Cornwell v The Commissioner of the Australian Federal Police

[1991] HCATrans 213

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S32 of 1991

B e t w e e n -

BRUCE RICHARD CORNWELL

Applicant

and

THE COMMISSIONER OF THE

AUSTRALIAN FEDERAL POLICE

Respondent

Application for special leave

to appeal

BRENNAN J
DAWSON J

GAUDRON J

Cornwell 1 9/8/91

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 9 AUGUST 1991, AT 9.54 AM

Copyright in the High Court of Australia

MR G. NICHOLSON, QC:  Your Honours, I appear with my learned

friend, MR B.W. CROSS, for the applicant.

(instructed by J.J. Cullen & Associates)

MR M.S. WEINBERG, QC: If the Court pleases, I appear

together with my learned friends, MR S.3, RUSHTON

and MR M.R. HILL, on behalf of the respondent.

(instructed by the Commonwealth Director of Public

Prosecutions)

MR NICHOLSON:  Your Honours, this is an application for an

enlargement of time and for special leave to question of enlargement of time?

appeal. It arises out of a decision of the

BRENNAN J: Perhaps if you were to deal with the substance

of the matter. If there is a problem about

enlargement of time you can come back to it later,

Mr Nicholson.

MR NICHOLSON:  Thank you, Your Honour.

The judgment of the Full Federal Court,

Your Honours, was delivered on 30 July and itself

was as a result of an appeal by the current

applicant against a decision of Justice Merling.

There was fixed by Justice Merling a pecuniary

penalty pursuant to sections 243B and 243C of the

Customs Act.

The heart of the matters to which I would wish

to take Your Honours deals with the question of the

assessment of "benefits derived" within the meaning

of that statute.

GAUDRON J: Perhaps, Mr Nicholson, you might indicate what

you say that phrase does mean? Your grounds of

appeal do not seem to make it precisely clear in

your draft notice.

MR NICHOLSON:  I think I would contend, as best I can in the

absence of clear authority on that question, for
the proposition that it refers to that portion of
the gross proceeds of the prescribed dealing
derived by the particular offender in question
embracing deductions, in the case of the particular

matter, for the cost of the goods and payments of

whatever type, be they percentage or agreed sum,

amongst co-offenders, that is, persons engaged in

the identical joint enterprise.

The majority judgment in the

Full Federal Court proceeded on the basis, I
believe, of gross proceeds but was not prepared to

accept from that calculation the payments by way of

Cornwell 2 9/8/91

fixed sum amongst co-offenders or the cost of the

goods.

GAUDRON J:  Now, could I ask this

MR NICHOLSON: Perhaps if I could just - I am sorry -

complete it. I have only answered half the

question. That referred to the word "benefit",

Your Honours. I refer to the term "benefits

derived" and it would be my contention that the

word "derived" carries the matter further and

attaches the benefit in a real way, not an

artificial way, to the particular participant.

DAWSON J:  The Full Court judgment did not exclude splitting

the proceeds, it was the fact that it was a fixed

sum that was important? Am I right?

MR NICHOLSON:  Yes, that is the case, Your Honour. The

Full Court appears to have accepted gross proceeds
but treated differently fixed sums from a

percentage or share not referable to an agreed

precise amount and, in addition, to have accepted

the cost of goods and may have been led into error
in its reasoning on the meaning of the term

"derived".

GAUDRON J: That, of course, has to be read in the light of

the subsection dealing with outgoings.

MR NICHOLSON: Yes, certainly. Your Honours, it is a key

issue. I believe the Full Federal Court took the

view that those two items for which I contend were

more properly treated as outgoings within the

meaning of section 243C(6).

GAUDRON J:  Does the issue really turn on whether or not they are outgoings?

MR NICHOLSON: Yes, I believe it does, Your Honour, yes. It

turns on whether - if I can put it this way:	I
contend the view for which I argue attaches reality

to the benefit derived and it leaves intact that area of outgoings and expenses associated with a

venture. I suggest that the view which is embodied

in the current Full Federal Court judgment is

prone, by its reasoning, to create an artificial

concept of "benefit" and I believe that is freely

conceded within the terms of the judgment.

