Director of Public Prosecutions v Kobelt, Searle, Searle, Butler & Beare - [2007] SADC 57

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
DIRECTOR OF PUBLIC PROSECUTIONS v KOBELT, SEARLE, SEARLE, BUTLER & BEARE
[2007] SADC 57
Reasons for Ruling of His Honour Judge Tilmouth
17 May 2007
CRIMINAL LAW
Judgment and punishment - Orders for compensation, reparation, restitution, forfeiture and other matters relating to disposal of property - Forfeiture - Serious drug offence - Ex parte order - Test to be applied on application to set aside - Relevant factors - Duty of full disclosure - Criminal Assets Confiscation Act 1996 (SA), s 15(2), (5).
Section 15(2) of the Criminal Assets Confiscation Act 1996 (SA) (the Act) permits an application for a restraining order relating to property to be brought ex parte, but requires the court to provide "the owner of the property a reasonable opportunity to be heard on the question whether the order should continue in force and, if after hearing the owner, the court is not satisfied there is good reason for the order to continue in force, the order must be revoked."
An exparte order restraining various properties was made in the Magistrates Court on 18 May 2004, under s15(1) of the Criminal Assets Confiscation Act 1996 (SA). No hearing of the kind contemplated by s15(2) was held and no application for exceptions were made pursuant to s15(5) before that Act was repealed by the Criminal Assets Confiscation Act 2005 on 2 April 2006.
The defendants contended the restraining order was invalid because no basis for proceeding exparte was shown, owing to the failure to comply with s15(2) and because the order was made with respect to property beyond the $300,000 jurisdictional limit of the Magistrates Court. They also maintained that applications for exception made in October 2006 remain on foot for determination on their merits either under the repealed Act or the 2006 Act, or both.
Held: (1) No clear factual basis for the need to proceed exparte was made out.
(2) The Magistrates Court declined or abdicated its jurisdiction to be "satisfied there is good reason for the order to continue in force".
(3) Although orders were made with respect to a number of properties together exceeding $300,000, as each order related to property less than that, the Magistrates Court had not exceeded its jurisdictional limit, as that relates to each item of property over which a restraining order was made.
(4) As ss15(2), 15(3) provided a complete remedy for all irregularities in obtaining exparte orders under s15(1), the legislature could not have intended orders made in breach to be invalid.
(5) Furthermore, orders made under s15(1) in jurisdictional error or involving irregularities, were amenable to correction on appeal or on judicial review and remained in effect until set aside by a court of competent jurisdiction.
(6) The applications for exception or exclusion were made after the 2006 Act came into effect on 2 April 2006, stood to be determined according to the provisions of that Act. As they were made more than six months following conviction, without an extension order being in place, they were out of time.
Criminal Assets Confiscation Act 1996 (SA) s3, 4(3), 15(1), 15(2), 15(3) and 15(5); Criminal Assets Confiscation Act 2005 (SA) Schedule 1, referred to.
DPP v Tregenza (2002) 84 SASR 346; 136 A Crim R 398; NSW Crime Commission v Ibrahim [2002] NSWSC 791 ; R v Kelly; Ex-parte Harvey (1985) 38 SASR 93 ; DPP v Le [2007] VSCA 18; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, applied.
Matheson v Matheson [1952] VLR 27; Lee v Saint [1958] VR 126, considered.

DIRECTOR OF PUBLIC PROSECUTIONS v KOBELT, SEARLE, SEARLE, BUTLER & BEARE
[2007] SADC 57
Preliminary

The Magistrates Court sitting in Adelaide on 18 May 2004 made a restraining order with respect to real and personal property either owned or in which the defendants held an interest (“the restraining order”) pursuant to s15(1) of the Criminal Assets Confiscation Act 1996 (SA) (“the repealed Act”). On 2 April 2006 the Criminal Assets Confiscation Act 2005 (SA) (the “2005 Act”) came into effect, at a time when the restraining order remained in force. It is the validity of that order and its consequences in light of the repeal, which are the subject of this preliminary ruling.
Proceedings before this Court
The matter comes before this Court by way of summons filed on 14 November 2006 in which the Director of Public Prosecutions (SA) (the “Director”) seeks orders pursuant to s19 of the Magistrate’s Court Act 1991 (SA) transferring the proceedings in which the restraining order was made into this court. He seeks further declarations pursuant to s77 of the 2005 Act forfeiting the subject property to the Crown. The property in question is substantial. As an alternative the Director seeks a declaration that each defendant is required to pay to the Crown “an amount as assessed by the Court” under Part 5 the 2005Act.
The first defendant seeks declarations (which the others support) invalidating the restraining order, that it be set aside and orders dismissing the transfer application. The same application filed on 24 January 2007 also sought orders pursuant to s34 (1) and s36 of the repealed Act excluding certain specified property from the ambit of restraining orders and if available to them pursuant to s74 of the 2005 Act, an order extending the restraining order to 10 July 2007. The fourth defendant is the partner of the third defendant, owning property jointly with him, which is also the subject of the restraining order. The restraining order also relates to the fifth defendant Beare, who has pleaded not guilty to various offences yet to be tried. Finally, Mr Kobelt Senior was represented in these proceedings as a person claiming to have an interest in one of the restrained properties, by reason of a substantial amount of money loaned by him to acquire it.
