Director of Public Prosecutions (WA) v Mansfield [No 9]
[2007] WASC 267
•15 NOVEMBER 2007
DIRECTOR OF PUBLIC PROSECUTIONS (WA) -v- MANSFIELD [No 9] [2007] WASC 267
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2007] WASC 267 | |
| Case No: | CIV:1977/2002 | 1 FEBRUARY, 23 APRIL, 18 & 25 MAY 2007 | |
| Coram: | BLAXELL J | 14/11/07 | |
| 19 | Judgment Part: | 1 of 1 | |
| Result: | Orders as summarised at the conclusion of the following reasons for decision | ||
| B | |||
| PDF Version |
| Parties: | THE DIRECTOR OF PUBLIC PROSECUTIONS FOR WESTERN AUSTRALIA NIGEL CUNNINGHAM MANSFIELD ROSALIND JANE MANSFIELD THE STATE OF WESTERN AUSTRALIA |
Catchwords: | Criminal law Confiscation of property Freezing order Application for criminal benefits declaration Objection to confiscation of frozen property Sundry interlocutory applications in related sets of proceedings Turns on own facts |
Legislation: | Criminal Property Confiscation Act 2000 (WA) |
Case References: | B v State of Western Australia [2002] WASC 298 Director of Public Prosecutions for Western Australia v Mansfield [2004] WASC 116 The Director of Public Prosecutions for Western Australia v Mansfield [2006] WASC 255 The Director of Public Prosecutions for Western Australia v Mansfield [2006] WASC 72 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Applicant
AND
NIGEL CUNNINGHAM MANSFIELD
Respondent
NIGEL CUNNINGHAM MANSFIELD
ROSALIND JANE MANSFIELD
First Objectors
THE STATE OF WESTERN AUSTRALIA
Respondent to the Objector
Catchwords:
Criminal law - Confiscation of property - Freezing order - Application for criminal benefits declaration - Objection to confiscation of frozen property - Sundry interlocutory applications in related sets of proceedings - Turns on own facts
(Page 2)
Legislation:
Criminal Property Confiscation Act 2000 (WA)
Result:
Orders as summarised at the conclusion of the following reasons for decision
Category: B
Representation:
Counsel:
Applicant : Mr T A Staples
Respondent : Mr M L Bennett
First-named First Objector : Mr M L Bennett
Second-named First Objector : Mr C E Chenu
Respondent to the Objector : Mr T A Staples
Solicitors:
Applicant : State Director of Public Prosecutions
Respondent : Lavan Legal
First-named First Objector : Lavan Legal
Second-named First Objector : Durack & Zilko
Respondent to the Objector : State Director of Public Prosecutions
Case(s) referred to in judgment(s):
B v State of Western Australia [2002] WASC 298
Director of Public Prosecutions for Western Australia v Mansfield [2004] WASC 116
The Director of Public Prosecutions for Western Australia v Mansfield [2006] WASC 255
The Director of Public Prosecutions for Western Australia v Mansfield [2006] WASC 72
(Page 3)
1 BLAXELL J: In these long standing proceedings between the applicant (the DPP), the respondent (Mr Mansfield) and the second-named first objector (Mrs Mansfield), I am required to determine a number of applications the subject of four separate Chamber summonses. The outcome of some of these applications depends in part upon my decisions on others, and for that reason I propose to deal with them in the following sequence:
(1) The DPP's application to set aside the freezing order in respect of Mrs Mansfield's half shares in two real properties, and her interest as sole owner of certain items of personal property (par 1 of the DPP's Chamber summons dated 28 December 2006).
(2) Mr Mansfield's application seeking a further variation of the freezing order to substitute the account from which fortnightly payments are made for Mr and Mrs Mansfield's reasonable living expenses (par 2 of the Chamber summons dated 19 April 2007).
(3) Mr Mansfield's application to further vary the freezing order to enable payment of his legal expenses in respect of the related criminal and civil proceedings (which application is made pursuant to leave granted on 14 August 2006 to amend his Chamber summons dated 19 September 2004).
(4) The DPP's applications to set aside the oral order of the Hon Justice McKechnie made on 21 July 2003 (that 'the application for a criminal benefits declaration and the objections of the first objectors proceed by way of pleadings and be heard together') and to have Mrs Mansfield's objection to confiscation of frozen property heard separately from the other proceedings (pars 6 and 7 of the DPP's Chamber summons dated 28 December 2006).
(5) The DPP's application for an order dismissing Mr and Mrs Mansfield's objections to confiscation of the frozen property on the grounds (inter alia) that the same are frivolous or vexatious, and/or for want of prosecution (pars 4 and 5 of the DPP's Chamber summons dated 18 April 2007).
