Commissioner of the Australian Federal Police v Whittall

[2020] NSWSC 1546

Supreme Court

New South Wales

Medium Neutral Citation:

Commissioner of the Australian Federal Police v Whittall and Anor [2020] NSWSC 1546

Hearing dates:

30 October 2020

Date of orders:

30 October 2020

Decision date:

30 October 2020

Jurisdiction:

Common Law

Before:

Johnson J

Decision:

See [94] of judgment.

Catchwords:

PROCEEDS OF CRIME - restraining order made under s.19 Proceeds of Crime Act 2002 (Cth) - exclusion order sought concerning certain property - defendants did not proceed with exclusion application which was dismissed - whether exclusion application “withdrawn” within s.49(3)(b) - held that exclusion application was withdrawn - s.49 forfeiture order made - valuation of property undertaken in accordance with s.56 of Act

Legislation Cited:

Civil Procedure Act 2005 (NSW)

Crimes Act 1900 (NSW)

Criminal Code (Cth)

Proceeds of Crime Act 2002 (Cth)

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Commissioner of Australian Federal Police v Kanjo & Ors (2019) 1 QR 568; [2019] QCA 143

Commissioner of Australian Federal Police v Lee (2016) 310 FLR 293; [2016] NSWSC 915

Commissioner of Australian Federal Police v Omar [2020] NSWSC 418

Commissioner of Taxation of the Commonwealth of Australia v Consolidated Media Holdings Ltd (2012) 250 CLR 503; [2012] HCA 55

Commissioner of the Australian Federal Police v Vo (2015) 302 FLR 209; [2015] NSWSC 1523

Commissioner of the Australian Federal Police v W (No 3) [2016] NSWSC 1200

Commissioner of the Australian Federal Police v W (No 4) [2016] NSWSC 1554

Commissioner of the Australian Federal Police v W [2016] NSWSC 683

Independent Commission Against Corruption v Cunneen (2015) 256 CLR 1; [2015] HCA 14

Lee v Director of Public Prosecutions (Cth) (2009) 75 NSWLR 581; [2009] NSWCA 347

Lordianto v Commissioner of the Australian Federal Police (2019) 266 CLR 273; [2019] HCA 39

Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28

Texts Cited:

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Category:

Principal judgment

Parties:

Commissioner of the Australian Federal Police (Plaintiff)
Charles Anthony Whittall (First Defendant)
Regan Boxall (Second Defendant)

Representation:

Counsel:
Mr G O’Mahoney (Plaintiff)
Mr CA Whittall and Ms R Boxall (In Person)

Solicitors:
Criminal Assets Litigation (NSW), Australian Federal Police (Plaintiff)

File Number(s):

2014/123758

Publication restriction:

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Judgment

1. JOHNSON J: In 2014, the Commissioner of the Australian Federal Police (the Plaintiff) obtained orders under the Proceeds of Crime Act 2002 (Cth) (“POC Act”) with respect to certain property in proceedings in which the Defendants included Charles Anthony Whittall (the First Defendant) and Regan Boxall (the Second Defendant).

2. On 24 April 2014, Campbell J made orders sought by the Plaintiff which included a restraining order under s.19 POC Act with respect to various categories of property. The property contained within Schedule 7, which was subject to the restraining order (“the Schedule 7 property”), may be described as follows:

1. one Panerai men's watch with black leather band;

2. one Hublot ceramic men's watch;

3. one Cerrone box containing a silver coloured “skull” pendant on a silver necklace;

4. $2,000.00 comprised of 20 x $100.00 notes;

5. one men's Breitling gold and silver coloured watch; and

6. one men's Breitling silver coloured diamond encrusted watch.

3. The Schedule 7 property is the subject of the Plaintiff’s application made today. Insofar as the s.19 restraining order made by Campbell J on 24 April 2014 concerned other categories of property (in Schedules 1 to 6), that aspect is not before the Court today and it is understood that that part of the litigation is otherwise concluded.

4. The issue for the Court today is whether a forfeiture order should be made under s.49 POC Act concerning the Schedule 7 property.

