Director of Public Prosecutions v Campillo

[1999] NSWSC 1294

CITATION:	DPP v CAMPILLO [1999] NSWSC 1294
CURRENT JURISDICTION:	Common Law Division
FILE NUMBER(S):	13147/1998
HEARING DATE(S):	10, 11, 12 November 1999
JUDGMENT DATE:	24 December 1999
PARTIES :	Commonwealth Director of Public Prosecutions - Respondent Jose Manuel Campillo - Applicant
JUDGMENT OF:	Smart AJ

COUNSEL :	A B O'Sullivan for DPP B Stratton QC & G Jones for Campillo
SOLICITORS:	Commonwealth Director of Public Prosecutions George Sten & Co
CATCHWORDS:	Possessory title to moneys seized; value thereof; whether provision for reasonable legal expenses should be made based on possessory title with no other likely claimant; ceiling placed on such expenses by value of possessory title at date of hearing
ACTS CITED:	Prceeds of Crime Act 1987 (Cth) Customs Act 1901
CASES CITED:	Gollan v Nugent (1988) 166 CLR 18
DECISION:	See detailed orders of 24 December 1999

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

No 13147 of 1998

SMART AJ

23 December 1999

Commonwealth Director of Public Prosecutions v Campillo
JUDGMENT

1 Jose Manuel Campillo seeks an order whereby he has access to the sum of $552,500 AUD currently held by the Australian Federal Police (AFP) and previously held by the Australian and New Zealand Bank to meet past legal expenses and the reasonable expenses of his forthcoming trial on serious drug charges. 2 From May 1998 until his arrest on 7 December 1998 Mr Campillo was under the joint surveillance of the AFP and the Australian Customs Service (ACS) along with Julian Del Prado Montero, a Spanish citizen residing in Spain and Beatriz Betes-Suarez Gonzalez, a Spanish citizen, residing in Spain, who travelled to Australia in November 1998. 3 According to the defendant, by pre-arrangement, two male agents of Mr Del Prado met with him at the Hilton Hotel, Adelaide on 12 July 1998 and handed him a bag containing $552,500. He did not know the names of the agents. The defendant stated that he had received this money upon the basis that he would transfer it to Canada and invest it there on behalf of Mr Del Prado. The defendant was to be responsible for the money and its investment. Mr Del Prado wanted an annual return on his capital of 20 per cent. The defendant was to receive a commission of 3 per cent of the capital invested. 4 On 13 July 1998, at a coffee shop in Adelaide, the defendant met Frank Zotti who was carrying a silver attache case. They left the shop and walked towards a white BMW, with the defendant carrying the attache case which he placed in the boot. The men drove away. A short time later the defendant dropped Mr Zotti off at the King William Street Adelaide Branch of the ANZ Bank. Mr Zotti was carrying a black briefcase. Zotti entered the bank, produced $552,500 in cash, deposited it at the bank and signed, as applicant, the instructions to telegraphically transfer the cash to the Canadian Imperial Bank of Commerce account No. 0242918 for the credit of a company named International Capital Income Investment Limited (ICIIL). The defendant had written these details on a piece of paper for Zotti and placed it in the briefcase with the cash. 5 Following Mr Zotti’s departure from the Bank, an Ion Scan examination of the $552,500 revealed traces of cocaine hydrochloride. On 13 July 1998 the Police executed a search warrant pursuant to s.3E of the Crimes Act 1914 on the ANZ Bank and seized the $552,500. 6 Zotti was a financial consultant. He had worked for the Australian Taxation Office for about 9 years and was dismissed for doing private tax work while an employee. He had established his own business with much of his work being for those in the lower income bracket. He sorted out their problems which were often quite basic. He operated from his home and in an informal way. He also had a Security Guard Licence. According to Mr Zotti, the defendant introduced himself at his soccer club and they spoke to each other a number of times. About two weeks later he told Mr Zotti that he had a requirement to transfer some money overseas and asked Mr Zotti if he would carry out some transfers for him, explaining that there would be large amounts. Mr Zotti agreed. He was told that the moneys (or some of them) were the proceeds of house parties in Sydney. The money was to be sent to “the other brother or other partner.” He did not question this explanation. He knew the defendant only as Joe and Jose, and did not know his address or other details. Later in their relationship he had a mobile telephone number through which he could contact the defendant. 7 Between 30 March 1998 and 13 July 1998 on some eight other occasions Zotti received large sums of money from the defendant to send overseas. The defendant contacted him, advised that there was money to be sent overseas and they arranged to meet. At the meeting or a little later the defendant handed him a suitcase or other bag or case containing the cash and written instructions as to where and to whom the money was to be sent by telegraphic transfer. One transfer was to Mr Del Prado Montero. Mr Zotti received a fee for carrying out each transfer. The transfers were effected through different banks and branches. Throughout this whole process Mr Zotti asked no questions as it was none of his business. Nor were any suspicions aroused on his part. He just carried out his instructions. 