Director of Public Prosecutions v Vu
[2006] VSCA 188
•20 September 2006
SUPREME COURT OF VICTORIA
COURT OF APPEAL
No. 1492 of 2006
| DIRECTOR OF PUBLIC PROSECUTIONS |
| v. |
| TIEN DUC VU |
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JUDGES: | CHERNOV, NETTLE AND NEAVE, JJ.A. | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 9 August 2006 | |
DATE OF JUDGMENT: | 20 September 2006 | |
MEDIUM NEUTRAL CITATION: | [2006] VSCA 188 | |
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Criminal Law - Confiscation of property – Restraining order – Where Director of Public Prosecutions may apply ex parte for a restraining order pursuant to s.16 of the Confiscation Act 1997 (“the Act”).
Criminal law - Confiscation of property – Restraining order – Where judge may order that notice of application for restraining order be given pursuant to s.17 of the Act – Whether judge bound to consider whether notice should be given – Whether general law principles as to the giving of notice of ex parte applications relevant to whether to order that notice of an application for a restraining order be given pursuant to s.17 of the Act.
Statutes – Statutory construction – Whether Part 2 of the Act excludes or affects the common law right to be heard – Navarolli v. DPP [2005] VSCA 323 explained – Confiscation Act 1997, ss. 14, 15, 16, 17, 18, 19 and 20.
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| APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Dr G. Griffith, Q.C. with | Ms A. Cannon, Solicitor for Public Prosecutions |
| For the Respondent | Mr D.F.R. Beach, S.C. with Mr J.B. Saunders | Valos Black & Associates |
NETTLE, J.A. for the Court (CHERNOV, NETTLE and NEAVE, JJ.A.):
This is an appeal by leave from an order made by a judge in the Practice Court that the appellant give notice to the respondent of an application proposed to be made under s.16 of the Confiscation Act 1997 for a restraining order under s.18 of the Act. It raises again the question of whether Navarolli v. DPP[1] was correctly decided.
[1][2005] VSCA 323.
In Navarolli a court composed of Maxwell, P. and Eames, J.A. held that a defendant had a prima facie right to be heard before a restraining order is made and, therefore, unless there are compelling reasons to proceed without notice,[2] a right to notice of the application for restraining order.
[2]Special Leave to appeal to the High Court was later refused on the basis that the case was not an appropriate vehicle for the determination of the question of principle.
In this case, the judge in the Practice Court said that he disagreed with Navarolli. In his view, Part 2 of the Act armed the Director of Public Prosecutions with a statutory right to apply without notice and authorised the court to deal with the application ex parte and without notice; albeit with power “in an appropriate case” to require the Director to give notice. The judge said, however, that he considered that he was bound by Navarolli and therefore that he should not make an order without notice unless there were compelling reasons to proceed without notice; and, since the property to which the order was directed had already been seized and was under the Director’s control, there were no compelling reasons to proceed without notice. Thus, his Honour ordered that notice be given.
The Director contends that Navarolli was wrong and therefore that the judge in this case was wrong. He submits that Part 2 of the Act in terms or by implication excludes the common law right to be heard, and therefore any presumption in favour of notice, and contemplates that an application for restraining order would be made and dealt with ex parte without notice unless the judge is persuaded that there is good reason for notice to be given.
Furthermore, the Director says that in this case there was no such good reason, because the respondent’s rights were sufficiently protected by his right to apply at a later date for exclusion of property from the order.
The scope of the decision in Navarolli
Before turning to the substance of the Director’s argument, it is relevant to note some details of the way in which the appeal in Navarolli came to be decided and hence of the scope of the decision.
First, it should be understood that counsel for Mr Navarolli was in court when the application for restraining order came on for hearing before the judge at first instance and that the judge nevertheless refused to hear him. On appeal, the question was whether the judge had been wrong to refuse to hear the respondent’s counsel in those circumstances. Not surprisingly, the court held that the judge was wrong.
Secondly, given the circumstances just described, it may be wondered why the question of notice arose for consideration at all. Evidently, Mr Navarolli was not concerned about a lack of notice. One way or another, he had got wind of the application and he had his counsel in court ready to argue against the application when it was called on for hearing.[3] The issue was whether the legislation compelled the judge to proceed ex parte even though counsel for Mr Navarolli was in court and wished to be heard.
[3]Cf. Re Gasbourne Pty Ltd [1984] V.R. 801 at 810-811.
Thirdly, the idea that notice was relevant started with the judge at first instance, presumably at the instance of the Director. His Honour construed s.17 of the Act as meaning that the only persons who may be heard in opposition to an application for a restraining order are persons to whom it is appropriate to give notice in accordance with s.17. Since, in his Honour’s view, there were no grounds to require that notice be given to Mr Navarolli, it followed that Mr Navarolli’s counsel should not be heard. As the judge put it:
“… I am not persuaded that there is any ground for requiring notice to be given to Mr Navarolli before the order is made. He will ultimately be served with a copy of the order, and if he wishes property to be excluded from the effect of the order he will have every opportunity to make an application for exclusion which will involve the Court in determining different issues.
The Legislature has given the right to the DPP to make the decision to bring the application without notice to any person. The application is in respect of property. No person may deal with the property if the order is made. The Court decides the question on the material before it and makes an order against property. Any person who may have an interest in the property may not deal with it. The Legislature has provided a procedure, not to attack the merits concerning the original order, but giving the right to any person to exclude property from the order.
The Court in those circumstances is concerned with different issues. The onus is on the applicant for the order.
Those matters lead to the conclusion in my opinion that s.17(1) notice would rarely be given, and no ground has been advanced to this Court which leads to the conclusion that Mr Navarolli or indeed any other person, should have notice of the application.”[4]
[4]Emphasis added.
