Director of Public Prosecutions v Dalibor Drazetic; Director of Public Prosecutions v MJP

[2022] SASC 35

SUPREME COURT OF SOUTH AUSTRALIA

(Civil)

DIRECTOR OF PUBLIC PROSECUTIONS v DALIBOR DRAZETIC; DIRECTOR OF PUBLIC PROSECUTIONS v MJP

[2022] SASC 35

Judgment of the Honourable Justice Parker  

EQUITY - EQUITABLE REMEDIES - INJUNCTIONS - INTERLOCUTORY INJUNCTIONS - INJUNCTIONS TO PRESERVE STATUS QUO OR PROPERTY PENDING DETERMINATION OF RIGHTS - MAREVA INJUNCTION

CRIMINAL LAW - PROCEDURE - CONFISCATION OF PROCEEDS OF CRIME AND RELATED MATTERS - FORFEITURE OR CONFISCATION

These proceedings relate to applications of the Director of Public Prosecutions (Director) arising out of joint operation of various state, Commonwealth and overseas law enforcements agencies, known as Operation Ironside. The applications were for numerous orders set out in the applicant’s Second Amended Originating Applications dated 16 July 2021 in both CIV-21-6262 and CIV-21-6263. The respondent in each proceedings are suspects arising out of that operation.

These are civil proceedings relating to the confiscation of assets of the respective respondents as sought by the Director. There are two consolidated issues before the Court to decide arising out of the Second Amended Originating Applications in these matters.

Firstly, the Director, in non-specific terms, seeks restraining orders under s 24 of the Criminal Assets Confiscation Act 2005 (SA) (the Act) over property that has not been identified by the police and might potentially be owned by the respondents. Secondly, the Director seeks ancillary orders under s 40 of the Act that the respondents provide sworn statements to police setting out details of their assets, liabilities and dealings in property over the past six years.

Those orders are opposed by both respondents and it is argued that the Court does not have power under the Act, or by any other source, to make those orders.

Found, per Parker J, dismissing the applications to the extent that generalised restraint orders and ancillary orders were sought under ss 24 and 40 of the Act:

1. As a matter of statutory construction, the Court’s power to restrain the property of a suspect under s 24 of the Act does not extend to unidentified property owned by a suspect or that is under his or her effective control.

2. The Court’s power to make necessary modifications to deemed forfeiture orders after a conviction under s 56A(3) of the Act, does not provide the Court with powers to extend the reach of s 24 of the Act to make restraint orders over unidentified property.

3. The Court does not have the power to make an order under s 24 of the Act analogous to a Mareva order generally extending to all property owned or under the effective control of the respondents.

4. There is a coercive information gathering scheme set out in the Act which is available to the Director (or his delegate) to obtain further information about the property and assets of the respondents and s 40 does not provide a basis for the Court to create an alternative to that process by making the ancillary orders sought.

Criminal Assets Confiscation Act 2005 (SA) ss 3(1), 6(1), 6A(3), 11, 24, 27, 29, 30, 32, 33, 40, 47(3), 56, 56A, 59(1), 59A, 59B, 131, 133, 136, 137, 140, 141, 142, 143, 144, 145, 149, 150, 154, 160, 165, 171, 172, 209A; Criminal Assets Confiscation Regulations 2021 (SA) Reg 6; Criminal Law Consolidation Act 1935 (SA) s 138(1); Supreme Court Act 1935 (SA) s 17; Proceeds of Crime Act 2002 s 17(2)(b); Criminal Assets Confiscation (Prescribed Drug Offenders) Amendment Act 2016 (SA); Supreme Court Civil Rules 2006 (SA) r 247; Uniform Evidence Civil Rules 2020 (SA) r 112.14, 112.15, 112.18; Controlled Substances Act 1984 (SA) ss 32(1), 32(3); Federal Court Rules 2011 (Cth) r 7.32, 7.33; Evidence Act 1995 (Cth) s 128A; Trade Practices Act 1974 (Cth) s 76; Independent Commission Against Corruption Act 2012 (SA) Sch 2; Royal Commissions Act 1917 (SA) s 11(1)(f), referred to.

Cardile v LED Builders Pty Ltd (1999) 198 CLR 380, applied.
Deputy Commissioner of Taxation v Shi (2021) 95 ALJR 634; [2021] HCA 22, distinguished.

Witham v Holloway (1995) 183 CLR 525; Jackson v Sterling Industries Ltd (1987) 162 CLR 612; Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319; A v C [1981] QB 956; Re O [1991] 2 QB 520; Re T (1993) 96 Cr App R 194; DPP (Cth) v Loades (2004) 236 LSJS 393; HT v The Queen (2019) HCA 40, 269 CLR 403; X7 v Australian Crime Commission (2013) 248 CLR 92; Clissold v Perry (1904) 1 CLR 363; DPP v Vitale (2020) SADC 55; Mareva Compania Naviera SA v International Bulkcarriers SA [1975] 2 Lloyds Rap 509; Grunwick Processing Laboratories Ltd v Advisory, Conciliation and Arbitration Service [1978] AC 655; Lister & Co v Stubbs (1890) 45 Ch1 D1; Jackson v Sterling Industries Ltd [1987] 162 CLR 612; Australian Competition and Consumer Commission v Chaste Corporation (No. 1) (2003) 127 FCR 418; Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199, discussed.

DIRECTOR OF PUBLIC PROSECUTIONS v DALIBOR DRAZETIC; DIRECTOR OF PUBLIC PROSECUTIONS v MJP
[2022] SASC 35

Supreme Court:       Civil

1. PARKER J:              These proceedings arise out of Operation Ironside.[1]  The first issue is whether the Court has power to make a restraining order over property that might potentially be owned by the respondents but has not been identified by the police.  The second issue is whether the Court has power to order the respondents to provide a sworn statement to the police setting out details of their assets and liabilities and also details of all dealings in property over the past six years.  The respondents contend that the Court lacks power to make such orders.  For the reasons that follow, I find that the Court does lack power to make the orders in question.

   [1]    A joint operation between South Australia Police, other State and Territory Police Forces, the Australian Federal Police, other Commonwealth agencies, and overseas law enforcement bodies involving interception of encrypted communications between persons allegedly engaged in serious and organised crime.

   Orders sought

2. By the second amended originating applications filed on 16 July 2021 in each of the actions CIV-21-6262 and CIV-21-6263, the Director of Public Prosecutions (the Director) sought orders to the following effect:[2]

   [2]    What follows is effectively a consolidation and renumbering of the relevant provisions of the orders sought against Mr Drazetic and MJP  in the applications filed on 16 July 2021.

   1.1Pursuant to s 24 of the Criminal Assets Confiscation Act2005 (SA) (the Act) a restraining order be made over all other property owned by, or under the effective control of, Dalibor Drazetic and MJP with the exception of “protected property” as defined in reg 6 of the Criminal Assets Confiscation Regulations 2021 (the General Restraining Order).

   1.2Pursuant to s 40 of the Act, Drazetic and MJP provide a sworn statement to South Australia Police in the terms set out in paragraph 5 of the second amended originating application (the Ancillary Orders) containing:

   1.2.1Details of any other person of whom they are aware of who has an interest in the property which forms the subject of the restraining order and the basis for their interest.

   1.2.2The full description of their assets, including all property in which they hold a legal, beneficial or equitable interest.

   1.2.3A full description of their liabilities incurred during the past six years.

   1.2.4Particulars of all dealings for the last six years with any property in which they have or had an interest.

   The Criminal Assets Confiscation Act 2005 (SA)

3. The provisions of the Act which are of central importance to these proceedings are as follows:

   11—Interaction with other Acts

   This Act is in addition to, and does not limit or derogate from, the provisions of any other Act.

   24 Restraining orders

   (1) A court must, on application by the DPP, make an order (a "restraining order") that specified property must not be disposed of or otherwise dealt with by any person (except in the manner and circumstances, if any, specified in the order) if satisfied that—

   (a)   a person has been convicted of, or has been charged with, a serious offence, or it is proposed that the person be charged with a serious offence; or

   (b)   a person is suspected on reasonable grounds of having committed a serious offence; or

   (c)   there are reasonable grounds to suspect that the property is the proceeds of, or is an instrument of, a serious offence (whether or not the identity of the person who committed the offence is known); or

   (d)   there are reasonable grounds to suspect that a person has committed a serious offence and has derived literary proceeds in relation to the offence.