8 Mr Zotti insisted that he was not the owner of the $552,500 and that he did not know who owned the money. He did not know if the defendant owned the money or any of it. 9 Detective Constable M J Garrick stated that he told Zotti on 14 July 1998 that the owners of the moneys or their lawyers should contact the AFP. Detective Garrick said that on 13 August 1998, Zotti telephoned him and advised that he had been contacted by lawyers from overseas who wanted proof that he had delivered the moneys to the ANZ Bank and that the AFP had seized the moneys. Detective Garrick reminded Zotti that the money was not his, a point with which he agreed. Detective Garrick stated that he would only deal with the true owners or their solicitors who should contact the AFP. By fax dated 20 August 1998 Zotti repeated his request for written confirmation of the seizure of the moneys from the ANZ Bank and stated “you can add that you are awaiting contact from the owners. I did receive a phone call confirming once you organise this confirmation you will be contacted by owners within 7 days.” Zotti telephoned Mr Garrick on 27 August 1998 seeking a letter of confirmation and again claiming not to be the owner of the money, not to know who the owner was or where the money came from. Zotti was again told to have the owners contact the AFP. The defendant gave evidence that he had Mr Zotti make inquiries on his behalf. The defendant said that he made no inquiries himself. 10 On 21 July 1998 a man calling himself Orlando Cueter inquired by telephone of Mr Parkin, District Manager of the ANZ Bank, Adelaide as to the whereabouts of USD492,277 to be sent to Canada in favour of ICIIL on 13 July 1998. He wanted to know what the delay was. He supplied his home telephone number in Toronto and a number at which he could be contacted in Florida on the following day. Later on 21 July 1998 Mr Parkin advised the man calling himself Orlando Cueter that the Australian Federal Police was holding the money. Cueter replied that he did not want anything to do with the money as he was only acting on behalf of a client who could not speak English. As soon as Cueter was told that the AFP had the money he wanted to end the conversation. The defendant said that the name Orlando Cueter meant nothing to him. 11 On 2 September 1998 a person identifying himself as Mr David Hall, an Adelaide solicitor who said that he was acting for Mr Del Prado regarding the seizure of moneys spoke by telephone with Detective Sergeant V J Lynch. A meeting was arranged for the following day. At that meeting Mr Hall claimed to be acting for an overseas agent. When asked who was the agent he was unable to provide any details. He claimed that he was acting on the basis of a telephone call from an overseas agent on the previous day. He was awaiting a letter of authorisation from his client. He indicated that earlier that day he had received a facsimile copy of an ANZ Requisition for Overseas Transfer and a facsimile copy of a s.3E Search Warrant for 6 Albion Terrace, Campbelltown, South Australia occupied by Mr Zotti. Mr Hall stated that he was acting on behalf of International Capital Income Investment Ltd. When asked, Mr Hall did not know who were the persons who represented this company. He seemed surprised when asked if his overseas agent was in Canada and did not answer. Mr Hall said that he did not know Mr Zotti. Detective Sergeant Lynch declined to provide any further information without a letter of authority from his clients indicating who they were and whether they were the owners of the moneys. Mr Hall accepted this. He was to return with a letter of authority and further instructions. He has not done so. The defendant said that he had his associate, Mr A Carracia speak to Mr Hall about the AFP seizing the money and its recovery. 12 Some of the material referred to in paragraphs 9, 10 and 11 was initially rejected. However, its relevance later became apparent and it was admitted at the commencement of the address of Mr O’Sullivan for the DPP. 13 From July 1998 to December 1998 there were many discussions between the defendant, Gonzalez and other persons located in Spain and Columbia. On 5 December 1998 a 52 foot ketch called the “Maeva Chiqui”, captained by Gregory Paul Meggett arrived in Coffs Harbour. On 6 December 1998 Gonzalez and the defendant drove to Taree, collected a boat trailer stored there and continued to Coffs Harbour, arriving on 7 December 1998. Later that day, Meggett lowered a Boston Whaler boat into the water, detached it from the “Maeva Chiqui” and piloted it to a boat loading ramp where the defendant and Gonzalez were waiting. The three men loaded the Boston Whaler onto the boat trailer. They were arrested shortly thereafter. 14 The Boston Whaler was searched and 225 packages were found concealed in its hull. Each package contained 1 kilogram of cocaine in bulk weight. 15 The defendant was charged with three offences

(i) being knowingly concerned in the importation of a commercial quantity of narcotics, namely cocaine contrary to s. 233 B (1) (d) of the Customs Act 1901

(ii) being in possession of a prohibited import, namely, a commercial quantity of cocaine contrary to s. 233B (1) (ca) of the Customs Act 1901 and

(iii) receiving and disposing of money reasonably suspected of being the proceeds of crime, contrary to s. 82 (1) of the Proceeds of Crime Act 1987 (Cth).

