Director of Public Prosecutions (SA) v Condo (No 2) - [2008] SADC 60

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
DIRECTOR OF PUBLIC PROSECUTIONS (SA) v CONDO & ORS (NO 2)
[2008] SADC 60
Judgment of His Honour Judge Tilmouth
14 May 2008
PROCEDURE - COSTS
General Rule - Costs follow the event - discretion conferred by s42 of the District Court Act 1991 (SA) and by Rule 101.02(1) of the Rules of Court, modified by s227 of the Criminal Assets Confiscation Act 2005 (SA).
Criminal Assets Confiscation Act 2005 (SA) ss36, 47, 48, 51, 59, 227; District Court Act 1991 (SA) s42, referred to.
Copping & Ors v ANZ McCaughan (1994) 63 SASR 523; Walton v McBride (1995) 36 NSWLR 440 at 464E, 474C, considered.

DIRECTOR OF PUBLIC PROSECUTIONS (SA) v CONDO & ORS (NO 2)
[2008] SADC 60
The issue

Judgment was delivered in this matter on 13 March 2008, dismissing the application of the plaintiff for an ‘instrument substitution declaration’ and for the forfeiture of certain property, pursuant to ss47 and s48 of the Criminal Assets Confiscation Act 2005 (SA) (“the Act”)[1].
[1] [2008] SADC 25 at [67]
The court found substantially in favour of the intervening parties, Mr and Mrs Condo, holding the Director of Public Prosecutions (SA) failed to prove the subject property was of the “same nature and description” as the property used as an instrument of an offence, or that the claimed property was available or able to be forfeited under s48 of the Act[2].
[2] [2008] SADC 25 at [66]
The parties were granted leave to file written submissions as to the appropriate consequent orders relating to costs. The interested parties seek orders for costs in their favour, orders resisted by the Director.
Costs in criminal assets confiscation proceedings
Ordinarily, costs follow the event “unless the court otherwise orders”: District Court Rules 1987 101.02 (1), now Rule 263 (1). This does not however fetter the general discretion at large under s42 of the District Court Act 1991 (SA)[3].
[3] Copping & Ors v ANZ McCaughan (1994) 63 SASR 523.
Section 227 of the Act modifies the usual position somewhat. This provides:
227—Costs
(1)     A court may, if -
        (a)     a person brings, or appears at, proceedings under this Act –
(i)    to prevent a forfeiture order or restraining from being made against                    property of the person; or
(ii)    to have property of the person excluded from a forfeiture order or   restraining order; and
        (b)     the person is successful in those proceedings; and
        (c)     the court is satisfied that the person was not involved in any way in the                commission of the serious offence in respect of which the forfeiture order or                restraining order was sought or made,
        order the Crown to pay the person costs in connection with the proceedings or such         part of those costs as is determined by the court.
(2)     To avoid doubt, the costs referred to in subsection (1) are not limited to costs of a     kind that are normally recoverable by the successful party to civil proceedings.
Three things, at least, may be said with some confidence about the effect of s227. The first is that s227(1)(c) prevents an order being made with respect to costs against the Crown relating to the defendant Paul Condo. That is, obviously, because he is clearly a person “involved … in the commission of the serious offence”. Second, as the section applies to persons bringing or appearing at proceedings under the Act, it permits orders for costs against the Crown in favour of persons who are not otherwise parties to the proceedings, but claim an interest in the property, thereby securing the right of appearance pursuant to s51 of the Act. Third, insofar as ss227(21) refers to “costs of a kind that are normally recoverable by the successful party to civil proceedings”, this no doubt picks up s42 of the District Court Act (above) and Rule 101.02 (1) or Rule 263 (1). As a consequence, it appears as if orders on a solicitor and client or an indemnity basis against the Crown remain open, if otherwise applicable: Walton v McBride[4].
[4] (1995) 36 NSWLR 440 at 464CE, 474C, see the discussion in Trevorrow v State of South Australia (No. 7) [2008] SASC 5.
Whether s227 leaves it open to make orders for costs against other persons or in favour of the Crown, are two potential questions that do not presently arise for determination.
The position of the parties