   (2) An application for an order under this section must specify the property to which the application relates.

   (3) The DPP may submit evidence in support of the application in the form of an affidavit.

   (4) Subject to subsection (5) and Division 3 , the court must specify in the restraining order all property specified in the application for the order.

   (5)The court may only specify property in a restraining order made under subsection (1)(a), (b) or (d) if satisfied that there are reasonable grounds to suspect that the property is—

   (a)  in the case of a restraining order made under subsection (1)(a) or (b) —

   (i)    property of the suspect; or

   (ii)property of another person (whether or not that other person's identity is known) that—

   (A)     is subject to the effective control of the suspect; or

   (B)     is proceeds of, or is an instrument of, the serious offence; or

   (b)     in the case of a restraining order made under subsection (1)(d) —

   (i)    property of the suspect; or

   (ii) property of another person (whether or not that other person's identity is known) that is subject to the effective control of the suspect.

   (6) The court must make a restraining order even if there is no risk of the property being disposed of or otherwise dealt with.

   (7) The court may specify that a restraining order covers property that is acquired by the suspect after the court makes the order.

   (8) A restraining order may be made subject to conditions.

   40 Ancillary orders

   (1) The court that made a restraining order, or any other court that could have made the restraining order, may make any ancillary orders that the court considers appropriate including (without limiting the generality of this subsection) any of the following orders—

   (a)   an order varying the property covered by the restraining order;

   (b) an order varying a condition to which the restraining order is subject;

   (c)an order relating to an undertaking required under section 26 ;

   (d)   an order directing the owner of the property (including, if the owner is a body corporate, a specified director of the body corporate) to give a sworn statement to a specified person, within a specified period, setting out particulars of, or dealings with, the property;

   (e)   if the Administrator is ordered under section 39 to take custody and control of property, an order—

   (i) regulating the manner in which the Administrator may exercise its powers or perform its duties under the restraining order; or

   (ii) determining any question relating to the property, including a question relating to the liabilities of the owner or the exercise of powers or the performance of duties of the Administrator; or

   (iii) directing any person to do anything necessary or convenient to enable the Administrator to take custody and control of the property;

   (f)   an order giving directions about the operation of the restraining order and—

   (i) a forfeiture order that covers the same property as the restraining order; or

   (ii) a pecuniary penalty order or a literary proceeds order that relates to the same serious offence as the restraining order;

   (g)   an order requiring a person whose property is covered by a restraining order to do anything necessary or convenient to bring the property within the State.

   (2) The court may only make an ancillary order on the application of—

   (a)   the DPP; or

   (b)   the owner of the property covered by the order; or

   (c)   if the Administrator was ordered to take custody and control of the property—the Administrator; or

   (d)   any other person who has the permission of the court.

   (3)A person who applies for an ancillary order must give written notice of the application to all other persons entitled to make such an application.

   (4) A court may, if the DPP requests, consider the application without notice having been given under subsection (3) .

   (5) An ancillary order may be made—

   (a)   if made by the court that made the restraining order—when making the restraining order; or

   (b)   in any case—at any time after the restraining order is made.

   (6) An order that is ancillary to a restraining order does not cease to have effect merely because the restraining order, or part of it, ceases to be in force under section 46(4) or (5) .

   …

   56A—Prescribed drug offenders

   (1)     Immediately on a person becoming a prescribed drug offender, a forfeiture order (a deemed forfeiture order) will be taken to have been made under Subdivision 1 by the convicting court.

   (2)     A deemed forfeiture order applies to all property owned by, or subject to the effective control of, the prescribed drug offender on the conviction day for the conviction offence other than the following:

   (a)protected property of the prescribed drug offender;

   (b)property that has been excluded from a restraining order under Part 3 Division 3;

   (c)property that is otherwise forfeited to the Crown under this Act.

   (3)     Except as provided in subsection (4), section 59A, section 59B and section 209A, this Act applies to a deemed forfeiture order in all respects as if it were a forfeiture order made under section 47(3)(a) in relation to conviction for the conviction offence, subject to such modifications as may be prescribed, or as may be necessary for the purpose.

   (4)     Any power that may be exercised by a court that is hearing or that is to hear an application for a forfeiture order may be exercised, in relation to a deemed forfeiture order, by the convicting court at any time within the period of 6 months (or such longer period as may be allowed by the convicting court) after the conviction day for the conviction offence.

   (5)In this section—

   convicting court, in relation to a prescribed drug offender, means the court that convicted the prescribed drug offender of the conviction offence.

4. Mr Drazetic and MJP have each been charged with a “commercial drug offence” within the meaning of s 6A(3) of the Act.  If they are convicted of that offence, they will come within the definition of a “prescribed drug offender” in s 6A(1).  Upon that occurring, s 56A will operate so that a “deemed forfeiture order” will be taken to have been made under Subdivision 1 of Division 4 of the Act by the convicting court.  In accordance with s 56A(2), a deemed forfeiture order will apply to all property owned by, or subject to the effective control of, the prescribed drug offender on the conviction day, other than certain specified classes of property.

5. The classes of property excluded from a deemed forfeiture order by operation of s 56A(2) include “protected property”.  The term “protected property” is defined in s 3(1) of the Act to mean property owned by or subject to the effective control of a person that is of a class declared by regulation for the purposes of the definition.  Regulation 6 of the Criminal Assets Confiscation Regulations 2021 (SA) declares protected property to be the moveable contents of premises, personal effects, and animals and plants. Regulation 6(2) excludes from the definition of “moveable contents” motor vehicles, boats, trailers, caravans, firearms, jewellery other than wedding rings, precious metals and copper, artwork, furniture more than 100 years old, stock-in-trade, and unopened packaged liquor.

6. The term “property” is defined in s 3(1) of the Act to mean:

   real or personal property (tangible or intangible), including –

   (a)     a chose in action; and

   (b)     an interest in property. 

7. The term “interest” is defined in s 3(1) of the Act to mean:

   (a)      a legal or equitable estate or interest in the property or thing; or

   (b)     a right, power or privilege in connection with the property or thing,

   whether present or future and whether vested or contingent.

8. Section 27 of the Act allows a Court that has made a restraining order, either at the time the order was made or at a later time, to order that the reasonable living expenses of the person or their dependents, and the reasonable business expenses of the person and a specified debt incurred in good faith by the person, may be met out of the restrained property or a specified part of it.

9. Section 27(2) provides that the Court may only make such an order if the person has disclosed all of their interest in property and their liabilities in a statement on oath and the Court is satisfied that the expense or debt does not or will not relate to legal costs that the person has incurred, or will incur, in connection with proceedings under the Act or proceedings for an offence against a law of the Commonwealth, a State or a Territory.  The Court must also be satisfied that the person cannot meet the expense or debt out of property that is not covered by a restraining order. 

10. Part 6 of the Act sets up a detailed scheme for information gathering.  Section 131 provides that if an application for a restraining order has been made or is in force, the relevant Court may, on the application of the DPP, make an order for the examination of any person about the affairs of a person.  The examination may include enquiries about the nature and location of any property.  Such an order is referred to as an “examination order”.

11. Section 133 provides that the DPP may give to a person who is the subject of an examination order a written notice (an examination notice) for the examination of that person.  Section 136 provides that a person subject to an examination order may be examined on oath by the DPP.  Section 136(5) provides that the DPP may require the person to answer the questions put to them at the examination that is relevant to the affairs (including the nature and location of any property) of a person covered by s 131.

12. Section 137 provides that an examination is to take place in private but the person may be represented by a legal practitioner.  Section 138 entitles the legal practitioner representing the person being examined to address the DPP and to examine the person about any matter about which the DPP has examined the person.  Section 140 provides that the DPP, either on his own initiative, or at the request of the person being examined, may refer a question of law arising at an examination to the Court that made the examination order.  Section 141 provides that the DPP may give directions preventing or restricting disclosure to the public of information given or documents produced in the course of the examination.

13. Section 142 provides that the DPP, when acting under Part 6, has the same protection and immunity as a Judge of the Supreme Court, and a legal practitioner appearing at an examination on behalf of the person being examined, has the same protection and immunity as a legal practitioner appearing for a party in proceedings before the Supreme Court.  A person being examined has the same protection and, in addition to the penalties provided in the Act, is subject to the same liabilities as a witness in proceedings in the Supreme Court.

