Commissioner of the Australian Federal Police v Kannan (Evidence Ruling) (No 2)
[2024] VSC 814
•20 December 2024
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
CONFISCATION AND PROCEEDS OF CRIME LIST
S CI 2016 04862
IN THE MATTER of the Proceeds of Crime Act 2002 (Cth)
- and -
IN THE MATTER of the offender, KUMUTHINI KANNAN
- and -
IN THE MATTER of the offender, KANDASAMY KANNAN
| THE COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE | Applicant |
| v | |
| KUMUTHINI KANNAN and KANDASAMY KANNAN | Respondents |
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JUDGE: | Gorton J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 29 November 2024 |
DATE OF RULING: | 20 December 2024 |
CASE MAY BE CITED AS: | Commissioner of the Australian Federal Police v Kannan (Evidence Ruling) (No 2) |
MEDIUM NEUTRAL CITATION: | [2024] VSC 814 |
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PRACTICE AND PROCEDURE – Evidence – Advance ruling – Respondents convicted of slavery offences and interests in house forfeited under confiscations legislation – Where Commissioner applying for pecuniary penalty orders against respondents, and first respondent applying for compensation order in respect of interest in house – Whether sentencing reasons and appeal reasons in prior criminal proceedings admissible – Meaning of ‘transcript’ in Proceeds of Crime Act 2002 (Cth) s 138(2)(a) – Whether sentencing reasons and appeal reasons are included in ‘transcript of proceeding’ – Whether Evidence Act 2008 (Vic) s 192A proper vehicle for this issue – Whether orders should be made under s 190(3) of the Evidence Act 2008 (Vic) to permit admission of sentencing remarks and appeal reasons – Degree to which matters are ‘not genuinely in dispute’ – Whether expense or delay caused if reasons inadmissible would be ‘unnecessary’ – DPP (Cth) v Kannan & Anor [2021] VSC 439, Kannan & Anor v R [2023] VSCA 58 – Gonzales v Claridades (2003) 58 NSWLR 188, Hollington v F Hewthorn and Co Ltd [1943] KB 587 – Commissioner of the Australian Federal Police v Courtenay Investments (No 2) (2014) 283 FLR 59 – Evidence Act 2008 (Vic) ss 55, 59, 76, 91, 92, 190, 192A – Proceeds of Crime Act 2002 (Cth) ss 138, 158, 315, 317, 318.
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Ms L De Ferrari SC with Mr N Petrie | Australian Government Solicitor |
| For the First Respondent | Mr E Fryar | JT Lawyers Pty Ltd |
| For the Second Respondent | Ms K Phair | Grey Legal Pty Ltd |
TABLE OF CONTENTS
A. Introduction................................................................................................................................... 1
B. Background.................................................................................................................................... 2
B.1The Commissioner’s applications for pecuniary penalty orders.................................... 2
B.2The first respondent’s application for compensation....................................................... 2
B.3The reason for the Commissioner’s application under s 190 of the Evidence Act 2008 3
B.3.1Sections 91, 92 and 178 of the Evidence Act 2008................................................... 3
B.3.2The certificates of conviction are of little assistance............................................ 4
B.3.3The sentencing remarks and decision of the Court of Appeal are of potential assistance.................................................................................................................................... 5
C. The power to waive the provisions that make the sentencing remarks and Court of Appeal Reasons inadmissible.................................................................................................................. 7
D. The ‘advance ruling’ procedure................................................................................................ 8
E. The Commissioner’s applications for pecuniary penalty orders...................................... 10
E.1The effect of s 138 of the Proceeds of Crime Act 2002 (Cth).............................................. 10
E.1.1The trial judges’ sentencing remarks in the criminal proceedings.................. 11
E.1.2The Court of Appeal reasons................................................................................. 13
E.2What order or ruling should be made?............................................................................ 15
F. The first respondent’s application for a compensation order............................................ 15
F.1Preliminary observations.................................................................................................... 15
F.2Are the matters in question ‘not genuinely in dispute’?................................................ 17
F.3Would the application of those provisions that make the sentencing remarks and Court of Appeal’s reasons inadmissible ‘cause or involve unnecessary expense or delay’?. 18
F.4Exercise of the discretion and conclusion........................................................................ 20
G. Risk of inconsistent decisions................................................................................................. 21
H. Disposition.................................................................................................................................. 21
HIS HONOUR:
A. Introduction
On 23 April 2021, Mrs Kumuthini Kannan and Mr Kandasamy Kannan, the first and second respondents, were found guilty by a jury of possessing a slave and of intentionally exercising over a slave powers attaching to the right of ownership, namely use, contrary to s 270.3(1) of the Commonwealth Criminal Code (‘the Criminal Code’).[1] The enslaved person was Mrs Rajalakshmi Natarajan,[2] and the indictment alleged that the offending occurred between 5 July 2007 and 30 July 2015. The respondents were sentenced on 21 July 2021.[3] The respondents applied for an extension of time in which to appeal against both conviction and sentence.[4] On 21 March 2023, the Court of Appeal dismissed their applications for extensions of time. Their Honours made finding on the merits of any appeal and decided not to extend time because any appeal would be futile.[5]
[1]The ‘Criminal Code’ is the schedule to the Criminal Code Act 1995 (Cth).
[2]Both Mrs Kannan and Mrs Natarajan were usually referred to in the criminal proceedings as Mrs Kannan and Mrs Natarajan, rather than as Ms Kannan and Ms Natarajan, and so I will also refer to them in that way.
[3]DPP (Cth) v Kannan & Anor [2021] VSC 439 (Champion J). The sentence was handed down in both the criminal proceedings against the first respondent (S CR 2018 0063) and the second respondent (S CR 2018 0064).
[4]Similarly to the criminal proceedings, the respondents each filed their own appeal proceeding (S EAPCR 2021 0193 and S EAPCR 2021 0182 respectively), which were dealt with together.
[5]Kannan & Anor v R [2023] VSCA 58 (Priest, Niall and Macaulay JJA).
