfeiture offence; or
(b)he or she took all reasonable steps to prevent –
(i)the commission of the offence; or
(ii)the use of the property in or in connection with the commission of the offence,
and the person was not in any way involved in the commission of the relevant forfeiture offence.
(2) A person who owns or effectively controls crime-used property is an innocent party in relation to the property if –
(a)the person did not acquire the property or its effective control before the time that the relevant forfeiture offence was committed or is likely to have been committed;
(b)at the time of acquiring the property or its effective control, the person did not know and had no reasonable grounds for suspecting that the property was crime-used;
(c)if the person acquired the property for valuable consideration – the consideration was lawfully acquired; and
(d)the person did not acquire the property or its effective control, whether by gift or for valuable consideration, with the intention of avoiding the operation of this Act.
(3) A person is an innocent party in relation to crime-derived property if –
(a)the person acquired the property, or the person's share of it (if it is owned by more than one person), for valuable consideration;
(b)the consideration was lawfully acquired;
(c)before acquiring the property or share, the person made reasonable inquiries, and took all other action reasonable in the circumstances, to ascertain whether or not the property was crime-derived;
(d)despite the inquiries made under paragraph (c), at the time of acquiring the property or share the person did not know and had no reasonable grounds for suspecting that the property was crime-derived; and
(e)the person did not acquire the property or share with the intention of avoiding the operation of this Act.
Restraint – Significant Features
The plaintiffs submitted that when regard is had to the potential impact of restraining orders on persons adversely affected and to the consequences of such orders, the Act is draconian in its effects and it is particularly important that procedural fairness be afforded on an application for a restraining order. In the context of that proposition, it is appropriate to highlight a number of features of significance that emerge from the restraining and objection provisions. They may be summarised as follows:
· An application to the Supreme Court for a restraining order under Division 2 may be made ex parte. The Court retains a discretion whether to grant such an application: s 41.
· Power is conferred to close the Court and to make orders ensuring the confidentiality of the proceedings: s 42.
· A restraining order may be made in relation to specified property if the Court is of the view that there are reasonable grounds for suspecting that the property is “crime-used or crime-derived” or is the subject of an examination order or is funds held in an account that is the subject of a monitoring or suspension order: s 43.
· A restraining order may be made in relation to property of a named person in a number of circumstances set out in s 44(1). Those circumstances include the fact that an application has been made, or it is intended that an application will be made within 21 days, for an unexplained wealth or criminal benefit declaration in relation to the named person.
· As to the content of the restraining order, “in a restraining order” the Court may make a number of specified orders, including making provision “for meeting the reasonable living and business expenses of the owner of the property”: s 46(1).
· Although there is no definition of “reasonable living and business expenses”, s 46(2) provides that such expenses do not include “legal expenses referred to in s 154”: s 46(2). Section 154 concerns legal expenses in relation to proceedings under the Act or criminal proceedings and is discussed in paragraphs [31] – [34] of these reasons.
· In contrast to the express power found s 14(3)(b) of the repealed Crimes (Forfeiture of Proceeds) Act, when making a restraining order there is no express power conferred to make provision for the legal expenses of the affected person.
· Unlike the Victorian Confiscation Act 1997, there is no express prohibition against the Court providing for legal expenses when making a restraining order: Sypott v The Queen [2003] VSC 41.
· While a restraining order is in place, the property cannot be dealt with. Income derived from the property is taken to be part of the property and is also subject to the restraining order.
· A restraining order has effect for a period, not exceeding three months, set by the Court when the order is made. On application the Court may extend the duration of the order for a further period not exceeding three months and orders of extension may be made on as many occasions as the Court sees fit.
· There is no provision for the making of an ex parte application to extend the duration of the order.
· Upon an application for a restraining order, the Court is directed by s 45 to consider each matter advanced by the applicant.
· If an order is made, the Court must set out in the order each ground that the Court finds is a ground on which the order may be made: s 45(1)(b).
· As soon as practicable after an order has been made, the applicant must arrange for service of the order on affected persons together with a notice summarising the effect of the order and the period for which it applies: s 47(1).
· As to confidentiality of information provided to the Court by the applicant, if the Court is “satisfied” that the release of information contained in an affidavit in support of the application “may materially prejudice an ongoing investigation”, the Court may order that the information is not to be provided when a copy of the restraining order is served on any person: s 45(2).
· Restrained property may be released from the restraining order “to meet reasonable living and business expenses” of the owner of the property: s 49(3). However, for those purposes, “reasonable living and business expenses” do not include “legal expenses referred to in s 154”: s 49(4).
· The only other provisions that allow for setting aside a restraining order on an application by an affected person are those found in Part 5 relating to objections to restraint of property.
· An objection must be filed within 28 days after service of a copy of the order on the objector or, where service has not been effected, within 28 days after the day on which the objector becomes aware, or could reasonably be expected to have become aware, that the property has been restrained: s 60(1)(a) and (2)(a). The time for lodging an objection may be extended by the court.
· Upon objection to restraint of property, the burden of proof rests upon the objector to establish a ground of objection specified in relevant sections: ss 63 - 65.
· If property is restrained on the grounds that the property is “crime-used”, the matters to be established are set out in s 63(1). If the restraint is on the basis that the property is “crime-derived”, the facts to be proven are set out in s 64(1).
· Other property is dealt with in s 65. In particular, if the order of restraint was made on the basis that an application had been made for an unexplained wealth declaration, the Court may set aside the order if it finds that it is “more likely than not” that the respondent to the unexplained wealth declaration does not own or effectively control the property and has not at any time given it away.
· Provision is made in s 66 for objection by an “innocent party” in relation to crime-used and crime-derived property.
· The Act is silent as to the use of confidential material in objection proceedings or in subsequent proceedings under the Act.
Legal Expenses – Section 154
As I have said, in making a restraining order s 46(1)(e) empowers the Court to provide for the meeting of reasonable living and business expenses of the owner of the property, but such expenses do not include legal expenses referred to in s 154: s 46(2). In addition, while a restraining order is in effect, a person may apply to the Court for release of the property in order meet reasonable living and business expenses of the owner of the property, but such expenses do not include legal expenses referred to in ss 154: s 49(3) and (4). Section 154 is in the following terms:
“154. Restrained property not available to meet legal costs
(1) Property that is subject to a restraining order under this Act –
(a)is not to be released to meet the legal expenses of a person, whether the expenses are in relation to proceedings under this Act that relate to the forfeiture of the property or criminal proceedings; and
(b)is not to be taken into account for the purposes of an application by the person for Legal Aid.