The Present Application

5. At the hearing today, the Plaintiff has been represented by Mr O'Mahoney of counsel. The First and Second Defendants have appeared here today unrepresented.

6. The hearing has proceeded with a volume of documentary material tendered and with helpful written submissions dated 11 June 2020 prepared by Mr O'Mahoney outlining the issue for determination. In the circumstances of today's application, although there is a substantial volume of documentary material before the Court (Exhibit A), the focal point is a limited category of material to which reference will be made.

7. It is the case that, during the course of the hearing, the First and Second Defendants said that they did not wish to be heard against the making of a forfeiture order concerning the Schedule 7 property, with their particular concern relating to costs.

8. In the circumstances of the application, however, which raises legal and factual issues and where they are unrepresented, it is appropriate that the Court gives a decision on the matter which, in the end, was not the subject of a fully contested hearing. It is appropriate that the Court determine the appropriate outcome of the forfeiture application concerning the Schedule 7 property.

9. The material of direct significance for the purpose of today is contained in an affidavit of James Michael Paterson sworn 7 April 2020. Mr Paterson is a Special Member of the Australian Federal Police and that affidavit recounts the history of the proceedings since 2014. Reference is made to earlier affidavits and materials which are also before the Court.

10. I should indicate that the material upon which the Plaintiff relies for today's hearing was served on the First and Second Defendants on 12 June 2020. There was some response from the Defendants by emails dated 10 July 2020 contained within Exhibit A (pages 1247 to 1250).

11. Accordingly, the material upon which the Court has been asked to rely has been with the First and Second Defendants for some time. However, I acknowledge that they are not legally qualified and therefore the task of absorbing the material would not be as straightforward for them as for a lawyer.

Factual Background

12. I will recite the factual background to the present hearing which serves to identify the central issue to be considered.

13. The restraining orders which were made on 24 April 2014 were sought on the basis that the Plaintiff suspected that, between the middle of 2008 and December 2013, the First Defendant dealt with property suspected to be the proceeds or an instrument of crime contrary to s.400.9(1) Criminal Code (Cth). The Plaintiff suspected that the property in Schedules 1 to 7 of the Summons was either the property of the First Defendant or within his effective control.

14. In September 2012, a Joint Task Force commenced an investigation into the suspected criminal activities of the First Defendant and his associates. Documents obtained by the Plaintiff from the Australian Taxation Office revealed that the First Defendant did not lodge an individual tax return since the year ended 30 June 2003. The evidence disclosed that the Second Defendant lodged income tax returns for the years ended 30 June 2003 to 2012, where her declared taxable income during that time ranged from nil to $42,549.00. The Second Defendant's employment ceased on or about 17 July 2013. At all relevant times, the Second Defendant was in a de facto relationship with the First Defendant.

15. Between December 2010 and July 2013, the First Defendant paid in excess of $113,000.00 for travel and accommodation. The First Defendant made payments in cash to this end.

16. On 23 December 2013, the First Defendant was arrested and charged with one count of using a false document to influence the exercise of a public duty contrary to s.254(b)(ii) Crimes Act 1900 (NSW) and one count of dealing with money suspected to be the proceeds of crime contrary to s.400.9 Criminal Code (Cth). The First Defendant was arrested and charged at what was said to be his residence at Holgate.

17. In relation to the arrest and charging of the First Defendant, a statement of facts was prepared. The Holgate property was searched by New South Wales Police pursuant to a search warrant. During the search, the following items were identified and seized:

1. eight wrist watches and assorted jewellery;

2. four motor vehicles (including an Audi TT, a Mercedes SL350 and a Mercedes G63); and

3. financial documents in relation to accounts in the United Arab Emirates, which were said to be controlled by the First Defendant.

18. It is not necessary, for the purpose of this judgment, to expand upon information with respect to the motor vehicles and their value, as that aspect of the matter is not before the Court today.

19. The Plaintiff submits that it has never been in dispute in these proceedings that the First Defendant was the beneficial owner of the Schedule 7 property.

Procedural History

20. As noted earlier, the proceedings were commenced by way of Summons filed on 24 April 2014 with Campbell J making restraining orders on that day.

