Commissioner of the Australian Federal Police v Dong Hua International Investments Pty Ltd
[2016] VSCA 15
•19 February 2016
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2016 0006
| THE COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE | Applicant |
| v | |
| DONG HUA INTERNATIONAL INVESTMENTS PTY LTD | First Respondent |
| and | |
| YUHONG ZHOU | Second Respondent |
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| JUDGES: | REDLICH, PRIEST and BEACH JJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 18 February 2016 |
| DATE OF JUDGMENT: | 19 February 2016 |
| MEDIUM NEUTRAL CITATION: | [2016] VSCA 15 |
| JUDGMENT APPEALED FROM: | [2015] VSC 748 |
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PRACTICE AND PROCEDURE – Application for leave to appeal – Interlocutory decision on questions of practice and procedure – Discretionary interlocutory decision on question of practice and procedure – Application for leave to appeal from decision refusing to adjourn trial – Fourth trial date – Application for leave to appeal decision refusing to make examination orders under the Proceeds of Crime Act 2002 (Cth) where examinations would necessitate vacation of fourth trial date – No material error in trial judge’s exercise of discretion – Judge entitled to weigh in the balance the allocation of 3 previous trial dates and setting aside of multiple days of court time – Application for leave to appeal refused.
PROCEEDS OF CRIME – Application for forfeiture orders – Applications for exclusion from restraining order – Applications for exclusion from forfeiture order – Applications for examination orders – Proceeds of Crime Act 2002 (Cth), ss 5, 49, 180, 180A, 180B and 180E.
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| APPEARANCES: | Counsel | Solicitors |
| For the Commissioner of the Australian Federal Police | Mr A Moses SC with Mr K Anderson | Australian Federal Police |
| For the Respondents | Mr T P Mitchell | Lincolns Lawyers & Consultants |
| For Heng Jie Zhang | Mr C G Juebner | Tony Hargreaves & Partners |
REDLICH JA
PRIEST JA
BEACH JA:
Introduction
Since August 2013, there have been proceedings on foot, between the applicant and the respondents, under the Proceeds of Crime Act 2002 (Cth) (‘the Act’), in the Trial Division of the Supreme Court. In May 2014, those proceedings were given a trial date of 30 September 2014 (‘the first trial date’). In September 2014, the first trial date was vacated and the proceedings were given a second trial date, 11 February 2015 (‘the second trial date’). In December 2014, the second trial date was vacated and the proceedings were given a third trial date, 4 August 2015 (‘the third trial date’). In July 2015, the third trial date was vacated and the proceedings were given a fourth trial date, 23 February 2016 (‘the fourth trial date’).
In November 2015, the applicant (the Commissioner of the Australian Federal Police) applied for examination orders under the provisions of the Act in respect of six individuals (‘the proposed examinees’), and to vacate the fourth trial date so as to allow the proposed examinations to be conducted. The Commissioner’s application was heard on 16 November 2015. The application was resisted by the respondents. At the hearing of the application, one of the examinees, Heng Jie Zhang (‘Zhang’), was permitted to appear. At the hearing, Zhang’s counsel also made submissions resisting the Commissioner’s application.
On 18 December 2015, the trial judge made an order for the examination of one of the examinees (the second respondent, Yuhong Zhou) and otherwise refused the application in respect of the other five proposed examinees and refused the application to vacate the fourth trial date.
The Commissioner seeks leave to appeal against the whole of the judge’s decision, other than the making of the examination order in respect of the second respondent. The Commissioner’s proposed grounds of appeal are as follows:
1.The learned trial judge mistook the facts in finding that the previous two vacations of hearing dates were due to delay on the Applicant’s part.
2.The learned trial judge should have found that all but one of the previous vacations of hearing dates were sought and instigated by the Respondents.
3.In exercising his discretion to refuse the Applicant’s applications for examination orders and vacation of hearing date, the learned trial judge failed to have regard, or alternatively failed to give sufficient weight, to the following relevant considerations:
(a)the first two previous vacations of hearing dates in the proceedings were sought and instigated by the Respondents;
(b)the third previous vacation of hearing date in the proceedings was necessitated by circumstances beyond the control of the Applicant;
(c)the extent to which the refusal to make examination orders would frustrate the objects of the Proceeds of Crime Act 2002 (Cth), in potentially permitting the Respondents to avoid a forfeiture order where there may have been evidence establishing that restrained property was proceeds or instruments of crime;
(d)the possibility that the conduct of examinations might reduce the scope of issues to be canvassed at trial (including in cross-examination of witnesses), consistent with the overarching purpose of case management; and
(e)the Applicant’s delay in seeking examination orders was explained by the recent decision in Commissioner of the Australian Federal Police v Zhang [2015] VSC 390.