(6) The DPP's application for an extension of time to strike out Mr Mansfield's defence to the application for a criminal benefits declaration on the ground (inter alia) that it discloses no reasonable defence (par 3 of the DPP's Chamber summons dated 18 April 2007).
(Page 4)
- (7) The various remaining applications the subject of the Chamber summonses dated 28 December 2006, 18 April 2007 and 19 April 2007.
A brief overview of the current state of proceedings
2 All of these applications need to be considered in light of the current state of the proceedings generally. In this regard it is relevant to note that there are four sets of related civil and criminal proceedings, being the following:
1. The proceedings commenced by the DPP's ex parte application for a freezing order which was granted by McKechnie J on 12 July 2002 pursuant to s 41 of the Criminal Property Confiscation Act 2000 (WA) (the Act). That order froze all of Mr Mansfield's property as well as property of Mrs Mansfield which was allegedly under his 'effective control'. Subsequently, there have been variations to the freezing order including an order made on 18 February 2004 allowing for fortnightly payments out of the frozen property in respect of Mr and Mrs Mansfield's reasonable living expenses, (pursuant to s 45(e) of the Act).
2. Proceedings commenced on 12 July 2002 by the DPP's application pursuant to s 15(1) of the Act for a criminal benefits declaration against Mr Mansfield alone (the primary proceedings). The statement of claim in these proceedings alleges that as a result of committing numerous 'confiscation offences' Mr Mansfield has acquired criminal benefits totalling $3,356,520.50.
3. Proceedings commenced jointly by Mr and Mrs Mansfield on 9 August 2002 by way of a notice of objection and Chamber summons pursuant to s 79(1) of the Act objecting to confiscation of the frozen property (the objection proceedings).
4. Criminal proceedings against Mr Mansfield and a co-accused for multiple alleged offences of insider trading and money laundering, which are being prosecuted in the District Court by the Commonwealth DPP.
3 All of the proceedings in the Supreme Court are deemed to be civil proceedings for all purposes pursuant to s 102 of the Act. On 21 July 2003 McKechnie J ordered that the primary proceedings and the objection proceedings should 'proceed by way of pleadings and be heard together', but since then they have not progressed very far. In September 2003, an application by Mr and Mrs Mansfield to dismiss the primary proceedings for want of prosecution was refused. Thereafter, very little occurred in
(Page 5)
- the primary proceedings and objection proceedings until February 2006 when the DPP applied for a stay of the primary proceedings pending the determination of the criminal prosecutions. That application was opposed by Mr and Mrs Mansfield, and by my decision in The Director of Public Prosecutions for Western Australia v Mansfield [2006] WASC 72 I refused a stay.
4 The criminal proceedings in the District Court commenced in August 2002, and originally there was a single indictment alleging that Mr Mansfield had committed three offences being fraud against the Commonwealth, conspiracy to defraud the Commonwealth, and money laundering. On 14 February 2003 this indictment was discontinued and Mr Mansfield was then charged under a State indictment with two offences of obtaining a financial advantage by deception (I understand that this indictment has since been withdrawn). At the present time, Mr Mansfield is the subject of three Commonwealth indictments (one involving an alleged co-offender) alleging multiple offences of insider trading, money laundering and conspiracy to commit offences of insider trading. Until 2006, the significant delays in these proceedings were not in any way attributable to Mr Mansfield. However, for at least the past 18 months, the failure of these matters to come on for trial has been due to Mr Mansfield's inability to fund his legal representation out of his own resources.
5 In this regard the estimates as to the likely lengths of the three criminal trials total more than 17 weeks, and Mr Mansfield asserts that the costs of legal representation including the briefing of senior counsel will exceed $1 million. Obviously, he cannot have recourse to his own assets to meet these costs unless the freezing order is further varied to enable this to happen. Pending the determination of this question, Mr Mansfield's application for legal aid in respect of the criminal proceedings has been deferred. In the event that Mr Mansfield is unable to pay for legal representation or to obtain legal aid there is the obvious prospect that he will seek to stay the criminal proceedings by way of a 'Dietrich' application.
6 When the objection proceedings commenced in 2002 Mr and Mrs Mansfield were jointly represented by the same solicitors, but they now have separate representation. During 2005 Mrs Mansfield separated from her husband and she has since commenced proceedings in the Family Court of Western Australia in relation to the matrimonial property. These proceedings have not been resolved and are unlikely to be resolved while the freezing order continues to have effect. Mrs Mansfield is not
(Page 6)
- the subject of any criminal prosecution, and the DPP acknowledges that she has been caught up in the proceedings in this court simply because she is married to Mr Mansfield and jointly owns property with him.
