Commissioner of the Australian Federal Police v WEN
[2017] VSC 391
•4 JULY 2017
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
CONFISCATION AND PROCEEDS OF CRIME LIST
S Cl 2016 03702
IN THE MATTER of the Proceeds of Crime Act 2002 (Cth)
and
IN THE MATTER of the suspects, Phillip WEN, Jun JI, Yu XIAO, Bei XIE, Xiao YAN-YE and Wei Min YE
and
IN THE MATTER of property suspected to be proceeds and/or an instrument of a serious
offence
and
IN THE MATTER of an application by the COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE
and
IN THE MATTER of Hongying YUAN
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JUDGE: | RIORDAN J | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 6 APRIL 2017 | |
DATE OF JUDGMENT: | 4 JULY 2017 | |
CASE MAY BE CITED AS: | COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE v WEN AND ORS | |
MEDIUM NEUTRAL CITATION: | [2017] VSC 391 | First Revision: 24 August 2017 |
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PROCEEDS OF CRIME – Order for examination – Principles to be applied in exercising discretion to make an order for examination discussed – Whether examination is for a substantially collateral purpose?
COMPULSORY EXAMINATION OF SUSPECT – Non-disclosure of compulsorily acquired material – Principles of statutory interpretation and principles of non-disclosure in relation to compulsory examinations discussed – Risk of prejudice to a fair trial – Should a non-disclosure order be made with respect to the examination of the person suspected of (but not charged with) a criminal offence?
COMPULSORY EXAMINATION OF NON-SUSPECT – Use of material compulsorily acquired from a third party in the prosecution of another person – Should a non-disclosure order be made with respect to the examination of the person not suspected of a criminal offence – Do the fundamental principle and companion rule protect an accused person from the use of material compulsorily acquired from a third party? – Proceeds of Crime Act 2002 (Cth) s 266A considered.
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APPEARANCES: | Counsel | Solicitors |
| For Wen and Xiao | Mr S K McGregor with Ms K N Phair | Galbally & O’Bryan Lawyers |
| For Ye | Mr T P Mitchell | Tony Hargreaves & Partners Lawyers |
| For Yan-Ye | Mr C G Juebner | Madison Branson |
| For Ji, Xie and Yuan | Mr M Amad (6 April 2017) and Ms E H Ruddle (Written submissions) | Amad & Amad Lawyers |
| For Australian Federal Police | Mr N J O’Bryan SC with Ms C F Gobbo | Commissioner for the Australian Federal Police |
Cases considered
A v Maughan (2016) 50 WAR 263
Azzopardi v The Queen (2001) 205 CLR 50
Commissioner of the Australian Federal Police v Cacu (2015) 300 FLR 194
Commissioner of the Australian Federal Police v Cacu [2017] NSWCA 5
Commissioner of the Australian Federal Police v Elzein [2017] NSWCA 142
Commissioner of the Australian Federal Police v Kaur (2016) 311 FLR 44
Commissioner of the Australian Federal Police v Mah (2014) 242 A Crim R 184
Commissioner of the Australian Federal Police v McGlone [2016] NSWCA 103
Commissioner of the Australian Federal Police v Zhao (2015) 255 CLR 46
Construction, Forestry, Mining and Engineering Union v Boral Resources (Vic) Pty Ltd (2015) 256 CLR 375
Dietrich v The Queen (1992) 177 CLR 292
Director of Public Prosecutions (Cth) v Chan (2004) 150 A Crim R 163
Director of Public Prosecutions (Cth) v Galloway [2017] VSCA 120
Hammond v Commonwealth (1982) 152 CLR 188
Lam v Commissioner of the Australian Federal Police [2017] VSCA 9
Lee v Director of Public Prosecutions (Cth) (2009) 75 NSWLR 581
Lee v New South Wales Crime Commission (2013) 251 CLR 196
Lee v The Queen (2014) 253 CLR 455
Mansfield v Director of Public Prosecutions (WA) (2006) 226 CLR 486
R v CB [2011] NSWCCA 264
R v Independent Broad-based Anti-corruption Commissioner (2016) 256 CLR 459
R v OC (2015) 90 NSWLR 134
R v Seller (2013) 273 FLR 155
R v Seller (2015) 89 NSWLR 155
Ruzehaji v Commissioner of the Australian Federal Police (2015) 124 SASR 355
Woolmington v Director of Public Prosecutions (UK) [1935] AC 462
X7 v Australian Crime Commission (2013) 248 CLR 92
Zanon v Western Australia (2016) 50 WAR 1
Zhao v Commissioner of the Australian Federal Police (2014) 43 VR 187
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TABLE OF CONTENTS
Cases considered................................................................................................................................ 1
Procedural history.............................................................................................................................. 3
Powers of examination and disclosure under the PoC Act........................................................ 4
Should the Court make an examination order?......................................................................... 12
Parties’ submissions................................................................................................................... 12
Consideration.............................................................................................................................. 14
Should the Court make an order prohibiting the disclosure of information obtained from the examination?............................................................................................................................... 19
Parties’ submissions................................................................................................................... 19
The Authorities............................................................................................................................ 21
Cases considering whether a statute permits compulsory examinations.......................... 21
X7......................................................................................................................................... 21
Lee No 1.............................................................................................................................. 26
R v IBAC.............................................................................................................................. 27
Elzein................................................................................................................................... 29
Application......................................................................................................................... 30
Cases considering disclosure of the content of compulsory examinations....................... 30
Lee No 2.............................................................................................................................. 30
Zhao..................................................................................................................................... 34
R v OC................................................................................................................................. 35
Zanon................................................................................................................................... 36
McGlone.............................................................................................................................. 38
Maughan............................................................................................................................. 40
Seller No 1........................................................................................................................... 42
Seller No 2........................................................................................................................... 44
Galloway............................................................................................................................. 45
Cases considering the effect of disclosure on third parties.................................................. 47
Cacu..................................................................................................................................... 47
Ruzehaji.............................................................................................................................. 50
Should a protective order be made under s 266A(2) of the PoC Act with respect to the examination of the Suspects?............................................................................................................................... 58
Should a protective order be made under s 266A(2) of the PoC Act with respect to the examination of the Yuan?..................................................................................................................................... 59
Orders................................................................................................................................................. 61
HIS HONOUR:
By an application filed 24 February 2017, the Commissioner of the Australian Federal Police (‘the Commissioner’) seeks orders pursuant to ss 180, 180A and/or 180B of the Proceeds of Crime Act 2002 (Cth) (‘PoC Act’) for the examination of:
(a) Phillip Wen (‘Wen’);
(b) Jun Ji (‘Ji’);
(c) Yu Xiao (‘Xiao’);
(d) Bei Xie (‘Xie’);
(e) Xiao Yan-Ye also known as Xiaoyan Ye and Xiao Yan Ye (‘Yan-Ye’); and
(f) Wei Min Ye (‘Ye’)
(together ‘the Suspects’).
By further application dated 22 March 2017, the Commissioner also seeks an order pursuant to ss 180, 180A and/or 180B of the PoC Act for the examination of Hongying Yuan (‘Yuan’).
Each of the Suspects are suspected of, but have not been charged with, engaging in conduct with possession of inside information contrary to s 1043A of the Corporations Act 2001 (Cth) (‘the alleged insider trading conduct’).
The suspicion arises from the following circumstances:
(a)Between 22 July 2016 and 29 July 2016, a large volume of shares in an Australian Stock Exchange listed public company, Vitaco Holdings Ltd (‘Vitaco’), were purchased through share trading accounts in the name of Xiao, Xie and Yan-Ye at prices between approximately $1.60 and $1.80 per share.
(b)On 4 August 2016, Vitaco made a price-sensitive announcement to the Australian Stock Exchange that Vitaco’s directors had recommended a scheme of arrangement for the proposed takeover of Vitaco by a Chinese consortium.
(c)Between 4 August and 16 August 2016, Xiao, Xie, and Yan-Ye (and/or Ye) sold Vitaco shares at between $2.11 and $2.13 per share.
On the grounds set out in the affidavit of Federal Agent Malcom Scott sworn 9 September 2016, Scott deposes to the following suspicions:
(a)Xiao, Xie and Yan-Ye purchased and sold the shares in Vitaco while in possession of inside information.[1]
(b)The account of Yan-Ye was in fact operated during the relevant times by Ye who physically undertook the trading.[2]
(c)The inside information about the proposed takeover of Vitaco was acquired by Wen and Ji who caused other persons to deal in the shares of Vitaco contrary to s 1043A(1) of the Corporations Act or communicated it to other persons who they knew would acquire shares in Vitaco contrary to s 1043A(2) of the Corporations Act.[3]
(d)Wen and Xiao are in a domestic relationship;[4] and Ji and Xie are in a domestic relationship.[5]
(e)The following accounts hold funds representing the proceeds of the sale of the Vitaco shares:
(i) Account #4170 in the name of Xiao;
(ii) Account #2224 in the name of Ji and Xiao;
(iii) Account #4024 in the name of Wen;
(iv) Account #2746 in the name of Yuan; and
(v) Account #4003 and Account #5850 in the name of Yan-Ye.[6]
[1]Affidavit of Federal Agent Malcolm Scott sworn 9 September 2016, [31] (‘Scott affidavit’).
[2]Ibid [59].
[3]Ibid [45].
[4]Ibid [48].
[5]Ibid [49].
[6]Ibid [16].
Procedural history
By application dated 9 September 2016, the Commissioner sought restraining orders under ss 18 and 19 of the PoC Act against suspected property of the Suspects.
By order made on 12 September 2016, Macaulay J restrained any person from disposing or dealing with the property specified in the order, other than in accordance with that order.
On 10 October 2016, the Commissioner applied for forfeiture orders under s 47 and pecuniary penalty orders under s 134 of the PoC Act.
On 16 February 2017, there was a further forfeiture order application under s 49 of the PoC Act.
The Suspects made the following applications:
(a)On 7 October 2016, Wen applied for an exclusion pursuant to s 31 of the PoC Act, which was withdrawn by consent on 6 March 2017.
(b)On 7 October 2016, Xiao applied for an exclusion pursuant to s 31 of the PoC Act, which was withdrawn by consent on 6 March 2017.
(c)On 7 February 2017, Wen applied for exclusion from forfeiture and for compensation pursuant to ss 74, 78, 94 and 94A of the PoC Act.
(d)On 7 February 2017, Xiao applied for exclusion from forfeiture and for compensation pursuant to ss 74, 78, 94 and 94A of the PoC Act.
(e)On 1 March 2017, Ji and Yuan applied for exclusion pursuant to s 31; and exclusion from forfeiture and compensation pursuant to ss 74 and 78 of the PoC Act.
(f)On 8 March 2017, Yan-Ye applied for exclusion pursuant to s 31; and exclusion from forfeiture and compensation pursuant to ss 74 and 78 of the PoC Act.
By application dated 24 February 2017, the Commissioner applied for the examination of the Suspects; and by application dated 22 March 2017, the Commissioner applied for examination of Yuan. These are the applications before me.
Powers of examination and disclosure under the PoC Act
The relevant powers of a court to make an order for examination of a person are contained in ss 180, 180A and 180B of the PoC Act, which relevantly provide as follows:
180 Examination orders relating to restraining orders
(1)If a restraining order is in force, the court that made the restraining order, or any other court that could have made the restraining order, may make an order (an examination order) for the examination of any person, including:
(a)a person whose property is, or a person who has or claims an interest in property that is, the subject of the restraining order; or
(b)a person who is a suspect in relation to the restraining order; or
(c)the spouse or de facto partner of a person referred to in paragraph (a) or (b);
about the affairs of a person referred to in paragraph (a), (b) or (c).
…
180AExamination orders relating to applications for exclusion from forfeiture
(1)If an application for an order under section 73 or 94 for an interest in property to be excluded from forfeiture is made, the court to which the application is made may make an order (an examination order) for the examination of any person including:
(a)a person who has or claims an interest in the property; or
(b)the spouse or de facto partner of a person referred to in paragraph (a);
about the affairs of a person referred to in paragraph (a) or (b).
