Commissioner of the Australian Federal Police v Cacu

[2015] NSWSC 1232

Supreme Court

New South Wales

Medium Neutral Citation:	Commissioner of the Australian Federal Police v Cacu [2015] NSWSC 1232
Hearing dates:	13 May 2015
Decision date:	03 September 2015
Jurisdiction:	Common Law
Before:	Adams J
Decision:	(1) The parties, within seven business days of delivery of this judgment are to submit agreed orders effecting the conclusions I have expressed. Failing agreement, the applicants are to submit their proposed orders with brief submissions within five business days of the expiry of the time for submission of agreed orders, to be followed by the Commissioner within a further three business days.  (2) As to costs, the parties are to submit agreed orders or make submissions in accordance with the timetable in order 1.
Catchwords:	PROCEDURE – civil – proceeds of crime – application for stay of proceedings under the Proceeds of Crime Act 2002 (Cth) – concurrent criminal proceedings – orders requiring the provision of financial statements – whether accused is required to assist prosecution by providing statements – balancing objects of the Act against the Court’s obligation to maintain the legitimacy of the administration of criminal justice
Legislation Cited:	Anti-Money Laundering and Counter Terrorism Financing Act 2006 (Cth), ss 140(1), 136(1) Australian Crime Commission Act 2002 (Cth) Criminal Code Act 1995 (Cth), ss 400.9(1), 400.3(1) Evidence Act 1995 (NSW), s 18 Proceeds of Crime Act 2002 (Cth), ss, 19, 39, 39A(1), 49,180 Proceeds of Crime Regulations 2002
Cases Cited:	Application of the Commissioner of the Australian Federal Police [2015] NSWSC 888 Commissioner of the Australian Federal Police v Zhao [2015] HCA 5; 89 ALJR 331 Dietrich v The Queen [1992] HCA 57; 177 CLR 292 Hammond v The Commonwealth of Australia [1982] HCA 42; 152 CLR 188 Lee v New South Wales Crime Commission [2013] HCA 39; 251 CLR 196; 235 A Crim R 326 Lee v The Queen [2014] HCA 20; 237 A Crim R 436; 88 ALJR 656 New South Wales Crime Commission v Lee [2012] NSWCA 276; 84 NSWLR 1 R v Seller [2013] NSWCCA 42; 273 FLR 155 Sorby v The Commonwealth [1983] HCA 10; 152 CLR 281 X7 v Australian Crime Commission [2013] HCA 29; 248 CLR 92; 232 A Crim R 410 X7 v R [2014] NSWCCA 273
Category:	Procedural and other rulings
Parties:	The Commissioner of the Australian Federal Police (Plaintiff) Ergun Cacu (First defendant) Sofya Kuzniatsova (Second defendant)
Representation:	Counsel: T M Thawley SC/ C Conde (Plaintiff) P Singleton (Defendants)   Solicitors: AFP Proceeds of Crime Litigation Unit (Plaintiff) Gregory J Goold Solicitor (Defendants)
File Number(s):	2015/00072625

Judgment

Introduction

1. Mr Cacu and Ms Kuzniatsova (or, where it is unnecessary to distinguish between them, the applicants), who are husband and wife seek a general stay of confiscation proceedings that were commenced against them under the Proceeds of Crime Act 2002 (Cth) (the Act) by the Commissioner of the Australian Federal Police. In the alternative, the applicants seek an order that the Court order a stay of orders made on 10 March 2015 relating to the provision of statements under s 39 of the Act and examinations under s 180 of the Act.

2. On 10 March 2015, the Commissioner applied ex-parte for orders restraining various properties, cars and bank accounts of Mr Cacu and place certain of his property into the custody and control of the Official Trustee in Bankruptcy, and to provide the Commissioner with sworn statements concerning his property, liabilities and dispositions or dealings with property. The Commissioner also sought orders in respect of assets in the name of Ms Kuzniatsova which were suspected of being “subject to the effective control of [Mr Cacu]”. The application was supported by an affidavit of Mr Steven Daher, dated 10 March 2015, which deposed to suspicions held by him that Mr Cacu had committed a number of serious offences under ss 140(1) and 136(1) of the Anti-Money Laundering and Counter Terrorism Financing Act 2006 (Cth) and ss 400.9(1) and 400.3(1) of the Schedule to the Criminal Code Act 1995 (Cth). These offences involve allegations that Mr Cacu provided false or misleading information when opening and using a Westpac bank account, including the use of a false name, ‘Egan Coen’.

3. On 11 March 2015, Federal Agents arrested Mr Cacu and charged him with offences substantially reflecting the suspicions of Mr Daher in his affidavit. (He was also charged with gun and drug offences which do not presently matter). On this date, the applicants were served with the orders made on 10 March 2015 by this Court.

4. The applicants filed two notices of motion in this Court on 1 and 24 April 2015. By the first, they sought a stay of the orders requiring Mr Cacu to file sworn statements of financial information with the Commissioner until after the determination of the criminal proceedings faced by him. By the second, they sought a general stay of the proceedings until after Mr Cacu’s criminal proceedings had been determined. The applicants also sought an order for the return of a vehicle to Ms Kuzniatsova and an extension of time for them to challenge the restraining orders. Those orders have been dealt with and the only questions left concern whether to grant either a partial or general stay of these proceedings whilst the criminal charges remain to be tried.

The elements of the charges and the issues in the forfeiture case

5. The affidavit of Mr Daher listed those matters which led to his suspicion that Mr Cacu had dealt with property having a value of over $100,000 which is reasonably suspected of being the proceeds of crime, contrary to s 400.9(1) of the Criminal Code. For the same reasons, Mr Daher suspected that Mr Cacu dealt with specified property worth over $1,000,000 which he believed was the proceeds of crime and/or intended it to be an instrument of crime, contrary to s 400.3(1) of the Criminal Code. These reasons were that the various assets (real property, bank accounts and motor vehicles) sought to be forfeited involved the use of funds greatly disproportionate to that expected to be available from legitimate sources of income as declared by Mr Cacu and Ms Kuzniatsova in their yearly tax returns between 2007 and 2014; in respect of some of the assets suspected actually to belong to or controlled by Mr Cacu, Mr Cacu used the alias Egan Coen to acquire or operate them; in respect of bank accounts, actually Mr Cacu’s, the use of the alias; whilst in respect of those in his own name, they represented access to funds; and, in respect of accounts and motor vehicles in Ms Kuzniatsova’s name, they are under Mr Cacu’s control.

6. It will be seen that the property in respect of which financial statements are sought and, ultimately examination is to occur, is property which is alleged to have been dealt with in a manner that constitutes the specified criminal offences.

The orders authorised by the Act

7. The financial statements were ordered to be provided under s 39A(1) of the Act –

“(1) The court that made a restraining order, or any other court that could have made the restraining order, may make any ancillary orders that the court considers appropriate and, without limiting the generality of this, the court may make any one or more of the following orders:

…

(ca) an order directing the suspect in relation to the restraining order to give a sworn statement to a specified person, within a specified period, setting out all of his or her interests in property, and his or her liabilities;

(d) an order directing the owner or a previous owner … to give a sworn statement to a specified person, within a specified period, setting out particulars of, or dealings with, the property;

(da) if the court is satisfied that there are reasonable grounds to suspect that a person (other than the owner or a previous owner) has information relevant to identifying, locating or quantifying the property – an order directing the person to give a sworn statement to a specified person, within a specified period, setting out particulars of, or dealings with, the property”

8. Examinations are conducted under Pt 3 Div 1 –

“180 Examination orders relating to restraining orders

(1) If a * restraining order is in force, the court that made the restraining order, or any other court that could have made the restraining order, may make an order (an examination order ) for the * examination of any person, including:

(a) a person whose property is, or a person who has or claims an * interest in property that is, the subject of the restraining order; or

(b) a person who is a * suspect in relation to the restraining order; or

(c) the spouse or * de facto partner of a person referred to in paragraph (a) or (b);

about the * affairs of a person referred to in paragraph (a), (b) or (c).