21. On 6 November 2014, the First Defendant filed a Notice of Motion seeking exclusion orders under s.31 POC Act. By that application, the First Defendant sought to exclude the Schedule 7 property from the restraining orders.

22. On 2 May 2016, an Amended Notice of Motion was filed in the proceedings in which both the First Defendant and the Second Defendant sought a number of orders, including an order under s.31 POC Act excluding the Schedule 7 property from the restraining order. As a result, from 2 May 2016, both the First and Second Defendants were applicants for exclusion orders under the POC Act.

23. On 16 April 2015, the Plaintiff filed an Amended Summons.

24. On 29 September 2015, the exclusion application was listed for a two-day hearing on 23 and 24 May 2016.

25. On 23 May 2016, the First and Second Defendants filed a Notice of Motion seeking orders staying the hearing of their exclusion application pending the outcome of criminal proceedings which had been brought against the First Defendant.

26. Adamson J heard the stay application on 24 and 27 May 2016. On 1 June 2016, Adamson J granted a stay until the earlier of either a further order of the Court or 31 August 2016: Commissioner of the Australian Federal Police v W [2016] NSWSC 683.

27. On 5 July 2016, the Plaintiff filed a Notice of Motion seeking orders reopening the hearing of the stay application and for the judgment and orders of Adamson J to be set aside.

28. On 29 August 2016, Adamson J delivered judgment setting aside the stay which had been ordered on 1 June 2016: Commissioner of the Australian Federal Police v W (No 3) [2016] NSWSC 1200.

29. On 23 August 2016, the exclusion application which had been brought by both the First and Second Defendants was listed for hearing on 10 and 11 October 2016.

30. On 13 September 2016, the Court was informed that the exclusion application was no longer pressed.

31. By letter dated 13 September 2016, directed to the solicitor for the Plaintiff, Ms Lauren MacDougall of Korn MacDougall Legal stated that her firm's instructions had been withdrawn by the First and Second Defendants, other than to confirm to the Court and to the Plaintiff the following:

“With respect to the Amended Notice of Motion filed by the First and Second Defendants on 2 May 2016 (Motion) listed for hearing before Adamson J on 10 and 11 October 2016, we are instructed that the First and Second Defendants are no longer seeking the orders sought in the Motion. They understand that this will likely result in the Plaintiff seeking to proceed with the forfeiture of the items listed in the Summons. Whilst they still maintain that the property is not proceeds of crime, their priority is to preserve their position in the District Court criminal trial proceedings.”

32. The letter went on to say that Korn MacDougall Legal was no longer representing the First and Second Defendants in the criminal proceedings then on foot due to lack of funds and that the Commonwealth Director of Public Prosecutions was to be so notified.

33. In due course, the matter once again came before Adamson J. In a judgment delivered on 2 November 2016, Commissioner of the Australian Federal Police v W (No 4) [2016] NSWSC 1554, Adamson J summarised the position with respect to the listed exclusion application in the following way (at [6]-[8]):

“6   On 23 August 2016 I listed W and B’s exclusion application for hearing on 10 and 11 October 2016.

7   By letter dated 13 September 2016 addressed to my Associate, the solicitors for W and B, Korn MacDougall, wrote to advise that their instructions had been withdrawn. They nonetheless confirmed that W and B no longer pressed the orders sought in the amended notice of motion filed on 2 May 2016. The solicitors also confirmed that they would not be filing submissions on costs although they submitted that the appropriate orders were that each party ought bear its, his or her own costs, as the case may be. The solicitors also said:

‘Whilst they [W and B] still maintain that the property is not proceeds of crime, their priority is to preserve their position in their District Court criminal trial proceedings.’

8   The matter came before me again on 28 September 2016 to permit W and B to confirm that they did not press the exclusion application, since the plaintiff had not heard from them and was concerned that their former solicitors were no longer acting when they wrote the letter referred to above. Neither W nor B appeared on that day. I made an order that unless W and B notified the plaintiff and my Associate by 5pm on Friday 30 September that they pressed the exclusion application, the hearing dates of 10 and 11 October 2016 would be vacated and the exclusion application would be dismissed forthwith. W and B were informed by letter of this order. As no notification was given, the order took effect.”