The interested parties, Mr and Mrs Condo, seek only “the general rule that costs follow the event pursuant to District Court Rules 263(1) should apply”.[5] The plaintiff maintains s227 is not satisfied on three bases. First, it is submitted the interested parties were unsuccessful in excluding their own interests in the subject property, since their interests were never at stake. This submission focuses on the words “property of the person” in both ss227(1)(a)(i) and (ii). The second ground is that the order from made by the court on 13 March did not “prevent a forfeiture order or restraining order from being made” or did not result in “property … [being] excluded from a forfeiture order or a restraining order”: ss227(1)(a) (i) and (ii). Thirdly, it is submitted the court cannot be satisfied they were “not involved in any way in the commission of the serious offence”, as required by s227(1)(c).
[5] Written submission paragraph 4.
Property of the person?
It is to be recalled that Mr and Mrs Condo applied under s36 of the Act for orders excluding the subject property from a restraining order. If successful, that has the effect of removing or excluding the property or relevant interest, from the ambit of an order for forfeiture. The initial application by the Director of Public Prosecutions was for the forfeiture of the defendant’s interest in the property, under s48.
Part 4, division 1, subdivision 1 of the Act (ss47-56 inc.) deals with forfeiture orders. The subject property was registered in the name of the defendant and Mr and Mrs Condo, as equal “joint tenants”. The court held the defendant’s interest was as trustee[6], so that he effectively held no beneficial interest in the property, whereas Mr and Mrs Condo did. Now, it is correct to observe the Director’s application related specifically to “the defendants’ interest in the property”, as did the restraining order of 26 April 2007. However, the Director pressed the case for forfeiture on the basis that the defendant held a one-third legal interest in it and he did not accept that it was held under trust. Therefore, the practical reality is that the intervening parties appeared in order to prevent the forfeiture of the one third interest belonging to them. It must follow then, they were resisting an order in relation to “property of the person” appearing in the proceedings within the meaning of s227(a)(i) and (ii), so the first submission for the Director must fail.
[6] at paras [40-42]
In any case, Mr and Mrs Condo brought their own application for exclusion of the whole of the subject property[7], so they would have come within s227(1)(a)(ii) as persons bringing proceedings for exclusion in any event.
[7] FDN 14
Success in the proceedings
The second line of defence taken by the Director, founds on the notion that Mr and Mrs Condo were not successful in preventing forfeiture or gaining an exclusion of their interests. The position is that the Director failed in the application for forfeiture at an antecedent stage of the proceedings, because he did not prove the matters necessary to acquire the necessary instrument substitution declarations under s48. That being so, Mr and Mrs Condo were necessarily successful in the proceedings to prevent forfeiture and therefore squarely come within the requirements of s227(1)(b), thus triggering the power to make an order for costs against the Crown in their favour.
Involvement in any way in the commission of the offence
The third ground of resistance is misplaced. The Director correctly points out, an onus rests on a party to prove matters they assert, pursuant to s220(1) of the Act. Coming to s227(1)(c), the submission is that Mr and Mrs Condo must demonstrate they were “not involved in any way in the commission of the serious offence in respect of which the forfeiture order … was sought”. This reproduces the same qualification as that contained in ss58(1)(c)(i) and s59(1)(c)(i), save that in this instance, the additional words “in any way” appear, after “was not involved”.
Whether the burden under s227(1)(c) lies on Mr and Mrs Condo or not, the fact remains there is not the slightest suggestion Mrs Condo was in any way involved in the defendant’s crime. As for Mr Condo, the only suggestion of his involvement comes by way of inadmissible secondary material contained in the sentencing remarks in relation to the defendant. As the court pointed out in its earlier reasons, this is not admissible to prove Mr Salvatori Condo was involved in the commission of the subject offence, nor for that matter that he was involved “in any way”[8]. That being so, there is nothing to suggest such involvement.
[8] at paras [63-65]
Order
In the result, as the interested parties were wholly successful, they are entitled to an order against the Crown pursuant to s227(1) of the Act, for the payment of their costs in connection with these proceedings, on a party/party basis, to be agreed or taxed.