(2) …

…

Division 2—Examination notices

183 Examination notices

(1) An * approved examiner may, on application by the * responsible authority, give to a person who is the subject of an * examination order a written notice (an examination notice ) for the * examination of the person.

(2) …

(3) The fact that criminal proceedings have been instituted or have commenced (whether or not under this Act) does not prevent the * approved examiner giving the * examination notice.

(4) An approved examiner is a person who:

(a) holds an office, or is included in a class of people, specified in the regulations; or

(b) is appointed by the Minister under this section.

187 Requirements made of person examined

(1) The person may be examined on oath or affirmation by:

(a) the * approved examiner; and

(b) the * responsible authority.

(2) The * approved examiner may, for that purpose:

(a) require the person either to take an oath or to make an affirmation; and

(b) administer an oath or affirmation to the person.

(3) The oath or affirmation to be taken or made by the person for the purposes of the * examination is an oath or affirmation that the statements that the person will make will be true.

(4) …

(5) The * approved examiner may require the person to answer a question that:

(a) is put to the person at the * examination; and

(b) is relevant to the * affairs of a person whose affairs can, under section 180, 180A, 180B, 180C, 180D, 180E or 181, be subject to the examination.

188 Examination to take place in private

(1) The *examination is to take place in private.

(2) The *approved examiner may give directions about who may be present during the *examination, or during a part of it.

(3) These people are entitled to be present at the *examination:

(a) the *approved examiner;

(b) the person being examined, and the person’s *lawyer;

(c) the *responsible authority;

(d) any person who is entitled to be present because of a direction under subsection (2).

189 Role of the examinee's lawyer

(1) The * lawyer of the person being examined may, at such times during the * examination as the * approved examiner determines:

(a) address the approved examiner; and

(b) examine the person;

about matters about which the approved examiner, or the * responsible authority, has examined the person.

(2) The * approved examiner may require a * lawyer who, in the approved examiner's opinion, is trying to obstruct the * examination by exercising rights under subsection (1), to stop addressing the approved examiner, or stop his or her examination, as the case requires.

…

192 Questions of law

The * approved examiner may:

(a) on his or her own initiative; or

(b) at the request of the person being examined, or the * responsible authority;

refer a question of law arising at the * examination to the court that made the * examination order.

193 Approved examiner may restrict publication of certain material

(1) The * approved examiner may:

(a) on his or her own initiative; or

(b) at the request of the person being examined, or the * responsible authority;

give directions preventing or restricting disclosure to the public of matters contained in answers given or documents produced in the course of the * examination.

(2) In deciding whether or not to give a direction, the * approved examiner is to have regard to:

(a) whether:

(i) an answer that has been or may be given; or

(ii) a document that has been or may be produced; or

(iii) a matter that has arisen or may arise;

during the * examination is of a confidential nature or relates to the commission, or to the alleged or suspected commission, of an offence against a law of the Commonwealth or a State or Territory; and

(b) any unfair prejudice to a person's reputation that would be likely to be caused unless the approved examiner gives the direction; and

(c) whether giving the direction is in the public interest; and

(d) any other relevant matter.”

It is also important to note the following provisions of the Act –

“198 Admissibility of answers and documents

An answer given or document produced in an * examination is not admissible in evidence in civil or criminal proceedings against the person who gave the answer or produced the document except:

(a) in criminal proceedings for giving false or misleading information; or

(b) in proceedings on an application under this Act; or

(c) in proceedings ancillary to an application under this Act; or

(d) in proceedings for enforcement of a * confiscation order; or

(e) in the case of a document--in civil proceedings for or in respect of a right or liability it confers or imposes.

…

266A Disclosure

(1) This section applies if a person obtains information:

(a) as a direct result of:

(i) the person being given a sworn statement under an order made under paragraph 39(1)(ca), (d) or (da); or

(ii) the exercise of a power (by the person or someone else), or performance (by the person) of a function, under Part 3-1, 3-2, 3-3, 3-4 or 3-5; or

(b) as a result of a disclosure, or a series of disclosures, under this section.

(2) The person may disclose the information to an authority described in an item of the following table for a purpose described in that item if the person believes on reasonable grounds that the disclosure will serve that purpose:

…

…

[Domestic law enforcement agencies for the purpose of assisting in the prevention or prosecution of offences punishable by imprisonment for at least 3 years or for life, the Australian Taxation Office to protect public revenue, and foreign authorities to investigate, trace, identify or confiscate as might be done under this Act.]

Limits on use of information disclosed

(3) In civil or *criminal proceedings against a person who gave an answer or produced a document in an *examination, none of the following that is disclosed under this section is admissible in evidence against the person:

(a) the answer or document;

(b) information contained in the answer or document.

(4) …

(5) In a * criminal proceeding against a person who produced or made available a document under a * production order, none of the following that is disclosed under this section is admissible in evidence against the person:

(a) the document;

(b) information contained in the document.

(6) …

(7) To avoid doubt, this section does not affect the admissibility in evidence of any information, document or thing obtained as an indirect consequence of a disclosure under this section.

(8) …

…

319 Stay of proceedings

The fact that criminal proceedings have been instituted or have commenced (whether or not under this Act) is not a ground on which a court may stay proceedings under this Act that are not criminal proceedings.”

9. The Proceeds of Crime Regulations 2002 make provision for the appointment of approved examiners –

“12 Approved examiners

(1) For paragraph 183(4)(a) of the Act, the class of people specified is the class that includes a person:

(a) to whom subregulation (2) applies; and

(b) whose name is on a register kept by the Minister for the purposes of section 183 of the Act.

(2) This subregulation applies to the following persons:

(a) a person who is:

(i) a presidential member of the Administrative Appeals Tribunal established under the Administrative Appeals Tribunal Act 1975 ; or

(ii) a non-presidential member of that Tribunal who is enrolled as a legal practitioner of the High Court, of another federal court or of the Supreme Court of a State or Territory, and has been so enrolled for at least 5 years;

(b) a person who has held the office of judge in the Supreme Court, District Court or County Court of a State or Territory and has stated, in writing, that he or she is willing to be an approved examiner;

(c) a person who has held the office of magistrate and has stated, in writing, that he or she is willing to be an approved examiner.”

Orders

10. The orders obtained by the Commissioner included orders restraining specified property of the applicants (orders 6, 7 and 8), orders restraining unspecified property held in the name and known alias of Mr Cacu (order 9), orders granting custody and control of specified property to the Official Trustee in Bankruptcy (orders 10, 11 and 12), orders requiring Mr Cacu to provide the Commissioner with sworn statements of financial information (orders 13 and 14) as also Ms Kuzniatsova (orders 15 and 16) and orders requiring Mr Cacu to obtain bank statements from a Turkish bank account said to be in his name and to transfer funds in that account to the account of the Official Trustee in Bankruptcy (orders 17 and 18).