(2) If –
(a)the Northern Territory Legal Aid Commission or another legal aid organisation provides a person with legal aid in respect of proceedings under this Act or criminal proceedings; and
(b)property of the person that was restrained under this Act is released –
(i)in whole; or
(ii)in part as surplus to an amount forfeited to the Territory (and any order for costs),
the person is liable to the Commission or other organisation for his or her legal costs and the property released is charged as security for those costs.
(3) A charge under subsection (2) –
(a)is subject to any prior encumbrances on the property that take priority; and
(b)if the property is land – takes effect when the charge is registered under the Land Title Act.
(4) If –
(a)legal aid is granted to a person whose property is restrained under this Act; and
(b)the restrained property is –
(i)released on grounds of hardship; or
(ii)forfeited,
the Commission or other organisation may apply to the Minister for reimbursement of the legal costs incurred in providing legal aid to the person.
(5) On application by the Commission or other organisation, the Minister may reimburse the Commission or organisation out of funds realised from the forfeited property, having regard to –
(a)the value of the property forfeited;
(b)the legal costs incurred by the Commission or organisation in the matter; and
(c)the state of the legal aid fund.”
Three features of s 154 should be noted. First, s 154 applies only to the release of property that is subject to a restraining order. It has no direct application at the earlier stage when a court is determining the content of a restraining order.
Secondly, s 154(1)(a) is not limited to expenses incurred in relation to proceedings under the Act. The direction is not to release property subject to the restraining order “to meet the legal expenses of a person”. On one view, the prohibition extends to all legal expenses, even if they are or will be incurred in connection with proceedings totally unrelated to the Act. In my view, however, bearing in mind the nature of the prohibition and the purposes of the legislation, the prohibition should be construed as relating to legal expenses only in relation either to proceedings under the Act or to criminal proceedings that are relevant to proceedings under the Act. The prohibition does not extend to legal expenses incurred in the ordinary course of running a business, personal affairs or criminal or other proceedings that are not relevant to proceedings under the Act.
Thirdly, subs (2) – (5) of s 154 contemplate that the restraint of property might adversely affect the capacity of an affected person to privately fund legal representation in respect of proceedings under the Act or “criminal proceedings”. As I have said, in my view the expression “criminal proceedings” in s 154(1)(a) should be read as limited to criminal proceedings that are relevant to proceedings under the Act. That expression should be construed in the same way for the purposes of s 154(2)(a). Regardless of that question, in providing that restrained property is not to be taken into account for the purposes of an application for legal aid, the Legislature has recognised the possible impact of restraint on the capacity to fund legal representation and has sought to ameliorate that particular impact.
Forfeiture
As to the operation of the legislative scheme after property has been restrained, the substantive question of forfeiture is dealt with in Parts 6 and 7.
Part 6 of the Act concerns proceedings for declarations. The Director may apply to the Supreme Court for an unexplained wealth declaration, a criminal benefit declaration and crime-used property substitution declaration. If the Court is of the view that it is more like than not that the respondent’s total wealth as assessed in accordance with the Act is greater than the lawfully acquired wealth, the Court must declare that the respondent has unexplained wealth. In that situation, the Court must assess the unexplained wealth and specify the assessed value of that wealth. In effect, the affected person must pay the amount assessed to the Territory or forfeit property to that value that is the subject of a restraining order.
Similar procedures are provided in the case of applications for other forms of declarations which, if successful, result in forfeiture of property or a debt to the Territory which may be paid or satisfied through forfeiture of property that is the subject of a restraining order.
Part 7 deals with satisfaction of liability to the Territory and contains provisions for applications by the Director for forfeiture of restrained property. The power to order forfeiture of restrained property is conferred in a number of circumstances, including determinations that the property is owned or controlled by a person declared under the Act to be a drug trafficker or that the property is crime-used or crime-derived.
As mentioned, once an order of restraint is made the burden shifts to the affected person to establish the grounds upon which the order should be set aside. However, in subsequent substantive proceedings relating to declarations and forfeiture, the restraint orders and findings of the Judge who made the restraint orders have no impact upon the burden of proof and are irrelevant to the merits of the substantive applications. In the substantive proceedings for declarations and forfeiture and for release of forfeited property, independently of the existence of a restraining order, in a number of respects presumptions are made adverse to the affected person and the burden of proof shifts to that person: ss 71(2), 75(2), 76(2), 83(1), 83(2), 92(2) and 121(1).
This brief overview of the legislative scheme and its consequences is sufficient to demonstrate that the Act is complex and far-reaching in its impacts. In a number of circumstances, presumptions adverse to affected persons are made and the onus of proof is reversed. Similar legislation in Western Australia has been described as “draconian in its operation”: Mansfield v Director of Public Prosecutions for Western Australia (2006) 226 CLR 486 at [24] and [50]. This is the context in which the issues raised by the plaintiffs are to be considered.
Validity
The foundation of the plaintiffs’ contention that ss 46(2), 49(4) and 154(1)(a) are invalid is the principle emanating from the decision of the High Court in Kable v Director of Public Prosecutions(NSW) (1996) 189 CLR 51. In substance, the plaintiffs submitted that the provisions impermissibly direct the Court as to the manner and outcome of the exercise of the judicial function and work such oppression that “they impose impermissible limitations on the function of the Supreme Court of the Northern Territory and impose statutory procedures which:
(a)compromise the institutional impartiality and appearance of impartiality of the Supreme Court;
(b)are repugnant to the judicial process in a fundamental degree;
(c)inhibit the performance of the judicial function;
(d)impose on the Supreme Court and the performance of the judicial function a rigid and inflexible rule; and
(e)interfere with a judicial discretion.”
As to the proposition that the effect of the impugned provisions is to direct the Court as to the manner and outcome of the exercise of the judicial discretion, the written submissions of the plaintiff were as follows:
“… Subparagraph 154(1)(a) of the Act clearly purports to direct the manner in which the Supreme Court’s judicial power is to be exercised and an outcome. The combination of challenged subsections require and authorise the Court to proceed in a manner that does not ensure equality before the law, that predicates an outcome and the effect of the proscription is to deny a person affected of an important right, namely, the right to use his or her property as a fund to defend himself or herself and the ability to have a lawyer of their choice to represent them. Section 154 of the Act has a contextual prejudgment of guilt factored into it. The subsection makes a person affected a second class or third class citizen in the enjoyment of a right and relegates them, at best, as a potential client of Legal Aid and then, one whose property restrained is nevertheless liable for the Legal Aid Commission’s costs. The combined prohibitions and directions in the challenged subsections, given the serious nature and effect of restraining orders, clearly compromises the impartiality and the reputation of the Court as a place where justice is administered.”
Principles – Institutional Integrity
It was common ground between the parties and the Attorney-General for the Northern Territory (intervening) that the Supreme Court of the Northern Territory “may exercise the judicial power of the Commonwealth pursuant to investment by laws made by the Parliament”: North Australian Aboriginal Legal Aid Service Inc v Bradley & Anor (2004) 218 CLR 146 at [28]. It was also common ground that in those circumstances the decision of the High Court in Kable applies in the Northern Territory.