4.The learned trial judge failed to give adequate reasons for rejecting the Applicant’s contention that the recent decision in Commissioner of the Australian Federal Police v Zhang [2015] VSC 390 explained the Applicant’s delay in seeking examination orders.
The Commissioner seeks orders overturning the decision of the trial judge (other than the making of the order for the examination of the second respondent). Additionally, the Commissioner seeks an order for the examination of the other five proposed examinees (Yijiang Shen, Zhang, Ren Yan Ping, Xiao Wei Shen and Zhiheng Zhou), and an order that the hearing date on 23 February 2016 be vacated. Zhang (who as we have said appeared below) was given leave by us to intervene in the application for leave to appeal and (if leave is granted) the appeal.
Background facts
In early 2013, the Commissioner commenced an investigation into the activities of a number of people who appeared to be involved in the unexplained movement of large sums of money from China into Australia. A comparison of the amounts of money deposited into casino and bank accounts controlled by certain individuals, relative to their declared incomes, apparently revealed significant discrepancies.
On 12 August 2013, the Commissioner applied, ex parte, for a restraining order under s 19 of the Act in respect of a property in Oakleigh (‘the Oakleigh property’) and a property in Spencer Street, Melbourne (‘the Spencer Street property’). The registered proprietor of the Oakleigh property was the first respondent, and the registered proprietor of the Spencer Street property was the second respondent. The restraining order was sought on the basis that the properties were suspected of being proceeds and/or instruments, as defined by the Act, of offences under ss 135.4 and/or 400.9(1) of the Criminal Code (Cth) (those offences being the causing loss of tax revenue to the Commonwealth, and the dealing with property suspected of being the proceeds of crime).
On 14 August 2013, Williams J made a restraining order (‘the restraining order’) in respect of both properties. On 20 August 2013, the Commissioner applied for forfeiture orders under s 49 of the Act in respect of the restrained properties. On 12 September 2013, the respondents applied for orders, under s 31 and s 39 of the Act, to exclude the properties from restraint. On 19 December 2013, the respondents amended their applications so as to also seek orders under s 74 of the Act excluding the properties from forfeiture, and orders under s 78 of the Act for compensation.
On 27 May 2014, orders were made establishing a timetable for evidence and setting the matter down for hearing on the first trial date (30 September 2014). Subsequently, the respondents sought and obtained the Commissioner’s consent to vacate the first trial date, on the basis that the respondents required additional time to prepare their evidence. On 23 September 2014, orders were made by consent vacating the first trial date and fixing the second trial date (11 February 2015).
On 18 December 2014, the respondents sought the Commissioner’s consent to a further vacation of the hearing date — on the basis that the respondents’ counsel was no longer available on 11 February 2015. The Commissioner consented to the vacation of the second trial date, on the condition that the respondents consented to the Commissioner being permitted to file further affidavit material in response to affidavits that had been filed by the respondents. The Commissioner subsequently advised the respondents that he had engaged a forensic accountant to prepare a report on the respondents’ financial affairs, and that the Commissioner would therefore not be in a position to file his further affidavit material until April 2015. On 10 February 2015, orders were made by consent vacating the second trial date and fixing the third trial date (4 August 2015).
The Commissioner subsequently sought and obtained the respondents’ consent to vacate the third hearing date — on the basis of delays he was experiencing in obtaining bank documents, and in the preparation of the forensic accountant’s report. On 22 July 2015, orders were made by consent vacating the third trial date and fixing the fourth trial date (23 February 2016).
On 4 August 2015, in proceedings under the Act between the Commissioner (as applicant), and Zhang and Yijiang Shen (in which the respondents sought exclusion from restraining orders and any order for forfeiture), the trial judge delivered judgment in the decision referred to in ground 3(e) of the Commissioner’s proposed grounds of appeal.[1] The Commissioner has sought leave to appeal against that decision. Amongst the reasons set out in the application why leave should be granted are contentions that the trial judge erroneously stated the manner in which exclusion and forfeiture applications should be conducted and thereby departed from the way such applications have been typically prepared for hearing. The appeal is listed for hearing on 21 June 2016, a date well beyond the trial date for the present proceedings.
[1]Commissioner of the Australian Federal Police v Zhang & Anor (Ruling No 1) [2015] VSC 390; (2015) 298 FLR 128 (‘the first Zhang ruling’).