The Commissioner of the Australian Federal Police (‘the Commissioner’) wishes to rely on the trial judge’s sentencing remarks made in the criminal trial, and the reasons given by the Court of Appeal following applications for extensions of time, in separate applications in this proceeding brought under the Proceeds of Crime Act 2002 (Cth).[6] The Commissioner is concerned that provisions of the Evidence Act 2008 preclude him from doing so. Section 190(3) of the Evidence Act 2008, headed ‘Waiver of rules of evidence’, allows the Court to make an order that certain provisions of the Evidence Act 2008 do not apply in relation to evidence sought to be led if the matter to which the evidence relates is not genuinely in dispute or if applying those provisions would cause or involve unnecessary expense or delay.[7] These reasons consider an application by the Commissioner for orders under s 190(3) of the Evidence Act 2008 that the provisions that would prevent him from tendering the sentencing remarks and the decision of the Court of Appeal not apply to those documents.[8]
B. Background
B.1 The Commissioner’s applications for pecuniary penalty orders
[6]Alternatively, to rely on particular findings of fact contained within these sets of reasons.
[7]Section 190(3) of the Evidence Act 2008 (Vic) applies only in civil proceedings. The applications under the Proceeds of Crime Act 2002 (Cth) are civil proceedings: see Proceeds of Crime Act 2002 (Cth) s 315.
[8]It was accepted that even if those provisions were waived, it would still be open to the respondents to object to the sentencing remarks and Court of Appeal reasons on the grounds that they or parts of them are not relevant, or should be excluded or their use limited under ss 135 or 136 of the Evidence Act 2008 (Vic).
The Commissioner has applied for pecuniary penalty orders against each of the respondents under ss 116 and 134 of the Proceeds of Crime Act 2002 (Cth). In order to succeed in his applications, the Commissioner will have to establish that the respondents have ‘derived benefits’ from the commission of the slavery offences. A ‘benefit’ includes ‘service or advantage’; ‘advantage’ includes ‘financial advantage’; and ‘financial advantage’ includes ‘the avoidance, deferral or reduction of a debt, loss or liability’.[9] The Commissioner has confirmed that he will only rely on the offences of which the respondents were convicted.[10]
B.2 The first respondent’s application for compensation
[9]See Proceeds of Crime Act 2002 (Cth) s 338.
[10]The grounds of the pecuniary penalty order application, as filed, indicated that the Commissioner would seek to establish that the respondents also benefited from ‘harbouring a victim’ contrary to s 271.7F of the Criminal Code, ‘harbouring an unlawful non-citizen’ contrary to s 233E(3) of the Criminal Code, and ‘concealing an unlawful non-citizen’ contrary to s 233E(2) of the Criminal Code.
The respondents’ house where they and Mrs Natarajan lived, or more accurately the net proceeds of the sale of that property, were restrained under provisions of the Proceeds of Crime Act 2002 (Cth) and have now been forfeited to the Crown.[11] The first respondent has applied for a compensation order under s 94A of the Proceeds of Crime Act 2002 (Cth).[12] In order to succeed in her application for a compensation order, the first respondent will have to establish that:
(a) a proportion of the value of her interest in the property ‘was not derived or realised, directly or indirectly, from the commission of any offence’; and
(b) her interest in the property (in reality, the house) was not an ‘instrument’ of the slavery offences. The property will be an ‘instrument’ of the offences if it was, relevantly, ‘used in, or in connection with, the commission of’ the offences.[13]
[11]Proceeds of Crime Act 2002 (Cth) s 92(1)(a)(i), and s 92(3)(b). The respondents were convicted on 23 April 2021. On 6 October 2021 the Honourable Justice Forbes made orders extending the period at the end of which the property covered by the restraining order (made by this Court on 28 November 2016) is forfeited, to 20 October 2022. No further extensions were sought or granted. Accordingly the net sales of the property have been forfeited to the Crown as from 20 October 2022.
[12]The second respondent brought a similar application, but has since withdrawn it. The second respondent transferred his interest in the property to the first respondent for ‘natural love and affection’ prior to the criminal trial commencing.
[13]Proceeds of Crime Act 2002 (Cth), s 329(2)(a).
If she can establish those matters, the first respondent will be entitled to an order that the Commonwealth pay to her an amount that reflects the proportion of the value of the property that was not derived or realised, directly or indirectly, from the commission of any offence.[14]
B.3 The reason for the Commissioner’s application under s 190 of the Evidence Act 2008
B.3.1 Sections 91, 92 and 178 of the Evidence Act 2008
[14]Ibid s 94A(2)(b)(ii).
Section 91 of the Evidence Act 2008, headed ‘Exclusion of evidence of judgments and convictions’, provides that evidence of a ‘decision, or a finding of fact, in [a legal proceeding] is not admissible to prove the existence of a fact that was in issue in that proceeding’. This was the position at common law also, on the reasoning that evidence of the findings of fact made by another judge in another proceeding would be hearsay, and also inadmissible as evidence of an opinion.[15] Section 92(2) of the Evidence Act 2008 modifies the position at common law in relation to evidence of a conviction, and provides that s 91 does not prevent, in a civil proceeding such as this, the admission or use of evidence that a party has been convicted of an offence. Section 178 of the Evidence Act 2008 is a procedural provision that allows evidence of the conviction to be led by the production of a certificate signed by the judge. Section 318(1) of the Proceeds of Crime Act 2002 (Cth) is to the same effect. However, unless the Court makes the orders sought by the Commissioner, only the certificates of conviction, and not the sentencing remarks or the reasons of the Court of Appeal, can be relied on in the applications brought in this proceeding.
B.3.2 The certificates of conviction are of little assistance
[15]See, eg, Gonzales v Claridades (2003) 58 NSWLR 188, 205 [66] (Campbell J); Hollington v F Hewthorn and Co Ltd [1943] KB 587, 595 (Goddard LJ); and Evidence Act 2008 (Vic) s 92(3).
