Hart v Commonwealth Director of Public Prosecutions

[2007] HCATrans 694

[2007] HCATrans 694

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane  No B35 of 2007

B e t w e e n -

STEVEN IRVINE HART

Applicant

and

COMMONWEALTH DIRECTOR OF PUBLIC PROSECUTIONS

Respondent

GUMMOW J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

FROM CANBERRA BY VIDEO LINK TO BRISBANE

ON FRIDAY, 16 NOVEMBER 2007, AT 1.24 PM

Copyright in the High Court of Australia

MR P.J. DAVIS, SC:   I appear with MS E.J. LONGBOTTOM for the applicant.  (instructed by Ryan & Bosscher)

MR P.J. FLANAGAN, SC:   I appear with MS J.S. BRIEN for the respondent.  (instructed by Commonwealth Director of Public Prosecutions (Brisbane Office))

GUMMOW J:   Yes, Mr Davis.

MR DAVIS:   Your Honours, as well as the application book, the Court should have an amended draft notice of appeal and should also have a copy of a recent decision of the Court, namely, Director of Public Prosecutions (Vic) v Le which was handed down two days ago and which cites with approval the Queensland Court of Appeal decision against which I seek special leave. 

The point on the present applications is a very narrow one. Section 121 of the Proceeds of Crime Act 2002, which is reproduced in paragraph [39] at page 21 of the application book, provides that a court can assess a pecuniary penalty amount by assessing the value of the proceeds which the offender obtains from criminal activity. There is a time limit to the criminal activity which the court can take into account and the critical issue is whether the restraining order which was obtained in this matter covers any of the property of the respondent to the pecuniary penalty application, namely, Mr Hart.

The operative and important parts of the restraining order are set out at page 5 of the application book and that is in the judgment of the District Court.  Your Honours will see the operative parts of the order commence at about line 20 on page 5.  So the restraining order was obtained over some aircraft and the motor vehicle which was property of a company called Flying Fighters Pty Ltd.

GUMMOW J:   Look, we know all this, Mr Davis.  We do read the papers before we come here.  What we want you to tell us if you can is, what is the error in the construction adopted in the Queensland court, in particular, by Justice Keane?  You have to take us to the particular paragraphs, to the statutory text and to show us to a sufficient degree of doubt what is wrong with his Honour’s reasoning.

MR DAVIS:   Yes.  The difficulty with his Honour’s reasoning is this, that section 17 of the Act provides for restraining orders.  Section 17(1) - ‑ ‑

GUMMOW J:   That is set out at page 17?

MR DAVIS:   Yes, your Honour.

GUMMOW J:   Yes.

MR DAVIS:   Now, our submission is simply this, that the restraining order under the scheme of the Act has two functions.  Its first function is to act as an injunction.  The second is to act as a trigger to forfeiture.  Under section 17 property must “not be disposed of or otherwise dealt with by any person”.  That is the injunctive nature of the restraining order.  By section 17(2), the property over which the restraining order operates is the property specified in the order.  So our submission is that the property specified in the order is the property which ought not be dealt with, disposed of, et cetera. 

Our submission is then, that property of a third party in whom the suspect here, Mr Hart, has an interest, it is the property of the third party which is restrained under section 17.  He may have an interest in that property but that property is not covered by the restraining order because the restraining order does not on its terms or by section 17 prevent dealing with that property, namely, the interest of the suspect.  To put it in the context of the facts of this case, Mr Hart is a discretionary beneficiary of a trust and the property which is restrained is held pursuant to that trust.  There is nothing in the restraining order which prevents him dealing with his interest.  He could, for instance, assign whatever property he has as a discretionary beneficiary and there is nothing in the restraining order which prevents that. 

The error made in the Court of Appeal, we submit, is this.  Can I take your Honours perhaps to the passage of Justice Philippides which was approved in Director of Public Prosecutions v Le?

GUMMOW J:   Where is that approval?  Which footnote?

MR DAVIS:   Footnote [55] in Le, which was at paragraph 83.  I am sorry, could your Honours please go to paragraph 17 of Le.

GUMMOW J:   Yes.

MR DAVIS:   We submit that misunderstands the nature of a restraining order and the operation of restraining order under the Act because what her Honour then says at that ‑ ‑ ‑

GUMMOW J:   Do you also go to paragraph 83?  That would be more helpful.  That is the majority judgment.

MR DAVIS:   Yes.

GUMMOW J:   To the same effect though, is it not?

MR DAVIS:   It is to the same effect, yes.  The distinction though is this, in our submission, that under the Victorian legislation section 29 creates the offence of contravention of a restraining order.  It says this:

A person who knowingly contravenes a restraining order by disposing of, or otherwise dealing with, an interest in property to which the order applies –

and that is a reference to the restraining order.  So what the Victorian legislation does is, in our submission, create an avenue for a restraining order over property, and that is, no doubt, the physical thing, but then also provides that it is an offence to deal with an interest in that property.  Our submission is that the Commonwealth legislation does not do that.  What the Commonwealth legislation does is to provide for a restraining order over property but does not provide for a restraint in dealing with existing interests in that property.  If we then go to what Justice Philippides said in the judgment below, her Honour says:

If a restraining order were not to extend to all interests in the property specified in the order, it could be rendered nugatory by the simple expedient of disposing of or otherwise dealing with the equitable interests in the property.

If it was the case that there was a piece of property that was both legally and beneficially owned by the respondent to the restraining order, then a disposal of an interest in the property would clearly breach the restraining order.  However, if, as in this case, the property is legally owned by the company on trust, so that there is an interest vested in Mr Hart before the restraining order is granted, then he is not restrained from dealing his interest in the property.

Section 37 of the Commonwealth legislation can be contrasted with section 29 of the Victorian legislation.  Section 37 deals with contravening restraining orders and says:

A person is guilty of an offence if:

(a)the person disposes of, or otherwise deals with, property; and

(b)the person knows that, or is reckless as to the fact that, the property is covered by a restraining order –

Our submission is that the property referred to there is the property restrained and not every interest in it.  If we are right in that contention, then

our submission is that under section 121 the interests which Mr Hart holds in the property is not covered by the restraining order. They are our submissions.

GUMMOW J:   Thank you.  We do not need to call on you, Mr Flanagan. 

The construction applied to the legislation, particularly in the judgment of Justice Keane in the court below, is correct and, accordingly, there are no prospects of success on any appeal.  Special leave is refused. 

Is there any questions as to costs?

MR FLANAGAN:   We would ask for costs, your Honours.

GUMMOW J:   Anything you say about that, Mr Davis?

MR DAVIS:   I cannot oppose them.

GUMMOW J:   Refused with costs, thank you.

AT 1.37 PM THE MATTER WAS CONCLUDED