Hoddy v Director of Public Prosecutions for Western Australia
[2007] WASC 7
•11 JANUARY 2007
HODDY & ANOR -v- DIRECTOR OF PUBLIC PROSECUTIONS FOR WESTERN AUSTRALIA [2007] WASC 7
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2007] WASC 7 | |
| Case No: | CIV:2049/2002 | 23 NOVEMBER 2006 | |
| Coram: | SIMMONDS J | 10/01/07 | |
| 28 | Judgment Part: | 1 of 1 | |
| Result: | Applications granted | ||
| B | |||
| PDF Version |
| Parties: | LESLIE THOMAS HODDY GAVIN LEIGH-BRENTON SMITH DIRECTOR OF PUBLIC PROSECUTIONS FOR WESTERN AUSTRALIA DIRECTOR OF PUBLIC PROSECUTIONS |
Catchwords: | Criminal law Confiscation of property Application to uplift documents and records on court file Difficulty caused by creation of separate court file for objection to freezing order Issues of confidentiality Turns on own facts Criminal law Confiscation of property Application for variation to freezing order to make provision for legal expenses Turns on own facts Criminal law Confiscation of property Undertaking for damages No proceeding taken under Criminal Property Confiscation Act 2000 (WA), s 30 Delay largely unexplained undertaking a condition of continuance of freezing order |
Legislation: | Criminal Property Confiscation Act 2000 (WA), s 8, s 11, s 15, s 30, s 43, s 45, s 70, s 94 |
Case References: | Bennett & Co (a firm) v Director of Public Prosecutions for Western Australia [2005] WASCA 141 Mansfield v Director of Public Prosecutions (2006) 228 ALR 214 The Director of Public Prosecutions for Western Australia v Mansfield [2006] WASC 255 "B" v State of Western Australia [2002] WASC 298 Australian Competition and Consumer Commission v Giraffe World Australia Pty Ltd (1998) 156 ALR 273 Australian Securities and Investments Commission v ACN 102 556 098 Pty Ltd (2003) 48 ACSR 350 Australian Securities and Investments Commission v Mauer-Swisse Securities Ltd (No 2) (2002) 42 ACSR 605 Australian Securities and Investments Commission v Triton Underwriting Insurance Agency (2003) 48 ACSR 249 Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 Director of Public Prosecutions for Western Australia v Gypsy Jokers Motorcycle Club Inc (2005) 153 A Crim R 8 ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248 Re Peters [1988] QB 871 Re the Criminal Property Confiscation Act 2000; Ex parte State Director of Public Prosecutions [2002] WASC 117 The Director of Public Prosecutions for Western Australia v Mansfield [2003] WASC 173 Thompson Australian Holdings Pty Ltd v Trade Practices Commission (1981) 148 CLR 150 Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 200 CLR 591 World Series Cricket Pty Ltd v Parish (1977) 16 ALR 181 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- First Applicant
GAVIN LEIGH-BRENTON SMITH
Second Applicant
AND
DIRECTOR OF PUBLIC PROSECUTIONS FOR WESTERN AUSTRALIA
Respondent
Director of Public Prosecutions for Western Australia against Leslie Thomas Hoddy
EX PARTE
DIRECTOR OF PUBLIC PROSECUTIONS
Applicant
Catchwords:
Criminal law - Confiscation of property - Application to uplift documents and records on court file - Difficulty caused by creation of separate court file for objection to freezing order - Issues of confidentiality - Turns on own facts
Criminal law - Confiscation of property - Application for variation to freezing order to make provision for legal expenses - Turns on own facts
Criminal law - Confiscation of property - Undertaking for damages - No proceeding taken under Criminal Property Confiscation Act 2000 (WA), s 30 - Delay largely unexplained - undertaking a condition of continuance of freezing order
Legislation:
Criminal Property Confiscation Act 2000 (WA), s 8, s 11, s 15, s 30, s 43, s 45, s 70, s 94
Result:
Applications granted
Category: B
Representation:
CIV 2049 of 2002
Counsel:
First Applicant : No appearance
Second Applicant : Ms M E McDiarmid
Respondent : Mr I S Jones
Solicitors:
First Applicant : No appearance
Second Applicant : Dwyer Durack
Respondent : State Director of Public Prosecutions
- <mpr>
CIV 1888 of 2002
Counsel:
Applicant : Mr I S Jones
Solicitors:
Applicant : State Director of Public Prosecutions
Case(s) referred to in judgment(s):
Bennett & Co (a firm) v Director of Public Prosecutions for Western Australia [2005] WASCA 141
Mansfield v Director of Public Prosecutions (2006) 228 ALR 214
The Director of Public Prosecutions for Western Australia v Mansfield [2006] WASC 255
Case(s) also cited:
"B" v State of Western Australia [2002] WASC 298
Australian Competition and Consumer Commission v Giraffe World Australia Pty Ltd (1998) 156 ALR 273
Australian Securities and Investments Commission v ACN 102 556 098 Pty Ltd (2003) 48 ACSR 350
Australian Securities and Investments Commission v Mauer-Swisse Securities Ltd (No 2) (2002) 42 ACSR 605
Australian Securities and Investments Commission v Triton Underwriting Insurance Agency (2003) 48 ACSR 249
Cardile v LED Builders Pty Ltd (1999) 198 CLR 380
Director of Public Prosecutions for Western Australia v Gypsy Jokers Motorcycle Club Inc (2005) 153 A Crim R 8
ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248
Re Peters [1988] QB 871
Re the Criminal Property Confiscation Act 2000; Ex parte State Director of Public Prosecutions [2002] WASC 117
The Director of Public Prosecutions for Western Australia v Mansfield [2003] WASC 173
(Page 4)
Thompson Australian Holdings Pty Ltd v Trade Practices Commission (1981) 148 CLR 150
Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 200 CLR 591
World Series Cricket Pty Ltd v Parish (1977) 16 ALR 181
(Page 5)
- SIMMONDS J:
Introduction
1 There are applications before me in each of these matters, which are under the Criminal Property Confiscation Act 2000 (WA) ("the Confiscation Act"). The applications, as made, are in two parts in each case, in much the same terms.