16 On 23 December 1998 the Court, on the application of the Director of Public Prosecutions made a restraining order that all the property of the defendant was not to be disposed of or otherwise dealt with by any person until 5 January 1999. That order was continued and still subsists subject to some variations. By consent, a variation order made on 15 March 1999 provided for the payment out of the defendant’s property of his legal expenses. The orders allowed the release of $143,500, being the amount estimated to be sufficient to cover his initial civil legal expenses and the costs and expenses of and relating to the committal proceedings. 17 On 21 May 1999, a further variation order was made providing for payment out of the defendant’s property of legal expenses in connection with the Court proceedings, that is, listening to audio tapes, interviewing witnesses at Taree and Forster-Tuncurry, viewing the relevant locations at Coffs Harbour and Forster and engaging a Spanish interpreter. 18 Prior to 15 June 1999 a brief of evidence comprising 7 volumes of police and civilian statements, 2 volumes of transcripts of conversation over the telephone and 3 volumes of transcripts of conversations recorded under Customs Act warrants were served on the defendant’s solicitors. 19 On 15 June 1999 committal proceedings in relation to the Customs Act offences started and continued over 12 days during the ensuing weeks. During the committal proceedings the DPP withdrew statements and evidence referring to the vessel Tvareg which had sailed from Central America to Australia via the Galapagos Islands, French Polynesia and Tonga, arriving in Australia in January 1998. Persons associated with that vessel (Del Prado, the defendant and Gonzalez) were involved in the telegraphic transfer of over $6 million from financial institutions in Adelaide to institutions overseas. This withdrawal shortened the committal proceedings. Further Customs Officer Loades confirmed that nothing untoward occurred in relation to the Tvareg. 20 On 4 August 1999 the defendant was committed for trial on the Customs Act offences. 21 On 19 August 1999 the restraining order was further varied by consent to permit the sale of a motor vehicle and household items with the resulting funds to be applied in payment of the defendant’s legal expenses. 22 On 1 September 1999 the DPP advised that the prosecution in respect of the proceeds of crime offence would not be proceeding in New South Wales because of section 80 of the constitution. With all the relevant events having taken place in South Australia, it was not easy to see how the courts in New South Wales had jurisdiction. On 13 September 1999 the DPP advised that a brief of evidence with respect to the events surrounding the seizure of the $552,500 would be delivered to the Adelaide Office of the DPP for consideration of whether any charges should be laid in South Australia. 23 On 16 September 1999 at Central Local Court the DPP sought leave to withdraw the charge with respect to the proceeds of crime on the basis that section 80 of the Constitution prevented the matter from proceeding to trial in New South Wales. On 7 October 1999 leave to withdraw such charge was refused. The DPP subsequently offered no evidence on the charge and the defendant was discharged on that charge. Costs in relation to that charge were awarded against the informant. 24 As at 11 October 1999 the defendant’s solicitors had incurred legal expenses comprising senior counsel’s fees of about $54,916, junior counsel’s fees of about $34,500 and solicitor’s fees of about $27,899 for which payment has yet to be made. To this total of $117,315 should be added another estimated $25,000 for costs of this application and another application and other preparation costs. Provision for fees is sought by the defendant for his upcoming trial due to start on 14 February 2000 and anticipated to last for 6-8 weeks. It is estimated that the fees for senior counsel, junior counsel and instructing solicitor for a six week trial with five days preparation at the rates consented to and ordered on 15 March 1999 would total $200,000. 25 The charge of being knowingly concerned in the importation of a commercial quantity of cocaine carries a maximum penalty of life imprisonment. The defendant is about 34 years of age. The matter is a grave one and he needs to be well represented. The assets which he has disclosed, other than his interest in $552,500 and some assets in Madrid of a limited value, have effectively been exhausted. 26 The defendant’s solicitor has stated that the defence to the Customs Act offences is that the defendant had no knowledge of the contents of the Boston Whaler. 27 In cross examination of the defendant these points emerged:

(a) He had personally met with Mr Del Prado in Australia and overseas. Mr Del Prado
did not like using the telephone. At a meeting or meetings some months before 12 July 1998 Mr Del Prado advised the defendant that he had or would have money to invest and that he wanted the defendant to invest it for him on the terms earlier mentioned, namely, a 20 per cent annual return and 3 per cent commission. No date was set for this to happen. There was no discussion about the amount of money to be invested or how or where the money was to be invested or what was to happen with the investment. There was no concrete investment in mind.

(b) He had made some small personal investments but had no other investing experience.

(c) He had selected ICIIL from a short list of recommended investments. That company was recommended to him by Mr Antonio Gutierez, a Portuguese businessman whom he met, by chance, in the Golden Wing lounge of Heathrow Airport, England while waiting for a plane. The company was yielding high returns. They spoke for less than an hour about financial matters. During their chat Mr Gutierez recommended a number of institutions with whom it would be good to invest. The list comprised companies world wide in a number of different countries basically in the growth regions.

