Director of Public Prosecutions for Western Australia v Gypsy Jokers Motorcycle Club Inc
[2005] WASC 61
DIRECTOR OF PUBLIC PROSECUTIONS FOR WESTERN AUSTRALIA -v- GYPSY JOKERS MOTORCYCLE CLUB INC [2005] WASC 61
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2005] WASC 61 | |
| Case No: | CIV:2360/2001 | 21 JANUARY & 23 MARCH 2005 | |
| Coram: | TEMPLEMAN J | 20/04/05 | |
| 21 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| A | |||
| PDF Version |
| Parties: | DIRECTOR OF PUBLIC PROSECUTIONS FOR WESTERN AUSTRALIA GYPSY JOKERS MOTORCYCLE CLUB INC THE STATE OF WESTERN AUSTRALIA |
Catchwords: | Practice and procedure Freezing order granted over property suspected of being derived from crime Examination order granted on same evidence Objection filed on basis of insufficient evidence for the orders Whether abuse of process Disclosure of some of the affidavits used in support of application for the orders Direction to show cause why a further affidavit not disclosed Whether objector should proceed by appeal or by application to set aside the orders Whether orders can be made in absence of reasonable grounds for suspecting property used in or derived from specific confiscation offence |
Legislation: | Criminal Property Confiscation Act 2000, s 42, s 43(8), s 44, s 49, s 58, s 70, s 81, s 106, s 141, s 146, s 148 Rules of the Supreme Court, O 58 r 23 Supreme Court Act, s 60(1)(f) |
Case References: | Always Holding's Pty Ltd v Liquorland (Australia) Pty Ltd [2004] WASCA 273 Australian Coal & Shale Employees' Federation v The Commonwealth (1953) 94 CLR 621 Bell Group NV (in liq) v Aspinall (1998) 19 WAR 561 Christmas Island Resort Pty Ltd v Geraldton Building Co Pty Ltd (No 5) (1997) 18 WAR 334 Corporation of the Town of Gawler v Minister for Transport and Urban Planning (2002) 119 LGERA 287 Director of Public Prosecutions v Logan Park Investments Pty Ltd (1995) 37 NSWLR 118 House v The King (1936) 55 CLR 499 Huddart Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 Hunter v Chief Constable of the West Midlands Police [1982] AC 529 Jago v District Court (NSW) (1989) 168 CLR 23 Jeffrey v Director of Public Prosecutions (1995) 79 A Crim R 514 Moevao v Department of Labour [1980] 1 NZLR 464 Morris v Kanssen [1946] AC 459 Nicholas v The State of Western Australia (1972) WAR 168 Re Grinter; Ex parte Hall [2004] WASCA 79 Re Smith; Ex parte Director of Public Prosecutions for Western Australia (No 1) [2004] WASC 145 Rogers v The Queen (1994) 181 CLR 251 The Director of Public Prosecutions for Western Australia v Mansfield [2004] WASC 255 Walton v Gardiner (1993) 177 CLR 378 Australian Securities & Investments Commission v Mauer-Swisse Securities Ltd (2002) 42 ACSR 605 Axon v Axon (1937) 59 CLR 395 Burton v President of the Shire of Barnsdale (1908) 7 CLR 76 Dey v Victorian Railways Commissioners (1949) 78 CLR 62 Director of Public Prosecutions for Western Australia v Bennett & Co (A Firm) [2005] WASC 1 Director of Public Prosecutions for Western Australia v Mansfield [2004] WASC 116 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 Gronow v Gronow (1979) 144 CLR 513 Mace v Murray (1955) 92 CLR 370 Mallock v Tabak [1977] VR 78 R v Korner (1870) 9 SCR (NSW) L 344 Re Smith; Ex parte Director of Public Prosecutions for Western Australia (No 2) [2004] WASC 147 Williams v Spautz (1992) 174 CLR 509 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Applicant
GYPSY JOKERS MOTORCYCLE CLUB INC
Objector
AND
THE STATE OF WESTERN AUSTRALIA
Respondent to the Objection
Catchwords:
Practice and procedure - Freezing order granted over property suspected of being derived from crime - Examination order granted on same evidence - Objection filed on basis of insufficient evidence for the orders - Whether abuse of process - Disclosure of some of the affidavits used in support of application for the orders - Direction to show cause why a further affidavit not disclosed - Whether objector should proceed by appeal or by application to set aside the orders - Whether orders can be made in absence of reasonable grounds for suspecting property used in or derived from specific confiscation offence