2 As I will now explain, the applications in fact reduce in substance to a single application.
3 There is an application in CIV 1888 of 2002 seeking two different types of order.
4 One part of the application is for orders for the uplifting of the documents and records on the court file by the solicitors, Dwyer Durack, for Gavin Leigh-Brenton Smith ("Mr Smith"). Mr Smith, although he is not named as a party to that action, is identified in the originating motion for that proceeding as the registered proprietor of certain property ("the Property") forming part of the property the subject of a freezing order made on 27 June 2002 by his Honour Justice McKechnie ("the freezing order"). I describe the Property in more detail below.
5 The freezing order was made under the Confiscation Act, s 43, on the bases, that an examination order was in force in relation to the property the subject of the order, and that the Director of Public Prosecutions ("the DPP") had advised the Court that, within 21 days of the orders, an application was likely to be made for an explained wealth declaration order and for a criminal benefits order. These orders would be sought against Leslie Thomas Hoddy ("Hoddy"). Hoddy died on 21 January 2005, a matter of some significance to the present applications, on the respondent's submissions.
6 The written submissions prepared for Mr Smith for the hearing before me refer to a notice of objection by Mr Smith to the freezing order that was prepared for and intended to be filed in CIV 1888 of 2002. However, "for some unknown reason" that filing did not occur. Rather, the notice was filed in CIV 2049 of 2002. In fact the latter file appears to indicate, as I will shortly explain, that the notice of objection was prepared for Hoddy only, as a notice of originating motion. Mr Smith was added as second applicant to that process by order of Pullin J (as he then was) on 8 August 2002. Why the notice of originating motion was filed in CIV 2049 of 2002, rather than CIV 1888 of 2002, will shortly appear.
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7 The first part of the application before me in relation to CIV 1888 of 2002 was apparently to enforce the common law right of a party to access the documents in a court file which has been said to be assumed by O 67 r 11: see Seaman Civil Procedure in Western Australia at [67.11.3], and Bennett & Co (a firm) v Director of Public Prosecutions for Western Australia [2005] WASCA 141, at [23].
8 The second part of the application in CIV 1888 of 2002 is for orders to vary the freezing orders to permit the use of the property the subject of the freezing order. This variation is to release the property the subject of the orders to pay for the legal expenses of Mr Smith in relation to those proceedings. This part of the application also seeks an undertaking as to damages by the DPP. The basis for this undertaking is the power to withhold a freezing order, or remove an order, unless an undertaking is provided.
9 I put aside the incidental orders also sought in the application.
10 The second part of the application I have referred to is brought on the authority of Mansfield v Director of Public Prosecutions (2006) 228 ALR 214 (HCA), which on my understanding of it referred the power of the court to vary or remove a freezing order in the respects indicated to s 43 of the Confiscation Act, read with s 45 of that Act and s 48 of the Interpretation Act 1984 (WA).
11 The application in CIV 1888 of 2002 was first heard by me on 6 November 2006.
12 The application under CIV 2049 of 2002 was before me in the same hearing. That application sought orders for the uplifting and copying of documents on that file in the same form, mutatis mutandis, as for that part of the application in CIV 1888 of 2002. The application also sought the same orders as to the freezing order as that part of the application in CIV 1888 of 2002.
13 CIV 2049 of 2002 is proceedings commenced by notice of originating motion dated 25 July 2002 in which objection was taken by Hoddy to the freezing order. Mr Smith was added as second applicant not long afterwards as I have indicated. An order for directions was made by his Honour Justice E M Heenan on 29 May 2003, to which I will return. There was virtually no other paper added to the file, except for a notice of change of solicitor for Mr Smith, filed on 31 August 2006, until the filings for the hearing before me on 6 November 2006.
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14 Following the hearing of 6 November 2002, consent orders dated 9 November 2006 were made in the applications on the two files I have referred to. The principal orders were:
• That the documents and records on the court file for CIV 1888 of 2002 be inspected by legal practitioners employed by the solicitors for Mr Smith;
• That those legal practitioners undertake to keep the content of those documents and records confidential, except for the content of documents provided by the Director of Public Prosecutions for Western Australia to the solicitors for Mr Smith, until further order; and
• The applications in CIV 1888 of 2002 and CIV 2049 of 2002 be adjourned to what became the hearing of 23 November 2006, with certain programming orders.
15 I note that, for the hearing of 6 November 2006, a set of submissions for Mr Smith in relation to the application in CIV 1888 of 2002 was filed and served, and a set of "further" submissions was filed and served for the later hearing before me. No set of submissions for Mr Smith was filed and served in relation to the application in CIV 2049 of 2002, however, for either hearing.
16 For the DPP, there were no submissions filed and served in relation to the application in CIV 1888 of 2002, nor were any filed and served in relation to the application in CIV 2049 of 2002 for the hearing on 6 November 2002. However, there were submissions for the DPP, in relation to the second part (only) of the application in CIV 2049 of 2002, filed and served for the later hearing before me.
17 I have noted this somewhat tortuous history, of what in substance is before me today as a single application in relation to the documents on the file for, and the freezing order in, CIV 1888 of 2002, to indicate the difficulties created by two files in what is in essence one matter. I am informed by the Registry of the Court that the creation of a separate file for objections to freezing orders under the Confiscation Act was the procedure followed at the time of the opening of those files. Since 2004 a single file, with a CPCA identifier, has been the procedure. Where since then an objector has proceeded by originating motion a new file has been created. However, in such a case a consolidation of the files could be ordered. Where, as will often be the case in these matters, the applicant
(Page 8)
- parties to the matters are different, consequential orders for joinder could be made.
18 The difficulty to which separate files can lead emerges from a reading of the submissions for Mr Smith, who is not named as a party to CIV 1888 of 2002, but who is without doubt an interested party who would have standing to seek an order under O 58 r 23 to seek to have the freezing order set aside: Bennett & Co (supra) at [24], [43], [62] and [63].