The Jurisdiction of the Magistrates Court
Section 3 of the repealed Act provided on a court being satisfied there were “reasonable grounds to suspect that property may be liable to forfeiture, the Court may make a restraining order prohibiting … any dealing with the property”. “Property” is widely defined to include choses in action or any interest in property, as to which there is no issue between the parties. Nor is issue taken with the requisite grounds for suspension.
The “Court” is defined to include the Supreme and District Courts and the Magistrates Court “if the proceedings involved property to the value of $300,000 or less”. No doubt this falls for decision at the time of making orders under the repealed Act.[1] The nub of the submission for the defendants is that the property in question was unquestionably valued at more than $300,000 and therefore the restraining order went beyond jurisdiction and is consequentially void.
[1] Doner v Princes Securities Pty Ltd (1971) 1 SASR 78.
Section 19 of the Magistrates Court Act (above) relevantly provides:-
19-Transfer of proceedings between courts
(1)     The District Court may order-
(a)that civil proceedings commenced in the Magistrates Court be transferred to the District Court; or
(b)    ….
(2)     …
(3)     Where proceedings have been transferred under this section, they may be continued and completed as if steps taken in the proceedings prior to the transfer had been taken in the court to which they are transferred.
It is further submitted that s47, 74, 78 and 95-99 inclusive of the 2005 Act are invalid, an argument based on Chapter III of the CommonwealthConstitution and the decision of the High Court in Kable v The Director of Public Prosecutions (NSW);[2] see also Re Criminal Proceeds Confiscation Act 2002 (Qld)[3] and Chaffey v Santos Ltd.[4] That not insubstantial question has been postponed pending the resolution of the current applications, as it would not fall for determination should the restraining order be set aside.
[2] (1996) 189 CLR 51
[3] [2003] QCA 249
[4] [2006] NTSC 67
Proceedings in the Magistrates Court
It became apparent that proceedings in the Magistrates Court following the order of 18 May remained on foot, as no order finally disposing of them was ever made. The restraining order itself provided for further consideration on 25 June 2004 at 9.30 am “at which time the defendants will be hard on the question of whether this restraining order should remain in force”.[5] It further gave the defendants and any person “affected by the terms of this order” liberty to apply to “vary or discharge this order” on giving 48 hours notice. No-one took advantage of those options. As to the former, the endorsements on the court file disclose that further consideration was successively adjourned. On 23 July 2004 Mr Retalic appeared on the defence side, when “by consent the matter was adjourned to Friday 22 October 2004 at 9.30 am with liberty to the defendants to apply during the period of the adjournment”. It was further adjourned on the latter date, and again on 4 March 2005, 7 October 2005, 25 November 2005, 20 October 2006 and 15 December 2007.
[5] Paragraph 17.
On 20 October 2006, a solicitor for the first defendant, Mr Zollo, appeared before Ms O'Connor SM in the Adelaide Magistrates. In an affidavit sworn by him on 22 March 2007 he deposes as to this occasion:
6.Ms Giorgini informed the Court that an application had been made or was in the process of being made by the Director of Public Prosecutions to have matters relevant to the confiscation of criminal assets transferred to the District Court jurisdiction. I acknowledge that I was aware of this course of action being taken by the Director of Public Prosecutions.
7.Ms O'Connor SM then indicated that she would adjourn the matter to allow any application by the Director of Public Prosecutions to the District Court regarding a transfer of confiscation of criminal assets to be heard and determined.
8.I specifically recall addressing Her Honour on the issue of ensuring that our client's rights to be heard on the Application needed to be preserved whilst the Director of Public Prosecutions made their application to the District Court to have the confiscation of criminal assets issue transferred into that jurisdiction. I recall Her Honour acknowledging my concern but electing to adjourn the matter so that the application of the Director of Public Prosecutions within the District Court could be determined.
The application to which he was referring must have been that filed on 12 October 2006. The proceedings were finally adjourned to 29 June 2007 “to await the outcome of the DPP’s application to proceed in the District Court”.
Section 20 of the Magistrates Act 1983 (SA) enables a Judge of the District Court to exercise “the jurisdiction, powers or functions of a Magistrate”. This power coupled with s5 of the Judicial Administration (Auxiliary Appointments and Powers) Act 1988 (SA) confirms the capacity of a District Court Judge “to exercise … the jurisdiction and powers attaching to any other judicial office of a co-ordinate or lesser level of seniority” (s5(1)). These were interpreted by the full court in Tarasenko v Boylan[6] as furnishing the power of a Judge to sit in the Magistrates Court as though a magistrate and to exercise the jurisdiction, powers and functions of a magistrate therein. It also enables him or her, whilst sitting in this court and exercising its jurisdiction, to exercise the jurisdiction, powers or functions of a Magistrate, including those which the magistrate could exercise when sitting as the Magistrates Court.
[6] (1992) 58 SASR 587 at 590-591, see also R v Gibbs (2004) 89 SASR 30, R v Smith [2005] SASC 212 [6-7].