Both the Commissioner’s applications for pecuniary penalty orders and the first respondent’s application for compensation are likely to be affected by the duration of the period for which Mrs Natarajan was kept in a condition of slavery and the conditions in which she was kept. The certificates of conviction will be evidence that the respondents engaged in the activities that constituted the elements of the offences of which they were found guilty.[16] One difficulty with relying only on the certificates of conviction is that, although the indictment alleges that the offences took place over a period of some eight years, the trial judge directed the jury that:
This does not mean that the prosecution must prove that Mrs Natarajan was in a condition of slavery, and either intentionally possessed, or intentionally used for 24 hours a day, every day, for the whole period specified in the indictment. What the prosecution must prove is that during the period specified, Mrs Natarajan was at some time, or at some times, in a condition of slavery and that at that time, or those times, she was intentionally possessed, or intentionally used, by either or both of the accused in the way the prosecution alleges.
[16]Evidence Act 2008 (Vic), s 92; Proceeds of Crimes Act 2002 (Cth), s 318(1). The certificates act as evidence that the respondents engaged in the acts that constitute the elements of those offences, but is not conclusive: Edwards v State Trustees Ltd (2016) 54 VR 1, 31 [112], 32 [116] (Santamaria JA).
Accordingly, the respondents are likely to submit the guilty verdicts are consistent with the respondents’ engaging in the activities that constituted the slavery offences for only a short time within the eight years. For that reason, in the Commissioner’s applications for pecuniary penalty orders, determining the extent to which the respondents obtained a ‘benefit’ from the commission of the offences simply from the certificates of conviction will be problematic.[17]
[17]See Proceeds of Crime Act 2002 (Cth), s 116(1)(b)(i).
Equally, the amount of remuneration that Mrs Natarajan received and the amount and nature of work she performed are both likely to affect the evaluation of any ‘benefit’ that the respondents received, and the extent to which Mrs Natarajan was confined physically or by circumstances may affect any decision on whether the house was an ‘instrument’ of the offence. Again, the certificates of conviction do not establish facts from which those matters may be determined.
B.3.3 The sentencing remarks and decision of the Court of Appeal are of potential assistance
The criminal trial ran for some 49 days. The Commissioner, it seems, wishes to avoid the time and expense and inconvenience, as well as presumably the stress for Mrs Natarajan, of having to lead evidence from her again,[18] and so wishes to be able to rely on findings made by the sentencing judge. In his sentencing remarks, the trial judge, as well as setting out as facts the general background circumstances of the offending, said (and these are only examples, in no particular order):
[18]The Commissioner submitted Mrs Natarajan ‘doesn’t speak English’, ‘has limited skills’, and that at the criminal trial of the respondents ‘five or six’ Video Audio Recordings of Evidence of Mrs Natarajan were played, following which she was cross-examined ‘at length’. The Court understands Mrs Natarajan would be now at least 70 years of age, and had been described by the Court of Appeal as being ‘illiterate and innumerate’.
Your actions were such as to subjugate Mrs Natarajan, over an extended period measured in years rather than months …[19]
[19]DPP (Cth) v Kannan & Anor [2021] VSC 439, [104].
…
As discussed above, it is not possible to be satisfied to the required degree as to when Mrs Natarajan became reduced to a condition of slavery. Because such condition involves the exercise of certain powers over the slave, it is quite possible that the number and intensity of these powers waxed and waned over the period the condition existed. Having considered all the evidence and submissions, I am satisfied that a condition of slavery existed for a substantial period within the eight year period that framed the incident.[20]
[20]DPP (Cth) v Kannan & Anor [2021] VSC 439, [219].
…
Further, you paid her minimal sums of money…[21]
…
You paid her meagre remuneration and she was almost entirely in your control…. She … had no wherewithal or means to extract herself from your family and return home. You did not let her go home… [22]
[21]Ibid [102]. The Court of Appeal, in Kannan & Anor v R [2023] VSCA 58, [73] (Priest, Niall and Macaulay JJA), described the sums paid as a ‘pittance’.
[22]DPP (Cth) v Kannan & Anor [2021] VSC 439, [223].
The Commissioner submitted, too, that the risk of two courts coming to conflicting decisions would be reduced if the judge hearing the applications under the Proceeds of Crime Act 2002 (Cth) had before him or her, and presumably could treat as evidence, the sentencing remarks.
The reasons of the Court of Appeal also contain a finding, among other things, that Mrs Natarajan ‘lived at the Kannan family home… for eight years… [d]uring those years, she cared for the applicants’ three children, and undertook a variety of household chores.’[23]
[23]Kannan & Anor v R [2023] VSCA 58, [10] (Priest, Niall and Macaulay JJA).
I asked the Commissioner whether statements as to the duration of the offending at the level of generality expressed in the sentencing remarks or in the reasons of the Court of Appeal would be sufficient for any calculation of a benefit obtained, and whether he was intending to call the evidence from Mrs Natarajan regardless of the outcome of this ruling. It appeared to me that the exercise of any discretion might depend at least in part on whether Mrs Natarajan was going to have to be called in any event. The Commissioner’s counsel told me that, if the Commissioner succeeded in this application, the Commissioner ‘almost certainly’ would not call Mrs Natarajan.[24]
[24]Counsel for the Commissioner further advised that the respondents had been examined pursuant to ss 180 and 180A of the Proceeds of Crime Act 2002 (Cth), following orders made by consent on 2 March 2022 by this Court, and that this evidence was available to the Commissioner for use in this proceeding.
All that said, just how a judge hearing the applications brought under the Proceeds of Crime Act 2002 (Cth) would determine those matters if the Commissioner were able to rely on the sentencing remarks and the reasons of the Court of Appeal, but Mrs Natarajan did not give evidence again, was not made clear. Presumably, the Commissioner would submit that the judge hearing the application should in effect simply adopt the findings made by the judge who made the sentencing remarks. There is something unsatisfactory about that, of course, and this issue will be returned to.
C. The power to waive the provisions that make the sentencing remarks and Court of Appeal Reasons inadmissible
Section 190(3) of the Evidence Act 2008 provides that:
In a civil proceeding, the court may order that any one or more of the provisions mentioned in subsection (1) do not apply in relation to evidence if—
(a)the matter to which the evidence relates is not genuinely in dispute; or
(b)the application of those provisions would cause or involve unnecessary expense or delay.