19 At the same time, however, whether or not such files are consolidated, there are important matters of access to and copying of documents in the file or files which arise in cases such as these. As a result of conclusions arrived at by agreement at the hearing, I am able to be fairly brief in my treatment of those matters. I deal with the relevant part of the application, what I call its first part, before I turn to the matters of the undertaking as to damages and provision for legal costs.
Uplifting and copying documents in the file
20 I begin by noting that no argument was addressed to me by either party as to the contents of the file in CIV 2049 of 2002. I took that to indicate that application was not now pressed.
21 As I understood the position taken by the Director of Public Prosecutions, it was not contended that the solicitors for Mr Smith and their client could not uplift and copy those contents of the file for CIV 1888 that were relevant to the objection by Mr Smith to the freezing order. However, the DPP required an identification of what those contents were said to be, and if necessary the establishment of their relevance.
22 Counsel for the DPP noted there were many documents on the file for CIV 1888 of 2002, which, unlike the file for CIV 2049 of 2002, was substantial. Many of those documents, it was said, went to proceedings in that matter that on no view would be relevant to the objection. I was provided with a list of documents in CIV 2002 grouped under headings by the types of order applied for which it was said showed this. I am prepared so to conclude for the purposes of this part of the application.
23 I was reminded of the provisions and policy of the Confiscation Act, s 70, which prohibits disclosure of certain matters by any "person". Those provisions and that policy made the possibility of such disclosures a matter of public concern. I am prepared to consider that there is a basis
(Page 9)
- for particular concern in this respect in the case of Mr Smith, at least unless he were carefully and repeatedly advised about s 70. I note his affidavit sworn on 27 June 2003 in CIV 2049 of 2002 in support of his objection to confiscation of property. That affidavit refers to his having a mental disability which "affects my memory, comprehension and attention span" (par 2). That affidavit also refers to the fact he relies "a lot" on his mother, Patricia Smith, and his father, Hoddy, in his "everyday life, especially to do things involving paperwork, banking, medical treatment and other personal errands" (par 3).
24 There is also authority on the Confiscation Act which supports the view that orders might be made, at the instance of the DPP, to prohibit access to documents or parts of them in a file, at least where disclosure to the party would be injurious to the public interest and where access to the matter by the party if not by its legal representative would not be required under the principles of natural justice in relation to a party's objection to a freezing order: see Bennett & Co (supra), at [45] and [87].
25 Counsel for Mr Smith submitted that the burden should not be placed on it to identify as relevant any documents or parts of them, and that he and his legal representatives should have access to all of the documents on the file. I understood that, in relation to the particular position of Mr Smith, this should include his mother. In addition, it was said, it was appropriate to release his legal representatives from their undertakings in the consent orders of 9 November 2006.
26 Both counsel confirmed that they considered the orders to be made on this, the first, part of the application to be matters for the exercise of my discretion, bearing in mind the considerations which they respectively pressed.
27 During the course of argument, I indicated to the parties that I was attracted to a form of orders which would allow for the uplifting and copying of all of the documents on the file by Mr Smith's legal representatives and release of those representatives from their undertaking referred to. However, that form or orders might respond to the concern for injury to the public interest I have referred to in the following way.
28 The form of order might be that the documents and records on the court file in CIV 1888 of 2002 be uplifted by Mr Smith's legal representatives and might be photocopied. The order of 9 November 2006 to keep the content of the documents inspected on that court file confidential might be vacated. However, Mr Smith's legal representative
(Page 10)
- should give undertakings to the Court not to provide the content of any of these documents to any person other than the following persons, and then only for the purposes of these proceedings, and with the saving indicated. Those persons would be counsel, Mr Smith and his mother. The saving on provision to those persons would be that no such provision might be made if Mr Smith's solicitors had reason to believe that counsel, Mr Smith or his mother would disclose any information obtained as a result of such provision for a purpose other than for the conduct of these proceedings or in breach of s 70 of the Confiscation Act. Of course access to the file is for the purpose of the conduct of the proceedings, not for any other purpose, and no disclosure could be made by the solicitors or anyone else in contravention of the Confiscation Act. The purpose of the undertaking and the saving is to provide the reinforcement for the public policy of the legislation I have referred to.
29 It was suggested to me by counsel for the DPP that the orders should also be subject to undertakings from Mr Smith and his mother that they not disclose any of the material to any other person in contravention of s 70 of the Confiscation Act. However, I am not clear on what basis an undertaking from Mr Smith's mother would rest, as she is not a party to these proceedings. Nor it seems to me, on further reflection since the hearing, that their undertakings are necessary, in view of the obligations on Mr Smith's solicitors referred to. However, I will hear from the parties on the matter if it is wished to press it.
30 This of course would leave to the respondent the possibility of making any application to this Court, pursuant to the liberty to apply to which these orders would be subject, or otherwise, that only Mr Smith's solicitors should have access to particular matter on the file for CIV 1888 of 2002. See Bennett (supra), at [81] and [82].
31 The parties indicated, subject to taking further instructions, they expected they might be in a position to agree to orders of this sort, at least provided that a mutually satisfactory formulation of them could be arrived at.
32 Absent such an agreement, I would entertain further argument on the matter of the appropriate orders to make in relation to the first part of the application.
33 I turn now to what I have called in substance the application for the allowance for legal costs and for an undertaking as to damages, dealing with each separately, in the order given.
(Page 11)
The allowance for legal costs
34 The application in this respect is for an order for the DPP to release "the property frozen" by the freezing order, to pay Mr Smith's "reasonable legal expenses", including disbursements. Provision is made for the rates for time spent, for disbursements to include GST, and for accounts to be rendered to the DPP.
35 It seems to me that no order should be made except as to the property in respect of which Mr Smith claims a proprietary interest. That property for my purposes, as I will explain, is certain personal property registered in Mr Smith's name, as indicated by the terms of the application in respect of the undertaking to which I return below. Hoddy, not Mr Smith is, of course, the prospective subject of an application for a declaration of confiscation, on an unexplained wealth declaration, on a criminal benefits declaration, or, as I will explain, the other basis for a declaration of confiscation in this matter, under the Misuse of Drugs Act 1981 (WA).