(Page 2)
Legislation:
Criminal Property Confiscation Act 2000, s 42, s 43(8), s 44, s 49, s 58, s 70, s 81, s 106, s 141, s 146, s 148
Rules of the Supreme Court, O 58 r 23
Supreme Court Act, s 60(1)(f)
Result:
Application dismissed
Category: A
Representation:
Counsel:
Applicant : Mr T A Staples
Objector : Mr G A Rabe
Respondent to the Objection : No appearance
Solicitors:
Applicant : State Director of Public Prosecutions
Objector : Williams Ellison
Respondent to the Objection : No appearance
Case(s) referred to in judgment(s):
Always Holding's Pty Ltd v Liquorland (Australia) Pty Ltd [2004] WASCA 273
Australian Coal & Shale Employees' Federation v The Commonwealth (1953) 94 CLR 621
Bell Group NV (in liq) v Aspinall (1998) 19 WAR 561
Christmas Island Resort Pty Ltd v Geraldton Building Co Pty Ltd (No 5) (1997) 18 WAR 334
Corporation of the Town of Gawler v Minister for Transport and Urban Planning (2002) 119 LGERA 287
Director of Public Prosecutions v Logan Park Investments Pty Ltd (1995) 37 NSWLR 118
House v The King (1936) 55 CLR 499
(Page 3)
Huddart Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330
Hunter v Chief Constable of the West Midlands Police [1982] AC 529
Jago v District Court (NSW) (1989) 168 CLR 23
Jeffrey v Director of Public Prosecutions (1995) 79 A Crim R 514
Moevao v Department of Labour [1980] 1 NZLR 464
Morris v Kanssen [1946] AC 459
Nicholas v The State of Western Australia (1972) WAR 168
Re Grinter; Ex parte Hall [2004] WASCA 79
Re Smith; Ex parte Director of Public Prosecutions for Western Australia (No 1) [2004] WASC 145
Rogers v The Queen (1994) 181 CLR 251
The Director of Public Prosecutions for Western Australia v Mansfield [2004] WASC 255
Walton v Gardiner (1993) 177 CLR 378
Case(s) also cited:
Australian Securities & Investments Commission v Mauer-Swisse Securities Ltd (2002) 42 ACSR 605
Axon v Axon (1937) 59 CLR 395
Burton v President of the Shire of Barnsdale (1908) 7 CLR 76
Dey v Victorian Railways Commissioners (1949) 78 CLR 62
Director of Public Prosecutions for Western Australia v Bennett & Co (A Firm) [2005] WASC 1
Director of Public Prosecutions for Western Australia v Mansfield [2004] WASC 116
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125
Gronow v Gronow (1979) 144 CLR 513
Mace v Murray (1955) 92 CLR 370
Mallock v Tabak [1977] VR 78
R v Korner (1870) 9 SCR (NSW) L 344
Re Smith; Ex parte Director of Public Prosecutions for Western Australia (No 2) [2004] WASC 147
Williams v Spautz (1992) 174 CLR 509
(Page 4)
1 TEMPLEMAN J: The Gypsy Jokers Motorcycle Club Incorporated ("the Objector") applies to set aside a freezing order made pursuant to the Criminal Property Confiscation Act 2000 ("the Act"), on the basis that it was obtained by an abuse of process. The order was made by a Judge of this Court on 7 September 2001, in respect of $72,995 ("the Property") found by police in the execution of a search warrant at the Objector's club house.
2 The application was made on three grounds, but only one is pursued: that in making the freezing order the court acted without any evidence to support a suspicion that the Property was derived wholly or partly from the commission of a confiscation offence. Before considering that ground, it is necessary to set out the way in which the freezing order came to be made.
Background
3 Section 43 of the Act sets out the circumstances in which the court may make a freezing order. They include, in s 43(1)(b):
"the DPP advises the court that an application for an examination order, a monitoring order or a suspension order has been made in relation to the property, or is likely to be made in relation to the property within 21 days after the freezing order is made."
