Director of Public Prosecutions (WA) v Yeo
[2012] WASC 440
•23 NOVEMBER 2012
DIRECTOR OF PUBLIC PROSECUTIONS (WA) -v- YEO [2012] WASC 440
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2012] WASC 440 | |
| 23/11/2012 | |||
| Case No: | CPCA:37/2011 | 15 OCTOBER 2012 | |
| Coram: | KENNETH MARTIN J | 15/10/12 | |
| 9 | Judgment Part: | 1 of 1 | |
| Result: | Application granted | ||
| B | |||
| PDF Version |
| Parties: | DIRECTOR OF PUBLIC PROSECUTIONS (WA) BENG ENG YEO |
Catchwords: | Criminal Property Confiscation Act 2000 (WA) Application for freezing order Pending application for unexplained wealth declaration Whether undertaking as to damages required from DPP |
Legislation: | Criminal Property Confiscation Act 2000 (WA), s 12, s 43 |
Case References: | Centurion Trust Company Ltd v Director of Public Prosecutions (WA) [2010] WASCA 133 Director of Public Prosecutions (WA) v Mansfield [2006] WASC 255 Hoddy v Director of Public Prosecutions (WA) [2007] WASC 7 Mansfield v Director of Public Prosecutions (WA) [2006] HCA 38; (2006) 226 CLR 486 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
BENG ENG YEO
Defendant
Catchwords:
Criminal Property Confiscation Act 2000 (WA) - Application for freezing order - Pending application for unexplained wealth declaration - Whether undertaking as to damages required from DPP
Legislation:
Criminal Property Confiscation Act 2000 (WA), s 12, s 43
Result:
Application granted
(Page 2)
Category: B
Representation:
Counsel:
Plaintiff : Mr I S Jones
Defendant : Mr C E Chenu
Solicitors:
Plaintiff : Director of Public Prosecutions (WA)
Defendant : Bennett & Co
Case(s) referred to in judgment(s):
Centurion Trust Company Ltd v Director of Public Prosecutions (WA) [2010] WASCA 133
Director of Public Prosecutions (WA) v Mansfield [2006] WASC 255
Hoddy v Director of Public Prosecutions (WA) [2007] WASC 7
Mansfield v Director of Public Prosecutions (WA) [2006] HCA 38; (2006) 226 CLR 486
(Page 3)
- KENNETH MARTIN J:
(These reasons were delivered orally and have been edited from the transcript.)
1 This action was started by an originating motion on 22 June 2011 as Criminal Property Confiscation Act action 37 of 2011. Freezing orders were sought against three properties: two in Western Australia (Mount Lawley and Maylands) and one in New South Wales (Bondi). The orders sought were grounded upon the foreshadowed examination of the defendant, pursuant to s 43(1)(a) of the Criminal Property Confiscation Act 2000 (WA) (the Act). The freezing orders sought were made by Simmonds J on 7 July 2011.
2 A year passed before that examination took place before a registrar of this court. The examination spanned 5 and 6 July 2012. After the defendant was examined, the original freezing orders, if I can use that terminology, which were grounded upon a pending examination, stayed in place. The matter has since been entered in the CMC List and has been case managed by Corboy J.
3 The particular application I am now dealing with was the subject of modification and amendment today to bring it up to date to take cognisance of the fact that it is no longer a case of a foreshadowed application for an unexplained wealth declaration, as it was on 1 August 2012 when the notice of motion was filed.
4 The notice of motion filed on 1 August 2012, supported by an affidavit sworn by Mr McGrath SC, the Director of Public Prosecutions, indicated that an application would be made for an unexplained wealth declaration, pursuant to s 11 of the Act,and that the DPP had given instructions for the confiscation team to progress that application speedily.
5 The parties' written submissions, which were filed according to the programming directions, have to an extent been overtaken by the fact that the unexplained wealth declaration motion was received by the court on 5 October 2012. Accordingly, and without opposition, I gave leave for updating amendments to be made to the notice of motion of 1 August 2012 to reflect that change, such that this application is now brought pursuant to s 41(1) and s 43(3)(b) of the Actin respect of the same Mount Lawley, Maylands and Bondi properties as were previously frozen, effectively on the ground that the application for an unexplained wealth declaration was brought against the defendant on 5 October 2012.
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6 The essential matter now at issue between the parties is whether or not the DPP ought to proffer an undertaking as to damages as a condition of obtaining the freezing orders sought.
7 It is important to understand the purpose and effect of an undertaking as to damages. The undertaking as to damages originated in the practice of the courts of equity. Before the court granted an interlocutory injunction preserving the status quo up to trial, it would almost invariably require the party seeking the injunction to provide an undertaking as to damages. That is to say, the party seeking the injunction was required to give an undertaking that, if it failed at trial, it would make good the loss or damage suffered by the party the subject of the interlocutory injunction as a result of the interlocutory injunction being granted.
