Dpp (Cth) v Loades - [2004] SADC 158

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
DPP (CTH) v LOADES
Reasons for Decision of His Honour Judge Muecke
10 November 2004
STATUTES
INTERPRETATION
Construction of the Proceeds of Crime Act 2002 (Cth) - purpose of Act - proceeds gained from criminal activities - confiscation of property - processes relating to confiscation.
Whether s39(1) of the Act empowers the court to order the Defendant to give a sworn statement setting out particulars of, or dealings with, all of his real and personal property of every description, and not limited to his property the subject of a restraining order.
HELD: S39(1) of the Act empowers the court to order that the Defendant give a sworn statement as to all of his property, not confined to restrained property.
Proceeds of Crime Act 2002 (Cth) ss5, 6, 7, 8, 18, 19, 39(1), 180, 196, 197, referred to.
Leon Fink Holdings Pty Ltd v Australian Film Commission (1979) 24 ALR 513, 519, considered.

DPP (CTH) v LOADES
[2004] SADC 158

This judgment concerns the Proceeds of Crime Act 2002 (Cth) (“the Act”) and its construction.
When the Proceeds of Crime Bill 2002 was introduced in the Commonwealth Parliament a general outline to the Bill included the following:
The purpose of the Proceeds of Crime Bill is to prevent criminals from being able to enjoy the fruits of their crimes, by depriving them of the proceeds and benefits gained from criminal conduct, and to prevent the re-investment of those proceeds and benefits in further criminal activities. The Bill also enables the freezing and confiscation of property used in, intended to be used in or derived from terrorism offences. It implements Australia’s obligations under the International Convention for the Suppression of the Financing of Terrorism and resolutions of the United Nations Security Council relevant to the seizure of terrorism related property.
Strong and effective action to confiscate proceeds of crime assists in attacking the profit-motive of organised crime, including illicit activities involving drug trafficking, people smuggling, money laundering and large-scale fraud.
The Bill proposes a civil forfeiture regime, that is, a regime directed to confiscating unlawfully acquired property, without first requiring a conviction. That new regime will operate in addition to the conviction-based confiscation regime.
The procedures for civil forfeiture will enable confiscation by a simpler civil process, where a court decides whether it is more probable than not that a person committed a serious offence and that property has been derived from that conduct, without first needing a criminal prosecution leading to a conviction before that property can be confiscated. A person will have the opportunity to prove to the court that his or her assets were lawfully derived; if such proof can be provided, those assets will not be forfeited. The civil forfeiture regime will operate in parallel with the existing conviction-based regime.
S5 of the Act sets out its principal objects. They are:
(a)to deprive persons of the *proceeds of offences, the *instruments of offences, and *benefits derived from offences, against the laws of the Commonwealth or the *non-governing Territories; and
(b)to deprive persons of *literary proceeds derived from the commercial exploitation of their notoriety from having committed offences; and
(c)to punish and deter persons from breaching laws of the Commonwealth or the non-governing Territories; and
(d)to prevent the reinvestment of proceeds, instruments, benefits and literary proceeds in further criminal activities; and
(e)to enable law enforcement authorities effectively to trace proceeds, instruments, benefits and literary proceeds; and
(f)to give effect to Australia’s obligations under the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime, and other international agreements relating to proceeds of crime; and
(g)to provide for confiscation orders and restraining orders made in respect of offences against the laws of the States or the *self-governing Territories to be enforced in the other Territories.
*To find definitions of asterisked terms, see the Dictionary, at section 338.
Part 1-3 of the Act provides an outline of the Act. Ss6, 7 and 8 provide as follows:
6 General
This Act establishes a scheme to confiscate the proceeds of crime.
It does this by:
(a)setting out in Chapter 2 processes by which confiscation can occur; and
(b)setting out in Chapter 3 ways in which Commonwealth law enforcement agencies can obtain information relevant to these processes; and
(c)setting out in Chapter 4 related administrative matters.
It concludes with miscellaneous provisions and with definitions and other interpretive material.
7 The confiscation scheme (Chapter 2)
Chapter 2 sets out 5 processes relating to confiscation:
(a)restraining orders prohibiting disposal of or dealing with property (see Part 2-1); and
(b)forfeiture orders under which property is forfeited to the Commonwealth (see Part 2-2); and
(c)forfeiture of property to the Commonwealth on conviction of a serious offence (see Part 2-3); and
(d)pecuniary penalty orders requiring payment of amounts based on benefits derived from committing offences (see Part 2-4); and
(e)literary proceeds orders requiring payment of amounts based on literary proceeds relating to offences (see Part 2-5).