- And in s 43(8):
" … if there are reasonable grounds for suspecting that the property is crime-used or crime-derived."
"A. An application for an examination order has been made in relation to the Property (s 43(1)(b))
B. There are reasonable grounds to suspect that the Property is crime-derived (s 43(8))."
5 The DPP sought, inter alia, an order that three persons named in the schedule to his Notice of Motion attend before the court on a date to be
(Page 5)
- fixed, and submit to an examination about the nature and source of the Property and "the wealth and expenditure" of the Objector.
6 By s 58(1)(b) of the Act, an examination order may be made in relation to property which is not frozen "but is suspected on reasonable grounds of being confiscable". That is, property which is suspected on reasonable grounds of falling within the definition of confiscable property in s 142 of the Act, namely property that is:
"(a) owned or effectively controlled, or has at any time been given away, by a person who has unexplained wealth;
(b) owned or effectively controlled, or has at any time been given away, by a person who has acquired a criminal benefit;
(c) crime-used property;
(d) crime-derived property; or
(e) owned or effectively controlled, or has at any time been given away, by a declared drug trafficker."
7 In the present cases, only (d) above is relevant. In other words, the DPP sought an examination order on the basis of his suspicion that the Property was crime-derived. He sought a freezing order on the same basis, pursuant to s 43(8) of the Act.
8 It was then for the court to consider whether, on the evidence put before it (consisting of four affidavits), the DPP's suspicion that the Property was crime-derived was a reasonable suspicion: s 43(8) and s 44(a) of the Act.
9 The orders set out the grounds on which it was made, as required by s 44(b) of the Act. They were that an application for a freezing order had been made in relation the Property and that there were reasonable grounds for suspecting that the Property was crime-derived.
10 In due course, and in accordance with the Act, the Objector filed an objection to the Property being confiscated. The Property would have been confiscated had the objection not been filed.
11 The objection proceedings remain in abeyance pending the outcome of this application.
(Page 6)
The grounds for this application
12 The sole ground on which the Objector wishes to proceed is as follows:
"3. To the extent that the Court purported to make the Order pursuant to s 43(8) of the Act, its decision was made without any evidence to support a suspicion that the property was derived wholly or partly from the commission of a confiscation offence with the result that the Court's procedures were used in a manner which brought the administration of justice into disrepute.
PARTICULARS
a. Upon the proper construction of the Act and the legislative intent manifested in it, any order made pursuant to s 43(8) of the Act requires evidence before the court to support a suspicion that the property was derived wholly or partly from the commission of a confiscation offence: ss 4(d), 141 and 148.
b. Notwithstanding the provisions of s 106 of the Act, without an identifiable confiscation offence, it is not possible to link 'property; to any offence so as to give rise to a reasonable suspicion that the property is 'crime-derived' so as to trigger the operation of the critical provision relied on by the Court in making the Order, namely s 43(8).
c. There was no evidence before the Court linking the property the subject of the Order to an identifiable confiscable offence so as to give rise to any suspicion that the property was crime-derived for the purposes of s 43(8)."
13 The assertion that the freezing order was made "without any evidence to support a suspicion that the property was derived wholly or partly from the commission of a confiscation offence", is based on a legal and a factual contention. The legal contention, which the Objector describes as its "core submission", is that, on the true construction of the Act, it is not open to the DPP to form a reasonable suspicion that property
(Page 7)
- is crime-derived unless the property can be linked to an identifiable confiscation offence.
14 The factual contention is that the affidavits on which the DPP relied in support of his application for a freezing order did not contain evidence linking the Property to any confiscation offence.
The course of this application
15 So far as the Objector was aware when this application was filed, the DPP had relied on three affidavits which he disclosed (at the Objector's request) some time after the freezing order was made.
16 When the application came before me on 21 January 2005, it soon emerged that the DPP had filed a fourth affidavit which (and the existence of which) he had not disclosed to the Objector.
17 The fourth affidavit was on the court file, but the DPP maintained his position that it was not to be disclosed to the Objector. The situation was, therefore, that I was asked by the DPP to determine the application on the basis of affidavit evidence which was only available to one party.