8 One can see the basis in fairness for orders of that kind, because such interlocutory orders are made without final determination of the merits of a case. They are made on an assessment by reference to well-known considerations. But they by no means reflect the final outcome of a trial. If the final outcome of the case is adverse to the party who obtained the pre-trial orders, it is only right, just and fair that the party who obtained them should bear some measure of responsibility for their adverse consequences in the meantime. That is the price of an interlocutory injunction.
9 The judgment of the plurality (Gleeson CJ and Gummow, Kirby, Hayne and Crennan JJ) in Mansfield v Director of Public Prosecutions (WA)[2006] HCA 38; (2006) 226 CLR 486 [42] - [46] explains the background of the undertaking as to damages in equity. Their Honours say:
The present litigation does not concern the general jurisdiction of the Supreme Court under the Supreme Court Act to award injunctive relief. However, the jurisdiction under the Act to make freezing orders does involve the protection of the prospective or contingent (it is unnecessary to choose between these terms) property rights of the State. It is more difficult to categorise the freezing order procedure purely as 'a law enforcement action' in the sense used in the House of Lords. The statutory regime is sui generis. The situation is sufficiently dealt with by holding that, within the authority conferred by s 43 of the Act, the Supreme Court had the power (albeit not the duty) to require the provision of an undertaking and, if this was not offered or was offered in unsatisfactory terms, the Supreme Court was at liberty to refuse the freezing order sought by the DPP [46].
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10 Subsequent to Mansfield, there have been applications in this court of the principle under s 43. See first, Director of Public Prosecutions (WA) v Mansfield[2006] WASC 255, where Blaxell J did require an undertaking, which was ultimately given. Second, see Hoddy v Director of Public Prosecutions (WA) [2007] WASC 7 where, in somewhat unusual circumstances involving the death of Mr Hoddy after the commencement of the application, the undertaking as to damages was required.
11 The question, then, is whether the power of the court under s 43, which has been recognised by the High Court and which is not in dispute, should be exercised in the particular facts and circumstances of the present case. I will identify the evidence for that purpose. Apart from the affidavit of Mr McGrath SC of 1 August 2012, to which I have referred, there are two affidavits by a Mr Orsi, the second of which is a recently compiled two-volume document sworn 5 October 2012. Prior to that Mr Orsi had sworn an affidavit on 15 June 2011. All that material is relied on today.
12 Mr Orsi's forensic investigation, which is the subject of his October affidavit, was conducted with the benefit of the examination of the defendant on 5 and 6 July 2012. Mr Orsi's revised calculation of the defendant's unexplained wealth is in the order of $522,000, as shown in the table to which I was referred in argument.
13 Today is not the time for an evaluation of the merits of the application for an unexplained wealth declaration. It is, however, an occasion upon which to evaluate a freezing order which is grounded upon the pendency of such an application. In that respect I refer to s 43(3):
The court may make a freezing order for all or any property that is owned or effectively controlled by the person or that the person has at any time given away if -
…
(b) an application has been made against the person for an unexplained wealth declaration, criminal benefits declaration, crime-used property substitution declaration or a production order.
14 I refer to the defined terms found within the Act'sglossary, where, relevantly, an unexplained wealth declaration is defined as 'a declaration under section 12'. Section 12 of the Act is found in pt 3 div 1 and appears under the heading 'Unexplained wealth'. Section 11 (2) provides as follows:
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- An application may be made in conjunction with an application for a freezing order, in proceedings for the hearing of an objection to confiscation, or at any other time.
15 Section 12 provides:
(1) On hearing an application under section 11(1), the court must declare that the respondent has unexplained wealth if it is more likely than not that the total value of the person's wealth is greater than the value of the person's lawfully acquired wealth.
(2) Any property, service, advantage or benefit that is a constituent of the respondent's wealth is presumed not to have been lawfully acquired unless the respondent establishes the contrary.
16 See also s 12(3) to s 12(5), s 13 and s 14 regarding the nature of the unexplained wealth declaration process.
17 The unexplained wealth declaration process is different in character to some of the other grounds for issuing a freezing order, such as property being identified as the direct proceeds of crime, or a criminal benefit, or under a crime-used property substitution declaration, or in some fashion that shows a direct nexus between a crime or criminal activity and property created or obtained as a result of criminal activity. It is effectively a security process by which the state, given the pendency of an application for an unexplained wealth declaration, may secure its position in the interim by obtaining freezing orders against real or personal property. Such property may have no connection whatsoever with a crime. The process is effectively a commercial outcome to sustain the viability of the process of seeking the unexplained wealth declaration: see Centurion Trust Company Ltd v Director of Public Prosecutions (WA) [2010] WASCA 133 [191(b)] (Buss JA). The end result, if the state is ultimately successful, may be that there is an order of the court requiring a defendant to pay to the state the amount of what has been declared to be unexplained wealth.
18 Another point of principle is that under s 12(2) the onus is upon the defendant to show that the wealth or the asset they hold has been lawfully acquired. That is effectively a reversal of the onus of proof ordinarily applied in civil proceedings.
19 These are the general issues of principle in terms of the Act and the power, which set up the scenario in which I am asked to exercise a discretion to require the DPP to provide an undertaking as to damages in respect of these freezing orders against the three properties I identified
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- earlier. These properties have been, as I have said, the subject of freezing orders justified on different grounds since 7 July 2011.