7 One of the matters which I am about to determine is an application by the DPP to release the bulk of Mrs Mansfield's property from the freezing order. No doubt Mrs Mansfield would have consented to this application if it had been made some years ago, but she presently opposes it on the grounds that she is likely to suffer adverse consequences if her property is released prior to the determination of the objection proceedings. In this regard, the apartments in which Mrs Mansfield holds a joint interest are mortgaged, and the mortgage commitments have not been met since the date of the freezing order in 2002. As well as the mortgagees, there are other creditors who are likely to seek recourse against any assets released from the effects of the freezing order. In an endeavour to resolve this situation, I ordered in February 2007 that the DPP and Mrs Mansfield should attend before a mediation Registrar. So far as I am aware, this has not resulted in any narrowing of the issues between them.
8 The financial impact of the freezing order on Mr and Mrs Mansfield has been aggravated by the delay in the proceedings. There are now very substantial arrears of mortgage payments which are continuing to accumulate at default rates of interest. As the freezing order has prevented Mr Mansfield meeting other debts, he is also subject to a bankruptcy petition (which is itself unresolved because of the freezing of his assets). Because of this situation I made an order on 30 November 2006 requiring the DPP to provide an undertaking as to damages (in respect of both Mr and Mrs Mansfield) as a condition for the continuation of the freezing order pending the final disposition of the proceedings. The DPP duly provided that undertaking.
9 On 15 March 2007 (following an application by Mr Mansfield to strike out the primary proceedings as an abuse of process), I made a consent order referring certain questions to the Court of Appeal pursuant to O 43 r 16. Those questions raise issues as to the fundamental validity of the primary proceedings, namely whether property can be frozen and an application made for a criminal benefits declaration under the (State) Act when the offences are alleged to have been committed in breach of Commonwealth law which has its own regime of confiscatory legislation (the Proceeds of Crime Act 2002 (Cth)). The Court of Appeal has reserved its decision after hearing the submissions of the parties as to those matters.
(Page 7)
10 As already noted, the freezing order was varied on 18 February 2004 to allow payment to Mr and Mrs Mansfield of their reasonable living and business expenses. Since 28 February 2006 those expenses have been fixed (following assessment by a Registrar) at $3,600 per fortnight, and payments at that rate have continued up until the present date.
11 When making provision for these expenses, the court on each occasion ordered that the same should be paid from a particular frozen bank account (the Glentown account). Because of the delays in the proceedings, the Glentown account has been totally depleted by the fortnightly payments of living expenses as well as payments made in respect of Mrs Mansfield's legal expenses. Consequently, on 23 April 2007 I made an interim order that the continuing fortnightly payments should be met from a substitute account pending determination of application (2) above. On my understanding of the materials before me, if I grant that application it will result in Mr Mansfield's frozen cash assets becoming exhausted within approximately 14 months. In my opinion it is very unlikely that the proceedings can be resolved within that period.
12 Self evidently, there has been a lack of satisfactory progress in all aspects of the proceedings between the parties, but there is little point in trying to attribute blame for this situation. The most sensible way forward would be to expedite the criminal proceedings, but this cannot occur until Mr Mansfield has found a way of funding his defence. For the reasons outlined below, there is very little prospect that that funding can be provided from his frozen assets. Accordingly, if Mr Mansfield is unable to obtain a grant of legal aid the parties will face the serious possibility that there is simply no way forward and that the proceedings will end up in what has been described (by counsel for the DPP) as a 'state of gridlock'.
The application by the DPP to release some of Mrs Mansfield's property from the freezing order.
13 By par 1 of its Chamber summons dated 28 December 2006, the DPP applies pursuant to s 81(1) and s 84(1) of the Act to set aside the freezing order in respect of Mrs Mansfield's half share as joint tenant with her husband in each of the two South Perth apartments, and in respect of certain household furniture and effects of which she is sole owner.
14 Given that the DPP seeks this order prior to any hearing of the objection to confiscation of the frozen property, s 81 of the Act can have no bearing. The application can only be made under s 84 which allows me to make such an order if I find that 'it is more likely than not that
(Page 8)
- [Mr Mansfield] … does not own or effectively control the property, and has not at any time given it away'.
15 The DPP's previous position and the basis on which it obtained a freezing order over Mrs Mansfield's property was that these items were then under Mr Mansfield's 'effective control'. However, the DPP now accepts that the particular items of Mrs Mansfield's property the subject of its present application were not under Mr Mansfield's effective control. Accordingly, I have a discretion under s 84 to set aside the freezing order in respect of those items of property.