11. Those presently in issue are –

“[13] Pursuant to section 39(1)(ca) of the … Act, Ergun Cacu is directed to give to the Commissioner of the Australian Federal Police or his nominated delegate within 28 days of the date of service of these orders a sworn statement, in the form set out in Schedule Four to these orders setting out:

a. all of his interests in property within the meaning of the Act, worldwide, not including any asset or interest in property with a value of less than AUD5.000 as at the date of these orders; and

b. all of his liabilities, worldwide, not including any liability with a value of less than AUD5,000 as at the date of these orders.

[14] Pursuant to section 39(1)(d) of the Act, an order directing Ergun Cacu to give a sworn statement to the Commissioner of the Australian Federal Police or his nominated delegate no later than 28 days after being notified of the making of the order setting out particulars of or dealings with the property specified in Schedules One and Two.

[15] Pursuant to section 39(1)(d) of the Act, an order directing Sofya Kuzniatsova to give a sworn statement to the Commissioner of the Australian Federal Police or his nominated delegate no later than 28 days after being notified of the making of the order setting out particulars of or dealings with the property of Ergun Cacu with a value of AUD10,000 or greater.

[16] Pursuant to section 39(1)(da) of the Act, an order directing Sofya Kuzniatsova to give a sworn statement to the Commissioner of the Australian Federal Police or his nominated delegate no later than 28 days after being notified of the making of the order setting out particulars of or dealings with the property of Ergun Cacu with a value of AUD 10,000 or greater.”

12. Schedule Four sets out the form of the sworn statement required under order 13 and requires the provision of particulars concerning the nature and extent of all assets and liabilities, including the names of persons or institutions having custody of title documents, the dates of acquisition, the amounts and dates of payments in discharge of any liability in relation to property and the source of any such payments, the identity of any creditor, full particulars of dealings with property since 15 May 2009 as well as the property, liabilities and dealings of companies of which Mr Cacu is a director. In substance, the order requires Mr Cacu to disclose the entirety of his financial position to the Commissioner. The requirement to disclose sources of payments is somewhat uncertain in scope: at its narrowest, it would simply require identification of the provider of the funds to Mr Cacu (e.g. the bank account from which they were paid); at its widest, the mode (even if criminal, say by drug dealing) by which he acquired the funds to make the payments would have to be disclosed. It seems to me that this latter construction is the correct one. Orders for examination of the applicants were also made.

Submissions

13. The applicants submit, firstly, that Mr Cacu should not be placed in a position where he must decide whether to prejudice his criminal trial or his defence of the forfeiture proceedings. In the event that these proceedings are not stayed, the issue would arise concerning the impact of the compulsory financial statements and examination on the fairness of his trial of the criminal charges. Reliance was placed on Commissioner of the Australian Federal Police v Zhao [2015] HCA 5; 89 ALJR 331, in which the High Court upheld an order staying, until the conclusion of cognate current criminal proceedings, confiscation proceedings brought by the Commissioner. The proceedings had moved to the point that it was necessary to make an exclusion application in order to prevent automatic forfeiture (see ss 19 and 49 of the Act) with the practical consequence that Zhao would have to put on evidence dealing with the issue whether the property was the proceeds of crime or not, the very issue that was the subject of the criminal trial. Hence his need for a stay to avoid prejudicing the fairness of his trial. The applicants contend, as did the second respondent in Zhao that, as Mr Cacu faces pending criminal proceedings concerning allegations that grounded the confiscation proceedings, the issues in the confiscation and the criminal proceedings are “substantially identical”, and he is able to point to the risk of prejudice to his criminal proceedings if required to defend himself in the confiscation proceedings. In Mr Cacu’s affidavit he asserted that the risk of prejudice arises from his ability to defend the confiscation proceedings while the related criminal proceedings remain on foot. In particular, “There are material matters that I would like to advance in defence of the confiscation proceeding. These matters are substantially similar to the matters that I would like to put forward in response to the criminal charges”. Mr Cacu also contended that, in complying with orders 13 and 14, which require him to provide written statements concerning his properties and liabilities, he would need to provide evidence that “would be directly relevant to the criminal charges”. He also deposed to his fear that his answers in the sworn statements might lead police or prosecuting authorities to “conduct further investigations directed at obtaining admissible evidence to prove those matters in my criminal proceeding”. He said that, if the confiscation proceedings continue throughout the criminal proceedings against him, he would be “forced from time to time to make difficult judgements about the extent to which I should waive my right to silence in order to lead evidence to counter the plaintiff’s allegations in the confiscation proceeding”.

14. The Commissioner submitted that Zhao concerned the pursuit of forfeiture proceedings to a hearing before the relevant criminal proceedings had concluded against the accused, whilst here it has not yet sought forfeiture and does not plan to do so until after the conclusion of the criminal proceedings and, accordingly Zhao is irrelevant. The point of the orders requiring the statements is to identify assets that might be restrained and enable consideration to be given to whether they should be restrained and protected from dissipation. The plaintiff submitted that an order staying the entire proceedings would undermine the principal objects of the legislation, specified in s 5 as including “to enable law enforcement authorities effectively to trace proceeds” of crime and confiscate them. The Commissioner contended this purpose would be thwarted if the currency of criminal proceedings having a factual overlap with the confiscation proceedings (which will almost always exist) provided a basis for staying the latter, including preventing or, at least, substantially delaying the necessary ancillary processes of requiring financial statements and conducting examinations. The Commissioner pointed to s 319 of the Act as demonstrating that the legislature contemplated that criminal and civil proceedings might run concurrently and thus, as stated in Zhao at [30] –

“[Mr Cacu, although charged] … with an offence which is relevant to forfeiture or other civil proceedings brought under the … Act must do more than point to the existence of criminal proceedings in order to obtain a stay of the civil proceedings.”

15. The Commissioner relied on Lee v New South Wales Crime Commission [2013] HCA 39; 251 CLR 196; 235 A Crim R 326 (Lee 1), in which the High Court allowed an accused to be examined under the Criminal Assets Recovery Act 1990 (NSW) (CAR Act) on subject matters related to pending criminal charges because the legislation (submitted to be analogous to the Act) provided adequate safeguards against any risk of prejudice that might arise from the overlap in proceedings. In the context of this case, the Commissioner submitted that, although information from financial statements and the examination can be shared, it is inadmissible against Mr Cacu in any criminal proceedings. Furthermore any sharing – if it occurred – would need to be carefully undertaken to avoid the risk of the trial miscarrying as occurred in Lee v The Queen [2014] HCA 20; 237 A Crim R 436; 88 ALJR 656 (Lee 2) where transcripts of the appellant’s evidence before the Commission were published to the Director of Public Prosecutions and available to the prosecutors.

The cases

16. In Zhao the Court stated (omitting references) –

“Whether a stay should have been granted

[43] The risk of prejudice to the second respondent if a stay is not granted in the forfeiture proceedings and the exclusion proceedings is plain. It is not necessary for the second respondent to say any more than he did on the application for a stay in order to identify that risk, given that the offences and the circumstances relevant to both proceedings are substantially identical.

[43] The Commissioner contends, as the primary judge had held, that it was necessary that the second respondent state the specific matters of prejudice before a stay could be contemplated. However, to require the second respondent to do so would be to make the risk of prejudice a reality by requiring him to reveal information about his defence, the very situation which an order for a stay seeks to avoid. Similarly, the Commissioner's contention that the court should defer making an order for a stay until the parties have exchanged their evidence is beside the point.