Acting under these provisions, the court gave directions bringing the Magistrates Court file into court for the purposes of considering the material before the Magistrate insofar as it was relevant to the submissions concerning the validity of the restraining order and to facilitate orders relating to the exceptions claimed, if and when that course of action became appropriate or necessary.[7]
[7] Magistrates Court File AMCCI 04-5934
It is further apparent from the materials before the lower Court that the restraining order was made by ex-parte application on 18 May 2004, when a Magistrate simply enclosed a draft minute filed with the application. Needless to say such orders may have serious consequences for the owners of the property affected: DPP v Alexander.[8] The application was supported by an affidavit filed by a “para-legal officer” employed by the Director of Public Prosecutions purporting to be “cognizant of the facts”, on the premise that “if the defendants received notice of the claim … prior to the order being made mischief may be caused to the plaintiff in that the defendants may dispose of the property prior to the restraining order being made”. No basis for that apprehension is deposed to or disclosed.
[8] (2003) 86 SASR 577 at [71].
A further affidavit in support of the application was filed by a police officer, which identified property held by the first and second defendants at Coffin Bay said by him to be valued at $220,000. Other premises at Coffin Bay were valued at that time at $77,000 and a further two properties in the Hundred of Lake Wangary were said to be worth $46,000 and $73,000 respectively. As to the third defendant, property allegedly liable to forfeiture at Coffin Bay was valued at $190,000 and with respect to the fifth defendant Beare, property in Port Lincoln worth $68,000 was involved.
It can be seen that none of the individual properties on the face of this material exceeded the $300,000 limitation specified by the definition of “Court” in the repealed Act, and yet the combined total plainly appreciably exceeds that amount.
The $300,000 jurisdictional limit
The basis of the argument for invalidity hinges on the court stepping outside of or acting in exercise of jurisdiction by making orders with respect of property of a combined value of more than $300,000. A second major head of attack focused on alleged procedural irregularities, principally comprised in the fact that a hearing never took place as contemplated by s15(2) of the repealed Act on the question of whether the restraining order “should continue in force … or must be revoked”.
It is inescapable that the jurisdiction of the Magistrates Court with respect to such orders is limited to “proceedings” involving property with a value of $300,000 or less. What is less clear is whether this refers to the accumulated value of all property encompassed in the one proceeding, or whether the $300,000 ceiling applies with respect to each item of property over which restraint is sought or made. In the 2005Act the same monetary limitation continues to apply with respect however to “any application … that involves property …”. What difference, if any the change in terminology makes, is unclear. The same result seems to be apparent when applied to the facts of this case, as there was only one application or proceeding with respect to all properties.
Section 15(1) of the repealed Act reads:
Restraining orders
15. (1) If a court is satisfied, on application by the Director of Public Prosecutions, that there are reasonable grounds to suspect that property may be liable to forfeiture, the court may make a restraining order prohibiting, subject to the exceptions (if any) stated in the order, any dealing with the property.
It can be seen that s15(1) itself focuses on “property”. It is silent as to questions of the ownership or interest that may be held in such property.
The nature of the application and the way in which the resultant orders were drafted, demonstrate they were intended to relate to individual and precisely described real and personal property. It is difficult to imagine an order capable of enforcement or execution, without specific property being precisely identified.
Accordingly, initial ex-parte restraining orders made under s15(1) relate essentially to “property”. It is property which the court restrains under s15(1). When it comes to subsequent procedures, the court is required for the first time to hear and consider the interests of “the owner of the property”. The same applies to applications for exception from forfeiture under s15(5), bearing in mind at that stage the court may additionally consider the interests of persons having “acquired an interest in the property”: s15(5) exception 3. As noted in Director of Public Prosecution v Le[9] in relation to practically identical legislation, “the property and the applicant’s interest in the property, are thus separate and distinct”.
[9] [2007] VSCA 18 at 50
It follows that it is property alone which is relevant at the ex-parte stage. There is nothing in the Act which compels or even suggests the view that the accumulated value of each item of property counts for the purpose of the $300,000 jurisdictional provision. Indeed the definition of “court” equally fastens on “property” rather than on interests or ownership. The court in making a restraining order must consider the merits in relation to each item of property involved, as to which the Magistrates Court has jurisdiction only to the extent of $300,000. For precisely the same reasons, the Director’s submission that the monetary limit relates to the value of the particular interest, must equally be rejected. It is not appropriate or necessary to make findings of that kind in an ex-parte proceeding.
The proper construction of Part 3 as a whole of the repealed Act leads to the conclusion that when proceedings involving restraining orders over property are concerned, the $300,000 limitation relates to individual items of property over which an order for restraint is sought. A contrary construction would mean that where property collectively valued at more than $300,000 is involved, individual proceedings would be necessary with respect to each. If heard by the one Magistrate at the one time, orders not infringing the jurisdictional limit could be made, whereas if brought in the same circumstances in the one application, they would. This is an inefficient and impractical construction. Moreover a combined application better places the court in a position to consider in context all applications for restraint and equally for exceptions in the case of forfeiture under s9(2) and restraint under s15(5) of the repealed Act.
A contrary view would also mean the present applications for exception filed in the Magistrates Court are incompetent. The better view is that Parliament intended a consistent application of the jurisdictional limitation at each stage of the process established under the repealed Act.
Was the restraining order invalid for breach of jurisdictional limit?
Even then it is difficult to see how the restraining order was a nullity, assuming it exceeded the monetary limit. A complete cure lies in the power contained in s15(2) to revoke the order, so that if a Magistrate was persuaded the restraining order was made in excess of jurisdiction, it could be immediately set aside. Wider remedial powers apply under the 2005 Act: Section 40. Furthermore an order made in excess of jurisdiction remained amenable to correction on appeal or on judicial review: Nollen v Police[10] and Griffiths v ANZ Banking Group Ltd.[11]
[10] (2001) 78 SASR 421, (2001) 120 A Crim R 64 at [27] – [29].