It has been said that a single principle does not emerge from Kable: R v Moffatt [1998] 2 VR 229 at 249 and 251; John Fairfax Publications Pty Ltd v Attorney-General (NSW) (2000) 81 ALR 694 at [14] and Gypsy Jokers Motorcycle Club Inc v Commissioner of Police (2007) 33 WAR 245 at [77] (special leave to appeal to the High Court was granted on 15 June 2007). In Silbert v Director of Public Prosecutions (WA) (2004) 217 CLR 181 Kirby J provided the following general statement of the Kable principle:
“[25] Kable holds that Ch III of the Constitution limits the power of State Parliaments to confer non-judicial functions or non-judicial characteristics on State Courts that are incompatible with, or repugnant to, the core requirements of such courts as potential recipients of federal jurisdiction, as provided for in the Constitution. The core requirements referred to include those of the manifest independence and impartiality of the judiciary in the discharge of their functions. This includes independence from legislative directions over individual judicial decisions and in the findings of fact and law that are necessary to them.” (footnotes omitted)
In Baker v The Queen (2005) 223 CLR 513 at [5], Gleeson CJ expressed the principle in the following terms:
“… The principle for which [Kable] stands as authority is that, since the Constitution established an integrated Australian court system, and contemplates the exercise of federal jurisdiction by State Supreme Courts, State legislation which purports to confer upon such a court a function which substantially impairs its institutional integrity, and which is therefore incompatible with its role as a repository of federal jurisdiction, is invalid.”
The concept of “institutional integrity” was discussed in the joint judgment of Gummow, Hayne and Crennan JJ in Forge v Australian Securities and Investments Commission (2006) 228 CLR 45, when their Honours explained that federal jurisdiction may only be invested in a “‘court’ as that word is to be understood in the Constitution …” [61]. The judgment continued:
“[62] Recognising that to be so reveals an important boundary to the power given to the Parliament by s 77(iii). The Parliament may not make a law investing federal jurisdiction in a body that is not a federal court created by the Parliament or that is not a ‘court’ of a State or Territory. But there is another and different proposition that is to be drawn from Ch III which has significance for State legislation concerning State Supreme Courts.
[63] Because Ch III requires that there be a body fitting the description ‘the Supreme Court of a State’, it is beyond the legislative power of a State so to alter the constitution or character of its Supreme Court that it ceases to meet the constitutional description. One operation of that limitation on State legislative power was identified in Kable. The legislation under consideration in Kable was found to be repugnant to, or incompatible with, ‘that institutional integrity of the State courts which bespeaks their constitutionally mandated position in the Australian legal system’ (Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at [101]) …”.
Although the concept of “institutional integrity” has not been defined in a single definition, the joint judgment described the principle as “one which hinges upon maintenance of the defining characteristics of a ‘court’, or in cases concerning a Supreme Court, the defining characteristics of a State Supreme Court”. The judgment continued:
“[63] … It is to those characteristics that the reference to ‘institutional integrity’ alludes. That is, if the institutional integrity of a court is distorted, it is because the body no longer exhibits in some relevant respect those defining characteristics which mark a court apart from other decision-making bodies.
[64] It is neither possible nor profitable to attempt to make some single all-embracing statement of the defining characteristics of a court. The cases concerning identification of judicial power reveal why that is so. …”.
Later in the joint judgment, the following statement is made about the institutional integrity of the court:
“[66] … Thus when reference is made to the institutional ‘integrity’ of a court, the allusion is to what The Oxford English Dictionary describes as ‘the condition of not being marred or violated; unimpaired or uncorrupted condition; original perfect state; soundness’”.
As to the defining characteristics of a court, it is appropriate to note the observation in the joint judgment that the capacity of courts to administer the common law system of adversarial trial is an “important element” in the “institutional characteristics of courts in Australia” [64]. The judgment then emphasised the requirements of independence and impartiality:
“[64] … Essential to that system is the conduct of trial by an independent and impartial tribunal.
…
[66] … Even the appearance of departure from the principle that the tribunal must be independent and impartial is prohibited lest the integrity of the judicial system be undermined. …”.
Many authorities have identified “institutional characteristics” of importance. In Gypsy Jokers Steytler P reviewed a number of relevant authorities. It is unnecessary, therefore, to undertake such a review. It is sufficient to refer to a number of uncontroversial “pointers” to essential characteristics and institutional integrity of courts identified by Steytler P.
Steytler P identified the “pointers” after noting that the “critical notions of repugnancy and incompatibility have not been clearly defined in the context of the conferral of functions by State legislatures on State courts” [84] and that there is “no clearly accepted definition of ‘institutional integrity’” [87]. These “pointers” may be summarised as follows:
· Although public confidence is not a separate consideration sufficient in itself for the operation of the Kable principle, it is a “basic quality” of courts, citing Gleeson CJ in Baker:
“[6] The strength of the [Kable] principle lies in its constitutional legitimacy. It was not an invention of a method by which judges may wash their hands of the responsibility of applying laws of which they disapprove. In some of the judgments in Kable, references were made to public confidence in the courts. Confidence is not something that exists in the abstract. It is related to some quality or qualities which one person believes to exist in another. The most basic quality of courts in which the public should have confidence is that they will administer justice according to law. As Brennan CJ said in Nicholas v The Queen [(1998) 193 CLR 173 at 197 [37]]:
‘It is the faithful adherence of the courts to the laws enacted by the Parliament, however undesirable the courts may think them to be, which is the guarantee of public confidence in the integrity of the judicial process and the protection of the courts’ repute as the administrator of criminal justice’”. (my emphasis)
· “… [A] Supreme Court will lack institutional integrity if it is, or is perceived to be, not institutionally independent of the legislative and executive government in the exercise of its federal jurisdiction … . There are suggestions that a court will not have the required degree of independence if it acts as a mere instrument of government policy …” [89].
· “… [I]nstitutional impartiality, and the appearance of it, must not be compromised … ” [90].
· “… [T]he appearance of institutional independence and impartiality is no less important to the institutional integrity of the court than the fact of its institutional independence and impartiality. That, in turn, must be so because its absence will result in a loss of public confidence in the court as an institution, to the detriment of that institution and of the community generally” [94].
· It is at least a material consideration to determine whether the power conferred by the legislature is “antithetical to the judicial process” [92].