Section 190(4) of the Evidence Act 2008 provides that:
Without limiting the matters that the court may take into account in deciding whether to exercise the power conferred by subsection (3), it is to take into account:
(a)the importance of the evidence in the proceeding; and
(b) the nature of the cause of action or defence in the nature of the subject-matter of the proceeding; and
(c)the probative value of the evidence; and
(d) the powers of the court (if any) to adjourn the hearing, to make another order or to give a direction in relation to the evidence.
The Commissioner seeks an ‘advance ruling’ that neither ss 91, 59 nor 76 of the Evidence Act 2008 apply to the reasons of the sentencing judge and of the Court of Appeal.[25] Section 91, as noted above, excludes evidence of the decision or findings of fact of another Court. Section 59 excludes hearsay. Section 76 excludes opinion evidence. Each of those sections is capable of being waived under s 190(3) as they are ‘provisions mentioned in [s 190(1)]’. An order that neither ss 59 nor 76 of the Evidence Act 2008 apply was sought because, at common law, and as noted above, it is the rules against hearsay and opinion evidence that prevent evidence of a decision given by another judge in another proceeding being given.
[25]The application for an advance ruling is brought pursuant to s 192A of the Evidence Act 2008 (Vic). See Part D below.
It is not absolutely clear whether s 190(3) sets out the criteria that have to be satisfied in order to enliven the Court’s power to grant a waiver, and s 190(4) then sets out matters to be considered when deciding whether to exercise that power, or whether the two subsections are more intertwined. The structure and chapeaux of the two sections suggest the former, but the use of the word ‘unnecessary’ in s 190(3)(b) suggests the latter. ‘Unnecessary’ must be interpreted as requiring some evaluative judgment as to whether the expense or delay saved is, in the circumstances, sufficient to warrant the expense or delay being viewed as ‘unnecessary’. In this way, the word ‘unnecessary’ must be importing some sense of disproportionality in the circumstances. It is difficult to see how that evaluative exercise could be engaged in without having regard to the various factors set out in s 190(4) of the Evidence Act 2008. Whether a degree of expense or delay involved in proving matters in the ordinary way is ‘unnecessary’ or ‘necessary’ would likely depend on, for example, and among other matters, ‘the importance of the evidence in the proceeding’[26] and its ‘probative value’.[27] It is no small thing for a court to exercise a power to exclude the rules of evidence. The rules of evidence are designed to promote fairness in decision making and are not to be waived lightly, and some amount of delay may be ‘necessary’ if a proceeding is to be conducted in a fair and just manner. For practical purposes, however, it probably does not matter whether the circumstances referred to in s 190(4) are strictly seen as matters going to the exercise of the discretion, or whether they are seen as matters going to whether the expense or delay saved is, in the circumstances, ‘unnecessary’.
D. The ‘advance ruling’ procedure
[26]Evidence Act 2008 (Vic), s 190(4)(a).
[27]Ibid s 190(4)(c).
The Commissioner expressed his application as being made under s 192A of the Evidence Act 2008. That section provides that:
192A Advance rulings and findings
Where a question arises in any proceedings, being a question about—
(a) the admissibility or use of evidence proposed to be adduced; or
(b) the operation of a provision of this Act or another law in relation to evidence proposed to be adduced; or
(c) the giving of leave, permission or direction under section 192—
the court may, if it considers it to be appropriate to do so, give a ruling or make a finding in relation to the question before the evidence is adduced in the proceedings.
Section 192A, and its interstate and federal counterparts, is a discretionary case management tool which can carry significant benefits in promoting efficiency in trials, including by allowing counsel to select witnesses and prepare for trial with greater certainty.[28] The test a court is to use when deciding whether to make such a ruling is whether the Court ‘considers it appropriate to do so’, although there will often be ‘some good reason’ for the Court to exercise such discretion,[29] and its use should accord with the overarching purposes of the relevant regulatory schemes.[30] A court may elect to not give a s 192A ruling and instead leave the issues sought to be addressed in the question for trial;[31] or may elect to make a ruling but do so by answering the question sought to be addressed by the ruling in the negative.[32] A court can also rule by answering s 192A questions ‘partially’ – that is, by declaring only particular paragraphs of disputed documents are admissible.[33]
[28]See McNickle v Huntsman Chemical Company Australia Pty Ltd (Expert Evidence) [2021] FCA 370, [23]-[28] (Lee J); see particularly [25] citing the Explanatory Memorandum to the Evidence Amendment Bill 2008 (Cth) at [242].
[29]See Lambert Leasing Inc v QBE Insurance Australia Ltd [2012] NSWSC 953, [11]–[13] (Stevenson J).
[30]Nagel v Clay [2020] FamCA 326; 60 Fam LR 550, [58] (Harper J); see generally also [55]-[62].
[31]Lambert Leasing Inc v QBE Insurance Australia Ltd [2012] NSWSC 953.
[32]See eg Nagel v Clay [2020] FamCA 326; 60 Fam LR 550, [133] where Harper J held particular video recordings ought not be adduced as evidence ‘because their probative value is substantially outweighed by the danger that they might cause or result in undue waste of time’.
[33]See generally Searle v Commonwealth of Australia (No 5) [2022] NSWSC 119.
All that said, it is not clear that I am, on a proper analysis, being asked to exercise a power under s 192A of the Evidence Act 2008. It is not clear to me whether the Commissioner has a ‘question’ about the ‘admissibility or use of evidence proposed to be adduced’ on which he is asking me to give a ‘ruling’ or to make a ‘finding’ under s 192A, because the Commissioner accepts that the material on which he wishes to rely is, unless a further step is taken, inadmissible and is asking that I exercise the discretionary power given to me under s 190 of Evidence Act 2008. Whether s 192A is properly invoked was not an issue that was ventilated in the hearing.[34] This does not matter, however, because it was not in dispute that I am able, now, either under s 192A of the Evidence Act 2008 or otherwise, to give consideration to the exercise of the power contained in s 190 of the Evidence Act 2008. I am satisfied that it is appropriate that I give consideration to that matter now.