…
180B Examination orders relating to applications for compensation
(1)If an application for an order under section 77 or 94A (which deal with compensation) is made in relation to an interest in property that has been or may be forfeited, the court to which the application is made may make an order (an examination order) for the examination of any person including:
(a)a person who has or claims an interest in the property; or
(b)the spouse or de facto partner of a person referred to in paragraph (a);
about the affairs of a person referred to in paragraph (a) or (b).
…
Provisions relating to the disclosure of compulsorily acquired material are contained in ss 193 and 266A of the PoC Act and provide as follows:
193 Approved examiner may restrict publication of certain material
(1) The approved examiner may:
(a) on his or her own initiative; or
(b)at the request of the person being examined, or the responsible authority;
give directions preventing or restricting disclosure to the public of matters contained in answers given or documents produced in the course of the examination.
(2)In deciding whether or not to give a direction, the approved examiner is to have regard to:
(a) whether:
(i) an answer that has been or may be given; or
(ii)a document that has been or may be produced; or
(iii) a matter that has arisen or may arise;
during the examination is of a confidential nature or relates to the commission, or to the alleged or suspected commission, of an offence against a law of the Commonwealth or a State or Territory; and
(b)any unfair prejudice to a person’s reputation that would be likely to be caused unless the approved examiner gives the direction; and
(c)whether giving the direction is in the public interest; and
(d) any other relevant matter.
266A Disclosure
(1) This section applies if a person obtains information:
(a) as a direct result of:
(i)the person being given a sworn statement under an order made under paragraph 39(1)(ca), (d) or (da); or
(ii)the exercise of a power (by the person or someone else), or performance (by the person) of a function, under Part 3‑1, 3‑2, 3‑3, 3‑4 or 3‑5; or
(b)as a result of a disclosure, or a series of disclosures, under this section.
(2)The person may disclose the information to an authority described in an item of the following table for a purpose described in that item if:
(a)the person believes on reasonable grounds that the disclosure will serve that purpose; and
(b)a court has not made an order prohibiting the disclosure of the information to the authority for that purpose.[7]
[7]Emphasis added. PoC Act s 266A(2)(b) was added with effect from 1 March 2016 following the High Court’s decision in Commissioner of the Australian Federal Police v Zhao (2015) 255 CLR 46 (‘Zhao’). See [80]–[82] below.
Recipients and purposes of disclosure Item Authority to which disclosure may be made Purpose for which disclosure may be made 1 Authority with one or more functions under this Act Facilitating the authority’s performance of its functions under this Act 2 Authority of the Commonwealth, or of a State or Territory, that has a function of investigating or prosecuting offences against a law of the Commonwealth, State or Territory Assisting in the prevention, investigation or prosecution of an offence against that law that is punishable on conviction by imprisonment for at least 3 years or for life 2A Authority of a foreign country that has a function of investigating or prosecuting offences against a law of the country Assisting in the prevention, investigation or prosecution of an offence against that law constituted by conduct that, if it occurred in Australia, would constitute an offence against a law of the Commonwealth, or of a State or Territory, punishable on conviction by imprisonment for at least 3 years or for life 2B Authority of a State, or a self‑governing Territory, that has a function under a corresponding law of the State or Territory Any one or more of the following purposes:
(a) engaging in proceedings under that corresponding law;
(b) engaging in proceedings for the forfeiture of things under a law of that State or Territory;
(c) deciding whether to institute proceedings of a kind referred to in paragraph (a) or (b)
2C Authority of a foreign country that has one or more of the following functions:
(a) investigating or prosecuting offences against a law of the country;
(b) identifying, locating, tracing, investigating or confiscating proceeds or instruments of crime under a law of the country
Assisting in identification, location, tracing, investigation or confiscation of proceeds or instruments of crime, if the identification, location, tracing, investigation or confiscation could take place under this Act, or under a corresponding law of a State or a self‑governing Territory, if the proceeds or instruments related to an offence against a law of the Commonwealth, State or Territory 3 Australian Taxation Office Protecting public revenue
Limits on use of information disclosed
(3)In civil or criminal proceedings against a person who gave an answer or produced a document in an examination, none of the following that is disclosed under this section is admissible in evidence against the person:
(a) the answer or document;
(b) information contained in the answer or document.
(4) Subsection (3) does not apply in:
(a)criminal proceedings for giving false or misleading information; or
(b) proceedings on an application under this Act; or
(c) proceedings ancillary to an application under this Act; or
(d) proceedings for enforcement of a confiscation order; or
(e)civil proceedings for or in respect of a right or liability the document confers or imposes.
Note: Subsections (3) and (4) reflect section 198.
(5)In a criminal proceeding against a person who produced or made available a document under a production order, none of the following that is disclosed under this section is admissible in evidence against the person:
(a) the document;
(b) information contained in the document.
(6)Subsection (5) does not apply in a proceeding under, or arising out of, section 137.1 or 137.2 of the Criminal Code (false or misleading information or documents) in relation to producing the document or making it available.
Note: Subsections (5) and (6) reflect subsection 206(2).
(7)To avoid doubt, this section does not affect the admissibility in evidence of any information, document or thing obtained as an indirect consequence of a disclosure under this section.
Relationship with subsection 228(2)
(8) To avoid doubt:
(a)this section does not limit subsection 228(2) (about a search warrant authorising the executing officer to make things seized under the warrant available to officers of other enforcement agencies); and
(b) subsection 228(2) does not limit this section.
Additional means to control disclosure of compulsorily acquired documents or information are provided in ss 188 and 319 of the PoC Act:
188 Examination to take place in private
(1) The examination is to take place in private.
(2)The approved examiner may give directions about who may be present during the examination, or during a part of it.
(3) These people are entitled to be present at the examination:
(a) the approved examiner;
(b) the person being examined, and the person’s lawyer;
(c) the responsible authority;
(d)any person who is entitled to be present because of a direction under subsection (2).
319 Stay of proceedings
(1)A court may stay proceedings (the POCA proceedings) under this Act that are not criminal proceedings if the court considers that it is in the interests of justice to do so.
(2)The court must not stay the POCA proceedings on any or all of the following grounds:
(a)on the ground that criminal proceedings have been, are proposed to be or may be instituted or commenced (whether or not under this Act) against the person subject to the POCA proceedings;
(b)on the ground that criminal proceedings have been, are proposed to be or may be instituted or commenced (whether or not under this Act) against another person in respect of matters relating to the subject matter of the POCA proceedings;
(c) on the ground that:
(i)a person may consider it necessary to give evidence, or to call evidence from another person, in the POCA proceedings; and
(ii)the evidence is or may be relevant (to whatever extent) to a matter that is, or may be, at issue in criminal proceedings that have been, are proposed to be or may be instituted or commenced (whether or not under this Act) against the person or any other person;
(d)on the ground that POCA proceedings in relation to another person have been, are to be or may be stayed.
(3)Paragraph (2)(a) applies even if the circumstances pertaining to the POCA proceedings are or may be the same as, or substantially similar to, the circumstances pertaining to the criminal proceedings.
(4)Paragraph (2)(b) applies even if the subject matter of the POCA proceedings is the same as, or substantially similar to, the matter at issue in the criminal proceedings.
(5)Paragraph (2)(d) applies even if the staying of the POCA proceedings would avoid a multiplicity of POCA proceedings.
(6)In considering whether a stay of the POCA proceedings is in the interests of justice, the court must have regard to the following matters:
(a)that the POCA proceedings, and any criminal proceedings of a kind referred to in paragraph (2)(a) or (b), should proceed as expeditiously as possible;
(b)the cost and inconvenience to the Commonwealth of retaining property to which the POCA proceeding relates and being unable to expeditiously realise its proceeds;
(c)the risk of a proceeds of crime authority suffering any prejudice (whether general or specific) in relation to the conduct of the POCA proceedings if the proceedings were stayed;
(d)whether any prejudice that a person (other than a proceeds of crime authority) would suffer if the POCA proceedings were not stayed may be addressed by the court by means other than a stay of the proceedings;
(e)any orders (other than an order for the stay of the POCA proceedings) that the court could make to address any prejudice that a person (other than a proceeds of crime authority) would suffer if the proceedings were not stayed.
Note:Examples of orders the court could make to address any prejudice that a person (other than a proceeds of crime authority) would suffer if the POCA proceedings were not stayed include an order under section 319A (closed court) or an order prohibiting the disclosure of information.
The relevant division of the PoC Act:[8]
(a)makes it an offence to refuse to attend an examination,[9] to refuse to answer a question that the approved examiner requires the person to answer;[10] or to give false or misleading answers;[11] and
(b)abrogates privilege against self-incrimination[12] and provides that the evidence given is not admissible in proceedings against the examinee (except in limited, and presently irrelevant specified circumstances).[13]
[8]Div 4 of pt 3-1 of ch 3.
[9]PoC Act s 195.
[10]Ibid s 196.
[11]Ibid s 197A.
[12]Ibid s 197.
[13]Ibid s 198.
In summary, ss 180, 180A and 180B empower the court to make an order for the examination of any person about the affairs of the following persons:
(a) If a restraining order is in force:
(i)the person who has or claims an interest in the property the subject of the restraining order;
(ii) a person who is a suspect; and
(iii)the spouse or de facto partner of the persons referred to in parts (i) and (ii).
(b)If there is an application for an interest in property to be excluded from forfeiture, a person who has or claims an interest in the property or a spouse or a de facto partner of such person.
(c)If there is an application for compensation in relation to an interest in property that has been forfeited, the person who has or claims an interest in the property or a spouse or de facto partner of such person.
On this application, there is no issue that:
(a)the Commissioner is a responsible authority empowered by s 182 of the PoC Act to make an application for an examination order;
(b)each of the Suspects and Yuan are persons who may be the subject of an order for examination under the above sections; and
(c)under one or other of ss 180, 180A and 180B, the examination that each of the respondents will undergo will be about their own affairs and the affairs of one or more of the other respondents.[14]
[14]Affairs is defined in s 338 of the PoC Act as follows:
“affairs” of a person includes, but is not limited to:
(a)the nature and location of property of the person or property in which the person has an interest; and
(b)any activities of the person that are, or may be, relevant to whether or not the person has engaged in unlawful activity of a kind relevant to the making of an order under this Act.
Should the Court make an examination order?
Parties’ submissions
There is no issue between the parties that, if the Court made an examination order, it should be in the form as set out below in sub-paras 2, 5, 8, 11, 14, 17 and 20 of [135] below.
Mr McGregor and Ms Phair, who appeared as counsel for Wen and Xiao, submitted that the Court should not exercise its discretion to order the examination because their clients were subject to a concurrent examination pursuant to the Australian Securities and Investments Commission Act 2001 (Cth) (‘ASIC Act’).
On 22 September 2016, Wen and Xiao were examined following service of a notice pursuant to s 19 of the ASIC Act which had been served on 12 September 2016.[15] The affidavit of Federal Agent Scott discloses that the Australian Securities and Investment Commission (‘ASIC’) has provided information to the Criminal Assets Confiscation Team of the Australian Federal Police (‘AFP’). The ASIC investigation is ongoing.
[15]Affidavit of Paul Galbally sworn 30 March 2017, [25]-[28].
The extent of the common areas of interest between the ASIC investigation and the proposed examination was cross-referenced in a table exhibited to the affidavit of Paul Galbally sworn 30 March 2017.
It was submitted that, as the table demonstrates that there is substantial correlation between the areas of interest identified by the AFP and the areas in respect of which ASIC has examined his clients, there is a risk of prejudice to the clients arising from inconsistent answers and the Court should not order the further examination.
Mr Mitchell, who appeared as counsel for Ye, submitted that, if the applicant establishes there are adequate grounds, the Court has discretion to grant an examination order where it is ‘necessary’. He submitted that the application was premature because the Commissioner before whom the examination would be conducted had applied for the transcript of the compulsory examination of Ye by ASIC. After the transcript is analysed, it may be that there are no ‘real questions as to the true position with respect to the source and ownership of property that is subject to a restraining order or property which might be the proceeds of crime’.[16]
[16]Lam v Commissioner of the Australian Federal Police [2017] VSCA 9 [38] (Tate, Beach and Ferguson JJA).