[44] The Commissioner suggests that protective orders could be made, which might maintain the confidentiality of evidence, and that evidence could be given in closed court. In the latter regard, the open court principle, to which the law adheres… now finds expression in s 28 of the Open Courts Act 2013 (Vic). The rationale of the open court principle is that court proceedings should be subjected to public and professional scrutiny, and courts will not act contrary to the principle save in exceptional circumstances. Closing the court so that the Commissioner might progress forfeiture proceedings and receive the second respondent's evidence does not qualify as a proper reason for departing from the principle.

[45] During the course of argument, at a point when the power given by s 266A of the… Act to disclose to a prosecutor evidence obtained by compulsion was mentioned, the Commissioner was at pains to reassure the Court that he does not contend that s 266A provides a licence to communicate information obtained in the civil proceedings to the prosecuting authorities. The Commissioner emphasised that the Proceeds of Crime Litigation section is not regarded as an arm of the prosecution, which appears to have been the perception of the New South Wales Crime Commission in Lee No 2.

[46] Regardless of the conduct in Lee No 2, it would not be correct to approach a matter such as this on the basis that a wrong would be committed. However, s 266A would not render the provision of the second respondent's evidence to the prosecution unlawful. Even if it could not be used as evidence against him, its possession by the prosecution might affect his defence. The Court of Appeal's view, that protective orders would not suffice to remove the risk of prejudice to the second respondent's defence, is clearly correct.

[47] The prospect that civil proceedings may prejudice a criminal trial and that such prejudice may require a stay of the civil proceedings is hardly novel. In some jurisdictions, procedures are provided for making an application for a stay in such circumstances... The risk of prejudice in a case such as this is real. The second respondent can point to a risk of prejudice; the Commissioner cannot.”

17. The submission of the Commissioner as to the generality of the basis for the applicant’s contention that Mr Cacu’s fair trial will be prejudiced is answered, as it seems to me, by the fact (not really contested) that “the offences and the circumstances relevant to both proceedings are substantially identical”: see Zhao at [42], set out above. Requiring Mr Cacu, in effect, to admit (or deny) his ownership or control of the assets which are the subject of the Criminal Code offences will constitute a breach of the “important aspect of a criminal trial which follows from a fundamental principle of the common law … that the prosecution is to prove the guilt of an accused person charged with a crime and cannot compel a person charged with a crime to assist in the discharge of its onus of proof”: Zhao at [18]. This principle is acknowledged by the presence of s 198. However, the use of the statements to obtain derivative evidence is not prohibited and such derivative evidence would be admissible in his trial to support, if it happened to do so, the prosecution case or provide the basis for other charges.

18. The starting point of the recent jurisprudence concerning the significance of the intersection between executive compulsory investigation and criminal trials dealing with the same person and overlapping factual issues is Hammond v The Commonwealth of Australia [1982] HCA 42; 152 CLR 188, where the plaintiff, who had been charged with criminal offences, was liable to be questioned about those matters by a Royal Commission. It was accepted that, if there were a real risk, as opposed to a remote possibility, that the administration of justice would be interfered with if the proposed examination occurred, it would constitute a contempt of court and the examination must be adjourned until the conclusion of the trial. In finding there was such a risk Gibbs CJ (with whom Mason J agreed) said (at 198) that the proposed examination was “very likely to prejudice… [Hammond] in his defence”. Brennan J, coming to the same conclusion, said (at 202) that, although the source of the immunity against self-incrimination may be debateable, “it is sufficient for present purposes to appreciate that it is a principle deep-rooted in our law and history that the Crown may not subject an accused person to compulsory process to obtain his answers upon the issue of his guilt of an offence with which he has been charged”. Deane J, (who proposed a wider restraint than Gibbs CJ and Brennan J) described it (at 208) as –

“… fundamental to the administration of criminal justice that a person who is the subject of pending criminal proceedings in a court of law should not be subjected to having his part in the matters involved in those criminal proceedings made the subject of a parallel inquisitorial inquiry by an administrative tribunal with powers to compel the giving of evidence and the production of documents which largely correspond (and, to some extent, exceed) the powers of the criminal court. Such an extracurial inquisitorial investigation of the involvement of a person who has been committed for trial in the matters which form the basis of the criminal proceedings against him constitutes, in my view, an improper interference with the due administration of justice in the proceedings against him in the criminal court and contempt of court.”

19. In X7 v Australian Crime Commission [2013] HCA 29; 248 CLR 92; 232 A Crim R 410, a majority of the High Court held that the Australian Crime Commission Act 2002 (Cth) did not authorise the examination by the Commission of a charged person in respect of matters which were the subject of the charges. Hayne and Bell JJ described the impact on the process of criminal justice of the proposed construction as follows –

“[124] Even if the answers given at a compulsory examination are kept secret, and therefore cannot be used directly or indirectly by those responsible for investigating and prosecuting the matters charged, the requirement to give answers, after being charged, would fundamentally alter the accusatorial judicial process that begins with the laying of a charge and culminates in the accusatorial (and adversarial) trial in the courtroom. No longer could the accused person decide the course which he or she should adopt at trial, in answer to the charge, according only to the strength of the prosecution's case as revealed by the material provided by the prosecution before trial, or to the strength of the evidence led by the prosecution at the trial. The accused person would have to decide the course to be followed in light of that material and in light of any self incriminatory answers which he or she had been compelled to give at an examination conducted after the charge was laid. That is, the accused person would have to decide what plea to enter, what evidence to challenge and what evidence to give or lead at trial according to what answers he or she had given at the examination. The accused person is thus prejudiced in his or her defence of the charge that has been laid by being required to answer questions about the subject matter of the pending charge.

[125] As has been explained, if an alteration of that kind is to be made to the criminal justice system by statute, it must be made clearly by express words or by necessary intendment. If the relevant statute does not provide clearly for an alteration of that kind, compelling answers to questions about the subject matter of the pending charge would be a contempt.”

20. In their dissenting judgment, French CJ and Crennan J concluded that the specific provisions of the Australian Crime Commission Act contemplated the conduct of an examination of a person charged with an offence and made specific provision as to the use and disclosure that might be made of material elicited relevant to the subject matter of the offence, making specific reference to the risk of prejudicing the fair trial of the accused (at [25]-[26]). That Act reflected “a legislative judgment” that gave priority to the investigative functions of the Commission over the “private interest in claiming the privilege against self-incrimination” (at [29]).

21. The problem in Lee 1 concerned the exercise of the power to order an examination by a registrar of the court of defendants under s 31D of the CAR Act, which was likely to concern conduct in respect of the relevant property that would impinge upon offences with which they were also charged. (I interpolate that examinations under the Act are not conducted by the registrar but by a person prescribed by the regulations: s 183. Although such a person may have judicial or quasi-judicial status (see regulation 12, supra), in no sense are they acting judicially.) French CJ (omitting some references) observed –

“[1] The presumption of innocence, the privilege against self-incrimination and the right to silence are important elements of the ‘accusatorial system of justice’ which generally prevails in the common law world.”

Furthermore –

“[54] It may be accepted that the examination process under the CAR Act may, if it touches upon matters the subject of pending criminal charges against the examinee, affect the accusatorial character of the trial process. Even if the responses of the examinee to questions put to him or her were kept secret and were solely exculpatory or did no more than disclose defences to the charges, the examinee could be said to have suffered a forensic disadvantage. The nature of that disadvantage was discussed in the joint judgment of Hayne and Bell JJ in X7 [(2013) 248 CLR 92 at 142-143 [124]]. I do not, with respect, disagree with anything their Honours said in the description of that disadvantage.”

