Director of Public Prosecutions (ACT) v Le, Hiep Huu

[1998] FCA 764

FEDERAL COURT OF AUSTRALIA

PROCEEDS OF CRIME – Proceeds of Crime Act 1991 (ACT) – appeal by Director of Public Prosecutions – application for restraining order under s.45 – whether residual discretion to decline to make order is removed by s.46.

PROCEEDS OF CRIME – Proceeds of Crime Act 1991 (ACT) – whether forfeiture under s.28 takes place if no restraining order in place six months after conviction – whether statutory purpose served by making restraining order after expiry of six months period.

PROCEEDS OF CRIME – Proceeds of Crime Act 1991 (ACT) – cross-appeal against restraining order against certain property – expiry of six months period between conviction and hearing of appeal – forfeiture to Territory under sub-s.28(1) – whether cross-appeal ceased to be competent – it did.

Proceeds of Crime Act 1991 (ACT), ss.24, 28, 29, 45, 46, 51, 61
Evidence Act 1995 (Cth), s.75
Interpretation Act 1967 (ACT), s.11A
Supreme Court Rules (ACT), O.40 r.3

Re Dunsborough Districts Country Club Inc [1982] WAR 321 at 329
Julius v. The Bishop of Oxford and Another (1880) 5 A.C. 214
Ex parte Gleeson [1907] VLR 368
Ward v. Williams (1955) 92 CLR 496
The Queen v. The Commissioners for Special Purposes of the Income Tax (1888) 21 QBD 313
Bevan v. Chambers 12 TLR 417
Sanofi v. Parke Davis Pty Ltd  (No. 1) (1982) 149 CLR 147
Hall v. Nominal Defendant (1966) 117 CLR 423
R v. Connell (1990) 3 WAR 516

DIRECTOR OF PUBLIC PROSECUTIONS (ACT) v. HIEP HUU LE & OTHERS

AG 98 of 1998-06-26

MILES, MATHEWS AND MADGWICK JJ
CANBERRA
25 MAY 1998

IN THE FEDERAL COURT OF AUSTRALIA	)
)
AUSTRALIAN CAPITAL TERRITORY  DISTRICT REGISTRY	) )  AG 98 of 1997
)
GENERAL DIVISION	)

ON APPEAL FROM THE SUPREME COURT OF THE
AUSTRALIAN CAPITAL TERRITORY

BETWEEN:	DIRECTOR OF PUBLIC PROSECUTIONS (ACT)       Appellant
AND:	HIEP HUU LE      First Respondent
MAI THI NGUYEN      Second Respondent
TIEN DAT BUI      Third Respondent
AND:	NHAN HUU LE      Cross Appellant
AND:	PHUC HUU LE      Cross Appellant

JUDGES:	MILES, MATHEWS AND MADGWICK JJ
PLACE:	CANBERRA
DATED:	25 May 1998

THE COURT ORDERS THAT:

1. The appeal against the decision of the Supreme Court in the application for a restraining order in relation to 10 Solus Place, Palmerston be allowed.

1. The order of the Supreme Court be set aside and in lieu thereof the Court by order directs that the property, being the interests of the second and third respondents in 10 Solus Place, Palmerston not be disposed of or dealt with by any person.

1. The cross-appeals be dismissed.

1. The parties pay their own costs of the appeal and the cross-appeals.

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

IN THE FEDERAL COURT OF AUSTRALIA	)
)
AUSTRALIAN CAPITAL TERRITORY  DISTRICT REGISTRY	) )  AG 98 of 1997
)
GENERAL DIVISION	)

ON APPEAL FROM THE SUPREME COURT OF THE
AUSTRALIAN CAPITAL TERRITORY

BETWEEN:	DIRECTOR OF PUBLIC PROSECUTIONS (ACT)       Appellant
AND:	HIEP HUU LE      First Respondent
MAI THI NGUYEN      Second Respondent
TIEN DAT BUI      Third Respondent
AND:	NHAN HUU LE      Cross Appellant
AND:	PHUC HUU LE      Cross Appellant

JUDGES:	MILES, MATHEWS AND MADGWICK JJ
PLACE:	CANBERRA
DATED:	25 May 1998

REASONS FOR JUDGMENT

THE COURT:

Background

On 27 November 1997 Cooper J in the Supreme Court of the Australian Capital Territory (the Territory) gave judgment in relation to applications made by the Director of Public Prosecutions (DPP) of the Territory for restraining orders under the Proceeds of Crime Act 1991 (ACT) (the Act). Restraining orders had been sought in relation to four properties in the Territory. In relation to three of them, his Honour declined to make an order. In relation to the fourth he made an order as requested. His Honour’s refusal to make an order in relation to two of the properties has not been challenged. However the DPP has appealed against his Honour’s refusal to make an order in relation to 10 Solus Place, Palmerston. The registered proprietors of that property have cross‑appealed against his Honour’s refusal to grant them costs. Finally, the parties with an interest (or previous interest) in property at 53 MacDowell Street, Evatt, as to which a restraining order was made, have cross‑appealed against the making of that order.

Legislative Background

The power to make a restraining order is set out in ss.45 and 46 of the Act. Those sections, so far as relevant here, provide as follows:

Division 2‑Restraining orders

Restraining orders

45.      (1)       Where a person (in this section and section 46 called the “defendant”)‑

(a)       has been convicted of an indictable offence; or

(b)       has been, or is about to be, charged with an indictable offence;

the DPP may apply to the Supreme Court for an order under subsection (2) against one or more of the following:

(c)       specified property of the defendant;

(d)all the property of the defendant (including property acquired after the making of the order);

(e)all the property of the defendant (including property acquired after the making of the order) other than specified property;

(f)specified property of a person other than the defendant.

