Director Of Public Prosecutions (WA) v Patricia Evelyn Smith as administrator of the estate of Leslie Thomas Hoddy (Dec) - [2008] WASC 141

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: DIRECTOR OF PUBLIC PROSECUTIONS (WA) -v- PATRICIA EVELYN SMITH as administrator of the estate of LESLIE THOMAS HODDY (Dec) [2008] WASC 141

CORAM: TEMPLEMAN J

HEARD: 25 JUNE 2008

DELIVERED : 16 JULY 2008

FILE NO/S: CIV 1888 of 2002
CIV 2049 of 2002
(Consolidated by Order of 18 October 2007)

MATTER :Criminal Property Confiscation Act 2000 (WA)
and
Director of Public Prosecutions for Western Australia against LESLIE THOMAS HODDY

BETWEEN: DIRECTOR OF PUBLIC PROSECUTIONS (WA)
Applicant
AND
PATRICIA EVELYN SMITH as administrator of the estate of LESLIE THOMAS HODDY (Dec)
First Respondent
GAVIN LEIGH-BRENTON SMITH
Second Respondent
PATRICIA EVELYN SMITH as administrator of the estate of LESLIE THOMAS HODDY (Dec)
First Objector
GAVIN LEIGH-BRENTON SMITH
Second Objector
DIRECTOR OF PUBLIC PROSECUTIONS (WA)
Respondent

Catchwords:

Proceeds of crime - Whether appropriate to release further frozen funds for constitutional challenge to legislation - Test for release - Analogy with Beddoe summons

Legislation:

Criminal Property Confiscation Act (2000) (WA), s 159, s 160

Result:

Application dismissed

Category: A

Representation:

Counsel:

Applicant:     Mr G T J Farley
First Respondent           :     Ms L B Black
Second Respondent      :     Ms L B Black
First Objector                :     Ms L B Black
Second Objector           :     Ms L B Black
Respondent:     Mr G T J Farley

Solicitors:

Applicant:     Director of Public Prosecutions (WA)
First Respondent           :     Dwyer Durack
Second Respondent      :     Dwyer Durack
First Objector                :     Dwyer Durack
Second Objector           :     Dwyer Durack
Respondent:     Director of Public Prosecutions (WA)

Case(s) referred to in judgment(s):

3 Individual Present Professional Trustees of 2 Trusts v An Infant Prospective Beneficiary of one Trust [2007] EWHC 1922 (Ch)
Mansfield v Director of Public Prosecutions (WA) [2006] HCA 38
Re Beddoe, Downes v Cottam [1893] 1 Ch 547
Re Eaton [1964] 1 WLR 1269
Silbert v Director of Public Prosecutions (WA) (2004) 217 CLR 181