His Honour emphasised (at [24]) the fundamental character of the privilege against self-incrimination which, though “not an essential element of the process of trial by jury”, is “a basic and substantive common law right” (citing X7 at [104] per Hayne and Bell JJ) that “supports the presumption of innocence”. It followed from its fundamental importance that any qualification by statute must be justified by strict construction of the statutory language, taking into account the legislative purpose as well as text and context (at [29]). Nevertheless, s 31D of the CAR Act authorised the making of an order for examination of a person charged with an offence about matters relevant to the offence, leaving the Court with a discretion to refuse to make such an order (at [4]) as the examination was a judicial process carried out “before the Court, or before an officer of the Court prescribed by rules of court”, with all its powers to supervise and control its own processes including “the power to take appropriate action to prevent injustice” or diminish or prevent prejudice beyond that authorised by the CAR Act (at [40]-[41]). This distinguished the case from that in Hammond (at [36]) and in X7 (at [47]). A further point was that, as distinct from this position, it would be inapposite to analyse the power of compulsory examination conferred on a court “by reference to whether the court is authorised to do that which would otherwise be a contempt of court” (at [48]).

22. The following matters were, according to the Chief Justice, determinative –

“[55] …

● the objects of the CAR Act, which expressly contemplate its application to persons facing criminal charges;

● the application of the substantive proceedings under the CAR Act to persons facing such charges;

● the premises upon which the former s 62 and s 63 were framed, which contemplate the conduct of proceedings touching matters the subject of pending charges;

● the character of the examination under s 31D as ancillary to substantive confiscation proceedings under the CAR Act;

● the conferring of a power to make an order for an examination on the Supreme Court and the conferring of the examination power itself on the Court;

● the capacity of the Court to exercise its discretion to make or decline to make an examination order and to make directions affecting the conduct of any examination.”

23. In dissent (with Kiefel and Bell JJ), Hayne J concluded that the power given to the Supreme Court of New South Wales, by s 31D(1) of the CAR Act, to order the examination on oath of a person “concerning the affairs of the affected person” did not permit the Court to order the examination of a person charged with, but not yet tried for, an offence about the subject matter of the pending charge since the loss of the privilege against self-incrimination would work “a fundamental alteration to the accusatorial process of criminal justice” which the general language of the section did not envisage (at [59]-[60]). His Honour considered that the question had been decided by X7, which had applied “fundamental and generally applicable principles of very long standing” (at [71]). Furthermore –

“[74] No less importantly, the effect on the accusatorial process cannot be measured by confining attention to issues of self-incrimination. The accusatorial process of criminal justice represents the balance that is struck between the power of the state and the individual in the prosecution of crime. The particular balance that is struck requires that the state formulate the charge that is to be prosecuted and then prove every element of that charge, beyond reasonable doubt, without the accused being required to make any answer to the charge at any stage of the process.”

24. His Honour mentioned and dismissed the significance of the lack of a distinction drawn in s 31D between the commencement or otherwise of criminal proceedings and continued (omitting references) –

“[76] Similarly, the relevant question is neither addressed nor answered by asserting that s 63 of the CAR Act confirms that the CAR Act has adverted to the possibility of concurrence between proceedings under s 31D(1)(a) and criminal proceedings against the person being examined. Section 63 provides that:

‘The fact that criminal proceedings have been instituted or have commenced (whether or not under this Act) is not a ground on which the Supreme Court may stay proceedings under this Act that are not criminal proceedings.’

The generality of the words of s 63 presents the same question for consideration as s 31D(1). Do the general words used in the provision extend to the particular case of examination of a person charged with, but not yet tried for, an offence about the subject matter of the pending charge? Section 63 does not answer this question unless it is first assumed that it must. Yet that is the very issue to be determined. It must be recalled that, but for s 63, there may have been lively debate about whether the pendency of criminal charges against any person permitted or required an order staying civil proceedings touching upon issues that may arise at a criminal trial … Section 63, therefore, has evident work to do without assuming that its general words mean that the CAR Act works a fundamental alteration to the process of criminal justice.”

25. Hayne J articulated the general principle as follows (omitting most references) –

“[79] The asking of questions and the compelling of answers about the pending charge inevitably interfere with the conduct of an accusatorial trial and embarrass the defence of the accused. The answers the accused has been compelled to give to the questions asked deprive the accused of forensic choices that otherwise would be legitimately open at trial to test the case which the prosecution advances. That is, the asking of questions about the pending charge and the compelling of answers to those questions work a fundamental alteration to the accusatorial process of criminal justice.

[80] It is theoretically possible that, at the end of a trial, it may be said that the deprivation of those choices was anodyne in its practical effect. But that is not to the point. The issue is presented when it is sought to conduct the examination. The examination occurs before the trial has begun.

[81] No doubt, it is important to notice that an examination under s 31D(1) was to be conducted before the Supreme Court or an officer of the Court prescribed by rules of court. It is to be assumed that the Court or its officer would act to prevent oppression of the person being examined and would act to prevent misuse or abuse of the process of examination, whether by limiting or precluding publication of what transpires at the examination, or otherwise. But if the trial of the person being examined is pending, the Court (or the officer of the Court) cannot know, and cannot predict, what might harm the defence of that person at trial. Those matters are unknown to, and unknowable by, the Court (or its officer) for the simple reason that the Court (or its officer) does not know, and cannot be told, what are or will be the accused's instructions to his or her lawyers at trial.

[82] To suggest that preserving the legitimate forensic choices that are open to an accused at a criminal trial would permit, let alone encourage, the pursuit of falsehood misstates the fundamental character of a criminal trial. Reference to the pursuit of falsehood may suggest that a criminal trial is an inquisition into the truth of the allegation made. It is not … Subject to the rules of evidence, fairness and admissibility, each of the prosecution and the accused is free to decide the ground on which to contest the issue, the evidence to be called and the questions to be asked. Reference to the pursuit of falsehood may suggest that legitimately testing the strength of the prosecution's proof is somehow dishonest. It is not.

[83] Accepting either suggestion would set at nought the fundamental principle stated by this Court, nearly 80 years ago, in Tuckiar v The King (1934) 52 CLR 335 at 346, that counsel for an accused has "a plain duty, both to his [or her] client and to the Court, to press such rational considerations as the evidence fairly [gives] rise to in favour of complete acquittal" or conviction of a lesser charge. That ‘plain duty’ arises because, whether an accused ‘be in fact guilty or not, [the accused] is, in point of law, entitled to acquittal from any charge which the evidence fails to establish that he [or she] committed’ … [52 CLR at 346] (emphasis added).

[84] The accusatorial process of criminal justice reflects the balance that is struck between the power of the state and the place of the individual. Legislative alteration to that balance may not be made without clear words or necessary intendment.”

26. Crennan J (in the majority), following a review of the CAR Act, focused on the purpose of the ancillary powers given to the court to make orders facilitating the “objects of identifying and recovering property sourced from serious crime related activity” of which examining the defendant was one and noted that delaying an examination until criminal proceedings instituted against the defendant were completed could frustrate these objects (at [131]). The power to order examination and require answers to incriminatory questions is not expressed to be limited by the currency of criminal proceedings and that there is no such limit is indicated by the grant of direct use immunity (at [133]). The allowing of derivative use in criminal proceedings did not oust generally applicable rules as to admissibility and the examinee is protected “against any such derivative use by requiring that the examination take place before the Supreme Court, or an officer of the Court, having in addition to the [power to restrict publication]…, the inherent power to ensure the proper administration of justice”: at [137] quoting Meagher JA in the Court of Appeal in New South Wales Crime Commission v Lee [2012] NSWCA 276; 84 NSWLR 1 at 23-24 [99]. The CAR Act –

“[141] … confers on the Supreme Court powers to be exercised judicially, in accordance with legal principle, and so as to diminish the possibility of oppression and injustice in any examination … The Court, controlling an examination, has the power to conduct the examination in private, to adjourn and resume the examination, to disallow questions designed to establish the examinee's guilt or to elicit defences in respect of pending criminal charges, to make orders restricting publication of the examination or related information, and (other than restoring the abrogated privilege) to make such other orders as are necessary to safeguard an examinee's fair trial.”