Mr Juebner, who appeared as counsel for Yan-Ye, submitted that his client did not oppose an order for her examination provided that the Court ordered that the Commissioner was prohibited from disclosing the information arising out of the examination to any State or Commonwealth authority that has a function of investigation or prosecuting offences against the law of the Commonwealth, State or Territory.
Similarly, Mr Amad, who appeared as solicitor for Ji, Xie and Yuan, only objected to the examinations proceeding in the absence of a condition restricting its publication.
Ms Ruddle, who made further written submissions on behalf of Ji, Xie and Yuan conceded that each of her clients fell within the scope of an order under s 180 of the PoC Act. However, she noted that the order is discretionary and the Commissioner bears the onus of proof and that, if orders were made permitting an examination, protective orders should also be made.
Ms Ruddle further submitted with respect to Yuan that, despite the fact there was no evidence of a suspicion that Yuan was involved in criminal offences, a prohibition order under s 266A(2)(b) of the PoC Act should also be made because:
(a)the Commissioner conceded at the hearing of this application that charges are likely to be forthcoming; but the exact details of who will be charged and what charges they will face are yet to be disclosed; and
(b)the restriction was necessary to avoid prejudice to the Suspects.[17]
[17]Citing Commissioner of the Australian Federal Police v McGlone [2016] NSWCA 103 [134]–[135] (‘McGlone’) and Commissioner of the Australian Federal Police v Kaur (2016) 311 FLR 44, 57 [46], 63 [67]–[70] (J Forrest J) (‘Kaur’).
Mr O’Bryan SC, who appeared as counsel for the AFP, submitted that there was a clear forensic purpose for the examination of each of the Suspects and Yuan because there were real questions with respect to the suspected criminality, the connection of the criminal conduct with the restrained property and the provenance of that property. He further submitted as follows:
(a)The six criteria set out by J Dixon J in Commissioner of the Australian Federal Police v Mah[18] do not include potential disclosure by the Commissioner under s 266A. Accordingly, any such process cannot be relevant to the exercise of examination discretion under Part 3-1.
(b)The table exhibited to the affidavit of Mr Galbally demonstrated that there remained ‘numerous important areas of investigation and inquiry that had not been apparently inquired into by ASIC’.
(c)As ASIC was performing a different function which focussed on the companies and securities markets, it could be reasonably inferred that its examination would focus on different aspects than an examination under the PoC Act.
[18] (2014) 242 A Crim R 184, 191 [28].
Consideration
The key purpose of the PoC Act is to deprive persons of the proceeds of offences by confiscation.[19] Property is deemed to be the proceeds of an offence if it is wholly or partly derived or realised (whether directly or indirectly), from the commission of an offence.[20]
[19]PoC Act s 5.
[20]Ibid s 329.
The PoC Act establishes a scheme to confiscate the proceeds of crime. Section 6 explains that the scheme is to achieve its objects by:
(a) the processes of confiscation, set out in ch 2;
(b)the obtaining of information relevant to these processes by Commonwealth law enforcement agencies, set out in ch 3; and
(c) the related administrative matters, set out in ch 4.
Section 8 sets out five ways that ch 3 provides for obtaining information and relevantly includes ‘Examining any person about the affairs of people covered by examination orders (see Part 3-1)’.[21]
[21]Ibid s 8(1)(a).
As the purpose of such examinations is to facilitate the confiscation of the proceeds of crime, the preconditions to the making of examination orders under ss 180, 180A, 180B, 180C, 180D, 180E and 181 demonstrate how the examinations are to be applied for that purpose. The preconditions with respect to the sections (‘the preconditions’), which are relevant to this application, are:
(a) a restraining order is in force (s 180(1));
(b)an application has been made for an interest in property to be excluded from forfeiture (s 180A(1)); and
(c)an application has been made for compensation in relation to an interest in property that has been or may be forfeited (s 180B(1)).
In my opinion, the above provisions demonstrate that the purpose of the examinations is to enable information to be gathered to assist the responsible authority in obtaining the forfeiture orders; and to resist exclusion orders and compensation orders.
Accordingly, relevant matters properly the subject of examination would include the following:
(a) Whether a relevant crime has been committed?
(b) Whether the relevant property is the proceeds of a relevant crime?
(c)Whether an applicant for an exclusion order or compensation has a specified interest in the property?
In my opinion, if an applicant satisfies the Court, on the balance of probabilities,[22] of the existence of the relevant preconditions and that the purpose of a proposed examination is to ascertain relevant matters in furtherance of the objects of the PoC Act, prima facie the Court should exercise its discretion and make an order for the examination. Of course, if the Court considers that the application for the examination has a substantial purpose, other than the furtherance of the objects of the PoC Act, the application would usually be refused. Substantial, in this sense, means that ‘no attempt would have been made to exercise the power but for the desire to achieve the [other] purpose’.[23]
[22]Kaur (2016) 311 FLR 44, 56 [42] (J Forrest J).
[23]DPP (Cth) v Galloway [2017] VSCA 120 [196] (Maxwell P, Redlich and Beach JJA) (‘Galloway’).
In my opinion, this is, in substance, no different from a conclusion that the examination is ‘necessary’[24] or that there are ‘real questions as to the true position with respect to the source and ownership of property subject to a restraining order and, possibly other property which might be the proceeds of crime’.[25]
[24]DPP (Cth) v Chan (2004) 150 A Crim R 163, 168 [26] (Crispin J).
[25]Lee v DPP (Cth) (2009) 75 NSWLR 581, 594 [51] (Basten JA, Macfarlan JA and Sackville AJA) as cited with approval in Lam v Commissioner of Australian Federal Police [2017] VSCA 9 [38] (Tate, Beach and Ferguson JJA).
In Director of Public Prosecutions (Cth) v Chan,[26] Crispin J considered the meaning of s 32 of the PoC Act which provides:
The Court must not hear an application to exclude specified property from the restraining order if:
(a) the restraining order is in force; and
(b)the [DPP] has not been given a reasonable opportunity to conduct [an examination of the applicant].
[26](2004) 150 A Crim R 163.
The DPP applied for an order under s 180 of the PoC Act. His Honour dismissed the application for an examination on the basis that the DPP had failed to establish ‘adequate grounds for the order’. In particular, he relied upon the following:
(a)He was unable to discern from the affidavit material ‘what issue arises from the affairs of the first respondent that need to be investigated’.
(b)The examination of the respondent, whom it was suspected had committed an offence, would enable questions to be asked ‘to which he or she may not be entitled to decline to answer on the ground of self-incrimination, and that such an investigation may therefore place that person in a position of considerable prejudice’.[27]
[27]Ibid 169 [27].
Although his Honour commented that the affidavit material did ‘not seem to substantially address the question of why an examination of this particular person is necessary’,[28] I do not consider that he was intending to suggest that, before an order could be made under s 180 of the PoC Act, the applicant must establish that the examination is necessary in the sense that, without it, the confiscation proceeding would fail. Rather, I consider that his Honour considered that an application for an examination should be refused if it was not needed for the applicant to properly pursue the objects of the PoC Act.
[28]Ibid 169 [26] (emphasis added).
I note that in Lam v Commissioner of Australian Federal Police[29] the Court of Appeal noted the applicant’s submission that the Commissioner had to establish that an application was ‘necessary’ on the authority of Director of Public Prosecutions (Cth) v Chan.[30] However, in the analysis, their Honours stated that the applicant was required to show ‘adequate grounds for the order’; but did not suggest that it was incumbent on the applicant to establish necessity.[31]
[29][2017] VSCA 9 (Tate, Beach and Ferguson JJA).
[30]Ibid [31].
[31]Ibid [38].
I do not accept that the fact that the Suspects have been compulsorily examined by ASIC (or that many of the topics, identified as being relevant in the affidavit of Federal Agent Scott, have been the subject of questions in the ASIC examinations) is a basis for refusing the application for an examination order under the PoC Act. I reach that conclusion for the following reasons:
(a)Although it would be expected that the ASIC examination would cover similar areas to the proposed examination under the PoC Act, I accept the applicant’s submission that the purposes of the respective examinations are quite distinct and accordingly the focus of the examinations may be quite different. In particular, the ASIC examination may not have been particularly focussed on tracing the proceeds of the alleged insider trading conduct to the accounts subject to the restraining orders.
(b)Even accepting the table exhibited to the affidavit of Mr Galbally at face value, it demonstrates that a number of the proposed areas of examination under the PoC Act have not been dealt with in the ASIC examinations. If the transcripts of the ASIC examinations are made available to the applicant and the approved examiner conducting the examinations under the PoC Act, the approved examiner should be able to ensure that the examination is not conducted in an unnecessarily oppressive manner by the repetition of information already provided. Of course, there may be good reason for the approved examiner wanting to retrace areas about which the Suspects have already been examined by ASIC.
(c)Although the burden of proving that the proposed examination under the PoC Act is bona fide for the purpose of the PoC Act rests with the applicant, I do not consider it appropriate that the applicant be required to specifically identify, before this Court, the questions it proposes to ask and the information it may seek to obtain from the proposed examination for the purposes of establishing that the ASIC examinations have not covered the field.
I am satisfied that the applicant proposes to examine the respondents for the bona fide purpose of getting information to facilitate the furthering of the objects of the PoC Act. Accordingly, I will make the order in the form agreed.
Should the Court make an order prohibiting the disclosure of information obtained from the examination?
Parties’ submissions
Counsel for each of the Suspects and Yuan submitted that, if an examination order was made under Part 3-1 of the PoC Act, a further order should be made prohibiting the disclosure of information obtained in the examinations and, in particular, to any person who might be involved in the prosecution of any of the Suspects or Yuan.
On behalf of the applicant it was submitted that:
(a)a non-disclosure order should not be made because the Suspects and Yuan have not been charged; and
(b)R v Independent Broad-based Anti-corruption Commissioner[32] was authority for the proposition that the companion principle did not extend to a person who had not been charged.
[32](2016) 256 CLR 459 (‘R v IBAC’).
Further, it was submitted as follows:
(a)The decision of the New South Wales Court of Criminal Appeal in R v OC[33] was authority for the proposition, in similar circumstances, that the transcript of an examination of an accused person, who was compulsorily examined pursuant to s 19 of the ASIC Act, could be provided to the officers of the Commonwealth Director of Public Prosecutions (‘the CDPP’) responsible for the prosecution.
(b)Although the Court was there considering information obtained under the ASIC Act, ‘it is the same as AFP information, because the same coercive powers are being exercised’.
(c)Section 198 of the PoC Act provides appropriate protections for the Suspects in the event that related criminal proceedings are commenced.
[33](2015) 90 NSWLR 134.
In the alternative, it was submitted that the Commissioner would undertake to give the respondents 14 days’ notice prior to any disclosure to enable them to make an application for non-disclosure orders.
The respondents submitted that s 266A(2)(b) of the PoC Act empowered the Court to make non-disclosure orders and that such an order should be made in this case for the following reasons:
(a)R v OC[34] was distinguishable because s 49 of the ASIC Act empowered ASIC to consider the examination transcript in deciding whether criminal proceedings should be commenced. Accordingly, the Court found that there was an implied statutory authorisation to provide the transcripts to the CDPP officers responsible for the prosecution so that the admissibility of such statements could be considered. It was submitted that there was no equivalent provision in the PoC Act.
(b)The intention of the PoC Act is to afford the responsible authority a forensic advantage. However, that forensic advantage must be limited to a forensic advantage in respect to applications under the PoC Act, but not any other potential proceedings.
(c)In the absence of a non-disclosure order, there is a real risk that there will be use of derivative evidence which could not have been obtained, or the significance of which could not have been appreciated, but for the compulsorily obtained evidence.
(d)A non-disclosure order is consistent with the Commissioner’s position as stated in Zhao,[35] being that use of the powers under the PoC Act is not regarded as an ‘arm of the prosecution’.