16 Mrs Mansfield opposes such an order because of the lapse of time since the freezing order and the consequential accumulation of significant debts including arrears of mortgage payments in respect of the two South Perth apartments. Those mortgage arrears continue to accrue and are also incurring interest at default rates. Mrs Mansfield presently lacks the means to meet her debts and she understandably fears that her creditors will take action to seize any assets once they are released from the freezing order.
17 Accordingly, Mrs Mansfield's counsel submits that it would be unjust to grant the application pending a final resolution of all of the issues between the parties. (In the event that those issues are ultimately resolved in a manner favourable to Mrs Mansfield it can be assumed that appropriate arrangements would be made pursuant to the DPP's undertaking as to damages to ensure that her assets are not seized by creditors.) The DPP's response to this submission is as follows:
A freezing order serves the same purpose as a Mareva order, namely to preserve property for the benefit of the prospective judgment creditor … Its purpose is not and cannot be to protect an objector from the risk of possible action by identified or unidentified secured or unsecured creditors. This would be contrary to the scheme of [the Act]. The creditors or possible creditors are not parties to these proceedings. Any issues between Mrs Mansfield and any of her creditors should be determined independently of the Act and these proceedings. (par 24 of submissions dated 23 April 2007)
18 It is relevant to the exercise of my discretion under s 84 of the Act that the DPP does not seek the release of all of Mrs Mansfield's property. The DPP does not apply for the release of a cash management account in Mrs Mansfield's name which it continues to allege was under Mr Mansfield's effective control. The DPP also denies Mrs Mansfield's claim to funds held in Mr Mansfield's name in respect of which she claims a beneficial entitlement.
(Page 9)
19 In my opinion, it would be manifestly unjust to set aside the freezing order in respect of the non-cash items of Mrs Mansfield's property without at the same time providing her with the means to meet the debts which have accumulated as a result of that order. To do so would be to invite Mrs Mansfield's creditors to take whatever steps they can against the released property to secure their debts, and I consider that it would be unfair to inflict this further detriment on Mrs Mansfield. Accordingly, the application in par 1 of the Chambers summons of 28 December 2006 will be refused.
The application by Mr Mansfield to substitute the account from which living expenses are paid
20 As noted above, the frozen Glentown account from which living expenses were met between 2004 and 2007 has been exhausted. By his Chamber summons dated 19 April 2007 Mr Mansfield seeks a further variation of the freezing order to substitute a particular Challenge Bank cash management account in his own name as the account from which the continuing payments of $3,600 per fortnight should be drawn. Pending the determination of this application I have made an interim order that the fortnightly payments should be met from that substitute account.
21 The DPP opposes this application on a number of grounds as summarised by the following paragraphs of its written submissions dated 23 April 2007:
5. Given the limited equity in the two items of frozen real property and the unknown or uncertain value of the frozen furniture and effects, the above account is the sole remaining asset of any significance against which the applicant can execute in the event that he is successful in obtaining a criminal benefits declaration at trial pursuant to CPCA ss 15 and 16.
6. It has been accepted that the litigation has a public interest dimension (Director of Public Prosecutions v Mansfield [2006] WASC 255, [14]-[16]) and the applicant has a prospective or contingent interest in all frozen property, including the above account: Mansfield v Director of Public Prosecutions for Western Australia (2006) 80 ALJR 1366, [43], [46].
7. To grant an order allowing the effectively sole remaining asset of any value to be dissipated would entirely frustrate the purpose of the proceedings and be contrary to public policy.
8. If this Honourable Court dismisses paragraph 2 of the above chamber summons, the respondent and the second named first objector will not be without an income. They will be able to apply
- for a benefit from Centrelink … The respondent and the second named first objector have both been requested to explore the Centrelink option, but have chosen to disregard those requests …
- 9. In any event, the second named first objector should not be entitled to draw on above account in circumstances where she has not formulated and cannot formulate a claim as an 'owner' of that account … and has not filed any or any sufficient affidavit material to establish a valid objection.
10. An objector has the legal and evidential burden to make out his or [her] objection by admissible evidence on the balance of probabilities: Director of Public Prosecutions v Mansfield [2003] WASC 173, [3] per Wheeler J. An objector also has the obligation to prosecute the objection proceedings to trial expeditiously: Director of Public Prosecutions v Mansfield [2003] WASC 186, [55] per Barker J. The second named first objector has failed to discharge both these fundamental obligations.