On 16 October 2015, the Commissioner filed the first version of his application for the examination of the six proposed examinees and the vacation of the fourth trial date ‘so as to allow the proposed examinations to be conducted’. The proposed examinees are:
(a) the second respondent;
(b) Yijiang Shen, the husband of the second respondent, a director and shareholder of the first respondent, and the deponent of two affidavits filed by the respondents in the proceedings;
(c) Zhang, a former director and shareholder of the first respondent, and a signatory on loan documentation relating to a loan from the Commonwealth Bank secured against the Oakleigh property;
(d) Zhiheng Zhou, a niece of the second respondent who was identified in an affidavit sworn by Yijiang Shen as having been involved in the transfer of funds used to partly finance the acquisition of the Oakleigh property;
(e) Xiao Wei Shen, a niece of Yijiang Shen, who was identified in an affidavit sworn by the second respondent as having been involved in the transfer of funds used to finance (in part) the acquisition of the Oakleigh property; and
(f) Ren Yan Ping, a friend of the second respondent who was identified in affidavits of the second respondent as having repaid a loan to the second respondent, funding a bank account used to finance in part the acquisition of the Spencer Street property.
As originally filed, the Commissioner’s application was returnable in the Practice Court on 5 November 2015. However, on 4 November 2015, the parties filed minutes of consent orders adjourning the Commissioner’s application until 16 November 2015.
All of the proposed examinees, other than the second respondent (in respect of whom, as we have said, the judge ultimately made an examination order), are residents in China.
On 11 November 2015, the Commissioner filed an amended application for examination orders against the six proposed examinees. The return date specified in this amended application was the date upon which the hearing of the original application had been adjourned to (16 November 2015). In the original application, the Commissioner applied for examination orders only under s 180 of the Act. In his amended application, the Commissioner expanded his application so as to seek orders under ss 180A, 180B and 180E as well.
The Commissioner’s evidence in support of his examination/adjournment application
In support of the Commissioner’s application for the examination of orders and the consequential vacating of the fourth trial date, the Commissioner filed an affidavit sworn by a member of the Australian Federal Police, Mr Dean Barnes.[2] In the October 2015 affidavit, Mr Barnes deposed to the making of the first Zhang ruling and its consequences. In addition, Mr Barnes deposed to the making of a second ruling in the Zhang matter on 6 August 2015.[3] The second Zhang ruling dealt with evidentiary objections taken by the respondents in the Zhang proceedings to portions of affidavits filed on behalf of the Commissioner.
[2]Affidavit of Dean Barnes sworn 16 October 2015 (‘the October 2015 affidavit’).
[3]Commissioner of the Australian Federal Police v Zhang & Anor (Ruling No 2) [2015] VSC 437 (‘the second Zhang ruling’).
In respect of the first Zhang ruling, Mr Barnes deposed:
On 4 August 2015 the Honourable Justice T Forrest made a preliminary ruling that had a major impact on how the rest of the trial was to be conducted and the net effect of it was that the Commissioner must proceed first with his forfeiture application prior to the hearing of any exclusion application.[4]
[4]Paragraph 18 of the October 2015 affidavit.
With respect to the second Zhang ruling Mr Barnes deposed:
On 6 August 2015 the Honourable Justice T Forrest made a further ruling in regards to Zhang and Shen’s evidentiary objections. This ruling related to the form of evidence required for forfeiture applications by the Commissioner. This form is at odds with the way in which these applications have generally been prepared by the Commissioner and the way the Commissioner has prepared for this specific trial.[5]
[5]Paragraph 20 of the October 2015 affidavit.
Next, Mr Barnes deposes to the Commissioner having ‘appealed the decision in Commissioner of the AFP v Zhang & Anor’.[6] In fact, the Commissioner has sought leave to appeal from the orders made in the first Zhang ruling.[7]
[6]Paragraph 22 of the October 2015 affidavit.
[7]This application for leave to appeal and (appeal if leave is granted) is currently fixed for hearing in this Court on 21 June 2016.
Mr Barnes’s affidavit then goes on:
The impact of the rulings referred to … is that both the Commissioner and the applicants (scil, respondents) will need to change how their cases are currently structured and further evidence will be required. The gist of the difficulty for the Commissioner is that until these rulings, the Commissioner ran these applications by cross-examining the exclusion applicants on their affidavit material, then relying on a deeming provision to achieve forfeiture if the exclusion applications are dismissed. Unless any appeals are successful, the Commissioner will now need to file much more detailed evidence in support of an affirmative case.
The Commissioner also wants to now avail himself of the examination procedure under s 180 of the Act.