Fourthly, it is not clear whether Maxwell, P. and Eames, J.A. accepted the validity of the judge’s premise that the only persons who may be heard in opposition to an application for restraining order are persons to whom it is appropriate to require that notice be given. On one view, however, the following passage of their Honours’ judgment suggests that they treated the entitlement to notice and the entitlement to be heard as being co-extensive:
“As we said to counsel for the Director during argument, given that counsel for Navarolli were present in court and ready to make those submissions, it was counter-intuitive for the Court to refuse to give notice to Navarolli and, in consequence, to refuse to hear submissions on behalf of the very person whose bank account was the subject of the application. In our view, that course could only have been justified if there were some compelling reason for conducting the hearing ex parte. As we have said, not only was there no compelling reason, there was, in our view, no reason at all to conduct the hearing ex parte.[5]
The reference to the court refusing to give notice is presumably a reference to the judge’s decision that it would not have been necessary to give notice.
[5]Emphasis added.
Fifthly, unlike Navarolli, this appeal is not concerned with the question whether the entitlement to notice and the entitlement to be heard are co-extensive.[6] It is to do only with the circumstances in which notice should have been given in this case and, for that reason, it is distinguishable from Navarolli. But, while the appeal in Navarolli could perhaps have been decided on the narrow basis that counsel was in court and wished to be heard, and therefore should have been heard, that is not the way in which it was decided. As Maxwell, P. and Eames, J.A. ultimately expressed themselves, the ratio of their decision was that Mr Navarolli was entitled to notice and, because he was entitled to notice, he was entitled to be heard. In their Honours’ words:
“… [The judge] fell into error in regarding the statute as creating what amounted to a presumption against the giving of notice, or as imposing on a person in Navarolli's position the onus of showing why he should be given notice. His Honour failed to consider the fundamental natural justice principle to which we have referred. For the reasons given, that principle meant that Navarolli had a right to be heard, unless there was some compelling reason for that to be denied to him.”[7]
[6]About which, for present purposes, it is unnecessary to express an opinion.
[7][2005] VSCA 323 at [40].
Finally, and despite the fact that Navarolli was decided by a court constituted by only two members, it would be inappropriate for us not to follow it in this appeal, even if we thought it were wrong. The preferable course would be to refer the matter to a bench of five judges or, alternatively, to dismiss the appeal and leave the issue for determination by the High Court.[8] But as it happens, although we consider that it is unnecessary to approach the operation of s.17 by reference to presumptions, we do not disagree with the substance of what Maxwell, P. and Eames, J.A. said in Navarolli about the circumstances in which it is appropriate for a judge to order that notice be given under s.17.
[8]Assuming that the High Court considered that the matter was one appropriate for its consideration.
The Confiscation Act
Section 14 of the Confiscation Act 1997 provides for restraining orders as follows:
14. Restraining orders
(1)A restraining order is an order that no property or interest in property, that is property or an interest to which the order applies, is to be disposed of, or otherwise dealt with by any person except in the manner and circumstances (if any) specified in the order.
(2)If a provision of this Act confers a power to apply for a restraining order in respect of property in which a person has an interest, the application may be made in respect of one or more of the following-
(a) specified property of the person;
(b)all the property of the person, including property acquired after the making of the order;
(c)specified property of the person and all other property of the person, including property acquired after the making of the order;
(d)all the property of the person, including property acquired after the making of the order, other than specified property;
(e) specified property of another person.
(3)If the court making a restraining order considers that the circumstances so require, the order may direct a trustee specified in the order to take control of some or all of the property specified in the order.
(4)A restraining order may, at the time it is made or at a later time, provide for meeting-
(a)the reasonable living expenses (including the reasonable living expenses of any dependants); and
(b) reasonable business expenses-
of any person to whose property the order applies if the court that makes or made the order is satisfied that these expenses cannot be met from unrestrained property or income of the person.
(5)A court, in making a restraining order, must not provide for the payment of legal expenses in respect of any legal proceeding, whether criminal or civil, and whether in respect of a charge to which the restraining order relates otherwise.
(6)Subject to sub-sections (4) and (5), a restraining order may be made subject to any conditions that the court thinks fit.
(7)The court may refuse to make a restraining order if the DPP or another person or body on behalf of the State refuses or fails to give to the court any undertakings that court considers appropriate concerning the payment damages or costs in relation to the making and operation of the order.
Section 15 provides for the purposes for which application for restraining order may be made.
15. Purposes for which a restraining order may be made
(1) A restraining order may be made to preserve property in order that the property will be available for any one or more of the following purposes-
(a)to satisfy any forfeiture order that may be made under Division 1 of Part 3;
(b)to satisfy automatic forfeiture of property that may occur under Division 2 of Part 3;
(c)to satisfy any civil forfeiture order that may be made under Part 4;
(d)to satisfy any pecuniary penalty order that may be made under Part 8;
(e)to satisfy any order for restitution or compensation that may be made under the Sentencing Act 1991.
(2)An application for a restraining order must state the purpose for which it is sought.
(3)If a court makes a restraining order in respect of property or an interest in property-
(a)the court must state in the order the purpose for which the property or interest is restrained; and
(b)if the court excludes property or an interest in property from the order in respect of a purpose, the court must state in the order whether the property or interest remains restrained for any other purpose and, if so, state that other purpose.
(4)If a court makes a restraining order on application under section 16(2)(a) and a person is subsequently charged with a Schedule 2 offence in relation to which the restrained property or interest in property is tainted property, the court may vary the restraining order to add or substitute the purpose for which the property or interest is restrained.
Section 16 of the Act provides for the persons who may apply for a restraining order and the circumstances in which an application may be made:
16. Application for restraining order
(1) If a person has been, or within the next 48 hours will be, charged with or has been convicted of a Schedule offence-
(a) the DPP may apply, without notice, to any court; or
(b)an appropriate officer may apply, without notice, to the Magistrates' Court or the Children's Court-
for a restraining order in respect of property in which the defendant has an interest or which is tainted property in relation to that offence.
(2)The DPP or a prescribed person, or a person belonging to a prescribed class of persons, may apply, without notice, the Supreme Court or the County Court for a restraining order in respect of property if-
(a)a member of the police force suspects on reasonable grounds that the property is tainted property in relation to a Schedule 2 offence; or
(b)a member of the police force or a person authorised by or under an Act to prosecute the relevant type of offence believes that-
(i)within the next 48 hours a person will be charged with a Schedule 2 offence; and
(ii)that person has an interest in the property or that the property is tainted property in relation to that offence; or
(c)a person has been charged with a Schedule 2 offence and that person has an interest in the property or the property is tainted property in relation to that offence; or
(d)a person has been convicted of a Schedule 2 offence and that person has an interest in the property or the property is tainted property in relation to that offence.