34. It will be seen from her Honour's judgment that, after the letter from Korn MacDougall Legal of 13 September 2016 was drawn to her Honour's attention, the matter came before the Court on 28 September 2016 to permit the First and Second Defendants to confirm that they did not press the exclusion application. Neither the First nor Second Defendant appeared on 28 September 2016. Her Honour made an order that, unless the First Defendant or Second Defendant notified the Plaintiff and her Honour's Associate by 5.00 pm on 30 September 2016 that they pressed the exclusion application, the hearing dates of 10 and 11 October 2016 would be vacated and the exclusion application would be dismissed forthwith. The First and Second Defendants were informed by letter of her Honour’s order.

35. As Adamson J observed, as no notification was given by the First or Second Defendant, then her Honour's order took effect. As a result, the exclusion application brought by the First and Second Defendants was dismissed.

36. Since that time, no further exclusion application has been brought by either the First or Second Defendant with respect to the Schedule 7 property.

Basis of Forfeiture Application

37. Mr O'Mahoney submits that, in these circumstances, an appropriate foundation exists for the Court to order forfeiture of the Schedule 7 property. Written submissions furnished in support of the Plaintiff's application outline the basis upon which such an order is sought.

38. Section 49 POC Act provides as follows:

“49    Forfeiture orders - property suspected of being proceeds of indictable offences etc.

(1)    A court with proceeds jurisdiction must make an order that property specified in the order is forfeited to the Commonwealth if:

(a)    the responsible authority for a restraining order under section 19 that covers the property applies for an order under this subsection; and

(b)    the restraining order has been in force for at least 6 months; and

(c)    the court is satisfied that one or more of the following applies:

(i)    the property is proceeds of one or more indictable offences;

(ii)    the property is proceeds of one or more foreign indictable offences;

(iii)    the property is proceeds of one or more indictable offences of Commonwealth concern;

(iv)    the property is an instrument of one or more serious offences; and

(d)   Repealed.

(e)    the court is satisfied that the authority has taken reasonable steps to identify and notify persons with an interest in the property.

(2)    A finding of the court for the purposes of paragraph (1)(c):

(a)    need not be based on a finding that a particular person committed any offence; and

(b)    need not be based on a finding as to the commission of a particular offence, and can be based on a finding that some offence or other of a kind referred to in paragraph (1)(c) was committed.

(3) Paragraph (1)(c) does not apply if the court is satisfied that:

(a)     no application has been made under Division 3 of Part 2 1 for the property to be excluded from the restraining order; or

(b)    any such application that has been made has been withdrawn.

Refusal to make a forfeiture order

(4)    Despite subsection (1), the court may refuse to make an order under that subsection relating to property that the court is satisfied:

(a)    is an instrument of a serious offence other than a terrorism offence; and

(b)    is not proceeds of an offence;

if the court is satisfied that it is not in the public interest to make the order.”

39. Pursuant to s.317 POC Act, as the applicant for the forfeiture order, the Plaintiff bears the onus of proving the matters necessary to establish the grounds for granting the relief sought and such facts are to be established on the balance of probabilities.

40. Section 56 POC Act requires that, in making a forfeiture order under s.49(1), the Court must specify the amount it considers to be the value of the property (other than money) specified in the order at the time the order is made.

41. The operation of s.49 POC Act arises for consideration in the present context. It will be noted that s.49 is expressed in mandatory terms - a Court with proceeds jurisdiction must make an order that the property specified in the order is forfeited to the Commonwealth if the criteria identified in s.49 are made out.

42. There are a number of elements provided for in s.49.

43. Firstly, it is clear that the Supreme Court of New South Wales is a Court with proceeds jurisdiction.

44. Secondly, by reference to s.49(1)(a), it is clear that the Plaintiff, who is a responsible authority for the purpose of the POC Act, obtained the restraining order under s.19 that covers the Schedule 7 property with that order having been obtained from a Judge of this Court on 24 April 2014. That requirement is satisfied.

