C McMunn v Director of Public Prosecutions (No. 2)
[2009] VSC 379
•8 SEPTEMBER 2009
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
CRIMINAL DIVISION
No. 1463 of 2005
IN THE MATTER of the Confiscation Act 1997
| CORNELIA MARIA McMUNN | Applicant |
| v | |
| DIRECTOR OF PUBLIC PROSECTUIONS FOR VICTORIA | Respondent |
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JUDGE: | HARPER | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 20 & 24 FEBRUARY 2009 (written submissions) | |
DATE OF JUDGMENT: | 8 SEPTEMBER 2009 | |
CASE MAY BE CITED AS: | C McMUNN v DPP (No. 2) | |
MEDIUM NEUTRAL CITATION: | [2009] VSC 379 | |
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Costs – Whether Court is precluded by s.133A of the Confiscation Act 1997 from awarding costs to the DPP following his successful opposition to an application for an order excluding property from a restraining order – Phan Thi Le (No. 2) [2007] VSCA 57 cited – DPP v Tat Sang Loo & ors [2007] VSC 437 followed – Confiscation Act 1997, s.133A – Supreme Court Act 1986, s.24(1).
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr C. Juebner | Randles Cooper & Co Pty Ltd |
| For the Respondent | Mr M. Derham QC with Mr S.K. McGregor | Stuart Ward, Acting Solicitor for Public Prosecutions |
HIS HONOUR:
On 18 February 2009, I gave judgment following the hearing of an application by Cornelia McMunn made pursuant to s.20 of the Confiscation Act 1997. This section applies to a person who claims an interest in property against which a restraining order has been made pursuant to the Act. Mrs McMunn was such a person. The matrimonial home, of which she was the sole registered proprietor but which on her own admission was the joint property of both herself and her husband, was at that time subject to an order forbidding the disposal of it or of any interest in it. That order had been made following the conviction of Mrs McMunn’s husband on 16 counts of obtaining a financial advantage by deception.
I was satisfied that the matrimonial home had been acquired using funds obtained by the commission of the relevant offences. It was therefore “tainted” property within the meaning of that word as used in the Act. It followed that, even though Mrs McMunn had not been convicted of any offence, her interest in the property is subservient to the restraining order (and her application to have that interest excluded from the order must fail) unless she satisfies the Court that she acquired her interest in the matrimonial home without knowing, and in circumstances such as not to arouse a reasonable suspicion, that the property was tainted.
Mrs McMunn failed to satisfy me that, when she acquired her interest, she was in that state of innocent ignorance which the legislation demands of her if an application such as hers is to succeed. It was therefore dismissed. The Director of Public Prosecutions, as the successful respondent, now applies for his costs.
In a criminal trial on indictment or presentment, no order for costs may ordinarily be made against, or in favour of, the Crown. On the other hand, Mrs McMunn’s application is to be regarded as civil in character: Confiscation Act, s.133(1). In those circumstances, s.24(1) of the Supreme Court Act 1986 applies “[u]nless otherwise expressly provided by this or any other Act or by the Rules”. The section goes on to provide that, in the absence of such provision, “the costs of and incidental to all matters in the Court … is in the discretion of the Court and the Court has full power to determine by whom and to what extent the costs are to be paid.” The discretion must, of course, be exercised judicially; but, by enacting s.24(1), Parliament evinced an intention that, as a general rule, the Court is to exercise an otherwise unfettered discretion when deciding how and by whom the costs of a proceeding are to be borne.
Mrs McMunn contends that s.133A of the Confiscation Act qualifies as an express provision precluding the exercise of that otherwise unfettered discretion. Section 133A is given the heading “Costs”, and (omitting that which is not presently relevant) is in the following terms:
133A. (1) Costs may only be awarded in accordance with this section.
(2) If —
(a)a person brings, or appears at, proceedings under this Act before a court in order—
(i)to prevent a forfeiture order or restraining order from being made against property of the person; or
(ii)to have property of the person excluded from a forfeiture order or restraining order; and
(b) the person is successful in those proceedings; and
(c)the court is satisfied that the person was not involved in any way in the commission of the offence in respect of which the forfeiture order or restraining order was sought or made —
the court may order the applicant for the forfeiture order or restraining order to pay all costs incurred by the person in connection with the proceedings or any part of those costs that is determined by the court.
(3) …
(4)The amount of costs referred to in subsections (2) and (3) is in the discretion of the court.