(2A)An application under sub-section (2) for the purposes of civil forfeiture may only be made in respect of property that is reasonably suspected to be tainted property.
(3)An application under sub-section (2) for the purposes of automatic forfeiture may only be made before the end of the relevant period in relation to the conviction.
(4)An application under sub-section (1) or (2)(b), (c) or (d) must be supported by an affidavit of-
(a) a member of the police force; or
(b)a person authorised by or under an Act to prosecute the relevant type of offence-
setting out any relevant matters and stating that the member or person believes the following matters and setting out the grounds on which the member or person holds those beliefs-
(c)in the case of an application made in reliance on the proposed charging of the defendant with an offence, that the defendant will be so charged within the next 48 hours; and
(d)that the defendant has an interest in the property or the property is tainted property, as the case may be; and
(e)if the restraining order is being sought for a purpose referred to in paragraph (a), (d) or (e) of section 15(1), that -
(i)a forfeiture order may be made in respect of the property; or
(ii)a pecuniary penalty order may be made against the defendant; or
(iii)an order for restitution or compensation may be made under the Sentencing Act 1991.
(5)An application under sub-section (2)(a) must be supported by an affidavit of a member of the police force setting out any relevant matters and stating that the member suspects that the property is tainted property in relation to a Schedule 2 offence and setting out the grounds on which the member has that suspicion.
Section 17 of the Act provides for the procedure to be observed for the hearing and determination of the application.
17. Procedure on application
(1)The court may require an applicant under section 16(1) or (2) to give notice of the application to any person whom the court has reason to believe has an interest in the property that is the subject of the application.
(2)Any person notified under sub-section (1) is entitled to appear and to give evidence at the hearing of the application but the absence of that person does not prevent the court from making a restraining order.
(3) The court may-
(a)order that the whole or any part of the proceeding be heard in closed court; or
(b)order that only persons or classes of persons specified by it may be present during the whole or any part of the proceeding; or
(c)make an order prohibiting the publication of a report of the whole or any part of the proceeding or of any information derived from the proceeding.
(4)The court must cause a copy of any order made under sub-section (3) to be posted on a door of the court house or in another conspicuous place where notices are usually posted at the court house.
(5)A person must not contravene an order posted under sub-section (4).
Section 18 provides for circumstances in which the court is bound to make an order:
18. Determination of application
(1)On an application under section 16(1) or (2)(b), (c) or (d), the court must make a restraining order if it is satisfied that the defendant-
(a)has been, or within the next 48 hours will be, charged with; or
(b) has been convicted of-
a Schedule 1 offence or a Schedule 2 offence (as the case may be) and-
(c)it considers that, having regard to the matters contained in the affidavit supporting the application and to any other sworn evidence before it, there are reasonable grounds for making the restraining order; and
(d)if the restraining order is being sought for a purpose referred to in section 15(1)(e), it is satisfied that-
(i)applications have been, or are likely to be, made for restitution or compensation under the Sentencing Act 1991 in respect of the Schedule 1 offence or Schedule 2 offence; and
(ii)the order of the court under the Sentencing Act 1991 is likely to exceed $10 000.
(2)On an application under section 16(2)(a), the court must make a restraining order if it is satisfied that-
(a)the deponent of the affidavit supporting the application does suspect that the property is tainted property in relation to a Schedule 2 offence; and
(b) there are reasonable grounds for that suspicion.
Section 19 provides for notice of an order once made to be served on a range of affected persons.
Section 20 provides that if a court makes a restraining order against property under section 18, any person claiming an interest in the property (including the defendant) may apply to that court for an order under section 21, 22 or 24 for an order to exclude property from the restraining order on the grounds that it is not tainted property or will not be required to satisfy any purpose for which the restraining order was made; or, in a case where the restraining order has been made in relation to a Schedule 2 offence for the purposes of automatic forfeiture, to exclude property from the restraining order on the ground that the property was lawfully acquired; or in a case where the restraining order has been made in relation to a Schedule 2 offence for the purposes of civil forfeiture, on the ground that the property is not tainted or the applicant was not involved in the commission of the Schedule 2 offence.
The Directors’ contentions
The Director contends that the Act is framed upon the basis that prior notice should not ordinarily be given to a person whose property may be affected by an application. He submits that the context in which the legislation was enacted;[9] a close consideration of the text of the relevant provisions of the Act; and what he describes as the inconvenience and improbability of the result in Navarolli, combine to constrain the construction of the Act[10] and so to give it its true force as a seizure/forfeiture statute that necessarily, in some or even most cases, adversely affects innocent third parties’ rights without notice.
[9]See, generally, the Australian Law Reform Commission’s Report “Confiscation That Counts: A Review of the Proceeds of Crime Act 1987” (1999).
[10]Cf. Network Ten Pty Ltd v. TCN Channel Nine Pty Ltd (2004) 218 C.L.R. 273 at 281 [21].
As the Director would have it, one may see within the Act a three-step legislative scheme, comprised of:
a) the identification and making of a restraining order without notice, save in exceptional cases, against the property;
b) the identification of persons who may have an interest in such property made subject to an order; and
c) particular provisions [such as s.20] enabling any such persons to apply to vindicate their property interests.
In the Director’s submission that structure explicitly prescribes the level of natural justice to be accorded to respondents and, by necessary implication, excludes the application of default common law principles and, in particular, the common law right to be heard.
The Director accepts, as of course he must, that the common law right to be heard is not lightly displaced and hence that a court should approach the construction of a statute with a presumption that the legislature does not intend to deny natural justice. Thus, where legislation is silent on the matter, it may be presumed that the legislature has left it to the court to prescribe and enforce the appropriate procedure to ensure natural justice.[11] But the Director argues that where, as here, Parliament has made express provision for the rights of persons to be heard and the circumstances in which they shall be heard, as it is said it has done by s.20 of the Act, it is not for the court to imply something additional or different to what Parliament so clearly intends.
[11]Twist v. Randwick Municipal Council (1976) 136 C.L.R. 106 at 109-110, per Barwick, C.J.