45. Thirdly, s.49(1)(b) requires that the restraining order has been in force for at least six months. The restraining order applying to the Schedule 7 property has been in force since 24 April 2014, a period of more than six years and six months so that that requirement is satisfied.

46. Fourthly, s.49(1)(c) provides for certain matters of which the Court is to be satisfied on a forfeiture application. However, s.49(3) states that 49(1)(c) does not apply if the Court is satisfied that (as is presently relevant) an application for exclusion from a restraining order was made and "any such application that has been made has been withdrawn". If the exclusion application made by the First and Second Defendants has been withdrawn, then it is not necessary for the Plaintiff to make out the element contained in s.49(1)(c) of the Act. I will return to that issue shortly.

47. Fifthly, s.49(1)(e) requires the Court to be satisfied that the authority has taken reasonable steps to identify and notify persons with an interest in the property. In that regard, the affidavit of Special Member Paterson dated 7 April 2020 sets out (at paragraphs 29 to 31) steps taken to notify, in this case, Mr Gabriel Saffo of Jacobsons Jewellery at Bondi Junction of the matter with respect to one of the Breitling men's watches. I am satisfied, for the purpose of s.49(1)(e), that the Plaintiff has taken reasonable steps to identify and notify persons with an interest in the property apart from the First and Second Defendants. I should observe that no interest has been claimed in the s.19 property by Mr Saffo or anyone else.

Has the Exclusion Application Made by the First and Second Defendants Been “Withdrawn”?

48. I return then to the question whether, in the circumstances of this case, the exclusion application brought by the First and Second Defendants was withdrawn.

49. The word "withdrawn" is not defined in the POC Act. However, the provision has been considered in a number of decisions of this Court. Those decisions, of course, relate to the particular factual circumstances which existed in each case as to whether the exclusion application could be appropriately characterised as having been withdrawn. I have been assisted in determining this application by the decisions of Schmidt J in Commissioner of the Australian Federal Police v Vo (2015) 302 FLR 209; [2015] NSWSC 1523 (“Vo”) and the decision of Beech-Jones J in Commissioner of Australian Federal Police v Omar [2020] NSWSC 418 (“Omar”).

50. In considering the meaning of the word “withdrawn” in the POC Act, it is appropriate to keep in mind the objects of the POC Act, which provide the context in which the section is to be construed. The objects and the overall framework of the POC Act are of particular importance in a case such as this: Lordianto v Commissioner of the Australian Federal Police (2019) 266 CLR 273; [2019] HCA 39 (“Lordianto”) at [62].

51. The meaning of the word “withdrawn” in s.49 falls to be considered by reference to the natural and ordinary meaning of the word in its statutory context: Commissioner of Taxation of the Commonwealth of Australia v Consolidated Media Holdings Ltd (2012) 250 CLR 503; [2012] HCA 55 at [39].

52. It is appropriate to adopt an approach to construction that gives “internal logical consistency and overall consistency in accordance with the principles of statutory interpretation” as stated in a decision of the High Court of Australia in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 at [69]-[70]: Independent Commission Against Corruption v Cunneen (2015) 256 CLR 1; [2015] HCA 14 at [35]).

53. According to the Macquarie Dictionary the word “withdraw” means “to draw back or away; take back; remove” or “to attract or recall; to withdraw a charge”.

54. Schmidt J made clear in Vo (at [71]) that what was required with respect to the proper construction of the word ”withdrawn” in s.49(3)(b) is a practical approach with emphasis being placed upon the “substance of the course” pursued by the applicants for exclusion orders under the POC Act “rather than to its form”. Beech-Jones J in Omar (at [17]-[19]) followed the construction adopted by Schmidt J. In addition, Beech-Jones J referred to a decision of Campbell J in Commissioner of Australian Federal Police v Lee (2016) 310 FLR 293; [2016] NSWSC 915 at [13], where his Honour characterised the circumstances in Vo as “amounting to a constructive withdrawal”.