1. Sections 143 and 144 of the Act provide that it is an offence to refuse or fail to attend at an examination to answer questions or to produce documents.  In each instance, the maximum penalty is a fine of $2,500 or imprisonment for six months.

2. Importantly, s 145 provides that if a natural person is required to answer a question or produce a document under s 144 and that would tend to incriminate them or make them liable to a penalty, including a confiscation order under the Act, they must nevertheless give the information but the answer will not be admissible in evidence against them in proceedings for an offence other than proceedings in respect of the making of a false or misleading statement or declaration.

3. Division 2 of Part 6 contains powers relating to the making and enforcement of production orders in relation to what is defined in s 149 as a “property tracking document”.  While that term is given a very broad meaning in the definition, in essence the term is self-explanatory.  Section 150 empowers a magistrate on the application of an authorised officer to make a production order requiring a person to produce property tracking documents or to make them available for inspection.  Section 154 contains provisions in relation to self-incrimination that mirror those contained in s 145, to which I have already referred.

4. Division 3 of Part 6 confers investigative powers relating to financial institutions. Section 160 provides that a police officer of or above the rank of superintendent may give a written notice to a financial institution requiring it to provide an authorised officer with a wide range of information or documents relevant to accounts and transactions held by a specified person.

5. Division 4 of Part 6 provides for the making of monitoring orders.  Section 165 empowers a judge of the District Court on application by an authorised officer to make a monitoring order which requires that a financial institution provide information about transactions conducted during a specified period, including a future period, through an account held by a specified person with the institution. 

6. Division 5 of Part 6 confers powers of search and seizure in relation to material liable to seizure under the Act.  Such material is defined in s 171 to mean tainted property or evidence relating to property in respect of which action has been or could be taken under the Act, or benefit derived from the commission of a serious offence.  The term “tainted property” is defined in s 3(1) to include property owned by, or subject to the effective control of the prescribed drug offender on the conviction day for the conviction offence other than protected property.

7. Section 172 empowers a magistrate on application by an authorised officer to issue a warrant to search the particular person or premises and authorising the seizure of material liable to seizure under the Act.

   Background

8. Mr Drazetic has been charged with two other defendants with trafficking in a large commercial quantity of a controlled substance, namely methylamphetamine, contrary to s 32(1) of the Controlled Substances Act 1984 (SA) (‘the CSA’). That allegation relates to about 50 kilograms of white crystals that are believed to include methylamphetamine. The potential value of the methylamphetamine, if sold as street deals of 0.1 grams, is alleged to be between $25 million and $50 million. Mr Drazetic has also been charged with trafficking in cannabis contrary to s 32(3) of the CSA. That charge relates to approximately 500 grams of cannabis found at his home. A further charge against Mr Drazetic relates to the sum of $37,035 in cash which was found in his possession that he allegedly obtained by unlawful activity contrary to s 138(1) of the Criminal Law Consolidation Act 1935 (SA).

9. The Court has made restraining orders in respect of property owned by or under the effective control of Mr Drazetic.  This property comprises the fee simple interest in three pieces of land, two motor vehicles, two boat trailers, one personal watercraft, two watches, seven firearms and sums of $158,275 and $4,768 held in bank accounts and $2,832 held in a TAB betting account. 

10. MJP has been charged together with five other defendants with one count of trafficking in a large commercial quantity of methylamphetamine contrary to s 32(1) of the CSA. That charge allegedly involves about 10 kilograms of methylamphetamine which, if sold as street deals of 0.1 grams, is alleged to have a value of between $5 million and $10 million.

11. During the search of MJP’s home, police located, amongst other items, 11 mobile phones, three laptop computers, and cash in the amount of $1,705.  On the same day, a search warrant executed on a bank resulted in police seizing $174,280 from bank accounts operated by MJP.

12. In the case of MJP, the Court has made restraining orders in relation to one fee simple interest in real property, one motor vehicle and the sum of $174,280 referred to above. 

    The submissions of the Director

13. There was a substantial difference between the written and oral submissions presented by the Director.  For that reason, it was necessary to grant senior counsel for the respondents an adjournment of one week to allow him to consider the oral submissions advanced by the Director.

14. I will first refer to the written submissions prepared on behalf of the Director and then the oral submissions presented in person by the Director.  The Director points to the fact that if the respondents are convicted of the offences with which they have been charged, they will be prescribed drug offenders and all property owned by them or subject to their effective control will be deemed to have been immediately forfeited to the Crown by the operation of s 6A of the Act, subject to some exceptions that are not presently relevant.  Against that background, the Director submits that the purposes of the orders that he seeks are firstly, to prevent abuse or frustration of the legislative scheme and secondly, and related to that first purpose, to prevent abuse or frustration of the Court process in relation to matters coming within its jurisdiction.[3]

    [3]    Deputy Commissioner of Taxation v Shi (‘Shi’); [2021] HCA 22 at [22] (Gordon J with Kiefel CJ, Gageler and Gleeson JJ agreeing); Witham v Holloway (1995) 183 CLR 525 at 535 (Brennan, Deane, Toohey and Gaudron JJ); Jackson v Sterling Industries Ltd (1987) 162 CLR 612 at 623 (Deane J); Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319 at 321 (Gleeson CJ).

15. The Director submits that the orders sought will prevent the respondents from being able to keep hidden, and/or disposing of assets, that must by law be forfeited to the Crown upon conviction.  For that reason, the orders should not be considered novel or controversial. 

16. The Director further submits that the restraining orders are no different in nature, purpose or function to a Mareva injunction under the common law.  While the proposed orders are broader in their scope than a typical Mareva injunction, that fact merely reflects the breadth of property covered by a modern statutory confiscations scheme. 

17. The Director further submits that the disclosure orders are no different in nature, purpose or function to ancillary orders available within the inherent jurisdiction of the Court which are either necessary or desirable to facilitate the operation of a Mareva injunction or a restraining order.  In fact, it has long been recognised, and there is ample common law authority, that an order for disclosure of the assets of a respondent is a necessary ancillary order to ensure the effective operation of a restraining order.[4]  The Director also refers to the decisions in Re O[5] and Re T[6] which established that the High Court of Justice in England and Wales had inherent power to order disclosure of assets in criminal proceeds cases.

    [4]    See A v C [1981] QB 956 at 959-960 (Robert Goff J).

    [5] [1991] 2 QB 520.

    [6] (1993) 96 Cr App R 194.

18. The Director also submits that the approach he is advancing in this instance has been well accepted in the Federal Court as appropriate in instances where the Court is satisfied that there is a danger that a prospective judgment will be wholly or partly unsatisfied because the assets of the prospective judgment debtor might be disposed of or diminished in value.[7]  Further to that submission, the Director also contends that for a restraining order to be effective, there must also be a timely disclosure of assets.  If that does not occur, it will be difficult, if not impossible, for the Court to exercise its jurisdiction properly.

    [7]    Shi at [21] (Gordon J with Kiefel CJ, Gageler and Gleeson JJ agreeing).

19. By way of explanation, the Director notes that he seeks that the order requiring disclosure of past dealings operate for a period of six years because the definition of “effective control” in s 6(1)(d) of the Act encompasses property disposed of without sufficient consideration within the six years prior to the person becoming a prescribed drug offender.

20. The Director also submits that the affidavits upon which he relies establish that there are reasonable grounds to suspect that there is other property owned by the respondents, or which is subject to their effective control, but which at present has not been capable of identification and particularisation by the police.  This cannot occur without the Court making a disclosure order.

21. The Director acknowledges that it is axiomatic that the Court must ensure that individuals are not compelled to incriminate themselves.  There is a material difference between the written and oral submissions of the Director as to how that issue was most appropriately addressed.  The written submissions relied upon the decision of Judge Muecke under the Proceeds of Crime Act 2002 (Cth) (‘the POCA’), as it then stood, in DPP (Cth) v Loades.[8]  As the oral submissions advanced by the Director have superseded his written submissions on the self‑incrimination issue, it is not necessary to consider the written submissions.

    [8] [2004] SADC 158, (2004) 236 LSJS 393.

22. I turn to the Director’s oral submissions.  Those submissions rely upon a broad reading of s 56A(3) of the Act.  Leaving aside the specific exclusion of ss 56A, 59A, 59B and 209A, s 56A(3) applies to a “deemed forfeiture order in all respects as if it were a forfeiture order made under section 47(3)(a) […] subject to such modifications as may be prescribed or as may be necessary for the purpose”.[9] The reference to “such modifications as may be prescribed” authorises the Executive to enact a regulation prescribing particular modifications.  However, the words “as may be necessary for the purpose” leave it to the Court to determine to what extent the provisions of the Act may need to be modified in a case where they are to apply to a deemed forfeiture order that operates under s 56A in all respects as if it were a forfeiture order made under s 47(3)(a).