27. It is clear that, as with French CJ, Crennan J’s view of the reach of s 31D rested significantly, indeed decisively, upon the continuing powers of the Court to ensure that the procedures authorised by the CAR Act did not result in an unfair trial. Thus, that s 63 deprives a defendant subject to pending criminal proceedings of an entitlement to have civil proceedings (envisaged by the CAR Act) stayed did “not operate to override the Supreme Court’s ‘undoubted power to stay a criminal proceeding which will result in an unfair trial’: Dietrich v The Queen [1992] HCA 57; 177 CLR 292 at 298 per Mason CJ and McHugh J; see also at 332 per Deane J…” (at [143]). Thus “consideration of whether an order for examination might prejudice the fair trial of a person proposed to be examined is relevant not only to the exercise of discretion under s 31D(1)(a) to order an examination, but also to the subsequent conduct of any examination in the Supreme Court” (at [145]).

28. Kiefel J, having mentioned the abrogation by s13A(1) of the CAR Act of the common law privilege against self-incrimination (at [158]), pointed out (citing X7) –

“[159] … [the] common law principle that the prosecution cannot compel a person accused of a crime to assist in the discharge of its onus of proof. This is an essential aspect of an accusatorial system and is fundamental to the common law. It lies at the heart of the system of criminal justice administered by the courts ...”

Her Honour noted the virtual certainty that the evidence obtained in an examination would be passed on to investigators and the prosecution, which would lead –

“[163] … [to the] real risk, if not a likelihood, that aspects of the appellants' trials will differ from a criminal trial as it is ordinarily conducted, especially in its accusatorial aspects. Rather than the prosecution being required to prove its case without assistance from the appellants, the examination is likely to result in the prosecution being advantaged in the conduct of its case and the appellants prejudiced.”

The extent and efficacy of the Court’s inherent powers to prevent “obstruction to the administration of criminal justice”, such as limiting the publication of information or requiring the examination to be conducted in private and preventing a contempt are relevant to the exercise of the discretion under s 31D but not to the construction of the CAR Act (at [164]). Her Honour pointed out (at [170]) that, in X7, the majority of the High Court held that the Australian Crime Commission Act did not authorise the examination of a person about an offence with which he or she had been charged. This construction depended on the significance of the fundamental principle of the criminal law, reflective of the presumption of innocence, that the onus is on the prosecution to prove an accused’s guilt (at [174]) and cannot compel the accused to give evidence for it, which is “an essential aspect of the criminal trial in our system of criminal justice” (at [176]). The question is “whether the statute in question clearly intends to alter that system and that principle”. Importantly, the privilege against self-incrimination “is not to be equated with the inability to compel an accused person to give evidence. The privilege may be lost but the fundamental principle of the accusatorial system of criminal justice remains” (at [182]). Referring to the reasoning of Gibbs CJ, in Hammond v The Commonwealth (1982) 152 CLR 188 at 198 and Sorby v The Commonwealth [1983] HCA 10; 152 CLR 281 at 294, Kiefel J observed (at [210]) that “the use of material obtained as a result of a compulsory examination is but one aspect of the risk of interference with the criminal trial … [with] more at stake than merely the loss of the privilege” since the defendant is very likely to be prejudiced “in his defence”. The prosecution might be “forewarned of defences and explanations, that are not otherwise apparent, being provided of transactions” (R v Seller [2013] NSWCCA 42; 273 FLR 155 at 183-184 [104] per Bathurst CJ where, at first instance it was also noted that the information might assist “the prosecution in preparing its witness statements and presenting its case”). Accordingly –

“[211] It is likely that the prosecution will be advantaged at trial by the examination of the appellants in a way for which the system of criminal justice would not otherwise provide. The attainment of such an advantage through the exercise of statutory powers may in itself amount to an interference with the administration of justice … Such an advantage may, to an extent, correspond with the prejudice caused to an accused person. It may be more extensive. But … it was not the advantage gained by the prosecution which was identified in Hammond to follow ‘inescapably’ … [152 CLR at 198] from an examination of a person charged with an offence about that offence. The interference, and thus the contempt, identified by Gibbs CJ in Hammond lay in the fact that if Mr Hammond were examined, in detail, as to the circumstances of the alleged offence, he was likely to be prejudiced in his defence … "because he could no longer determine the course he would follow at his trial according only to the strength of the case that the prosecution proposed to, and did, adduce in support of its case that the offence charged was proved beyond reasonable doubt’ … [X7 (2013) 248 CLR 92 at 146].

[212] What was identified in Hammond was not the loss of some forensic advantage in an accused person. In any event, to describe the effects of an examination for an accused person in this way tends to trivialise both them and the fundamental principle in its practical operation. The choices open to an accused person with respect to the conduct of that person's defence result from the requirement of the fundamental principle that the prosecution prove its case. It is therefore not correct to cast doubt upon the importance of those choices or whether the accused should be entitled to them. Neither Hammond nor the cases preceding it considered the prejudice occasioned to an accused to be insubstantial.”

Kiefel J concluded (at [213] and [253]), following X7, that by merely abrogating the privilege against self-incrimination, the CAR Act did not effect such a fundamental change in the administration of criminal justice as would authorise the examination of a person then charged with a criminal offence.

29. Bell J agreed with the judgment of Kiefel J, in her additional remarks emphasising the direct relevance of X7 in disposing of the Commission’s argument that the CAR Act authorised “the compulsory examination of a person about the subject matter of a charged offence” or, if not, “the Registrar conducting the examination would not permit [such] questioning” (at [255] and [258]). “A real risk that the administration of justice will be interfered with” (vide Hammond 152 CLR at 198 per Gibbs CJ) arises not merely from “the conferral of an advantage on the prosecution that the rules of procedure would otherwise deny” but, “as X7 explains, the compulsory examination would … [deprive the accused] of forensic choices legitimately available” by substantially reducing “the areas in which the prosecution case may be tested in accordance with counsel’s obligations” (at [264]-[265]). “[T]he assumption upon which our adversarial system of criminal justice proceeds … [is] that the accused is entitled to be acquitted of a charge of criminal wrongdoing unless unaided by him or her the prosecution proves guilt” (at [266], emphasis in original).

30. Gageler and Keane JJ both concluded that the CAR Act authorised an order for examination of a person accused of criminal offences about matters relevant to the offences and that this overlap was not a basis for the Court to refuse to make the order (at [268]-[269]). In respect of Hammond and X7, their Honours said (omitting some references) –

“[322] Hammond is illustrative of the proposition that a real risk to the administration of justice can arise where there is a real risk that the practical consequence of an exercise of a coercive statutory power would be to give to the prosecution in criminal proceedings ‘advantages which the rules of procedure would otherwise deny’... Hammond is not authority for the proposition that a real risk to the administration of justice necessarily, or presumptively, arises by reason only of the exercise of a statutory power to compel the examination on oath of a person against whom criminal proceedings have been commenced but not completed where the subject matter of the examination will overlap with the subject matter of the proceedings. The majority in X7 does not appear to us to have embraced such a proposition.