GAUDRON J: Well, the statute does that, does it not?

MR NICHOLSON:  To a limited degree, because of the

provisions of subsection (6) certainly. The key

meaning will be, I think, what is embraced within

subsection (6) or, on the other side of the coin,

Cornwell 9/8/91

what is to be embraced from the meaning of "benefit

derived".

GAUDRON J:  Now, was this case put at first instance as

distinct from the case that your client was only

marginally involved in the venture? ·

MR NICHOLSON:  Yes, Your Honour. I believe that the case,

as first put, for whatever reason, was not put as fully as it might have been but, certainly, there

was no fault to which I can point there. I

believe that the procedure adopted at first

instance was such that following very lenient

accommodation for the preparation of the

circumstances of the case by His Honour examination proceedings for the pecuniary penalty,

there was a period of time in which submissions

were attracted from each party, following which

there was a judgment handed down which contained

the thrust of what now is within the

Full Federal Court judgment.

GAUDRON J:  The question of the cost, for example, appears

to have emerged only in the judgment of

Mr Justice Pincus.

MR NICHOLSON:  Yes, and that will be because, no doubt, of

from both parties at the

the debate in which I was engaged in the extensive debate

Full Federal Court on this issue. I think the

appeal book, from memory, numbered about seven,

very extensive, thousands of pages of material.

The question of the deductibility of cost did

not emerge as a final issue anticipated by the
applicant here at first instance by virtue of the

disparate cases put at first instance. The

plaintiff, in those proceedings, contended for the

position that there were, in one conspiracy, two

sets of principals, one set in Thailand, one set in

Australia, and that within Australia the applicant

was the principal conspirator.

It contended for a penalty in the full value of the cargo which was not in dispute eventually.

There was some dispute as to a number of dollars

but His Honour Justice Marling ruled that at $4000

a kilo and calculated the sum of $6.9 million as

the total value of the cargo which was the amount

of the prescribed penalty imposed by His Honour.

The case put for the applicant and from which

there was no variation in the Full Federal Court

was that there was, indeed, the one conspiracy on

foot but that he was, in fact, a middleman, a

Cornwell 4 9/8/91

Mr 10 per cent. That was rejected by

Justice Merling in his judgment. That having been

rejected in the judgment, no further opportunity

arose to adduce evidence of any type as to the cost

or value of goods - - -

GAUDRON J: But why should you need further opportunity at

that stage? The issue was the value of the

benefits derived.

MR NICHOLSON:  The value of the benefits derived, on one

view, in a gross sense, would involve a deduction
of the cost of the goods. However, dealing with it
from another point of view, the meaning of the term
"derive", in order to attract the pecuniary
penalty, it should be equivalent to the benefit
derived. There are two things necessary to have

been shown; the first, that the benefit arose and,

secondly, that it was derived by the applicant.

The first may, indeed, start with a

consideration of the total value of the cargo.	On
the primary findings of fact they did find their way - on the primary findings of fact, as a
principal conspirator to the applicant here.

Whether that benefit was actually derived by

him may raise a different issue, that is, what was

the benefit derived by him? Inherent in the term

"derived" is a sense of reality, that is, what was

it that passed to him? On that view, it was

incumbent upon the plaintiff in those proceedings

to establish not only that there was a benefit but

a benefit in a sum and a value was derived by the

applicant in these proceedings.

That stage did not arise simply because at the

conclusion of the first instance hearing and upon
consideration of the submissions, judgment was
delivered fixing that amount.

DAWSON J:	What did Justice Merling do with the cost?
MR NICHOLSON:	The short answer is disregard it.

DAWSON J: Well, there was no evidence of any cost?