20 For its part the defendant, whilst not submitting to freezing orders grounded upon the application for an unexplained wealth declaration, seeks an undertaking as to damages from the DPP as a condition of any further freezing orders, in the same way that undertakings were required in Mansfield (Blaxell J) and in Hoddy.
21 Two affidavits have been read and relied upon by the defendant, these being the affidavit of the defendant, sworn 11 September 2012, and her further affidavit, sworn 9 October 2012.
22 The question then is whether I should require an undertaking as to damages from the DPP, in the context of the application for an unexplained wealth declaration. In informing myself of the principles applicable to that question, it seems that prior cases, whilst of some assistance, do not replicate the rather unique fact situation before me, in which freezing orders are sought exclusively upon the basis of the DPP's pending application for an unexplained wealth declaration.
23 In this case the defendant has not been charged with, let alone convicted of, any offence. She was, of course, the subject of an examination before a registrar of this court on 5 and 6 July 2012. But that is all.
24 I also take into account the fact that there is a considerable potential for interim harm arising from property freezing orders of this nature. That, I do not apprehend to be disputed as a matter of concept. It is a live consideration, particularly in respect of the vacant block at Pakenham Street, Mount Lawley, as to which there is some evidence the defendant intended to build a one-storey residence, and had sold another property to obtain funds to implement that proposed redevelopment on the basis that a dwelling would be erected and that she would in due course move in and reside there.
25 The defendant has been prevented from achieving that objective by the freezing orders in place to date. She would continue to be prevented if the orders sought today by the DPP were made. Orders of this kind, tying up land, carry an almost inherent financial prejudice associated with the inability of an owner to deal with their property, either to sell, encumber, or even effectively develop with a view to making some return or profit. That is such an obvious financial prejudice that a court can take
(Page 8)
- cognisance of the effects of sterilisation of real property almost without a need for other evidence.
26 Against that, what is said on behalf of the DPP is that it has assembled a strong case through affidavit materials, particularly as seen in Mr Orsi's two reports. There has then been the examination of the defendant across two days; the onus of proof to justify the defendant's wealth, as has been seen, rests upon her, so that the case, it is said, is a strong one.
27 That may all be so. But, in the end, an undertaking as to damages is a protective measure which may give a defendant who has been made the subject of intrusive restraints some degree of interim protection should the application for an unexplained wealth declaration ultimately fail. That is the first consideration.
28 A second consideration is that these matters will undoubtedly consume some more time before being fully resolved, via a trial. There is a public interest, where such intrusive orders exist, for the matter to be resolved as soon as possible. I do not render any finding that there has been undue delay to date in terms of how this matter has proceeded. But the fact is that this matter was commenced over a year ago, in June 2011. Only today am I asked to make programming orders as regards a hearing of the unexplained wealth declaration application.
29 The practical reality is that these applications do take some time to be prepared and to be resolved. For as long as this application remains unresolved, it is in the public interest, in my view, that there be some inducement for the DPP towards a timeous resolution. There should not be an open-ended or unqualified period within which property can be tied up without some countervailing constraint. One such inducement is an undertaking as to damages.
30 It is important for this case particularly - where there are, as against this defendant, no criminal charges pending, no conviction, and not even a nexus suggested between the three properties frozen and a crime (or even a nexus between the properties and the defendant's alleged unexplained wealth) - that there be some modest element of protection against delays and an incentive for timeous progress of the action to a resolution. If the unexplained wealth case is as strong as the DPP suggests, then, upon its projected success at trial, the DPP's undertaking as to damages would not be called upon. On the other hand, if the outcome at trial were different, there is at least a modicum of protection for this defendant if she can
(Page 9)
- prove a consequential financial loss arising from the freezing order's adverse effects to then.
31 The situation overall calls here for an appropriate check against what are draconian measures now being brought to bear against this defendant's property (see the comments of the plurality in Mansfield [24] - [25] and [50]). The situation calls for a small counterbalance by reason of the defendant's interim exposure to damage. That is appropriate, in my view.
32 That is not to say that it would be appropriate in every case. I could, for instance, envisage some situations of a pending application for an unexplained wealth declaration, where there is also a proven direct nexus between properties sought to be frozen and the unexplained wealth; a link that is not yet shown in present circumstances as between the properties the subject of these freezing orders. In the present case, there is simply a forensic accountant's assessment that there is wealth of the defendant which is prima facie unexplained, with the shifting of the onus of proof to her, under s 12(2), to justify her wealth. She must do that in due course at a trial. But this is a case where it is appropriate to afford a small measure of protection to the defendant by the DPP's undertaking as to damages, offering her some protection should she ultimately prevail.
33 I am of the view that there is a basis for the freezing orders now sought to be made, subject to a termination of all previous freezing orders (which I understand to be accepted on behalf of the DPP), and subject to the Court receiving the undertaking as to damages from the DPP, in usual terms, pending determination of the application for an unexplained wealth declaration against the defendant.
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