36 I consider that the public interest in the proceedings in this case is largely centred on Hoddy, and not on Mr Smith. That in my view means that action may more readily be taken in respect of the property in respect of which Mr Smith claims a proprietary interest. I note the decision of Blaxell J in The Director of Public Prosecutions for Western Australia v Mansfield [2006] WASC 255, on the application for a variation of the freezing order in that case to provide for the legal costs of a Mrs Mansfield, whose position resembles that of Mr Smith in this case. In that decision, as I read it, a similar approach was taken by his Honour: see especially his judgment at [38]. DPP v Mansfield was the decision on the rehearing of the application the original decision on which was the subject of Mansfield v DPP.
37 I recognise that orders might be made, in a case like this one, for provision for the legal costs of an objector out of the frozen assets of another party. For example, such an order might be made, in respect of jointly owned property, where the other party consents to the provision of funds out of that party's joint interest in the property. This, as I understand it, was foreshadowed in DPP v Mansfield (supra), Blaxell J, at [35], [36], in relation to Mrs Mansfield's application, although it is not altogether clear from the reasons for decision that all of the property concerned was jointly owned.
38 However, it seems to me that only in cases like that one, at least in respect of jointly owned property, would such an order be one I would expect a court to be able readily to consider making. This is in view of
(Page 12)
- the public interest in the freezing order against the party in the position of Hoddy.
39 With respect to the power to make an order for legal expenses, I note the following, from Mansfield v DPP (supra), per Gummow, Kirby, Hayne, and Crennan JJ (at [49], [50]):
"The unique and essential function of the judicial branch of government is the quelling of controversies by the ascertainment of the facts and the application of the law [Fencott v Muller (1983) 152 CLR 570 at 608; D'Orta-Ekenaike v Victoria Legal Aid (2005) 79 ALJR 755 at 763 [43]; 214 ALR 92 at 102-103]. This is done by an adversarial system of litigation. It is plain that the operation of that system is assisted by the presence of legal representation, and may be severely impaired by its absence. In Dietrich v The Queen [(1992) 177 CLR 292 at 302], Mason CJ and McHugh J repeated the extrajudicial opinion of Lord Devlin that, save in the exceptional case of the skilled litigant, in practice the adversarial system breaks down where there is no legal representation.
The Act, as remarked earlier in these reasons, is draconian in its operation and complex in various of its provisions. There is not readily to be implied a denial of the powers of the Supreme Court when making or varying a freezing order to mould its relief to permit the use of funds to obtain legal assistance. Such assistance is for the benefit not only of the individual but for the more effective exercise of the jurisdiction conferred by s 101 of the Act with respect to proceedings under the Act. In that sense, it is also for the benefit of the State and the public."
40 This passage formed part of that section of their Honours' reasons in which they concluded, as I understand those reasons, that the power to make a freezing order with the scope in the Confiscation Act, s 45, included a power to make a freezing order limited as to the property covered, on condition that the property not so covered or any part of it was used in the way specified in the order. Their Honours particularly noted (at [54]) the following, by reference to the relevant part of the passage of the judgment of his Honour Justice Pullin in his dissenting judgment in the Court of Appeal, from the judgment of the Court of Appeal from which the appeal in Mansfield v DPP had been taken:
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- "It calls for great care by the parties and the Court in the framing of the condition to ensure, to the maximum practical extent, that exempted funds are not misused, whether by overservicing and overcharging or by other abuse."
41 However, their Honours did not, it seems to me, indicate in their reasons that a freezing order, so qualified for reasonable legal expenses, should generally be made, nor did they purport to set out any of the considerations the Court should bear in mind for the purpose of exercising its discretion.
42 I consider the approach I should follow is that referred to by Blaxell J in DPP v Mansfield (supra), where he said this, at [22] – [25]:
"The Act, of course, is silent as to the criteria to be applied when the court is deciding whether or not to mould its relief to allow funding for legal expenses. However, courts have often had to grapple with substantially the same issue in the context of similar confiscatory legislation or when granting Mareva injunctions. An example is In Re Peters [1988] QB 871 where there was an application to the court to vary a 'restraint order' over the property of an alleged drug trafficker to allow for certain expenses. Nourse LJ (at 880) held that:
' ... the jurisdiction to make or vary restraint orders is closely analogous to the jurisdiction to make or vary Mareva injunctions. In both cases the object is to strike a balance at an interlocutory stage between keeping assets available to satisfy a final order, if and when one is made, and meeting the reasonable requirements of their owner in the meantime.'
In Australian Federal Police v Malkoun (1989) 58 A Crim R 366, Ryan J of the Federal Court was asked to exercise a similar discretion to allow funding of legal expenses out of assets the subject of an interlocutory restraint. At 386, his Honour held that:
' ... the task of the Court in exercising the discretion ... is to strike a balance between the interest of the defendant in having recourse to his assets to enable his defence in the criminal trial to be prepared and conducted as he thinks appropriate, and the interest of the community in preserving those assets intact to satisfy any pecuniary penalty that the defendant might ultimately be ordered to pay ... '
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- In 'striking a balance' in such cases, the court must obviously consider the likely quantum of costs to be expended on legal representation if this is to be allowed. This issue arose in NSW Crime Commission v Fleming and Heal (1991) 24 NSWLR 116 where the relevant legislation provided the court with a discretion to permit expenditure on 'reasonable legal expenses' when making a 'restraining order' over the property of an alleged drug trafficker. The question was whether an agreement between the defendant and his solicitor as to the quantum of fees to be charged established what was reasonable. At 124, Gleeson CJ (with whom Hope A-JA agreed) held:
'An agreement between the solicitor and client as to the costs which the solicitor will be entitled to charge will be relevant if there is a dispute as to the reasonableness of the legal expenses in question, but it will not be conclusive. The court will be required to consider what is reasonable, not only from the point of view of the client, but also having regard to the public interest, bearing in mind the possibility that an order for confiscation or forfeiture may be made.