MR NICHOLSON:  Yes, and when that point was taken on the

appeal to the Full Federal Court - - -

DAWSON J:	Was it taken before Justice Merling though?
MR NICHOLSON:	No, not - the answer is, no.
DAWSON J:	No one sought to adduce evidence of cost?
Cornwell	9/8/91

MR NICHOLSON:  No, neither side. It was not an issue

litigated as to the gross value and evidence being

adduced as to what the cost might be for a sound

discretionary judgment to be formed as to what the

amount of the pecuniary penalty could be. Perhaps,

if I do go for a moment, and then I will- come

directly come back to this point. There was

certainly a value of $6.9 million ascribed to that

cargo. The value of the pecuniary penalties

imposed as between the applicant and a Mr Bull was

$7.2 million and that disregarded that which was
accepted in the Full Federal Court that there were

certainly other payments amongst other

conspirators.

We have a situation then where the financial benefit said to arise out of a cargo worth

$6.9 million itself exceeds $6.9 million and we

have a situation where the statute which requires

that the financial benefit be derived by the

particular offender, when taken in toto, exceeds

the maximum one might have thought were possible.

This is described as unsatisfactory and artificial

by Justice Wilcox in the majority judgment in the

Federal Court. He accepted this was so but

maintained that this was the intention of

Parliament in the legislation.

That is to be found at page 69 of the appeal books, Your Honours. His Honour, at the previous

few pages, had considered the debate in Fagher but

had moved on to consider the consequences of

subsection (6) and read the outgoings referred to

in that subsection as embracing both the cost of

goods and payments amongst co-offenders by way of a

specific sum rather than an indeterminate amount, a

share.

GAUDRON J: But does that not have to be read in the light

of the other finding, that your client was the

principal and that Mr Bull was no more than an

assistant, and the finding that your client got

possession and control of the whole cargo?

MR NICHOLSON:	It certainly needs to be read in the light of the whole judgment which does make those comments
and I have to address those comments.

GAUDRON J: Well, they are factual findings against you, are

they not, and they put a complexion on that
statement which, prima facie, puts it in the nature

of an expense or outgoing?

MR NICHOLSON:  No, I do not believe, with respect,

Your Honours, that that is the case.	I believe
that if you look at the judgment of

Justice Merling, it is a progression. At the

Cornwell 6 9/8/91

commencement of the judgment there is primary
findings of a factual nature that in the Raukawa
conspiracy, that is the subject conspiracy - that

was the name of the vessel - in that conspiracy

there were two sets of principals. One set of

principals in this conspiracy - with the- conspiracy

in Thailand and one set of conspirators in

Australia.	They were the conspirators in the
conspiracy.

The next turn is a consideration then within the conspiracy of the conspirators in Australia,

and then the principal Australian conspirator, and

the last conclusion is the principal in the
conspiracy. So, we start off with a whole variety
of people named as conspirators. They are

geographically separated. Those persons nominated

in Australia are considered. The applicant is

nominated as the major controller amongst those

persons in Australia, and at the conclusion he is

named as a major principal in the whole conspiracy.

But within the conspiracy itself there are many

persons involved and that is the thread throughout

the judgment of Justice Morling. Now, what we are

talking about then are payments between persons

involved in the conspiracy.

GAUDRON J: But that does not make them equal partners or

anything of that nature. They would be

conspirators quite without any entitlement in

capital, as it were.

MR NICHOLSON:  That may be so, as it is so in all

conspiracies. In relation to the particular

conspiracy, Justice Merling found, as remarked upon

by Justice Wilcox, that were undoubtedly large

payments made or payments made between various of

the conspirators. The nature of those payments is

itself under a consideration here. If those

payments are to be treated within the meaning of

subsection (6) as outgoings of disbursements, we

are led, I suggest to Your Honours, to a quite

artificial result whereby from a maximum amount of

benefit which could be derived in one enterprise,

one can get many, many multiples of it by simply

repeating the same edition.

I made the point which has found its way into

the Full Federal Court's judgment that if one had,

I think I said $10 million in receipt of goods, and

it passed through 10 hands and possession itself

per se was sufficient to attract the total value of
the goods as a pecuniary penalty, then the passage

of $10 million worth of cargo through 10 hands

would give $100 million of financial benefit

derived which would appear not to merit reality.