· There are a number of “relevant incidents” which are ordinarily part of the judicial process such as “the fact of a public hearing, application of rules of evidence, the existence of a discretion where appropriate; provisions with respect to the onus and standard of proof; an obligation to afford natural justice; an obligation to make proper disclosure; an obligation (and ability) to give reasons; and the existence of the right of appeal.” [92]
Counsel for the Attorney-General relied upon the following observations of McHugh J in Fardon v Attorney-General (Qld) (2004) 223 CLR 75:
“[41] The bare fact that particular State legislation invests a State court with powers that are or jurisdiction that is repugnant to the traditional judicial process will seldom, if ever, compromise the institutional integrity of that court to the extent that it affects that court’s capacity to exercise federal jurisdiction impartially and according to federal law. State legislation may alter the burden of proof and the rules of evidence and procedure in civil and criminal courts in ways that are repugnant to the traditional judicial process without compromising the institutional integrity of the courts that must administer that legislation. State legislation may require State courts to exercise powers and take away substantive rights on grounds that judges think are foolish, unwise or even patently unjust. Nevertheless, it does not follow that because State legislation requires State courts to make orders that could not be countenanced in a society with a Bill of Rights, the institutional integrity of those courts is compromised.
[42] The pejorative phrase – ‘repugnant to the judicial process’ – is not the constitutional criterion. In this area of constitutional discourse, it is best avoided, for it invites error. That which judges regard as repugnant to the judicial process may be no more than a reflection of their personal dislike of legislation that they think unjustifiably affects long recognised rights, freedoms and judicial procedures. State legislation that requires State courts to act in ways inconsistent with the traditional judicial process will be invalid only when it leads to the conclusion that reasonable persons might think that the legislation compromises the capacity of State courts to administer invested federal jurisdiction impartially according to federal law. That conclusion is likely to be reached only when other provisions of the legislation or the surrounding circumstances as well as the departure from the traditional judicial process indicate that the State court might not be an impartial tribunal that is independent of the legislative and the executive arms of government.”
The plaintiffs submitted that McHugh J stands alone in these views. It is unnecessary to resolve that question. At the least, it is plain that not every legislative direction or conferral of power that alters the traditional judicial processes compromises the institutional integrity of the court. For example, conferring a power to hear an application ex parte or reversing the onus of proof may be seen as altering the traditional judicial processes, but such alterations do not in themselves compromise the institutional integrity of the court.
In the context of the issues of public confidence and independence from the Legislature and Executive, it is appropriate to have regard to the joint judgment of Brennan CJ and Dawson, Toohey, McHugh and Gummow JJ in Wilson v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 189 CLR 1. The High Court was concerned with a provision in Commonwealth legislation nominating a Federal Court Judge as the person to report to the Minister. In determining that the provision was invalid, the joint judgment considered the incompatibility between performance of a non-judicial function and the office and function of a Ch III Judge. The joint judgment said (16):
“In the present case, the category of incompatibility that arises for consideration is ‘the performance of non-judicial functions of such a nature that public confidence in the integrity of the judiciary as an institution or in the capacity of the individual judge to perform his or her judicial functions with integrity is diminished.’” (footnote omitted)
In that context, three questions were posed by the joint judgment in the following terms (17):
“The statute or the measures taken pursuant to the statute must be examined in order to determine, first, whether the function is an integral part of, or is closely connected with, the functions of the Legislature or the Executive Government. If the function is not closely connected with the Legislature or the Executive Government, no constitutional incompatibility appears. Next, an answer must be given to the question whether the function is required to be performed independently of any instruction, advice or wish of the Legislature or the Executive Government, other than a law or an instrument made under a law (hereafter ‘any non-judicial instruction, advice or wish’). If an affirmative answer does not appear, it is clear that the separation has been breached. The breach is not capable of repair by the Ch III judge on whom the function is purportedly conferred, for the breach invalidates the conferral of the function. If the function is one which must be performed independently of any non-judicial instruction, advice or wish, a further question arises: Is any discretion purportedly possessed by the Ch III judge to be exercised on political grounds – that is, on grounds that are not confined by factors expressly or impliedly prescribed by law? In considering these questions, it will often be relevant to note whether the function to be performed must be performed judicially, that is, without bias and by a procedure that gives each interested person an opportunity to be heard and to deal with any case presented by those with opposing interests. An obligation to observe the requirements of procedural fairness is not necessarily indicative of compatibility with the holding of judicial office under Ch III, for many persons at various levels in the executive branch of government are obliged to observe those requirements. But, conversely, if a judicial manner of performance is not required, it is unlikely that the performance of the function will be performed free of political influence or without the prospect of exercising a political discretion.” (footnote omitted)
There is nothing necessarily antithetical in the processes which are adopted by the Act. So far as the alteration of the burden of proof and the presence of the presumptions to which I have earlier referred are concerned, it is not unexpected that a legislature would require the defendant in proceedings brought under the Act to explain the legitimacy of his assets. He is, after all, in the best position to know. Of course it may be more difficult for him or her to do so without legal and accountancy assistance. This may be particularly so if the defendant is already serving a term of imprisonment, but it does not inevitably follow that the proceedings must necessarily be unfair or that the Court cannot control the proceedings in such a way as to ensure that, so far as possible, the defendant receives a fair hearing.
Reliance was placed by Mr McDonald QC for the plaintiffs upon the decision of the High Court in Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (supra) at 36 per Brennan, Deane and Dawson JJ, who said:
“It is one thing for the Parliament, within the limits of the legislative power conferred upon it by the Constitution, to grant or withhold jurisdiction. It is a quite different thing for the Parliament to purport to direct the courts as to the manner and outcome of the exercise of their jurisdiction. The former falls within the legislative power which the Constitution, including Ch. III itself, entrusts to the Parliament. The latter constitutes an impermissible intrusion into the judicial power which Ch. III vests exclusively in the courts which it designates.”
However, there is no doctrine of separation of powers between the legislature, the executive and the judiciary in the Northern Territory. In the absence of such a doctrine, legislation which offends the principles set out in Chu Kheng Lim will not be invalid for that reason alone; it will only be invalid where the legislation directs the court as to the manner in which it is to exercise its jurisdiction in a way which infringes the Kable principle.
There is nothing in s 46(2) which directs the court as to the manner and outcome of the exercise of its jurisdiction as to whether or not it should grant a restraining order. It simply grants a particular and confined power as contemplated by Brennan, Deane and Dawson JJ in Chu Kheng Lim with respect to what orders can be made in the event that the court decides that it is proper to make a restraining order.
I would answer each of the questions raised by Olsson AJ in the reference in matter No 153 of 2006, no.
Were the defendants denied procedural fairness?
The Act contemplates that an application for a restraining order under Division 2 of Part IV of the Act may be made ex parte (s 41(2)). The reason for such a provision is obvious. If notice were required to be given in all cases, the assets could be dispersed out of the court’s jurisdiction.
The fact that an application can be made ex parte does not by itself mean that the proceedings are necessarily unfair even though there are significant consequences once a restraining order is made.