It follows in the Director’s submission that the reasoning in Navarolli was misplaced and, to the extent that the case purported to lay down an approach of general application to the giving of notice in the ordinary case, that it was wrong and should be overruled. In any event, the Director says, it is inappropriate to attempt to lay down principles of general application for the exercise of the power conferred by s.17(1). The power accorded by s.17(1) is better viewed as a discretionary exception to the presumption that notice will not be given, and for that reason its application should be left to be decided on a case by case basis according to the facts of each case.
We propose to deal with those submissions in turn.
The legislative scheme
We do not accept that the structure of the Act in general, or s.20 of it in particular, evinces an intention to exclude in all cases where an application has been made under s.16 of the Act the operation of the common law right to be heard. To the contrary, in our view the legislation impliedly recognises the right and in large part provides for it to be given effect. In so far as it excludes natural justice it does so only to a limited extent and in circumstances that are spelt out in the Act.
Clearly, s.16(2) of the Act gives the Director of Public Prosecutions the right to apply without notice to the Supreme Court for a restraining order in circumstances mentioned in that section, thereby suggesting that the court is to hear the application ex parte. But this apparent disregard of the rules of natural justice is qualified by the very next section – s.17 – that empowers the court to direct the Director to give notice of the application. In effect, as the Court observed in Navarolli, the Act gives the Director the right to apply without notice and leaves to the court the determination of the question whether the application will be heard without notice. Thus, the effect of the legislation is to leave to the judge the discretion to determine whether the matter is to be heard with or without notice. But it is not to be doubted that the discretion must be exercised judicially, according to what is necessary and proper in the circumstances of each case, and in that sense the discretion is by no means unconstrained.[12] Fundamentally, we think, it is a matter of balancing the right to be heard against the purposes of the legislation.
[12]Knight v. FP Special Assets Ltd (1992) 174 C.L.R. 178 at 205; Mansfield v. DPP for Western Australia (2006) 80 A.L.J.R. 1366 at [10].
Relevant considerations
The exercise finds a parallel in another area of the law. The legislation makes it apparent that the purpose of a restraining order is to secure and preserve assets pending hearing and determination of a forfeiture or vesting proceeding.[13] As Callinan, J. observed in the course of the special leave hearing in Navarolli,[14] the purpose and effect of a restraining order are analogous to those of a Mareva order in civil proceedings. That analogy implies that the considerations which determine whether and when it is necessary to give notice of an application for Mareva order afford guidance as to when and if it may be appropriate to order notice of an application for a restraining order. Indeed, as the judge at first instance in this case noted, in England it is not uncommon for a restraining order to be described as a criminal Mareva.[15]
[13]So much is made plain by s.15 and s.27(6).
[14][2006] HCA Trans 327 at 11.
[15]Jennings v. Crown Prosecution Service [2006] 1 W.L.R. 182 at 199; In re Peters [1988) Q.B. 871 at 879; cf. Mansfield v. Director of Public Prosecutions for Western Australia (2006) 80 A.L.J.R. at [46].
It is rudimentary that Mareva orders are more often than not sought and granted ex parte, without notice. The practice is justified, as it is with ex parte interlocutory injunctions, on the basis that the delay or disclosure likely to result
from notice would impair the value of the plaintiff’s rights.[16] The concern is that, if the respondent were to learn of the application, the assets would be dissipated before the order is made. In our view, the structure of the Confiscation Act, and in particular s.16 of the Act, are informed by largely similar concerns. The aim of a restraining order is to secure the property to which it is directed before it disappears or is dissipated.[17] The purpose of s.16 is to enable a restraining order to be sought ex parte and without notice where the delay or disclosure which would result from notice would be likely to prejudice the efficacy of the order.
[16]Meagher, Heydon and Leeming, Meagher Gummow & LeHane’s Equity, Doctrines & Remedies, 4th Ed. at [21-425]
[17]See, in particular, s.15 and s.27(6) of the Act.
In civil proceedings the potential for detriment to a respondent to a Mareva order application is high.[18] As a result, a range of safeguards have been developed which are designed to protect the respondent’s position against unnecessary detriment.[19] Arguably, the most important safeguard is that an applicant for Mareva order must satisfy the court that the risk of dissipation is sufficient to warrant that the application be dealt with ex parte.[20] Similarly, in proceedings under the Confiscation Act, the potential for detriment to the defendant or other person interested in property the subject of an application for restraining order is equally high.[21] And, in a fashion which is akin to the practice with applies to applications for Mareva orders, s.17 of the Act provides a safeguard against unnecessary detriment in the case of restraining orders. It enables the judge to consider whether the circumstances of the case are really such as to warrant that the application be dealt with ex parte, without notice.
[18]Meagher Gummow & LeHane at [21-445].
[19]See Biscoe, Mareva and Anton Piller Orders, Ch. 6.
[20]Z. Ltd v. A-Z [1982] Q.B. 558 at 585-6; Patrick Stevedores Operations No. 2 Pty Ltd v. Maritime Union of Australia (1998) 195 C.L.R. 1 at 92 [197], per Callinan, J.
[21]Bennett & Co v. Director of Public Prosecutions (WA) (2005) A. Crim. R. 279 at 289; Mansfield v. Director of Public Prosecutions for Western Australia (2006) 80 A.L.J.R. 1366 at [24].
Thus, for reasons explained, once an application under s.16 of the Act comes before the court, it is bound to consider whether notice of it should be given to the relevant parties. In those circumstances, bearing in mind the absence of relevant parties from the hearing, as the Court explained in Navarolli, it is for the applicant for the restraining order to satisfy the judge that notice of the application should not be ordered. Their Honours said:
“…In the ordinary course, applications for restraining orders are made, as s.16 contemplates, ex parte to the judge in the Practice Court... It would, we think, be no less than the ethical obligation of counsel for the Director on any such application to make sure that the Court entertaining the application was aware of that provision and of the power which it conferred. (In the present case the Judge was made aware of s.17). Naturally, once the Court’s attention was drawn to s.17, the Director would be at liberty to make such submissions as he thought appropriate against the giving of notice. Accordingly, nothing we have said precludes the judge from exercising his discretion against giving notice where relevant circumstances exist which justify the denial of the right to be heard.”[22]
And once the court concludes that notice should be given, the hearing of the application for the restraining order will obviously be put over to a date when the notified party has the opportunity of being present.