(d) He had caused at least a dozen financial institutions to be looked into.

(e) He had a friend in Europe, Colete Baena, whom he asked to make inquiries of ICIIL

as to the returns which could be obtained, the security of any investments with it and

the type of investment portfolios the company offered. Mr Baena was in the music

industry and produced records, promoted records and artists and the sale of rights to

literary material.

(f) Mr Baena told him that investment in ICIIL was a good bet. There was probably

other conversation between them but the defendant could not recollect it. He trusted Mr

Baena who obtained the bank account details of ICIIL subsequently given to Mr Zotti by

the defendant. The defendant had no recollection about the nature of the company’s

operations or the fields in which it operated. He was under the impression that its

business lay in the stock market. Nor did he know exactly what enquiries Mr Baena

made.

(g) He was prepared to invest the moneys in a medium to high risk portfolio to obtain the

required returns. He invested the money on the basis of Mr Baena’s recommendation.

He did not make any independent analysis or assessment.

(h) Initially Mr Del Prado thought that Mr Zotti had stolen the moneys. Mr Del Prado

required the defendant to be responsible for the missing funds. The defendant said that he

believed that he was and still is responsible for the moneys. Mr Del Prado refused to tell

the defendant what was the source of the $552,500, saying it was none of his business.

This made the defendant’s task of recovering the money more difficult. As Mr Del Prado

would not reveal the origin of the funds he and other subordinates “had to devise some

means to legitimise” the moneys so they could recover them. They canvassed a number

of possibilities.

(i) This exchange occurred:

“Q Because Del Prado would not tell you the origin of the funds you are saying
you had to come up with a story
A More or less, sir
Q And that is in fact what you have done, isn’t it
A No, sir”

(j) The defendant agreed that Mr Del Prado was in a position of power and that he was working for Mr Del Prado.

28   The defendant denied that he had concocted the story as to how he came to obtain $552,500, the story about Mr Gutierez and that as to the purpose for which he received the money. 29   The defendant was taken through a number of transcripts of telephone conversations

which he held with his associates:

(a) On 20 July 1996 in a conversation with Ms Gonzalez he said “…I’ll have to cover

myself 100% here” and “…I don’t want to burn myself..” The defendant was unable to

say to what matter this related.

(b) On 27 July 1996 in a conversation with Mr Baena the defendant said, “…Tell him

Del Prado to do something and to move quickly because the slower he goes, the more

suspicions there will be.”

(c) On 29 July 1996 he was told by Mr Baena that the Cousin (Del Prado) had consulted

with somebody and been advised that nothing could be done from there (Spain or

Europe). This related to the $552,500. The defendant also said “…the problem is that

the Cousin (Del Prado) does not have a story to cover it…He wants somebody here to

get burnt for him and that’s not going to be like that.” There was a reference to the

company (ICIIL) and that it was not pursuing the moneys and it being burnt and knowing

this. The defendant stated, “…normally a transaction like this is that you’ve sold

something; what have you sold? Something that costs that much”. The defendant also

said:

“What the Cousin is looking for is somebody here to sacrifice because then this person

steps in to say he has paid and to collect what will be his…When he says that, he’s burnt”

and

“…they’re looking for two things: the person who paid for it and the person who receives

it. Is that they’re smelling something bad…”

(d) The defendant also said “It will be very good if you can make it a political thing, that

could be a diplomatic thing…If you can build a very convincing story you can make it an

international affair.”

The defendant said that ‘he’s burnt’ was a reference to the astronomical legal costs in

Australia. Mr Baena stated that this could not be done and that neither Mr Del Prado nor

anyone associated with him or behind him could run the risk of making a claim.

(e) Later in the conversation the defendant observed:

“They’re going to say, the one who delivered it…is the one who has to claim it; and as

soon as that person appears for that, that person if he does not have the cover that he

needs is….completely fucked for life.”

(f) In a conversation with Ms Gonzalez on 17 October 1998 the defendant pointed out

that Mr Del Prado could not get a solicitor to obtain the papers until someone states that

the moneys belong to him and the solicitor represents him. Later, the defendant

emphasised that the first person to say that the moneys belong to him would be burnt. Ms

Gonzalez insisted that Mr Del Prado was not going to do anything. Effectively Mr Del

Prado was treating the money as lost. The defendant spoke of working out a strategy to

obtain the moneys.

30   The defendant does not own the money seized and at best has a possessory title. Mr Zotti

makes no claim to the moneys. It is probable that the true owner will never claim the

moneys because of the risk of criminal proceedings. The true owner may be Mr Del

Prado or some other person.