In light of the above, we request an examination order be made so as to allow the Commissioner a fair trial in light of the new rulings. In the alternative that this matter proceed to hearing without examinations, the Commissioner will need to mount arguments which risk creating inconsistent verdicts at the Trial Division level.
The respondents’ arguments at first instance
The respondents submitted to the judge that the judge ought not exercise his discretion in favour of the Commission because:
(g) the structure of the Act required forfeiture applications to be determined before any examinations could take place; and
(h) the trial date would necessarily have to be postponed if examination orders were made.
Additionally, it was submitted that the fact that most of the examinees were currently in China ‘was decisive in favour of refusing the applications’.
The Commissioner’s submissions at first instance
The Commissioner submitted that there was nothing in the Act which precluded examinations taking place before forfeiture applications were heard and determined. Further, the Commissioner submitted that the Act was intended to have extra territorial reach. Finally, the Commissioner submitted that the first Zhang ruling ‘explained the lateness of [the Commissioner’s application}’.
The judge’s reasons
The judge rejected the respondents’ submissions that the structure of the Act required forfeiture applications to be determined before any examination under the provisions of the Act could take place. He also proceeded on the basis that the Act has extra territorial reach, and he did not accept the proposition that the fact that a proposed examinee was currently residing in China was decisive in favour of refusing an application to examine that person.
It was common ground before the judge that if the examination orders sought by the Commissioner were to be made, then the fourth trial date would have to be vacated. Indeed, that was the basis upon which the Commissioner sought the vacation of the fourth trial date. In rejecting the Commissioner’s application, the judge said that he was ‘simply not prepared to delay this matter further’.[8] Specifically, the judge said:
[8]Commissioner of the Australian Federal Police v Dong Hua International Investments Pty Ltd & Anor [2015] VSC 748 [32] (‘Reasons’).
I am more concerned with practical implications of these applications. Five of the six proposed examinees are in China. The trial date is fixed for 23 February 2016. If I grant the applications for examination orders the trial date will certainly need to be vacated. I shall set out an abbreviated procedural history of the matter.
(a)On 14 August 2013, Williams J made ex parte restraining orders against the two properties.
(b)Shortly thereafter the Commissioner applied for a forfeiture order, and the respondents applied for exclusion from the restraining order.
(c)On 19 December 2013, Elliott J granted Dong Hua and Yuhong Zhou leave to file amended applications for exclusion and applications for compensation.
(d)On 27 May 2014, the matter was set down for a hearing commencing
30 September 2014.
(e)On 23 September 2014, consent orders were made vacating the date. This was primarily due to the respondents asserting that they experienced difficulties in gathering evidence.
(f) The hearing was re-fixed for 11 February 2014.
(g)This hearing date was vacated by consent due to the Commissioner wishing to lead evidence from a forensic accountant, who would not have a report ready until April 2014.
(h) 18 months went by.
(i) A new trial date was fixed for 4-6 August 2015.
(j)By late June 2015, the Commissioner still had not received the forensic accountant’s report. Towards the end of July 2015, the Commissioner once more applied to vacate the trial date, supported by the affidavit of Dean Barnes, sworn 21 July 2015.
(k)On 22 July 2015, consent orders were made by Daly As J vacating the August trial dates. The matter was then listed for three days commencing on 23 February 2016.
(l)In November 2015, the Commissioner applied for the impugned examination orders and for the 23 February 2016 trial date to be vacated.
If I were to grant these applications it is entirely unclear to me as to whether and when the examinations of the five Chinese residents would occur. Even if the Act has extraterritorial reach, and a foreign non-party resident can be compelled to respond to compulsive Australian court process, there is no temporal certainty at all. As I have indicated I am asked to exercise a broad discretion that involves consideration of many factors, including delay. I have concluded that delay, in the context of the procedural history that I have outlined, is a decisive factor in the exercise of my discretion.
The Commissioner has been entitled to seek examination orders under s 180 of the Act for more than two years. He has not sought to do so until very recently. In the meantime the trial date has been vacated on three occasions, the last two of which were due to delay on the Commissioner’s part. On at least the last two occasions multiple days of court time were set aside. If I allow the application for the Chinese resident examination orders I will be compelled to vacate another block of court days. I am simply not prepared to delay this matter further.
Yuhong Zhou is in a different category. As I understand it, she currently resides in Melbourne. I have concluded that I ought make an examination order in respect of her. I am unsure whether it is logistically possible to carry out all the steps in the examination process (including transcription) before 23 February 2016, but I am satisfied the Commissioner should have the opportunity to do so. The parties should proceed on the basis that the hearing will commence on 23 February 2016 regardless of whether the Zhou examination has been conducted.