[323] There is a variety of ways in which, as a matter of practical reality, the examination on oath of a person against whom criminal proceedings have been commenced may have a tendency to give rise to unfairness amounting to an interference with the due course of justice in a particular case. The deprivation of a legitimate forensic choice available to the person in those proceedings may be one of those ways. However, we are unable to regard as the deprivation of a legitimate forensic choice a practical constraint on the legal representatives of the person leading evidence or cross-examining or making submissions in the criminal proceedings to suggest a version of the facts which contradicted that given by their client on oath in the examination. The legal representatives would, of course, be prevented from setting up an affirmative case inconsistent with the evidence but they would not be prevented from ensuring that the prosecution is put to proof or from arguing that the evidence as a whole does not prove guilt…

[324] The notion that any subtraction, however anodyne it might be in its practical effect, from the forensic advantages enjoyed by an accused under the general law necessarily involves an interference with the administration of justice or prejudice to the fair trial of the accused is unsound in principle and is not consistent with Hamilton v Oades. To accept that a criminal trial "does not involve the pursuit of truth by any means" (R v Apostilides [1984] HCA 38; (1984) 154 CLR 563 at 576; [1984] HCA 38 is not to condone as legitimate the pursuit of falsehood. The words of Lord Scarman in R v Sang [1979] UKHL 3; [1980] AC 402 at 456 concerning the judicial discretion to exclude legally admissible evidence on the ground of unfairness, resonate more widely:

‘The test of unfairness is not that of a game: it is whether ... the evidence, if admitted, would undermine the justice of the trial. Any closer definition would fetter the sense of justice, upon which in the last resort all judges have to rely: but any extension of the discretion ... would also undermine the justice of the trial. For the conviction of the guilty is a public interest, as is the acquittal of the innocent. In a just society both are needed.’”

31. The function of the examination was to permit inquiry about matters pertinent to the CAR Act proceedings and any other purpose, such as whether to charge the defendant with offences or assist the conduct of pending criminal proceedings, would be improper (at [327]). But, in pursuit of property in which an “affected person” has an interest, the scope of the examination –

“[330] … extends to anything done by the person that was a serious criminal offence at the time it was done irrespective of whether the person has been charged with the offence and irrespective of whether the person, if charged, has been tried for the offence.”

A real risk of interference with the fair trial of a person to be examined is not permitted but mere overlap of subject matters gives rise to no more than the possibility of such interference because of the ability of the Court or its officer conducting the examination “to control the course of questioning and to make suppression or non-publication orders limiting the timing and scope of any use or dissemination by the Commission of answers given or documents produced” (at [340]).

32. Although it dealt with a different situation to that with which I am faced, I should mention X7 v R [2014] NSWCCA 273, in which the Court (Bathurst CJ, Beazley P, Hidden, Fullerton, R A Hulme JJ agreeing) found that, although the disclosure of X7’s evidence to those conducting the prosecution of his trial had been a breach of the requirements of the examiner’s direction made under s 25A(9) of the Australian Crime Commission Act, a permanent stay of the trial was not justified when a new prosecution team was briefed and was not given the interdicted material. A temporary stay of the examination proceedings until after an impending trial, justified by the interference with the proper processes of the administration of criminal justice and not dependent on any demonstrable practical prejudice was fundamentally different from a permanent stay, which is not only rarely granted, but required the identification of a fundamental defect in fact, as distinct from potentially, having unfair or unjustifiably oppressive consequences incapable of corrective action by the trial judge or else brought the administration of justice into disrepute (Bathurst CJ at [90]-[92]). His Honour pointed out (at [105]), after reviewing the decisions (amongst others) mentioned above, that the judgments (including of those in dissent), particularly in X7, concerned the significance of the essentially agreed position that the examination procedures authorised by the legislation in question fundamentally altered the accusatorial judicial process (the question being whether the legislation permitted this alteration and to what extent) and thus were concerned with the requirement that the trial comply with the law rather than with the question of fairness.

32. In Application of the Commissioner of the Australian Federal Police [2015] NSWSC 888 Button J declined to make orders under s 180 of the Act for the examination of several persons (the respondents) until the criminal trial then pending against them had concluded. (Publication of the judgment is restricted because of pending criminal trials. However, it will not be necessary to do more than refer to the legal principles applied by his Honour, which will not disclose any identifying material.) Following their arrests on drug importation charges, a search of certain premises linked with one of the respondents located drugs and cash. Ultimately they were charged with importing prohibited substances and dealing with property reasonably suspected of being the proceeds of crime under the Criminal Code 1995 (Cth). The Commissioner commenced proceedings seeking, inter alia, orders for the examination of the respondents about their affairs which, it was not contested, would include the subject matter of their impending trial. The respondents relied, inter alia, on Zhao. The Commissioner sought to distinguish Zhao on the same basis as has been argued before me, namely that it concerned Pt 2.2 of the Act dealing with forfeiture applications and concomitant exclusion orders whilst the instant application (as here) concerned, inter alia, examinations under Pt 3.1. In the latter situation, the privilege against self-incrimination was specifically abrogated, though with direct use immunity (as with the compulsory financial statements) and the proceedings conducted in private, whilst in the former, the hearings were in public and the privilege was not abrogated; furthermore, examinations are directed to serving the fundamental purpose of the Act by enabling the authorities to locate assets that might be subject to forfeiture.

33. Button J, as I have mentioned, in effect decided to delay the making of the examination orders until the trial was completed. Starting from the obvious facts that the examinations would deal with the cash discovered during the search and that the evidence as to the finding of that cash would be relied on in support of all the charges, his Honour also thought that answers to questions about other moneys could well lead to the discovery of other relevant evidence that would be tendered in the respondents’ trial, since there was no derivative use immunity available. Compulsory disclosure of the entirety of their financial affairs shortly before their trial argued, his Honour considered, for postponement of the examination until after the trial had concluded (ibid at [46]-[47]). His Honour noted, however, (at [48]) the provisions of the Act as to immunity, which did not exclude derivative use, and to the effect that the mere fact of pending criminal proceedings was not a basis for a stay of proceedings under the Act, as I understand his Honour, demonstrated that the problem of overlap had been considered by Parliament and needed to be considered in light of the purpose of the Act to identify, restrain and, ultimately, expropriate tainted property. At the same time, this did not mean that the Court was necessarily precluded from postponing the examination in the circumstances of the case (at [51)]. Although the objects of the Act would be thwarted during the time of any postponement, his Honour considered that there would be no “practical prejudice” since the cash founding the proceedings was in the control of the Commissioner and any further dishonest or illegal dealing with their financial affairs would have been ended with their arrest and incarceration (at [51]-[52]). The legislation does not prohibit the Court from ensuring, to the extent it is able (consistent with the Act), that the pending trial will be conducted consistently with the fundamental characteristics applying in Australia to criminal proceedings, as described in recent decisions of the High Court of Australia, amongst others, X7, Lee 1 and Zhao (at [55]-[56]).

34. Button J rejected the Commissioner’s submission that Zhao, in particular, was distinguishable because it concerned the postponement of a forfeiture and exclusion hearing until after the pending trial dealing with the same subject matter. His Honour considered that its reasoning applied with “more force here” because it dealt with the situation where the accused had a choice about giving evidence as distinct with what his Honour was considering, where the accused were to be compelled to give evidence in their examination (at [58]). The mere fact that the Act abrogated direct use immunity and not derivative use immunity so far as examinations are concerned and left the forfeiture and exclusion hearings unaffected (because compulsion was not involved) did not suggest a legislative intent to discriminate between the two procedures (as I understand his Honour) for the purpose of considering whether the Court’s discretion to ensure that the overlapping criminal trial was undertaken in accordance with fundamental principles (at [59]-[60]).

