Commissioner of the Australian Federal Police v Kirk, W.B

[1989] FCA 141

Re: COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE
And: WILLIAM BRUCE KIRK(also known as William Albert Jenkins); RICHARD
SHIERK LEETH (also known as James Robert Delaney); DALE STEWART KIRK
(also known as Donald Paterson); MICHAEL ALAN BOCKOFF; DONNA JANE
SCHLINKERT(also known as Donna Jane Paterson); VALERIE ELIZABETH SCOTT
ROBYN ANNE GUNDERS; PAUL JOSEPH DONOVAN; TERRE REBECCA TUCKER and
CAROL ANN POWELL
No. QLD G175 of 1987
FED No. 141
Costs
24 FCR 528

COURT

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
Pincus J.(1)

CATCHWORDS

Costs - Customs Act - order for legal costs to be paid out of trust fund - numerous defendants - order permitting pooling of funds to pay legal costs - whether order beyond power - part of order deleted by consent - whether order beyond power can be restored.

Customs Act 1901, s.243E

HEARING

BRISBANE

#DATE 7:4:1989

Counsel for the applicant: S. Kiefel Q.C. with

D.R.G. Pestorius

Solicitors for the applicant: Director of Public Prosecutions

Counsel for the 2nd, 4th, 8th, 9th
and 10th respondents: A. Morris

Solicitors for the 2nd, 4th, 8th, 9th
and 10th respondents: Bailey & Bailey

Solicitor for the Official Trustee in
Bankruptcy: Australian Government Solicitor

ORDER

The court orders that the application made to discharge the order of 5 April 1989 be dismissed.

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

This is an application made to discharge an order I made recently - to be precise, on Wednesday - and is the latest of a series of applications and other proceedings by the defendants in this Court which have been principally concerned, directly or indirectly, with the question of solicitors' costs.

1. A large sum has been taken into control under the relevant provision of the Customs Act 1901, s.243E, for the purpose of providing a fund from which a pecuniary penalty might ultimately be obtained, as contemplated by the statute. The major part of the money which has been so taken into control has gone in costs, although a substantial amount, some hundreds of thousands of dollars, is still left.

2. A total of over a million dollars has been spent in costs; that may seem surprising in view of the fact that money has been applied, it appears, chiefly to pay for committal proceedings and the proceedings in this Court, which have themselves, directly or otherwise, mainly concerned the question of provision of funds for costs.

3. The present application, in its practical implications, has not been fully explained to me, but it is a reasonable inference that it relates to the problem that the relevant solicitors' sole remaining client in criminal proceedings (that is, the only one who is still defending the charge against him) has property which, although very substantial, is less than the whole sum left with the trustee. The solicitors wish, I infer, to have access to that whole sum with, presumably, the result that most of what is left may be expended.

4. While the conclusion to which I have come does not in any way depend upon questions of convenience or discretion, I feel obliged to say that those who framed the legislation might not have contemplated the funds taken into control being so rapidly expended in litigation, as has happened in this case. In fact, the legislation quite ignores the question of legal costs, and it seems to me unfortunate that it does so.

5. The immediate problem is one of the Court's power, and the legal point may be briefly explained. On 19 October 1987, Sheppard J. made an order pursuant to the provision I have mentioned, s.243E, under which control was taken of all the property of certain defendants. Under that order, paragraph 3(b), there was power in the Official Trustee to pay costs, but the order was so framed as to make it clear that the property of each several defendant was to be used only in relation to his or her respective legal expenses. On 14 January 1988 Spender J. varied Sheppard J.'s order by deleting the words which had the effect I have just mentioned. In particular, Spender J. deleted words reading "of his or her respective" from the order of Sheppard J., so as to permit a pooling of funds. The purpose and effect of this order of Spender J. were to permit the legal expenses of one defendant to be met out of property of another.

6. For substantive reasons, I set aside on Wednesday so much of Spender J.'s order as had that effect, not on the ground that it was beyond power. I am now asked to restore what I then deleted, by consent. I have had the advantage of looking at the transcript, from which the reasons which prompted Spender J. to make the order may be deduced. The question of power to make the order was not expressly dealt with by his Honour. In my respectful opinion, the order made by Spender J. was beyond power. Confronted with a similar problem, in an application I decided in relation to some of these defendants on 19 December 1988, I expressed doubts as to whether the Court had power to make an order to apply one defendant's property to meet another's expenses.

7. One reason for the doubts I then had was that the legislation, which has been held to be valid, has the effect of interfering in an important way with proprietary rights, in anticipation (to put it broadly) of the conviction of the property owners in question. The interference should not, on orthodox principles, be taken to be any more extensive than the terms the statute require. It would seem extraordinary for the legislature to provide that, pending the final disposition of proceedings brought under the relevant division of the Customs Act, property held for one defendant, not then convicted of any offence, could be ordered to be applied to the liabilities of another. The statute does not say this can happen, but it is implicit in the argument which Miss Kiefel Q.C. has put to me that, if there is consent, that can be ordered.

8. Section 243E(4)(c) reads as follows:
   

"Without limiting the power of the Court under

paragraph (2)(d), an order directing the Official Trustee to take control of property -

. . .

(c) may make provision for meeting the reasonable living and business expenses of the defendant out of that property, or out of a specified

part of that property."

1. I have, since the matter was before me yesterday, had some opportunity to reconsider the problem of jurisdiction which I discussed on 19 December 1988. On that occasion I did not have to reach a firm conclusion about it, but now I do.

2. This Court is not set up by Division 3 as an administrative agency to arrange such convenient dispositions of the funds held as it sees fit, or as may be agreed. It can deal with the funds only insofar as the statute on its proper construction permits. Once it is accepted, as it seems it must be, that the expression "that property" in s.243E(4)(c) means property of the defendant in question, it follows, prima facie, that an order purporting to allow the funds of A to be used to pay expenses of B is beyond power. I put aside the possibility that such an application of funds might be justified on the basis that the use of the funds of A to meet B's expense may be proper because A has a legal responsibility for the expenses of B.

3. The order of Spender J. was effective as long as it stood: Wilde v. Australian Trade Equipment Co. Proprietary Limited (1981) 145 CLR 590. But the relevant part of it, which, in my respectful opinion, was beyond power, has now been set aside; the difficulty is that the order I am asked to make would revive that part of Spender J.'s order which, in my opinion, was not authorised by the statute.

4. It should be added that if there were power to do so, I would, as a matter of prudence require some evidence that those defendants whose property is proposed to be expropriated have given what might be called an informed consent to that course. It has been clear to me that some of the applications to this Court have been in the interests of the solicitors as well as the clients, a point which has been commented on by counsel. In view of the history of the matter, I would not, if I had power to do so, take away the property of any of these defendants to meet another defendant's costs merely on a statement from the bar table.

5. However, that is by the way. Having again looked at the relevant provisions, I am of opinion there is no express provision entitling the Court to take the course of using the frozen fund owned by A to pay the expenses of B. The statute does not say that one can do that and unless there were clear words, or a necessary implication, one would not so read it.

6. I need hardly add that the fact that what is sought to be done is said to be consented to cannot give the Court jurisdiction; see for example Vol. 10 Halsbury para.718. The application made to discharge the order made on Wednesday, 5 April 1989 is therefore dismissed.