It is to be noted that a restraining order under the Act is different in important respects from an ex parte injunction obtained in the Court’s ordinary equitable jurisdiction. Usually an ex parte injunction will only be granted on an interim basis. Upon the return date, the applicant for the injunction must establish his case all over again, after having given notice in the meantime to the defendant. A restraining order made ex parte can be set aside under s 63 and s 64 of the Act in so far as the orders were made on the basis that the property was crime used property or crime derived property. There is no specific provision for setting aside a restraining order made on the basis that an application has been made or is intended to be made for an unexplained wealth direction under s 44(1)(b)(ii). Notwithstanding that, it is my view that a restraining order could be set aside in any case where the application was made mala fides or where there was material non-disclosure or a failure to give an undertaking as to damages, for example.
I do not think that there is anything unfair in the order consolidating the two proceedings. At the time that the order was made the proceedings had not been served. I think it was open to the learned Judge to have made that order and I can see no denial of natural justice to the plaintiffs in making it ex parte on this occasion. If there was some good reason for setting that order aside, an application to the Judge could be made at any time.
Next it is complained that the proceedings were conducted in camera or at least a large part of the proceedings were conducted in camera and without a transcript.
The Court has power under s 42(a) to order that the whole or any part of the proceedings relating to a restraining order is to be heard in closed court. It also has power to make an order prohibiting the publication of a report of the whole or any part of the proceedings or any information derived from the proceedings under s 42(c). It is understandable that the Court may need to use these powers where material is put before the Court in support of the restraining order where the information provided to the Court, if released, might materially prejudice an ongoing investigation. So much is recognised by s 45(2) of the Act.
However in this case, the Court did not provide any reasons for the making of the order. It was submitted that no reasons are necessary because the order was only an interlocutory order, but in my opinion, interlocutory or not, a judge should give reasons when making such an ex parte order based upon material which is not fully disclosed to the parties affected by the order: see Re Criminal Proceeds Confiscation Act 2002 (supra) at 47 [9] per Williams JA and at 56–57 [62]–[63] per White J. That is not to say that reasons are always required when all of the affidavits relied upon are to be served with the order. Much will depend upon the circumstances.
Under the provisions of the Supreme Court Act s 51 and s 53 the plaintiffs in these proceedings have a right to seek leave to appeal to the Court of Appeal from the orders made by the Judge. If reasons are not given the defendants to the restraining order are not in a position to know whether they have a case to exercise their right to apply for leave to appeal. In order to obtain leave, they must demonstrate that the correctness of the judgment of the Court is attended with sufficient doubt to warrant the granting of leave: see Nationwide News Pty Ltd & Ors v Bradshaw & Anor (1986) 41 NTR 1. Without reasons, the defendants will not know whether the Judge applied the correct test or tests in deciding whether to grant the order. For example, in relation to a restraining order on the basis that the property is crime used or crime derived, the Court has to be satisfied that there are reasonable grounds for suspecting that the property is crime used or crime derived. On the other hand an application for a restraining order under s 44(1)(b)(ii) on the basis that an application has been made or is intended to be made for an unexplained wealth declaration, the Judge would have to be satisfied that there is a prima facie case. If the basis upon which a non-disclosure order is made rests upon public interest immunity of a kind going beyond non-disclosure of information which might materially affect an ongoing investigation (assuming that the Court can make an order based on that kind of material which I doubt), the Court should indicate at the least the class of information being protected, what balancing considerations have been taken into account and why it is protected: see for example Asiatic Petroleum Co Ltd v Anglo-Persian Oil Co Ltd [1916] 1 KB 822; Australian National Airlines Commission v The Commonwealth of Australia & Anor (1975) 132 CLR 582; Young v Quin & Ors (1985) 59 ALR 225; as well as any other relevant factors: see generally S D Simpson, D L Bailey and E K Evans, Discovery and Interrogations, 2nd edition, Butterworths, Sydney, 1990, pp 210-221. In a case where the Court has received material which is based upon information which, if released, might materially prejudice an ongoing investigation, the reasons ought to disclose as much as possible consistent with the need to protect the confidential material. The Judge ought to address questions such as what balancing considerations have been taken into account, whether it is sufficient to suppress the names of any informants or the circumstances under which information has come to the attention of the Director of Public Prosecutions or the police, or whether it is necessary to go so far as to decide that the nature of the information is such that release of any of it could result in a significant risk that it would lead to the sources being discovered.
In Gypsy Jokers Motorcycle Club Inc v Commissioner of Police (supra) Martin CJ said at para [63] in reference to s 76(2) of the Corruption and Crime Commission Act 2003 (WA) which precluded information from being disclosed to the other party which the Commissioner of Police claimed to be confidential:
“… s 76 should be construed as being consistent with the overriding and inherent obligation of a court to do justice as between the parties to proceedings before it. Thus, while the terms of s 76(2) will preclude disclosure of information which the Commissioner of Police claims to be confidential, this does not necessarily mean the court is precluded from imposing other procedures which might assist to inform the applicant of the case which has to be met. This is, of course, subject to due compliance with the prohibition upon disclosure of confidential information. On my view of the section, the court will be obliged to take whatever procedural steps are available to minimise the disadvantages suffered by an applicant if the Commissioner of Police claims confidentiality pursuant to s 76(2) (see Osenkowski v Magistrates Court of South Australia).”
Similarly, in my view, the Court in exercising its powers under s 45(2) should consider whether, for example, a summary of the information contained in the confidential material can be released or alternatively if there is some other course which may be able to be adopted such as releasing the information to the defendant’s lawyer upon receiving an appropriate undertaking to the Court not to reveal the information to the defendant. Perhaps in order to achieve this, the Court ought in the first place make only an interim order, and require the proceedings to be served before making a restraining order. I note that the Act provides, in s 40, for the applicant to apply to the Local Court for an interim order. However, I consider that the Supreme Court could also make an interim order, even though there are no specific legislative provisions relating to this Court. Where, by an Act of Parliament, a right or power is created, there must by implication carry with it the power to do everything which is indispensable for the purpose of exercising the right or power, or fairly incidental or consequential to the power itself: Alice Springs Town Council v Mpweteyerre Aboriginal Corporation and Others (1997) 115 NTR 25 at 35.
It is my view that the failure to give reasons in this case is not only an error of law, but it has deprived the defendants of procedural fairness: Re Criminal Proceeds Confiscation Act2002 (supra); Pettitt v Dunkley [1971] 1 NSWLR 376; Mobasa Pty Ltd v Nikic (1987) 47 NTR 48.
Likewise, I consider that his Honour should have provided more expansive reasons for the refusal of the plaintiffs’ application for access to the confidential affidavits when that application was subsequently made to his Honour.