[22]At [41].
In a case of application for Mareva order, it may be assumed that unless the applicant satisfies the court that the urgency or risk of dissipation is such as to warrant proceeding without notice[23] the Court will refuse to deal with the matter ex parte. Similarly, in the case of an application for a restraining order, unless the applicant satisfies the court that there is urgency or risk of dissipation if notice of the application is given, it may be expected that the court will order that the relevant parties be notified of the application before the matter is heard. Despite the sequential disposition of ss.16 and 17 - which perhaps suggests that an application is to proceed to hearing without notice unless good reason be shown to require notice – in our view the underlying common law right to be heard is of itself sufficient reason to require that notice be given unless there is sufficient urgency or risk of dissipation, or other sufficiently good reason, to warrant proceeding without notice. It is in that sense that the court said in Navarolli that a judge should approach s.17 on the basis that the Director should be ordered to give notice unless “the giving of notice to Navarolli might lead to the disposal or disappearance of the relevant property”[24] or there is otherwise “some compelling reason” not to give notice.[25]
[23]Patterson v. BTR Engineering (Aust) Pty Ltd (1989) 18 NSWLR 319 at 321; Cardile LED Builders Pty Ltd (1999) 198 C.L.R. 380 at 394.
[24][2005] VSCA 323 at [22].
[25][2005] VSCA 323 at [40].
We mention for completeness that in the case of a Mareva order granted ex parte and without notice, a respondent has the right, once served with the order, to return to court and to argue for modification or disolution of the order. The existence, however, of that right does not detract from the need for the applicant for Mareva order to persuade the the judge that the circumstances of the case warrant the grant of the Mareva order ex parte and without notice. Similarly, in the case of a restraining order, a respondent once served with the order has a right under s.20 of the Act to apply for discharge or modification of the order. But parity of reasoning implies that the existence of that right does not detract from the need for a judge to decide whether to order notice under s.17, and thus the need for an applicant to persuade the judge that the circunstances of the case are such as to warrant that there be no notice.[26]
[26]Cf. Bennett & Co v. Director of Public Prosecutions (WA) (2005) 154 A. Crim. R. 279 at 292[62], to which Maxwell, P. and Eames, J.A. referred in Navarolli .
The history of the legislation
Counsel for the Director of Public Prosecutions submitted that so to conclude was to ignore that the clear and consistent theme of amendments to the confiscation legislation since 1987 has been to make the hearing of applications for restraining orders ex parte in all but exceptional cases and to put over to the time of application for the exclusion of property from a restraining order the opportunity for the defendant and other interested persons to be heard. In our view, however, that contention does not correctly reflect the effect of the amendments made since 1987.
Legislation for the confiscation of the profits of crime was first enacted in Victoria in the form of the Crimes (Confiscation of Profits) Act 1986:
1) Section 16 of that Act provided that if a person had been or was about to be charged with a serious offence, the Director of Public Prosecutions or an appropriate officer could apply to the Supreme Court for an order to restrain disposition of specified property of the person, property acquired by the person after the order was made and specified property of any other person used in or in connexion with the offence or derived or acquired as a result of the commission of the offence.
2) Section 16(2) required that an application for restraining order be supported by an affidavit as to the deponent’s belief that a forfeiture order may be made in respect of the specified property if the person were convicted, or that the property was that of the person charged or to be charged and that a pecuniary penalty order may be made if the person were convicted, and that there was an unacceptable risk that the person would dispose of or deal with the property so as to prevent effective compliance with the order.
3) Section 16(3) provided that the applicant for restraining order had to give notice to any person whose property was the subject of the application and to any person who the applicant had reason to believe had an interest in the property.
4) Section 16(4) provided that the Supreme Court may at any time before final determination of the application direct that notice be given to such other persons as the Court thought fit.
5) Section 16(5) provided that any person whose property was the subject of application and any other person who claimed an interest in the property was entitled to appear and give evidence at the hearing of the application.
6) That was qualified, however by s.16(6), which provided that in an urgent case the Supreme Court may make an order without giving notice but that such an order could only have effect for a maximum of seven days.
7) Section 16(7) provided that the Supreme Court may make a restraining order if it considered that “having regard to the matters contained in the affidavit, there are reasonable grounds for [the deponent] holding those beliefs”.
8) That was qualified, however, by s.16(8), which provided that the Supreme Court must not make a restraining order in reliance on the proposed charging of a person with a serious offence unless satisfied that the person was likely to be charged within 48 hours.
9) Section 16(9) provided that a restraining order may provide for meeting the reasonable living and business expenses of a person to whose property the restraining order applied.
10) Section 16(10) allowed a restraining order to be made subject to such conditions as the Supreme Court thought fit.
11) Section 16(11) provided that the Supreme Court may refuse to make a restraining order unless the Director of Public Prosecutions gave an undertaking as to damages and costs.
12) Section 17 provided that if a restraining order were made in respect of property of a person to whom notice of the application for the order had not been given, notice of the making of the order be given to that person.
13) Section 18 provided that the Supreme Court may at the time of making a restraining order or at any later time make such orders in relation to property the subject of the order as it considers just, including an order authorising another court to set aside the restraining order, and that application for such orders could be made by a range of persons, including a person whose property was the subject of the restraining order.
14) Section 21 provided that a restraining order made on the basis that a person had been charged or was to be charged and if convicted that a pecuniary penalty order would be made, should constitute a charge on the property to which the order applied.