I will make an order for the examination of Yuhong Zhou pursuant to s 180 of the Act. It is unnecessary to make a s 180A order which examination would canvas the same material. A s 180B order is premature. I refuse the applications for examination orders insofar as the other five proposed witnesses are concerned, and I refuse the application to vacate the hearing date.[9]
[9]Ibid [30]–[34].
The issues before this Court
In his proposed grounds of appeal, the Commissioner makes the following complaints: first, the judge is said to have got the facts upon which he made his decision wrong when he said that the second hearing date was vacated ‘due to the Commissioner wishing to lead evidence from a forensic accountant’ and that this vacation of the hearing date was ‘due to delay on the Commissioner’s part’;[10] secondly, there is a complaint concerning the judge’s failure to find that all but one of the previous vacations of the hearing dates were sought by the respondents; thirdly, the Commissioner complains of a failure by the judge to have proper regard to, and/or give sufficient weight to, the procedural history so far as adjournments were concerned, the objects of the Act, the possibility that examinations might reduce the scope of issues to be canvassed at trial and the applicant’s explanations for delaying in seeking examination orders based on the first Zhang ruling; and finally, there is a complaint that the judge failed to give adequate reasons for rejecting the applicant’s explanation, for his late application, based upon the first Zhang ruling.[11]
[10]Ibid [30(g)] and [32].
[11]No complaint is made by the Commissioner about the incorrect reference to 2014 (should be 2015) in [30(g)] of the Reasons, nor the incorrect reference to 18 months (should be 6 months) in [30(h)] of the reasons. We assume these to be inconsequential slips, having regard to the correct reference to ‘more than two years’ in [32] of the Reasons.
The respondents and the intervenor (Zhang) contend that there is no substance in any of the Commissioner’s proposed grounds of appeal. Additionally, the respondents contend that the judge’s decision can be supported on the following ground:
In a proper exercise of discretion, the learned trial judge could have refused the applicant’s application that the overseas resident proposed examinees (the examinees) be examined having regard to the following matters:
(a) they are ordinarily resident in China and:
(i)there was no evidence before the trial judge as to how the applicant (or the approved examiner) could enforce an examination notice given under s 183 of the Act against any of the examinees in China; and
(ii)any order requiring the examinees to travel from China to Australia to be compulsorily examined (and possibly also to produce documents) would offend principles of comity; and
(b)the evidence in support of the application was insufficient to warrant the making of an examination order against any of the examinees.
The respondents relied upon this ground in a notice of contention.
Zhang too filed a notice of contention. Zhang’s notice of contention picked up the substance of the respondents’ notice of contention but, in addition, relied upon assertions that Zhang does not claim any interest in the restrained property and has not made any affidavit in the present proceedings.
In response to the notices of contention, the Commissioner submits that if the trial judge’s discretion miscarried, then the fact that there might be other grounds upon which the discretion could be exercised as it was by the trial judge, could not save the trial judge’s exercise of discretion. In such circumstances, the discretion would have to be exercised afresh (either by this Court or the trial judge), at which time all matters relevant to the exercise of the discretion could be considered (including any matters that might relevantly be made out by the respondents or any of the proposed examinees).
Before addressing the substance of this application we should make some general observations. First, this is an application for leave to appeal in respect of an interlocutory decision on a question of practice and procedure. The principles governing the circumstances in which an appellate court will interfere in the exercise of the discretion of primary judges in respect of interlocutory decisions is well established.[12] As has been said repeatedly, an appeal court will exercise particular caution before interfering with an exercise of discretion in relation to practice and procedure.[13] While there are no rigid or exhaustive criteria governing appeals from interlocutory decisions of practice and procedure, generally an appellate court will expect an applicant for leave to appeal from such decisions to establish both error of principle and that the decision appealed from will work a substantial injustice to one of the parties if left unreversed. Accordingly a balance must be struck between case management principles and the interests of justice in any given case.[14]
[12]Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1988) 148 CLR 170, 177.
[13]See for example, In re the Will of Gilbert (dec) (1946) 46 SR (NSW) 318, 323 (Sir Frederick Jordan). See further, Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170, 177 (Gibbs CJ, Aickin, Wilson and Brennan JJ).
[14]Cf Aon Risk Services Pty Ltd v Australian National University (2009) 239 CLR 175, 211 [92]–[93], 213 [98].