[34]In other words, the respondents did not submit the s 192A Evidence Act 2008 (Vic) procedure was invalid on the basis there was no ‘threshold question’: see Searle v Commonwealth of Australia (No 5) [2022] NSWSC 119, [33]-[37] (Garling J).
Further, as the below will reveal, the argument developed in a manner that did call for the making of an advance ruling pursuant to s 192A of the Evidence Act 2008.
E. The Commissioner’s applications for pecuniary penalty orders
E.1 The effect of s 138 of the Proceeds of Crime Act 2002 (Cth)
The second respondent drew the Commissioner’s attention, and the Court’s, to s 138 of the Proceeds of Crime Act 2002 (Cth). That provision relates to the Commissioner’s applications for pecuniary penalty orders against the respondents and provides as follows:
138 Procedure on application
(1) The person who would be subject to the *pecuniary penalty order if it were made may appear and adduce evidence at the hearing of the application.
(2)The court may, in determining the application, have regard to:
(a) the transcript of any proceeding against the person for an offence that constitutes *unlawful activity; and
(b) the evidence given in any such proceeding.[35]
[35]The asterisks direct the reader to the definition of terms in the Dictionary contained in s 338 of the Proceeds of Crimes Act 2002 (Cth). It is common ground that the Commissioner is seeking a ‘pecuniary penalty order’ as defined and that the use of Mrs Natarajan as a slave constitutes ‘unlawful activity’ as defined.
The purpose of subsection (2) is, clearly, to overcome those provisions of the Evidence Act 2008 (and their equivalents in other jurisdictions) that would otherwise make the transcript and evidence inadmissible. Allowing the Court to ‘have regard to’ the transcript must mean that the Court is allowed to act upon the content of that transcript notwithstanding that it is hearsay.[36] In this way, the specific provision in the Proceeds of Crime Act 2002 (Cth) allowing the Court to have regard to the transcript in an application for a pecuniary penalty order overcomes the general provisions in the Evidence Act 2008 that would not permit that to be done.[37] In other words, for pecuniary penalty order applications under the Proceeds of Crime Act 2002 (Cth), the legislature intended a new ‘default position’ that the transcript of the criminal proceeding against the respondent (and any exhibits tendered in that proceeding) may be put before the judge hearing those applications.
[36]Edelman J in Commissioner of the Australian Federal Police v Courtenay Investments (No 2) (2014) 283 FLR 59 at 73-74 [73], in similar circumstances, described the phrase ‘have regard to’ as broader than a requirement of admission into evidence; see also 74 [79].
[37]See, eg: Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd (2018) 264 CLR 1, 15 [35] per Kiefel CJ, Bell, Keane, Nettle and Gordon JJ where specific statutory terms in the Building and Construction Industry Security of Payment Act 1999 (NSW) creating a scheme was held to oust by implication a power in the Court to grant an order in the nature of certiorari; King v Muriniti (2018) 97 NSWLR 991, 999 [31] where Basten JA referred to a similar possibility with s 8(2) of the Vexatious Proceedings Act 2008 (NSW).
The second respondent relied on this provision in support of a submission that waiving the relevant provisions of the Evidence Act 2008 would not save unnecessary expense or delay; the Commissioner could tender the transcript of Mrs Natarajan’s evidence and would not have to call her to prove the details of the offences. The application took a twist when, in response, the Commissioner’s counsel embraced s 138 of the Proceeds of Crime Act 2002 (Cth) but took it further; she submitted that the Commissioner was, by reason of that section, allowed to rely also on the transcript of the trial judge’s sentencing remarks on the grounds that the transcript of those remarks formed part of the transcript of the proceeding. For the following reasons, I accept both submissions.
E.1.1 The trial judges’ sentencing remarks in the criminal proceedings
The question as to whether the phrase ‘transcript of any proceeding against the person for an offence’ includes the transcript of sentencing remarks, rather than just the transcript of the evidence led at the trial, is not straightforward. On one view, were s 138 of the Proceeds of Crime Act 2002 (Cth) intended to permit only the transcript of evidence at the criminal trial, then there would be no reason for s 138(2)(a), because it would fall within what is now s 138(2)(b).
In making sense of this issue, it is appropriate to consider the whole of the Proceeds of Crime Act 2002 (Cth). Section 158 of the Proceeds of Crime Act 2002 (Cth), which deals with a claim for ‘literary proceeds’,[38] specifically refers to ‘sentencing proceedings’. It provides as follows:
[38]Defined in Proceeds of Crime Act 2002 (Cth) at s 153 as ‘any benefit that a person derives from the commercial exploitation’ of either ‘the person’s notoriety resulting, directly or indirectly, from the person committing an indictable offence or a foreign indictable offence’, or ‘the notoriety of another person involved in the commission of that offence, resulting from the first-mentioned person committing that offence.’
158 Determining literary proceeds amounts
…
(3) In determining the *literary proceeds amount, the court is to have regard to such matters as it thinks fit, including any of the following:
(a) the amount of the *literary proceeds relating to the offence;
(b) if the person stood trial for the offence—the evidence adduced in the proceedings for the offence;
(c) if the person was convicted of the offence—the transcript of the sentencing proceedings.
Surprisingly, when setting out what a court may have regard to when determining an application for confirmation of a literary proceeds order after a conviction has been quashed, the legislature reverted to the same wording that it used in section 138 and the other sections set out above.[39]
[39]Proceeds of Crime Act 2002 (Cth), s 175(2).
This isolated referral in s 158 of the Proceeds of Crime Act 2002 (Cth) to the ‘evidence adduced’ and to the ‘transcript of the sentencing proceedings’, instead of to the ‘transcript of any proceeding’, is somewhat of a mystery. It may be because, unlike a pecuniary penalty order, a literary proceeds order may be made even if a person has not been convicted so the legislature had to deal with the situation of a trial where a person was acquitted. Be that as it may, the fact that the legislature refers in s 158(3)(b) to ‘the evidence adduced in the proceedings’ (in circumstances where there may not have been a conviction and thus no sentencing remarks) and in s 158(3)(c) to ‘the transcript of the sentencing proceedings’ indicates, to my mind, that the legislature intends the concept of ‘transcript’ of a ‘proceeding’ to include more than merely transcript of the evidence led, and intends the concept to extend to the sentencing remarks. If the legislature intended to exclude the sentencing remarks, it would have been easy and natural for the legislature in s 158(3)(c) to have referred instead to ‘the evidence adduced in the sentencing proceeding’. Further, I am unable to discern a reason why the legislature would allow a court determining an application for a literary proceeds order to have regard to transcript of sentencing remarks, but would intend not to allow a court determining an application for a pecuniary penalty order, or a forfeiture order, or related orders, to have regard to transcript of sentencing remarks.