Cornwell 7 9/8/91

That was accepted as so in the judgment but a

separate point put up.

GAUDRON J: But you have got a quite different set of

factual findings against your client here in that

he was the principal.	He got possession·and
control of the entire cargo.	Not just possession;

possession and control of the entire shipment and

the entire shipment was at his disposal.

MR NICHOLSON:  Those are primary findings of fact which I

have attempted to attack in another place and I

appreciate they are the primary findings of fact.

However, if I could take Your Honours back to

possibly page 68 of the appeal book which deals
with the term "benefits" - of course, it is

"benefits derived" and considers therein whether,

as a matter of law, payments of fixed amounts

between offenders should be treated as outgoings,

and comes to the view, unsatisfactory though it may

be, that that was the intention of Parliament in

subsection (6).

The words appear about the fifth or sixth line

down:

Parliament accepted that, to this extent, the benefits assessed by the Court may exceed the actual benefits derived by the offender from

the transaction.

Now, that will be a key issue I would seek to

debate if leave were granted.

GAUDRON J: But that is the inevitable consequence of the

existence of subsection (6).

MR NICHOLSON:  Your Honours, I hand up copies of the second

reading speech in relation to the legislation, and

I apologize, there is a marking on them.	I
apologize for that.

BRENNAN J: Is that the part we should read?
MR NICHOLSON:	I will take you directly to it, yes. If I

could take Your Honours to 2619, and I quote - this

is a passage relating to pecuniary penalties:

The essential objective of this extremely

complex proposed law is, through proper civil

court proceedings, to empower the Federal

Court of Australia to order against a person a

pecuniary penalty equivalent to the benefit
derived from dealings in illicit drugs.

I would contend that those words state clearly the intention and I would suggest that they are capable

Cornwell 8 9/8/91

of being read in a different light than have been

read by Justice Wilcox.

BRENNAN J: It depends whether you insert the word "gross"

before "benefit".

MR NICHOLSON:  I think the word "equivalent" is an important

word also, Your Honour.

BRENNAN J: Well, it must be equivalent to something and the

things is what is the thing to which it is

equivalent and that is described as a "benefit".

Then one comes to consider, "Well, what's meant by

'benefit'", and one can look at it, if one likes,

in terms of net assessable income, if one wants to

take an analogy from the Income Tax Assessment Act,

or one can take it in terms of assessable income.

MR NICHOLSON:  Yes. As a starting point, I think this Court

in McMillan referred to the term "gross benefits"

rather than "net" and I think also used the term

"sound discretionary judgment" in the same context.

I appreciate it is a matter of considerable

debate as to what is meant and that is at the very

heart of the appeal for which special leave is now

sought.

DAWSON J:  One thing is clear though, it does not mean

taxable income or the equivalent of taxable income.

MR NICHOLSON:  I think that is a fairly safe interpretation.

I do not envisage that taxation considerations were

at the forefront of the legislators.

DAWSON J:  No, but it is a convenient way of expressing the

concept.

MR NICHOLSON: Certainly.

BRENNAN J:  The problem is, of course, that when you are dealing with crime, you are not dealing with the

outgoings which are necessarily incurred,

et cetera, you have got a different concept and you

have what is available to divide up amongst

everybody. And if somebody has the kitty, as it

were, which is available for division, well then,

perhaps that is what the benefit is.

MR NICHOLSON:  I would not be greatly in dispute with that,

but it is the question of what is in the kitty?

Does it make any difference whether what goes out

is a fraction of the kitty or said to be an agreed

amount in the kitty? Is there any real distinction

between the two such as to characterize, one, a

participant in the venture and, one, an outgoing?

I do not not wish to refer to equity or capital

Cornwell 9 9/8/91

considerations because I do not think they are

appropriate to this type of nefarious activity.