The vacation of the second trial date
At the heart of the Commissioner’s proposed grounds 1 and 2 is a complaint that the judge wrongly attributed the vacation of the second trial date to the fault of the Commissioner. This complaint also forms part of proposed ground 3. The Commissioner submits that any fault concerning the vacation of the second trial date should have been attributed to the respondents, and that if the judge had attributed such fault to the respondents then the proper exercise of the judge’s discretion would have resulted in the granting of the Commissioner’s application for an adjournment for the purpose of conducting the examinations sought by the Commissioner.
The Commissioner’s contentions proceed on the premise that the judge sought to weigh, in a determinative way, the parties’ respective faults for the tardy progress of proceedings, and then determined that the Commissioner was more culpable and so should be denied the relief he sought in his application. We do not accept that this was so.
During the hearing before the trial judge, the Commissioner informed the trial judge that the parties ‘jointly’ were responsible for the delays in commencing the trial.[15] In reply the respondents accepted that both parties had to bear responsibility for the adjournments of the trial date. Notwithstanding issue being taken by counsel for the Commissioner in this Court, in our view, before the trial judge, neither party ultimately submitted that responsibility for the delays was germane to the resolution of the application now under consideration. It was therefore entirely understandable that the judge’s decision to refuse the Commissioner’s application was made fundamentally on the basis that there had been four hearing dates allocated for this proceeding and that valuable court time had been set aside for the parties and then not used by them. His Honour said as much at the end of submissions when observing that it was the ‘effect of the delay’ that he must consider and that the causes of the delay would not affect the way his discretion would be exercised.[16] When one coupled these matters with the fact that the Commissioner had had more than two years in which to seek the examination orders that he first sought in October/November 2015, the judge’s view was that the proper exercise of his discretion was to refuse the Commissioner’s application.
[15]At p 24.
[16]At pp 60-1.
The judge’s attribution of sole responsibility for the vacation of the second trial date was, with respect, an error on the judge’s part. On one view, the vacation of the second trial date could have been attributed to fault on the part of both sides (the respondents’ counsel being unavailable, and the Commissioner subsequently seeking further time to file additional affidavit material). However, the question of precisely where any fault lay in respect of the vacation of the second trial date was not materially relevant to the reasoning and decision of the judge to refuse the Commissioner’s application. In attacking the judge’s statements concerning the attribution of responsibility for the vacation of the second trial date, the Commissioner has not undermined the material reasoning of the judge that led to the judge’s order rejecting the Commissioner’s application.
The Commissioner’s arguments concerning the judge’s incorrect attribution of responsibility for the vacation of the second trial date must be rejected. It follows that proposed grounds 1 and 2 must be rejected — as must proposed ground 3 to the extent that it relies upon the same arguments.
The Commissioner’s explanation for delay based upon the first Zhang ruling
In support of the application for examination orders and the adjournment, the Commissioner submitted to the judge that the first Zhang ruling had so changed the landscape as to require the Commissioner to gather evidence in support of forfeiture applications before these applications were heard by a court.
Section 49 of the Act provides:
49Forfeiture orders—property suspected of being proceeds of indictable offences etc.
(1)A court with proceeds jurisdiction must make an order that property specified in the order is forfeited to the Commonwealth if:
(a)the responsible authority for a restraining order under section 19 that covers the property applies for an order under this subsection; and
(b)the restraining order has been in force for at least 6 months; and
(c)the court is satisfied that one or more of the following applies:
(i)the property is proceeds of one or more indictable offences;
(ii)the property is proceeds of one or more foreign indictable offences;
(iii)the property is proceeds of one or more indictable offences of Commonwealth concern;
(iv)the property is an instrument of one or more serious offences; and
(e)the court is satisfied that the authority has taken reasonable steps to identify and notify persons with an interest in the property.
(2)A finding of the court for the purposes of paragraph (1)(c):
(a)need not be based on a finding that a particular person committed any offence; and
(b)need not be based on a finding as to the commission of a particular offence, and can be based on a finding that some offence or other of a kind referred to in paragraph (1)(c) was committed.
(3)Paragraph (1)(c) does not apply if the court is satisfied that:
(a)no application has been made under Division 3 of Part 2‑1 for the property to be excluded from the restraining order; or
(b)any such application that has been made has been withdrawn.
Refusal to make a forfeiture order
(4)Despite subsection (1), the court may refuse to make an order under that subsection relating to property that the court is satisfied:
(a)is an instrument of a serious offence other than a terrorism offence; and
(b)is not proceeds of an offence;
if the court is satisfied that it is not in the public interest to make the order.