18 I regarded this as highly unsatisfactory. I therefore directed the DPP to show cause why he should not disclose the fourth affidavit. Before doing so, I noted the decision of Roberts-Smith J in Re Smith; Ex parte Director of Public Prosecutions for Western Australia (No 1) [2004] WASC 145, in which his Honour held that there was nothing in s 70 of the Act (which restricts the disclosure of certain information) prohibiting the disclosure of evidence filed in support of an application for a freezing order. I accepted that despite any express prohibition, there might be circumstances in which it would not be in the public interest for evidence to be disclosed. However, having read the fourth affidavit myself, (adopting the course followed by Roberts-Smith J in Re Smith (supra)) it did not seem to me that the public interest would justify its non-disclosure.
The DPP's response to the show cause direction
19 The DPP does not rely on public interest considerations as a ground for non-disclosure. He submits, however, that this application is bound to fail in any event, so that disclosure would be pointless. The DPP relies on a number of contentions. I deal with each in turn. (The numbering is mine).
(Page 8)
Contention 1: The freezing order is based also on the application for an examination order and is not challenged on that basis
20 The DPP relies on s 49(6) of the Act which provides, in substance, that if a freezing order was made on two or more grounds, but the order "has not stopped being in force under ss 49(2), (3), (4) or (5), in relation to each of those grounds, the freezing order continues in force as if it had been made on each remaining ground".
21 The DPP submits that the proposition that a freezing order may be made and maintained on a number of independent bases is supported by s 81 of the Act. Section 81(1) provides that the court may set aside a freezing order to the extent permitted under s 82, s 83 or s 84. Subsection 81(2) then provides:
"However, if the property was frozen on 2 or more grounds, but the court does not set aside the freezing notice or freezing order in relation to both or all the grounds, the freezing notice or freezing order continues in force as if it had been made on each remaining ground."
22 That being so, the DPP submits, even if a freezing order could be set aside because of the inadequacy of the evidence on which it was obtained, it would not be permissible to do so when it had been based also on the fact that an application for an examination order had been made.
23 As I have noted above, an examination order may be made in respect of property which is not frozen, but which is suspected on reasonable grounds of being crime-derived. If, therefore, the evidence relied on by the DPP did not provide a proper basis for a freezing order, neither could it provide a basis for an examination order.
24 It follows, in my view, that the DPP's first contention does not provide a basis for withholding the fourth affidavit.
Contention 2: The Court has no jurisdiction to entertain an application of this kind
25 The DPP contends that his entitlement to apply to the court ex parte, pursuant to s 41(2) of the Act, creates a special jurisdiction in the court; a jurisdiction which is separate and distinct from its equitable jurisdiction. The DPP relies on the observation made by Roberts-Smith J in The Director of Public Prosecutions for Western Australia v Mansfield [2004] WASC 255 at [43], that:
(Page 9)
- "It would be entirely inconsistent with the purpose and objects of the Act and the detailed regime established by it, to regard freezing orders as merely a form of statutory injunction and subject to the same rules and principles as ordinarily apply to injunctions."
26 I respectfully agree: and I shall consider, below, the nature of the jurisdiction. However, I do not think the Act could have been intended to prevent the court from exercising, in a proper case, its powers to deal with an abuse of its processes. Such a result would be contrary to the law as stated by McHugh J in Rogers v The Queen (1994) 181 CLR 251 at 286:
"Inherent in every court of justice is the power to prevent its procedures being abused."
27 In so saying, his Honour followed a well-established line of authority, including Hunter v Chief Constable of the West Midlands Police [1982] AC 529 at 536; Walton v Gardiner (1993) 177 CLR 378; Jago v District Court (NSW) (1989) 168 CLR 23; Moevao v Department of Labour [1980] 1 NZLR 464 at 481.
28 An abuse of process might involve a situation in which "the processes of the court are being used for a purpose different to the purposes for which they were designed": Christmas Island Resort Pty Ltd v Geraldton Building Co Pty Ltd (No 5) (1997) 18 WAR 334 at 344-5.
29 On the Objector's case, that is the position here: the processes of the court, pursuant to the Act, were designed to enable a freezing order to be made in respect of property linked to an identifiable confiscable offence, whereas those processes have been used to freeze property when no such link has been shown to exist.