In these circumstances, I interpret the phrase ‘transcript of any proceeding’ in s 138(2) of the Proceeds of Crime Act 2002 (Cth) as including the transcript of all that was said and done in the course of the proceeding, including the sentencing remarks.
As noted above, it is not immediately clear how the Court is to rely on the sentencing remarks particularly where the evidence adduced may differ and the proceeding is of an altogether different nature. As s 138(1) itself makes clear, the respondents to such applications may adduce evidence that was not before the judge hearing the criminal trial. That will be an issue for determination at the time of the hearing of the applications for pecuniary penalty orders. As the Commissioner made clear in his submissions, all that I am being asked to do now is to exercise a power so as to exclude from application those provisions of the Evidence Act 2008 that would otherwise preclude the sentencing remarks from being admissible; questions of relevance,[40] or whether the prejudicial value of that evidence would outweigh its probative value,[41] are for later.
E.1.2 The Court of Appeal reasons
[40]Evidence Act 2008 (Vic), s 55.
[41]Ibid s 137.
The question then arises whether this applies also to the reasons given by the Court of Appeal. In my view it does. Although the appeals were, strictly, by reason of the ways the rules of court have been formulated, separate proceedings brought by the respondents, it would otherwise create an unworkable situation if the Court of Appeal were to rule that conclusions reached by a sentencing judge were erroneous. It cannot have been intended that transcript of sentencing remarks that have found to have been erroneous may be placed before a court hearing a pecuniary penalty order application, but an appeal court’s decision that those remarks were erroneous may not be. In my view the phrase ‘transcript of any proceeding against the person for an offence’ must include the record of any appeal brought (or sought to be brought) by such a person against the orders made in that proceeding. Equally, the transcript should be read as extending to written reasons where, for convenience, written reasons are summarised in open court and later published rather than read aloud in their entirety by the judicial officer handing down their reasons.
Again, just what the judge hearing the pecuniary penalty order applications makes of the Court of Appeal’s observations on the facts, and the weight that ought to be placed upon them, is a matter for that judge and later argument.
In this respect I note that, if the parties were to be bound by the findings of the sentencing judge (or appeal court) on those issues when trying an application for a pecuniary penalty order, one would have expected the Proceeds of Crime Act 2002 (Cth) to say as much. Instead, the Proceeds of Crime Act 2002 (Cth) provides that an acquittal does not affect a court’s power to make a pecuniary penalty order,[42] and also that the respondent to that application ‘may appear and adduce evidence at the hearing of the application’.[43] The inference to be drawn is that a court hearing an application for a pecuniary penalty order is obliged to form its own views on the matters relevant to that application, save for the fact in the case of a conviction it must proceed on the basis that the offence has been committed; there is no suggestion by the Commissioner that any issue estoppel or like principles apply. Beyond that, the fact that the evidence may be different indicates that conclusions might be different, and that the fact that one set of conclusions have been drawn on a contested matter in one forum does not mean that those matters are not thereafter genuinely in dispute in other forums.
E.2 What order or ruling should be made?
[42]Proceeds of Crimes Act 2002 (Cth), s 120.
[43]Ibid s 138(1).
In circumstances where I have concluded that ss 91, 92 and 178 of the Evidence Act 2008 do not preclude the admission of the transcript of the sentencing remarks and the Court of Appeal reasons, there is no occasion for me to order pursuant to s 190 of the Evidence Act 2008 that ss 91, 92 and 178 do not apply. Indeed, in light of my conclusions, it could not be said that those provisions would cause or involve unnecessary expense or delay. I will dismiss the Commissioner’s application that I do so.
I will, however, rule, pursuant to s 192A of the Evidence Act 2008, that:
(a) The transcript of proceeding DPP (Cth) v Kumuthini Kannan (S CR 2018 0063), including the sentencing remarks, and the transcript of the appeal proceeding (S EAPCR 2021 0193), including the Court of Appeal’s reasons, are admissible, subject to any argument pursuant to ss 135 or 136 of the Evidence Act 2008, in the Commissioner of the Australian Federal Police’s application against Mrs Kumuthini Kannan for a pecuniary penalty order under ss 116 and 134 of the Proceeds of Crime Act 2002 (Cth); and
(b) Any transcript of proceeding DPP (Cth) v Kandasamy Kannan (S CR 2018 0064), including the sentencing remarks, and the transcript of the appeal proceeding (S EAPCR 2021 0182), including the Court of Appeal’s reasons, are admissible, subject to any argument pursuant to ss 135 or 136 of the Evidence Act 2008, in the Commissioner of the Australian Federal Police’s application against Mr Kandasamy Kannan for a pecuniary penalty order under ss 116 and 134 of the Proceeds of Crime Act 2002 (Cth).
F. The first respondent’s application for a compensation order
F.1 Preliminary observations
In the first respondent’s application for a compensation order, she bears an onus to establish that she has an interest in the property (or the proceeds of its sale) and that interest was not derived or realised, directly or indirectly, from the commission of the offences and is not an instrument of those offences.[44] The proceeding is a civil proceeding and so the onus is the balance of probabilities.[45]
[44]Proceeds of Crime Act 2002 (Cth), s 317. As noted above, the Commissioner has confirmed that in defending the application he will be contending that the first respondent’s interest was derived or realised from, or that the property was an instrument of, only the slavery offences of which the respondents were convicted.
[45]Proceeds of Crime Act 2002 (Cth) s 315.