22 In respect of the issues raised by par 5 - par 7 above, the DPP undoubtedly has a valid concern that continued payment of Mr and Mrs Mansfield's living expenses will result in the value of the frozen property being significantly diminished. In this regard, there is a public interest in the value of the frozen property being preserved in case it is ultimately confiscated to meet any liability of Mr Mansfield under a criminal benefits declaration.
23 Although that concern should be given appropriate weight, it cannot be determinative of the question of whether or not the payments for living expenses should continue, because the court has an unfettered discretion to provide for those expenses under s 45(e) of the Act and there are other factors to be taken into account.
24 As to par 8 of the submissions above, it can be assumed that Mr and Mrs Mansfield will be able to obtain Centrelink payments if they are left without any other source of income. However, it can also be assumed that those Centrelink payments would be substantially less than the fortnightly allowance that Mr and Mrs Mansfield are presently receiving. As to the quantum of the present allowance, the DPP originally consented to an order for payment of $2,500 per fortnight, and there was a more recent assessment by a Registrar of this court that payments of $3,600 per fortnight would be reasonable. It necessarily follows that the quantum of Centrelink payments would not be sufficient to meet the reasonable living expenses of Mr and Mrs Mansfield.
(Page 11)
25 As to par 9 and par 10 of the above submissions the DPP correctly observes that Mrs Mansfield is not an 'owner' of the particular account from which it is proposed that the fortnightly payments should now be made. In this regard, s 45(e) of the Act allows the court to make provision for the living expenses of 'the owner of the property'.
26 However, the 'owner' of the account (Mr Mansfield) consents to it being used for payments in respect of the living expenses of both himself and his wife. Furthermore, as Mrs Mansfield has at all material times been dependent upon her husband it necessarily follows that expenditure in respect of her maintenance and upkeep properly forms part of Mr Mansfield's living expenses.
27 Paragraph 10 of the DPP's submissions does not take account of Justice McKechnie's order of 21 July 2003 that the primary proceedings and objection proceedings should be heard together. Mrs Mansfield has been caught up in the proceedings through no fault of her own, and she is not in any way responsible for the delays that have occurred. I can see no merit in that submission.
28 It is also relevant to note that when the court originally made provision for living expenses in 2004, and when it revised that provision in 2006, the identity of the account from which the payments were to be made was of little moment. The only reason why it was necessary to identify a particular frozen account was that without that occurring the bank would have had no way of knowing whether it was authorised to allow the deductions that were then made.
29 In the end, the present application does not require me to redetermine the question of whether or not the payments previously allowed are reasonable. I am simply being asked to exercise my discretion to vary the freezing order so as to substitute the account from which those payments are to be made. In my view it is appropriate that I should grant that application and I so order.
Mr Mansfield's application to vary the freezing order to allow payment of his legal costs
30 Mr Mansfield's application to vary the freezing order to enable payment of his legal costs has a long history as outlined in my decision in The Director of Public Prosecutions for Western Australia v Mansfield [2006] WASC 255 [2] - [4]. In that decision at [47] I indicated that I would only be in a position to exercise my discretion to vary the freezing order for this purpose if I was provided with further evidence.
(Page 12)
31 In a subsequent affidavit sworn on 6 December 2006 Mr Mansfield has deposed as to the following:
(a) In respect of the related criminal and civil proceedings Mr Mansfield has incurred known legal costs totalling $509,795 of which he has paid $291,700 leaving $218,095 outstanding.
(b) Mr Mansfield borrowed the funds which were used to make the partial payments totalling $291,700. He is obliged to repay the totality of what he has borrowed, and is unable to borrow any further funds for the purpose of making further payments of legal fees.
(c) The firm of solicitors acting for Mr Mansfield in the civil proceedings has provided him with credit to date in order to continue its representation in respect of interlocutory matters. If Mr Mansfield is unsuccessful with the present application:
The firm must reconsider its capacity to act for me further in these proceedings without payment of outstanding fees and without payment of fees I incur in the future conduct of these proceedings and in respect of the recovery of fees from costs orders made in my favour to date.
(d) The Legal Aid Commission is unwilling to consider a grant of aid to Mr Mansfield in respect of the civil proceedings.
(e) The firm of solicitors representing Mr Mansfield in the criminal proceedings will not continue to act in future unless it is paid fees totalling $46,300 that are outstanding to that firm.
(f) Enquiries of the Legal Aid Commission indicate that a grant of legal aid for the criminal proceedings will not be considered whilst there is any prospect of funds being released from the frozen property to fund Mr Mansfield's defence. The Legal Aid Commission has also advised that should Mr Mansfield seek a grant of aid for the criminal matters 'he will need to provide updated financial information together with advice on how the court proceedings have been funded so far and why this source of funding cannot be continued'.