35. Accordingly, Button J considered he should adopt the approach of the Victorian Court of Appeal, which was unanimously upheld by the High Court in Zhao, and postpone the proposed examinations until after the conclusion of the trial.

36. At [63]-[67], Button J pointed out, in respect of Lee 1, that, although Gageler and Keane JJ were of the view both that the Court had power to order an examination as to overlapping subject matter with a pending trial and no discretion to refuse to do so, both the Chief Justice (explicitly at [49] and [51]) and Crennan J (implicitly at [141]) considered that such a discretion survived, pointing out, at all events that the appeal concerned only the power of the Court to order examinations and not whether the discretion to do so had miscarried. Furthermore, the majority emphasised the significance of the fact that the examination was to be conducted before a Registrar of the Court, which is not the case under the Act.

37. More generally, his Honour noted (at [68]) that s 180 of the Act itself is permissive and not mandatory, providing for the exercise of the judicial discretion. Whilst the mere fact of pending criminal proceedings does not prevent an examination (s 186(4)) or justify a stay (s 319), adjournments are not prohibited (at [70]).

38. This reasoning applies here in respect of the examination but, in substance, an order delaying the requirement to provide financial statements would amount to a stay. Where, however, the circumstances in a particular case demonstrate the intersection to a significant degree of the issues in the pending trial and those raised or agitated by the compulsory procedures and create the substantial risk that the trial will be unfair in the sense that fundamental principles of criminal justice will be significantly qualified, a great deal more is involved than the mere coincidence of proceedings, which s 319 states is not a ground for a stay.

Discussion

40. The above review of the authorities shows, as it seems to me, that requiring an accused person to assist the Crown in its prosecution of him or her is a substantial departure from the fundamental character of the process of a criminal trial which, unless authorised by statute, would result in the accused being denied a trial according to law. It is not disputed in this case that the Act authorised the orders as to the provision of financial statements made against the applicants as well as those for their examination. The real question is whether these orders must be complied with despite the pending criminal trial against Mr Cacu. Another way of putting this question is whether that part of the investigation of their affairs comprising compliance with the orders should be delayed until after the trial. Although it is not known quite how significant the sought disclosures would be as a practical matter, it can be readily accepted that they would assist the Commissioner to perform his functions under the Act and serve the objects of the Act as they apply to the Mr Cacu. Furthermore, it is self evident that the function and those objects might be frustrated to a greater or lesser degree by delay because of actions that might be undertaken by the applicants or of their agents to conceal or dissipate assets that have been restrained but not identified.

41. The question here is whether the Act has so adjusted the incidents of trial according to law that the investigative processes ordered to occur must proceed without delay or impediment despite the pendency of Mr Cacu’s trial. Although the statement of affairs and the examination are processes set in motion by orders of the Court, the examination is not conducted by the Court or the Registrar as distinct from the situation in Lee 1. The powers of the Court to control the use of the statement and the conduct of the examination and the information Mr Cacu might disclose, obviously enough, cannot be delegated to the appointed examiner, nor in any sense can the examiner be regarded as acting judicially: he or she is the agent of the executive. It is not altogether clear whether, in light of s 266A, the Court could make it a condition of its orders to the effect that neither the statement nor the information provided by Mr Cacu at the examination be disclosed to the prosecution, though I rather think it could. Certainly such a condition could not be imposed by the examiner in respect of matter disclosed in any examination. However, no party submitted that this might overcome the prejudice that would otherwise subsist were the stay not granted. In this regard, I should mention the point made by French CJ in Lee 1 at [54] (supra) to the effect that keeping material disclosures secret from the prosecution would not remove the forensic disadvantage an accused person would suffer in the conduct of his or her trial from compulsory disclosure, in this respect not disagreeing with the characterisation of the disadvantage stated by Hayne and Bell JJ in X7 at [124] (supra, cf Kiefel J, with whom Bell J agreed, in Lee 1 at [164], [211]-[213] and [240], Crennan J at [ibid 141] where her Honour seemingly implied that secrecy might be sufficient, as did Gageler and Keane JJ at [340]).

Conclusion

42. The Commissioner has not submitted that there is a particularly urgent need for the financial statements or examinations additional to the common sense consideration that, when dealing with assets of the kind in question here and the inducement to dissipate or conceal them created by impending forfeiture, it is advantageous and best fulfils the objects of the Act to proceed with promptitude. This must be balanced against the real and substantial risk that the legitimacy of the administration of criminal justice will be prejudiced by breach of the fundamental principles to which I have referred (and which, despite the differing results reflecting varying interpretations of relevant legislation, are not significantly controversial) that the Court not only has the power but also the duty to maintain as far as it is able. I am also minded that, in this Court, Button J has made orders staying examinations pending completion of a trial. Where, perhaps, no bright line distinctions can be made, judicial comity should in a comparable case (which this substantially is) lead me to the same result. Accordingly, in respect of Mr Cacu, I propose to order a stay of the orders requiring him to provide statements of his affairs and to order that examination not take place until his impending trial has been completed.

43. Ms Kuzniatsova is in a different position. She has not been charged and is not facing pending criminal proceedings. It was submitted on her behalf that her defending the confiscation proceedings will be prejudicial to the interests of her husband in his criminal proceedings. Of course, she has a privilege in respect giving evidence in criminal proceedings under s 18 of the Evidence Act1995 (NSW), but proceedings under the Act are civil in character. In Zhao, the forfeiture proceedings against the accused’s wife were also stayed, essentially to avoid the multiplicity of proceedings (supra at [48]). However, a separate statement of affairs would, at all events, be required and her examination would also proceed independently. Although Button J stayed the wife’s examination in Application of the Commissioner of the Australian Federal Police, at least partly this was because of the possibility that she also might be charged with supplying the drugs forming the basis of her husband’s charges. There is no evidence and it is not submitted that Ms Kuzniatsova is facing this risk. I do not see a proper basis for interfering with the ordinary procedures applying to her by virtue of the orders made against her.

Extension of time

44. The applicants sought orders extending the time in which to make applications under s 42 of the Act to revoke the restraining orders presently applying to their property. Such an application must be made within 28 days after being notified of the order, if an application has been made for an extension within that period, within such longer period not exceeding three months as the court allows: s 42(1A). There is no question that the application for an extension was made within time. The applicant was in custody during the whole of the 28 day period and, it is submitted, the practical difficulties of mounting a substantive application during that period are so manifest as to make it appropriate to extend the time. The extension was opposed by the Commissioner on the ground that, apart from referring to the incarceration of Mr Cacu, no evidence of the difficulties facing an application for revocation has been adduced. It seemed to me that the difficulties of dealing with legal proceedings whilst in gaol are obvious whilst, on the other hand, it was conceded on behalf of the Commissioner that there was no prejudice that might be occasioned by acceding to the application. For these reasons, I made the order extending time to the applicants to 1 July 2015.

Orders

1. The parties, within seven business days of delivery of this judgment are to submit agreed orders effecting the conclusions I have expressed. Failing agreement, the applicants are to submit their proposed orders with brief submissions within five business days of the expiry of the time for submission of agreed orders, to be followed by the Commissioner within a further three business days.

2. As to costs, the parties are to submit agreed orders or make submissions in accordance with the timetable in order 1.

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Decision last updated: 04 September 2015