8Information gathering (Chapter 3)
Chapter 3 sets out 5 ways to obtain information:
(a)examining any person about the affairs of people covered by examination orders (see Part 3-1); and
(b)requiring people, under production orders, to produce property-tracking documents or make them available for inspection(see Part 3-2); and
(c)requiring financial institutions to provide information and documents relating to accounts and transactions (see Part 3-3); and
(d)requiring financial institutions, under monitoring orders, to provide information about transactions over particular periods (see Part 3-4_; and
(e)searching for and seizing tainted property or evidential material, either under search warrants or in relation to conveyance (see Part 3-5).
As indicated Chapter 2 of the Act provides for the confiscation scheme. Part 2-1 of that chapter provides for restraining orders. A simplified outline of that part states:
Restraining orders can be made against property, in relation to certain offences, on grounds that relate to possible forfeiture or confiscation orders relating to those offences. (There is not always a requirement that a person has been convicted of such an offence.)
Division 1 of Part 2-1 requires or empowers a court to make restraining orders in a variety of circumstances. The Director of Public Prosecutions (“DPP”) may apply for restraining orders.
By ex parte Summons filed in this court on 26 August 2004 the DPP applied for a number of orders pursuant to the Act. He requested the court to consider the application without notice having been given to any person (see s26(4), Division 2 Part 2-1 of the Act). The defendant to the Summons was Caleb John Loades (“the defendant”). The DPP sought restraining orders pursuant to s18 and s19 of the Act, examination orders for the examination on oath of the defendant and the defendant’s brother, and other orders. The examination orders were sought pursuant to s180 of the Act.
The orders sought by the DPP were supported by affidavit as is required for an order sought pursuant to s18 of the Act (ss(3)) and for an order sought pursuant to s19 of the Act (ss(1)(e)). That was an affidavit of Wendy Lorraine Quinn sworn 26 August 2004. Ms Quinn is a customs officer of the Australian Customs Service. In her affidavit she set out her reasons for suspecting that the defendant had, within six years preceding the application, committed indictable offences against the laws of the Commonwealth including certain offences which are “serious offences” as defined by s338 of the Act. She identified a number of “serious offences” of Opening and Operating a False Name Bank Account. Ms Quinn further swore that she suspected that certain property identified in Schedule 1 to a Notice for Specific Directions filed with the DPP’s ex parte Summons is proceeds of crime as defined by and for the purposes of the Act, namely property derived from the commission of indictable offences against the Commonwealth. She set out information upon which she formed such a suspicion. That included the interception by the Australian Customs Service of a parcel purportedly containing nutritional supplements from Canada addressed to the same false name as she suspected the defendant having used to open and operate bank accounts comprising the alleged “serious offences” to which she had earlier referred. The parcel was alleged to have been found to contain ephedrine having a purity of between 40% and 50%. Ms Quinn referred to other documentation having been seized from the defendant and answers the defendant had given to officers of the Australian Customs Service to questions put to him in the course of the execution of a search warrant at the defendant’s residential premises. She referred to the execution of a search warrant on 12 August 2004 on a safety deposit box, the key to which had been located in the defendant’s motor vehicle. The search revealed cash in the sum of AUD$235,000 and various documents relating to mail boxes in the same allegedly false name used by the defendant.
Other detailed information was referred to in the affidavit as to banking transactions allegedly conducted by the defendant and suspected prior importations of ephedrine from Canada by the defendant in 1998. The affidavit also referred to “legitimate sources of income” of the defendant and, in particular, referred to information from the Australian Taxation Office for the financial years ending June 2001 and June 2002 which showed very modest income. The affidavit also referred to the defendant and his brother becoming registered as joint proprietors of a property in metropolitan Adelaide in April 2001 for consideration of $178,000. The mortgagee had advised that payments in excess of the required mortgage repayments of at least $20,000 had been made since mid-2002. In addition, documentation seized from the defendant’s premises allegedly showed the defendant had expended at least $50,000 in cash on landscaping to those premises.