32 Mr Mansfield wishes to engage senior counsel from Melbourne in respect of all three criminal trials, and the total costs of his representation including junior counsel, expert witnesses, travel and accommodation have been estimated at $1,080,858. There is simply insufficient cash amongst the frozen assets to meet these costs, and even if one or both of the South Perth apartments were to be sold, it is questionable whether the
(Page 13)
- proceeds (after satisfaction of mortgage liabilities) would be sufficient to fund this expenditure. Certainly, no party is suggesting that this should happen, and it necessarily follows that I must refuse the application to vary the freezing order to enable payment of Mr Mansfield's legal costs of defending the criminal proceedings.
33 Although this decision was anticipated by counsel, it is nevertheless submitted on Mr Mansfield's behalf that funds should be released from the frozen property to enable him to defend the primary proceedings. In essence, Mr Mansfield argues that the civil proceedings should be determined ahead of the criminal proceedings in the hope that this will result in the release of all frozen property and the payment of damages by the DPP pursuant to its undertaking. In these circumstances it is said that Mr Mansfield would then be in a position to fund his defence in the criminal proceedings. Combined with this proposition there has been some focus on whether or not the civil proceedings can be resolved by the trial of a preliminary issue. (However the question whether there should be a trial of a preliminary issue has been deferred pending a decision in the matters currently before the Court of Appeal).
34 I have given these submissions careful thought, but in the end have decided that the application to vary the freezing order to enable payment of Mr Mansfield's legal costs in the civil proceedings should also be refused. I have come to this decision primarily because of the very limited quantum of cash that remains amongst the frozen assets. As already noted, the fortnightly payments being made in respect of Mr and Mrs Mansfield's living expenses are likely to exhaust all remaining cash within approximately 14 months. I consider that first priority should be given to payment of these expenses, and that there are simply insufficient funds to provide for legal costs.
The DPP's application to set aside the order that the primary proceedings and objection proceedings be heard together
35 There are a number of decisions by single Judges of this court establishing that a person who lodges a notice of objection to confiscation of frozen property does not become a party to the primary proceedings under the Act (eg Barker J in B v State of Western Australia [2002] WASC 298 [38]). Accordingly objection proceedings ordinarily progress independently of the primary proceedings. However, in the present instance, the DPP applied for and obtained a consent order from McKechnie J on 21 July 2003 that 'the application for a criminal benefits declaration and the objections of the first objectors proceed by way of
(Page 14)
- pleadings and be heard together'. Through oversight, none of the parties ever took steps to extract that order.
36 The DPP now applies (by pars 6 and 7 of its Chamber summons dated 28 December 2006) to set aside the order made on 21 July 2003, and to have Mrs Mansfield's objection to confiscation of frozen property heard on a priority basis and ahead of the other proceedings. The DPP submits that the granting of these orders would result in Mrs Mansfield being 'taken out' of the proceedings and all issues between her and the State being efficiently resolved.
37 Although this is an admirable objective, it is highly unlikely that it can be achieved. Certainly, a prior hearing of Mrs Mansfield's objection could determine whether or not the account in her name was under Mr Mansfield's effective control, and whether or not she is beneficially entitled to the funds held in another account in Mr Mansfield's name. However even if the latter issue was to be determined in Mrs Mansfield's favour it would not result in those funds being released to her, because they were necessarily under Mr Mansfield's 'effective control', and must remain frozen until completion of the primary proceedings.
38 Furthermore, if a criminal benefits declaration is ultimately made against Mr Mansfield and he fails to pay the amount of the declared criminal benefit, then all of the frozen property will be liable to confiscation. At that late stage of the proceedings, Mrs Mansfield would still be entitled (under s 85 of the Act) to apply for the release of the frozen funds that she claims to beneficially own.
39 If there was any prospect that the proposed orders might result in Mrs Mansfield being totally extracted from the proceedings, then there would be some merit in granting the DPP's application. However, in light of the considerations outlined above, I have decided that the applications in pars 6 and 7 of the Chamber summons dated 28 December 2006 should be refused. (In any event, and even if there had been merit in the proposed orders, it would not have been appropriate to grant the applications pending the determination of the questions referred to the Court of Appeal.)