...
A primary factor affecting the reasonableness of the legal expenses for which provision is sought will be the market for legal services in which the client, as a consumer, is obliged to seek such services. Underlying the policy of [the legislation] is a recognition that justice requires that persons accused of criminal offences, or confronted with a threat of forfeiture of their property, should not be unfairly deprived of the means of defending themselves, and it would be inconsistent with that recognition to adopt an approach to the question of reasonableness of legal expenses which had the practical consequence of depriving persons of the opportunity of obtaining proper legal representation.'
A similar question was considered by Scott J in Director of Public Prosecutions (Cth) v Gillis (1993) 9 WAR 331 where the respondent sought the release of funds the subject of a restraining order under the Proceeds of Crime Act 1987 (Cth) in order to engage senior counsel in related criminal proceedings. As to the question whether it was reasonable in all of the
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- circumstances to engage senior counsel, Scott J stated (at 335 - 336):
'In this respect there appear to be two competing factors. The counsel of choice policy is designed to enable an accused person to be represented by counsel of his choice. On the other hand the Proceeds of Crime Act requires me to assess what in all the circumstances are reasonable expenses. Where those two principles come into conflict, there is, in my view, a need for the exercise of some discretion by a judge making the appropriate order ... .
It is clear when one reads the authorities that wherever possible this Court should now see that appropriate funding is available for a person such as the respondent to be properly represented at trial (see Dietrich v The Queen (1992) 177 CLR 292) and that where necessary, the interests of the accused person should prevail against those of the revenue ... '
His Honour noted (at 336) that a relevant factor to be taken into account was the availability or otherwise of legal aid. His Honour further stated (at 338):
'If this Court does not limit legal expenses to what is seen to be reasonable ... then the person seeking legal representation would obtain the most expensive lawyers in the realisation that the assets which are the subject of restraint might as well be used for the purpose of providing a legal defence in order to avoid forfeiture to the Crown. The statute, in my view, is designed to prevent that course and to give the court some control over the way in which restrained assets are used for the purpose of providing a legal defence.'"
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44 I note that there was another affidavit of Mr Harrison sworn on 23 November 2006. This affidavit attached among other things correspondence passing between Dwyer Durack and the DPP showing the process of conferral for the purposes of the application before me. I do not consider I need to make any further reference to this affidavit, in view of the submissions of the parties to me.
45 As to the ability of Mr Smith to afford legal representation, he deposes he is a disability pensioner in receipt of a Centrelink pension who has no significant assets, and in particular "no significant assets to pay for my legal expenses and Court fees". He further deposes that "my property is frozen by [the freezing order]". I understand "the property" referred to is that of which he deposes to being the owner in his affidavit in CIV 2049 of 2002 sworn 27 June 2003 to which I referred earlier. This property so understood is what I have called in these reasons "the Property". Paragraph 8 of the affidavit refers to a "1990 Custom boat trailer", a "1975 Mack Prime Mover" and a "Randell boat named 'San Matteo II'". In respect of all three items he also deposes "[n]o-one apart from me has any interest" (the second paragraph numbered 6).
46 It is true, as submitted by the counsel for the DPP, that the applicant has not provided particulars of all of his assets, so as to make clear that those assets (by necessary implication, other than those frozen by the freezing order) are indeed not "significant". For that purpose, the submissions for the respondent reminded me to note that the freezing order expressly excepted from its scope a number of assets registered in the name of Mr Smith, being a 1991 Ford sedan, a 1965 Datsun tray top, a 1975 Holden Statesman sedan, a 1984 Holden Statesman sedan, a 1975 Ford truck, a 1978 Datsun sedan, a 1995 Cmade flat top trailer, a 1967 650cc Triumph motorcycle, a 1974 Nolist tipper trailer and a fibreglass runabout boat "Addicator". However, I do not consider that material or any other before me to which my attention was drawn makes it necessary for him to provide the particulars referred to before I should consider making an order. This is in view of the period of time since the freezing order was made.
47 Nor is there in my view any reason to consider that Mr Smith's affidavit of 9 November 2006 is false or misleading. For such a reason, however, counsel for the respondent referred me to what I took to be material in Mr Smith's affidavit of 27 June 2003 that it is said indicated he had received a reward for his work in his father's businesses while he was in receipt of a disability pension. That material (the second paragraph numbered 9 and the following paragraphs) indicates he had not been paid
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- a wage, but had received the boat above referred to "in return for the work I did" (the second paragraph numbered 20). However, I do not consider that is sufficient to indicate the reason contended for. The making of such provision does not indicate to me that there were other substantial assets that it might be expected Mr Smith had received other than those the subject of the freezing order.
48 Although counsel for the respondent did not draw my attention to the matter, I note from the Smith affidavit of 27 June 2003 his indication that (par 7):
"[m]y parents have always supported me in whatever interest I took up over the years whether it be driving trucks or anything else."
49 I do not consider this reference, or those to the circumstances in which he obtained the boat (previously described), or to his mother having "bought me" the Custom boat trailer (the second paragraph numbered 10, a matter to which my attention was not drawn), indicate there was a need for him to show that he could not expect financial support from one or other of his parents (one of whom, Hoddy, is now, as I have indicated deceased, property of whom is also the subject of the freezing order). The matter of the availability of such support for Mr Mansfield was of significance to Blaxell J in DPP v Mansfield (supra), at [45]. However, in that case Mr Mansfield had been legally represented in all proceedings up to that point, "and there is nothing before me to indicate that this situation will not continue". In this case Mr Smith had had legal representation in relation to his objection. However, there is no indication that the expenditures in that regard had not been met from his other assets at the time. There are also indications from the material before me that significant activity on or of relevance to the objection filed for Mr Smith ceased in the last quarter of 2003, except for activity in relation to negotiations for an unexplained wealth application to which I will return.