In the first Zhang ruling, the Commissioner argued that exclusion applications should be heard and determined before the Commissioner’s forfeiture applications were heard. The course the Commissioner suggested would involve respondents to forfeiture applications giving evidence in support of their exclusion applications and being cross-examined by the Commissioner. If the Commissioner successfully resisted the exclusion order then (so the Commissioner’s argument went) the exclusion order would have been properly considered to have ‘been withdrawn’ pursuant to s 49(3)(b) of the Act. In such circumstances, the Commissioner contended that he would not have to establish any of the matters set out in s 49(1)(c) of the Act. Thus (as the Commissioner’s argument ran) respondents to forfeiture applications should be required to run their exclusion applications first (that is, before the Commissioner’s forfeiture applications were heard and determined) so that the Commissioner might have the chance to defeat these applications (the exclusion applications) — the defeating of which exclusion applications would result in orders being made in favour of the Commissioner on the forfeiture applications without the need for the Commissioner to actually establish that the property forfeited was the proceeds of an indictable offence or an instrument of one or more serious offences within the meaning of s 49(1)(c) of the Act.
In our view, the explanation that the first Zhang ruling explains the delay in seeking an order for examination must be rejected. It is not necessary for us to consider whether the first Zhang ruling is correct. That is the subject of the appeal from the first Zhang ruling. But the Commissioner’s contentions in the first Zhang ruling requires a court to ascribe to s 49(3) the meaning that an exclusion application that has been heard and determined adversely to an applicant for an exclusion order falls within s 49(3) of the Act as either not having been made or as having been withdrawn. The meaning which the Commissioner seeks to attribute to s 49(3), is not the literal meaning of the text and is hardly so obvious a meaning as to justify the Commissioner conducting applications on the basis that no other view could be taken as to its meaning. Significantly, even if the construction which the Commissioner contends for is correct, it is very difficult to see how such a construction supports the further contention that applications for exclusion should be heard before or at the same time as the application for forfeiture. On the Commissioner’s construction, that was a course that was open to a court but it was not one that a court was mandated to follow. That is to say there was no justification for the Commissioner’s asserted confidence that a court would endorse the approach for which he contended in the first Zhang ruling. To institute forfeiture applications and then not fully prepare them on the basis that a court would accede to an argument that was at least attended by doubt was a highly risky strategy for the Commissioner. We are far from persuaded that the explanation based upon the first Zhang ruling was so compelling as to mandate an exercise of the trial judge’s discretion in favour of the Commissioner.
The Commissioner took two and a half months to apply for examination orders following the first Zhang ruling. As the trial judge states at [29] of his reasons for refusing the present application, at no stage did he suggest that the Commissioner’s ‘prehearing evidence gathering process, including through examination orders’ was circumscribed in any way and could have been conducted before the forfeiture hearing. Had the Commissioner applied for examination orders in mid-August 2015 so as to protect the fourth trial date, a different outcome may have resulted.
All in all, we see no error in the trial judge’s conclusion that the Commissioner had more than two years to apply for the examination orders that he now sought, and that this was more than enough time in the circumstances of the history of this case.
It follows that proposed ground 3 (to the extent that it relies upon the first Zhang ruling) must be rejected.
The inadequacy of reasons complaint
In proposed ground 4, the applicant complains that the judge failed to give adequate reasons for rejecting the applicant’s contention that the first Zhang ruling explained the applicant’s delay in seeking examination orders. This complaint is without substance. It is to be remembered that, in substance, the application before the judge was an application to vacate a trial date (the fourth trial date). The judge gave reasons in some detail as to why he refused that application. As those reasons disclose, the judge was unimpressed by the elapse of time that had been allowed to occur by the parties and was of the view (with respect, correctly) that the Commissioner had had more than two years to seek the examination orders he sought. His Honour recited the fact that the applicant relied upon the first Zhang ruling as an explanation for the delay in making the application. Although he did not say so in terms, it is implicit from the finding that the Commissioner had two years in which to make the application and that the trial judge did not regard the first Zhang ruling as a matter of such significance as to overshadow the considerations referred to by the judge that led to the exercise of discretion being to refuse the adjournment application.
The judge, in the course of his reasons, noted the Commissioner’s reliance upon the first Zhang ruling. While he could have said more about the Commissioner’s reliance upon the first Zhang ruling, the fact is that the judge gave clear reasons in some detail as to why the adjournment application was lost. The judge’s path of reasoning was clearly exposed, and there could be no doubt that the Commissioner knows with precision the reasons his adjournment application was lost. No more was required.[17]
[17]See generally Franklin v Ubaldi Foods Pty Ltd [2005] VSCA 317 [38]; Transport Accident Commission v Kamel [2011] VSCA 110 [71]; Whisprun Pty Ltd v Dixon (2003) 77 ALJR 1598, 1610 [62].