    [9]    My emphasis.

23. On that basis, the Director’s first contention was that the effect of s 56A(3) was to empower the Court to modify the requirements of, for example, s 24(1) so that it meets the needs of the deemed forfeiture order. The Director further submitted that this would permit the Court to make a restraining order that specified a class of property as opposed to specifying individual items of property. In support of this contention the Director submitted that s 56A, in combination with s 24, contemplates two classes of property. One class comprises all property owned by or subject to the effective control of the prescribed drug offender. The second class comprises protected property.

24. The Director submitted that on the broad construction of s 56A(3) he advances, the Court could modify the operation of s 24(1) to make an order applying to each of the respondents that restrained all property that they owned or was subject to their effective control, but excluding protected property.

25. A second alternative contention advanced by the Director is that the requirement in s 24(1) that property be specified simply requires that property be specified by referring to all property owned or under the effective control of a respondent with the exception of protected property. The purpose of the statutory reference to “specified property” was that the respondent and any person having an interest in the restrained property should know precisely what is restrained and to what extent. That purpose is not in any way undermined if the Court specifies that all property is restrained other than protected property. The property is specified by reference to the class to which it belongs.

26. A third alternative submission advanced by the Director is founded upon s 11 of the Act.  This provides that the Act “is in addition to, and does not limit or derogate from, the provisions of any other Act”.  Thus, the power conferred by the Supreme Court Act 1935 (SA) includes an implicit power to make a Mareva injunction. Consistently with the purpose of the Act, such an order would preserve the estate of the respondents and anything under their effective control, other than protected property, for forfeiture to the Crown upon conviction. 

27. The Director further submitted that the Court has power to make the disclosure orders that are sought against the respondents because it is not otherwise possible to know what it is that is subject to the order. The disclosure orders may either be made under s 24 as it stands, or under s 24 as modified by the operation of s 56A(3), or pursuant to the implied power of the Court.

28. The Director acknowledged that if the Court were to make an order in the terms set out at [2] that would infringe the privilege against self‑incrimination.  He submitted that the appropriate approach was to adopt what the High Court described in HT v The Queen as “tailoring orders”.[10]  Such an order would operate so as to preserve the privilege against self‑incrimination while at the same time ensuring that the property subject to forfeiture is preserved pending conviction or acquittal.  The Director also acknowledged that it would be necessary to prevent him and his Office receiving information about other property owned by the respondents or which was under their effective control without there being a risk of potential incrimination.  That information might be used as evidence or as a basis to commence further investigations as to how the assets were acquired.  In either case, that may reinforce arguments that the respondents are or were involved in drug trafficking.  However, the Director submitted that the orders that he has proposed would avoid those issues.

    [10] (2019) 269 CLR 403 at [43]-[46] (Kiefel CJ, Bell and Keane JJ)

29. The orders proposed by the Director were as follows:

    1.   Upon the Director undertaking to delegate power over the criminal assets confiscation proceedings insofar as they relate to the present respondents to the Crown Solicitor until such time as 21 days after the date of their conviction, the disclosure orders sought by the Director shall be made.

    2.   And the purpose of order 2, however it is framed, is that nothing will operate until the Crown Solicitor gives an undertaking to the Court not to disclose the assets of the respondents in which they have disclosed their assets until 21 days after the conviction date. 

30. The effect of these orders would be, in the submission of the Director, that the Office of the DPP would be removed from the criminal assets proceedings until such time as the conviction day arises.  In the meantime, upon giving the required undertaking, the Crown Solicitor would take over the conduct of the criminal assets proceedings and exercise the powers of the Director under the Act as his delegate.  Thus, there would be a “hard Chinese wall” that would ensure that nothing in the affidavits of the respondents is provided to the Director that can be used, either directly or indirectly, against either respondent.

31. The Director submitted that the source of power to make these orders was to be found in s 40 of the Act and, in particular, the chapeau. That provides that “the Court that made a restraining order […] may make any ancillary orders that the Court considers appropriate including (without limiting the generality of the subsection) any of the following orders”. The Director submitted that the proposed order would be ancillary to the restraining order and therefore authorised by s 40. Alternatively, the proposed order could be made under s 11. That provision would support an order made under the Supreme Court Act where the Court used its implied power to give effect to its jurisdiction.

32. The Director also submitted that the respondents cannot succeed in their argument that the various powers conferred upon the Executive under Part 6 of the Act, and s 131 in particular, to examine a respondent to obtain information about their property somehow extract power from s 40. There are many authorities that establish that a grant of jurisdiction to a court should not be read down but should be given all the breadth that the language of the grant of power can reasonably carry.

    The respondents’ submissions

33. The respondents contend in their written submissions that the Act creates a unique statutory system which, in part, overrides longstanding common law rights and immunities. While some of the provisions of the Act are similar to those found in the POCA, many of the provisions in the Act are sui generis. The overall scheme created by the Act is materially different from that created by the POCA. For that reason, the respondents submit that care needs to be taken in relying upon the statements of general principle advanced by the Director based upon observations made by the High Court in Shi. That case was decided under an entirely different legislative regime.

34. The respondents also submit that the reliance by the Director on common law principles, even by way of analogy, is misplaced.  The common law doctrines of attainder, forfeiture and escheat, whereby property may be forfeited to the Crown upon being convicted of a serious crime, were abolished by statute in South Australia long ago and remain abolished.  Thus, the only current sources of confiscation and forfeiture upon conviction are found in the Act.  As the former common law principles have been abolished, it is illogical to interpret the statutory regime according to, or by analogy with, common law principles.  The task is simply a matter of statutory interpretation. 

35. The respondents further submit that there is a clear difference between a civil proceeding in which a Mareva injunction might be made in the inherent jurisdiction of the Court and the making of a restraining order or an ancillary order under a statutory code for confiscation and forfeiture based upon criminal conviction.  While there may be a superficial similarity, the powers being exercised by the Court and the circumstances of their exercise are fundamentally different.  The attempt by the Director to reason by analogy is unhelpful.

36. The Act must be interpreted in accordance with the principle of legality.  Common law rights and immunities will not be taken by a Court to have been displaced by legislation except where the intention to do so is expressed with “irresistible clearness”.[11]  Legislation is also presumed not to interfere with vested proprietary interests.[12]  That presumption has been applied in interpreting the Act.[13] 

    [11] X7 v Australian Crime Commission (2013) 248 CLR 92 at [158] (Kiefel J).

    [12] Clissold v Perry (1904) 1 CLR 363 at 373 (Griffith CJ).

    [13] DPP v Vitale [2020] SADC 55.

37. The respondents submit that if the power to make a restraining order in the terms sought by the Director exists, that power must be found in s 24 of the Act. The meaning of s 24 must be determined by considering all of the words used in the provision and the Act as a whole. Section 24 was contained in the Act when first enacted and has only been subject to minor amendments made in 2018. Those amendments occurred when the prescribed drug offender provisions were introduced by the Criminal Assets Confiscation (Prescribed Drug Offenders) Amendment Act 2016 (SA) which commenced operation on 10 August 2018. Section 24(5a) was introduced at that time and s 24(4) was amended to introduce a cross-reference to s 24(5a).

1. The respondents emphasise the repeated use in s 24 of the words “specify” and “specified” in relation to property. The respondents submit that s 24 does not evince a legislative intention to empower the Court to make a restraining order over unspecified property. Section 24 operates cohesively to require that the terms of a restraining order must specify either the particular property of a suspect or the particular property of another person that is subject to the effective control of the suspect.

2. Although it was clearly the legislative intention that s 24 was to have a very significant effect on vested proprietary interests, the interpretation advanced by the Director would result in an even more drastic interference with vested rights. Such an interpretation is not appropriate in the absence of express words to that effect. Neither the words nor the purpose of s 24 convey such an implication.

3. By way of example, the respondents submit that, if an order were to be made in the terms proposed, one of the effects on the vested proprietary interests of a suspect would be to prevent them from funding their own legal defence against the criminal charge upon which the restraining order was based. They would also be prevented from funding the defence of confiscation proceedings under the Act.  That is because, upon the making of a restraining order, any money owned or under the effective control of a suspect, or that is held to the credit of a suspect in a solicitor’s trust account, would be frozen and no longer able to be used to pay their legal fees. 