It is submitted on behalf of Mrs McMunn that s.133A(1) “is mandatory in that it provides that costs may only be awarded in accordance with this section”.[1] And I accept that, unless certain preconditions are made out, the person who brings or appears at proceedings of the kind described in paragraphs (a)(i) or (a)(ii) of sub-s.(2) cannot successfully apply for an order that the applicant for a forfeiture or restraining order pay any costs. The position if the preconditions are satisfied is of course different. If the person (i) has sought the relief to which s.133A(2)(a) refers; and (ii) has been successful; and (iii) if the Court is satisfied that the person was not involved in any way in the commission of the relevant offence, then – and only then – the Court has the discretion described in that sub-section. In other words, the Court may, given the fulfilment of those preconditions, order that the applicant for the restraining order pay all or any part of the costs incurred by the person in connection with the proceedings. If, however, those preconditions have not been met, then the general discretion otherwise made available to the Court by s.24(1) of the Supreme Court Act cannot be exercised in favour of the person seeking the relief described in s.133A(2)(a) of the Confiscation Act.
[1](Written) costs submissions for the applicant, 24 February 2009 (italics and underlining as in the original).
To this point, nothing I have said is inconsistent with the submissions put forward on behalf of Mrs McMunn. But I am not here concerned with an application for costs where that application is made by a person who has brought, or who has appeared at, proceedings of the kind mentioned in s133A(2)(a) – in the case of Mrs McMunn, proceedings to have property excluded from a restraining order. I am concerned with an application by the Director of Public Prosecutions for his costs of his successful opposition to such exclusion. Far from being such a person as Mrs McMunn, the Director sits firmly in the opposite camp. As the applicant for a restraining order, by definition the Director cannot be a person who “brings, or appears at, proceedings ... to have property ... excluded from a … restraining order”. It is therefore necessary to ascertain whether, on a proper construction of its language, the prohibition in s133A(1) against an award of costs otherwise than in accordance with the section prevents him from making a successful application for such an award.
The Director relies upon DPP v Phan Thi Le (No.2).[2] In that case, Mr Le succeeded in having property excluded from automatic forfeiture. The Director appealed, and lost again. Mr Le applied for his costs. The Court of Appeal ordered that they be paid by the Director. In so doing, the Court rejected his argument “that, by force of subsection (1), s.133A was to be regarded as an exhaustive statement of the Court’s power to order costs in confiscation matters.”[3] The joint judgment of Maxwell P, Chernov and Neave JJA continued:
[2][2007] VSCA 57.
[3]Ibid, at [3].
4The starting point for any consideration of the Court’s power to make an order for costs is s 24(1) of the Supreme Court Act 1986, which gives the Supreme Court (including the Court of Appeal) “full power” to order costs “unless otherwise expressly provided by … any other Act”. Since s 133A is not expressed to limit the scope of s 24(1), the question must be whether the language of s 133A requires the conclusion that Parliament intended to remove altogether the general power to order costs and to replace it with a limited power, enabling the Court to order costs only in certain specified types of proceeding. As the High Court said in Rose v Hvric (1963) 108 CLR 353 at 358, where the phrase “except where otherwise expressly enacted” is used:
“… no case is outside that provision unless that is the necessary result of the operation of another enactment according to the intention it manifests”.
5We do not consider that the statutory language requires that conclusion. On the contrary, we think that on its proper construction s 133A leaves untouched the general costs power as it applies to types of proceeding not mentioned in s 133A(2) and s 133A(3).
6Several considerations are relevant to the question of construction. First, s 133A leaves out various categories of proceedings in respect of which the general costs power would ordinarily be expected to be exercisable. We can discern no policy rationale which might explain what the Director contends was a deliberate legislative decision to deny the Court any power to order costs in such proceedings.
7The present case illustrates the point well. Under s 133A(2)(a)(ii) an “all costs” order may be made in proceedings brought by a person –
“to have property of the person excluded from a forfeiture order or restraining order”.
In this proceeding, the applicant succeeded in having property excluded from automatic forfeiture … rather than from a forfeiture order … Section 133A makes no provision for – and hence, on the Director’s argument, precludes – an order for costs in such a proceeding, even at first instance. We can see no policy basis for allowing costs to be awarded to a successful applicant in one type of exclusion order proceeding but prohibiting such an order in another type of exclusion order proceeding.
Mrs McMunn nevertheless contends that, in the circumstances of this case, s.133A excludes any discretion which would otherwise be derived from s.24(1) - and that, accordingly, the Court does not have the power to make any costs order in favour of the Director. She relies in support of her submissions on DPP v Tat Sang Loo& Ors.[4] In that case, the Director had successfully applied for a restraining order over property owned by a company called Bow Ye Investments Pty Ltd (in liquidation). The company had opposed the application. In his Honour’s opinion, the critical question was whether the company’s appearance was in order “to prevent … a restraining order from being made against property of the person.”[5] He held that, in substance, it was. The case of Tat Sang Loo is therefore indistinguishable from that of Mrs McMunn.
[4][2007] VSC 437.
[5]Ibid, at [14].