[11] (2002) 83 SASR 491 at [48-56].
Whether an order made in breach of a jurisdictional limitation is invalid, is dependant upon the purpose of the legislation to invalidate such orders. So much is made clear from the decision of the High Court in Project Blue Sky Inc v Australian Broadcasting Authority.[12]In the joint judgment of McHugh, Gummow, Kirby and Hayne JJ, the following principle of construction is set out at 388-390 [91-92] (footnotes omitted):-
[91] An act done in breach of a condition regulating the exercise of a statutory power is not necessarily invalid and of no effect. Whether it is depends upon whether there can be discerned a legislative purpose to invalidate any act that fails to comply with the condition. The existence of the purpose is ascertained by reference to the language of the statute, its subject matter and objects, and the consequences for the parties of holding void every act done in breach of the condition. Unfortunately, a finding of purpose or no purpose in this context often reflects a contestable judgment. The cases show various factors that have proved decisive in various contexts, but they do no more than provide guidance in analogous circumstances. There is no decisive rule that can be applied there is not even a ranking of relevant factors or categories to give guidance on the issue.
[92] Traditionally, the courts have distinguished between acts done in breach of an essential preliminary to the exercise of a statutory power or authority and acts done in breach of a procedural condition for the exercise of a statutory power or authority. Cases falling within the first category are regarded as going to the jurisdiction of the person or body exercising the power or authority. Compliance with the condition is regarded as mandatory, and failure to comply with the condition will result in the invalidity of an act done in breach of the condition. Cases falling within the second category are traditionally classified as directory rather than mandatory. In Pearse v Morrice, Taunton J said "a clause is directory where the provisions contain mere matter of direction and nothing more". In R v Loxdale, Lord Mansfield CJ said "[t]here is a known distinction between circumstances which are of the essence of a thing required to be done by an Act of Parliament, and clauses merely directory". As a result, if the statutory condition is regarded as directory, an act done in breach of it does not result in invalidity. However, statements can be found in the cases to support the proposition that, even if the condition is classified as directory, invalidity will result from non-compliance unless there has been "substantial compliance" with the provisions governing the exercise of the power. But it is impossible to reconcile these statements with the many cases which have held an act valid where there has been no substantial compliance with the provision authorising the act in question. Indeed in many of these cases, substantial compliance was not an issue simply because, as Dawson J pointed out in Hunter Resources Ltd v Melville when discussing the statutory provision in that case: "substantial compliance with the relevant statutory requirement was not possible. Either there was compliance or there was not."
[12] (1998) 194 CLR 355.

No legislative intent emerges to invalidate orders made under s15(1), simply because the repealed Act provided for a complete and effective remedy for any deficiencies in the ex-parte restraining order process. In that situation then, the restraining order remains intact unless and until set aside by a court of competent jurisdiction: Cameron v Cole,[13] Re Macks Ex parte Saint.[14]
[13] (1944) 68 CLR 571
[14] (2000) 204 CLR 158.
Nor is this a case where jurisdictional error results in the restraining order being treated as a nullity: Craig v State of South Australia.[15] In Minister for Immigration & Multicultural Affairs v Bhardwaj[16] Gleeson CJ observed:
I would accept that it is inconsistent with the scheme of the Act to conclude that the Tribunal, upon being persuaded that it has denied procedural fairness, at any time after it has made or purported to make a decision, and regardless of what a person affected by the decision has done or failed to do, may treat that decision as legally ineffective and consider afresh the matter that was originally before it. It follows that, at the time the decision was made, it was inaccurate to say that it was completely without legal effect.
[15] (1994-1995) 184 CLR 163 at 179-180,
[16] (2002) 209 CLR 597 at [13]
In their joint judgment, Gaudron and Gummow JJ at [51], said (footnotes omitted):
A decision that involves jurisdictional error is a decision that lacks legal foundation and is properly regarded, in law, as no decision at all. Further, there is a certain illogicality in the notion that, although a decision involves jurisdictional error, the law requires that, until the decision is set aside, the rights of the individual to whom the decision relates are or, perhaps, are deemed to be other than as recognised by the law that will be applied if and when the decision is challenged.
At [53] they continued:
As already pointed out, a decision involving jurisdictional error has no legal foundation and is properly to be regarded, in law, as no decision at all. Once that is accepted, it follows that, if the duty of the decision-maker is to make a decision with respect to a person’s rights but, because of jurisdictional error, he or she proceeds to make what is, in law, no decision at all, then, in law, the duty to make a decision remains unperformed. Thus, not only is there no legal impediment under the general law to a decision-maker making such a decision but, as a matter of strict legal principle, he or she is required to do so.
Having made the order on an ex-parte basis under s15(1), s15(2) and (3) plainly then provided the means of safeguarding and protecting those affected, or potentially affected, by giving them the right to a hearing on the question whether the order should “continue in force or be revoked”. They also provided an effective mechanism to set aside any orders made in excess of jurisdiction.
No basis for ex-parte hearing?