31 I have approached the evidence of the defendant with considerable caution. I think that one or more persons provided him with the sum of $552,500 before it was given to Mr Zotti. I do not know whether it was given to the defendant in a lump sum or whether a number of persons handed money to him over a period. He may have been a collecting agent for Mr Del Prado. I have not felt able to be satisfied that the defendant’s evidence on these points was correct. I do not know what the money represented or anything about its source. 32 I doubt if the investing of the $552,500 was left up to the appellant. He was probably told with whom the money had to be invested. The defendant had no investment experience of consequence. His evidence as to his chance one-off meeting with Mr A Gutierez and the latter making recommendations as to investments of the kind earlier mentioned struck me as far-fetched. I doubt if the defendant had Mr Baena carry out the investigations suggested. It is probable that he received instructions from Mr Baena as to where to send the money. 33 One of the puzzling features of the present case is how such a large sum came to be accumulated. This also applies to the other large sums transmitted. Further, many of the sums so sent followed upon large cash deposits. This rather suggests that goods or services were sold or debts due to other causes had to be satisfied and the moneys paid to the defendant on behalf of some other person or several other persons. There was no suggestion that $552,500 had been brought into the country by cash, cheque or telegraphic transfer etc. 34 The handing of the money to the defendant was not unlawful and he asked no questions as to its source. However, as the owner has not come forward to claim such a large sum since its seizure some 17 months ago the sources which yielded the moneys are probably not legitimate. The materials gathered from the telephone intercepts point to Mr Del Prado and possibly some others in Europe having a superior title to the moneys. 35 Once it was known that the police had seized the moneys and it was realised that they would ask awkward questions as to the underlying sources, interest in pursuing recovery of the money evaporated except on the part of the defendant. There will probably never be another claimant to the moneys, whether the owner or owners or some other persons due to such person being unable to give a credible, lawful and satisfactory explanation of the real source of the moneys. The risk of facing investigation and serious criminal charges is too great. 36 The defendant does not own the money seized and at best has a possessory title. No one having a superior title will come forward and expose himself or herself to the prospect of a long gaol sentence. The true owner may be Mr Del Prado or some other person. 37 The DPP urged that I should not take such a pragmatic approach. Someone may eventually come forward and make a claim. The DPP submitted that having found that the applicant was not the owner of the money I should dismiss the current application for the provision of legal expenses. It would then be a matter for someone to claim the money from the police. The fate of the money could then be determined in subsequent litigation. There will be no subsequent litigation because of the possibility of gaol for such a claimant. The only likely claimant is the applicant. 38 If the defendant is convicted of the drug offences it is possible that the DPP will seek an assets forfeiture order in respect of the moneys. Section 43 (3) (b) of the Proceeds of Crime Act 1987 envisages that a court may make provision out of the property of a person the subject of a restraining order for his reasonable expenses in defending a criminal charge. 39 It is necessary to be satisfied that making such provision is not impermissible at law. In Gollan v. Nugent (1988) 166 CLR 18 Justices Deane, Dawson, Toohey and Gaudron pointed out at 44 that “the law will not lend its processes for criminal, illegal or immoral purposes.” At 46 they said: “As a general proposition, a plaintiff will not be denied relief unless he has to rely upon an unlawful or immoral transaction to establish his cause of action.” 40 They referred to a number of cases where the police had seized moneys illegally acquired but the plaintiff had recovered them. They said at 46-47:

“In Gordon v. Chief Commissioner of Metropolitan Police the plaintiff successfully recovered money which was the proceeds of street betting illegally carried on by him. The money was seized from the plaintiff’s house under a search warrant along with a number of betting slips. The plaintiff was subsequently acquitted of a charge of using the house as a gaming house. The police declined to return the money, relying upon the illegal circumstances of its acquisition. The plaintiff succeeded upon the basis that, although the money had been acquired by him in unlawful circumstances, he had no need to place any reliance upon the street betting in his action against the Chief Commissioner of Police. As Fletcher Moulton LJ said:

‘There being no forfeiture of the money under the Street Betting Act, 1906, and the property in the coins having passed out of the payer by his own voluntary act of payment, that property must be in the receiver, and whatever punishments and liabilities he may incur through his wrongful action in frequenting the streets for the purpose of betting, there is nothing that affects his property in the money received by him. It stands exactly in the same position as any other money that belongs to him, and his paying it into his account at his bank or his changing it for other moneys of an equal amount would be absolutely without effect on his legal position with regard to it.’


A similar case is Russell v. Wilson in which this court held that the plaintiff, who conducted sweeps on horse races, was entitled to recover moneys seized by the police which had been received by him, the plaintiff, in connexion with his business. The plaintiff was convicted of an offence under the Gaming and Betting Act 1912 (NSW) but, although that Act provided for forfeiture, no order for forfeiture of the money was made. The possessory title of the plaintiff to the money was held to be good against all but a superior title such as that of the true owners. Once the proceedings against the plaintiff had terminated, no order for forfeiture having been made, the power of seizure and retention by the police was exhausted.”