Osborn J determined that, because (like Mrs McMunn) Bow Ye Investments had appeared in order to prevent a restraining order from being made against its property, the application fell “within the purpose requirement governing that class of applications within s.133A(2).”[6] This, his Honour held, had the result that, as the applicant for the restraining order, the Director “is not within that class of persons for whose benefit an order can be made.”[7] Accordingly, in his view, the Court had no power to award costs to the Director: the Court has power to make an order against, but not in favour of, such an applicant.
[6]Ibid, at [16].
[7]Ibid, at [18].
As I understand his Honour’s judgment, he came to that conclusion having examined the question whether the class of proceedings governed by the restrictive costs provision to be found in s.133A falls within one or the other of two possible alternatives. One alternative is that the section governs the question of costs whenever a person brings a proceeding seeking any of the forms of relief mentioned in either paragraph (i) or paragraph (ii) of sub-s.(2)(a). That (by contrast with Phan Thi Le) was Mrs McMunn’s case - hers of course being a proceeding seeking to have her interest in her matrimonial home excluded from the relevant restraining order. If these are the circumstances Parliament had in mind as governing the question of costs under s.133A, then – once such a proceeding is brought - the Court cannot make any costs order other than an order that the applicant for the forfeiture or restraining order pay the costs, in whole or in part, of a person who has successfully sought either to prevent the order being made or to have property excluded from it, and who has satisfied the Court of his or her innocence of any involvement in the relevant offence.
The second alternative is that the restriction on the Court’s power to order costs applies only where the three preconditions previously mentioned are present – namely, that (i) relief of the kind described in sub-s.(2) is sought; (ii) the person seeking that relief is successful; and (iii) that person is innocent of any involvement in the commission of the offence in respect of which the forfeiture or restraining order was made. In the absence of any one of the three preconditions, costs are at large.
In his Honour’s opinion, the first alternative was to be preferred. His Honour held that, if the contrary view be taken, then the word “only” in subs.(1) is left with no work to do. That being the case, the terms of s.133A(1) constitute an express provision otherwise than in accordance with s.24(1) of the Supreme Court Act. The effect of s.133A(1) is therefore that s.133A(2) and (3) “cover the field with respect to the power to award costs” in proceedings brought and appearances made for the purposes specified.[8]
[8][2007] VSC 437 at [20].
I find myself in respectful agreement with this analysis. It is contended on Mrs McMunn’s behalf that the proceeding heard by me was of a “type” mentioned in s.133A(2), and that therefore the decision of the Court of Appeal in Phan Thi Le can be distinguished. I agree. The description of the proceeding encompassed by the section is in the circumstances of this case beyond doubt. It is to be found in sub-section (2)(a). A proceeding is not typecast according to which party is successful: ss.(2)(b); or whether the court is satisfied that a person appearing before it was not involved in a particular offence: ss.(2)(c). It follows that paragraphs (b) and (c) in no way describe the type of proceeding to which the section refers.
As I understand the submissions of the Director, he accepts the above analysis. He contends, however, that “[w]hether the section precludes any particular costs order being made under the general power in s.24 of the Supreme Court Act depends on whether that is a ‘necessary result of the operation …’ of s.133A ‘according to the intention it manifests’.”[9] In his submission, Osborn J’s analysis “relies too heavily on the reference in the Court of Appeal decision to the consideration of the ‘type of proceeding’ (which was the relevant consideration in that decision because of the circumstances it presented) and gives insufficient weight to the field of operation of ss.133A(2)”, and to that intention.[10]
[9]Respondent’s costs submission, 20 February 2009 at [13].
[10]Ibid, at [16].
It is true that it is difficult to discern any “policy rationale which might explain … a deliberate legislative decision to deny the Court any power to order costs” in favour of the Director in circumstances such as obtain in this case. But, as the Court of Appeal said in DPP v Phan Thi Le, the Confiscation Act is “punctuated with unexplained – and inexplicable – omissions and inconsistencies”[11] and “the opportunity should … be taken to review and clarify the policy underlying, and the scope of, the costs provisions.”[12]
[11][2007] VSCA 57 at [11].
[12]Ibid, at [12].
The director now submits that s.133A manifests an intention to avoid any encroachment on the Court’s discretion to make an order for costs where the person applying to have property excluded from a restraining order is unsuccessful. I cannot agree. Had that been the intention of Parliament, it could easily have given expression to it. It could have said that, if a person seeks the relief to which s.133A(2) refers, and is successful, and was not involved in the commission of a relevant offence, then and only then might that person be awarded his or her costs. Had that been the result of the drafting exercise, a successful Director could have relied with confidence on s.24 of the Supreme Court Act as the foundation for an order for costs in his favour. Instead, however, Parliament enacted the blanket provision that is s.133A(1): “Costs may only be awarded in accordance with this section.” It seems to me that this in its terms covers, and restricts, the making of costs orders in all proceedings in which the relief specified in ss.(2) or (3) is sought. This is such a proceeding.
Accordingly, there is in my view no power in the circumstances of this case to award costs to the Director of Public Prosecutions.
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