50 Nor is there any reason to consider, in civil proceedings of the nature for which legal expenses are sought to be provided, that he could reasonably expect his legal expenses to be provided for in the future from other sources, such as legal aid or pro bono representation.
51 As to a reasonable allowance for legal expenses, I note that I have, as an annexure to the affidavit of Harrison sworn 23 November 2006, a copy of the costs agreement between Mr Smith and Dwyer Durack. That cost
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- agreement shows hourly rates to which no objection was taken by the respondent and which would, in any event, appear to me within scale.
52 As to an estimate of likely future legal costs that does not raise the concern of the exhaustion of assets in order to avoid forfeiture to the State, I note that the same annexure to the Harrison affidavit sworn 23 November 2006 indicates that Dwyer Durack's overall estimate of legal costs (including, as I understand the matter, past and future costs) was $11,000, inclusive of disbursements. This does not appear to me to be an amount, relative to the Property, which clearly engages the concern referred to.
53 However, I note in DPP v Mansfield (supra) Blaxell J appears to have considered, at least as a preliminary view, that, in respect of the claim for past costs, "there will need to be some process akin to taxation of which could best be performed by a Registrar" (at [41]). His Honour appears to have left that matter and the matter of the vetting of future costs to submissions from the parties. In this case, I note that the orders sought would allow for the accounts for the solicitors for Hoddy to be provided as they are rendered to the DPP. It seems to me that, subject to the allowance of a period of time before payment being made to accommodate objection by the DPP by application to the Court, this provides for the possibility of such objection.
54 I would entertain further submissions on the matter of appropriate provision for vetting processes for past and future legal costs, whether of this or another kind.
55 On that basis, I consider that my discretion to make an order is enlivened. I also consider that I should make such an order, subject to its elaboration following the submissions I have indicated I would entertain.
56 I should not leave the application for an order to release frozen property without noting a further matter raised by counsel for the DPP. It concerns the effect of Confiscation Act, s 8, the possible application of which to this case it was said distinguishes this case from DPP v Mansfield (supra). As I explain in the next section of these reasons, s 8 may apply here so as to work a confiscation that might extend to the Property. I set out the relevant terms of s 8 below.
57 However, as counsel for the DPP appeared to concede, it was not clear that any such confiscation would extend to the Property, altogether apart from any other question of the application of s 8. Such extension would turn on whether the Property answers the description in s 8(1)(a) or
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- (b), which I set out below. Any release of the Property under any order I might make would not affect any claim that might subsequently be brought against Mr Smith in respect of the Property asserting that it had been confiscated under s 8, and so Mr Smith was liable to the State for his dealing with it.
58 Further, as Mr Smith had lodged an objection to a confiscation, counsel for the DPP, as I understood him, was not contending I did not have the jurisdiction to make the order for release of the property in question. Mr Smith was seeking that release to permit him to contest the confiscation of the Property, including its confiscation under s 8, on any ground sufficient to avoid that result.
59 Accordingly, I do not consider that the further matter raised by counsel for the DPP would prevent me making the orders sought. Nor is that further matter sufficient to cause me not to make the order. It seems to me that the possibility of a confiscation under s 8 having been made which extends to the Property goes to matter in respect of which an order to allow for legal costs may be needed, rather than a factor which would tell against making that order.
Undertaking
60 The application in this respect is for an order the DPP give:
" … an undertaking for damages, failing which [the freezing order] freezing property registered in [Mr Smith's] name and property claimed by [Mr Smith], be vacated."
61 Although the form of the application for an undertaking might be read to suggest there is more property than that registered in Mr Smith's name (the Property) which he claims, no such property was described to me. I take the form of the application in fact to identify the Property to be the property he claims.
62 With respect to the power to make this order, I note the following from the judgment in Mansfield (supra), per Gummow, Kirby, Hayne, and Crennan JJ, at [33], [34]:
"In Russell v Farley [105 US 433 (1881)], Bradley J, referring to the treatment of the subject in the first edition of Kerr on Injunctions [A Treatise on the Law and Practice of Injunctions in Equity, (1867). See also 'Notes – Interlocutory Injunctions and the Injunction Bond', (1959) 73 Harvard Law Review 333],
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- where reference is made to 18th century statutory requirements in Maryland and Virginia for injunction bonds, said [105 US 433 at 438 (1881)]:
'It is a settled rule of the Court of Chancery, in acting on applications for injunctions, to regard the comparative injury which would be sustained by the defendant, if an injunction were granted, and by the complainant, if it were refused [Kerr on Injunctions, (1867) at 209, 210]. And if the legal right is doubtful, either in point of law or of fact, the court is always reluctant to take a course which may result in material injury to either party; for the damage arising from the act of the court itself is damnum absque injuria, for which there is no redress except a decree for the costs of the suit, or, in a proper case, an action for malicious prosecution. To remedy this difficulty, the court, in the exercise of its discretion, frequently resorts to the expedient of imposing terms and conditions upon the party at whose instance it proposes to act. The power to impose such conditions is founded upon, and arises from, the discretion which the court has in such cases, to grant, or not to grant, the injunction applied for. It is a power inherent in the court, as a court of equity, and has been exercised from time immemorial.' (emphasis added)
In contemporary circumstances, the traditional powers of a court of equity have devolved, in Australia, upon State Supreme Courts inter alios. In the exercise of its jurisdiction and powers, absent express provision to other effect by or under statute, the Supreme Court enjoyed a like power in the grant of an injunction or analogous remedy. Against this background, the traditional concern with avoidance of unfairness and injustice in the administration of powers such as those conferred by s 43 of the Act with respect to freezing orders, supports, in the absence of express statutory provision to other effect, not the negative implication urged by the DPP, but the contrary."
63 Again, I note this was part of the reasons of their Honours for the conclusion that a freezing order under s 43 might be conditioned on an undertaking as to damages from the DPP.
64 Again, I note that their Honours did not purport to indicate that an undertaking should generally be required, or any of the considerations
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- which the Court should bear in mind in determining whether or not to require one, save in the respect which is shortly reached in the quotation from DPP v Mansfield (supra) I am about to set out.