30 Even if that is so, I do not accept that it constitutes an abuse of process. The court is given a jurisdiction to make freezing orders. The DPP made his application for that purpose and the court made the order. In other words, the process was used to achieve the objective for which it was designed.
31 However, in my view, it does not follow that the court has no jurisdiction to entertain this application. Although it may be accepted that the Act creates a special jurisdiction, it must be open to the court to determine, as a matter of construction, the extent of that jurisdiction. For that reason, I do not accept the DPP's second contention.
(Page 10)
Contention 3: The grant of a freezing order is discretionary and the presumption of regularity applies
32 The DPP relies on authorities including Australian Coal & Shale Employees' Federation v The Commonwealth (1953) 94 CLR 621 and House v The King (1936) 55 CLR 499 for the proposition that where a discretionary order is made, there is a presumption in favour of its correctness: an appellate court will not interfere unless it is shown that the primary judge erred in some way when exercising the discretion.
33 In my view, this principle has no application in the present case. This is not an appeal from the decision of the primary judge. And if there was to be an appeal (a matter to which I shall refer below) the presumption would be rebutted if it was shown that (as the Objector contends) the judge erred in law.
34 A different presumption of regularity can arise in the context of administrative decisions, but that presumption would be equally inapplicable here. In any event, the presumption is rebuttable. It cannot be relied on if, on inquiry, it appears that it would be inappropriate to do so: Corporation of the Town of Gawler v Minister for Transport and Urban Planning (2002) 119 LGERA 287 at 296, per Debelle J, applying Morris v Kanssen [1946] AC 459 at 475-6.
Contention 4: Disclosure is prohibited by s 70 of the Act
35 Despite the observation made by Roberts-Smith J in Re Smith, to which I have referred above, the DPP submits that disclosure would be prohibited by s 70(1)(e) and s 70(2)(e) of the Act. They provide, respectively:
"(1) A person must not make a disclosure to anyone, except as permitted under section 71, about —
...
(e) the fact that the person or anyone else is or has been subject to a production order, an examination order, a monitoring order or a suspension order;
(2) Without limiting subsection (1), a person makes a disclosure for the purposes of the subsection if the person —
(Page 11)
- …
(e) discloses information to a person from which the person could reasonably be expected to infer anything about the existence or operation of an examination order, a production order, a monitoring order or a suspension order;"
36 In my view, these provisions have no application in the present case. They refer to existing orders: not to the possibility (however great) that such orders might be made.
Contention 5: The Objector has not adduced any additional material as a basis for setting the freezing order aside; and
Contention 6: The Objector should proceed by way of an appeal
37 I take these contentions together because they are related.
38 Order 58 r 23 of the Rules of the Supreme Court provides that the court may set aside any order which has been made ex parte.
39 However, the DPP relies on the well-established proposition that a judge should not set aside an order made ex parte by another judge, unless there was material non-disclosure when the order was made or there is further material, not before the original judge, which throws a new and different light on the position: Bell Group NV (in liq) v Aspinall (1998) 19 WAR 561 at 569, 570.
40 There is no suggestion of non-disclosure in the present case: nor is there any new material. I am asked to set aside the freezing order on the basis of the legal argument summarised above, and what is said to be the inadequacy of the affidavits filed in support of the application for that order. In essence, therefore, the Objector's contention must be that the judge who made the freezing order erred in law in so doing. But that is only a basis for instituting an appeal: it is not a basis for another judge to review the decision and set it aside, even if persuaded that the decision demonstrates error.
41 In considering whether an appeal can lie from the imposition of a freezing order, it is necessary to examine the nature of the special jurisdiction conferred on the court by s 42 of the Act. It provides:
(Page 12)
- "42. Proceedings for freezing orders
In proceedings for a freezing order, the court may do any or all of the following —
(a) order that the whole or any part of the proceedings is to be heard in closed court;
(b) order that only persons or classes of persons specified by the court may be present during the whole or any part of the proceedings;
(c) make an order prohibiting the publication of a report of the whole or any part of the proceedings or of any information derived from the proceedings."