The DPP's application to dismiss the objection proceedings
40 By a 'notice of objection' and a Chamber summons (both dated 7 August 2002) Mr and Mrs Mansfield jointly objected to confiscation of all of the property that had been frozen under the freezing order made on 12 July 2002, and also applied (pursuant to s 73 and s 83 of the Act) for
(Page 15)
- the release to them of that property. It should be noted that although the objection proceedings are quite separate from the other proceedings, O 81 FA r 5(2) required that they be commenced by way of a 'summons in the proceedings on the application for the freezing order'.
41 By Chamber summons dated 30 May 2003 the DPP applied for and obtained the consent order made by McKechnie J on 21 July 2003 requiring that the primary proceedings and the objection proceedings proceed by way of pleadings and be heard together.
42 At that time McKechnie J also made appropriate directions requiring the filing of a statement of claim by the DPP and a reply by Mr Mansfield in the primary proceedings, as well as grounds of objection by Mr and Mrs Mansfield and a response by the DPP in the objection proceedings. All of those directions were complied with by 4 November 2003. It is relevant to note that the grounds of objection filed by Mr and Mrs Mansfield on 6 October 2003 purported to be a response to the DPP's statement of claim in the primary proceedings. Those grounds of objection also pleaded points of law that are now the subject of the questions that have been referred to the Court of Appeal.
43 For a lengthy period following the filing of these pleadings, the parties were mainly focused on interlocutory activity concerning the freezing order, and the primary proceedings and the objection proceedings were allowed to languish. However, by its Chamber summons dated 18 April 2007, the DPP now applies for the following orders:
4. Under the Court's inherent jurisdiction, the First Objectors' notice of objection filed on 9 August 2002, chamber summons filed on 9 August 2002 and the objection proceedings be and are hereby dismissed on the ground that they are frivolous or vexatious, may prejudice, embarrass or delay the fair trial of the proceedings, or are otherwise an abuse of process of the Court.
5. Further, under the Court's inherent jurisdiction, the objection proceedings shall stand dismissed for want of prosecution.
44 Quite obviously, the second of these applications cannot succeed because on 21 July 2003 McKechnie J ordered that the primary proceedings and the objection proceedings should proceed and be heard together. The simple fact is that there has been a want of prosecution by all parties, and the DPP is not in a position to attribute this unfortunate situation entirely to Mr and Mrs Mansfield.
(Page 16)
45 As to the first of the above applications the only submission of substance from the DPP is that Mr and Mrs Mansfield's Chamber summons of 7 August 2002 is to some extent unintelligible. However, this is a problem which has lain dormant for approximately five years and which did not trouble the parties at the time that they were filing their pleadings. The defects can be easily remedied by way of amendment, and in my view they are not sufficient to justify the dismissal of the objection proceedings.
46 Accordingly, the DPP's application should be dismissed, but Mr and Mrs Mansfield should have leave to amend their Chamber summons dated 12 July 2002. Furthermore, it seems to me that Mr and Mrs Mansfield no longer have a common interest in the outcome of the objection proceedings and that they should be required to file separate pleadings. Subject to further submissions from the parties I propose to make directions along these lines pursuant to O 29 r 2. I also consider that compliance with those directions should await the outcome of the matters presently before the Court of Appeal.
The DPP's application to strike out Mr Mansfield's statement of defence
47 After obtaining leave, the DPP and Mr Mansfield have each recently filed amended pleadings in the primary proceedings. The DPP's re-amended statement of claim is dated 12 March 2007, and Mr Mansfield's amended defence is dated 23 April 2007. By par 3 of its Chamber summons dated 18 April 2007 the DPP now makes the following applications:
(1) pursuant to O20 r19(3)(a) there be an extension of time in which to bring this application; and
(2) pursuant to O20 r19(1)(a) and (c) of the Rules of the Supreme Court 1971, or alternatively, under the Court's inherent jurisdiction, the Respondent's statement of defence filed on 23 September 2003 be struck out on the ground that it discloses no reasonable defence and may prejudice, embarrass or delay the fair trial of the primary proceedings.
48 I am asked to decide these applications largely on the basis of written submissions from the parties. The DPP's and Mr Mansfield's written submissions are dated 4 and 17 May 2007 respectively.
49 In my view it is appropriate to grant the extension of time applied for, and in respect of the DPP's more minor objections to Mr Mansfield's
(Page 17)
- (amended) statement of defence, I make the following rulings by reference to the relevant paragraphs in its written submissions:
1. Paragraph 5: the reference to Fitzroy All Trust as second objector in the heading of the amended defence is embarrassing and should be struck out.
2. Paragraph 6: the introductory plea makes reference to a superseded version of the statement of claim, is embarrassing and should be struck out.