(e)Absent a non-disclosure order, the examination material may prejudice the respondents if they are charged with a criminal offence. Reference was made to the statements of Hayne and Bell JJ in X7 v Australian Crime Commission.[36]
(f)The High Court decision of Lee v The Queen[37] establishes that the provision of coercively obtained material to prosecuting authorities would prejudice the fair trial of those persons who might be subsequently charged.
[34]Ibid.
[35](2015) 255 CLR 46, 60 [45].
[36](2013) 248 CLR 92, 142–3 [124] (‘X7’).
[37](2014) 253 CLR 455 (‘Lee No 2’).
Counsel for the applicant replied submitting that the decision in Lee No 2 was distinguishable on the following bases:
(a)The coercively obtained examination material was provided to the prosecuting authorities after the accused had been charged.
(b)The coercively obtained examination material was provided in breach of a non-disclosure direction.
The Authorities
The proliferation of legislation authorising compulsory examinations and purporting to remove an examinee’s right to refuse to answer on the grounds of self-incrimination has resulted in substantial judicial consideration of whether such examinations are permitted in circumstances where the fair trial of an examinee might be prejudiced.
Cases considering whether a statute permits compulsory examinations
X7
In X7,[38] the appellant had been arrested and charged with three indictable offences under the Criminal Code Act 1995 (Cth) sch 1 (‘Criminal Code’). After his arrest, but before his trial, X7 was summoned to appear and give evidence at an examination conducted under the Australian Crime Commission Act 2002 (Cth) (‘ACC Act’). The ACC Act:
(a)empowered an examiner to summon a person to appear and be compulsorily examined;
(b) specifically abrogated the privilege against self-incrimination; and
(c) conferred a direct use immunity.
[38](2013) 248 CLR 92.
With respect to the conduct of an examination and the publication of evidence, ss 25A(3) and 25A(9) of the ACC Act provided as follows:
(3)An examination before an examiner must be held in private and the examiner may give directions as to the persons who may be present during the examination or a part of the examination.
…
(9) An examiner may direct that:
(a) any evidence given before the examiner; or
(b)the contents of any document, or a description of anything, produced to the examiner; or
(c)any information that might enable a person who has given evidence before the examiner to be identified; or
(d)the fact that any person has given or may be about to give evidence at an examination;
must not be published, or must not be published except in such manner, and to such persons, as the examiner specifies. The examiner must give such a direction if the failure to do so might prejudice the safety or reputation of a person or prejudice the fair trial of a person who has been, or may be, charged with an offence.[39]
[39]Emphasis added.
On the first day of X7’s examination, after the examiner explained that any evidence given by X7 before the Australian Crime Commission (‘ACC’) would not be disclosed to prosecutors, X7 answered questions concerning the subject matter of the offences with which he had been charged. On the second day, X7 declined to answer questions on those matters; and he was informed that he would be charged with failing to answer questions. The examiner then gave a direction to X7 under s 25A(9) of the ACC Act, relevantly, that the evidence and the contents of documents produced during the examination (‘the compulsorily acquired material’) were not to be published or made available to prosecutors or police officers associated with the prosecution of the offences with which X7 had been charged.
X7 subsequently commenced proceedings in the original jurisdiction of the High Court seeking certain declarations and injunctions; and the matter proceeded as a case stated reserving, relevantly, the following questions for consideration by the Full Court:
Does Division 2 of Part II of the ACC Act empower an examiner appointed under s 46B(1) of the ACC Act to conduct an examination of a person charged with a Commonwealth indictable offence where that examination concerns the subject matter of the offence so charged?
Critical to the analysis of the members of the High Court in X7 was that the privilege against self-incrimination, which had been expressly abrogated by the ACC Act, was only one aspect of the right to silence of an accused or the right to not be compelled to assist the prosecution in discharging the onus of proving a criminal offence.[40] The so-called ‘right to silence’ is in fact ‘a convenient description of a collection of principles and rules: some substantive, and some procedural; some of long standing, and some of recent origin’, which differ in ‘incidence and importance, and also as to the extent to which they have already been encroached upon by statute’.[41]
[40]Ibid 123 [55] (French CJ and Crennan J), 140 [118] (Hayne and Bell JJ), 153 [159] (Kiefel J).
[41]Azzopardi v The Queen (2001) 205 CLR 50, 57 [7] (Gleeson CJ) cited in Lee v New South Wales Crime Commission (2013) 251 CLR 196, 313 [318] (Gageler and Keane JJ) (‘Lee No 1’).
Subsequently, in Lee No 1,[42] Gageler and Keane JJ identified the most pertinent principles and rules as the following:
(a)The right of any person to refuse to answer any question except under legal compulsion.
(b)The privilege of any person to refuse to answer any question at any time on the ground of self-incrimination.
(c)The right of any person who believes he or she is suspected of a criminal offence to remain silent when questioned by any person in authority about the occurrence of an offence, the identity of the participants and the roles which they played.
(d)The right of a person charged with a criminal offence to a fair trial, ‘more accurately expressed in negative terms as a right not to be tried unfairly or as an immunity against conviction otherwise than after a fair trial’.[43]
[42](2013) 251 CLR 196.
[43]Ibid 313 [318] quoting Dietrich v The Queen (1992) 177 CLR 292, 299 (Mason CJ and McHugh J). See also 326–8, 362.
In X7,[44] Hayne and Bell JJ (with whom Kiefel J substantially agreed) said that the protective actions taken by the examiner did not avoid prejudice to the accused because, even if the compulsorily acquired material was not available to the prosecution, his lawyer cannot test the prosecution case in a manner inconsistent with instructions, neither can counsel do so inconsistently with the accused person’s answers under oath in a compulsory examination.[45] Their Honours stated:
Even if the answer cannot be used in any way at the trial, any admission made in the examination will hinder, even prevent, the accused from challenging at trial that aspect of the prosecution case.[46]
[44](2013) 248 CLR 92.
[45]X7 (2013) 248 CLR 92, 127 [101] (Hayne and Bell JJ). See 152–3 [157] (Kiefel J agreeing).
[46]Ibid 127 [71] (Hayne and Bell JJ) (emphasis in original).
Hayne and Bell JJ concluded that a compulsory examination of an accused was not authorised by the ACC Act. In so concluding, their Honours reasoned as follows:
(a)A statutory provision, which permitted the compulsory examination of a person charged with an offence about the subject matter of the pending charge, would ‘effect a fundamental alteration to the process of criminal justice’.[47]
(b)By the application of the principle of legality, as a matter of statutory construction, a statutory provision would only be interpreted as effecting a fundamental alteration to the process of criminal justice if the legislature expressed itself ‘clearly by express words or necessary intendment’.[48]
(c)The legislature did not express itself with the necessary clarity as follows:
(i)The relevant provisions do not expressly provide for the compulsory examination of a person charged with an indictable Commonwealth offence.[49] The general words of s 25A(9) of the ACC Act about not prejudicing the fair trial of ‘a person who has been, or may be, charged with an offence’ could be read as extending to the examination of a person who has been charged. However, it could also properly be read (and have ‘ample work to do’) as having a more limited reference to the examination of a person, who may be suspected of wrongdoing; but who has not yet been charged.[50]
(ii)The legislative history of the ACC Act provided little or no assistance in dealing with the question of construction.[51]
(iii)The relevant provisions ‘when read in their context, do not imply, let alone necessarily imply, any qualification to the fundamentally accusatorial process of criminal justice which is engaged with respect to indictable Commonwealth offences’.[52]
[47]Ibid 140 [118].
[48]Ibid 140–1 [119]. See also 131–2 [86]–[87].
[49]Ibid 148–9 [142].
[50]Ibid 131 [83].
[51]Ibid 131 [84].
[52]Ibid 150 [147] (emphasis in original).
Kiefel J explained that the fundamental principle of the common law is ‘that the onus of proof rests on the prosecution [and] … its companion rule [is] that an accused person cannot be required to testify to the commission of the offence charged. The prosecution, in the discharge of its onus, cannot compel the accused to assist it’.[53]
[53]Ibid 153 [159].
The critical finding of Hayne and Bell JJ was that the relevant statutory provision fundamentally altered the accusatorial nature of the criminal justice system to a marked degree.[54] Accordingly, applying the principle of legality, the majority concluded that the legislature had failed to express an intention to make such a fundamental alteration with the ‘irresistible clearness’[55] necessary to effect such a change. Hayne and Bell JJ specifically eschewed the question of whether a compulsory examination about the subject matter of a pending charge would result in an ‘unfair’ trial;[56] and did not consider the provisions which provided protection for a fair trial under the ACC Act because it was neither appropriate nor necessary for the purpose of statutory construction.[57]
[54]Ibid 132 [87].
[55]Ibid 153 [158] (Kiefel J).
[56]X7 (2013) 248 CLR 92, 133 [89].
[57]See the explanation of X7 (2013) 248 CLR 92 in Lee No 2 (2014) 253 CLR 455, 466 [31] (French CJ, Crennan, Kiefel, Bell and Keane JJ).
The minority, French CJ and Crennan J, recognised the fundamental right of the accused not to be tried unfairly[58] and ‘the accusatorial nature of a criminal trial and the interrelationship between an accused’s right not to give evidence or answer incriminating questions on the one hand, and on the other, the fundamental principle … that the prosecution must prove the guilt of the prisoner is part of the common law … and no attempt to whittle it down can be entertained’.[59] However, their Honours interpreted the ACC Act as permitting the examination of X7, although he had been charged, because the safeguards provided by ss 25A(3) and (9) were ‘capable of preventing a compulsory examination from occasioning an unfair burden on the examinee when defending criminal charges’.[60]
[58]X7 (2013) 248 CLR 92, 116 [37].
[59]Ibid 119–20 [46] citing Woolmington v DPP (UK) [1935] AC 462, 481–2.
[60]X7 (2013) 248 CLR 92, 123 [57].
Lee No 1
The High Court gave further consideration to the power of the legislature to make provisions for compulsory examination of an accused in Lee No 1.[61]
[61](2013) 251 CLR 196 (French CJ, Hayne, Crennan, Kiefel, Bell, Gageler and Keane JJ).
This case concerned an application by the New South Wales Crime Commission to the New South Wales Supreme Court for orders to examine two persons who had been charged with various criminal offences under the Criminal Assets Recovery Act 1990 (NSW) (‘CAR Act’). Section 31D(1) of the CAR Act broadly provided that, on application for a confiscation order, the ‘affected person’[62] could be examined concerning the affairs of the affected person, including the nature and location of any property in which the affected person had an interest. The CAR Act abrogated the privilege against self-incrimination and provided a direct use immunity; but expressly did not provide an immunity with respect to derivative use.
[62]As defined by s 31D(4) of the CAR Act.
In three separate judgments, the majority[63] emphasised the fact that the conduct of the examination was subject to the supervision of the Supreme Court and therefore ‘the possibility that the implementation of the examination order might give rise to an interference with the administration of justice does not rise to the level of a real risk merely because the subject matter of the examination will overlap with the subject matter of pending criminal proceedings against the person to be examined’.[64] Gageler and Keane JJ, in a joint judgment, said that Hammond v Commonwealth[65] and X7[66] were not authority for the proposition that compulsory examination of a person, who has been charged, about matters including the subject of the relevant offence, necessarily or presumptively created a real risk to the administration of justice.[67]
[63](French CJ, Crennan J, and Gageler and Keane JJ).
[64](2013) 251 CLR 196, 321 [340] (Gageler and Keane JJ). Also see 221 [36], 223–4 [40]–[41], 227 [48], 230–1 [56] (French CJ); 254–5 [137], 255–6 [141], 258 [151] (Crennan J).
[65](1982) 152 CLR 188.
[66](2013) 248 CLR 92.
[67]Ibid 315 [322].
The minority consisting of Hayne, Kiefel and Bell JJ in separate judgments considered that the reasoning in X7[68] required that the CAR Act be interpreted as not permitting the examination of a charged person.
[68](2013) 248 CLR 92.