TEMPLEMAN J: On 27 June 2002, the Director of Public Prosecutions (WA) (DPP) obtained a freezing order pursuant to the Criminal Property Confiscation Act 2000 (WA) (the Act) in respect of the property of Leslie Thomas Hoddy.
On 20 May 2004, Mr Hoddy was charged with two counts of selling a prohibited drug under s 6(1)(c) of the Misuse of Drugs Act 1981 (WA). He subsequently pleaded not guilty to those charges. However, Mr Hoddy died on 21 January 2005, before he could be tried.
Letters of administration of Mr Hoddy's estate were granted subsequently to Patricia Evelyn Smith.
On 25 July 2002, Mr Hoddy had filed an objection to the confiscation order. That objection has been maintained by Ms Smith. An objection was filed also by Gavin Leigh‑Brenton Smith. I shall refer to Ms and Mr Smith together as the objectors.
There has been a considerable history to these proceedings which it is not necessary to relate for present purposes. I am concerned only with an application for directions made on 25 June 2008. On that occasion, counsel for the objectors sought an order that part of the frozen property be released to provide funds for the purpose of paying the objectors' reasonable costs of obtaining an opinion from senior counsel in relation to a challenge to the Act.
The proposed challenge focuses on s 159 and s 160 of the Act. By s 159(1), a 'declared drug trafficker' includes a person who is taken to be a declared drug trafficker under s 159(2). That subsection provides:
(2)For the purposes of this Act, a person is taken to be a declared drug trafficker if -
(a)the person is charged with a serious drug offence within the meaning of section 32A(3) of the Misuse of Drugs Act 1981;
(b)the offence was committed, or is more likely than not to have been committed, after the commencement of this Act;
(c)the person could be declared to be a drug trafficker under section 32A(1) of that Act if he or she is convicted of the offence;
(d)the charge is not disposed of or finally determined; and
(e)the person absconds in connection with the offence.
Section 160(2) then provides:
(2)A person charged with an offence absconds in connection with the offence if -
(a)a warrant for the person's arrest for the offence is in force, or the person is arrested for the offence without warrant (whether before or after being charged with the offence);
(b)the charge has neither been disposed of nor finally determined; and
(c)the person dies.
The primary issue in respect of which senior counsel's opinion is sought, is whether the deeming provisions referred to above are unconstitutional: in essence, because they may result in a person being declared a drug trafficker without any judicial determination of guilt.
Counsel for the objectors has advised her clients that the opinion of senior counsel be sought. Thus far, senior counsel has been good enough to consider the matter informally and has provided a written 'Summary Questions for Opinion' in which he identifies three questions bearing on this issue.
In Mansfield v Director of Public Prosecutions (WA) [2006] HCA 38, the High Court held that when making a freezing order pursuant to the Act, the court could exempt some property on the condition that it be used to meet legal expenses: [53]. However, the court went on to say that great care should be taken by the parties and the court in framing such a condition to ensure, to the maximum practical extent, that exempted funds are not misused, whether by overservicing and overcharging or by other abuse [54].
In the present case, the DPP agreed in January 2008 to release some $6,000 for the payment of legal costs and disbursements incurred in connection with or as a consequence of the imposition of the freezing order. However, the DPP has declined to release further funds for the pursuit of a constitutional challenge to the Act, at least without being given some indication of the nature of the case. The DPP contends that the decision of the High Court in Silbert v Director of Public Prosecutions (WA) (2004) 217 CLR 181 forecloses the issue.
At the directions hearing, the issue arose as to the appropriate test to be satisfied if funds were to be released for the payment of legal expenses in this context. The DPP contends that funds should not be released:
Unless the constitutional challenge proposed by the … objectors can objectively be considered reasonably arguable as a matter of law …
Against that, the objectors submit that the appropriate test is that stated in Mansfield. In other words, that:
When releasing funds to be used for legal fees … the funds are not being misused by overservicing, overcharging or any other abuse. That is, the use of the legal fees must be reasonable.
The objectors submit that there would be no such misuse or abuse if the funds were made available for legal fees to seek an opinion from senior counsel to determine whether possible arguments identified thus far were worth pursuing.
In my view, the DPP's test is to be preferred. I think an analogy may be drawn (albeit somewhat tenuously) between the present circumstances and those in which a trustee wishes to prosecute or defend legal proceedings at the expense of the trust fund. If the trustee wishes to obtain an indemnity from the fund in respect of legal costs, he may apply to the court for an appropriate order, on a Beddoe summons, following the decision in Re Beddoe, Downes v Cottam [1893] 1 Ch 547.
It was there held that a trustee should not have an indemnity merely because he was acting bona fide, on the advice of his solicitor. In other words, it would be necessary for the trustee to persuade the court that there was merit in the course he wished to pursue. That would involve the trustee making proper disclosure of his case and (usually) counsel's opinion as to its prospects of success to a judge who would not be the trial judge. Generally, the matters put before the judge on the Beddoe application would not be disclosed to the opposing party. However, there might be exceptions to this rule: see Re Eaton [1964] 1 WLR 1269 and 3 Individual Present Professional Trustees of 2 Trusts v An Infant Prospective Beneficiary of one Trust [2007] EWHC 1922 (Ch).
I accept that in the present case, it is not appropriate for the DPP to determine the reasonableness or otherwise of the objectors' proposed cause of action. In order to avoid the impasse, counsel for the objectors handed me, in a sealed envelope, a copy of her advice and senior counsel's summary questions for opinion.
For the purposes of this published judgment, it is sufficient to say that in my view, the questions would be answered unfavourably to the objectors, with the result that it would be unreasonable to allow any of the frozen property to be used in order to pursue them.
I do not think it appropriate to set out my reasons here. However, I will do so in an annexure which will not be published, but which will be provided to the objectors.
In these circumstances, I consider it appropriate to make the directions sought by the DPP on 25 June 2008, these being what might be described as conventional directions in matters of this kind.