(2) Where the DPP applies to the Supreme Court for an order under this subsection against property, the Court may, subject to section 46, by order‑

(a)direct that the property, or such part of the property as is specified in the order, is not to be disposed of, or otherwise dealt with, by any person, except in such manner and in such circumstances (if any) as are specified in the order; and

(b)if the Court is satisfied that the circumstances so require‑direct the Public Trustee to take custody and control of the property, or of such part of the property as is specified in the order.

(3)       A restraining order against a person’s property may be made subject to such conditions as the Supreme Court thinks fit and, without limiting the generality of this, may make provision for meeting, out of the property or a specified part of the property, all or any of the following:

(a)the person’s reasonable living expenses (including the reasonable living expenses of the person’s dependants (if any) and reasonable business expenses;

(b)the person’s reasonable expenses in defending a criminal charge;

(c)a specified debt incurred by the person in good faith (being a debt to which neither paragraph (a) nor (b) applies).

(4)       The Supreme Court shall not make provision of a kind referred to in subsection (3) unless it is satisfied that the defendant cannot meet the expense or debt concerned out of property that is not subject to a restraining order.

...

(8)       Where the DPP applies to the Supreme Court for an order under subsection (2), a witness shall not be required to answer a question or to produce a document if the Court is satisfied that the answering of the question or the production of the document may prejudice the investigation of, or the prosecution of a person for, an offence.

Grounds for making restraining order

46.      (1)       Where the offence concerned is a serious offence, the Supreme Court shall, subject to subsections (3), (4), (8) and (10), make a restraining order against the property.

(2)       Where the offence concerned is an ordinary indictable offence the Supreme Court shall, subject to subsections (3), (4), (5), (6), (7) and (10), make a restraining order against the property unless the Court is satisfied that it is not in the public interest to make such an order.

(3)       If the defendant has not been convicted of the offence concerned, the Supreme Court shall not make a restraining order unless‑

(a)the application for the order is supported by an affidavit of a police officer stating that the officer believes that the defendant committed the offence; and

(b)the Court is satisfied, having regard to the matters contained in the affidavit, that there are reasonable grounds for holding that belief.

(4)       Where the application is made in reliance on the proposed charging of the defendant with the offence concerned, the Supreme Court shall not make a restraining order unless it is satisfied that the defendant will be charged with the offence or a related offence within 48 hours.

(5)       Where‑

(a)the offence concerned is an ordinary indictable offence; and

(b)the application seeks a restraining order against specified property of the defendant;

the Supreme Court shall not make a restraining order against the property unless‑

(c)the application is supported by an affidavit of a police officer stating that the officer believes that‑

(i)the property is tainted property in relation to the offence; or

(ii)the defendant derived a benefit, directly or indirectly, from the commission of the offence; and

(d)the Court is satisfied, having regard to the matters contained in the affidavit, that there are reasonable grounds for holding that belief.

(6)       Where‑

(a)       the offence is an ordinary indictable offence; and

(b)       the application seeks a restraining order against‑

(i)        all the property of the defendant;

(ii)all the property of the defendant other than specified property; or

(iii)specified property of the defendant and all other property of the defendant;

the Supreme Court shall not make a restraining order against the property unless‑

(c)the application is supported by an affidavit of a police officer stating that the officer believes that the defendant derived a benefit, directly or indirectly, from the commission of the offence; and

(d)the Court is satisfied, having regard to the matters contained in the affidavit, that there are reasonable grounds for holding that belief.

(7)       Where the application seeks a restraining order against specified property of a person other than the defendant and the offence concerned is an ordinary indictable offence, the Supreme Court shall not make a restraining order against the property unless‑

(a)the application is supported by an affidavit of a police officer stating that‑

(i)the officer believes that the property is tainted property in relation to the offence; or

(ii)       the officer believes that‑

(A)the property is subject to the effective control of the defendant; and

(B)the defendant derived a benefit, directly or indirectly, from the commission of the offence; and

(b)the Court is satisfied, having regard to the matters contained in the affidavit, that there are reasonable grounds for holding that belief.

(8)       Where the application seeks a restraining order against specified property of a person other than the defendant and the offence concerned is a serious offence, the Supreme Court shall not make a restraining order against the property unless‑

(a)the application is supported by an affidavit of a police officer stating that‑

(i)the officer believes that the property is tainted property in relation to the offence; or

(ii)the officer believes that the property is subject to the effective control of the defendant; and

(b)the Court is satisfied, having regard to the matters contained in the affidavit, that there are reasonable grounds for holding that belief.

(9)       The Supreme Court may make a restraining order in respect of property whether or not there is any risk of the property being disposed of, or otherwise dealt with, in such manner as would defeat the operation of this Act.

(10)     The Supreme Court may refuse to make a restraining order if the Territory refuses or fails to give to the Court such undertakings as the Court considers appropriate with respect to the payment of damages or costs, or both, in relation to the making and operation of the order.

(11) For the purposes of an application under section 45, the DPP may, on behalf of the Territory, give to the Supreme Court such undertakings with respect to the payment of damages or costs, or both, as are required by the Court.

(12)     An affidavit made by a police officer for the purposes of this section that states that the officer believes a particular matter shall set out the grounds on which the officer holds that belief.

We have quoted s.46 in full, although much of it is not directly relevant to this appeal. However the whole section will need to be considered when determining whether a discretion exists to refuse to make a restraining order, a matter which we shall be discussing shortly.