"(a) summarise the effect of the order;
(b) advise the recipient to the effect that the property described in the order may be confiscated automatically under this Act unless an objection to the confiscation of the property is filed in the court specified in the notice within 28 days after the date of service of the notice;
(c) tell the recipient that he or she may be eligible to file an objection to the confiscation of the property; and
(d) give details of the recipient’s obligations under section 47."
43 I note that s 46(6) does not require the recipient of the notice to be given a copy of the application papers, nor to be informed about a right of appeal. Indeed, there is no reference to any right of appeal in the Act.
(Page 13)
44 Despite that, the DPP contends that it is open to the Objector to seek leave to appeal against the imposition of the freezing order, pursuant to s 60(1)(f) of the Supreme Court Act 1935. That provision is to the effect that no appeal may be brought against an interlocutory order or judgment without the leave of the Judge or the Court of Appeal.
45 Although the point has not been argued, I think the DPP is correct in accepting that an appeal may lie from a decision to impose a freezing order.
46 If there was no right of appeal it would follow that in dealing with applications for freezing orders, the Court was acting in some administrative capacity: see Huddart Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330, at 357.
47 It would probably have been open to the Parliament of Western Australia to pass legislation having that effect, because "the doctrine of separation of powers does not apply in its entirety to State Courts" Re Grinter; Ex parte Hall [2004] WASCA 79 at [36]; Nicholas v The State of Western Australia (1972) WAR 168 at 173, 175). However, I think it unlikely that that Parliament would have intended to do so, because such a course would undermine the judicial role of the Court. Applications for freezing orders are made to the Court: not to judges, as personadesignata.
48 Assuming, without deciding, that a freezing order is interlocutory in nature, it is difficult to see how an appeal against such an order could be instituted unless the applicant had access to all the evidence on which it was made. A right of appeal must surely involve an entitlement to procedural fairness.
49 The DPP's contention that the Objector should appeal, simply postpones the decision whether he should be required to disclose the fourth affidavit. However, in my view, it does not provide a reason for non-disclosure. Even if the public interest militated against full disclosure, arrangements could no doubt be made which would preserve the appropriate degree of confidentiality.
50 On the basis that the Objector has a right of appeal, I accept the DPP's submission that because there is no evidence of non-disclosure when the freezing order was made, and no new evidence, there is no basis for setting the order aside. That being so, this application must be dismissed. However, as the Objector's "core submission" has been argued, I will set out my views in relation to it.
(Page 14)
The Objector's core submission
51 As I have noted above, the Objector's "core submission" is that on the true construction of the Act, a freezing order cannot be made pursuant to s 48(3), unless there are reasonable grounds for suspecting that the relevant property has been used in, or derived from a specific confiscation offence.
52 The Objector submits that if no such offence can be identified, it is impossible to establish any link between an offence and the property sought to be frozen. In those circumstances, the Objector submits, there can be no reasonable grounds for suspecting that the property is crime-used or crime-derived.
53 In my view, the Objector's submission is supported by the definitions of crime-used and crime-derived property in s 146 and s 148 of the Act respectively.
54 The definitions (in which I have supplied some emphasis) are as follows:
"146. Crime-used property
(1) For the purposes of this Act, property is crime-used if —
(a) the property is or was used, or intended for use, directly or indirectly, in or in connection with the commission of a confiscation offence, or in or in connection with facilitating the commission of a confiscation offence;
(b) the property is or was used for storing property that was acquired unlawfully in the course of the commission of a confiscation offence; or
(c) any act or omission was done, omitted to be done or facilitated in or on the property in connection with the commission of a confiscation offence.
(Page 15)
- (2) Without limiting subsection (1), property described in that subsection is crime-used whether or not —
(a) the property is also used, or intended or able to be used, for another purpose;
(b) anyone who used or intended to use the property as mentioned in subsection (1) has been identified;
(c) anyone who did or omitted to do anything that constitutes all or part of the relevant confiscation offence has been identified; or
(d) anybody has been charged with or convicted of the relevant confiscation offence.
(3) Without limiting subsection (1) or (2), any property in or on which an offence under Chapter XXII or XXXI of The Criminal Code is committed is crime-used property.