It was submitted on behalf of the defendants the material upon which the restraining order was made was seriously incomplete, as there was no sufficient or proper basis disclosed for maintaining the need to hold an ex-parte hearing. The only material relating to this was mere the assertion “mischief may be caused … in that the defendant may dispose of the property, prior to the restraining order being granted”.
An affidavit in identical terms was considered by Gray J in the Director of Public Prosecution v Tregenza.[17]Of that his Honour said (at [10-11]):
[10] This material was less than satisfactory. The affidavit only specified one defendant and did not identify that person. No explanation was offered for the seven month delay between the arrest and the making of the ex parte application. Although the affidavit referred to the Director's fear that the property may be disposed of, no basis for his fear was disclosed. No particulars were proffered.
[11] An applicant for an ex parte order has a duty of full disclosure. That duty includes the disclosure of all relevant factors that may affect a magistrate's decision including matters that support the other party's position. There needs to be a clear factual basis established for the need to proceed ex parte. The basis of the Director's fear or apprehension should be disclosed and particularised.
[17] (2002) 84 SASR 346; 136 A Crim R 398, cited in Director of Public Prosecutions v Alexander (2003) 86 SASR 577 at [7], [26], [71].
Gray J further reasoned in relation to applications under s15(1) at [54]:
[54] The practice of routinely seeking ex parte orders is inappropriate. An ex parte order affecting rights with respect to property should only be made in accordance with the terms of the Criminal Assets Confiscation Act. The Director must establish the necessary factors to enliven the court's discretion. The Director must also establish a real risk of disposal of property if the party against whom the order is sought has knowledge of the application. A mere assertion is not sufficient. A basis for the apprehension must be established.
This was the identified situation in the current matters. The incompleteness of the material placed before Mr Hiskey SM was compounded by an assertion in one affidavit before him (paras 9.3 & 9.4), that two properties were held jointly by the first and second defendants, when the titles to which they related revealed ownership in the capacity as trustees of the property. The point rather assumes they were bare trustees holding no beneficial interest, but this contention nevertheless serves to illustrate the need for care, accuracy and precision. However at that point in the process, s15(1) of the repealed Act made no demands of the court so far as ownership of the property was concerned – that only became relevant once ss15(2), 15(3) and 15(5) were engaged.
The fact remains that these deficiencies equally had their cure in s15(2), or in applications to vary or revoke under s15(3) and if necessary on appeal or judicial review in the Supreme Court. It is to be remembered at this stage such orders were simply “interim orders to preserve the status quo pending the trial of an accused”: Hepworth v Director of Public Prosecutions (SA).[18] That being the case it is not open to reason by applying the principles so clearly established by the High Court in Project Blue Sky Inc v Australian Broadcasting Authority (above), that it was intended by Parliament the failure of the court proceedings under s15(1) to be satisfied of the need for an ex-parte hearing, necessarily vitiated the resultant restraining order.
[18] (2001) 79 SASR 480 at 485.
The requirement to hold a hearing under s15(2)
Next it is said that the restraining order fails because no hearing as contemplated by s15(2) of the repealed Act ever took place. The submission was that this required the court effectively to consider or reconsider “whether the orders should continue in force”. The precise requirement of s15(2) is that “the Court must allow the owner of the property a reasonable opportunity to be heard”, not that it must necessarily undertake such a hearing. That opportunity was initially afforded by the terms of the order itself (quoted above). However the Magistrates Court at no stage turned its mind again to the validity or appropriateness of the restraining order, nor did it embark upon any inquiry to satisfy itself there was “good reason for the order to continue in force”. The section rather presupposed such an inquiry must occur and that it was necessary for the applicant to demonstrate “good reason” for the order to remain in force.
The record shows the s15(2) proceeding - if it may be loosely so called – and the subsequent applications for exceptions were perpetually adjourned, as it appears, to abide the events in the criminal and transfer proceedings in the circumstances mentioned above. Despite the fact that the defendants did not apply for such a hearing or seek orders for variation or discharge - a somewhat surprising stance given the gravity of the claimed irregularities - it is not possible on the material available to the court to reach the conclusion they abandoned those grounds of relief or were forced to an election as to those matters.[19] As mentioned above, the first defendant was anxious to preserve his rights and interests.
[19] Compare Jadwman Pty Ltd v Secretary, Department of Health and Aged Care & Anor (2003) 145 FCR 1, at [48] and [84].
In discharging the power conferred by s15(2), the court exercises judicial functions, and for which it necessarily possesses the power to adjourn from time to time.[20] There are however inherent limitations on the power to adjourn, delineated by King CJ in R v Kelly; Ex-parte Harvey,[21] in the context of an application for interstate extradition brought under s18 of the Service and Execution of Process Act 1901 (Cth) as it then was:
Power to adjourn proceedings for a reasonable time and upon reasonable grounds, is a necessary incident of the power to make decisions of the kind required by s 18. But the incidental power to adjourn proceedings is circumscribed by the purpose for which it exists. It exists for procedural purposes to facilitate the fair disposal of the proceedings. If the matter is adjourned for extraneous purposes, or on unreasonable grounds, or for an unreasonable time, it may amount to a refusal or neglect to perform the function conferred by law and may result in mandamus. The same observations apply to the power conferred by s 18(5) to remand and admit to bail.