Issues raised in the appeal

On 2 October 1996 the DPP filed a notice of motion pursuant to para.45(1)(f) of the Act seeking a restraining order over the property situated at 10 Solus Place, Palmerston. At that time the registered proprietors of the property were Mai Thi Nguyen and Tien Dat Bui. Neither of these people had been charged with any relevant offence. However it was the DPP’s case that the property was liable to be restrained as it was subject to the effective control of Hiep Huu Le (Hiep). On 28 April 1997 Hiep had been convicted of supplying a traffickable quantity of heroin, and on 10 June 1997 he was sentenced to periodic detention. The offence of which he was convicted was a serious offence under s.46 of the Act. There is no suggestion that the Palmerston property was “tainted property” in relation to the offence committed by Hiep. The DPP’s case was based on the proposition that the property was subject to the effective control of Hiep. This is one of the two grounds provided in s.46(8) for the making of a restraining order (see also para.45(1)(f)).

Sub-section 46(8) of the Act provides that the Court shall not make a restraining order unless the application is supported by an affidavit of a police officer stating his or her belief that the property is (as relevant here), subject to the effective control of the defendant, and the court is satisfied, having regard to the matters contained in the affidavit, that there are reasonable grounds for holding that belief. In this case his Honour had before him numerous affidavits sworn by various police officers which were relevant to this issue. Most if not all of the deponents were cross‑examined by counsel for the respondents. At the end of a lengthy hearing his Honour, in a very detailed judgment, made a number of factual findings adverse to the respondents. He concluded that there were reasonable grounds for believing that the Palmerston property was subject to the effective control of Hiep.

However, his Honour went on to discuss whether there was any statutory purpose to be achieved by the making of a restraining order, as it was already more than six months since Hiep had been convicted for the offence in question. His Honour’s concern arose from the terms of s.28 of the Act. That provision, so far as relevant, provides as follows:

Division 4‑Forfeiture in case of serious offence

Forfeiture of all restrained property if person convicted of serious offence

28.      (1)       If‑

(a)a person (in this subsection called the “defendant”) is convicted of a serious offence (otherwise than by reason of paragraph 5 (1) (d));

(b)a restraining order is or was granted in respect of property (whether property of the defendant or of some other person) in reliance on‑

(i)        the defendant’s conviction of that offence; or

(ii)the charging or proposed charging of the defendant with that offence or a related offence;

(c)the restraining order, to the extent to which it relates to the property, is not the subject of a declaration under subsection 51 (5); and

(d)the restraining order is in force at the end of the period of 6 months commencing on the day of the conviction;

the property is, under this subsection, forfeited to the Territory at the end of that period.

(2)       Subject to subsection (3), where property is forfeited to the Territory by virtue of subsection (1), the property vests absolutely in the Territory.

...

His Honour concluded that forfeiture under s.28 can take place only if there is a restraining order in force at the moment of expiration of the six month period. His Honour made the following observation:

The consequence of a construction of s 28(1)(d) which requires that there exists a restraining order in respect of property on the day that constitutes the end of a period of six months from conviction as a requirement of the section, is that once that date passes without there being in existence a restraining order, s 28 can never automatically operate to forfeit property in respect of the conviction specified in paragraphs (a) and (b) of subsection (1). That, in my view, is the proper construction of the subsection and the consequence which follows by the effluxion of time.

Once the six months period has expired, there is no statutory purpose in terms of automatic forfeiture under s 28 to be achieved by making a restraining order.

His Honour then proceeded to enquire whether there is any statutory purpose other than forfeiture to be achieved through the making of a restraining order. He determined this matter in the negative. He then declined to make a restraining order, saying: “the power to make a restraining order under s.45 is constrained to the extent that it must be exercised for the purposes of the Act and the discretion to make or refuse an order should be exercised accordingly”.

The DPP relied on three grounds of appeal. They are:

“GROUNDS

That His Honour Mr Justice Cooper erred in that:

(a)he considered that the combined effect of sections 45 & 46 of the POCA gave him a discretion whether or not to make the order sought having found that there were reasonable grounds to believe that Hiep Huu Le had effective control over 10 Solus Place, Palmerston.

(b)held that the provisions of section 28(1)(d) of the POCA require that automatic forfeiture by operation of that section could only occur if a restraining order under Section 45 of the POCA was in place prior to the expiration of the period of six months from the date of the conviction of Hiep Huu Le.

(c)he held that there was no statutory purpose to be achieved by making the restraining order.

We shall deal with each of these in turn.

1. Was there a discretion?

The first ground is a simple one. Notwithstanding that sub-s.45(2) is expressed facultatively, so as to apparently give the Court a discretion to make a restraining order, it is subject to s.46. Sub-section 46(1), the provision which is relevant here, is mandatory in that, subject to the matters contained in sub-ss.(3), (4), (8) and (10), the Court is compelled to make a restraining order. No residual discretion remains. Sub-sections (3) and (4) apply to restraining orders which are sought before a conviction is entered and are thus not relevant to this case. This left sub-ss.(8) and (10) to be considered by his Honour. Having reviewed the evidence, his Honour was satisfied, within the terms of sub-s.(8), that there were reasonable grounds for believing that the property was subject to the effective control of Hiep. There was no issue as to any undertakings under sub-s.(10). Accordingly, the DPP urges, the requirements of sub-s.46(1) were fulfilled and his Honour had no discretion to decline to make a restraining order.

There is an apparent dichotomy between sub-s.45(2), which appears to be facultative in its terms, and s.46(1), which appears to be mandatory. Counsel referred us to a number of cases regarding the meaning of the word “may”. In its primary sense, this word denotes the existence of a discretion to act or not to act (Re Dunsborough Districts Country Club Inc. [1982] WAR 321 at 329). But it can sometimes be used in a mandatory sense, such as when a public officer is empowered to act for the benefit of particular persons under certain conditions. If the conditions are fulfilled, the beneficiaries of the power will be entitled to require it to be exercised (Julius v. The Bishop of Oxford and Another (1880) 5 App. Cas. 214). The authorities indicate that the onus lies on those who assert that the word “may” has a compulsory meaning to show that this was the legislative intention (Ex parte Gleeson [1907] VLR 368 at 373, Ward v. Williams (1955) 92 CLR 496 at 505 and Dunsborough at 329).