- 148. Crime-derived property
(1) Property that is wholly or partly derived or realised, directly or indirectly, from the commission of a confiscation offence is crime-derived, whether or not —
(a) anyone has been charged with or convicted of the offence;
(b) anyone who directly or indirectly derived or realised the property from the commission of the offence has been identified; or
(c) anyone who directly or indirectly derived or realised the property from the commission of the offence was involved in the commission of the offence.
(Page 16)
- (2) Without limiting subsection (1), property of the following kinds is crime-derived —
(a) stolen property;
(b) property bought with or exchanged for crime-derived property;
(c) property acquired by legitimate means that could not have been acquired if crime-derived property had not been used for other purposes;
(d) any thing of monetary value acquired, in Australia or elsewhere, from the commercial exploitation of any product, or of any broadcast, telecast or other publication, where the commercial value of the product, broadcast, telecast or other publication depends on or is derived from a person’s involvement in the commission of a confiscation offence, whether or not the thing was lawfully acquired and whether or not anyone has been charged with or convicted of the offence.
(3) The reference in subsection (2)(b) to crime-derived property is not limited to crime-derived property described in subsection (1) or in subsection (2)(a), (c) or (d), but also includes a reference to property that is crime-derived property because of a previous operation or previous operations of subsection (2)(b).
(4) Once property becomes crime-derived property it remains crime-derived property even if it is disposed of, used to acquire other property or otherwise dealt with, unless it stops being crime-derived property under subsection (8).
(5) Property owned by 2 or more people, whether jointly or as tenants in common, is crime-derived if any part of the share of any of the owners is crime-derived, whether or not any of the owners is
(Page 17)
- an innocent party in relation to the share or part-share that is crime-derived.
- (6) If a person once owned crime-derived property, but was divested of the property in such a way that it stopped being crime-derived property under subsection (8), then, if the person acquires the property again, it becomes crime-derived property again.
(7) For the purposes of deciding whether property is crime-derived, the proceeds of a sale or other dealing do not lose their identity as those proceeds only as a result of being credited to an account.
(8) Crime-derived property stops being crime-derived property —
(a) when it is acquired by an innocent party;
(b) if it is frozen property — when the freezing order is set aside under section 83;
(c) if it has been confiscated — when the court orders its release under section 87;
(d) if it is money to be paid into the Confiscation Proceeds Account under section 131(1) — when it is paid into the Confiscation Proceeds Account;
(e) if it has been confiscated, but is not money — when the property is disposed of in accordance with regulations under section 140(2)(e); or
(f) in any other circumstances prescribed by the regulations."
(Page 18)
56 By s 141 of the Act, a confiscation offence is defined as follows:
"141. Confiscation offences
(1) In this Act, “confiscation offence” means —
(a) an offence against a law in force anywhere in Australia that is punishable by imprisonment for 2 years or more; or
(b) any other offence that is prescribed for the purposes of this definition.
(2) An offence of a kind referred to in paragraph (1)(a) is a confiscation offence even if a charge against a person for the offence is dealt with by a court whose jurisdiction is limited to the imposition of sentences of imprisonment of less than 2 years."
58 The DPP contends that s 106 of the Act stands in the way of that submission. It provides:
"106. Evidence that property is crime-used or crime-derived
A finding that particular property is crime-used or crime derived, or that there are reasonable grounds for suspecting that it is crime-used or crime-derived, and any decision, declaration or order based on such a finding —
(a) need not be based on a finding as to the commission of a particular confiscation offence, but may be based on a finding that some confiscation offence or other has been committed;
(b) may be made whether or not anyone has been charged with or convicted of the relevant confiscation offence; and
(Page 19)
- (c) may be made whether or not anyone who owns or effectively controls the property has been identified." (my emphasis)
59 The Objector submits that s 106 is inconsistent with s 43(8): and that, having regard to the proper approach to the construction of penal statutes, the latter should prevail.
60 I turn to consider that submission.
Is s 106 of the Act inconsistent with s 43(8)?
61 As I have noted above, the effect of s 43(8) of the Act, when read together with the relevant definition provisions, is that a freezing order may be made in respect of specified property if there are reasonable grounds for suspecting that the property has been used in, or derived from, an offence punishable by at least 2 years' imprisonment, or a prescribed offence.