It follows that proposed ground 4 must be rejected.
The failure to have regard to, or give sufficient weight, to relevant considerations complaint
In proposed ground 3, the Commissioner identifies five matters in respect of which it is said that the judge has failed to have sufficient regard or failed to give sufficient weight. Two of these matters concern first, the vacation of the second trial date (to which we have already referred); and secondly, the explanation based upon the first Zhang ruling (again, to which we have already referred). The other three matters concern the vacation of the third trial date, the objects of the Act and an asserted ‘possibility that the conduct of examinations might reduce the scope of issues to be canvassed at trial’.
In our view, there is nothing in any of these matters. We have already explained why there is nothing in the circumstances of the vacation of the second trial date and the first Zhang ruling. So far as the third trial date is concerned, it would be generous to conclude that the vacation of this hearing date was ‘necessitated by circumstances beyond the control of the [Commissioner]’. Merely because a party asserts that it is taking more time to obtain an expert’s report is not to conclude that an adjournment said to be necessitated by that fact is one ‘necessitated by circumstances beyond the control’ of that party.
As to the Commissioner’s assertion that the refusal to vacate the fourth trial date so as to permit examinations to occur might frustrate the objects of the Act by permitting the respondents to avoid a forfeiture order where there may have been evidence establishing that the restrained property was the proceeds or instruments of crime is concerned, the short answer is that there is nothing in the judge’s reasons that suggests that his Honour was not fully aware of the objects of the Act[18] and the importance to both parties of the various applications they have made under the Act. As important as the objects of the Act might be, applications of the kind made by the Commissioner to the trial judge still have to be determined by reference to fairness to both sides and the importance of the proper management of scarce judicial resources. Every refusal of an application to adjourn a trial based upon one party’s desire to obtain more evidence carries with it the consequence that that party may not be able to call additional evidence. That is not a reason for permitting parties to continue to vacate hearing dates one after the other until all parties are satisfied that they have all of the evidence they might wish to call.
[18]See s 5 of the Act.
Finally with respect to proposed ground 3, it is simply speculative to assert (as is asserted in sub-paragraph (d) of that ground) that ‘the conduct of examinations might reduce the scope of issues to be canvassed at trial’. In any event, even if this could be assumed in the Commissioner’s favour, the mere possibility of this occurring could not cut across the judge’s reasons for refusing the Commissioner’s application. There is no substance in proposed ground 3.
The notices of contention
Having regard to the conclusions we have expressed above, it is not strictly necessary for us to deal with the notices of contention filed by the respondents and Zhang. It is sufficient for us to say that we agree with Dixon J in Mah,[19] that the Act is intended to have an extra territorial operation and that there was no impediment to the trial judge making an order for examination had he chosen to do so.
[19]Commissioner of Australian Federal Police v Mah (2014) 242 A Crim R 184 (‘Mah’).
Conclusion
There is no basis for interfering with the trial judge’s exercise of his discretion to refuse to vacate the trial date or make an order for examination. Beyond the bare assertion in the affidavit in support of the application for examination orders and vacation of the trial date that an examination was required if the applicant was to obtain a fair trial, the applicant did not attempt to establish during the hearing that he would suffer a substantial injustice if the order for examination was not made. On the other hand the respondents were unable to demonstrate that they in fact would suffer real prejudice if the trial date were vacated. In that setting the trial judge was entitled to weigh in the balance the fact that the Court had allocated three previous trial dates with multiple days of court time which had previously been set aside and that if the application was acceded to, the further trial date would be vacated with the potential for a further wasting of scarce public resources. For the reasons given above, we are not satisfied that the Commissioner’s proposed appeal has any real prospect of success.
It is also to be recognised that in the alternative to applying for an order for examination in a timely manner, the Commissioner could have sought to expedite the hearing of the application for leave to appeal against the first Zhang ruling before the trial date or sought at an earlier date to vacate the trial date. If the perception was that the decision given in the first Zhang ruling so affected the content of the case that the Commissioner contemplated could be presented, it must be noted that no step was taken to expedite the hearing of the application for leave to appeal from that ruling, and no step was taken for some months to make application to examine the proposed examinees or to vacate the trial when the trial date was imminent. We would not, for these additional reasons, be disposed, in any event, to grant leave to appeal even if the applicant had otherwise established error.
Accordingly, the Commissioner’s application for leave to appeal must be refused.[20]
[20]Supreme Court Act 1986, s 14C.
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