Section 64 of the Proceeds of Crime Act 2002 (Cth) is in similar terms to s 138 of that Act and applies in the case of an application for a forfeiture order, but there is no like provision that applies to an application for a compensation order. Accordingly, the starting position is that the judge’s sentencing remarks, and indeed the transcript of the trial more generally, are not admissible in the first respondent’s application for a compensation order.
Further, it must be recognised that the legislature, when enacting the Proceeds of Crime Act 2002 (Cth), specifically turned its mind to whether a transcript of a criminal proceeding should be admissible in a proceeding brought under it, and:
(a) provided for that to be done in applications brought by the Commissioner for
(i) forfeiture orders (and for confirmation of forfeiture orders);[46]
[46]Ibid ss 64(2)(a), 83(2)(a). See also 109(2)(a) as to the procedure on application for confirmation of forfeiture when a conviction has been quashed.
(ii) pecuniary penalty orders (and for confirmation or variation of pecuniary penalty orders);[47] and
[47]Ibid ss 138(2)(a), 148(2)(a), 149A(3)(b).
(iii) literary proceeds orders (and for confirmation of literary proceeds orders);[48] but
(b) did not provide for that to be done in applications for exclusion orders brought by persons whose property has been restrained or in proceedings for compensation orders by persons whose property has been forfeited.
[48]Ibid s 158(3)(c), if the person was convicted of the offence; but as noted above not if the person only stood trial for the offence: s 158(3)(b). See otherwise s 175(2)(a).
As noted above, in order to enliven the power in s 190 of the Evidence Act 2008, the Commissioner must establish, at least, that the matters to which the sentencing remarks relate are ‘not genuinely in dispute’, or that the application of those provisions that would exclude them would ‘cause or involve unnecessary expense or delay’.
F.2 Are the matters in question ‘not genuinely in dispute’?
The Commissioner, in his written submissions, submitted that the matters on which he sought to rely in the sentencing remarks were ‘not genuinely in dispute’. I accept this submission partly,[49] insofar as the Commissioner seeks to rely on those parts of the sentencing remarks that summarise objective background facts, such as the dates on which Mrs Natarajan arrived and left Australia, and her medical state as recorded by doctors. I return to this issue in Part F.4 below.
[49]It was common ground, as I understood it, that, if need be, I could waive the operation of the provisions of the Evidence Act 2008 (Vic) for only particular parts of the sentencing remarks.
However, I reject the submission in so far as it relates to issues such as the nature of the constraints that were imposed on Mrs Natarajan, when they were imposed, and the benefits that the respondents (or she) received over time. The respondents pleaded not guilty, those matters were contested in the criminal proceedings, and the respondents continue (as I understand it) to deny that they kept Mrs Natarajan in conditions of slavery. In my view, the evidence does not become ‘not genuinely in dispute’ for the purpose of s 190(3) of the Evidence Act 2008 because of the jury verdict or because a sentencing judge has made findings, at least to some extent, on those issues and those findings were not disturbed on appeal. In my view, the extent to which the respondents confined Mrs Natarajan, physically or by circumstances, and the extent to which they used the house as an instrument to do so, remain ‘genuinely in dispute’ between the parties to the applications under the Proceeds of Crime Act 2002 (Cth) for the purposes of s 190 of the Evidence Act 2008.
F.3 Would the application of those provisions that make the sentencing remarks and Court of Appeal’s reasons inadmissible ‘cause or involve unnecessary expense or delay’?
The Commissioner’s central contention is that if the sentencing remarks are able to be tendered by him, then he would not need to call Mrs Natarajan. As is noted above, the criminal trial took some 49 days and, the Commissioner submitted, being able to rely simply on the sentencing remarks would save considerable time. This second limb of s 190(3) of the Evidence Act 2008 can take effect even if matters are ‘genuinely in dispute’.
On the other hand, evidence in chief may be led by affidavit.[50] Presumably, Mrs Natarajan could swear an affidavit in which she either deposed to the facts upon which the Commissioner wished to rely, or she could, possibly, swear an affidavit that produced a transcript of the evidence that she gave in the criminal trial, or extracts from it, and depose that she gave that evidence and that it was correct. She would, in all likelihood, be cross-examined,[51] but the amount of court time taken up with her evidence would likely be considerably less than in the criminal trial.
[50]Supreme Court (Criminal Procedure) Rules 2017, r 6.23.
[51]Whether this occurred would be for the judge hearing the application.
Also, as counsel for the second respondent pointed out, the time occupied by the criminal trial is an uncertain guide to the time that would be occupied by the hearing of the application under the Proceeds of Crime Act 2002 (Cth), because the criminal trial was trial by jury. That meant that time was taken up with the empanelment, oral openings, final addresses and a charge (as well as time for the jury to deliberate). A proceeding before a judge sitting alone, on affidavit and with written opening and closing submissions, is likely to proceed much more quickly.
That said, I do accept that allowing the Commissioner to rely on the sentencing remarks and Court of Appeal decision, instead of calling Mrs Natarajan to give evidence even if only to be cross-examined, would make the hearing proceed more quickly and thus at less expense. I am not in a position to quantify in any real way what the difference would be, but I accept that it would not be trivial and could be significant. That, then, requires attention to return to what is meant by ‘unnecessary’.
The context in which that is to be assessed is that the first respondent wishes to bring a claim for compensation for the property forfeited. She is entitled to bring that proceeding and it raises issues that were not finally determined in the criminal trial. In order to do so, she will, I am prepared to assume, have to give evidence herself, and probably also file an affidavit sworn by Mr Kannan, the second respondent.[52] The Commissioner may also wish to file transcripts of the examinations of the respondents performed under Part 3.1 of the Proceeds of Crime Act 2002 (Cth). It follows that there will be, I am prepared to assume, a significant body of evidence before the judge hearing the compensation application that was not led at the criminal trial and so was not before the trial judge when his Honour made findings for the purpose of his sentencing. If that happens, then the factual findings set out in the sentencing remarks and observations made in the Court of Appeal will, inevitably, have been made on an incomplete view of the evidence led in the compensation application. That is one reason for which the judge hearing the compensation application may hesitate to accept or to act upon, or to be assisted by, the findings of fact made by his Honour.
