Commissioner of the Australian Federal Police v Pitman and Anor (Ruling as to costs)

[2024] VCC 223

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

COMMON LAW DIVISION

Revised
Not Restricted
Suitable for Publication

CONFISCATION LIST

Case No. CI-22-02031

IN THE MATTER of the Proceeds of Crime Act (2002) (Cth)

and

IN THE MATTER of the suspects Debbie Louanne Pitman and Michael Murray

and

IN THE MATTER of an application by the Commissioner of the Australian Federal Police under s180 of the Proceeds of Crime Act 2002 (Cth)

and

IN THE MATTER of an application for costs against Michael Murray

BETWEEN:

THE COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE	Applicant
v
DEBBIE LOUANNE PITMAN	First Respondent
and
MICHAEL MURRAY	Second Respondent

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JUDGE:	HER HONOUR JUDGE HINCHEY
WHERE HELD:	Melbourne
DATE OF HEARING:	28 February 2024
DATE OF JUDGMENT:	28 February 2024 (ex tempore)
CASE MAY BE CITED AS:	Commissioner of the Australian Federal Police v Pitman and Anor (Ruling as to costs)
MEDIUM NEUTRAL CITATION:	[2024] VCC 223

RULING AS TO COSTS
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Subject:PROCEEDS OF CRIME – COSTS

Catchwords:              Restraining order – applications for examination – application for “quarantining orders” – “interim” quarantining orders sought pending outcome of relevant Court of Appeal decision – applications for quarantining orders ultimately withdrawn – application by Commissioner for costs – application resisted – relevant principles

Legislation Cited:      Proceeds of Crime Act 2002 (Cth), s180, s266A(2)(b); County Court Act 1958, s78A

Cases Cited:AFP v Li & Ors (Ruling) [2002] VCC 868; Commissioner of the Australian Federal Police v Yang [2023] VSCA 271; Commonwealth v Helicopter Resources Pty Ltd (2020) 270 CLR 523; R v Independent Broad-based Anti-corruption Commissioner (2016) 256 CLR 459; Commissioner of the Australian Federal Police v Opal Storm Pty Ltd [2018] VSCA 301

Judgment:                  Application by Commissioner for costs dismissed.  Application by respondents for costs of the Commissioner’s costs application granted.

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APPEARANCES:	Counsel	Solicitors
For the Applicant	Ms S Jacobson	Australian Federal Police Criminal Assets Litigation
For the Respondents	Mr S Ginsbourg	Radovic Lawyers Pty Ltd
The first respondent appeared in person

HER HONOUR:

Introduction and background

1In an application for examination orders under s180 of the Proceeds of Crime Act 2002 (“the POCA”) made in this matter on 6 April 2023 (the examination applications”), the Commissioner of the Australian Federal Police (“the Commissioner”) sought examination orders in respect of Mr Michael Jones, Mr John Vointin, Ms Kirsty Marshall, Ms Christine McMaster and Ms Debbie Louanne Pitman.

2By way of Grounds of Opposition filed by Ms Pitman and a Statement of Position (subsequently adopted during oral submissions) filed by Mr Murray, both Ms Pitman and Mr Murray informed this Court of their intention to seek non-disclosure orders (referred to as “quarantining orders”), in respect of any examination order made in accordance with the examination application.

Proposal by Mr Murray for interim resolution of the issues between the parties

3In pursuit of an interim resolution of the issues between the parties, in submissions made on behalf of Mr Murray, it was proposed that what have now been referred to as “interim” quarantining orders be put in place (“the interim order”), pending the hearing of an appeal against the decision of Judge Dyer in AFP v Li & Ors (Ruling).[1]The case name of the matter in the Court of Appeal is Commissioner of the Australian Federal Police v Yang,[2] a matter now referred to by all parties as “Yang”. 

[1] [2022] VCC 868

[2] [2023] VSCA 271 (“Yang”)

4This solution was specifically proposed on behalf of Mr Murray as a way in which all parties could avoid incurring the costs associated with pursuing the contested examination application.  Given the short timeframe within which it was known that the Yang matter would be heard and likely determined, it was submitted that the interim order would not prejudice the Commissioner, since it would specifically allow for the proposed examinations to proceed, and would only have the effect of “quarantining” the use to which the answers from those examinations could be put, until the outcome of Yang was known.