In the present case while an assets forfeiture order may eventually be made, s. 43 (3) (b) of the Proceeds of Crimes Act 1987 envisages provision for legal expenses being made.

41   In a dissenting judgment Brennan J discussed the general principles applicable when dealing with a claim based on possession and questions of illegality are raised. He pointed out that in trover a plaintiff must show an immediate right to possession and in detinue a right to possession. (p.25). At 27 Brennan J referred to these remarks of Fletcher Moulton LJ in Gordon:

“The law does not avail itself of such lawless methods as the defendant suggests in order to enforce respect for the law. If it intends moneys to be forfeited which are acquired by acts which are prohibited by statute, it provides that they shall be so forfeited and to whom they shall go. But I know of no principle of law, or decision, or even dictum, which renders money which has become the property of an individual liable to be taken and kept with impunity by any person who chances to get hold of it, merely because it has been acquired by some wrongful or prohibited act.”

42 There is no need to refer to the remainder of the erudite judgment of Brennan J. The evidence does not establish that the defendant’s possession of the $552,500 was unlawful. There may well have been illegality or unlawfulness at an earlier stage. That is one explanation why no one has come forward as claimant. 43 The DPP also submitted that the applicant lost his possessory title when he delivered the money to Mr Zotti. Mr Zotti disclaims any interest in or entitlement to the money. The defendant did not lose his possessory title when he delivered the money to Mr Zotti. Mr Zotti was the defendant’s agent to deposit the money with the ANZ Bank and send the money to the designated account and bank in Canada. If Mr Zotti had misappropriated the money, the defendant could have sued him for it and obtained injunctive relief. The defendant remained entitled to possession. Nor did the defendant lose his possessory title when the money was handed to and deposited with the bank. The bank was to transmit the money, as directed by Mr Zotti on behalf of the defendant. 44 The DPP submitted that the defendant was either a trustee of the money, or a fiduciary agent of the money and that if the court made an order making provision for the defendant’s legal costs it would be sanctioning or participating in a breach of trust or breach of fiduciary duty. I do not agree. It is not clear that the relationship between himself and Del Prado and possibly others was fiduciary. Further, if Del Prado does not wish to claim the moneys the defendant can hardly be blamed for asserting his possessory title. If the defendant had succeeded in having the moneys returned to him, the owner may have brought proceedings but what would have happened is far from clear. 45 The DPP contended that after the parting and deposit the defendant no longer had any interest in the moneys. Accordingly, the moneys were not the subject of the restraining order and not susceptible to the order sought for legal expenses. 46 The restraining order under s. 43 (2) (a) of the Proceeds of Crime Act 1987, provides that all the property of the defendant (including that specified in Part One of the Schedule to that order) is not to be disposed of or dealt with by any person. Part One includes

“2. The defendant’s interest in cash totalling $552,500 Australian (seized pursuant to warrant and presently held by the Australian Federal Police), being money deposited by the defendant’s agent, Frank Zotti, at the Australian and New Zealand Banking Corporation 81 King William Street Adelaide, South Australia on 13 July 1998 for transfer to the Canadian Imperial Bank of Commerce.”

At the time the order was sought and made the DPP took the view that the defendant had an interest in the cash..

47   Section 4 of the Act provides:

“property” means real or personal property of every description, whether situated in Australia or elsewhere and whether tangible or intangible and includes an interest in any such real or personal property.
“interest”, in relation to property means:
(a) a legal or equitable estate or interest in the property or
(b) a right, power or privilege in connection with the property, whether present or future and whether vested or contingent.