4. In those circumstances, s 27(2)(d) would operate to prevent the Court from making an order that the suspect’s legal costs incurred in connection with proceedings under the Act, or proceedings for a criminal offence, be met out of property covered by a restraining order.  The result of an order in the terms proposed is that persons charged with, or suspected of, commercial drug offences would never be represented in confiscation proceedings brought under the Act.  In criminal proceedings those persons would be forced to either conduct their own defence or seek legal aid.  Even if legal aid were to be granted, they will be prevented from instructing a lawyer of their choice.

5. The respondents further submit that if the Court were to find that s 24 does support an order in the proposed terms, that would effect a fundamental change to the criminal justice system in this State for all persons charged with, or suspected of, commercial drug offences. There is no indication in s 24 that the Parliament intended such an outcome. For that reason, the interpretation of s 24 advanced by the Director should be rejected.

6. The respondents also submit that it is very important that a restraining order must be certain in its operation.  A breach of the order will constitute a contempt of Court and may result in imprisonment.  The proposed orders prohibit the disposal, or other dealing with, by any person of unspecified property of the respondents and also unspecified property of unspecified other persons where that property is subject to the effective control of the suspect.  The restraining order will operate in rem against all persons.  However, the respondents ask rhetorically: “how will other persons who might deal with the unspecified property of unspecified individuals know that they are bound by or are breaching the restraining order?”

7. The respondents submit that the whole point of a scheme that requires property to be specified by description, and by owner, is that it will be clear to all persons from looking at the terms of the order made by the Court that property is subject to the order.  The proposed orders do not permit this.

8. The respondents further contend that a comparison of the provisions relating to the making of restraining orders under s 24 of the Act with the relevant provisions in the POCA supports their submissions. When the Act was first introduced into Parliament, the Attorney-General stated in his Second Reading speech that it contained measures corresponding to the POCA.[14]  The Attorney‑General also stated that in the drafting of the Act the Government had taken advantage of the experience of the common law and had included innovations which experience had suggested were both necessary and desirable.[15]

   [14] Parliamentary Debates, House of Assembly, 10 November 2004 at p 843.

   [15] Ibid.

9. At the time that the Attorney-General made his Second Reading speech in 2004, s 17(2)(b) of the POCA provided for the making of a restraining order over “all or specified property of the suspect”. However, the South Australian Parliament chose not to enact s 24 in similar terms to the Commonwealth provisions. Thus, the intention of the Parliament not to empower the Court to make a restraining order in the terms now sought could not have been more plainly indicated.

10. The Director’s submission that the prescribed drug offender provisions cannot operate meaningfully in practice without an order in the proposed terms is not correct. That is made clear by the terms of the restraining orders that have already been made against the respondents with respect to specified properties. While the Parliament made minor amendments to s 24 when the drug offender amendments were made in 2018, it did not take the opportunity to make an amendment that would clearly authorise orders in the terms the Director now seeks.

11. The respondents also submit that the reliance placed upon s 24(7) by the Director is misplaced. The fact that s 24(7) authorises the Court to make an order restraining property that is acquired by a suspect after the making of an initial order does not demonstrate that the Court has power to make an order restraining unparticularised property. That is because s 24(7) only applies to property that is acquired by a suspect rather than property acquired by other persons which is under the effective control of a suspect. Additionally, there will also be circumstances in which a court can specify or particularise property that has been subsequently acquired by a suspect. Section 24(7) still has work to do without the Court being able make an order in the terms sought by the Director.

12. The respondents also submit that the Director’s argument that s 40 of the Act requires the Court to adopt his preferred interpretation of s 24 is circular and illogical. The foundation of the argument is that because s 40 restricts the making of orders to circumstances that are ancillary to a restraining order issued under s 24, that restriction should be evaded by giving as wide as possible interpretation to the power to make orders under s 24.

13. The respondents had also advanced detailed written submissions in opposition to the ancillary orders sought by the Director under s 40 of the Act on the basis that the orders would infringe the privilege against self-incrimination. Because the Director conceded that point, and proposed alternative orders, the focus of the respondent’s submissions shifted to the operation of the revised orders sought by the Director.

14. The respondents submitted that the purpose of the concluding words used in s 56A(3) was to prevent the possibility that an exclusion order would be made in respect of property that was covered by a deemed forfeiture order.  Section 59(1) provides that a court that made a forfeiture order must make an order excluding property from forfeiture in the circumstances listed in paragraphs (a) to (d) of that subsection.  One of the circumstances in which an exclusion order may be made is, in accordance with s 59(1)(c), where the Court is satisfied that the property subject to the forfeiture order was neither the proceeds of crime nor an instrument of the offence. 

15. The respondents submit that s 56A(3) prevents the Court from exercising the power under s 59(1) to exclude property.  That construction was said to be supported by the legislative history.  In that respect, senior counsel for the respondents placed reliance upon the Second Reading speech for the Criminal Assets Confiscation (Prescribed Drug Offenders) Amendment Bill 2015 as read for the first time on 11 February 2015 and the eventual Criminal Assets Confiscation (Prescribed Drug Offenders) Amendment Bill 2016 as passed by both Houses of Parliament.  The effect of s 56A, as adopted by the latter Bill and commenced with the 2018 Amendments, is that under s 56A(1), upon a person becoming a prescribed drug offender, a deemed forfeiture order is taken to have been made under Subdivision 1 (i.e. the general forfeiture provisions).  In accordance with s 56A(2), that order applies to all property owned by, or subject to the effective control of, the prescribed drug offender on the conviction day other than protected property, or property excluded from a restraining order under  Division 3, or property that is otherwise forfeited to the Crown under the Act. 

16. Against that background, the respondents submit that the purpose of s 56A(3) is to ensure that property which is subject to a deemed forfeiture order cannot be the subject of an exclusion order under s 59. That is achieved by treating such property in the same way as property that is an instrument of a crime is treated under s 47(3)(b).  There is no requirement in the latter provision that property which is the instrument of a crime must have been subject to a restraining order before it becomes liable to forfeiture.

17. The respondents further submit that s 56A(3) requires that any modifications made by a judge to the operation of the Act must be necessary for the purposes of s 56A(3).  However, the making of a restraining order is not necessary for the purposes of that provision.  That is because the making of a restraining order is not necessary for the purposes of s 47(3)(a).  The purpose of s 56A(3) was not to broaden the scope of the property which might be subject to restraint.  Instead, the purpose was to prevent the possibility of an exclusion order being made under s 59(1).  For these reasons, the respondents submit that s 56A(3) does not authorise the making of a restraining order in respect of unidentified property.

18. In response to the contention by the Director that s 11 of the Act operates in combination with s 17 of the Supreme Court Act to empower the Court to make a general restraining order over unidentified property, the respondents submit that s 24 of the Act is, in effect, a code in relation to the orders that may be made restraining property. They also submit that it seems improbable that the Parliament could have intended that the inherent powers of the Court could be used to grant a Mareva order in circumstances where there is legislation specifically designed to deal with confiscation and forfeiture of criminal assets.

19. The respondents also submit that it should be recognised that s 24, and in particular s 24(6), sets a low bar as to the circumstances in which the Court must make a restraining order. Section 24(6) requires that the Court must make an order even if there is no risk of the property being disposed of or otherwise dealt with. That situation is very different to the common law principles relating to the exercise of the inherent jurisdiction to grant a Mareva order which require that there be a real danger that the property will be disposed of, so that if the order is not made, the processes of the Court will be abused.  Even if it were possible to make a Mareva order in these circumstances, the Court would need to be satisfied that such an order is necessary to ensure that the rights of the Crown are not rendered worthless. 

20. The material before the Court would not justify the making of a Mareva order in respect of either of the respondents.  The police have made very generalised statements about organised drug offences but there is no evidence that either respondent is involved in organised crime. There are simply hearsay assertions.  While charges have been laid against each respondent, that only required the existence of a reasonable suspicion. That is not sufficient to justify a Mareva order.  The Court would need to have much greater information about all of the circumstances before it could make a Mareva order.  The evidence would need to inform the Court about the financial circumstances of the respondents and establish that there was a real danger of asset dissipation rather than a mere assertion of a general risk.  It is for these reasons that the Act has adopted the approach of requiring the Court to make restraining orders in narrow circumstances that easily satisfy the criteria even where there is no risk of asset dissipation.