However, I think that it is possible to argue that

outgoings are something necessary to incur the

gross benefit to be shared amongst the participants

and that the method of calculating the entitlement

of participants in a conspiracy to their piece,

whether it be a fraction share or a precise sum, is

probably artificial and probably of little real

distinction if, in fact, it is part of the gross

proceeds of the situation, "gross" being that which

is received, not taking into account the

disbursements incurred in acquiring those gross

proceeds.

It is possible, I think, to argue that

payments amongst participants are a division of

gross proceeds amongst themselves, howsoever

calculated. They are, in effect, the prescribed

dealing itself.

DAWSON J: There is a difficulty with that, is there not? I

mean, say you pay a flat sum to a courier for a

trip, $5000. That would be a cost or expense which

you would disregard, would it not?

MR NICHOLSON:  If he was outside and his services used for a

specific item, but he was not part of the conspiracy, yes, I would agree with that.

DAWSON J:	What difference does it make that he is part of the conspiracy?
GAUDRON J:	A courier could not be anything other than part

of the conspiracy, could he?

MR NICHOLSON:  I think, with respect, he could be.

GAUDRON J: There would have to be at least an agreement

with a courier.	You might not charge a conspiracy
but there would be an agreement.

DAWSON J:  It may be only a conspiracy which is part of the

larger conspiracy.

MR NICHOLSON: Yes, that is what I had in mind, where you

have a number of subconspiracies comprising a

network of relationships which, whilst it is a

conspiracy, may not be the prescribed dealing with

which the court is there concerned.

DAWSON J:  But that does not matter. The fact is the

courier receives a flat rate payment which is an
expense. It is not part of the proceeds in any

sense.

Cornwell	10	9/8/91
MR NICHOLSON:	Yes.	I do not suggest, with respect to

Your Honours, that the matter admits of easy distinction or black and white answers but what I am suggesting is that equally, to arbitrarily

define payments of an agreed amount as distinct

from a fractional share goes the other way as

rigidly.

DAWSON J:  Then it is a question of fact which was decided

against you.

MR NICHOLSON: With respect, I think it is a question of

law, Your Honour, and I think that is what has been
decided at pages 68 to 70.

DAWSON J: At best it would be a mixed question of fact or law but in so far as it is a question of fact, it

was decided against you, was it not?

MR NICHOLSON:  No, with respect, I cannot accept that. A

question of fact - and take the case of the
co-offender. The co-offender named is said to have

received a sum of $300,000 and had an expectancy of

something further. That section is quoted in the

judgment of Justice Morling. He had had more - he

thought he was getting close to half of $800,000.

He was guaranteed $300,000 and had a little more.

That is a finding of fact but I do not accept that

it is necessarily a finding of fact against my

argument at all.	I am not disputing that that was
the situation.	I am suggesting that that being a

primary finding of fact, it is within the argument

I seek to advance, that if it is absurd to suggest

that a courier receiving a smaller amount of money

for doing a specific job could not be treated as

but an outgoing, then I would suggest, just as

clearly, it is equally as rigid and perhaps

impossibly so to arbitrarily state, whatever the

consequences in common sense are - apply a

mathematical addition we can get some absurd

results - that a person who receives a fraction -

rather than a fraction, receives an agreed sum,

perhaps a small expectancy, is other than part of

the major dealing, the prescribed dealing himself,

and that is his prescribed dealing; and it being

part of the original plan it be his prescribed

dealing, that it could not alter the benefit

derived by the others in the prescribed dealing.

Now, I think that is the nub of the matter.

BRENNAN J:  You are seeking, really, to erect a

jurisprudence of the proceeds of crime as a new

province of law and order.

MR NICHOLSON:  I think that undoubtedly it requires

clarification. That case of Fagher referred to by

Cornwell 11 9/8/91

Justice Wilcox in the majority decision clearly raised the issue. In that case the simple facts

were that of, I think, $113,500 he received, $2000

was located upon his person and $2000 was the
pecuniary penalty, the balance being deducted from

the benefit, presumably having gone to the co-

offender from whom he obtained the drugs. So, you

have there a payment of a sum of money and a

deduction of the cost of goods. That that is

sought, I would suggest, to be accommodated by

Justice Wilcox, as best it can be, in the light of

the confusion about the issue at about page 67/68 of the appeal book and that the difficulties that

flow from that accommodation, I think, are apparent

at that page.