R v IBAC
In R v IBAC[69] the High Court considered whether a person suspected of an offence could be compulsorily examined under the Independent Broad-based Anti-corruption Commission Act 2011 (Vic) (‘IBAC Act’). The IBAC Act conferred power on the Independent Broad-based Anti-corruption Commission (‘IBAC’) to hold examinations for the purposes of an investigation under the IBAC Act. The appellants had been suspended on the basis that they were reasonably believed to have committed an assault on a person in their custody at the Ballarat Police Station. The alleged assault was the subject of an IBAC investigation.
[69](2016) 256 CLR 459.
The Court[70] rejected the submission that the companion principle should be extended to persons not being charged because such an extension would:
(a)‘extend its operation beyond the rationale identified in the authorities, namely, the protection of the forensic balance between prosecution and accused in the judicial process as it evolved in the common law’;[71]
(b)lead to uncertainty as to the extent of its operation;[72]
(c)require identification of the person who must have the requisite suspicion and the quality of suspicion necessary to invoke the application of the principle;[73] and
(d)fetter the pursuit of the objects of the IBAC Act.[74]
[70]French CJ, Kiefel, Bell, Keane, Nettle; Gordon and Gageler JJ.
[71]R v IBAC (2016) 256 CLR 459, 473 [48] (French CJ, Kiefel, Bell, Keane, Nettle and Gordon JJ).
[72]Ibid 473 [49].
[73]Ibid 473 [50].
[74]Ibid 473–4 [51].
Further, the section abrogating the privilege against self-incrimination operated on the basis that ‘in its absence, an examinee would be entitled to claim the privilege against self-incrimination. If the [section abrogating the privilege against self-incrimination] did not apply in relation to a person reasonably suspected of having committed an offence, it would have no work to do’.[75] This was because the privilege can only be claimed by a person who has a reasonable ground to apprehend that the answer is apt to incriminate him or her.[76]
[75]Ibid 474 [53] (emphasis added).
[76]Ibid.
Elzein
In Commissioner of the Australian Federal Police v Elzein,[77] the New South Wales Court of Appeal considered whether an examination ordered ex parte under s 180 of the PoC Act could proceed after the proposed examinees had been charged. The relevant facts were as follows:
(a)On 28 September 2015, the Commissioner obtained ex parte orders for the examination of (under s 180 of PoC Act), and provision of sworn statements (under s 39(1)) by, Ahmad Elzein, Abbas Elzein and Elzein’s Mixed Business Pty Ltd.[78]
(b)On 29 September 2015, Ahmad Elzein and Abbas Elzein were charged with offences under the Customs Act 1901 (Cth) and the Criminal Code.
(c)Ahmad Elzein and Abbas Elzein applied for the orders to be set aside and the application was referred to the New South Wales Court of Appeal.
[77][2017] NSWCA 142 [76] (Beazley ACJ, Basten JA and Simpson JA) (‘Elzein’).
[78]Restraining orders under s 18 of PoC Act had already been made.
After a detailed consideration of the provisions of the PoC Act, the Court held that the examinations could proceed despite the pending charges.[79] As Basten JA explained:
[T]he provisions [of the PoC Act] should be understood in their terms as allowing an examination order obtained ex parte to stand after criminal charges have been laid, even though the examination may go to the conduct alleged to constitute the offences and, if appropriate protective orders have been made under s 266A(2), the examination may, absent some other countervailing consideration, be allowed to proceed.[80]
[79][2017] NSWCA 142 [2] (Beazley ACJ), [54]–[55] (Basten JA), [163] (Simpson JA).
[80]Ibid [101] (Basten JA, with whom Beazley ACJ and Simpson JA agreed).
Basten JA said it was necessary to refer to the protections provided in the PoC Act to avoid ‘a level of derogation from the fairness of the criminal trial as to interfere with the essential characteristic of such a trial’ because ‘express attempts to provide protection will demonstrate that the Parliament has turned its attention to the scope and effect of the derogation from general law principles.’[81]
[81]Ibid [88].
Application
Accordingly, on the authority of R v IBAC,[82] as uncharged persons, the Suspects are unable to rely on an infringement of ‘the companion principle’ to support an interpretation that the PoC Act does not authorise an examination of the Suspects. Further, on the authority of Elzein,[83] even if the Suspects had been charged, properly interpreted the PoC Act ‘authorises an examination of a person subject to current criminal charges, with respect to matters related to the charges’.[84]
[82](2016) 256 CLR 459.
[83][2017] NSWCA 142 [76].
[84]Ibid [2] (Beazley ACJ).
However, I am here engaged in a different part of the process, namely consideration of the invocation of the protective powers under the PoC Act, and in particular, an order prohibiting the disclosure of compulsorily acquired material pursuant to s 266A of the PoC Act. The importance of such a provision is highlighted by the reliance on protective provisions by French CJ and Crennan J in X7,[85] French CJ, Crennan, Gageler and Keane JJ in Lee No 1;[86] and the New South Wales Court of Appeal in Elzein.[87] It was from the presence of such protective provisions that their Honours discerned a legislative intention to permit examination of accused persons because such safeguards were capable of protecting the examinee from an unfair trial, and avoiding an interference with the administration of justice and a fundamental departure to the accusatorial system of criminal justice.
[85]See [60] above.
[86]See n 64 above.
[87]See [71] above.
Cases considering disclosure of the content of compulsory examinations
Lee No 2
In Lee No 2,[88] the High Court considered an appeal from the same appellants as in Lee No 1.[89] The relevant facts[90] were as follows:
[88](2014) 253 CLR 455 (French CJ, Crennan, Kiefel, Bell and Keane JJ).
[89](2013) 251 CLR 196.
[90]A more detailed chronology is set out in Zanon v Western Australia (2016) 50 WAR 1, 23 [121] (McLure P) (‘Zanon’).
(a) Prior to:
(i) being charged with drug offences on 13 May 2010; and
(ii)the application for the examination under the CAR Act (which was the subject of Lee No 1[91]) on 10 June 2010,
[91](2013) 251 CLR 196.
the appellants were:
(i)charged with firearms offences on 7 December 2009, after the execution of a search warrant on that day during which police officers discovered two weapons, a quantity of white powder and a large amount of cash; and
(ii)compulsorily examined on 26 November 2009 and 1 and 16 December 2009 by the New South Wales Crime Commission (‘NSWCC’) under s 16(1) of the New South Wales Crime Commission Act 1985 (NSW) (‘NSWCC Act’). That Act empowered the NSWCC to compulsorily examine persons; but s 13(9) required the NSWCC to make a direction prohibiting the publication of evidence given before it where publication might prejudice the fair trial of a person who had been or might be charged with an offence.
(b)At the compulsory examinations, the Commissioner of the NSWCC made a non-publication direction with respect to one of the appellants but did not do so with respect to the second. On appeal, it was accepted by the Crown that a direction ought to have been made. As to this concession the High Court said: ‘That is clearly correct, as the supply of drugs charges were, at the time, anticipated’.[92]
(c)Contrary to the direction that was made, and the direction that should have been made, the transcripts of the appellants’ evidence before the Commission were sent by the Commission to the police and to the DPP.
(d)In May 2010, after the white powder found in the raid of 7 December 2009 was identified as containing an illegal drug, the appellants were charged with drug offences.
(e)On 16 March 2011, the appellants were found guilty of firearms and drug offences.
[92]Lee No 2 (2014) 253 CLR 455, 459 [6].
The High Court set aside the conviction and ordered a new trial restating the fundamental principle and the companion rule as follows:
Our system of criminal justice reflects a balance struck between the power of the State to prosecute and the position of an individual who stands accused. The principle of the common law is that the prosecution is to prove the guilt of an accused person. This was accepted as fundamental in X7. The principle is so fundamental that ‘no attempt to whittle it down can be entertained’ albeit its application may be affected by a statute expressed clearly or in words of necessary intendment. The privilege against self-incrimination may be lost, but the principle remains. The principle is an aspect of the accusatorial nature of a criminal trial in our system of criminal justice.
The companion rule to the fundamental principle is that an accused person cannot be required to testify. The prosecution cannot compel a person charged with a crime to assist in the discharge of its onus of proof.[93]
[93]Ibid 466–7 [32] (emphasis added) (citations omitted).
With respect to the effect of compulsory examinations on this fundamental principle, the Court said:
In X7, it was held that the compulsory examination of a person with respect to an offence with which the person stands charged would be a departure, in a fundamental respect, from that principle. X7 was ultimately concerned with questions of statutory construction. Nevertheless, the point it makes about what may amount to a fundamental departure from a criminal trial as it is comprehended by our system of criminal justice is relevant to this case. It is a breach of the principle of the common law, and a departure in a fundamental respect from a criminal trial which the system of criminal justice requires an accused person to have, for the prosecution to be armed with the evidence of an accused person obtained under compulsion concerning matters the subject of the charges. It cannot be said that the appellants had a trial for which our system of criminal justice provides and which s 13(9) of the NSWCC Act sought to protect. Rather, their trial was one where the balance of power shifted to the prosecution.[94]
[94]Ibid 471 [46] (citations omitted).
The Court also noted that it was significant that French CJ and Crennan J in X7 had reasoned ‘that the legislation, in providing for a direction regarding non-publication, did so in order to safeguard the examined person’s trial as fair’.[95]
[95]Ibid 466 [31].
While the High Court noted (as was conceded by the Crown) that the disclosure of the transcripts to the DPP was unlawful, it identified that ‘the critical question on these appeals is not whether the publication was unlawful and wrongful. It is whether, as a result of the prosecution being armed with the appellants’ evidence, there has been a miscarriage of justice in the eyes of the law’.[96]
[96]Ibid 469 [39].
Despite the fact that the New South Wales Court of Criminal Appeal had concluded there had been no ‘practical unfairness’, the High Court found as follows:[97]
(a)The appellants’ trial was altered in a fundamental respect by the prosecution having the appellants’ evidence before the Commission in its possession’.[98] Accordingly, the High Court concluded:
It cannot be said that the appellants had a trial for which our system of criminal justice provides and which s 13(9) of the NSWCC Act sought to protect. Rather, their trial was one where the balance of power shifted to the prosecution.[99]
(b)The wrongful conduct of the prosecution, involving the wrongful release and possession of the evidence, which was not authorised by the legislation altered the position of the prosecution vis-à-vis the accused and therefore the appellants’ convictions had to be quashed. This was a case where the wrongfulness of the conduct ‘raised questions of policy, rather than questions of unfairness to an accused’.[100]
[97]Ibid 469 [40].
[98]Ibid 470 [43].
[99]Ibid 471 [46].
[100]Ibid 472 [50].
In my opinion, the significance of the High Court’s decision is:
(a)the Court answered the ‘critical question’ by holding that the prosecution being ‘armed’[101] with the appellants’ evidence given in the coercive examination had effected a fundamental change to the appellants’ trial; and
(b)the fact that the arming was illegal meant that, as a matter of policy, a new trial must be ordered despite there being no ‘practical unfairness’.[102]
[101]Ibid 473 [51].
[102]Ibid 470 [43].
Zhao
In Zhao,[103] the High Court dismissed an appeal from the Victorian Court of Appeal,[104] which ordered proceedings be stayed forthwith under the PoC Act against the respondents until completion of the criminal proceedings against the second respondent. The relevant facts were as follows:
(a)On 2 July 2013, the second respondent was charged in the County Court of Victoria with offences against the Criminal Code.
(b)On the same day, the County Court of Victoria made an ex parte order under s 19 of the PoC Act restraining the disposition of the second respondent’s home and other assets.
(c)On 24 July 2013, the Commissioner applied for forfeiture of the restrained property pursuant to s 49 of the PoC Act against the respondents. The first respondent was not charged with any offence, but she was the registered proprietor of the family home.
(d)The respondents applied under s 73 of the PoC Act to exclude the family home and another residential unit from restraint and forfeiture; and to stay the forfeiture proceedings until completion of the criminal proceedings against the second respondent.
[103](2015) 255 CLR 46 (French CJ, Hayne, Kiefel, Bell and Keane JJ).
[104]Zhao v Commissioner of the Australian Federal Police (2014) 43 VR 187 (‘Zhao CoA’).