21. The respondents submit that because a Mareva order is a form of interlocutory injunction, it is necessary to consider the balance of convenience.  The effect of the order sought by the Director is that the respondents would be prevented from paying legal fees to defend the asset confiscation proceedings and also the criminal offences.  Given that substantial assets have already been frozen under the Act, the balance of convenience lies against making further orders. 

    Consideration

    The Director’s first contention – operation of s 56A(3)

22. The first issue is whether the Director is correct in his contentions concerning the meaning and effect of s 56A(3) of the Act.  This is a complex provision. It is necessary to break it down into its component parts so as to clarify its operation.

23. The opening words of s 56A(3) create four exceptions to its operation. The exceptions relate to the matters dealt with in ss 56A(4), 59A, 59B and 209A. None of these exceptions are of present relevance.

24. The words “subject to such modifications as may be prescribed” in s 56A(3) are also not relevant because no regulation has been promulgated to effect such a modification.

25. The further question is the meaning of the words “this Act applies to a deemed forfeiture order in all respects as if it were a forfeiture order made under s 47(3)(a) in relation to conviction for the conviction offence”.  The term “deemed forfeiture order” takes its meaning from s 56A(1). It refers to a forfeiture order that is taken to have been made under Subdivision 1 of Part 4 of the Act immediately upon a person becoming a prescribed drug offender.  It is not in dispute that if the respondents are convicted of the offences with which they are presently charged, they will become prescribed drug offenders.

26. A court may make an order under s 47(3)(a) that property specified in the order is forfeited to the Crown if a person has been convicted of one or more serious offences and the Court is satisfied that the property is an instrument of one or more of the offences or is subject to an instrument substitution declaration under s 48.[16] Property may be made subject to a forfeiture order under s 47(3)(a) without it having been the subject of a restraining order made under s 24.

    [16] The latter provision permits property of the same nature or description to be substituted for property that was an instrument of the offence where the latter property is not available for forfeiture or is not able to be made the subject of a forfeiture order. 

27. The effect of s 56A(3) is to treat a deemed forfeiture order, for the purposes of the Act, as if it were a forfeiture order made in respect of property that was an instrument of an offence.  The further, and in this instance, crucial, issue is what is meant by the words “subject to such modifications … as may be necessary for the purpose”.

28. My firm view is that the modifications that “may be necessary for the purpose” are modifications to the application of the provisions of s 47(3)(a) to a deemed forfeiture order made upon a person becoming a prescribed drug offender. The Parliament has simply recognised that there may potentially be some circumstances where the treating of a deemed forfeiture order as if it was made in all respects under s 47(3)(a) may not be appropriate. It may sometimes be necessary to modify the application of s 47(3)(a) to a deemed forfeiture order. However, the important point is that the modification authorised by s 56A(3) is to the application to a deemed forfeiture order of the provisions that would ordinarily apply to a forfeiture order made under s 47(3)(a). Section 56A(3) does not authorise a modification to the application of s 24.

29. To put the matter more simply, the power under s 56A(3) to make the necessary modifications to the application of the Act only arises upon a deemed forfeiture order being taken to have been made upon the person becoming a prescribed drug offender. The modification made by s 56A(3) is to the application of the Act to the deemed forfeiture order rather than to the application of the Act generally. Section 56A(3) does not authorise an antecedent modification to the powers otherwise exercisable by the Court to make a restraining order under s 24.

30. As I have said, there is no requirement that there be a subsisting restraining order before a deemed forfeiture order comes into effect. A deemed forfeiture order comes into effect by force of s 56A(1) upon a person becoming a prescribed drug offender as defined in s 6A without any requirement that the property that is to be the subject of the order has been covered by a restraining order made under s 24. In contrast, the making of forfeiture orders under ss 47(3)(b) and 47(3)(c) is conditional upon a restraining order having been in force for at least six months. The fact that the prior making of a restraining order under s 24 is not a condition precedent to the coming into effect of a deemed forfeiture order is another indication that the words “subject to such modifications … as may be necessary for the purpose” in s 56A(3) were not directed at effecting a modification to the scope of s 24.

31. For these reasons, I reject the Director’s first contention that the modifications to the application of the Act that may potentially be necessary under s 56A(3) extend to the scope of a restraining order made under s 24.

    The Director’s second contention – The requirements of s 24

32. I turn to the Director’s second contention, this being that it is sufficient for the purposes of s 24 if a restraining order specifies property by reference to two classes. Those classes being, first, all property owned by or under the effective control of the suspect other than protected property and, secondly, protected property.

33. A serious obstacle to this second argument is the constant use within s 24 of the words “specified” and “specify” in connection with property. Thus, s 24(1) requires that the Court must make an order that specified property must not be disposed of if it is satisfied, amongst other grounds, that a person has been charged with a serious offence. Section 24(2) requires that an application for an order must specify the property to which the application relates. In similar terms, and subject to certain exceptions, s 24(4) directs that the Court must specify in the restraining order all property specified in the application. The power of the Court is limited by s 24(5) which directs that the Court may only specify property in a restraining order made under subsection (1)(a), (b) or (d) if it is satisfied that there are reasonable grounds to suspect that the property is property of the suspect or property of another person, whether or not their identity is known, that is subject to the effective control of the suspect. Section 24(5)(a) directs that the Court may only specify property in an order if it is satisfied that there are reasonable grounds to suspect that one of several alternative conditions are met. 

34. Although s 24(7) also includes the word “specify” in that it authorises the Court to specify that an order covers property that is acquired by the suspect after the Court makes the order, the Director submits that this provision supports his contention that restraining orders may be made without property being identified. 

1. An order made under s 24(7) might refer to specifically identified property where it is known that such property is to be acquired by the suspect after the making of the order. However, s 24(7) is not limited in its operation to such situations. Thus, does the inclusion of s 24(7) indicate that orders made under s 24 need not refer to specifically identified property?

2. Section 24(7) only applies to property acquired by a suspect, as distinct from property acquired by others but which is under the effective control of a suspect. Because third parties will not be subject to the order made under s 24(7), and as a suspect will in almost all circumstances be aware of property that they have acquired after the making of an order,[17] the concerns to which I refer at [90] to [94] below, will rarely arise. For those reasons, I do not consider that s 24(7), demonstrates a legislative intention that orders made under s 24 need not refer to specifically identified property. Section 24(7) is a very narrow and particular exception to the general principle.

   [17] It is possible that in rare circumstances a suspect might not be aware of a passive acquisition of property, such as a gift or bequest. However, in this context it seems arguable that a passive receipt of property will not be “acquired” by a suspect as distinct from received or gained.

3. In my view, the constant use of the words “specify” and “specified” suggest a legislative choice that the property that is to be the subject of an application restrained by an order must be identified with precision. That requirement is necessary to give proper effect to other provisions of the Act such as ss 29 and 33.

4. Section 29 requires that upon the Court making a restraining order covering property, the Director must give written notice of that order to the owner unless the Court dispenses with that requirement pursuant to s 29(3) so as to protect the integrity of any investigation or prosecution.  Even in such a case, s 29(4) requires that the Director must give notice to the owner as soon as practicable after the end of the period specified by the Court.

5. While s 30 provides for the Director to register restraining orders with registration authorities (e.g. the Lands Titles Office), that provision cannot operate where the Director has no specific knowledge of the property that is subject to the order.  Although s 30 does not impose a duty upon the Director to register restraining orders, registration does have potentially important consequences under ss 32 and 33.  If an order had been registered under s 30, a person who deals with the relevant property will be taken not to have been acting in good faith in the absence of evidence to the contrary.

6. Section 32 provides for the setting aside by a court of a disposition or dealing with property in contravention of a restraining order if the disposition or dealing was not for sufficient consideration or not in favour of a person who acted in good faith.

7. Section 33 provides that it is an offence to dispose of or otherwise deal with property covered by a restraining order where the person knows or is reckless to the fact that the property is covered by an order and the disposition or dealing contravenes that order. 

8. Clearly, it would not be possible to give notice under s 29 to an owner in respect of property about which the Director has no knowledge.  On one view, because compliance with s 29 is impossible in a case where a restraining order applies to unidentified property, the provision cannot operate and may be disregarded in such a case. I do not accept that interpretation.