5At a directions hearing which took place on 21 June 2023, the issue of resolution of the matter by the making of the interim order by consent, was again raised by Senior Counsel for Mr Murray.  Once again, it was contemplated that the interim order could be revisited upon the hearing and determination of Yang by the Court of Appeal.  Senior Counsel for Mr Murray specifically relied upon the avoidance of costs in support of this proposal.  This matter was raised in open court and discussed between the parties during a short adjournment of the directions hearing, by way of an attempt to negotiate a resolution of the examination applications.

Commissioner seeks timetable for filing documentation and hearing date

6Following the short adjournment, Senior Counsel for the Commissioner of the AFP indicated to the Court that as his instructions presently stood, there was “no prospect” of the Commissioner acceding to the making of the interim order as proposed by Mr Murray and Ms Pitman.  That submission was made on the basis that there is existing and binding High Court Authority which would compel the Court of Appeal to decide Yang in a manner which would be unfavourable to the position being advocated for by the Murray and Pitman parties. 

7The Court was informed that the Commissioner wished for the Court to set down a timetable for the contested examination application, which would include the parties drafting and filing documentation in anticipation of there being a contested hearing on 15 November 2023. 

8There being no negotiated resolution of the examination applications, by orders dated 21 June 2023, timetabling orders as requested by the Commissioner were made by this Court.  Those orders, including the requirement to file extensive documentation, were complied with by Mr Murray and Ms Pitman.  The documentation included a voluminous court book.  That resulted in the parties being required to incur costs prior to Yang being decided by the Court of Appeal.

The decision in Yang and the resolution of the examination applications

9The decision in Yang was handed down by the Court of Appeal on 9 November 2023.  On 14 November 2023, Mr Murray and Ms Pitman withdrew their applications for quarantining orders and conceded that examination orders should be made as proposed by the Commissioner. 

10That resulted in orders being made by this Court on 15 November 2023, which included the examination orders, and orders dismissing Mr Murray and Ms Pitman’s various applications.

11On the same date, the Commissioner made an application for his costs, including reserved costs, against Mr Murray and Ms Pitman (“the Commissioner’s costs application”). 

12Mr Murray and Ms Pitman indicated that they would be resisting the Commissioner’s costs application, and sought time to put in written submissions in relation to that matter.

13Due to recent engagement and unavailability of Ms Pitman’s legal representative, only the Commissioner’s application for costs against Mr Murray proceeded at the hearing which is the subject of this ruling.

Power to order costs

14It is accepted by the parties that pursuant to s78A of the County Court Act 1958, this Court has a wide discretion to make orders in relation to the costs of and incidental to all proceedings heard by the Court.[3]

[3]Further, it was accepted by both parties that the decision of Commissioner of the Australian Federal Police v Opal Storm Pty Ltd [2018] VSCA 301 at paragraphs [17], [20], [47] and [70]-[74], had applicability to considerations arising in this case

Submissions made by the Commissioner

15In relation to the Commissioner’s costs application, the Commissioner submits that in circumstances where the relevant applications were withdrawn the day prior to the special fixture listed on 15 November 2023 and were ultimately dismissed by orders dated 15 November 2023, costs should follow the event. 

16In addition, Senior Counsel for the Commissioner submitted:

“All the Yang decision was ever going to determine was whether or not personal concerns which were raised by Ms Yang were matters which could be taken into account when deciding whether to make a quarantining order, and that was never the grounds of the application in this case.   The grounds of the application in this case was that Ms Pitman and Mr Murray were contending that the examination of other people could prejudice their right to a fair trial … all the Court says in relation to this is to note what the High Court has held on at least two occasions, in the IBAC decision, and the Helicopter Resources decision that that proposition has been rejected.   So for that reason, the Court of Appeal decision was never going to change the legal landscape in relation to this because the Court of Appeal was always bound by what the High Court had said on that topic.”[4]

[4]Reference was made by both parties to the effect of the decisions in Commonwealth v Helicopter Resources Pty Ltd (2020) 270 CLR 523 at paragraph [22]; R v Independent Broad-based Anti-corruption Commissioner (2016) 256 CLR 459 at paragraphs [46]-[51]

17As to any prejudice to the Commissioner that would have occurred if the interim order had been made, at the hearing of the Commissioner’s costs application this day, Counsel for the Commissioner indicated her instructions that:

“It would cause prejudice and change the way the POCA investigation and examinations are conducted and use of examination product.[[5]] There would need to be in place extensive compliance and record keeping obligations, and subject to audit. There would also be uncertainty about how long s266A(2)(b) orders would be in place eg. If the matter was appealed to the High Court.”