Ms Quinn swore that, on the basis of the information referred to in her affidavit, she suspected that property specified in Schedule 1 to the application was “proceeds of crime” as defined by the Act, and more particularly that the property had been derived as a result of the commission of Commonwealth indictable offences of importation of prohibited imports within the six years prior to the making of the application. She further suspected that the defendant had committed serious offences of open and operate false name bank accounts and money laundering, contrary to Commonwealth criminal code, in the six years preceding the application. She considered that an examination of the defendant and his brother pursuant to s180 of the Act in relation to the affairs of the defendant would assist investigators in clarifying the source of funds transacted by the defendant and the source from which the property the subject of the application was derived. Ms Quinn swore as to her suspicion that property specified in Schedule 1 to the application was proceeds of crime as defined by and for the purposes of the Act; that the defendant had committed, within the six years preceding the application, certain offences which are “serious offences” as defined by and for the purposes of the Act; and that the property specified in Schedule 2 to the application was property of the defendant.
On 26 August 2004 this court made an order pursuant to s18 of the Act (restraining orders – people suspected of committing serious offences) in respect to the Schedule 2 property, and an order pursuant to s19 of the Act (restraining orders – people suspected of committing indictable offences etc ) in respect to the Schedule 1 property. Further, the court ordered, pursuant to s38 of the Act, that the Official Trustee take custody and control of the property specified in Schedule 1 until further order and that the defendant deliver up or cause to be delivered to the Official Trustee certain of the property in that schedule. Further, the court ordered, pursuant to s180 of the Act, that the defendant and his brother be examined about the affairs (including the nature and location of any property) of the defendant.
On 10 September 2004 the defendant was served with written notice of the restraining orders made by this court on 2 September 2004, together with a copy of the order, application and supporting affidavits.
By Notice for Specific Directions filed in this court on 27 September 2004 the DPP applied to the court to vary its order of 2 September 2004 insofar as that order was made pursuant to s19 of the Act. That variation was sought pursuant to s39(1)(a) and (presumably) (b) of the Act. These variations were made by the court on 30 September 2004 without opposition by the defendant.
The DPP sought a further variation of the court’s order of 2 September 2004 by seeking an order in the following terms:
An order pursuant to section 39(1) of the Act that the Respondent shall furnish to the Applicant, within 28 days from the making of this order, a statement of affairs verified by oath or affirmation of the Respondent setting out the nature, location and value of all real and personal property of every description, including monies, securities and loans, whether located in Australia or elsewhere, in which the Respondent has, or during the last 3 years has had, any legal, beneficial or equitable interests, or which he controls, or during the last 3 years has controlled, together with particulars of all dealings with the said property.
The defendant opposed a variation in these terms.
S39(1)(d) of the Act provides that “a court that made a restraining order, … may make any ancillary orders that the court considers appropriate and, without limiting the generality of this, the court may make … an order directing the owner of the property … to give a sworn statement to a specified person, within a specified period, setting out particulars of, or dealings with, the property”. The order sought by the DPP pursuant to s39(1) of the Act is, of course, wider than the specific power provided in s39(1)(d) of the Act. It would, however, on the face of it, fall within the general power of the court to make any ancillary orders that it considers appropriate, if the court considered such an order as sought by the DPP to be appropriate as ancillary to the restraining orders made by the court pursuant to ss18 and 19 of the Act.
The issue before me was whether an order in the terms sought by the DPP was authorised by s39(1) of the Act. This issue included the question whether or not the court was empowered by s39(1) only to make orders ancillary to a restraining order that were confined only to property which was the subject of the restraining order. The defendant submitted that s39(1)(d) of the Act empowered the court to make an order directing him to give a sworn statement to a specified person within a specified period setting out particulars of, or dealings with, the property the subject of the restraining orders under ss18 and 19 of the Act, but that the general power under s39(1) did not empower the court to make a “wider” order requiring him to set out particulars of, or dealings with, all property in respect of which he had, in the last three years, any legal beneficial or equitable interest, or which he controlled during that period, together with particulars of all dealings with such property. It was submitted that an order of that type would abrogate or curtail the Defendant’s fundamental rights or freedoms. It was submitted that -
… courts do not impute to the legislature an intention to abrogate or curtail fundamental rights or freedoms unless such an intention is clearly manifested by unmistakable and unambiguous language. General words will rarely be sufficient for that purpose. What courts will look for is a clear indication that the legislature has directed its attention to the rights or freedoms in question, and has consciously decided upon abrogation or curtailment. (Coco v R (1994) 179 CLR 427 at 437) As Lord Hoffmann recently pointed out in the United Kingdom, (R v Home Secretary; Ex parte Simms [2000] 2 AC 115 at 131) for parliament squarely to confront such an issue may involve a political cost, but in the absence of express language or necessary implication, even the most general words are taken to be ‘subject to the basic rights of the individual’. (see also Annetts v McCann (1990) 170 CLR 596 at 598) (S157/2002 v CTH (2003) 195 ALR 24, at para 30 (Gleeson CJ)).