3. Paragraphs 7 and 8: in a number of instances the amended defence pleads that certain paragraphs of the statement of claim 'fail to disclose a valid cause of action and ought properly to be struck out' or that other paragraphs are 'embarrassing and ought properly to be struck out'. These pleas in themselves are embarrassing and ought to be struck out. Furthermore, they ignore the decision of Le Miere J in Director of Public Prosecutions for Western Australia v Mansfield [2004] WASC 116 [58], [62], [75], [76] to the effect that the DPP's action is not frivolous or vexatious. For these reasons I rule that the objected passages in pars 2(ba), 2(c), 2(d) and 4 of the amended defence should be struck out. I am not persuaded that pars 8, 10 and 10a of the amended defence should be struck out.
4. Paragraph 9: for the reasons advanced by the DPP, pars 3(a), 3(b), 3(c), 3(g), 3(h), 5, 6 and 7 of the amended defence should also be struck out as embarrassing.
50 Very substantial arguments are raised as to pars 9, 10 and 10A of the amended defence which deny numerous paragraphs of the statement of claim and assert that Mr Mansfield is not required to further plead to the allegations because 'he is entitled to rely upon privilege against self incrimination and against penalties of forfeiture'.
51 The submissions of the parties address such questions as whether the application for a criminal benefits declaration involves the imposition of a penalty, whether the claim to privilege against penalties of forfeiture can be invoked by way of a pleading, whether the privilege against self incrimination is available in the absence of appropriate affidavit material, whether the privilege against self incrimination can be invoked in respect of a prosecution which already exists, and whether by Mr Mansfield's conduct in the proceedings he has waived all claims to privilege.
(Page 18)
52 However, in my view, there is a much more fundamental question which the parties have failed to address. This concerns the particular content of the relevant paragraphs of the amended statement of claim which do not assert any matters of fact but in their entirety plead points of law.
53 In this regard, par 9 of the amended statement of claim asserts that each of the acts previously pleaded against Mr Mansfield constituted an offence under the Corporations Law (WA). The succeeding paragraphs of the amended statement of claim through to par 10A deal with the impact of the Corporations Act 2001 (Cth) and the legal reasons why it is said that each of the alleged acts still constitutes a 'confiscation' offence within the meaning of s 141 of the Act.
54 In pars 9, 10 and 10A of the amended defence, Mr Mansfield denies each of the pleaded propositions of law and states that he is not otherwise required to plead to any of those allegations because he is entitled to rely upon the stated privileges. To my mind, this latter plea is entirely otiose, because having denied each of the DPP's propositions of law, there is really nothing else that can be said other than to plead alternative propositions of law based upon the alleged facts.
55 In these circumstances I am unable to conceive how any plea in par 9, 10 and 10A of the defence beyond the denials could create a risk of Mr Mansfield being exposed to a penalty, or tend to incriminate him in the alleged offences. Presumably, any further plea would necessarily be to the effect that his alleged acts did not (or do not) constitute offences.
56 For these reasons, I am tentatively of the view that, with the exception of each denial, pars 9, 10 and 10A of the statement of defence are embarrassing and should be struck out. However, as I am proposing to determine this issue on a basis not raised in the written submissions, I will defer my final decision until I have heard further from the parties.
57 If it follows that the application the subject of par 3 of the DPP's Chamber summons dated 18 April 2007 should be adjourned for further submissions by the parties. In my view, that application should not be re-listed until the decision of the Court of Appeal on the questions that have been referred to it has become known.
Summary of the orders that are now made
58 The applications the subject of pars 1, 6 and 7 of the DPP's Chamber summons dated 28 December 2006 are refused. The remaining
(Page 19)
- applications the subject of that Chamber summons are ancillary to the decisions that I have made above. It follows that that Chamber summons should be dismissed.
59 Mr Mansfield's application to further vary the freezing order to enable payment of his legal expenses (which application is made pursuant to leave granted on 14 August 2006 to amend his Chamber summons dated 19 September 2004) is refused.
60 For the reasons outlined above, the applications in pars 4 and 5 of the DPP's Chamber summons dated 18 April 2007 are refused. The applications the subject of pars 3 and 6 of that Chamber summons (for an extension of time to apply to strike out the defence, and for orders that Mr and Mrs Mansfield file full particulars of grounds of objection and a statement of claim in the objection proceedings) will be adjourned until after the Court of Appeal has delivered its decision in respect of the questions of law that have been referred to it.
61 The applications the subject of pars 1 and 2 of Mr Mansfield's Chamber summons dated 19 April 2007 are granted.
62 I will hear from the parties as to any further consequential orders or directions that should be made.
3
7
1