Just as the word “may” is generally taken to be facultative in meaning, the word “shall” is generally mandatory. And s.46, to which s.45 is expressly subject, provides that the Court shall, subject to sub-ss.(3), (4), (8) and (10), make a restraining order when the offence concerned is a serious one. The restrictions imposed by sub-ss.(3), (4),  and (10) were, as we have already observed, inapplicable in this case, and the condition imposed by sub-s.(8) had been fulfilled to his Honour’s satisfaction. On its face, therefore, the making of an order would appear to have been mandatory.

It is interesting to note the scheme of s.46. Sub-sections (1) to (8) are mandatory in their terms. Each of them provides that the Court either “shall” or “shall not” act in a particular way in certain circumstances. Sub-sections (9) and (10) then appear to be facultative, and to confer a discretion upon the Court, through the use of the word “may”. Sub-section (10) entitles but does not oblige the Court to refuse to make a restraining order if appropriate undertakings are not given on behalf of the Territory. Sub-section (9) at first sight appears to be out of place with the balance of the section, and even to be inconsistent with it. For in providing that the Court “may” make a restraining order, whether or not there is any risk of the property being disposed of, this provision appears to imply that the Court would be entitled to decline to make an order if there were no such risk. In other words, sub-s.(9) appears to assume that the Court has a discretion to refuse to make a restraining order, notwithstanding that the conditions for the making of an order are otherwise fulfilled. In this respect it appears, on its face, to be inconsistent with the remainder of s.46. That on its own would be a powerful reason to examine whether sub-s.(9) can be read in a different sense.

Neither sub-ss.(1) nor (2) of s.46 refer, in terms, to sub-s.(9). However sub-s.(2) itself contains a discretionary component, in that the Court is not obliged to make a restraining order if it is satisfied that it is not in the public interest to do so. It is in this context that sub-s.(9) might have some work to do. If a Court were otherwise inclined to refuse to make an order on the public interest ground, and the risk of disposal of the property were relevant to that issue, then sub-s.(9) might have some operation.

Another view of para.(a) is that it was inserted, for the sake of more abundant precaution, to negative any implication that might be thought to arise from the Act’s subject matter and its scheme that a restraining order should not be made if there is no risk of its being dealt with so as to defeat the operation of the Act.

In any case, it is difficult to see how this provision can otherwise be relevant to any of the matters contained in s.46. It certainly has no application in cases, such as this, where sub-s.46(1) has been invoked.

It is apparent that it was Cooper J himself who raised the question as to whether there was any statutory purpose to be served by the making of a restraining order, given that more than six months had elapsed since the date of conviction. The discussion before his Honour then centered on the utility of the making of an order in these circumstances. It was apparently assumed by all concerned that this was a relevant consideration, and that the Court had a discretion to decline to make a restraining order if to do so would achieve no useful purpose. It was not put to his Honour that sub-s.46(1) was obligatory, and that there was no residual discretion. Had his Honour’s attention been directed to the mandatory terms of sub-s.46(1), then the outcome might well have been different.

In our opinion, the clear meaning of s.46(1) is that, if the relevant conditions are fulfilled, the Court is bound to make a restraining order. Those conditions having been fulfilled in this case, there was no discretion to decline to make an order. The Court will always have an inherent power to refuse to make an order if to do so would constitute an abuse of its processes. But it is not suggested that the circumstances of this case go so far. Accordingly, in our view, his Honour was in error in declining to make the restraining order in this case.

This on its own would be sufficient to dispose of the appeal in favour of the DPP. However other matters raised on the appeal merit discussion, albeit briefly. In particular, It seems worthwhile to comment upon the operation of s.28(1) of the Act.

1. How flexible is the six months’ time limit for obtaining a restraining order?

It was submitted by the DPP that his Honour was in error in holding that unless the restraining order was in place at the expiration of six months after the defendant’s conviction, then the automatic forfeiture provisions of s.28 could not be activated. In his written submissions, the Director contended as follows:

Such a construction would lead to absurd results. Such a restrictive interpretation could only assist the more cunning criminals who contrive schemes to dispose of the proceeds of their criminal activities in such a way as to make them difficult for the authorities to detect. It would mean that any assets not detected by the authorities within six months following a conviction would escape the provisions of the legislation altogether. The more cunning offender would simply have to hide his assets for the period of six months from his conviction, after which period he would be free to openly enjoy the fruits of his criminal activities.

Such a construction makes no allowance for exigencies such as unavailability of Court time to determine an application within the statutory period.

The Director referred to several cases involving the interpretation of phrases “within or at the end of the year” (The Queen v. The Commissioners for Special Purposes of the Income Tax (1888) 21 QBD 313) or “at the end of the said term” (in relation to a tenancy dispute: Bevan v. Chambers 12 TLR 417). He submitted that s.28 should be construed in the context of the statutory scheme as a whole. Paragraph 28(1)(d), he urged, should apply to effect automatic forfeiture if the restraining order is in place “within six months of the relevant conviction or such time thereafter as is reasonable in all the circumstances, such as would ensure that justice is done”. The Director conceded that s.28 itself contains a provision which is contrary to his suggested interpretation of para.28(1)(d). For sub-s.(5) empowers the Minister to make directions in relation to forfeited property “at or after the end of the appeal period in respect of the conviction”. Nevertheless, he submits, the legislative scheme is consistent with the interpretation for which he contends.