The High Court dismissed the appeal and upheld the stay, in summary, for the following reasons:
(a)The Court identified the question for determination as ‘whether the second respondent should be placed in a position where he must decide whether to prejudice his criminal trial or his defence of the forfeiture proceedings in his case in the exclusion proceedings’.[105]
(b)The issues in the forfeiture proceedings was substantially the same as the criminal proceedings.[106]
(c)Accordingly, the risk of prejudice to the second respondent if a stay was not granted was ‘plain’.[107]
[105]Ibid 55 [19].
[106]Ibid 50 [5].
[107]Ibid 59 [42].
Section 266A(2) was included as part of a suite of amendments[108] to overcome the perceived effect of Zhao.[109]
[108] Crimes Legislation Amendment (Proceeds of Crime and Other Measures) Act 2016 (Cth) sch 1.
[109]Elzein [2017] NSWCA 142 [67] (Basten JA), [160]–[161] (Simpson JA).
R v OC
In R v OC,[110] the New South Wales Court of Criminal Appeal allowed an appeal against the temporary stay of proceedings based on the dissemination of compulsorily acquired material to the CDPP. In summary, the facts were as follows:
(a)In 2009, the accused was compulsorily examined pursuant to s 19 of the ASIC Act in connection with an investigation carried out by ASIC under s 13(1) of the ASIC Act.
(b)The compulsorily acquired material was provided to the CDPP pursuant to ss 17, 18 and 27 of the ASIC Act. The compulsorily acquired material was relevant to the alleged insider trading conduct, which had been given in evidence under a claim of privilege during the compulsory examination.
(c)In 2013, the accused was charged with respect to the alleged insider trading, which was relevant to the answers he had given under a claim of privilege during the examination.
[110](2015) 90 NSWLR 134 (Bathurst CJ, RA Hulme and Bellew JJ).
Bathurst CJ[111] held as follows:
(a)The provision of the transcript of a s 19 examination to those responsible for the prosecution of an examinee fundamentally altered the accusatorial judicial process.
(b)A fundamental alteration of this nature by statute could only be by clear words or necessary intendment.[112]
(c)Although the ASIC Act did not expressly provide that persons involved in the prosecution of a person who had been compulsorily examined can have access to the transcript of the examination,[113] a review of the ASIC Act demonstrated that, as a matter of necessary implication, the CDPP officers responsible for the conduct of the proceedings were entitled to have access to the examination transcripts, not only to formulate charges, but to prosecute them.[114]
[111]With whom RA Hulme and Bellew JJ agreed. An application for special leave to appeal to the High Court was refused: OC v The Queen [2016] HCATrans 26.
[112]R v OC (2015) 90 NSWLR 134, 158 [97]–[99].
[113]Ibid 159 [103].
[114]Ibid 161 [119].
Zanon
In Zanon,[115] the Western Australian Court of Appeal dismissed appeals against conviction and sentence by Quaid and Zanon. Quaid’s grounds of appeal included the use by the Director of Public Prosecutions (WA) of material compulsorily acquired before he had been charged. The facts with respect to the relevant ground were as follows:
(a)On 8 April 2013, the police executed a search warrant issued under the Misuse of Drugs Act 1981 (WA) at Quaid’s premises and located approximately $233,000 in cash.
(b)After the search, Quaid was taken to the office of the Proceeds of Crime Squad where he was compulsorily examined pursuant to s 76 of the Criminal Property Confiscation Act 2000 (WA), which authorised compulsory examination and abrogated the rule against self-incrimination.
(c)On 17 April 2013, Quaid was charged with the drug offences.[116]
(d)On 23 April 2013, the video recording of the compulsory interview was obtained by the police and provided to the DPP on a disc on 11 June 2013.
(e)In 14 November 2014, Quaid and Zanon were convicted and sentenced for serious drug offences.
[115](2016) 50 WAR 1.
[116]Ibid 26 [137].
With respect to the ground based on the prosecution being provided with compulsorily obtained material, McLure P held as follows:[117]
(a)On the basis that the High Court in R v IBAC[118] offered no comment about the examination being made in public:
Prima facie, the effect of R v IBAC is that the companion principle has no application to information obtained under compulsion prior to the commencement of the prosecution of an offence.[119]
(b)However, as she considered there was ‘uncertainty’ about the matter, the President proceeded on the basis that the companion principle did apply after the interviewees had been charged and concluded that the Criminal Property Confiscation Act 2000 (WA) authorised the possession[120] and derivative use[121] of compulsorily acquired material by the police and the DPP.
[117]With whom Buss JA and Mitchell J agreed.
[118](2016) 256 CLR 459.
[119]Ibid 27 [144].
[120]Ibid 29 [151].
[121]Ibid 29 [158].
McGlone
In Commissioner of the Australian Federal Police v McGlone,[122] the New South Wales Court of Appeal considered an appeal from a refusal to make examination orders pursuant to s 180 of the PoC Act against Mr and Mrs McGlone and Mr McKell. The relevant facts were as follows:
(a)On 20 May 2013, Mr McGlone and Mr McKell were arrested and charged with drug offences and dealing with property reasonably suspected of being the proceeds of crime.
(b)On 4 November 2014, orders were made under the PoC Act restraining the money seized by the police at the time of the arrest of Mr McGlone and Mr McKell.
(c)On 6 July 2015, the trial judge refused an application by the Commissioner for the examination of Mr and Mrs McGlone and Mr McKell. Mrs McGlone had not been charged with any offence but the trial judge refused to make the examination order against her on the basis that:
(i)she might be the subject of criminal charges in the future;
(ii)to avoid a multiplicity of proceedings.
[122][2016] NSWCA 103 (Beazley P, Ward and Gleeson JJA) (‘McGlone’).
Beazley P dismissed the appeal against the refusal to order the examination of Mr McGlone and Mr McKell for the following reasons:[123]
[T]he subject of that questioning was likely substantially to overlap with the subject of the pending criminal charge under s 400.3(1) so as to make the examination order of no practical consequence if the examiner proceeded on that basis.[180]
His Honour continued:
In the Commissioner’s written summary of argument the respects in which it was suggested that the examiner might control the course of questioning and the disclosure of information were limited to the making of directions as to who may be present during the examination (s 188(2)); the referring of questions of law to the Court (s 192); and the giving of directions preventing or restricting disclosure (s 193). None of these outcomes would control or avoid the principal risk of prejudice identified by the primary judge. For these reasons ground 2 does not identify any material error of the primary judge.[181]
[177]Meagher JA, with whom Gleeson JA and Sackville AJA agreed.
[178]Cacu Appeal [2017] NSWCA 5 [73].
[179]Ibid [74].
[180]Ibid.
[181]Ibid agreeing with the observation of Adams J in Cacu First Instance (2015) 300 FLR 194, 215–6 [41].
Ruzehaji
In Ruzehaji v Commissioner of the Australian Federal Police,[182] the Full Court of the Supreme Court of South Australia held that a requirement for Mr Ruzehaji, who had been charged with drug offences, to attend an examination and the possible provision of the transcript to the AFP was not repugnant to Ch III of the Constitution. The Court further found there should not be a stay of the further examination on the ground of prejudice to Mr Ruzehaji. The facts relevant to the latter of those issues were as follows:
(a)On 28 November 2012, the District Court made orders ex parte restraining property alleged to belong to or under the control of Mr Ruzehaji and a related company, of which he was the sole director and shareholder (‘the appellants’). The Court also made an order for the examination of Mr Ruzehaji.
(b)On 17 January 2013, Mr Ruzehaji was charged with drug offences and, on 26 June 2013, an additional charge of dealing with money the proceeds of crime was added.
(c)On 25 March 2013, Mr Ruzehaji was examined pursuant to the examination order. The examiner made an order pursuant to s 193(1) of the PoC Act that the compulsorily acquired material should not be disclosed to any member of the public with the exception of the Commissioner and staff of the AFP and certain other specified persons.
(d)On 2 September 2013, the Commissioner filed an application for orders for the examination of six persons pursuant to s 180 of the PoC Act about the affairs of the appellants and, in respect of two of them, about their own affairs.
(e)On 9 September 2013, a further examination notice was served on Mr Ruzehaji.
(f)On 24 April 2014, the District Court made orders including an order refusing to set aside the examination order of Mr Ruzehaji and granting the Commissioner’s application to examine the six other persons concerning the appellants’ affairs.
[182](2015) 124 SASR 355 (Gray, Peek and Nicholson JJ) (‘Ruzehaji’).
On the hearing of the appeal before the Full Court, the Commissioner undertook that ‘any further examination [of Mr Ruzehaji] would not deal with the subject matter of the criminal proceedings’.[183]
[183]Ibid 357 [3] (Gray J).
The Full Court refused to grant a stay of the further examinations requested by the Commissioner. The reasons of Gray J[184] included the following:
[184]With whom Peek J and Nicholson J agreed.
(a) Mr Ruzehaji failed to demonstrate any specific prejudice because:
(i)his evidence did not descend to detail how he would be required to address matters directly relevant to the criminal charges (unlike the evidence in Zhao[185]); and
(ii)of the Commissioner’s undertaking.
(b)There was no evidence that Mr Ruzehaji would suffer prejudice if the other persons were examined because ‘his assertions in respect of self-incrimination have no application to examinations of other persons’.[186]
Principles of statutory interpretation and principles of non-disclosure relating to compulsory examinations
[185](2015) 255 CLR 46.
[186]Ruzehaji (2015) 124 SASR 355, 383 [92].
From the abovementioned authorities, the following principles can be distilled:
(a)If a power to conduct a compulsory examination is expressly or impliedly for limited purposes, the use of that power substantially for any other purpose is unlawful.[187]
(b)In circumstances where a compulsory examination would ‘effect a fundamental alteration to the process of criminal justice’, a statute will not be interpreted as authorising the examination of a person about an offence with which he has been charged, unless the statute so authorises such an examination expressly or by necessary intendment.[188]
[187]Galloway [2017] VSCA 120 [196] (Maxwell P, Redlich and Beach JJA).
[188]X7 (2013) 248 CLR 92, 140 [118] (Hayne and Bell JJ).
Necessary intendment may be more readily inferred in the following circumstances:
(a)Provisions are included in an Act, which may be applied to ‘avoid a level of derogation from the fairness of the criminal trial so as to interfere with an essential characteristic of such a trial’.[189] The presence of such provisions aids statutory interpretation because ‘express attempts to provide protection will demonstrate that the Parliament has turned its attention to the scope and effect of the derogation from general law principles’.[190] Such protective provisions may include that ‘statutory powers are conferred upon a court to be exercised judicially’,[191] particularly if the ‘powers include the power to take appropriate action to prevent injustice’.[192]
(b)If the restrictive interpretation would leave the relevant provision with no work to do.[193]
[189]Elzein [2017] NSWCA 142 [88] (Basten JA with whom Beazley ACJ and Simpson JA agreed).
[190]Ibid.
[191]Lee No 1 (2013) 251 CLR 196, 230–1 [56] (French CJ) citing Mansfield v DPP (WA) (2006) 226 CLR 486, 492 [10] (Gleeson CJ, Gummow, Kirby, Hayne and Crennan JJ); also see Lee No 1 (2013) 251 CLR 196, 221 [36], 223–4 [40]–[41], 227 [48] (French CJ); 254–5 [137], 255–6 [141], 258 [151] (Crennan J); 321 [340] (Gageler and Keane JJ).
[192]Lee No 1 (2013) 251 CLR 196, 223 [41] (French CJ).
[193]For example in X7 (2013) 248 CLR 92, Hayne and Bell JJ found that their restrictive interpretation of s 25A(9) left the section with ‘ample work to do in respect of the examination of persons who may be suspected of wrong-doing but who, before examination, have not been charged with any offence’: 131 [83]; Cf R v IBAC (2016) 256 CLR 459, 474 [53]; also see Construction, Forestry, Mining and Engineering Union v Boral Resources (Vic) Pty Ltd (2015) 256 CLR 375, 399 [76] (Nettle J).