In 1991 the Act was amended by the Crimes (Confiscation of Profits) (Amendment) Act 1991 so as to adopt some of the features of more recent confiscation legislation in other States of the Commonwealth. They included in particular provision for restraining orders to be sought without notice and made ex parte and for the test for a restraining order to be made less stringent by deletion of the requirement to establish a risk of dissipation of the subject property. The objective of the amendments was thus explained in the Second Reading Speech under the heading “New Restraining Order Procedure” as follows:
“The provisions relating to restraining orders are recast in clause 17 of the Bill. The DPP working party identified a number of difficulties faced by law enforcement agencies in seeking to restrain assets of a person to ensure that money is available to satisfy any confiscation order which may subsequently be made. The new provisions adopt the approach taken in some other States, under which applications for restraining orders are made ex parte and may be dealt with in a closed court. This will minimise the risk of criminals being tipped off about imminent restraining order proceedings and hastily disposing of their assets. The test applied by the court is also made less stringent: once the court is satisfied that the defendant has been or is about to be charged and that a police officer has reasonable grounds to believe that if the defendant is convicted a confiscation order may be made, it will be able to make a restraining order.” [27]
[27]Hansard, Legislative Assembly, 10 October 1991 at 1153-4, emphasis added.
The most significant amendments to the procedure for applications for restraining orders were made by the substitution of a new s.16. The principal features of that section were as follows:
1) In contradistinction to the former s.16(1), the new s.16(1) provided that, if a person (described as a “defendant”) had been charged or was about to be charged with or had been convicted of a serious offence,[28] the Director of Public Prosecutions could without notice apply to the Supreme Court for a restraining order with respect to specified property of the defendant, all property of the defendant, or specified property of a person other than the defendant.
[28]As defined.
2) Like the former s.16(2), the new s.16(2) required the application to be supported by an affidavit as to belief of the deponent that a forfeiture order or pecuniary penalty order would be made against the defendant but, unlike the former s.16(2), the new s.16(2) did not require the deponent to state a belief as to whether there was an unacceptable risk of the property being disposed of or otherwise dealt with before a confiscation order or a pecuniary penalty order was made.
3) Unlike the former s.16(3), the new s.16 said nothing about the applicant giving notice of the application to the defendant. Instead, a new s.16A provided in a fashion similar to the former s.16(4) that the Supreme Court may require the Director of Public Prosecutions to give notice of an application under s.16(1) to any person who the Court had reason to believe had an interest in the property.
4) Like the former s.16(5), the new s.16A(2) provided that any person notified under s.16A(1) was entitled to appear and give evidence at the hearing of the application.
5) In the new s.16 there was no longer any reference to the Court making an order without notice in an urgent case. In effect that was superseded by the more general provisions of the new s.16(1).
6) The new s.16(3) took the place of the old s.16(7) but laid down a new test for the making of a restraining order. It provided that the Court may make a restraining order if, having regard to the matters contained in the affidavit in support of the application “and to any other sworn evidence before it”, it considers that “there are reasonable grounds for doing so.”
7) The new s.16(6) took the place of the former s.16(9). It allowed for a restraining order to provide for the reasonable living and business expenses of the person to whose property the order applied and the new s.16(7) identified the matters to which the court was to have regard when so providing.
8) The new s.16(8), like the former s.16(10), provided that a restraining order may be subject to such conditions as the Supreme Court thinks fit.
9) Like the former s.16(9), the new s.16(11) provided that the court could refuse to make an order unless the Director of Public Prosecutions gave an undertaking as to damages and costs.
It is to be noted that ss.17, 18 and 21 remained substantially unaltered.
Further amendments were made to the legislation in 1997 with the replacement of the Crimes (Confiscation of Profits) Act 1986 by the Confiscation Act 1997. That Act introduced the concepts of tainted property and of automatic forfeiture of property and civil forfeiture orders, as well as retaining the existing mechanisms of pecuniary penalty orders and orders for restitution or compensation under the Sentencing Act 1991. It also changed the nature of the court’s function in relation to a restraining order application from a discretionary power to make a restraining order to an obligation to make the order if the applicant satisfies defined conditions. As may be seen in the provisions of the Act which we earlier set out:
1) Section 15 of the Act provides in express terms that the purposes for which a restraining order may be made are to preserve property in order that the property will be available to satisfy a forfeiture order, an automatic forfeiture of property, a civil forfeiture order, a pecuniary penalty order an order for restitution or compensation under the Sentencing Act 1991.
2) Section 16(1) of the Act as originally enacted provided that, except in relation to a civil forfeiture offence where civil forfeiture is sought (as opposed to automatic forfeiture or a forfeiture order), a restraining order may only be made where a person has been charged with an offence, or is to be charged with an offence within 48 hours or has been convicted of an offence. It went further than the previous section, however, by providing that the Director of Public Prosecutions may make an application for restraining order to any court, and that an “appropriate person” may make application for restraining order to the Magistrates’ Court or the Children’s Court in respect of property in which the defendant has an interest or which is tainted property. Like s.16(1) of the 1986 Act as amended, it expressly provided that an application for restraining order may be made without notice.
3) Section 17 provides, in the same way as s.16A of the 1986 Act as amended provided, that the court may require an applicant for restraining order give notice to any person who the court has reason to believe has an interest in the property the subject of application.
4) Section 18 replaces the sub-sections of s.16 of the 1986 Act as amended which provided for the way in which an application for restraining order was to be determined and alters the way in which they are to be determined. Significantly, whereas s.16(3) of the 1986 Act as amended provided that the Supreme Court may make an order if it considered that there were “reasonable grounds” for doing so, s.18 of the Act provides that the court must make an order if satisfied that the defendant has been or within the next 48 hours will be charged with, or has been convicted of, a forfeiture offence, an automatic forfeiture offence or a civil forfeiture offence, and if, having regard to the matters deposed to in the affidavit in support of application and any other sworn evidence, the court considers that there are “reasonable grounds” for making the order.
5) Like s.17 of the 1986 Act as amended, s.19 of the Act provides that, if a restraining order is made in respect of property of a person to whom notice of the application has not been given, notice of the making of the order is to be given to that person.
6) Similarly, s.26 of the Act provides in the same way as s.18 of the 1986 Act as amended provided that the court may when it makes a restraining order, or at any later time, make such orders in relation to the property to which the order relates as the court considers just.
7) Section 20 of the Act establishes a new and possibly additional mechanism for the exclusion of property from a restraining order once made. It provides that, if a restraining order has been made, any persons claiming an interest in the property the subject of the order, including the defendant, may apply under ss.21, 22 or 24 for exclusion of property from the order on the basis that it is not tainted property and will not be required to satisfy any purpose for which the restraining order was made.