It was submitted by Mr Silvester that the plaintiffs have not sought any reasons from his Honour and that had they done so his Honour may have provided them. Although an appeal court may remit a proceeding to a Judge to give reasons (De Iacovo v Lacanale [1957] VR 553; Apps & Anor v Pilet (1987) 11 NSWLR 350; Pasha v Edmonds & Anor (1998) 28 MVR 217), it is now too late to ask his Honour to provide reasons and the matter should be reheard before another judge.
Mr Silvester submitted that although the Judge relied on confidential material to base the orders he made, that related only to the ground that the property was crime derived; that the order was supported in any event upon the basis of unexplained wealth and the affidavit material in respect of that subject matter has been fully disclosed. That may be so, but the order is nevertheless based also upon allegations that the property is crime derived and no reasons have been given for the order.
In my opinion the appeal should be allowed and the restraining order made on 30 March 2006 should be set aside. I agree with the Chief Justice that an interim order should be made until the matter is reheard by a single Judge.
Southwood J:
The Full Court is asked to consider questions of law which were reserved for the Court’s consideration by Olsson AJ in proceeding number 135 of 2006 and proceeding number 153 of 2006. The Court is asked to do so under s 21 of the Supreme Court Act.
In proceeding number 135 of 2006 the plaintiffs seek a declaration that the interlocutory orders of a single judge of the Supreme Court restraining the plaintiffs’ property specified in the orders (the restraining orders) are invalid. The restraining orders were made ex parte under s 41(2), s 42(2)(a) and (b), s 43(2)(a), s 44(1)(a) and s 44(1)(b)(ii) of the Criminal Property Forfeiture Act (the Act) on the grounds that the property specified in the restraining orders was crime derived property and constitutes unexplained wealth. The plaintiffs argue that they were denied procedural fairness on the grounds that the plaintiffs were not given notice of the application for the restraining orders; the plaintiffs were not given an opportunity to be heard in circumstances where the making of the restraining orders substantively changed their positions; the plaintiffs were refused access to six affidavits on which the Director of Public Prosecutions relied in support of his application for the restraining orders; the court was closed during the hearing of the application for the restraining orders and no transcript of the hearing has been made available to the plaintiffs; and the presiding Judge failed to give reasons for granting the restraining orders and denying the plaintiffs access to six of the affidavits filed by the Director of Public Prosecutions. While the restraining orders remain in place the specified property and any income derived from that property cannot be dealt with by the plaintiffs.
In proceeding number 153 of 2006, the plaintiffs seek a declaration that s 46(2), s 49(4) and s 154(1)(a) of the Act are invalid. The ground of invalidity is that the specified sections of the Act infringe Chapter III of the Constitution. The plaintiffs say that they do so because they confer a function upon the Supreme Court which substantially impairs the institutional integrity of the Supreme Court as a repository of federal jurisdiction: Kable v Director of Public Prosecutions(NSW) (supra); North Australian Aboriginal Legal Aid Service v Bradley & Anor (supra). The provisions of s 46(2), s 49(4) and s 154(1)(a) of the Act are repugnant to the judicial process and they inhibit the performance of the judicial function. The sections prevent a court that has made a restraining order from taking into account the legal expenses that a defendant may incur, thereby effectively denying a defendant the right to counsel and authorising the court to proceed in a manner that does not ensure equality before the law: Nicholas v The Queen (supra) per Gaudron J at 208 - 209. The sections also direct the Supreme Court as to the manner and outcome of the exercise of the court’s jurisdiction under the Act.
The questions of law reserved for the Full Court are set out in pars [19] and [20] of the Reasons for Judgment of Martin CJ. The facts which have been agreed by the parties are set out in par [17] of his Honour’s Reasons for Judgment. Additional facts which were placed before the Full Court during the hearing are set out in pars [196] to [198] inclusive of the Reasons for Judgment of Mildren J.
The issues
The following principal issues arise for consideration by the Full Court. First, there is the preliminary issue - should the Full Court accept the referral of the questions of law reserved for its consideration by Olsson AJ? Secondly, should the restraining orders be set aside on the ground that the presiding Judge failed to give reasons? Thirdly, do the provisions of s 46(2), s 49(4) and s 154(1)(a) of the Act substantially impair the institutional integrity of the Supreme Court in such a manner as to be incompatible with the Supreme Court’s role as a repository of federal jurisdiction?
For the reasons set out in pars [262] to [264] below, it is my opinion that the Full Court should not accept the referral of the questions of law. I agree with Martin CJ and Mildren J that rather than dismiss proceeding number 135 of 2006, sitting as the Court of Appeal, the Full Court should dispense with compliance with the Rules, grant leave to appeal and treat the matter as having been heard as an appeal against the restraining orders. I would dismiss proceeding number 153 of 2006 but I would allow the matters argued in that proceeding to be treated as part of the grounds of appeal against the restraining orders.
I would allow the appeal against the restraining orders on the ground that the Judge who made the restraining orders failed to give reasons for his decision. The failure to give reasons amounted to an error of law which frustrated the plaintiffs’ rights of appeal. The plaintiffs’ argument that s 46(2), s 49(4) and s 154(1) (a) of the Act are invalid cannot be sustained. The Act does not infringe Chapter III of the Constitution. The Court still retains the power to ensure that its procedures are not used in an oppressive manner and to ensure a fair hearing.
The Jurisdiction of the Full Court
In proceeding number 135 of 2006 the plaintiffs ask a single Judge of the Supreme Court to grant a remedy in the nature of prerogative relief against the interlocutory orders of another Judge of the Supreme Court. The declaration sought is a declaration that the restraining orders are invalid.
A single Judge of the Supreme Court does not have power to grant relief in the nature of prerogative relief against the orders of another Judge of the Supreme Court: Woolf v Trebilco [1933] VLR 180 per Mann J at 184. A Judge of the Supreme Court cannot make an order which is void. An order of the Supreme Court is valid until it is set aside: Cameron v Cole (1944) 68 CLR 571 per Rich J at 590; Sanders v Sanders (1967) 116 CLR 366 per Barwick CJ at 376. It is inappropriate to seek a declaration that an order of the Supreme Court is invalid. Provided that there is no irregularity, the only way in which the restraining orders can be set aside is on appeal against the restraining orders: Re Harrod (supra) per Hutley JA at 333. If there is an irregularity the appropriate course is to ask the Judge who made the restraining orders or the Judge who has the conduct of the substantive proceeding to set aside the orders.