The use of material acquired in a compulsory examination for the prosecution of charges against the examinee is:
(a)a breach of the fundamental principle of the common law which imposes the burden of proving the offence on the prosecution, ‘unaided by the accused’; and
(b)‘a departure in a fundamental respect from a criminal trial which the system of criminal justice requires an accused person to have’.[194]
Accordingly, it should not be permitted unless the statutory intention to effect such a departure is authorised by clear words or necessary intendment.[195]
[194]Lee No 2 (2014) 253 CLR 455, 471 [46] (French CJ, Crennan, Kiefel, Bell and Keane JJ).
[195]R v OC (2015) 90 NSWLR 134, 158 [97]–[99] (Bathurst CJ).
The prejudice, consequent on the prosecution being armed with compulsorily acquired material relevant to criminal charges, requires the courts to take action to avoid the improper advantage by:
(a) refusing an examination order;[196]
(b)ordering that the examination[197] or other proceedings under the PoC Act[198] be delayed until after the trial;
(c)accepting an undertaking that the examination would not deal with the subject matter of the criminal proceedings;[199]
(d)ordering that the trial,[200] or a new trial,[201] proceed with a prosecution team that is not privy to the compulsorily acquired material.
[196]McGlone [2016] NSWCA 103.
[197]Cacu Appeal [2017] NSWCA 5.
[198]Zhao (2015) 255 CLR 46.
[199]Ruzehaji (2015) 124 SASR 355.
[200]Seller No 1 (2015) 90 NSWLR 134; Galloway [2017] VSCA 120 (but see [108] above and [123(d)] below).
[201]Lee No 2 (2014) 253 CLR 455.
The fact that the compulsorily acquired material was obtained prior to the accused being charged does not prevent the fair trial being prejudiced by the advantage conferred on the prosecution. In my opinion, this conclusion is compelled by the decision in Lee No 2,[202] which the Victorian Court of Appeal explained as follows:
More recently, however, the High Court has spoken unanimously in Lee v The Queen[203] in terms which imply that, where the subject matter of forfeiture proceedings is substantially the same as the subject matter of criminal proceedings, unless the forfeiture proceedings are stayed until completion of the criminal proceedings, the Crown may be advantaged in a manner which fundamentally alters its position vis-à-vis the accused and therefore renders the trial of the criminal proceedings unfair.[204]
[202]See [73]–[79] above.
[203](2014) 253 CLR 455.
[204]Zhao CoA (2014) 43 VR 187, 204-205 [50] (Nettle, Tate and Beach JJA) (citation altered).
The fact that the focus is on the effect of the compulsorily acquired material on the trial, rather than on when it was obtained, is consistent with the following action taken by courts to ensure that, where a person was examined before being charged, their trial was fair:
(a) The new trial ordered in Lee No 2 after the unfair convictions were quashed.[205]
(b)The trial proceeding on the basis that the CDPP not use the compulsorily acquired material as in Seller No 1.[206]
(c) The exclusion of evidence in Seller No 2.[207]
(d)The endorsement of the Director’s proposal to change the prosecution team for the trial in Galloway.[208]
The fact that a fair trial requires such action is also consistent with the statement of Bathurst CJ in R v OC,[209] that the arming of the prosecution with the compulsorily acquired material, obtained before charges were laid, had ‘fundamentally alter[ed] the accusatorial judicial process’.[210]
[205](2014) 253 CLR 455, 473 [52].
[206](2013) 273 FLR 155, 185 [115] (Bathurst CJ, McClellan CJ at CL and Rothman J).
[207](2015) 89 NSWLR 155, 178 [123].
[208][2017] VSCA 120 [305].
[209](2015) 90 NSWLR 134 (Bathurst CJ, RA Hulme and Bellew JJ).
[210]Ibid 158 [97]–[99].
As was stated by Bathurst CJ in Seller No 1:[211]
The risk to a fair trial as envisaged by s 25A(9) and (11) is the same irrespective of when charges are brought. In the case of pre-charge dissemination the risk will only materialise when charges are in fact brought. That does not mean that courts may not take a different approach in assessing what, if any, relief should be given if the dissemination is pre or post-charge.[212]
[211](2013) 273 FLR 155 (Bathurst CJ, McClellan CJ at CL and Rothman J).
[212]Ibid 184 [105], agreeing with the statement of McClellan CJ at CL in R v CB [2011] NSWCCA 264 [111].
Although the Chief Justice states, ‘as envisaged by s 25A(9) and (11)’, in my opinion, the only differences in the risk of prejudice to a fair trial, in any circumstances, are:
(a)for those, who are not already charged, the risk will only materialise when charges are in fact brought; and
(b)different relief may be appropriate to avoid the risk of prejudice to the fair trial.
I recognise that the Western Australian Court of Appeal has held that:
(a)the effect of R v IBAC is that ‘the companion principle has no application to information obtained under compulsion prior to the commencement of the prosecution of an offence’;[213] and
(b)the approach of the plurality in R v IBAC[214] is only consistent with Lee No 2[215] being restricted to circumstances where the investigative material, which was compulsorily acquired, was provided to the prosecution in contravention of the statute authorising its acquisition.[216]
[213]Zanon (2016) 50 WAR 1, 27 [144]. McClure P suggested that a basis to reconcile Lee No 2 (2014) 253 CLR 455 with R v IBAC (2016) 256 CLR 459 was that one of the two accused in Lee No 2 (2014) 253 CLR 455 had been charged about firearm offences before being examined about the drugs offences; and the facts surrounding both types of offences were closely linked: Zanon (2016) 50 WAR 1, 27 [145].
[214](2016) 256 CLR 459.
[215](2014) 253 CLR 455.
[216]Maughan (2016) 50 WAR 263, 281–2 [63]–[64] (Martin CJ).
While it is accepted that:
(a)the companion principle does not apply to persons who have not been charged;[217] and
(b)unlike s 25A(9) of the ACC Act, s 266A(2) of the PoC Act does not require the Court to prohibit disclosure if the failure to do so might prejudice a fair trial;
the fundamental principle and companion rule will ‘materialise when charges are in fact brought’.[218] Accordingly, as a matter of statutory interpretation, because the PoC Act has provided discretionary powers to the Court to protect the examinations being used in a manner that might prejudice fair trials, the PoC Act does authorise examinations that might relate to the circumstances surrounding the subject of criminal offences.[219]
[217]R v IBAC (2016) 256 CLR 459, 473 [48].
[218]Seller No 1 (2013) 273 FLR 155, 184 [105] (Bathurst CJ, McClellan CJ at CL and Rothman J).
[219]Elzein [2017] NSWCA 142 [2] (Beazley ACJ), [54]–[55] (Basten JA), [163] (Simpson JA).
However, I consider, as a matter of discretion, it will usually be preferable to prohibit the disclosure of material, which is compulsorily acquired from an examinee, if:
(a) there is a real risk of him or her being charged; and
(b) such use of the material might prejudice his or her fair trial;
rather than the Court having to take retrospective protective measures such as those referred to at [123(c)–(d)].
In my opinion, the cases referred to at [123] require that courts take protective action to ensure that suspects, who are to be examined and are yet to be charged, are able to receive a fair trial if they are charged. With respect, I consider that the restricted interpretation of Lee No 2[220] adopted in Maughan,[221] which would permit derivative use of compulsorily acquired material against a subsequently charged examinee, is not consistent with the interpretation of Lee No 2[222] by:
(a) the Victorian Court of Appeal in Zhao CoA;[223] or
(b) the New South Wales Court of Criminal Appeal on R v OC.[224]
[220](2014) 253 CLR 455.
[221]Discussed at [92]–[95].
[222](2014) 253 CLR 455.
[223](2014) 43 VR 167, 204–5 [50] (Nettle, Tate and Beach JJA), see [122] above.
[224](2015) 90 NSWLR 134, 158 [97]–[98]. See [123] above. In Maughan (2016) 50 WAR 263, Martin CJ at 283 [66]–[68], acknowledged that R v OC (2015) 90 NSWLR 134 at [97]–[98] was inconsistent with his interpretation of Lee No 2 (2014) 253 CLR 455 but he considered that he was bound by his interpretation of the decision of the High Court in R v IBAC (2016) 256 CLR 459. See [95] above.
Further, I consider these conclusions to be consistent with the reasons of the High Court in Lee No 2,[225] in particular the following:
(a)Although the examinees had not been charged, charges were anticipated and therefore the direction under s 25(9) of the ACC Act should have been made – plainly because the failure to do so might prejudice the fair trial.[226]
(b)The critical question was not whether the publication was unlawful and wrongful; but rather ‘whether, as a result of the prosecution being armed with the appellants’ evidence, there has been a miscarriage of justice in the eyes of the law’.[227] The Court found that the disclosure to the prosecution of evidence obtained under compulsion constituted a fundamental departure from a criminal trial as comprehended by our system of criminal justice.[228] Accordingly, the unlawfulness and wrongfulness of the conduct was not relevant to the effect on the trial, although it did affect the appropriateness of a new trial being ordered, despite the finding of no practical unfairness.[229]
Should a protective order be made under s 266A(2) of the PoC Act with respect to the examination of the Suspects?
[225](2014) 253 CLR 455.
[226]Lee No 2 (2014) 253 CLR 455, 459 [6] (French CJ, Crennan, Kiefel, Bell and Keane JJ).
[227]Ibid 469 [39].
[228]Ibid 471 [46].
[229]Ibid 472–3 [50]–[51].
There was no issue between the parties that the Court has the power to make an order under s 266A(2)(b) of the PoC Act.[230] I propose to make an order restricting disclosure of the compulsorily acquired material from the Suspects for the following reasons:
[230]Cacu Appeal [2017] NSWCA 5 [47] (Meagher and Gleeson JJA and Sackville AJA); Kaur (2016) 311 FLR 44, 63 [68] (J Forrest J); Elzein [2017] NSWCA 142 [76] (Basten JA, with whom Beazley ACJ and Simpson JA agreed).
(a) The evidence, referred to in [4]–[5] above, establishes that:
(i)the investigation into the Suspects involvement in the alleged insider trading conduct is well advanced; and
(ii)there are strong grounds for suspicion that each of the Suspects has engaged in insider trading conduct. In my opinion, it is likely that some of the Suspects will be charged; and there is a real prospect that each of the Suspects will be charged with offences arising out of the alleged insider trading conduct.
(b)The circumstances surrounding the alleged insider trading conduct are likely to be substantially similar, if not identical, to the circumstances that will be the subject of the compulsory examination.
(c)The purpose of empowering the Court to prohibit disclosure is to protect compulsory examination material from being used in a manner that might prejudice a fair trial.[231] Similarly to the approach to be adopted with s 25A(9) of the ACC Act,[232] I consider that the Court should take a ‘careful approach’[233] in considering whether to exercise its power under s 266A(2)(b).
(d)Although, the approved examiner would have limited powers to control disclosure under ss 188(2) and 193(3) of the PoC Act, he or she would not have the power to prohibit a disclosure, which was otherwise in accordance with s 266A(2).[234]
Accordingly, in my opinion, there is a real prospect that the disclosure of material compulsorily acquired from each of the the Suspects to prosecuting authorities would prejudice a fair trial of that Suspect.
[231]Section 266A(2) of the PoC Act was amended by sch 1 of the Crimes Legislation Amendment (Proceeds of Crime and other Measures) Act 2015 as a consequence of the High Court’s decision in Zhao (2015) 255 CLR 46. See, Explanatory Memorandum, Crimes Legislation Amendment (Proceeds of Crime and other Measures) Bill 2015, 10–1 [41]–[52]. Also see the ‘Note’ to s 319 of PoC Act quoted at [14] above.
[232]See [124] above.
[233]Galloway [2017] VSCA 120 [196] (Maxwell P, Redlich and Beach JJA) citing Lee No 2 (2014) 253 CLR 455, 465–6 [28]–[29].
[234]Cacu Appeal [2017] NSWCA 5 [73] (Meagher and Gleeson JJA and Sackville AJA) agreeing with the observation of Adams J in Cacu First Instance (2015) 300 FLR 194, 215–6 [41].