We cannot accede to this interpretation of para.28(1)(d). The section is, in our opinion, clear of meaning and free of ambiguity. Nor do we agree that a literal interpretation of the section is contrary to the intention of the legislation. Certainly it might encourage criminals to contrive schemes to conceal their ownership of property and to dispose of the proceeds of their crimes in a manner which would be difficult to trace. The whole Act does that and would do so on any view of the meaning of para.28(1)(d). On the other hand, it provides a very strong incentive for law enforcement authorities to make prompt and timely investigations as to these matters. In this regard, the Act confers wide‑ranging powers on the authorities to gain access to documents enabling them to trace money and property relating to people who have been charged with criminal offences (referred to as “defendants” in the Act).

There are other reasons for preferring a literal interpretation of sub-s.28(1). The Act, which has sometimes been described as draconian in its operation, authorises very significant invasions of what would otherwise be the property rights of citizens. Some of these people, two of the respondents amongst them, have not themselves been the subject of any relevant conviction. There is a very strong public interest in maintaining certainty and security in relation to property holding. This public interest would be significantly undermined if the extreme sanctions allowed under the Act, particularly that of automatic forfeiture under s.28, were to be available for a more or less open ended period.

Nor does the scheme of the legislation support the DPP’s contentions as to the meaning of sub-s.28(1). During the hearing of the appeal the Director was asked at what point in time s.28 would apply to effect forfeiture in the case of a restraining order which was made after the expiration of the six month period. He replied that it would occur immediately upon the making of the restraining order. However para.61(2)(g) provides that a restraining order ceases to be in force when property is forfeited under s.28. Accordingly, under the scenario suggested by the Director, there would be three instantaneous events, two of them occurring by force of law: the making of a restraining order, the forfeiture of property subject to the restraining order, and the cessation of the restraining order. This cannot, in our view, have been intended by the legislature, particularly as the operation of the forfeiture provision, para.28(1)(d), depends upon the restraining order being in force. It provides, if it were needed, a further ground for rejecting the DPP’s suggested interpretation of the s.28.

Further, we agree with the reasons given by his Honour who relied on the following:

(a)The literal interpretation of para.28(1)(d) fits with the scheme shown by s.14 and s.24, that an application for an order that might result in confiscation of property by the Territory, whether by way of “forfeiture order of pecuniary penalty order”, must be brought within six months of conviction.

(b)Section 24(1) precludes the making of a pecuniary penalty order “until after the end of the period of six months commencing on the day of conviction”. This according to Parliament was to enable “the effect of the statutory forfeiture pursuant to cl.28 [to be] assessed”. That is, it was contemplated that statutory forfeiture would have occurred no later than six months after conviction.

(c)The Explanatory Memorandum, in explaining cl.28 of the Bill was in terms which are more consistent with a literal interpretation of para.28(1)(d) - unchanged from the Bill - than any other.

We accordingly affirm his Honour’s interpretation of s.28. If there is no restraining order in place at the expiration of six months after the defendant’s conviction, then the section will have no operation and automatic forfeiture will not take place.

1. Is there any point to a restraining order made more than six months after conviction?

In common with his Honour, we entertain some doubt as to whether there is a legitimate statutory purpose to be achieved through the making of a restraining order more than six months after a defendant’s conviction. Under s.14 of the Act, the DPP must apply to the Court within six months of the relevant conviction for a pecuniary penalty order or a forfeiture order in relation to tainted property. The order will, by virtue of paras.61(2)(g) and (j) and sub-s.61(6), ordinarily expire in any event six months after it was made. However that period may be extended by the Court: para.61(2)(i). The Director urges that s.51 contains other wide‑ranging powers which can be invoked during the currency of a restraining order. In particular he refers to the power under para.(1)(c) to seek information on oath relating to “the affairs (including [details] of any property” of the defendant or of others. Much of s.51 is aimed at the prevention of injustice to any person resulting from the making of a restraining order. The Court is empowered to make “any ancillary orders that the Court considers appropriate”: sub-s.57(1). The broad scope of this power is illustrated by the Court’s specific ability thereunder, among other things, to vary the property to which the restraining order relates (para.51(1)(a)) or to exclude a person’s (including a defendant’s) interest in the property from the order (sub-s.(4)). And the Court’s powers are to make “ancillary orders” in respect of a restraining order. However the inquisitorial power given by para.51(1)(c) is also treated as an ancillary order, although information about matters going beyond the property the subject of the restraining order would appear clearly to be within the scope of a para.51(1)(c) investigation. The legislation is, even when read tightly, by lawyers’ standards, very intrusive upon private rights. No doubt the legislature perceived good reason for this. In that context, there is probably no warrant to assume that the para.51(1)(c) powers were not intended to have a broad operation, independent of whether property presently covered by a restraining order might either be forfeited or affected by the results of the para.51(1)(c) investigation. A final determination of that question can however await another day. It is enough to say that it is not entirely clear that the para.51(1)(c) power is of no legitimate utility once the time has expired for forfeiture of the property or for obtaining a pecuniary penalty order. In that respect, we differ from his Honour.

At least we may assume, from the mere fact that the DPP has pursued this appeal with such purpose, that some benefit is perceived to follow from the making of a restraining order notwithstanding that the six month period has expired. The Director commented, with some force, that it would be contrary to the purposes of the legislation for him to be required to give details of any action which he proposes to take under the restraining order.

In the absence of clear demonstration that there is no utility in the making of a restraining order after the expiration of the six month period, the result of our earlier ruling, that the making of an order is mandatory does not call for qualification. The order will, by virtue of para.61(2)(j) and sub-s.61(6), expire in any event six months after it was made.

Accordingly we would allow the appeal.