Section 18, in my opinion, casts upon the magistrate before whom a person, apprehended pursuant to a warrant issued under the section, is brought, a duty to deal with the person in one or other of the ways stipulated in the section. He may, pursuant to sub-s (3), order the return of the apprehended person to the State or part of the Commonwealth in which the original warrant was issued, admit him to bail to answer the charge in that place, or pursuant to sub-s (6), discharge him or order his return after the expiration of a specified period. Paragraph (f) of sub-s (6) empowers the magistrate to "make such other order as he thinks just", but I think that such orders must be merely ancillary to the orders authorized by paragraphs (d) and (e). Section 19 is clearly intended to confer on the Supreme Court power to review the substantive orders authorized by s 18 and the types of orders mentioned in s 19 are limited to those specifically authorized by s 18. It would be unreasonable to suppose that sub-s (6)(f) authorizes substantive orders other than those specified in paragraphs (d) and (e) which would not be subject to review at the instance of either party.
I do not think that authority for an adjournment for the period or for the purpose of the present adjournment, can be found in sub-ss(5) or (6)(f) of s 18, nor do I think that it can fairly be regarded as reasonably incidental to the powers conferred by the section. The Magistrate was required to make one or other of the orders authorized by the section. It was within his competence to adjourn the proceedings for a reasonable time for genuinely procedural purposes. The adjournment which he ordered was not of that nature and amounted to a failure to perform the duty which he was required by law to perform.
[20] Boettcher v Boettcher [1948] QSR 74.
[21] (1985) 38 SASR 93 at 96.
Given the subject matter of s15(2) was repeatedly adjourned without resolution since 25 June 2004, there is little difficulty in concluding the circumstances amounted to declining or abdicating jurisdiction: Matheson v Matheson,[22] thus rendering the Magistrates Court amenable to administrative review: The Queen v Kelly; Ex-parte Harvey.[23] As such there was a constructive failure to exercise jurisdiction: Wentworth v Rogers,[24] Ex parte Hebburn Ltd; Re Kearsley Shire Council,[25] War Pensions Entitlement Appeal Tribunal; Ex parte Bott.[26]
[22] [1952] VLR 27, Lee v Saint [1958] VR 126 at 129-130.
[23] (above) at 95-96.
[24] [1984] 2 NSWLR 422 at [43].
[25] (1947) SR (NSW) 416 at 420.
[26] (1933) 50 CLR 228 at 242-243.
Unlike the Supreme Court, the District Court does not possess the power to set aside the restraining order on this account, although it does have the discretionary power to make binding declarations on “matters within its jurisdiction”. The application for transfer of the restraining order is certainly within the jurisdiction of this court. The cases referred to in The Queen v Kelly: Ex Parte Harvey[27] were pre-judicial review prerogative writ cases, in which orders nisi were made absolute, remitting the matter and commanding the court “to hear and determine the application according to law.[28]
[27] (Above).
[28] The Queen v Kelly: Ex Parte Harvey at 97, 98, Matheson v Matheson above at 31, Lee v Saint above at 133.
This court has no power of remission. Nor should it make declaratory orders in purely hypothetical circumstances: Santos Ltd v American Home Assurance Co,[29] or otherwise lacking in utility: Neeta (Epping) Pty Ltd v Philips.[30]
[29] (1986) 4 ANZ Ins Cas 60-795.
[30] (1974) 131 CLR 286.
According to King CJ and Matheson J in The Queen v Kelly Ex Parte Harvey[31] the adjournment orders were “unauthorised” and according to Matheson and Bollen JJ amounted to a “declining of jurisdiction”.[32] That was the same manner of expression employed by Herring CJ in Matheson v Matheson[33] and Lee v Saint.[34] As these matters are already quite protracted, it is in the interests of all parties that as many of the issues between them be resolved, and a declaration that the Magistrates Court sitting at Adelaide declined the jurisdiction to consider whether the restraining order should continue in force, might have been appropriate. However for the reasons to follow, any such declaration would prove futile.
[31] (Above at 97 and 98).
[32] At 98 and 103.
[33] Above at 31.
[34] Above at 133.
That does not mean the failure to exercise or to perfect the jurisdiction automatically compels the conclusion that the restraining order was a nullity. Once again the court is driven back to the inquiry required by Project Blue Sky v Australian Broadcasting Authority[35] (above) and to ascertain whether a legislative intent is apparent to treat the failure to comply with s15(2) as having any, and if so what effect.
[35] And refer Minister for Immigration and Multicultural Affairs v Bhardevaj (2002) 209 CCR 597 at [11-13], [51-53] and [149-151].
Failure to comply with s15(2), repealed Act
What then are the legal consequences of the Magistrates Courts failure to comply with s15(2)? First of all, the jurisdiction to vary or revoke under s15(3) remained available. It was also open to pursue appellate or administrative remedies for relief. That being the case, it is inescapable that the failure to comply with s15(2) was not intended to bring about invalidity. On the contrary the mechanisms provided for in the repealedAct demonstrates the intention to erect internal remedies catering for and dealing with such defects.
That conclusion does not diminish the force of the remarks made in DPP v Tregenza,[36] when the powers to vary or revoke restraining orders were described as “a safeguard … built into the Act …”.[37] In that case Gray J acknowledged “serious and drastic consequences may flow from the making of a restraining order”.[38] When his Honour proceeded to observe “then there must be a consideration of whether the court is satisfied that the order should continue”,[39] he was doing no more than paraphrasing the words of s15(2) on the assumption that the opportunity the section guarantees was presented and utilized. In this case they were not.