55. It is important to keep in mind, as well, the objects and terms of the POC Act in considering this question. The POC Act provides for a regime intended to deprive criminals of the proceeds of their crimes and to prevent reinvestment of those proceeds in further criminal activities: Lordianto at [9]-[10]. The exclusion regime within the POC Act is intended to create a high bar by which it is incumbent upon applicants to take proactive steps to prove the legitimate nature of their assets if the Court is to treat the property as being excluded from the effect of a restraining order. The POC Act “manifests a plain and clear intention to effect the confiscation of property in the circumstances which it prescribes, regardless of the interests of any person in the property”, that the taking of the property in the prescribed circumstances is the primary purpose of the legislation and that “the interests of a person in property the subject of a valid restraining order are deliberately and expressly at risk of confiscation, absent affirmative steps to exclude property on the application of the interested person”: Lee v Director of Public Prosecutions (Cth) (2009) 75 NSWLR 581; [2009] NSWCA 347 at [20]-[21]; Commissioner of Australian Federal Police v Kanjo & Ors (2019) 1 QR 568; [2019] QCA 143 at [44].

56. With the benefit of those principles with respect to statutory construction and the proper construction of s.49(3), I return to the facts of this case.

57. It is clear that an exclusion application was brought by both the First and Second Defendants. It was listed for hearing. It sought exclusion of certain property, including the Schedule 7 property.

58. On 13 September 2016, the solicitors acting on behalf of the First and Second Defendants wrote a letter expressing their instructions that the First and Second Defendants were no longer seeking the exclusion orders sought in the Amended Notice of Motion. The letter stated that the First and Second Defendants understood that this would likely result in the Plaintiff seeking to proceed with a forfeiture application concerning the items listed in the Summons. The letter went on to say that, whilst they still maintained that the property was not the proceeds of crime, the priority of the First and Second Defendants was to preserve their position in their District Court criminal trial proceedings.

59. Following that, Adamson J provided a clear opportunity for the First and Second Defendants to reconsider their position and to indicate whether they wished to press the exclusion application which had been brought in the Amended Notice of Motion. As Adamson J made clear in Commissioner of the Australian Federal Police (No. 4) (see [33] above), no such application was made by the First or Second Defendant and the exclusion application was dismissed.

60. Accordingly, since October 2016, no further exclusion application has been made to the extent that it may have been possible. That remains the position today.

61. It is necessary to look at the substance of the course taken by the First and Second Defendants and not to mere formality. Through their lawyers, each indicated to the Plaintiff and to the Court that they did not press the claim for exclusion orders as contained in the Amended Notice of Motion. Each of them indicated a consciousness that that approach would likely see the Plaintiff seeking to proceed with a forfeiture application concerning the property. The First and Second Defendants thereafter did not maintain the exclusion application, which was dismissed by a Judge of this Court.

62. In my view, what happened here may be characterised as an actual withdrawal of the exclusion application. To the extent that the concept of constructive withdrawal has been identified as being sufficient (see [54] above), that term clearly encompasses what has happened in this case.

63. I have kept in mind that the letter of 13 September 2016 from Korn MacDougall Legal explained that the First and Second Defendants were taking that approach because their priority was the criminal trial proceedings. That, however, does not undermine the concept that the exclusion application was withdrawn.

64. There has been no further exclusion application brought in the more than four years that have passed since that course was taken by them.

65. I am satisfied what has happened in this case fits comfortably within the concept of withdrawal in s.49(3)(b) POC Act. On that basis, I am satisfied that the First and Second Defendants did bring an exclusion application with respect to the Schedule 7 property, but that the application that was made was withdrawn in September 2016.

66. As a result, it is not necessary for the Plaintiff to make good any of the elements contained in s.49(1(c) POC Act.

67. Accordingly, the elements of s.49(1)(a), (b) and (e) POC Act have been made out. The Court is satisfied that the exclusion application which was brought has been withdrawn so that, by operation of s.49(3)(b), there is no need for the Plaintiff to make out, as an element of this application, any aspect of s.49(1)(c) POC Act.

68. Having reached that position, I am satisfied that the Court is bound to make a forfeiture order under s.49 with respect to the Schedule 7 property.

Valuation of the Property Under s.56 POC Act

69. Section 56 POC Act states:

“The court must specify, in any forfeiture order it makes, the amount it considers to be the value, at the time that the order is made, of the property (other than money) specified in the order.”