The Cross-Appeal against the restraining order

Competency of appeal

The order appealed against by the cross-appellants was as follows:

“1. Upon the Director of Public prosecutions of the Australian Capital Territory undertaking to pay any party adversely affected by a restraining order to be granted under s.45 of the Proceeds of Crime Act 1991 (ACT) over land and improvements at 53 MacDowell Street, Evatt, Canberra, such costs damages and compensation (if any) as the Court thinks just, in such manner as the Court directs, THE COURT ORDERS Phuc Huu Le and Nhan Huu Le by themselves their servants or agents or otherwise are restrained until 11 January 1998 or earlier order from disposing of or otherwise dealing with or creating any interest in or over that land and improvements situate at 53 MacDowell Street, Evatt, Canberra, ACT, more particularly described as Block 21, Section 70, Deposited Plan 4881, certificate of Title Volume 742 Folio 1, without the leave of the Court first had and obtained on notice to the said Director of Public Prosecutions.”

The triggering event for the making of this order was the conviction, on 11 July 1997, of Phuc Huu Le (Phuc) for the offence of supplying a traffickable quantity of heroin.  His Honour, after hearing the evidence, found that there were reasonable grounds for believing that the Evatt property was subject to the effective control of Phuc.

His Honour’s order was made on 27 November 1997, and was thus in force on 11 January 1998, six months after Phuc’s conviction.  On that date, by operation of sub-s.28(1) of the Act, the Evatt property was forfeited to the Territory.  Indeed, the DPP had a copy of the Certificate of Title which now shows the Territory to be the registered proprietor of this property.

The DPP applies to have the cross-appeal dismissed as incompetent, at least in part, upon the basis that the order of his Honour is now spent, the time during which it operated having expired on 11 January.  The DPP points out that no stay was sought, or other action taken, in respect of his Honour’s order which might have meant that the principal relief claimed, namely that the restraining order “be revoked”, would have any utility.

We see no answer to this.  His Honour may or may not have erred in law, as argued by the cross-appellants, in making the restraining order but it operated until set aside, unless it was a nullity.  The grounds of appeal set out in the Notice of Cross-Appeal do not suggest that his Honour lacked jurisdiction to make the order complained of, and we see no arguable basis for such a conclusion.   The order was therefore not a nullity.  It operated until 11 January.   On 11 January by operation of law (sub-s.28(1)), as the restraining order was then “in force at the end of the period of 6 months commencing on the day of the relevant conviction”, the subject property was then forfeited to the Territory.
Nothing we can do in these proceedings could now undo that forfeiture.  Among other things, although for certain purposes the DPP may be seen as representing the Crown in the right of the Territory, he does not do so for the purpose of defending any claim to the Territory’s interests in land.  The Territory would appear to have a right to be heard in any proceeding the effect of which might be to negate an interest in the subject land.  The Territory (other than as represented by the DPP) is not a party to the cross-appeal and has not been notified of it.  The forfeiture of the land was not an issue upon which Cooper J did or could make any orders.

Further, no cause of action is before the Court that would permit a reversal of the forfeiture. We do not necessarily suggest that there is any such cause of action available to the cross-appellants. They would at least need to invoke the discretion of the appropriate Court to make an application under s.29 of the Act which is, at least primarily if not solely, contemplated by the legislature as the means of reversing any injustice worked by the automatic forfeiture provisions of s.28.

So much is of course enough to dispose of the cross-appeal.  However, in deference to counsel’s industry (which verged on the daunting!) we add some comments on the substance of the more important of the arguments which were sought to be raised.

Procedure and evidence as to proof that there are reasonable grounds for a police officer’s belief

Sub-section 46(8), it will be recalled, provides:

“Where the application seeks a restraining order against specified property of a person other than the defendant and the offence concerned is a serious offence, the Supreme Court shall not make a restraining order against the property unless -

(a)the application is supported by an affidavit of a police officer stating that -

(i)the officer believes that the property is tainted property in relation to the offence; or

(ii)the officer believes that the property is subject to the effective control of the defendant; and

(a)the Court is satisfied, having regard to the matters contained in the affidavit, that there are reasonable ground for holding that belief.”

Sub-sections (5), (6) and (7) employ a similar formula: a police officer must swear to or affirm a belief in certain matters and the Court must be satisfied, having regard to the matters deposed to, that there are reasonable grounds for holding that belief.

Sub-section 46(12) provides:

“An affidavit made by a police officer for the purposes of this section that states that the officer believes a particular matter shall set out the grounds on which the officer holds that belief.”

The following may be observed. The use of the singular seems deliberate; the framers of the legislation are likely to have had in mind one police officer with overall knowledge of the case. The DPP is entitled to have that officer depose to all matters relied on by the officer to support the belief, including matters merely within his/her information and belief, as well as those within the officer’s own knowledge. Where such matters of information and belief are relied upon, there is no legal requirement that the sources of the information and belief should be disclosed. The DPP has a right to rely on an affidavit in the form which it has a duty under s.46 (see sub-s.(12)) to place before the Court to ground the relief sought. The section contemplates that this will be an affidavit of belief and that there will be “matters contained” in it that will go to whether there are reasonable grounds for holding that belief. Such a matter may be the deponent’s reasonable belief, on information available to him/her, as to relevant facts. That material would be admissible despite its having a hearsay element, without resort to O.40 r.3(2) of the Supreme Court Rules (ACT) (the Rules) or s.75 of the Evidence Act 1995 (Cth) (the Evidence Act). There is, therefore, no requirement of law that the source be stated. However, at the hearing of the DPP’s application, a person entitled to resist the application may enquire of the police officer as to that source and, subject to any claim for non-disclosure of the response to any person in the public interest, the source will be named.

Other material, from any other person, may be placed before the Court on the issue of whether there are reasonable grounds for holding the belief attested to by the police officer. In principle, that material, unless caught by O.40 r.3(2) of the Rules or s.75 of the Evidence Act, ought to be properly proved. But is it caught by either of those provisions?

Those provisions are respectively in the following terms:

Order 40 r.3(2):

“An affidavit for use in interlocutory proceedings may contain statements of information and belief with the sources and grounds of that information and belief.