[5]I took this to be a reference to the content of the answers to the questions which are posed to examinees during the examination process

Submissions made by Mr Murray

18In response, Counsel for Mr Murray submitted:

(a)   first, that in circumstances where Mr Murray had proposed an interim solution which would have avoided the parties incurring any costs at all, while it may have been open to the Commissioner to adopt the stance that he did (namely to insist that a timetable for exchange of material and a hearing date be set), it was not reasonable in the circumstances for the Commissioner to do so;

(b)   second, the proposal for interim quarantining orders was reasonable in circumstances where it was contemplated that they would only be in force for a matter of months;

(c)   third, notwithstanding the submissions made by the Commissioner as to the futility of the appeal, it was reasonable for Mr Murray to await the outcome of Yang, since there had never before been any intermediate appellate court authority that confined the operation of s266A(2)(b) of the POCA to the companion principle. In particular, “it was unresolved prior to Yang whether the grounds for orders pursuant to s 266A(2)(b) were co-extensive with the ‘companion principle’ (so called because it is a ‘companion principle to the onus of proof borne by the prosecution, namely, that an accused cannot be compelled to assist the prosecution in discharging that onus’) … .”;

(d)   last, that neither of the High Court authorities relied upon by the Commissioner, specifically dealt with the interpretation of any proceeds of crime legislation.

19In those circumstances, it was submitted on behalf of Mr Murray, not only that the Commissioner’s costs application should be refused, but also that the Commissioner should be ordered to pay Mr Murray’s costs of the Commissioner’s costs application.

Analysis and discussion

20Having considered all of the evidence in this matter, together with the written and oral submissions made on behalf of the Commissioner and Mr Murray, I am satisfied that while it was open to the Commissioner to adopt the position that he did in insisting on having a timetable set for a contested hearing in relation to the examination application, it was unreasonable in the circumstances for him to have done so. 

21That is because it had been proposed (by way of negotiation between the parties) on behalf of Mr Murray, that interim quarantining orders be put in place, which would not have prevented the Commissioner from proceeding with the proposed examinations.  It was proposed that the existence of the interim quarantining orders be re-visited once the Yang decision was handed down.  This was anticipated to be (and in fact was), a matter of months after the proposal was raised in June 2023.  Had this proposal been acceded to by the Commissioner, all of the costs which have now been incurred, would have been avoided. 

22Despite the submission made at the hearing this day as to matters of prejudice which would have arisen had such quarantining orders been made, in the limited circumstances of this case, I am not satisfied that the Commissioner would in fact have suffered any, or any significant, prejudice, had the interim order been made as proposed.

23In particular, I note that putting in place special administrative arrangements is a natural incidence to any quarantining order that may be made in any case.  It is true that in this case, there would have been numerous interim quarantining orders made, nevertheless, there is no evidence before me that this would have caused an unreasonable burden for the Commissioner to administer.  Further, it was contemplated that the interim order would be revisited following delivery of the decision in Yang – thus any prejudice identified at that time, for example from the existence of an appeal or proposed appeal – could have been raised by the Commissioner and considered by the Court at that time.

24Lastly, I accept the submission made on behalf of Mr Murray that until the Yang decision was handed down, there had never before been any intermediate appellate court authority that confined the operation of s266A(2)(b) of the POCA to the companion principle, and therefore, it was unresolved whether the grounds for orders pursuant to s266A(2)(b) were “co-extensive” with the companion principle. This matter went to the heart of the application made by Mr Murray for quarantining orders in this case.

Conclusion and orders

25Taking each of these matters into account, I do not consider it appropriate to grant the Commissioner’s application for costs in this matter.  Thus, the Commissioner’s application for costs is refused.

26Further, in circumstances where it can be seen that Mr Murray did everything in his power to avoid the parties incurring costs, I consider it appropriate to grant Mr Murray’s costs of the Commissioner’s application for costs, save for any costs thrown away by reason of the numerous adjournments leading up to today’s hearing.

27I will hear to parties as to appropriate form of orders.

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