Indeed, Justice Wilcox goes on to remark that

he is in agreement that the conclusions he has
reached appear to be unsatisfactory but goes on to

remark, "Well, that's the way it has to be."

Now, I seek to raise, if special leave is

granted, the accommodation between the intention of
Parliament and that unsatisfactory interpretation

of the pecuniary penalty provisions.

Your Honours will be aware that, of course,

worldwide and throughout Australia there is a

developing law in which society is seeking a more

instantaneous method of combating the rise in drug

trafficking by utilizing civil remedies. One is

careful to stay within the ambit of the Parliament and the terms of the statute and the reason within the judgments rather than look to the merit of the

client in this type of case, if I can put it that

way, but, nevertheless, the reasoning, perhaps, in

Murphy v Farmer might play some part, if there is,

indeed, confusion around the effect of subsection

(6) - then the reasoning in the majority judgment

in this Court in Murphy v Farmer perhaps could find

its way in to an argument.

I would submit that the area is of such a

confused nature that authorities within Australia,

both federally and locally, would benefit by

clarification.

BRENNAN J: But one would need to have the facts of the case

in a clearly defined compass in order to have the

questions clearly raised. Here, one of the points

that you wish to raise was not evidently agitated

at all on the trial of the proceedings.

MR NICHOLSON:	I am not sure that I - - -?
BRENNAN J:	The question of the cost of the narcotics.

Cornwell 12 9/8/91

MR NICHOLSON:  I think that I may have misled Your Honours

unintentionally when I referred my response to

that. I was referring to whether there was

evidence adduced in those proceedings on that

point. The arguments had taken place as to the

meanings. For instance, at one point in.the
transcript, the solicitor appearing for the

applicant raised the question with His Honour

whether His Honour was of the mind that if a sum of

$6.9 million worth of the cargo came into his

client's hands - and that itself was sufficient

without further deduction - there was little point

in proceeding further with the proceedings because

that undoubtedly was the fact. Learned senior

counsel then appearing for the plaintiff in those

proceedings remarked that he was not sure he would

be arguing that. But, indeed, that is the way it

settled, the argument was held that way.

When I said that the matter was not litigated,

I was referring to the absence of evidence being

adduced. On one view and on the view taken by

Justice Pincus in the Full Federal Court, the onus

was on the then defendant to adduce such evidence.

That was on the basis of an argument

applying ..... case, a case, I think, referred to in

the first instance proceedings.

The argument which I advanced earlier was that

the term "derived" may, indeed, throw a totally

different light on that argument. Now, while the

matters were raised in that unsatisfactory fashion,
only an argument without evidence at first

instance, they were certainly before the court.

DAWSON J:  I suppose, Mr Nicholson, it is unlikely that ever

a really satisfactory case will arise in the sense

that participants have kept full accounts and their

contractual arrangements have been reduced to

writing and all that evidence is before the court

but this case, even taking that into account, falls

to determine the questions which you seek to raise,	far short of being a satisfactory vehicle in which
does it not?

MR NICHOLSON: Well, Your Honour, I would dispute that, with

respect. I think this is an extremely satisfactory

case in that it is a case of considerable

magnitude, it is a case -

DAWSON J: Well, clearly, that does not make it

satisfactory.

MR NICHOLSON:  It is a case - may I carry on, Your Honour -

in which there has been considerable interest.

Cornwell 13 9/8/91

DAWSON J: Well, interest and magnitude are not factors

which make it a satisfactory vehicle. Evidence and

material on which one can determine the

distinctions would make it a satisfactory vehicle

and it is lacking in this case.

MR NICHOLSON: Well, Your Honour, I am not sure that that is

correct in its entirety.

DAWSON J:  And factual findings, if I may say so. Not just

evidence, factual findings, and the factual

findings in this case are such as to be rather

against you and the contentions that you make.