Section 75:

In an interlocutory proceeding, the hearsay rule does not apply to evidence if the party who adduces it also adduces evidence of its source.”

In the first place, it would appear that s.75 does not affect the operation of O.40 r.3(2) – see s.9 of the Evidence Act. In practice, despite some difference in the wording of the two provisions, this may not make much difference. In any case, if an application under s.45 is not an interlocutory proceeding within the meaning of s.75, or O.40 r.3(2), as was submitted by the cross-appellants, it would be within the power of the resident Judges of the Court to make for the future a rule regulating the means by which evidence may be given in proceedings under the Act.

Secondly, although the making of a restraining order and the mere lapse of time thereafter may have final consequences for the rights of the parties, it cannot be said that proceedings for a restraining order are themselves for the final determination of such rights.  It is necessary to understand the scheme of the Act.

The Act is described in the preamble as being “an Act to provide for confiscation of the proceeds of crime and for other related purposes”.  Under s.3, its principal objects are:

“(a)to deprive persons of the proceeds of, and benefits derived from, the commission of offences against the laws of the Territory;

(b)to provide for the forfeiture of property used in or in connection with the commission of such offences;

(c)to enable law enforcement authorities effectively to trace such proceeds, benefits and property; and

(d)to provide for the enforcement in the Territory of forfeiture orders, pecuniary penalty orders and restraining orders made in respect of offences against laws of the States and other Territories.”

The Act is divided into Parts as follows:

1. -          Preliminary (ss.1-13)

2. -          Confiscation (ss.14-32)

3. -          Confiscated Assets Trust fund (ss.33-37)

4. -          Control of Property Liable to Confiscation (ss.38-62)

5. -          Information Gathering Powers (ss.63-73)

6. -          Offences (ss.74-77)

1. -          Interstate Orders and Warrants (ss.78-88)

2. -          Miscellaneous (ss.89-95)

Part II is divided into Divisions:

1. -          Application for confiscation order (ss.14-18)

2. -          Forfeiture orders (ss.19-22)

3. -          Pecuniary penalty orders (ss.23-27)

4. -          Forfeiture in case of serious offence (ss.28-30)

5. -          Miscellaneous (ss.31-32)

Part IV consists of two Divisions: “1 – Search powers” and “1 – Restraining Orders” (ss.45-62).

Under Part II (“Confiscation”), the Court may make “confiscation orders” of two kinds – “forfeiture orders” and “pecuniary penalty orders” whereby, respectively, “tainted property” may be forfeited to the Territory (s.19) and a person who has derived benefits from the commission of an offence may be ordered to pay the amount of the benefits to the Territory. Additionally, under s.28 property the subject of a restraining order (made under s.46) which is in force six months after a conviction for a serious offence (and which is not protected against s.28 by a Court order under sub-s.51(5)) is forfeited to the Territory. Thus, s.28 forfeiture is treated, correctly, as a species of confiscation of property. Section 28 itself may not be the end of the road: s.29, for example, allows, in effect, reversal of a s.28 forfeiture after the event, at the suit of one whom s.29 conceives to be a deserving applicant.

As noted, restraining orders are dealt with by a Division within Part IV – “Control of Property Liable to Confiscation”. They are thus apparently conceived as analogous to orders for the interim preservation of property, pending some final disposition by operation of law, whether that operation is by way of order of the Court or the direct effect of s.28.

The terms of the Division confirm the impression of the interim nature of restraining orders. Under subs.45(3) the order may be made on “such conditions as the Supreme Court thinks fit", including by making provision for a person’s living expenses and expenses in defending a criminal charge. Sub-section 46(10) contemplates that the Court will or may exact undertakings from the Territory with respect to the payment of damages or costs. Under s.47 a short-term restraining order may be made ex parte. In particular, s.51 is relevant.

As noted earlier, much of s.51 is designed to give the Court power to ameliorate injustice to any person as a result of the making of a restraining order. This power is available not only when the Court makes the restraining order but also “at any later time”: sub-s.(1). An “ancillary order” under s.51 may outlast, in its effect, a forfeiture order that has ceased to be in force: sub-s.(3).

Section 60 provides for the revocation of a restraining order upon the giving of satisfactory security for the payment of a possible pecuniary penalty or, more generally, satisfactory undertakings concerning a person’s property.  These are steps, of course of a kind commonly taken in relation to what are undoubtedly interlocutory orders.

Section 61 governs the time during which a restraining order remains in force. It is not contemplated that it will ever be perpetual or in that sense “final”: paras.(2)(h), (i) and (j). The general approach is that an order ceases to be in force when what the legislature sees as the justification for such an order ceases: for example, on a failure promptly to charge an offence, or upon the withdrawal or acquittal of a charge (where a proposed or outstanding chare has been the basis of the order) – sub-s.(1)-(2)(d); upon the satisfaction of a pecuniary penalty order – para.(2)(e), or upon the forfeiture of the property under s.19 or s.28 – para.(2)(g).

Paragraphs (2)(e) and (g) indicate that an “automatic” forfeiture under s.28 is not the only purpose of the making of a restraining order. In general, failing such or like specific instances the order may not be in force for longer than six months: paras.(2)(j) and (6)(c). An extension of an order may only be granted if, among other things, a forfeiture order might still be made or the time for s.28 forfeiture (six months from conviction) has not expired – sub-s.(3).

The Australian Law Reform Commission shortly identified the cases at which provisions such as s.75 of the Evidence Act are aimed (similar provisions are to be found in the Rules of most Australian Supreme Courts):

“proceedings that are not final, usually dealing with procedural problems that arise in preparing a case for trial, but including proceedings for injunctions pending the trial of an action” (emphasis added) ALRC 38, para.143, 33.