It was further submitted on behalf of the defendant that the scheme of the Act did not support the construction of s39(1) of the Act contended for by the DPP. It was submitted that that section was part of the confiscation scheme part of the Act dealing with the making of restraining orders and orders ancillary to them. It was submitted that there was another part of the Act dealing with information gathering. Provisions of that part of the Act empowered courts to make orders for the examination of any person about the affairs of a person whose property is the subject of a restraining order, including the nature and location of any property of that person. Such provision is contained in s180 of the Act.
In this matter the court has made an order pursuant to s180 of the Act and has ordered that the defendant and his brother “be examined about the affairs (including the nature and location of any property)” of the defendant. That order has not been challenged by the defendant. It was not submitted before me on behalf of the defendant that “any property” referred to in s180 of the Act, and in the order made by this court pursuant to that section, was confined to property which was the subject of restraining orders the court made pursuant to ss18 and 19 of the Act. It was conceded on behalf of the defendant that he can, pursuant to the order made, be examined about his affairs in respect of the nature and location of any of his property, not just property that is the subject of restraining orders. It was submitted, however, that that was consistent with the scheme of the Act which provided for information gathering in respect of all property. It was further submitted that the information gathering part of the Act included specific reference to protections against self incrimination and otherwise (including legal representation and legal professional privilege).
However, it was submitted on behalf of the defendant that s39(1) of the Act did not authorise a court to order the defendant to provide a statement of his affairs generally. The provision of a statement of affairs pursuant to s39(1) of the Act was limited to property in respect of which there was a restraining order because only such an order was ancillary to the restraining order.
There is some force in the arguments that were put to me on behalf of the DPP and the defendant for the construction of s39(1) of the Act that was contended for by each.

The information gathering provisions of the Act, and in particular the power to examine the defendant about his affairs (including the nature and location of any of his property), is indicative, in my view, that the Parliament intended to empower the authorities with wide investigation powers effectively to trace the fruits or proceeds of offences so as to deprive persons of those fruits or proceeds. Inevitably, in my opinion, such tracing will involve enquiries into not only property which may be the subject of a particular restraining order or orders, but also into other property of a person like the defendant in this case. I consider that such is a possibility, even a likelihood, in practically every case.
Furthermore, I note and consider it important that a person whose property is the subject of a restraining order can be examined about any and all of his property and is compelled to answer even where such answer, or where the production of a document, would tend to incriminate him or would otherwise be the subject of legal professional privilege (ss196 and 197 of the Act).
The words used by Parliament in s39(1) of the Act: “without limiting the generality of this” are used in a number of Acts of parliament by which parliament is taken to have indicated an intention not to limit the circumstances in which a court may make orders pursuant to such a provision.
On the other hand, there is force in the defendant’s submission that the order sought by the DPP should not be held to be “ancillary” to the restraining orders made in respect to certain of the defendant’s property because s39(1) of the Act is contained within that part of the Act that deals with the confiscation scheme in relation to property in respect of which a restraining order exists. In my view all the “special” powers contained in s39(1) of the Act seem to relate, in one sense or another, to property in respect of which there exists a restraining order. Accordingly, there is force in the submission that the “general” power in that section should be read down to relate only to that property of the defendant to which the restraining orders relate and not generally.
Furthermore, there is, in my opinion, force in the submission that general words would rarely be sufficient to evince an intention to abrogate or curtail fundamental rights or freedoms. I consider, however, that the force of such a submission is considerably weakened when one considers precisely what fundamental rights or freedoms would be abrogated if a wide construction is given to s39(1) of the Act. There seems little doubt that other provisions of the Act abrogate rights against self-incrimination and the right to claim legal professional privilege. An examination about, or a statement of affairs in respect of, restrained property is much more likely to be an occasion when a person the subject of examination or the person making the statement would wish to refuse to answer on the grounds of self-incrimination, or to claim legal professional privilege, rather than when being examined or making a statement of affairs about legitimately obtained or held property. There is doubt that s39(1)(d) empowers a court to require the defendant to give a sworn statement setting out particulars of, or dealings with, his restrained property.
It is sometimes asserted that fundamental rights or freedoms are abrogated when it is not at all clear what such rights or freedoms are. A number of legislative provisions require citizens to disclose their income, assets, other property, and dealings in such properties.