65 Again, I consider the approach I should follow is that referred to by Blaxell J in DPP v Mansfield (supra) for the purposes of considering whether or not the undertaking sought in that case should be called for. His Honour stipulated for an undertaking in that case.
66 In respect of that approach, Blaxell J said this, at [7] and [8]:
"The High Court [in Mansfield v DPP (supra)] has not provided any guidelines as to the factors to be considered when exercising the discretion to order such an undertaking. However at [28] it refers to 'the considerations of justice and fairness which ordinarily attend the administration of a new remedy', and at [10] to the power 'to require the provision of undertakings so as to diminish the possibility of oppression and injustice'.
These are very fundamental considerations which need to be looked at in light of the statutory framework of the Act, and the impact that a freezing order is likely to have on a respondent or other affected party. Quite obviously there is a valid public interest in preserving the assets of an alleged criminal pending proceedings for their confiscation. On the other hand a freezing order has the potential to inflict considerable injustice if it turns out that there was no real basis for those proceedings in the first place. Depending on the particular circumstances in each case an undertaking as to damages offers some prospect of reconciling these competing concerns."
67 His Honour then noted the "very dire consequences" of the freezing order in DPP v Mansfield for the Mansfields, where all of Mr Mansfield's property, and all of Mrs Mansfield's "major assets", had been frozen (at [11]). Having noted this, as well as the denial to them of investment opportunities in a boom economy, and the likely continuation of the situation of asset denial for "some considerable time given the very slow progress of the related criminal and civil proceedings" (at [12]), he said this (at [14] to [16]):
"In all of these circumstances, the factors which favour the court requiring an undertaking as to damages (as a condition for continuation of the freezing order) are patently obvious.
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- However, there are countervailing factors to be taken into account, and these concern the public policy considerations which surround the DPP's role in obtaining the freezing order. The DPP has a public duty to perform its statutory functions, and it should not be inhibited from doing so out of fear of incurring liability for damages. As was stated by Lord Cross in Hoffmann-La Roche v Trade Secretary [1975] AC 295, 371 (in the context of proceedings for enforcement of provisions under monopolies legislation):
' ... if the Crown is taking proceedings under a statutory provision ... the court in considering whether or not to make the grant of an interim injunction conditional of the giving of an undertaking in damages has to bear in mind the interest which the public – and in particular any section of it which will benefit directly thereby – has in seeing that the law in question is enforced.
To make the granting of an interim injunction conditional on the giving of an undertaking in damages may deter the Crown from asking for one.'
Similarly, in Australian Securities and Investments Commission v ACN102 556 098 Pty Ltd (2003) 48 ACSR 350 Barrett J of the Supreme Court of New South Wales held (at 352) that ASIC was not required to give an undertaking as to damages when obtaining an ex parte order for appointment of a provisional liquidator to the defendant company. This was because ASIC was not vindicating some private right but was discharging a public duty:
'When ASIC asserts the standing it is given ... it does not act as a representative of any private interest and does not seek to enforce, directly or indirectly, the right of any creditor. It acts in aid of the community's interest in ensuring that limited liability companies do not remain operative when the capacity to pay their debts in full has been compromised.
In these circumstances, I was satisfied that, in making application for the appointment of a provisional liquidator in this case, ASIC was performing a public function. That function was of such a kind that ASIC's failure to proffer an
- undertaking as to damages was not something that should have worked to its disadvantage upon the determination of the application.'
- Self-evidently, the DPP performs a similar public function when applying for and obtaining a freezing order under the Act. This is so notwithstanding that the purpose of a freezing order is to protect the prospective or contingent property rights of the State. Accordingly, the public duty and statutory role of the DPP are factors which should ordinarily be afforded significant weight when the court is determining whether or not to require an undertaking as a condition of making or continuing a freezing order."
68 This approach distinguishes the matter of calling for an undertaking in the context of a freezing order from that of calling for an undertaking in the context of an interlocutory injunction, where the failure to do so is rare (see The Hon Justice Neville Owen, "The Interlocutory Injunction", in Civil Remedies: Issues and Developments, R Carroll ed., Sydney, Federation Press, 1995 at 259).
69 In this case as in DPP v Mansfield (supra) (see [10]) there has been a substantial period, in the order of over four years, since the freezing order was made. Over that period, there has been significant activity, so far as the contents of the file CIV 1888 of 2002 would indicate. Those contents indicate in particular that there were applications in 2002 for an unexplained wealth declaration and for a criminal benefits declaration under the Confiscation Act, s 11 and s 15, respectively. Such declarations would permit the taking of property – including frozen property which the respondent, who I understand to be Hoddy in both cases, did not own but effectively controlled – in satisfaction of the liabilities the results of those declarations, as the Confiscation Act allows.
70 I note that, as in DPP v Mansfield, I was not directed to any attempt by the DPP yet to bring the applications for an unexplained wealth and for a criminal benefits declaration. However, as I will indicate below, there are some indications such steps will be taken shortly, at least in respect of the application for an unexplained wealth declaration.
71 However, the case before me is distinguishable from that before Blaxell J in DPP v Mansfield, the respondent submitted. The distinction it was put to me made the case for an undertaking being required, put at its best for Mr Smith, rather less strong in respect of the factor of time
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- than his Honour found the corresponding case before him. While I agree that the case in respect of that factor is indeed somewhat less compelling, the matter is one of degree, however, and not a preponderant degree.
72 The distinction put to me was in the fact that since the freezing order:
• Hoddy had been charged with an offence under the Misuse of Drugs Act 1981 (WA) of the sort and in the circumstances described in the Confiscation Act s 159(2), which offence was also a "confiscation offence" within s 141 of the Confiscation Act; and
• Hoddy had subsequently died, on 21 January 2005, and thus he should be taken to have "absconded in connection with the offence", because of the Confiscation Act, s 160(2), while his death had no effect on the continued application of the Confiscation Act, as confirmed by s 138(3).