MR NICHOLSON:	Your Honour, I will not, of course, take the issue if Your Honour has a disposition towards it
but I maintain my position that the findings of fact are consistent with my argument and not
against it. But, Your Honour, in terms of whether
it is a satisfactory vehicle: this is a case in
which the authorities have embarked upon a
considerable degree of investigation of a financial nature; as to records, as to transfers of funds, as to receipts, there is an enormous amount of
research in this.

DAWSON J: Well, I take that point; I made that point to

you. It is unlikely ever to get a really suitable

case having regard to the nature of the

proceedings.

MR NICHOLSON: Certainly, and in terms of the nature of that

particular undertaking, it would be rare, indeed,

to find the level of records and asset

verification, flows of funds, which - - -

DAWSON J: Contractual arrangements.

MR NICHOLSON: Certainly, which are here and in which the

persons involved in the actual transportation were

examined and were examined fully as to what they

and others did. The evidence in its entirety is

entirely satisfactory as to what occurred and who

did what. It is the conclusions which flow from it

that I seek to litigate.

It is a case abnormal in the sense that the

financial analysis and resources poured into it

that flowed from the first factor that I mentioned,

by its nature, have been far reaching. It is a

case in which one has evidence of who did what,

overseas and at each stage, on the route to

Australia. The primary fact against me which I

cannot dispute is that following the receipt into

his hands of that cargo, he disposed of it. It is

what leads up to that and what flows from it that I

seek to argue. I accept the primary findings of

Cornwell 14

fact and do not seek to disturb it.	I could not do
so.

So, in a sense of whether it is a suitable

vehicle, we have a case where financial analysis is

probably as good as it is ever going to·be; maybe

better than it has ever been. We have persons

giving evidence who took part in each stage of the

transaction in what must be regarded as a very

fulsome police investigation. They have identified

all steps. We have the overseas transfer of funds

even following the event identified by the

authorities.	We have as full a set of facts as to
who did what as we are going to find.	It embraces

the question of the meaning of "benefits derived"

within the legislation and I concede that if I

cannot take the matter outside the scope of

"benefits derived", within the meaning of the

statute for which I have advocated, then the other

arguments by themselves are not special.

The only things that would follow will have to

follow upon the possibility of arguing that

"benefits derived" should not be read so as to give

an unsatisfactory result, perhaps looking at the

Murphy v Farmer approach to interpretation but, in

any case, looking at the second reading speech

where the equivalent to the benefits derived is

referred to which would appear, at first blush, to

be inconsistent with the unsatisfactory conclusion,

in the majority judgment's own words, they reach at

about page 70 of the application book.

Your Honours, that is the substance of the

matter.

BRENNAN J: Yes, thank you, Mr Nicholson. We need not

trouble you, Mr Weinberg.

The applicant seeks to challenge the quantum

of an order made under section 243B of the Customs

Act 1901 (Commonwealth) submitting that the amount	should be reduced by the sum paid out to acquire
the narcotics to which the conspiracy related and
by the sums paid out to co-conspirators. The
amount to be deducted under the first head was not
established by the evidence in the trial and there
is insufficient reason to doubt the conclusion that
the Full Court arrived at as to the non-
deductibility of the latter sums.

The facts of the case and the issues raised in

argument in the courts below do not make this a

suitable case for considering the manner of

application of the provisions of sections 243B and

243C of the Customs Act. Accordingly, special

leave is refused.

Cornwell 15 9/8/91

MR NICHOLSON: If the Court pleases.

MR WEINBERG:  If the Court pleases, we ask for costs in this

matter and might we ask for a particular order in

relation to costs? The orders that have been made

below have been orders directed to the Official

Trustee in Bankruptcy who has restrained these

assets, and the orders made below, a sample of them

are set out on page 39 of the application book:

The Official Trustee in Bankruptcy pay to the applicant, out of the property of the defendants that has come into his possession

or under his control by virtue of orders made proceedings.

in these proceedings pursuant to s.243E of the

We would seek an order in those terms.