9. I consider that the obligation to give notice is of fundamental importance because of the risk of prosecution under s 33 if there is a failure to comply with a restraining order.  A person should not be left in any doubt as to whether or not any particular item of their property is subject to a restraining order.  That is of particular importance where property is owned by a third party, but the Director contends that it is under the effective control of a respondent.  The third party will be subject to an onerous Court order that drastically affects their property rights without necessarily being aware that the order has been made.

10. Further support for this interpretation is provided by the text of s 29.  It requires that the Director “must give written notice of the order to the owner of the property”.[18]  The use of the word “must” is ordinarily taken to impose an obligation.[19]  That this was the legislative intention, is confirmed by the fact that any delay in the giving of notice requires the approval of the Court under s 29(3).  That approval may only be granted for a period determined by the Court and only if the Court considers it appropriate in order to protect the integrity of an investigation or prosecution.  Even if the Court grants its approval to delay notification, s 29(4) requires that notice must be given as soon as practicable after the end of the period determined by the Court.  The terms of ss 29(3) and 29(4) serve to emphasise the great importance placed by the legislature upon the giving of notice to an owner that their property is subject to a restraining order.  As I have said, the giving of notice is of paramount importance where property is owned by a third party but is alleged to be under the control of a suspect.  The terms of s 29 provide a further strong indication that the property covered by a restraining order must be specifically identified.

    [18]  Emphasis added.

    [19] Grunwick Processing Laboratories Ltd v Advisory, Conciliation and Arbitration Service [1978] AC 655 at 690 (Lord Diplock) and 698 (Lord Salmon).

11. The reasons I have expressed at [88] to [94] in relation to the operation of s 29, combined with my observations at [87] concerning the significance of the repeated use of “specify” and “specified” in s 24, reinforce my view that the references in s 24 to property being “specified” means that the property must be identified with a degree of specificity appropriate to the nature of the property. I do not consider that s 24 empowers the Court to make a restraining order that applies to unidentified property owned by a suspect or that is under the suspect’s effective control.

12. Against this background I turn to the Director’s contention that the requirement in s 24 that property be specified can be met by merely identifying all property other than protected property as one class and protected property as a second class. Section 24(5a) prohibits the Court from specifying protected property unless there are reasonable grounds to suspect that the property is an instrument of, or proceeds of, a serious offence. In the present case, the restraining orders have been sought under s 24(1)(a) on the basis that the respondents have been charged with a serious offence. The orders were not sought in reliance upon allegations that the property to which they apply was an instrument of, or proceeds of, a serious offence. Accordingly, protected property could not be specified in the restraining orders that apply to the respondents. For that reason, protected property could not comprise the second class of property identified in those orders.

13. Quite apart from that conclusion, I do not consider that the two classes proposed by the Director would satisfy the requirement that property be identified to an appropriate degree of specificity. In particular, an order couched in those terms would not address the issues that that I have discussed at [88] to [94]. I therefore find that such an approach would not satisfy the requirements of s 24.

    The Director’s third contention – the inherent powers of the Court

14. I turn to the third contention advanced by the Director, being that the Court can make an order under s 24 of the Act analogous to a Mareva order that applies to all property of the respondents or that is under their effective control.

15. It has long been recognised that the equitable jurisdiction of a superior court extends to making orders that prevent a party from disposing of assets with the intention of frustrating enforcement of a judgment.[20]  That inherent equitable jurisdiction was exercised through what became to be known as a Mareva injunction.[21]  In Cardile v LED Builders Pty Ltd the High Court held that the basis for such an order is founded in protection of the administration of justice and prevention of an abuse of process and, in an appropriate case, that includes the preservation of assets.[22]  Such an exercise of power is correctly referred to as a Mareva order rather than an injunction.[23] 

    [20] Lister & Co v Stubbs (1890) 45 ChD1.

    [21] Mareva Compania Naviera SA v International Bulkcarriers SA [1975] 2 Lloyds Rep 509.

    [22] (1999) 198 CLR 380.

    [23] Ibid at [393] and [399] – [401] (Gaudron, McHugh, Gummow and Callinan JJ).

16. Rule 247 of the Supreme Court Civil Rules 2006 (SA) provided for the making of freezing orders in substitution for the former practice of granting a Mareva injunction or order.  The same approach has been continued in the Uniform Civil Rules 2020 (SA).  UCR 112.14 empowers the Court to make a freezing order for the purpose of preventing the frustration or inhibition of the Court’s process by seeking to meet a danger that a judgment or prospective judgment of the Court will be wholly or partially unsatisfied.  Such an order may restrain a respondent from removing any assets located in or outside Australia or from disposing of, or dealing with, or diminishing the value of those assets. Under UCR 112.15, the Court may make an ancillary order for purposes that include eliciting information relating to assets.

17. Most importantly, UCR 112.18 provides that nothing in Division 5 of Part 2 of the UCR (being the provisions relating to freezing orders) diminishes the inherent, implied or statutory jurisdiction of the Court to make a freezing order or an ancillary order.

18. The Director has not relied upon the powers of the Court under UCR 112.14. Instead, the Director relies upon what he referred to as the implied powers of the Court. In fact, it is the inherent equitable jurisdiction that the Court holds under s 17 of the Supreme Court Act that supports the making of a Mareva order. As the Director correctly noted, s 11 of the Act provides that the Act does not derogate from the powers of the Court.  The question therefore is whether the inherent power to issue a Mareva order is available in the present circumstances. 

19. In Jackson v SterlingIndustries Ltd, Wilson and Dawson JJ explained that the jurisdiction to grant a Mareva order is based on the power of the Court to prevent an abuse of its process. [24]  Any attempt by a defendant to frustrate the enforcement of a judgment will be an abuse of process.

    [24] (1987) 162 CLR 612.

20. The Director has referred to the decision of the High Court in Shi.[25]  The Australian Taxation Office had instituted civil proceedings to recover unpaid taxation liabilities, interest and penalties from the respondent and members of his family.  The ATO obtained an ex parte freezing order under r 7.32 of the Federal Court Rules 2011 (Cth) and also an ancillary order under r 7.33 requiring that the respondent disclose in writing the location and value of the restrained assets. If he objected to such disclosure on the grounds that some or all of the required information may tend to prove the commission of an offence against Australian law or any foreign law, he was required to comply with the provisions of s 128A of the Evidence Act 1995 (Cth).

    [25] [2021] HCA 22: [2021] 95 ALJR 634.

21. Section 128A creates a regime whereby a person (the relevant person) who objects to the disclosure of information on the grounds of self-incrimination may provide that information to the Court in a sealed affidavit.  The relevant person must also file and serve on the other party a separate affidavit setting out the basis for their objection.  If the Court finds that there are reasonable grounds for the objection, it must not require the privileged information to be disclosed and the sealed affidavit must be returned to the relevant person.  However, if the Court is satisfied that the information disclosed in the sealed affidavit may tend to prove that the relevant person has committed an offence, or may be liable to a civil penalty under an Australian law, but does not tend to prove that they may have committed an offence or be liable to a civil penalty under a foreign law, and the interests of justice require disclosure of the information, the Court may order that the whole or part of the privileged information is to be disclosed.  However, evidence obtained as a direct or indirect result of the disclosure cannot be used against the person.

22. The respondent in Shi had not at any time applied for a discharge of the freezing orders made by the Federal Court or, alternatively, offered unencumbered assets as security for the judgment debt.  The respondent had also not challenged the stated purpose of the Federal Court for making the freezing orders.[26]  For those reasons, and as Shi concerned the operation of s 128A of the Evidence Act, a provision which has no direct analogy in South Australian law,[27] the High Court decision provides little assistance with the question whether the inherent power of the Court to make a Mareva order is available in the present circumstances.

    [26]  Shi at [52].

    [27] Although, as noted at [15], s 145 of the Act provides that where a person is compelled by s 144 to answer a question, or produce a document, and that would tend to incriminate them, or make them liable to a penalty (including a penalty in the nature of a confiscation order under the Act), that answer or document is not admissible against them in criminal proceedings, except proceedings in respect of the making of a false statement or declaration.