62 Section 106 makes it unnecessary to prove that the property is relevantly related to a specific offence: there "need not" be such a finding. That is the ordinary meaning of the expression: see Always Holdings Pty Ltd v Liquorland (Australia) Pty Ltd [2004] WASCA 273 at [16] – [17].
63 In other words, if it cannot be proved that the property was used in or derived from a particular offence, the Court will need to consider whether it has been used in or derived from "some confiscation offence or other". But that, I think, still requires the identification of an offence to which the property may be linked. If that were not so, the provision would serve no purpose. Confiscation offences are committed regularly. It could hardly be suggested (for example) that a burglary committed in Port Hedland on 1 January 2004, without more, would justify an order freezing property in Esperance on 1 January 2005.
64 What is required, in addition, I think, is some evidence linking the property with the offence, so as to ground a reasonable suspicion that it is crime-related or crime-derived. The possibility of a finding being made whether or not anyone has been charged with "the relevant confiscation offence", supports this construction. However, if the provision is ambiguous, I think it should be construed in this way, so as to give effect to the principles that property rights should not be abrogated without clear words: Director of Public Prosecutions v Logan Park Investments Pty Ltd (1995) 37 NSWLR 118 at 125; Jeffrey v Director of Public Prosecutions (1995) 79 A Crim R 514 at 517.
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65 I therefore see no inconsistency between s 43(8) and s 106. Indeed, in my view, their combined effect, together with s 146 and s 148, supports the Objector's submission. That is, for the Court to make a freezing order under s 43(8), relying on the second limb of s 106(a), it is necessary for it first to make a finding that some or other identifiable confiscation offence has been committed, and then to consider whether there are reasonable grounds for suspecting that the property sought to be frozen was used in or derived from that offence.
66 It is not sufficient, therefore, for the DPP to allege only that (for example) the person who owns or who has possession of the property is suspected of having engaged in some criminal activity, probably involving a confiscation offence.
67 Although I accept the Objector's core submission, I do not accept its submission that it would be impossible to discharge the onus of proving (on the balance of probabilities) that the Property was not crime-derived if the crime from which it is suspected of having been derived has not been identified.
68 In my view, a person who becomes the owner of substantial property by legitimate means ought reasonably to be expected to be able to prove that fact, on the balance of probabilities, without any great difficulty. If the route by which property came into the ownership of an objector is lawful, it will usually be documented in some way. In those circumstances, it matters not what allegations of criminal activity are made against the person concerned.
The evidence relied on by the DPP
69 Two of the three affidavits disclosed by the DPP were made by police officers who deposed, respectively, to the location and seizure of the Property and to a statement made by the Objector's President to the effect that although he did not personally know the source of the Property, it belonged to the Objector, because it was on the Objector's premises.
70 The third affidavit was made by a senior financial investigator employed by the National Crime Authority. This deponent referred, in general terms, to the alleged criminal activities of the Objector's numbers. He did not refer to any specific confiscation offence.
71 In my view, this evidence does not satisfy the criteria set out above.
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72 I do not think it appropriate to make any observations about the fourth affidavit.
Summary and conclusion
73 I accept the Objector's core submission that in order to obtain a freezing order (or an examination order) it is necessary for the DPP to adduce evidence giving rise to a reasonable suspicion that the relevant property represents the proceeds of, or has been used in, an identifiable confiscation offence.
74 Whether or not the DPP did adduce such evidence in the present case cannot be determined unless the DPP discloses all the affidavits on which his application was based.
75 If the evidence relied on by the DPP in this application did not link the Property to a confiscation offence, the Judge who made the freezing order must have erred in law. This does not mean, however, that there has been an abuse of process.
76 It would be open to the Objector to apply for leave to appeal against the making of the freezing order, on the basis that the primary judge had so erred. However, in the circumstances of this case, it would not be open to me to review the decision of the primary judge. This application should therefore be dismissed.
77 The DPP has not shown cause why the whole of the evidence before the primary judge should not be disclosed to the Objector. An order for disclosure (or an order permitting the Objector to inspect the fourth affidavit on the Court file) will therefore be made so as to enable the Objector to consider whether to appeal against the freezing order.
78 I propose to suspend the order for 21 days and stay it thereafter, if the DPP lodges an appeal against this decision.
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