The Full Court should refuse the reference of the questions of law in proceeding number 153 of 2006 on discretionary grounds. The proceeding amounts to a collateral attack against the restraining orders, acceptance of the reference would maintain a multiplicity of proceedings, a multiplicity of proceedings creates a possibility of inconsistent judgments and the procedure adopted by the plaintiffs unreasonably interferes with normal trial and appellate procedure: Giannarelli v Wraith at 594 to 595; Nichols v Queensland [1983] 1 Qd R 580. The ordinary appeal provisions should be left to regulate the consolidated proceeding in which the restraining orders were made.
Failure to give reasons
The presiding Judge, who made the restraining orders, erred in law when he failed to give reasons for making the restraining orders: Fleming v The Queen (1998) 197 CLR 250 at 260; De Iacovo v Lacanale; Pettitt v Dunkley (supra) per Asprey JA at 383; Soulemezis v Dudley (Holdings) Pty Ltd (supra); Papps v Police (2000) 77 SASR 210 at 218; R v Keyte (2000) 78 SASR 68.
A court at first instance is required to give reasons for its decision where a losing party may be effectively deprived of his or her right of appeal if the basis of the decision is not properly articulated: Pettitt v Dunkley (supra) per Moffitt JA at 388; Soulemezis v Dudley (Holdings) Pty Ltd (supra) per McHugh JA at 280; R v Keyte (supra) per Doyle CJ at pp 75 to 79. The obligation to give reasons arises because there is a remedy of appeal against the orders of the court that examines any errors in the reasoning process of the judge at first instance: R v Keyte (supra) per Doyle CJ at pp 75 to 79. Reasons must be adequate. Reasons need to be given only so far as is necessary to indicate to the parties why the decision was made and to allow them to exercise such rights as may be available to them: Housing Commission (NSW) v Tatmar Pastoral Co Pty Ltd (supra) per Mahoney JA at 386. What is adequate is to be determined by the circumstances of the case and the issues in the case: R v Keyte (supra) per Doyle CJ at p 81. These may include the following: the nature of the application before the presiding Judge; the fact that the proceeding was an ex parte application; the fact that the appellant will not have access to all of the information that was before the presiding Judge; and the obligations of the party making the application before the presiding Judge.
The plaintiffs’ rights of appeal in this case have been effectively frustrated by the failure of the presiding Judge to give reasons for making the restraining orders. As a result of the application for the restraining orders being made ex parte and in camera and the nondisclosure of the contents of the six affidavits on which the presiding Judge relied, the plaintiffs do not know the basis of the decision against them and they are unable to determine whether the presiding Judge fell into error. Without the presiding Judge’s reasons for decision the plaintiffs in this case are unable to know what was found by the presiding Judge to be the reasonable grounds for suspecting that the property specified in the restraining order was crime derived property; whether the Judge made all necessary findings of fact; and whether the Judge correctly identified and applied the relevant rules of law.
In this case in order to explain the basis of the decision to grant the restraining orders, without divulging the details of the confidential information in such a way that may have prejudiced an ongoing investigation, the presiding Judge should have delivered reasons for decision that: stated the basis on which it was determined that there was a risk that the specified property would not be preserved if the application for the restraining orders did not proceed ex parte; stated the basis for finding that certain documents were confidential because they attracted public interest immunity; identified the class of documents that attracted public interest immunity; stated the factors which were taken into account in determining that the balance lay in favour of non-disclosure and not in favour of the open administration of justice; stated why the fair disposition of the case did not require disclosure of the confidential material; identified the principal issues that arose during the hearing of the ex parte application; stated whether there was any evidence which supported a finding in favour of the plaintiffs; identified the material findings of fact at an appropriate level of generality; stated the reasonable grounds for suspecting that the four residential properties, the commercial property, the net proceeds of the property in Queensland, the five motor vehicles, the monies held in three bank accounts and the monies held in two firms of solicitors’ trust accounts was all crime derived property; and identified the rules of law and the relevant tests which were applied in determining the application.
I accept that in the circumstances of this case the obligation to give adequate reasons is an aspect of procedural fairness which is to be accorded to the plaintiffs who are entitled to know why the restraining orders were made: Tran v Claydon (supra) per McLure J at par [36]. However, I do not accept the plaintiffs’ submissions that they were otherwise denied procedural fairness which should have been accorded to them (emphasis added). An entitlement to procedural fairness may be modified by statute and while the exercise of the Director of Public Prosecutions’ right to make an ex parte application for a restraining order may deprive persons with an interest in specified property of a right to be heard at an interim stage of a proceeding, the provisions of the Act as a whole and the inherent jurisdiction of the court ensure that persons, who have an interest in the property which may be made the subject of a restraining order, have an opportunity to be heard.
A restraining order is an interlocutory order which has effect for no longer than three months. An application for a restraining order should only proceed ex parte and in camera if the court considers such procedures are just in the circumstances of the case, necessary for the preservation of the specified property and necessary to preserve the confidentiality of information that might materially prejudice an ongoing investigation. If the court considers that it would be unjust to hear an ex parte application for restraining orders then under its incidental powers: Harris v Caladine (supra) at 136, the court may grant an interim injunction restraining the specified property and give appropriate directions for the conduct of the hearing of an application under s 41 of the Act including directions as to the confidentiality of affidavits. Under the Act a person, who has an interest in the restrained property, has a right to file and to be heard upon the filing of an objection to a restraining order under s 59 of the Act, and a right to be heard at the substantive hearing of the criminal forfeiture proceeding before the Supreme Court. Under s 51 and s 53 of the Supreme Court Act, a person who has an interest in the property specified in the restraining order may also, with leave of the Court of Appeal, appeal against a restraining order and against any final orders made by the court.
The institutional integrity of the Supreme Court
The basis of the plaintiffs’ argument that s 46(2), s 49(4) and s 154(1)(a) of the Act infringe Chapter III of the Constitution was summed up by Ms Webb QC in reply. As I understand Ms Webb QC’s submissions the plaintiffs’ argument is that the combined effect of s 49 and s 154(1)(a) is to deprive the court of all of its necessary powers to ensure that the substantive proceeding before the court is equal and fair and that the court’s processes are not used in an oppressive manner. The court is authorised to proceed in a manner that does not ensure equality before the law. A fundamental feature of the adversary system is that all parties to court proceedings are entitled to equality before the law and a key aspect of the principle of equality before the law is the right of each party to use the party’s own resources to retain the party’s counsel of choice. If the effect of a restraining order is to prevent the party whose property is restrained from having access to sufficient resources to retain the counsel of the party’s choice the continuation of the proceeding would mean that the party whose property is restrained is in an unequal position before the court. Furthermore, the proceeding would be unfairly oppressive because not only is the party, whose property is restrained, denied the right to counsel of the party’s choice but the party bears the burden of proving that the restrained property was lawfully acquired property. A superior court which does not have all of the necessary powers to ensure that its processes are not used oppressively is not a suitable repository of Federal judicial power.