48   Upon the assumption that the defendant did not lose his possessory title to the moneys when he handed them to Mr Zotti and they were deposited with the bank, section 43 (2) (a) and the definitions of “property” and an “interest” in relation to property comfortably embrace and cover the defendant’s possessory title in the moneys. 49   The DPP further submitted that the court should only permit the defendant access to the moneys to an extent commensurate with the nature and extent of his interest in it as it was only the defendant’s interest in it that was restrained. It was pointed out that there was no evidence of the value of his interest in the moneys and thus no way the court could value it. A possessory title in moneys cannot be valued in a conventional way. If the owner appears and claims the money the possessory title is worth very little, perhaps almost nothing. If the owner does not claim and cannot do so because of the dangers of a criminal investigation, criminal proceedings and a gaol sentence the possessory title is valuable. There is, of course, the possibility of subsequent claims by the owner on the defendant as the holder of the possessory title, if he receives the moneys eventually. The DPP’s point was that if part of the moneys were spent on the legal fees of the defendant it was gone forever and that any subsequent proceedings as to that part would be futile. 50   In this case it is necessary to look into the future. This requires caution. Despite my firm views as to there being no likely claimant other than the defendant it would be incorrect for me to treat the whole of the $552,500 as available in this application. That would be to treat the defendant as the owner and not as the holder of a possessory title. An upper limit on the amount which is available to the holder of a possessory title at this stage must be imposed. That upper limit is $225,000. 51   The DPP urged that in the exercise of the court’s discretion the court should attach weight to the possibility of the money laundering charge being preferred in South Australia. I have taken this into account along with the delay which has occurred in such a charge being preferred in South Australia. 52   I need to take into consideration the $10,000 held by the defendant in a Spanish bank account in Madrid and a 1994 BMW sedan currently believed to be in his sister’s garage in Madrid. It will be up to the defendant to arrange for the BMW sedan to be sold despite the difficulties of doing so from gaol in Sydney and to cause the proceeds of sale and the sum of $10,000 in his bank account in Madrid to be remitted to his solicitors by 11 February 2000 or such later date as may be agreed with the DPP. With a trial due to start on 14 February 2000, there may be a need for money for reasonable legal expenses before this. The defendant’s solicitors will have to confirm to the DPP in writing by 14 February 2000 that they have received the moneys from Madrid and the amount thereof and that they have been applied in payment of the defendant’s legal costs or will be so applied. Not more than $40,000 is to be paid on account of reasonable legal expenses prior to receipt of the moneys from Madrid. It will be up to the defendant and his solicitors to make the necessary arrangements. 53   It will be necessary for the defendant and the solicitors for the defendant to so conduct his case and manage his financial affairs that the legal expenses of the defendant up to the time of verdict and, if necessary, sentence do not exceed $225,000 and the moneys remitted from Madrid. There will be no more money made available. There cannot be having regard to my assessment of the present value of the possessory title. The defendant’s solicitors and counsel should not proceed on the basis of exhausting these moneys and then letting legal aid funding take over. The daily rates fixed are not to be exceeded and there may have to be a downwards adjustment in these rates. Only one counsel may be able to be briefed. The court will require undertakings from the defendant’s solicitor and counsel that the defendant will be represented within the amounts stipulated to the completion of the trial including sentence if that arises. Large sums have already been spent on legal expenses and the trial has not yet started. A sense of proportion must be maintained. 54   If the defendant is to be tried jointly it will be necessary for the prosecution and the trial judge to be aware of the representation position and limits of the defendant’s resources and the problems which could arise if the trial became protracted and the defendant’s counsel and solicitors seek to be released from their undertakings because of the conduct of the trial by the legal representatives of the co-accused. This may bear upon the desirability of a joint trial. 55   During the hearing the defendant applied to amend the defendant’s motion by seeking in the alternative:

An order that the restraining order be varied to exclude from its operation the sum of $552,500 now held by the Australian Federal Police in South Australia

The DPP did not object and leave was granted accordingly and the amendment was deemed to have been made. It was accepted that if the court made such an order there may need to be a declaration that such sum did not form part of the property of the defendant the subject of the restraining order in view of the width of the order which embraced all his property. This alternative form of relief does not arise on my findings.

56   As the moneys were seized by the AFP pursuant to a warrant and held by them for evidentiary purposes a question arose whether they should be joined as a party. The AFP by their solicitor appeared before this court and assured it that if it made an order for provision of the reasonable legal expenses of the defendant out of those moneys such an order would be complied with. The AFP asked that it be allowed 14 days from the date of any order to release any moneys to comply with such an order. 57   The defendant’s costs of this application are to come out of the $225,000 earlier mentioned. The DPP should bear his own costs. Neither party has substantially succeeded. Each has succeeded in part. The motion raised novel questions. The defendant’s evidence was not accepted on substantial matters. 58   The following orders are made:

1. Pursuant to ss. 43 (3) and 48 (1) of the Proceeds of Crime Act 1987 the restraining order made on 23 December 1998 (the restraining order) as extended by order made on 5 January 1999 and varied by orders made on 15 March 1999, 21 May 1999, 19 August 1999 and 26 November 1999 be further varied to allow for the payment of the reasonable past and future legal expenses (including those of the proceedings culminating in this order) additional to those previously paid and not exceeding a further $225,000 and subject to the conditions hereinafter mentioned of Jose Manuel Campillo in defending these criminal charges:

(a) One offence under s.233 B (1) (d) of the Customs Act 1901 of in about December 1998 being knowingly concerned in the importation of a commercial quantity of narcotics, namely cocaine, and