23. In Australian Competition and Consumer Commission v Chaste Corporation (No 1) (‘Chaste Corporation’), Spender J dismissed an application for a Mareva order which had been sought to prevent the respondent from dissipating his assets prior to the Court determining an application for pecuniary penalties under s 76 of the Trade Practices Act 1974 (Cth).[28]  Spender J referred to the decision of the High Court in Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (‘Lenah’) where it had been held that, when an interlocutory injunction is sought, it is necessary to identify the legal or equitable rights which are to be determined at trial and in respect of which final relief is sought. [29]  The legal right may be a statutory right and the final relief that is being sought need not be injunctive relief.  The High Court held in Lenah that an interlocutory injunction could not be granted if no legal or equitable rights were to be determined in the proceedings.[30]

    [28] (2003) 127 FCR 418.

    [29] (2001) 208 CLR 199.

    [30] Ibid at [15] (Gleeson CJ), [60] (Gaudron J) and [105] (Gummow and Hayne JJ).

24. After reviewing several other authorities, Spender J held in Chaste Corporation:[31]

    In my opinion, there is a real distinction between there being a danger that a plaintiff if he gets judgment will not be able to get it satisfied, and a danger that a fine or penalty ordered to be paid will not be paid.  Satisfaction of a judgment in not an apt way of describing the payment of a fine or civil penalty.

    [31] [2003] 127 FCR 418 at [26].

25. Spender J found that there was a prima facie case of resale price maintenance contrary to the Trade Practices Act against the first respondent, the Chaste Corporation, and the fourth respondent Mr Peter Foster.  Spender J noted that Mr Foster had a “sad and lengthy history of dishonesty, deception and evasion”.[32]  His Honour also found that there was a real risk that Mr Foster would do everything within his power to avoid the payment of any penalties ordered against him by the Court and that he would do whatever he could, including the concealing and moving of assets, to avoid payment of any costs order.

    [32] Ibid at [42].

26. Nevertheless, Spender J found that:[33]

    Notwithstanding my fears about Mr Foster’s future conduct, in my judgment I do not have power, within s 23 of the Act or otherwise, to make the Mareva order sought by the ACCC or any similar order, or to order discovery in aid of any such Mareva order.

    It is not to the point that some people might believe the Court should have such a power.  The nature of the proceedings against Mr Foster are punitive, not compensatory or restitutionary.

    The proceedings are civil proceedings, not criminal, and Mr Foster is not at liberty on some sort of bail.  I do not regard it as a proper exercise of the Court’s power to make Mareva order, to freeze the assets of a person so as the better to ensure a payment of any penalties that might be ordered by a court some time in the future, in respect of past contraventions of the Trade Practices Act.  A fortiori, it is not, in my opinion, a proper exercise of the power to make Mareva orders to freeze the assets of a person to enhance the prospects of payment of any costs order that might be made in the future in favour of a regulatory authority.

    [33] Ibid [61] to [63].

27. The question arises as to whether the making of a Mareva order to compel the respondents to identify all property owned by them, and all transactions relating to that property over the past six years, is contrary to the principle stated by Spender J in Chaste Corporation.  The principle as stated by his Honour was that a Mareva order should not be made to freeze a person’s assets so as to better ensure the payment of any civil penalty ordered in respect of the Trade Practices Act or the payment of a costs order in regulatory proceedings.

28. A deemed forfeiture order will be made by operation of s 56A of the Act if the respondents are convicted of the commercial drug offences with which they have been charged.  The purpose of the General Restraining Order sought by the Director is to better ensure that all of the respondents’ property is subject to a deemed forfeiture order should they be convicted.  The making of a deemed forfeiture order is a civil, rather than criminal, proceeding.  By stripping a serious drug offender of the entirety of their assets (save for protected property and limited other exceptions), a deemed forfeiture order is a form of civil penalty, albeit consequential upon conviction of a specific class of criminal offence.  Thus, like the civil penalty order considered by Spender J in Chaste Corporation, it is punitive rather than compensatory or restitutionary in nature.

29. In this context, I note that s 145 of the Act treats a “confiscation order” as a form of civil penalty so as to attract the privilege against self-incrimination.  A “confiscation order” is defined in s 3(1) to include a forfeiture order.  It is clear from s 56A(1) that a deemed forfeiture order is a particular type of forfeiture order. Thus, s 145 indirectly confirms that a deemed forfeiture order is a civil penalty.

30. Although I am not bound by the decision of Spender J in Chaste Corporation, and the legislation considered in that case was different, I consider that his Honour’s reasoning is highly persuasive.  While a deemed forfeiture order and a civil penalty order under the Trade Practices Act are both civil in nature, they are each a form of penalty imposed following an adverse finding by a court.  The close parallel between the two situations is shown by the fact that in one case the order follows a criminal conviction, and in the other, it is imposed after a finding that there has been a contravention of a statutory standard of conduct in trade or commerce.  I do not consider the position to be altered by the fact that in one case the order is made by force of the Act upon conviction without any exercise of discretion by the Court and in the other case, the Court has a discretion as to the extent of the penalty, if any, it imposes after a finding that there has been a contravention.

1. Even if the analysis by Spender J in Chaste Corporation is disregarded, in my view there are other considerations which militate against the Court making an order under s 24 analogous to a Mareva order that extends to all property owned, or under the effective control, of the respondents. I have discussed several of those considerations at [82] to [95] in relation to the second contention advanced by the Director. It is unnecessary to repeat that material.

2. I also note the submission by senior counsel for the respondent that the State Parliament could have, but did not, follow the same path as the Commonwealth Parliament by including a provision to the same effect as s 17(2)(b) of the POCA as it stood in 2004 when the Bill that led to the enactment of the Act was introduced to the South Australian Parliament (i.e. an order could apply to “all or specified property” of a suspect). While the Attorney-General stated in his Second Reading speech that the content of the Bill had drawn upon the Commonwealth experience with the POCA, why the State had adopted a narrower approach in this instance was not explained.

3. Had the broader POCA approach been adopted, either when the Act was first enacted or when subsequently amended, the present issue would not have arisen. Regardless of the reason for the different legislative policy, it is clear that the South Australian Parliament has elected not to empower the courts to make an order specifically restraining unidentified property. In that light, and for the other reasons I have already given, I do not consider that s 24 would support the making of the General Restraining Order.

4. I referred in detail at [10] to [20] to the wide-ranging scheme for information gathering created by Part 6 of the Act.  Most importantly, s 131 provides that if an application for a restraining order has been made, or is in force, the Court may, on the application of the Director, make an order for the examination of any person about the affairs of a person who falls within any of the classes identified in paragraphs (a), (b) or (c) of s 131(1).  Such an examination may include inquiries about the nature and location of any property.  The examination is conducted by the Director (or his delegate[34]). The Director may require a person to answer questions and produce documents. It is an offence not to comply. The coercive investigative powers conferred upon the Director under Part 6 are in many respects similar to those conferred upon the Independent Commissioner Against Corruption under Schedule 2 to the Independent Commission Against Corruption Act 2012 (SA) and the powers exercisable by a Royal Commissioner under s 11(1)(f) of the Royal Commissions Act 1917 (SA). Importantly, s 144 of the Act preserves the privilege against self-incrimination where a person is compelled to answer a question or produce a document.[35]  That would avoid the need for a “tailored order” such as that proposed by the Director.

   [34] Section 13 of the Act.

   [35] As do both clause 8(5) of Schedule 2 to the Independent Commission Against Corruption Act and s 16 of the Royal Commissions Act.

5. I consider that by enacting Part 6, Parliament has contemplated and made specific provision for the situation that concerns the Director where he holds a suspicion that a suspect may own, or have effective control over, additional property which the police are unable to identify or locate. While the Director is no doubt correct in his suggestion that the use of Part 6 would be resource intensive, both for his Office and perhaps the courts, Part 6 is a detailed and specific process provided in the legislative scheme to identify additional property owned, or under the effective control, of suspects. In my view, the elaborate and comprehensive nature of the scheme created by Part 6 indicates that it is intended to be a code covering exhaustively the powers intended to be available for coercive information gathering about property that may come within the scope of the Act. For that reason, I do not consider s 40 of the Act would permit the making of the proposed Ancillary Orders.

6. In any event, as have I rejected the Director’s application for a General Restraining Order, it is also necessary to reject the Ancillary Orders.  Those orders cannot operate in the absence of the General Restraining Orders, to which they are ancillary.

   Conclusion

7. I dismiss the second amended originating applications filed on 16 July 2021 insofar as they seek General Restraining Orders and the Ancillary Orders against the two respondents, Dalibor Drazetic and MJP.  

8. I will hear the parties as to costs.