Effect of the 2005 Act on the restraining order
[36] Above and see NSW Crime Commission v Ibrahim [2002] NSWSC 791 at [53-55].
[37] Para [25].
[38] Para [39].
[39] Para [49].
It was contended by the Director that the 2005Act rendered the applications for exception ineffective, as they were made out of time according to the revised limitations erected thereunder. In order to appreciate the point it becomes necessary to deal with the relevant provisions.
The “special provisions” of the repealed Act applied to restraining orders in relation to “serious drug offences”. Under s15(5)(d) a restraining order became “automatically converted into a forfeiture order” upon conviction for such offences, once “6 months after all rights of appeal are exhausted or expire…”. Convictions were recorded in the case of the defendants Kobelt and Leone and Adrian Searle, by their pleas of guilty and administering the allocatus on 10 April 2006 before another Judge exercising the criminal jurisdiction of this court, in relation to what is accepted as “serious drug offences”, within the meaning of the 2005Act: Griffiths v The Queen.[40] Rights of appeal on conviction expired following the elapse of 21 days, so they fell out of time on that contingency towards the end of September 2006. As both were only recently sentenced, they presently retain rights of appeal against sentence.
[40] (1977) 137 CLR 293.
In the case of the defendant Beare, an application was lodged on 3 October 2006 to vary the restraining orders by allowing him to take a mortgage over one of the restrained properties. The first and third defendants filed their application for exception on 6 October 2006, calling in aid ss36 and 76(a) of the 2005Act. Subsequent applications for similar orders were filed in this Court on 26 March 2007. Identical applications were filed by Mr Kobelt Senior on 4 October 2006 and 27 March 2007 respectively.
It should be mentioned that the defendants, especially the third defendant, flagged the prospect of bringing applications to extend time pursuant to s48 of the Limitations of Actions Act 1936 (SA) in order to try and revive the exception and/or exclusion should that become necessary. As such applications have not yet been issued, that question falls to be determined if and when they are. Needless to say any such action would have to deal with the kinds of issues discussed in Crafter v Webster and Guscott [41] and Brook v Flinders University of South Australia,[42] in addition to addressing issues of discretion in terms of the matters outlined by Bray CJ in Ulowski v Miller.[43]
[41] (1979) 23 SASR 61.
[42] (1988) 47 SASR 119.
[43] [1968] SASR 277 at 283.
It is argued by the Director that the reference to “all rights of appeal” in s15(5)(d) was referable to conviction alone, as the conversion to forfeiture is dependent on the entering of a conviction, a consequence unaffected by penalties of any magnitude. There is some force in that submission for that very reason. However if that were intended to be the position it would have been simpler and clearer drafting to have stipulated “6 months after conviction” and to have removed the reference to “all rights of appeal”. That is precisely what Parliament appears to have been achieved in the 2005 Act. As s15(5)(d) stood, on that construction those words “all rights of appeal” have no work to do, as there is only one right of appeal against conviction.[44] Furthermore, it is possible the findings in the sentencing process might influence a later court in dealing with applications for exception, so there is a corresponding purpose in extending the time of statutory forfeiture to allow for that contingency.
[44] R v Brain (1999) 74 SASR 92.
The better construction is that s15(5) picked up both appeals against conviction and sentence, because of the wider expression employed and because it is possible to identify reasons for waiting upon final resolution of all aspects of the criminal proceeding before the somewhat draconian and conclusive forfeiture order irrevocably takes hold of the restrained property. On that view of things there would have been no automatic conversion of the restrained into forfeited property under the repealed Act.
Forfeiture under the 2005 Act.
Under the 2005 Act, restrained property becomes forfeited by force of statute, following conviction at the “end of the relevant period”: s74(1)(b)(i). The are two limbs to that period, the first “6 months starting on the day of conviction”: s74(6). On that contingency there is no question other than that the properties are now forfeited. The second is “until the end of the extended period relating to an extension order”: s74(6)(b). Such an order is available to an applicant seeking to exclude property from the ambit of a restraining order under s76, providing it was made within six months of conviction: s75(1). Once again if s74(6) applies, all defendants have failed to forestall forfeiture as no such extension order was made in favour of any party. Nor was one sought except in the case of the first defendant in an application dated 6 October 2006 and filed in the Magistrates Court on 12 October 2006. As such that application was two days outside the period “starting on the day of conviction” as required by ss75(1).

In sum the Director’s stance is that all defendants are out of court so far as contending the forfeiture orders have not validly taken effect and so far as their applications for exception or exclusion are within time under both statutory regimes. This is not a conclusion the court is minded to reach lightly, as no interested party has yet had the benefit of a determination on the merits. There is not the slightest suggestion parties should lose all rights to seek exception or exclusion in the process of transition or owing to technicalities in the change of statutory regimes. Both vest substantial and significant rights of exception, albeit it quite different terms.
Under the repealedAct those rights were exercisable at the instance of the owner upon proof of acquisition of the subject property more than 6 years before the commission of the forfeiture offence: s15(5) exemption 1; on proof of acquisition of an interest in the forfeited property in good faith for valuable consideration, not knowing forfeiture had taken effect: s15(5) exemption 4; or to any other person claiming an interest in the forfeited property acquired in good faith for valuable consideration: s15(5) exemption 4.