Section 49 of the Act provides as follows:
49. Effect of restraining order
(1) While a restraining order is in effect in relation to property –
(a) subject to Division 3, the property cannot be dealt with;
and
(b)the applicant in relation to the restraining order may apply under this Act to the court that made the restraining order for an order that all or some of the property is forfeit to the Territory.
(2) Income or other property that is derived from property subject to a restraining order is taken to be part of the property and is also subject to the restraining order.
(3) A person may apply to the court that made a restraining order for the release of property that is subject to the order to meet reasonable living and business expenses of the owner of the property.
(4) In subsection (3), reasonable living and business expenses does not include legal expenses referred to in section 154.
Section 154(1)(a) of the Act provides as follows:
(1) Property that is subject to a restraining order under this Act –
(a)is not to be released to meet the legal expenses of a person, whether the expenses are in relation to proceedings under this Act that relate to the forfeiture of the property or criminal proceedings;
The plaintiffs argue that the effect of s 49(4) and s 154(1)(a) of the Act is to direct the court not to release property that is the subject of a restraining order for the purposes of legal expenses and to thereby deprive the court of a necessary power to ensure that the parties are equal before the law.
The plaintiffs’ argument is unsustainable. The purposes of s 46(2), s 49(4) and s 154(1)(a) of the Act are to prevent the dissipation of property that may be crime used, crime derived or unexplained wealth and to enable the party whose property has been restrained and who may as a result have insufficient resources to pay for legal expenses to obtain legal aid if necessary. The Act does not abrogate the right to counsel in proceedings under the Act and in any event the right to counsel of a party’s choice is not an absolute right. Even in this case it has not been established that the plaintiffs do not have resources other than the restrained property which they may use to fund their legal expenses. Parties to legal proceedings, including civil proceedings, often have unequal resources.
It is not unusual for there to be specific rules about the burden of proof for specific classes of case: see for example s 94(2) of the Marriage Act (Cth); Attorney-General (Hong Kong) v Lee Kwong-kut [1993] AC 951 at 969. Nor is it unusual for the burden of proof to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted: Blatch v Archer (1774) 98 ER 969 at 970; Hampton Court Ltd v Crooks (1957) 97 CLR 367 at 371; Apollo Shower Screens Pty Ltd v Building and Construction Industry Long Service Payments Corp (1985) 1 NSWLR 561. It would ordinarily be expected that the owner of property would be in the best position to explain how the property has been acquired and with what resources it has been acquired.
Parliament has otherwise taken the Supreme Court as it finds it with all of the incidents of doing so: Electric Light and Power Supply Corp Ltd v Electricity Commission of New South (supra) at 560; Mansfield v Director of Public Prosecutions (WA) (supra) at 491. The Supreme Court of the Northern Territory has inherent power to ensure that its processes are not used oppressively and to ensure that the parties to a proceeding receive a fair hearing. The principle enunciated in Dietrich v The Queen (supra), that the courts have power to stay proceedings that will result in an unfair trial and the power extends to a case in which representation by counsel is essential to a fair trial, applies to proceedings under the Act: Director of Public Prosecutions (Cth)v Saxon (1992) 28 NSWLR 263 per Kirby P at 275; Director of Public Prosecutions (SA) v Vella (1993) 61 SASR 379 per King CJ at 382; R v Parker (1994) 75 A Crim R 437 at 443 to 446; Mansfield v Director of Public Prosecutions (WA) (supra) per Pullin JA at pars [94] to [101].
While a number of the cases to which I have referred above involved the Court making an order permitting a defendant to access restrained property for the purpose of funding legal proceedings and the Parliament of the Northern Territory has expressly precluded a defendant from accessing restrained property for that purpose, the principle enunciated in Dietrich v The Queen (supra) which is the principle on which the courts relied to grant defendants access to restrained funds has not been abrogated by Parliament. The Supreme Court of the Northern Territory still retains the inherent power to require an undertaking as to damages and to either stay a proceeding under the Act or to refuse to extend a restraining order if a defendant is unrepresented and representation by counsel is essential to a fair hearing of the proceeding. The power extends to staying a proceeding or to refusing to extend a restraining order on the grounds of oppression if the restraining order precluded the defendant from receiving a fair hearing in a criminal proceeding. Alternatively, the criminal proceeding itself could be stayed. That is, the court still retains the capacity to justly administer the proceedings before the court: Forge v Australian Securities and Investment Commission (supra) per Gummow, Hayne and Crennan JJ at 76 par [64]. The courts have recognised that because of the draconian nature of the provisions of criminal property forfeiture legislation there are cases where the proper administration of justice would break down if defendants were not represented by counsel. In such cases it is in the best interests not only of the defendant but also of the administration of justice that a defendant be legally represented.
In my opinion the powers conferred by the Act on the Supreme Court are not antithetical to the judicial process. The court is required to act judicially and it is not a mere instrument of executive policy. The integrity of the court is not substantially impaired by the provisions of the Act. The court still retains those defining characteristics which mark a court apart from other decision making bodies. Not every conferral of power that alters traditional judicial processes compromises the institutional integrity of the Supreme Court: Fardon v Attorney-General(Qld) (supra) per McHugh J at pars [41] to [42].
The Court’s power to refuse to make a restraining order over some property
I have had the advantage of reading a draft of Martin CJ’s Reasons for Decision. For the reasons given by his Honour I agree that at the time that the court is hearing an application for a restraining order the court may make a restraining order with respect to some property and refuse to make a restraining order in relation to sufficient property to allow legal expenses to be paid. His Honour’s reasons are consistent with the principles I have referred to above and the legislature has not clearly stated in the Act that the court does not have such a discretion: Director of Public Prosecutions (Cth) v Saxon (supra) per Kirby P at 275 E – F; Knight v FP Special Assets Ltd (1992) 174 CLR 178 at 205.
Orders
I would make the following orders:
1.The reference of the questions of law reserved by Olsson AJ in proceeding number 135 of 2006 is declined.
2.The reference of the questions of law reserved by Olsson AJ in proceeding number 153 of 2006 is declined.
3.In proceeding number 135 of 2006:
(a)The rules in relation to the bringing of an application for leave to appeal are dispensed with.
(b)The plaintiffs are granted leave to appeal.
(c)The plaintiffs are given leave to add as grounds of appeal the matters argued in proceeding number 153 of 2006.
(d)The appeal is allowed on the ground that the learned judge at first instance failed to give reasons for decision for making the restraining orders.
(e)The restraining orders are set aside.
(f)The matter is referred to the Registrar for fixing a hearing date of the application for restraining orders before another Judge.
(g)An interim injunction is granted until further order restraining the plaintiffs from dealing with all of the property that was previously subject to the restraining orders.
4.Proceeding number 153 of 2006 is dismissed.
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