8) Section 35 of the Act provides that if a person is convicted of an automatic forfeiture offence and a restraining order is or was made in respect of property for the purposes of automatic forfeiture in reliance on the defendant’s conviction or the charging or proposed charging of the defendant with that offence, the restrained property is automatically forfeit to the State.
Further amendments were made to the legislation in 2003 and 2004. The principal effect of those was to expand the range of automatic forfeiture offences and to allow civil forfeiture to apply to the same range of offences. It is also now no longer necessary that a person have been charged or be about to be charged with an offence before application for restraining order is made in relation to tainted property. It is sufficient to found an application for restraining order in relation to tainted property that a member of the police force believes on reasonable grounds that property is tainted property with respect to a relevant offence.
The effect of the amendments since 1987
We accept that the 1991 amendments enabled the Director of Public Prosecutions to apply for a restraining order without notice and made the risk of dissipation of assets cease to be a matter of which the court needed to be satisfied before making a restraining order. That is the literal meaning of s.16 of the Crimes (Confiscation of Profits) Act 1986 as amended by the 1991 Act and it is also the effect which it was said in the Second Reading Speech was sought to be achieved.
We do not accept, however, that if follows that all applications for restraining order were thenceforth to be determined ex parte or that the risk of dissipation ceased to be a relevant consideration in determining whether to order that notice of an application be given under s.16A of the Act as amended. In our view, the evident purpose of adding s.16A to the Act, at the same time as providing that the Director of Public Prosecutions could apply without notice, was to empower the court to order that notice be given when it was appropriate that notice be given, and we consider that the risk of dissipation was in most cases likely to be the principal consideration in determining whether it was appropriate that notice be given.
Inasmuch as it was open under s.18 of the 1986 Act as amended for an affected person to whom notice had not been given to apply to set aside or vary a restraining order, there was good reason under the 1986 Act as amended for the court to wish to hear from such a person before the order was made, and thereby to avoid making an unnecessary or inappropriate order. Accordingly, absent a risk of dissipation or other prejudice the result of giving notice, it was to be expected that notice would be given.
We are strengthened in that view by the passage of the Second Reading Speech earlier set out where it was said that the facility for the Director of Public Prosecutions to apply for a restraining order “without notice” was introduced to “minimise the risk of criminals being tipped off about imminent restraining order proceedings and hastily disposing of their assets”.
We are also of the view the position remains substantially the same under the 1997 Act. As already explained, s.17 of the 1997 Act is in terms identical to s.16A of the 1986 Act as amended and s.26 of the 1997 Act is substantially the same as s.18 of the 1986 Act as amended. In those circumstances, we see no reason to doubt that s.17 of the 1997 Act was intended to have the same effect as s.16A of the 1986 Act as amended.
Counsel for the Director of Public Prosecutions contended that, whatever may have been the effect of the 1986 Act as originally enacted or as amended, the changes wrought by the 1997 Act implicitly abrogated s.17 or at least drained it of relevant content. He instanced in particular the change in the court’s role in relation to an application for restraining order (from the exercise of a discretion to an obligation to make an order if specified conditions were satisfied); the shift in the burden of proof brought about by the introduction of ss.20, 21, 22 and 24; and the automatic forfeiture provisions embodied in s.35. He submitted that so long as the onus of proof remained with an applicant for a restraining order, as it did under s.16 of the 1986 Act in the determination of an application for a restraining order, and under s.18 of the 1986 Act in the determination of an application for the exclusion of property from a restraining order, there may have been utility in allowing a person affected to be heard in opposition to an application for restraining order and, therefore, utility in requiring that an applicant for a restraining order give notice of the application unless the risks of dissipation or otherwise were too great. But, it was said, after the 1997 Act came into force and compelled the court to make an order if the conditions specified in s.18 of the 1997 Act were satisfied, and ss.20, 21, 22 and 24 cast the burden of proof upon a person affected seeking to have property excluded from a restraining order, and thus from automatic forfeiture, there was no point in hearing the person affected in opposition to the application for restraining order and, therefore, no point in requiring that notice of the application be given under s.17 of the Act.
Counsel for the Director further contended on that basis that the effect of the 1997 Act was to turn an application for restraining order into what he termed a mere “step-through” or exercise in “ticking the boxes”, against which the defendant or other interested person was not intended to be heard, and thereby to put over to the hearing of any application for exclusion of property under ss.21, 22 or 24 the first opportunity for the defendant or other interested person to advance evidence and argument in opposition to the restraining order.
We observe that that contention replicates one of the points relied on by the judge at first instance in Navarolli and that it was also referred to by Hayne, J. with apparent favour in the course of the High Court special leave application in Navarolli.[29] But, with respect, we reject counsel’s argument because, in our view, the logic of it breaks down at a number of levels.
[29][2006] HCA Trans 327 at 9.
To begin with, although s.18 provides that the court must make a restraining order if the conditions of the section are satisfied, those considerations include the court being satisfied that, having regard to the matters contained in the affidavit in support of the application and to any other sworn evidence, there are reasonable grounds for making the order. That means that before making an order in relation to property the court must be satisfied that:
a) the defendant has been charged with or convicted of a Schedule 1 offence and satisfied that there are reasonable grounds to believe that the defendant has an interest in the property or that the property is tainted property in relation to the offence; or
b) there are reasonable grounds to suspect that the property is tainted property in relation to a Schedule 2 offence; or
c) there are reasonable grounds to believe that the defendant will be charged with a Schedule 2 offence within the next 48 hours and reasonable grounds to believe that the defendant has an interest in the property or that the property is tainted property in relation to the offence; or
d) the defendant has been convicted of a Schedule 2 offence and that there are reasonable grounds to believe that the defendant has an interest in the property or that the property is tainted property in relation to the offence.
It follows that there is a considerable amount of which a court needs to be satisfied before it will make a restraining order and so a considerable amount upon which a defendant or other interested person might usefully adduce evidence and make submissions in opposition to the making of the order.
In addition to the relatively small possibility that a person named as a defendant is in truth not a person to be charged or who has been convicted of a relevant offence, as, for example, might occur in a case of mistaken identity, it appears to us that in the case of an order pursuant to ss.16(1) or (2)(b), (c) or (d) there would be significant scope for a defendant or other interested person to adduce evidence to support the claim that the judge should not be satisfied on all the evidence before the judge that there are reasonable grounds for making a restraining order, or in the case of an order under s,16(2)(a), that there are not reasonable grounds to conclude that the property sought to be made the subject of the order is tainted property.