(b) One offence of in about December 1998 being in possession of a prohibited import, namely a commercial quantity of cocaine contrary to s. 233 B (1) (ca) of the Customs Act 1901
2. Order 1 is conditional upon:
(a) The solicitor and counsel for the defendant undertaking that they will complete the trial (including any sentence proceedings) of the defendant for a total cost not exceeding a further $225,000 and the moneys remitted from Madrid standing to the credit of the defendant’s bank account there and said to be about $10,000 and the proceeds of sale of his 1994 BMW sedan located there, and
(b) the rates of remuneration of counsel and solicitors not exceeding those set out in Schedule B of the orders of 15 March 1999 and
(c) the non payment of more than $40,000 from the sum of $225,000 until the solicitor for the defendant confirms in writing that the moneys have been received from Madrid representing the proceeds of the defendant’s bank account there and the proceeds of sale of his 1994 BMW sedan and the amount thereof and that such moneys have been applied to payment of the defendant’s legal costs or will be so applied.
3. The release of the moneys the subject of order 1 is to take place each 28 days with the first release not to occur prior to 21 January 2000. (The DPP, the Australian Federal Police and the solicitors for the defendant are to establish a workable regime).
4. No order as to the costs of the DPP of this application.
As the orders made are a little unusual and I may not be aware of the intricacies of the legal expenses I propose to direct that the orders may be entered as and from 30 December 1999. This will give the parties the opportunity to speak to the orders. It should be understood that the upper limit of $225,000 is immutable.

THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

No 13147 of 1998

SMART AJ

Friday 24 December 1999

Commonwealth Director of Public Prosecutions v Jose Manuel Campillo
JUDGMENT

1   HIS HONOUR: Upon publishing my reasons yesterday I made no orders but stood over the question of the orders to be made until to-day. Counsel for Mr Campillo brought in short minutes of order to-day and there has been a brief debate on a few points. 2   Upon the court making its orders in accordance with the short minutes initialled by me and placed with the papers, Mr O’Sullivan for the DPP made an application for a stay of the proceedings. He sought, on behalf of the Director of Public Prosecutions, a stay until the further order of the Court of Appeal or alternatively 11 January 2000. 3   Mr O’Sullivan advised that the Commonwealth DPP was at present considering his position and whether he wished to seek leave to appeal. It is realised that at this time of year it is not always easy to make decisions in matters such as this. 4   Mr O’Sullivan relied strongly on the fact that if the appeal was successful the utility of appeal would be undermined because $225,000 (or at least a substantial portion of it) would have been spent on legal fees with no prospect of the Commonwealth recovering such moneys. That argument has considerable strengths and in other circumstances may well have prevailed. I do not underestimate its value. Of course, the balance of $327,500 out of $552,500 seized by the police would remain untouched. 5   On the material presently before the Court Mr Campillo is the likely claimant of the $552,500 both in the short term and the long term based on a possessory title. No other claimant will probably come forward. While that could possibly change it is most unlikely. I do not overlook the possibility of assets forfeiture orders being made. 6   There are in this case some very special considerations. These include that the trial on a serious drug importation offence is fixed for 14 February 2000. That trial involves Mr Campillo and two co-accused. They have been in custody since 7 December 1998. That is a long time to be awaiting trial.

If a stay was granted it is almost certain that the trial date of 14 February 2000 would have to be vacated. That would not only affect Mr Campillo but the co-accused.

7   It is estimated that the trial will last at least six to eight weeks. On the present information before this court a future date would not be able to be fixed in the District Court before, at the earliest, August 2000 and the starting date could even extend into early 2001. 8   This is said to be the largest importation of cocaine. The matter needs to be resolved quickly, bearing in mind that Mr Campillo and the co-accused have already spent over a year in custody. 9   If the trial date had to be vacated and a further trial date could not be set until August 2000 or later, then the question of bail would become very pressing. The DPP has indicated that the grant of bail would be opposed. 10   Mr O’Sullivan submitted that the only consequence which I should take into account is the destruction of the utility of the appeal. That is important. That consideration must be tempered by Mr Campillo being the only probable long term claimant of the $552,500 and having a better title than the police. There are also the other special considerations earlier mentioned which are of great importance. 11   One further matter needs to be mentioned; that even if I be wrong in the views I have expressed in my reasons it will fall upon legal aid to meet the costs of Mr Campillo. His costs would come from public moneys. If assets forfeiture orders were made, the moneys or part thereof would be forfeited to the Crown. 12   Mr Stratton for Mr Campillo has stressed that it is necessary for the defence to commence working as soon as possible on the defendant’s case to ensure that his case is fully prepared by 14 February 2000. He has reminded me that there are issues as to some of the translation or transcription of parts of the tapes and that these are important. A qualified and skilled interpreter has to do the detailed checking necessary. I have been reminded that there are differences between the Spanish spoken in Spain and that spoken in Colombia. 13   The defence case at the trial will be that Mr Campillo was not aware that cocaine was secreted in the Boston Whaler which came ashore from a yacht in the harbour at Coff’s Harbour. It is alleged, amongst other things, that Mr Campillo helped to load the Boston Whaler onto a trailer at a boat ramp at Coff’s Harbour. The tapes could be of significance on the question of knowledge. 14   On balance I would refuse to grant a stay of proceedings. However, bearing in mind the Director’s desire to have some time for reflection I propose to add to the short minutes of order paragraph 14 which will read:

“The Court further orders that the orders not be entered until 4 January 2000 on
which date they may be entered.”

Last Modified: 12/30/1999