In the case of the 2005 Act such rights of exclusion are afforded to the owner of property convicted of a serious offence who can show to the satisfaction of the court under s 76(1) that (i) the property is not the proceeds of unlawful activity; and (ii) the defendant’s interest in the property was lawfully acquired; and (iii) it would not be contrary to the public interest for the property to be excluded from such forfeiture.
Significantly, s76(2) expressly prevents an extension order from being made once the property is forfeited. Obviously these are less generous rights of exception to those conferred by the repealed Act, but they remain significant nonetheless.
At the time the 2005Act came into force, persons entitled to claim exception retain no less rights than those contained in that Act, even when restraining orders or applications for exception were made under the repealed Act. In that respect the court is obliged by accepted cannons of construction to construe the potential extinguishment of those previous rights, only by clear and unambiguous language: Scott v Cawsey,[45] Beckwith v the Queen,[46] Director ofPublic Prosecutions v Logan Park Investments Pty Ltd[47] and Della Patrona v Director of Public Prosecutions (Cth) (No2).[48]
[45] (1907) 5 CLR 132 at 154-155
[46] (1976) 135 CLR 569
[47] [1995] NSWLR 68
[48] (1995) 38 NSWLR 257; (1995) 132 ALR 307; (1995) 83 A Crim R 208 at [30] and 3.
The consequences of repeal
The task for the court at this point then is to ascertain whether the words of the 2005 Act clearly and unambiguously manifest the intention to replace or extinguish the rights of the defendants to pursue applications for exception under the terms of s15(5) of the repealed Act. This is much the same as the question posed in Della Patrona v Director of Public Prosecutions (Cth) (No2).[49] This task commences with an examination of the applicable provisions. Of most relevance for this purpose is the following, bearing in mind the 2005 Act came into operation on 2 April 2006:-
[49] Above at p311-312
CRIMINAL ASSETS CONFISCATION ACT 2005 - SCHEDULE 1
Schedule 1—Transitional provisions
Part 7—Transitional provisions
11—Transitional provision
(1) An order in force under the former Act immediately before the commencement of this Act continues in force, subject to this Act, as if this Act had been in force when the order was made and the order had been made under this Act.
(2) In this clause—
former Act means the Criminal Assets Confiscation Act 1996 .
It is clear enough it was intended the 2005Act would affect total repeal the “former Act”. It is equally clear the repeal was intended to have retrospective effect in both its procedural and substantive aspects.[50] Furthermore, it preserves restraining orders made under the repealed regime and then ensures their enforcement as if made under the 2005Act. The terms of the transitional provision are equally capable of having the same effect with respect to all orders under the repealed Act, including forfeiture orders as well as orders for exception.
[50] Owen v State of South Australia (1996) 66 SASR 251
However the 2005 Act says nothing expressly as to the fate of applications for exception made within time and remaining on foot under the repealed Act. Had that been the situation, the combination s11 of the 2005 Act and s19(3) of the Magistrate’s Court Act (above) would have served to preserve the survival of such applications, which may thereby have been “be continued and completed” in the proceedings transferred into this court. The same conclusion was open by applying s16 of the Acts Interpretation Act 1915 (SA), the equivalent of which was interpreted by the High Court in Esber v Commonwealth.[51]
[51] (1992) 174 CLR 430, and see Lay v Employers Mutual Ltd (2005) 66 NSWLR 270.
Regrettably, this all remains beside the point as the applications for exception were made following the repeal and therefore wholly under the cloak of the 2005 Act.
Summary of conclusions
The relevant convictions were recorded on 10 April 2006, when the 2005 Act was in force, thus triggering the minimum period of 6 months before forfeiture. At the expiration of that period the restraining order was liable to be converted to statutory forfeiture. As those convictions were entered after the 2005 Act came into operation, the substantive rights to secure exclusion, stood to be determined according to the 2005 provisions.
Even though the applications for exception filed in October 2006 remain unresolved, they fail to preserve the interests of the applicants to obtain a determination on the merits, as the six months after the time of conviction expired on 10 October 2006, at a time when no application for an extension order was made and no such order remained in force. The failure of the defendants to seek an extension order or to bring their applications within 6 months of conviction, that is before 10 October 2006, has therefore proved fatal.
It must follow that the restraining order of 28 May 2004 remains valid and in tact, that the Director’s application to transfer the proceedings with respect thereto is validly made and that the applications for exception or exclusion are now precluded.
The court will proceed to hear the parties as to the precise terms of the orders it should make, consistent with these reasons, as to costs and any other necessary or consequential issues. The question of declarations as sought pursuant to s77 of the 2005 Act also remain for consideration.
The result is one the court finds unpalatable and one it is reluctant to make. Yet it is one dictated by the clearly expressed legislative intent to determine extant proceedings under the repealedAct in accordance with the 2005Act. Had the applications for exclusion been made under the repealed Act before repeal, or applications made for extension orders within 6 months of conviction under the 2005Act, matters would necessarily stand quite differently. As it is, for reasons remaining unapparent, no such application was made.
So far as the summary court file has been brought into this court pursuant to s20 of the Magistrates Court Act (above) is concerned, it would appear that orders are appropriate dismissing the applications for exception, an issue that can also be debated at the resumed hearing.
The parties should now be heard on these and the other issues arising. They have liberty to apply on short notice.