In the second place, s.26(1) expressly contemplates the possibility that a defendant or other interested person may be heard in opposition to an application for restraining order and ss.26(2) and (3) expressly contemplate that a defendant or other interested person may be heard at the time of the application for a restraining order on all of the matters referred to in s.26(5).
In the third place, it appears to us that the onus of proof was just as much on the defendant or interested person seeking exclusion under s.18 of the 1986 Act as amended it is under ss.21, 22 and 24 of the 1997 Act. Under the 1986 Act as amended: if, after a restraining order had been made under s.16, a defendant or other interested person had applied under s.18 to have all or part of the property excluded from the order, that person would have had to satisfy the court that there were not reasonable grounds for making the order in respect of that property. Under the 1997 Act: if, after a restraining order has been made under s.18, a defendant or other interested person applies to have all or part of the property excluded from the order under ss.21, 22 or 24, that person must satisfy the court that the property is not tainted property and will not be required to satisfy any purpose for which the order was made. Theoretically, there is a difference between demonstrating that property is not tainted property or required for a specified purpose and demonstrating that there are not reasonable grounds to believe that property is not tainted property or required for the specified purpose. But the former is not necessarily more difficult to prove than the latter. Indeed an applicant may be able more easily to satisfy a court on the balance of probabilities that property is not tainted property or required for a specified purpose than to establish that there are not reasonable grounds to believe that the property is tainted property or required for a particular purpose. Practically speaking the level of satisfaction required in each case is likely to be the same.
In the fourth place, there can be little doubt that the power given to the Supreme Court by s.18 of the 1986 Act to “make such orders in relation to the property to which the restraining order relates as it considers just” included power to set aside a restraining order. Section 26 of the 1997 Act gives the court a similar power to “make such orders in relation to the property to which the restraining order relates as it considers just”. The only significant difference between s.18 of the 1986 Act as amended and s.26 of the 1997 Act is that s.18(1)(b) of the 1986 Act as amended expressly authorised the Supreme Court to make an order authorising another court to set aside a restraining order whereas s.26 does not refer to that possibility. But that change is immaterial. The provision in s.18(1)(b) of the 1986 Act for the Supreme Court to authorise another court to set aside a restraining order was premised on the Supreme Court having power itself under s.18(1)(a) to set aside the restraining order and, as it appears to us, the only reason that s.26 does not provide for the Supreme Court to delegate to another court the power to set aside a restraining order under s.26 is that the 1997 Act enables all courts to make restraining orders and gives to each court the same powers with respect to the restraining orders made by that court as the Supreme Court has with respect to restraining orders made by the Supreme Court. It may be, perhaps, that ss.20, 21, 22 and 24 impliedly exclude from s.18 of the 1997 Act the power to set aside a restraining order after it is made.[30] But even if that is so it still leaves intact the express power under s.18 to be exercised at the time of making a restraining order to exclude property from the order and to subject the order to conditions.
[30]In accordance with the maxim expressum facit cessare tacitum: Anthony Horden and Sons Ltd v. The Amalgamated Clothing and Allied Trades Union of Australia (1932) 47 C.L.R. 1 at 7; The King v. Wallis; Ex parte H.V. Mckay Massey Harris Pty Ltd (1949) 78 C.L.R. 529 at 550; Ainsworth v. Criminal Justice Commission (1992) 175 C.L.R. 564 at 575; PMT Partners Pty Ltd (In Liq) v. Australian National Parks and Wildlife Service (1995) 184 C.L.R. 301 at 311-312; Ousley v. The Queen (1997) 192 C.L.R. 69 at 111.
Finally, any implication which might otherwise be derived from the fact that a restraining order once made is capable of resulting in automatic forfeiture under s.35 of the Act is negatived by the fact that forfeiture under s.32 and civil forfeiture under s.37 are not automatic consequences of a restraining order.
The reasoning in Navarolli
That leaves the Director’s contention that the Court in Navarolli went too far in exposition of the factual circumstances that may result in a decision to order that notice be given. In our view that is not so.
In substance, the court in Navarolli said no more than that, when a judge is faced with an application for restraining order under s.16 of the Act, the judge must consider whether to order that notice be given under s.17 of the Act; and that, in determining whether to order that notice be given, the judge must bear in mind the common law right to be heard and balance it against other competing considerations. As the court said, such competing considerations include, in particular, the risk that notice may result in dissipation of the property the subject of application. Obviously, however, they also include things such as “the risk of criminals being tipped off” with consequent prejudice to an anticipated arrest or a continuing criminal investigation or danger to persons or property .
In our view, it is to be expected that the bulk of applications for restraining orders under s.16 of the Act will be made and determined under s.18 without notice and ex parte. That is because an application for a restraining order involves a defendant who is suspected or charged or about to be charged with a serious criminal offence, or who has been convicted of a serious criminal offence or, alternatively, involves reasonable grounds to believe that the property the subject of application is tainted property.[31] In the scheme of things it is likely that in most such cases the risks entailed in giving notice of the application will be seen to outweigh the right to be heard. But, as the Court in effect said in Navarolli, there will be some cases where it is plain that there is no risk of dissipation or of flight or of prejudice to imminent arrest or otherwise sufficient reason to weigh against the common law right to be heard. And, in those cases, it is to be expected that the judge will order that notice of the application be given.
[31]Cf. Jennings v. CPS [2006] 1 W.L.R. 181 at 198, per Laws, L.J.
The need for notice
In this case the judge at first instance found that there was no risk of the respondent getting his hands on the property the subject of the application and, so far as can be told from his Honour’s reasons, it was not suggested that there was any other risk of prejudice likely to result from giving notice.
It has not been contended before us that the judge was wrong so to find and it is not now suggested that there was any other risk or consideration which weighed against giving notice.
In those circumstances, we are of the view that the judge was not in error to order that the Director give notice under s. 17 of the Act.
Conclusion
It follows, for the reasons which we have given, that the appeal will be dismissed.
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