70. It is not entirely clear why s.56 requires this step, but it is a statutory requirement if a forfeiture order is made. In the course of submissions, Mr O'Mahoney has indicated that it may have some relationship to the determination of a pecuniary penalty order under the POC Act.

71. It is not necessary to consider that aspect further because the simple fact is, if the Court is to proceed to make a forfeiture order, the Court is required to identify a value of the property in compliance with s.56 POC Act.

72. To that end, evidence has been placed before the Court as contained in the affidavit of Special Member Paterson of 7 April 2020. He states (in paragraphs 35 to 37)) that on 17 March 2020, he made arrangements for each of the items referred to in Schedule 7 (apart from cash), to be valued by Mr Ari Taibel, Director of First State Auctions, Sydney. Mr Taibel has produced certificates of valuation with respect to each of the items. The following table summarises the valuation evidence of Mr Taibel:

Item	Retail Replacement Value	Estimated Auction Realisation
Panerai men's watch with black leather band	AUD28,000	AUD7,000-10,000
Hublot ceramic men’s watch	AUD290,000	AUD55,000-75,000
Cerrone box containing silver coloured “skull” pendant on silver necklace	AUD2,000	AUD300-500
Breitling gold and silver coloured watch	AUD12,000	AUD4,000-6,000
Breitling silver coloured diamond-encrusted men’s watch	AUD30,000	AUD5,000-7,000

73. As will be seen, Mr Taibel has identified for each of the items a retail replacement value and an estimated auction realisation value. It will be apparent immediately that there is a significant difference between the two values for each item. To the extent that the Court is required under s.56 to identify a value which it considers to be the value at the time when the forfeiture order is made, I am immediately conscious that the Court is dealing with specialty items.

74. The valuations contained in Annexure E to the affidavit of Special Member Paterson, as I have said, identify his valuations with respect to each jewellery item in the Schedule 7 property.

75. It has been submitted for the Plaintiff that in discharging the function of the Court under s.56 POC Act, the estimated auction realisation value should be selected. This must be the case. It would be inappropriate to select the retail replacement value, which clearly, in the case of these items, includes some very high valuations. Although Mr Taibel has identified that each of the items is either in “very good” or “excellent” condition, the reality is that the value of these items must be assessed as effectively second-hand items with the value to be determined by reference to estimated auction realisation valuations.

76. I have kept in mind that Mr Taibel's valuations are now seven months old. I am conscious as well that, in the seven months since 19 March 2020, the world has been subjected to the COVID-19 pandemic which has had an effect upon many, if not all, aspects of life. However, when it comes to the second-hand high-end watch and jewellery market, I proceed on the basis that a valuation given some seven months ago is likely to remain solid even at this point. Beyond that, of course, the Court is in no position to form a view about the value of these items. The evidence as contained in the valuations of Mr Taibel constitutes the best evidence for the Court to exercise its statutory function under s.56 POC Act.

77. The appropriate course to take, in fulfilling that function, is to nominate the estimated auction realisation valuation. To the extent that an actual figure (as opposed to a range) may be necessary to fulfil the s.56 function, then the lower end of the range would be the appropriate figure to select.

78. Accordingly, I propose to make a forfeiture order with respect to each of the nominated items in the Schedule 7 property, together with an order expressing the Court's valuation with respect to each item (other than the cash) in accordance with the estimated auction realisation valuation given by Mr Taibel concerning each item.

[Further submissions made concerning orders to be made]

79. I have been provided with a form of order which reflects the forfeiture order sought by the Plaintiff concerning the Schedule 7 property. The form of order was prepared upon the basis that the s.56 order would utilise a midpoint in the estimated auction realisation value provided by Mr Taibel with respect to each item. Doing the best I can, I do not consider it appropriate to utilise the midpoint and I have selected, in each case, the bottom of the estimated auction realisation range, which I have inserted in the orders which I propose to make.