[52]Neither of the respondents gave evidence in the criminal trial.
But more fundamentally, in circumstances where there will be a fresh body of evidence upon which the first respondent will ask the Court to decide the fate of her application, it is entirely reasonable that the first respondent may wish to put that evidence to Mrs Natarajan and to try to obtain agreement or concessions from her. That may not be done if the Commissioner is entitled to put the sentencing remarks (and decision of the Court of Appeal) before the Court, instead of an affidavit from Mrs Natarajan herself (producing the transcript of her earlier evidence, or potentially adding or altering it). It is to be recalled that the first respondent is entitled to bring the application she has, and that the fact that she was found guilty of criminal offences does not mean that she may not have a good claim for compensation for her house being restrained and then forfeited. The material set out in the sentencing remarks, being in essence a series of findings based on Mrs Natarajan’s evidence, is potentially probative, but is not essential in the sense that the evidence is able to be led instead from Mrs Natarajan herself. If the Commissioner wishes to defeat the claim for compensation associated with the forfeiture of the house based on Mrs Natarajan’s evidence, then making Mrs Natarajan available, rather than relying on the sentencing judge’s remarks, is more likely to lead to a just result in the application.
In these circumstances, it cannot be said, in my view, that the delay or expense involved in having Mrs Natarajan prepare an affidavit and, if so ordered, be available for cross-examination is ‘unnecessary’. The test is not what would be the most convenient or efficient manner of determining the application, but whether the ordinary rules of evidence should be dispensed with because they cause unnecessary expense or delay. The delay and expense they here cause, even though not trivial, is, in my view, necessary if there is to be a proper and fair hearing of the first respondent’s application; or at least, I am not satisfied that it is ‘unnecessary’.
F.4 Exercise of the discretion and conclusion
I have recorded in Part F.1 above that there are parts of the sentencing remarks that refers to facts that are not in dispute. The same applies to the reasons of the Court of Appeal. That enlivens my power to make orders under s 190 of the Evidence Act 2008 in respect of those parts of the sentencing remarks or Court of Appeal reasons, but I still have a discretion to exercise.
I have decided not to exercise the power under s 190 of the Evidence Act 2008 in respect of those parts of the sentencing remarks or Court of Appeal reasons that are not in dispute. In circumstances where I have concluded that not having the sentencing remarks or Court of Appeal reasons in evidence would not cause ‘unnecessary’ cost or delay because of the ability to call evidence by affidavit, it seems to me that attempting to parse the sentencing remarks and Court of Appeal reasons to identify which particular parts of it record facts that are not disputed is an unnecessary and wasteful exercise that would more likely add to than reduce the cost of the proceedings. To the extent that facts are not in dispute, they will or should be agreed, or may be proved by affidavit evidence (including, potentially, reference to any exhibited transcript of evidence given).
G. Risk of inconsistent decisions
The Commissioner emphasised the risk of inconsistent decisions if the courts hearing the pecuniary penalty order applications and the compensation application did not have before them the sentencing remarks and Court of Appeal reasons. Although initially attractive, this argument falls away after further consideration. First, the applications brought under the Proceeds of Crime Act 2002 (Cth) are separate, stand-alone applications and are not a mere adjuncts to the criminal trial. Second, it is not apparent that the decisions themselves would be ‘inconsistent’ in the sense ordinarily used as conveying that the administration of justice would brought into disrepute, because the applications are distinct and seek distinct statutory remedies such that the ultimate orders obtained would likely not conflict.[53] Third, and perhaps most importantly, the legislative scheme clearly anticipates that there may be different evidence before the courts that hear the applications under the Proceeds of Crime Act 2002 (Cth) from the evidence that was before the court hearing the criminal charges, and it also provides for a different standard of proof.
[53]See, eg, Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589, 603 (Gibbs CJ, Mason and Aickin JJ).
Equally, the legislation anticipates that there may be different evidence before a court hearing an application for a pecuniary penalty order (where the legislation permits the transcript of the criminal trial may be put before the court), and a court hearing an application for compensation (where the legislation does not permit the transcript to be put before the court). In those circumstances, the making of different findings in the process of reaching particular orders in distinct applications is readily understandable and would not bring the administration of justice into disrepute.
H. Disposition
It follows from my reasons that the transcript of the sentencing remarks and the reasons of the Court of Appeal will be (subject to any applications under ss 135 and 136 of the Evidence Act 2008) before the judge in the Commissioner’s applications for pecuniary penalty orders, but not before the judge in the first respondent’s application for a compensation order. That is somewhat unsatisfactory, of course, but not unworkable. The applications are distinct. Further, as noted above, such a result is consistent with the decision made by the legislature expressly to permit a court to have regard to transcript of the criminal proceedings in claims brought by the Commissioner, but not in claims brought by convicted persons.
In light of the above findings as to s 138(2) of the Proceeds of Crime Act 2002 (Cth), I make the following ruling pursuant to s 192A of the Evidence Act 2008:
(a) The transcript of proceeding DPP (Cth) v Kumuthini Kannan (S CR 2018 0063), including the sentencing remarks, and the transcript of the appeal proceeding (S EAPCR 2021 0193), including the Court of Appeal’s reasons, are admissible, subject to any argument pursuant to ss 135 or 136 of the Evidence Act 2008, in the Commissioner of the Australian Federal Police’s application against Mrs Kumuthini Kannan for a pecuniary penalty order under ss 116 and 134 of the Proceeds of Crime Act 2002 (Cth); and
(b) Any transcript of proceeding DPP (Cth) v Kandasamy Kannan (S CR 2018 0064), including the sentencing remarks, and the transcript of the appeal proceeding (S EAPCR 2021 0182), including the Court of Appeal’s reasons, are admissible, subject to any argument pursuant to ss 135 or 136 of the Evidence Act 2008, in the Commissioner of the Australian Federal Police’s application against Mr Kandasamy Kannan for a pecuniary penalty order under ss 116 and 134 of the Proceeds of Crime Act 2002 (Cth).
I will otherwise dismiss the Commissioner’s application for orders under s 190 of the Evidence Act 2008.
I will hear the parties on the precise form of order and on costs.
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