I recognise that the Commissioner was prepared, if necessary, to give an undertaking not to disclose the compulsorily acquired information except on the giving of 14 days’ notice. However, I do not consider that the undertaking should be accepted in substitution for an order prohibiting non-disclosure for the following reasons:
(a)Such an undertaking would not bind an approved examiner, the responsible authority, who is entitled to be present under s 188(3)(c), or any other person, who may be entitled to be present by reason of a direction under s 188(3)(d) of the PoC Act. The power to give directions about who may be present at the examination, under s 188(2), does not extend to excluding those who are entitled to be present.[235]
(b)The giving of notice would oblige the Suspects to take action to prohibit the disclosure. I propose to give the Commissioner liberty to apply so that, if a decision is made not to prosecute a Suspect or there is other good reason, the Commissioner may apply for the prohibition order to be discharged in whole or in part.
Should a protective order be made under s 266A(2) of the PoC Act with respect to the examination of the Yuan?
[235]Elzein [2017] NSWCA 142 [81] (Basten JA with whom Beazley ACJ and Simpson JA agreed).
In my opinion, the Court should not make an order restricting disclosure of the compulsorily acquired material from Yuan for the following reasons:
(a)There is no evidence that there is any real risk of Yuan being charged with an offence arising out of the alleged insider trading conduct.
(b)Although variously expressed, the right to silence,[236] the fundamental principle[237] and the companion rule,[238] all principally focus on the accusatorial nature of the criminal process and the onus on the prosecution to prove the criminal offences unassisted by the accused. I was unable to find any reference to these principles extending to the prosecution not being assisted by material that has been compulsorily acquired from others. Although it could be fairly said that the use of compulsorily acquired material from others has traditionally not been available to the prosecution, other forms of evidence compulsorily acquired from the exercise of powers of search and seizure, under warrant or subpoena, are common.[239]
(c)Section 266A of the PoC Act specifically authorises the compulsorily acquired material being used to -
Assist in the prevention, investigation or prosecution of an offence against that law that is punishable on conviction by imprisonment for at least 3 years or for life.[240]
Given that, as I have found, such material provided by the examinee should not be used to assist the prosecution against the examinee, this provision would have no work to do if material provided by the examinee could not be used in the prosecution of others.
(d)The Full Court of the Supreme Court of South Australia in Ruzehaji,[241] and Adams J in Cacu First Instance[242] both refused to make protective orders with respect to compulsorily acquired material from examinees, who had not been charged, on the basis that self-incrimination principles have no application to examinations of other persons. The New South Wales Court of Appeal in McGlone[243] did make the examination order on the condition that the material compulsorily acquired from Mrs McGlone would not be disclosed to persons involved in the prosecution; but the order was made without argument on the basis that the condition was offered by the Commissioner.[244]
(e)It is instructive that, although the Victorian Court of Appeal and the High Court in Zhao[245] stayed the proceeding to forfeit the interests in the jointly owned house of both the husband (who had been charged) and the wife (who had not been charged), the sole reason stated was to avoid a multiplicity of proceedings.[246] Neither Court made any reference to the proceeding against the wife being stayed because of unfairness arising out of the prosecution being armed with her compulsorily acquired material.
[236]Lee No 1 (2013) 251 CLR 196, 313 [318] (Gageler and Keane JJ). See also at 326–8, 362.
[237]Lee No 2 (2014) 253 CLR 455, 466–7 [32].
[238]See for example X7 (2013) 248 CLR 92, 153 [159] (Keifel J).
[239]Construction, Forestry, Mining and Engineering Union v Boral Resources (Vic) Pty Ltd (2015) 256 CLR 375, 389–90 [44] (French CJ, Kiefel, Bell, Gageler and Keane JJ).
[240]PoC Act s 266(2) item 2.
[241](2015) 124 SASR 355, 383 [92] (Gray, Peek and Nicholson JJ). See [115]–[117] above.
[242](2015) 300 FLR 194, 216 [43]. See [109]–[114] above. This decision was not the subject of the appeal in Cacu Appeal [2017] NSWCA 5 (Meagher and Gleeson JJA and Sackville AJA).
[243][2016] NSWCA 103 [135] (Beazley P, Ward and Gleeson JJA). See [87]–[91] above.
[244]A similar order was made in Kaur (2016) 311 FLR 44, 63 [69] (J Forrest J) on the basis it was ‘consistent with [the approach] taken recently by the NSW Court of Appeal in McGlone’. The Court does not appear to have been referred to the decisions of Ruzehaji (2015) 124 SASR 355 and Cacu First Instance (2015) 300 FLR 194.
[245](2015) 255 CLR 46.
[246]Ibid 61 [48]; Zhao CoA (2014) 43 VR 187, 209 [67] (Nettle, Tate and Beach JJA).
In the circumstances, I do not propose to make a prohibition order with respect to the material compulsorily acquired from Yuan. Of course, if Yuan was to be later the subject of charges, the Commissioner would need to ensure that procedures were put in place to ensure that any disclosure of such material did not prejudice the fair trial of Yuan.
Orders
Accordingly, I propose to make orders as follows:
1. In these orders, ‘compulsorily acquired material’ means
(a) the transcript of;
(b) any matter contained in answers given during the course of; and
(c) documents produced by the examinee at;
the relevant examination.
Philip WEN
2.Pursuant to ss 180, 180A and/or 180B of the PoC Act, Phillip WEN be examined about:
(a) his affairs;
(b) the affairs of Yu XIAO;
(c) the affairs of Jun JI;
(d) the affairs of Bei XIE;
(e) the affairs of Xiao YAN-YE (also known as Xiaoyan YE); and
(f) the affairs of Wei Min YE.
3. In respect of the examination conducted pursuant to order 2:
(a)no person involved in the investigation or prosecution of any alleged criminal offences in respect of which Phillip WEN is currently being investigated be present during the examination; and
(b)insofar as the examination relates to the investigation of alleged criminal offences committed by Phillip WEN, any compulsorily acquired material not be disclosed to any person involved in the investigation or prosecution of Phillip WEN.
4.Access to any compulsorily acquired material arising from the examination of Phillip WEN shall be restricted to members of the Criminal Assets Confiscation Taskforce and used only for the purpose of any proceedings under the PoC Act, including any information gathering and investigative activities and applications which are undertaken in relation to those proceedings (including current and future proceedings) and Counsel briefed to advise and appear and any expert engaged to give an opinion in those proceedings.
Yu XIAO
5.Pursuant to ss 180, 180A and/or 180B of the PoC Act, Yu XIAO be examined about:
(a) her affairs;
(b) the affairs of Phillip WEN;
(c) the affairs of Jun JI;
(d) the affairs of Bei XIE;
(e) the affairs of Xiao YAN-YE (also known as Xiaoyan YE); and
(f) the affairs of Wei Min YE.
6. In respect of the examination conducted pursuant to order 5:
(a)no person involved in the investigation or prosecution of any alleged criminal offences in respect of which Yu XIAO is currently being investigated be present during the examination; and
(b)insofar as the examination relates to the investigation of alleged criminal offences committed by Yu XIAO, any compulsorily acquired material not be disclosed to any person involved in the investigation or prosecution of Yu XIAO.
7.Access to any compulsorily acquired material arising from the examination of Yu XIAO shall be restricted to members of the Criminal Assets Confiscation Taskforce and used only for the purpose of any proceedings under the PoC Act, including any information gathering and investigative activities and applications which are undertaken in relation to those proceedings (including current and future proceedings) and Counsel briefed to advise and appear and any expert engaged to give an opinion in those proceedings.
Jun JI
8.Pursuant to ss 180, 180A and/or 180B of the PoC Act, Jun JI be examined about:
(a) his affairs;
(b) the affairs of Bei XIE;
(c) the affairs of Phillip WEN; and
(d) the affairs of Yu XIAO.
9. In respect of the examination conducted pursuant to order 8:
(a)no person involved in the investigation or prosecution of any alleged criminal offences in respect of which Jun JI is currently being investigated be present during the examination; and
(b)insofar as the examination relates to the investigation of alleged criminal offences committed by Jun JI, any compulsorily acquired material not be disclosed to any person involved in the investigation or prosecution of Jun JI.
10.Access to any compulsorily acquired material arising from the examination of Jun JI shall be restricted to members of the Criminal Assets Confiscation Taskforce and used only for the purpose of any proceedings under the PoC Act, including any information gathering and investigative activities and applications which are undertaken in relation to those proceedings (including current and future proceedings) and Counsel briefed to advise and appear and any expert engaged to give an opinion in those proceedings.
Bei XIE
11. Pursuant to s 180 of the PoC Act, Bei XIE be examined about:
(a) her affairs;
(b) the affairs of Jun JI;
(c) the affairs of Phillip WEN; and
(d) the affairs of Yu XIAO.
12. In respect of the examination conducted pursuant to order 11:
(a)no person involved in the investigation or prosecution of any alleged criminal offences in respect of which Bei XIE is currently being investigated be present during the examination; and
(b)insofar as the examination relates to the investigation of alleged criminal offences committed by Bei XIE, any compulsorily acquired material not be disclosed to any person involved in the investigation or prosecution of Bei XIE.
13.Access to any compulsorily acquired material arising from the examination of Bei XIE shall be restricted to members of the Criminal Assets Confiscation Taskforce and used only for the purpose of any proceedings under the PoC Act, including any information gathering and investigative activities and applications which are undertaken in relation to those proceedings (including current and future proceedings) and Counsel briefed to advise and appear and any expert engaged to give an opinion in those proceedings.
Xiao YAN-YE
14.Pursuant to s 180, 180A and/or 180B of the PoC Act, Xiao YAN-YE (also known as Xiaoyan YE) be examined about:
(a) her affairs;
(b) the affairs of Wei Min YE;
(c) the affairs of Phillip WEN; and
(d) the affairs of Yu XIAO.
15. In respect of the examination conducted pursuant to order 14:
(a)no person involved in the investigation or prosecution of any alleged criminal offences in respect of which Xiao YAN-YE is currently being investigated be present during the examination; and
(b)insofar as the examination relates to the investigation of alleged criminal offences committed by Xiao YAN-YE, any compulsorily acquired material not be disclosed to any person involved in the investigation or prosecution of Xiao YAN-YE.
16.Access to any compulsorily acquired material arising from the examination of Xiao YAN-YE shall be restricted to members of the Criminal Assets Confiscation Taskforce and used only for the purpose of any proceedings under the PoC Act, including any information gathering and investigative activities and applications which are undertaken in relation to those proceedings (including current and future proceedings) and Counsel briefed to advise and appear and any expert engaged to give an opinion in those proceedings.
Wei Min YE
17. Pursuant to s 180 of the PoC Act, Wei Min YE be examined about:
(a) his affairs;
(b) the affairs of Xiao Yan-YE (also known as Xiaoyan YE);
(c) the affairs of Phillip WEN; and
(d) the affairs of Yu XIAO.
18. In respect of the examination conducted pursuant to order 17:
(a)no person involved in the investigation or prosecution of any alleged criminal offences in respect of which Wei Min YE is currently being investigated be present during the examination; and
(b)insofar as the examination relates to the investigation of alleged criminal offences committed by Wei Min YE, any compulsorily acquired material not be disclosed to any person involved in the investigation or prosecution of Wei Min YE.
19.Access to any compulsorily acquired material arising from the examination of Wei Min YE shall be restricted to members of the Criminal Assets Confiscation Taskforce and used only for the purpose of any proceedings under the PoC Act, including any information gathering and investigative activities and applications which are undertaken in relation to those proceedings (including current and future proceedings) and Counsel briefed to advise and appear and any expert engaged to give an opinion in those proceedings.
Hongying Yuan
20.Pursuant to ss 180, 180A and/or 180B of the PoC Act, Hongying Yuan be examined about her affairs.
General
21.Xiao YAN-YE file and serve any affidavit material in support of her application for exclusion, pursuant to s 31 of the PoC Act by 4:00 pm on 31 July 2017.
22. Costs are reserved.
23. There is liberty to apply.
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