80. I have raised with counsel for the Plaintiff the purpose of the expression of a value under s.56 POC Act. I am exercising that function today, acting as a type of informal jewellery valuer. The Court is making the orders today upon the basis that the items in Schedule 7 which are to be forfeited will no doubt be sold at such value as can be obtained with the money passing to the Commonwealth of Australia in accordance with the scheme under the POC Act. I trust that it is not a consequence of the orders the Court is making today that, if there was some gap between the value of any of these items as sold and the s.56 valuation, there would be further pursuit of either the First or Second Defendant for any more sums of money.

81. I am assured by counsel for the Plaintiff that that is not what is intended. From the Court's perspective, that is not what should happen. It is time for these proceedings to be brought to a complete end in the interests of the Plaintiff and the First and Second Defendants. I express those views in the judgment as against the possibility that the valuations I have inserted may give rise to any thought of further action being taken.

[Submissions were made concerning costs]

Costs

82. I have heard the parties on the question of costs.

83. Mr O'Mahoney submits that, these being civil proceedings, there is no good reason why costs should not follow the event. He submitted that the material having been served on the First and Second Defendants in June 2020, there has been no indication since then of a willingness to consent to a forfeiture order being made and that it was necessary for the Plaintiff to prepare for today's hearing, to file written submissions and other material and to attend and conduct the hearing today on behalf of the Plaintiff as in fact occurred.

84. The First Defendant has indicated that the concern all along of himself and the Second Defendant has been the question of costs. He asks the Court to take that into account, having expressed the view that an effort was sought to be made to resolve the matter two years ago by his then legal representative.

85. The starting point for the Court is that s.98 Civil Procedure Act 2005 (NSW) provides that costs are in the discretion of the Court. Rule 42.1 Uniform Civil Procedure Rules 2005 (NSW) provides that, subject to that Part of the Rules, if the Court makes any orders for costs, the Court is to order that the costs follow the event unless it appears to the Court that some other order should be made as to the whole or any part of the costs.

86. It is, of course, a matter for the Court to determine, in the exercise of discretion, whether a costs order should be made, but the starting point is the expectation that costs should follow the event unless there is some reason not to adopt that approach.

87. I am conscious that the costs presently under consideration are confined to the costs in relation to today's hearing and preparation for it. Other costs orders have been made in the past by Adamson J with respect to earlier phases of the litigation to which I have made mention which took place in 2016. The costs of today relate effectively to the preparation by the solicitor for the Plaintiff of the materials for this hearing, retaining counsel, preparation by counsel of helpful written submissions and then the appearance by counsel and solicitor for the Plaintiff at today's hearing.

88. It is the case that the First and Second Defendants indicated in their emails of 10 July 2020 (referred to at [10] above) that their focus of attention concerned costs. However, there was no indication on behalf of the First or Second Defendant in or since July 2010 of a willingness to consent to any orders with the sole issue to be argued related to costs. Nor was there any negotiation where there was an offer to consent to orders upon some agreed basis concerning costs, of a type often seen in civil litigation.

89. In making those comments, I am not being critical of the First and Second Defendants. They are not legally represented. Their emails of 10 July 2020 indicated a level of frustration that these proceedings were still on foot. I detect in their emails a desire to put the whole matter behind them, with this being the clear approach that they have articulated today in their appearances, which have been respectful and helpful to the Court.

90. The real question is whether there is any proper reason for not making an order that they pay the costs of the Plaintiff.

91. The Plaintiff was required to prepare for a hearing and conduct the hearing. I have delivered judgment (which has occupied some time) because it was a matter for the Court in the end to determine these matters.

92. I have considered the submissions which have been made. I am satisfied that it is appropriate that an order be made that the First and Second Defendants pay the Plaintiff’s costs of today. In that respect, it may be expected by the First and Second Defendants that the costs being sought will be confined to the steps taken to prepare for today's hearing. The many earlier phases of this litigation are not the subject of this costs order.

93. Accordingly, I will make an order that the First Defendant and the Second Defendant pay the Plaintiff's costs of and incidental to the making of these orders.

Orders

94. For the reasons which I have given, I make Orders 1, 2, 3 and 4 in accordance with the form of order which I have signed and dated today.

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Decision last updated: 05 November 2020