The mischief in cases thus described and others is that, absent a provision like s.75 or O.40 r.3(2), the rigidities of the merely procedural laws of evidence, especially the hearsay rule, may in urgent cases (or what ought to be subsidiary and inexpensive proceedings) stultify the doing of justice according to the substantive law.  The world of convicted or reasonably suspected criminals with substantial assets is plainly one calling for urgent action by the DPP and, in proper cases, the Court, if the objects of the Act are to be achieved.  The necessity for urgency is compounded by the evident view of the legislature that the duration of citizens’ liability to such drastic disruption of their enjoyment of property rights as the Act permits ought to be stringently limited.  An absurd result would be reached if the effective operation of the Act might be prejudiced through insistence on the hearsay rule.

However, those considerations alone are not a sufficient condition for a conclusion that the proceedings are “interlocutory”: urgent final hearings are not rendered interlocutory merely because of their urgency. Can it fairly be said that the character of restraining orders is interlocutory? Having regard to the Act as a whole and to the purposes of reform of the law of evidence effected by O.40 r.3(2) of the Rules and the Evidence Act, we think a positive answer to that question should be given. As we have sought to show, at various points in the Act, express provision is made which emphasises that ss.45 and 46 are intended to have only interim effects. It would be wrong, in our view, to interpret O.40 r.3(2) of the Rules and s.75 of the Evidence Act as having been intended by their respective framers to draw a distinction between proceedings of such a kind and those more conventionally and obviously regarded as interlocutory. Such an interpretation would deny the purposes underlying such provisions: c.f. s.11A of the Interpretation Act 1967 (ACT).

Counsel for the cross-appellants presented a comprehensive argument to the contrary, but we are unable to accept it.  It may be conceded that the ordinary test to determine whether an application is interlocutory is whether the order finally determines the rights of the parties, see e.g. Sanofi v. Parke Davis Pty Ltd (No. 1) (1982) 149 CLR 147 at 152 and that such test concerns the legal rather than the practical or real effect of the order in question: ibid at 153.  However, in our view, the application of those tests confirms the approach we have taken.

Nor, in our view, is there any requirement, in order to constitute interlocutory proceedings, that there must be engrafted a requirement that there is also to be “a principal cause pending between them”, c.f. Hall v. Nominal Defendant (1966) 117 CLR 423 at 443 per Windeyer J. It is simply that in most cases where the issue arises, and of course it commonly arises in the context of whether an appeal from an order or decision lies as of right or only by leave, there will be some such principal cause pending.

We do not consider, for the reasons indicated that an application under s.45 can itself be regarded as such a “principal cause” so as to deny it an interlocutory character. While there is only a limited express power to “revoke” a s.45 order (s.60), the effect of sub-ss.51(4) and (5), for example, is that there can be ordered such a “variation” or “disregard” of the restraining order as to amount, wholly or virtually wholly, to what in ordinary parlance would be called a revocation of the order. Indeed it must be the case, for some classes of applicants for relief under s.51, that they could only get it after the making of a s.45 order. And in the present case (an application under sub-s.46(8)) the very same issues – tainted property and effective control – are able to be finally determined, as distinct from determined on a police officer’s reasonable belief, under para.57(4)(g).

In the result, we agree with the judgment of Cooper J insofar as it dealt with  the evidentiary and procedural issues (it may not have dealt with all of them) sought to be relied on in the cross-appeal.  Cooper J relied on a decision of Nicholson J in R v. Connell (1990) 3 WAR 516. Our approach also accords with that of Nicholson J. In particular, dealing with Western Australian legislation of the same general kind his Honour made two observations which we gratefully adopt. The first was that, for the purpose of the interpretation of provisions such as O.40 r.3(2) of the Rules and s.75 of the Evidence Act:

“[t]he question is whether the nature of the proceeding is such as to impact upon the nature of the evidence which the court may take into account.”

To that question a positive answer must be given in the case of s.45 of the ACT Act. The second was:

“It is apparent from a reading of each of the sections that the making of a restraining order does not have the legal effect of finally disposing of the fact or conditions of restraint.”

If it be correct that the “fact or conditions of restraint” might be the subject of the relevant rights of the parties, that remark is as apposite to the ACT legislation as to that applying in Western Australia.

Cross-appeal on costs in relation to premises at 10 Solus Place, Palmerston

Ms. Mai Thi Nguyen, the second respondent, and Mr. Tien Dat Bui, the third respondent, appeal from his Honour’s decision of 27 December 1997 not to make an order for costs in their favour despite their successful resistance before his Honour of the DPP’s application for a restraining order over the subject premises.

We have, however, already decided that his Honour erred in not making the restraining order.  It follows that the costs of the appeal must fail.  In any event, given his Honour’s findings, we detected no error in his approach to costs.

Outcome

The appeal against the decision of the Supreme court in the application for a restraining order in relation to 10 Solus Place, Palmerston is allowed.  The order of the Supreme Court is set aside and in lieu thereof the Court by order directs that the property, being the interests of the second and third respondents in 10 Solus Place, Palmerston, is not to be disposed of or dealt with by any person.  The cross-appeals are dismissed.  In the circumstances, the parties are to pay their own costs of the appeal and the cross-appeals.

I certify that this and the preceding twenty-six
(26) pages are a true copy of the Reasons for
Judgment herein of the Court.

Associate:

Dated: 25 May 1998

Counsel for the appellant:	T. Golding
Solicitors for the appellant:	ACT Director of Public Prosecutions
Counsel for the 2nd & 3rd respondents:	G. Grogin
Solicitors for the 2nd & 3rd respondents:	Tetlow Jensen & Doyle
Counsel for the cross-appellant	G. Grogin
Solicitors for the cross appellant:	Tetlow Jensen & Doyle
Date of hearing:	5 March 1998
Date of judgment:	25 May 1998