The construction of a provision such as s39(1) of the Act will depend on the precise character of the provision and on the context in which it is found. In Leon Fink Holdings Pty Ltd v Australian Film Commission (1979) 24 ALR 513 the High Court considered a provision in the Australian Film Development Corporation Act 1970 (Cth) which empowered the Corporation “to do all things necessary or convenient to be done for or in connexion with the performance of its functions and, without limiting the generality of the foregoing, had power – (a) to make loans on such terms and conditions, including conditions are to repayment of interest, as the Corporation thinks fit, to producers of Australian films …”. The High Court considered whether such a provision empowered the Corporation to lend money to a person who was not the producer of Australian films, so long as the purpose of the lending was to encourage the making or the distribution of Australian films. The High Court held that the words “without limiting the generality of the foregoing” “evince an intention that the general power should be given a construction that accords with the width of the language in which it is expressed and that this construction (empowering the Corporation to make loans to persons other than producers of Australian films) is not to be restricted by reference to the more specific character of that which follows”. The presence of the specific power did not negative the more general power (see Mason J at page 519). Mason J said further, at page 519:
I do not wish to be taken as suggesting that a clause of this kind will always be effective to prevent the making of a restrictive implication derived from the presence of a specific power which is expressed to be subject to limitations, qualifications, restrictions or conditions. In every case it will depend on the precise character of the relevant provisions and on the context in which they are found. Here it is only the limitation on the specific power to lend which confines it to the making of loans to producers of Australian films that is relied upon to restrict the general power, or to inhibit resort to it, as authority for lending to others. To my mind this is not a sufficiently solid basis for restricting the general power or denying its availability, when it is followed by a clause whose purpose is to ensure that the presence of the particular powers does not erode the generality of the initial grant of power.
Aickin J said, at page 519:
The formula “without limiting the generality of the foregoing” has been extensively used in Commonwealth legislation and regulations, but so far as appears it has not previously been the subject of judicial consideration in Australia. At first sight it would appear to indicate a parliamentary intention that the general words which precede the expression should be construed as if the more particular words which follow were not there. That, however, is too wide a proposition for in every case it must depend on the whole of the context. In some cases the particular words which follow may be such as necessarily to indicate an intention to restrict the operation of the preceding general words. In each case it will be a matter requiring examination of the actual words used, both general and particular, as well as the context as a whole.
Aicken J concluded that the particular power to make loans to producers of Australian films cannot in its context exclude powers to make all other loans of money.
I have come to a similar conclusion in this matter. In my view, both the purpose of the Act, its specific objects, and the investigative powers its provides to the authorities, support a construction of s39(1) of the Act which would empower the court to order the defendant to verify a statement of all his property for a certain period prior to any application by the DPP. Such a conclusion would, in my view, be consistent with the overall scheme of the Act and its objects.
I do not consider that the context in which s39(1) of the Act is found militates against my conclusion. There is some force in the submission that the information gathering procedures are wide in order to provide a basis for and leading to applications for restraining orders and thereafter forfeiture orders. The investigative powers need to be broad to encompass all property whilst the confiscation scheme is necessarily narrower.
But the practicalities for law enforcement agencies, and in particular for the DPP, are such that there is no reason in principle for the process necessarily to take such a form. I see no reason in principle why restraining orders should not be made, as they were here, before resort is had to examinations pursuant to s180 of the Act. I consider that in this context an order for a statement of affairs of the type sought by the DPP can properly be characterised as an order ancillary to a restraining order. I consider that the court is, by the words “without limiting the generality of this” in s39(1) of the Act, empowered to make an order of that type which is not confined to restrained property.
There remains the issue as to whether I should make an order in terms sought by the DPP or in some other terms.
It was submitted that the DPP had not discharged the onus on it to satisfy me on affidavit evidence that an order in the terms sought, or in terms similar to that sought, should be made. I do not agree. I consider that the affidavit evidence that the DPP filed on his original application, with the affidavit evidence filed subsequently, supports the making of an order of the type sought by the DPP.
I order that the Defendant give to the DPP, within 28 days from the making of this order, a sworn statement setting out particulars of, or dealings with, all real and personal property of every description, including monies, securities and loans, whether located in Australia or elsewhere, in which the Defendant has, or during the last three years has had, any legal, beneficial or equitable interest, or which he controls, or during the last three years has controlled, together with particulars of all dealings with the said property, and together with particulars of the nature, location and value of the said property.