BRENNAN J: Whereabouts do we find this form?

MR WEINBERG:  Paragraph 3 at page 39 of the application

book, Your Honour. The Crown is one and

indivisible, Your Honour, but it has different

pockets.

GAUDRON J: Yes, but has the other pocket ever been involved

in the proceedings?

MR WEINBERG:  We act for the Commissioner who obtain the

restraining orders and put the Official Trustee in.

We, with respect, would submit that the

Official - - -

GAUDRON J: Yes, but that does not necessarily - I mean, if

that made him your servant or agent, you would not

want the order, of course.

MR WEINBERG:	No, Your Honour.
GAUDRON J:	And because he is not your servant or agent, one wonders what he thinks about the order for costs.
I am minded to mention this only because one knows
that at least under the Bankruptcy Act itself there
are provisions about proceedings being commenced with or without - - -
MR WEINBERG:	Of course, Your Honour. This is not a

bankruptcy, of course. The Official Trustee is

simply the person designated by the statute as the

responsible official for taking control of the

assets.

Your Honour, it may be that section 243C(8) is

of assistance. That subsection provides that:

Cornwell 16

For the purposes of this section, where

property of a person vests in a trustee in bankruptcy, the property shall be taken to continue to be the property of the person.

So that it is still for these purposes -

Mr Cornwell's property. A trustee, in that sense,

has no separate interest in the matter and there
are no other creditors or persons with interests.

GAUDRON J: It is the same as costs out of the State, but it leaves it to the trustee to work out whether or not it takes priority or is somehow lost in the

process.

MR WEINBERG: That may be right, Your Honour.

BRENNAN J:  The order would seem to give you a security over

property.

MR WEINBERG:  I am sorry, Your Honour, I do not quite

understand why the order - - -

BRENNAN J:  If there is an order that the Official Trustee

in Bankruptcy pay to you out of the property of the

defendants the amount of the costs, the property in

his hands is charged with that payment.

MR WEINBERG:  The intention of the legislation, Your Honour,

is to put the Commonwealth in the same position as

any plaintiff in civil proceedings and not, it

would seem, to put him in a secured position. But
we are not aware of any other creditors or any

bankruptcy proceedings.	I do not believe
Mr Cornwell is a bankrupt.

BRENNAN J: Well, is there any reason why the costs should

not go against Mr Cornwell?

MR WEINBERG:  Only that there may be some difficulty about

extracting them from the Official Trustee in

Bankruptcy if the order is made against Mr Cornwell

personally. Certainly, Their Honours in both the Full Federal Court and the Federal Court took the

view that the order ought to be made in these

terms.

BRENNAN J:	Do you wish to be heard on this matter?
MR NICHOLSON:	On the subject-matter of pockets, I am

regretfully silent. I can inform the Court, if it

assists the Court, that Mr Cornwell is not

bankrupt.

BRENNAN J:  Mr Weinberg, there are obvious problems about

making an order against either the Official Trustee or as against the property which is in the hands of

Cornwell 17 9/8/91

the Official Trustee. Perhaps, again, there are

problems about making an order against Mr Cornwell

if Mr Cornwell should also be given rights as

against his own property now in the hands of the

Official Trustee.

In the circumstances, it would seem

appropriate to indicate that whilst the Court is
disposed to make an order in your favour in respect
of costs, it would be desirable to adjourn the
making of that order in order to allow the parties
on either side of the bar table to consult with the

Official Trustee as they may be advised and to make

such submissions to us as they may be advised with

respect to the question of the form that the order
for costs should take, the Official Trustee being
equally entitled to make submissions at the same

time.

MR WEINBERG:  And those can be written submissions, if the

Court pleases?

BRENNAN J: Those are to be written submissions and should

be made within 14 days. Copies of the submissions

provided to the other parties affected.

MR WEINBERG: If the Court pleases.

MR NICHOLSON: If the Court pleases.

AT 10.52 AM THE MATTER WAS ADJOURNED SINE DIE

Cornwell 18 9/8/91