73 In consequence of these two matters, for the purposes of the Confiscation Act, s 8, Hoddy, it was put to me, was a person "declared to be a drug trafficker under s 32A(1) of the [Misuse of Drugs Act]" (see s 159(2) of the Confiscation Act) who was such a person "as a result of being convicted of a confiscation offence that was committed after the commencement of [the Confiscation Act]" (see s 157(1)(d)). This worked what was described as an "automatic" confiscation, that is, one that did not require compliance with the processes in the Act in the cases of unexplained wealth or criminal benefits declarations.
74 The Confiscation Act, s 8, does indeed appear to work a confiscation of the sort contended for. That provision reads (in material part) as follows:
"(1) When a person is declared to be a drug trafficker under section 32A(1) of the Misuse of Drugs Act 1981 as a result of being convicted of a confiscation offence that was committed after the commencement of this Act, the following property is confiscated –
(a) all the property that the person owns or effectively controls at the time the declaration is made;
(b) all property that the person gave away at any time before the declaration was made, whether the gift
- was made before or after the commencement of this Act.
- (2) When a person is taken to be a declared drug trafficker under section 159(2), the following property is confiscated –
(a) all the property that the person owned or effectively controlled at the time that the person absconded;
(b) all property that the person gave away at any time before the person absconded, whether the gift was made before or after the commencement of this Act.
...
(4) Nothing in subsection (1) or (2) prevents a criminal benefits declaration from being made against a person, whether the relevant confiscation offence was committed, or is likely to have been committed, before or after the commencement of this Act.
(5) Nothing in subsection (1) or (2) prevents an unexplained wealth declaration from being made against a declared drug trafficker or a person who has been charged with an offence that may lead to his or her being declared a drug trafficker."
75 A confiscation worked by the Confiscation Act, s 8, would mean the freezing notice would stop "being in force" (s 49(3)(f)).
76 I should note that it is not altogether clear to me that the two matters listed have the effect contended for, as a matter of the close reading of the phrase in s 8(1) (noting the words I have emphasised):
"A person is declared to be a drug trafficker under section 32A(1) of the Misuse of Drugs Act 1981 as a result of being convicted of a confiscation offence."
77 However, I do not need to resolve that matter. Accepting the proposition put to me for the respondent, I also note that the respondent has taken no proceedings under s 30 of the Act for a declaration of confiscation in which the matter of the application of s 8 at all, or indeed
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- the application of the provisions of s 8 to all of the property the subject of the freezing order, could be tested. In any event, it is not clear to me that such proceedings would be taken without first having sought and obtained an unexplained wealth or a criminal benefits declaration.
78 I note that there is material before me that the State had not proceeded further on its application for an unexplained wealth declaration, nor applied for a declaration of confiscation under s 8, because of negotiations conducted by the solicitor who had previously acted for Mr Smith, that solicitor acting "on behalf of Ms Smith and Ms McGrath" (annexure RAH1 to the affidavit of Harrison sworn 6 November 2006, being from the DPP to Dwyer Durack dated 6 September 2006). It is not clear to me who "Ms Smith and Ms McGrath" were, nor that those negotiations were conducted by the solicitor on behalf of Mr Smith. I further note that that material indicates the negotiations were unavailing, and the State plans to continue with its unexplained wealth declaration and to make an application for a declaration of confiscation under s 8.
79 In any event, the negotiations referred to explain only a part of the delay in this case, leaving most of the delay not so explained.
80 I also note that there were programming orders made in relation to Mr Smith's objection in CIV 2049 of 2002, by E M Heenan J, on 5 June 2003. I further note that Mr Smith filed (one day late) his affidavit of 27 June 2003 apparently pursuant to that order. However, I do not have any indication from the file in CIV 2049 of 2002 that the respondent filed any affidavit by way of reply as allowed for under those order. In any event, neither party has applied to list Mr Smith's objection for hearing as allowed for by those orders.
81 However, I do not draw from this that the case for an undertaking is significantly weakened because Mr Smith could have brought his objection to a hearing. His position in that respect does differ from that of Mrs Mansfield in DPP v Mansfield (supra), but not in a way that I consider telling against the exercise of my discretion. While Mr Smith, unlike Mrs Mansfield, appears to be in a position to pay for his living expenses without resort to the property the subject of the freezing order, he could, in view of his limited resources, reasonably take the position he should await the proceedings for a declaration, either of unexplained wealth, or confiscation, in which to have his objection tested.
82 This last point also in my view in part responds to the submission for the respondent made to me that Mr Smith had an alternative way of
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- dealing with any concern he had with effect of the freezing order on the Property, which I accept has been depreciating. The Confiscation Act, s 94, allows for a person who has "responsibility for the control or management" of frozen property to apply to the Court for an order to sell property "subject to substantial waste or loss of value if it is retained". Mr Smith is not that person. So far as I can tell from the file for CIV 1888 of 2002, Hoddy was that person while he was alive. However, it is not clear to me that arranging for Hoddy's personal representative to sell the Property is a satisfactory alternative to an undertaking as to damages. At the very least, it is not clear to me that the measure of the damage which Mr Smith might suffer and which an undertaking would respect is restricted to the loss of value referred to.
83 Admittedly, Mr Smith did not take the step of seeking to have the DPP's civil proceedings (for an unexplained wealth declaration) set aside for want of prosecution, as the Mansfields did: see DPP v Mansfield (supra), at [18]). However, I note that the resources available to the Mansfields for the purpose of initiating such proceedings appear to have been rather more substantial than those on the materials before me available to Mr Smith. Nor, at least until Mansfield v DPP (supra), would it have been evident to those advising Mr Smith that an application could successfully be made for a variation of the freezing order to allow for legal expenses.
84 Blaxell J in this judgment also refers to the possibility that the strength of the DPP's case in the civil proceedings may be a factor which "should be taken into account" (par 17). In that case, the case referred to was that in relation to whether or not Mr Mansfield had committed a "confiscation offence". However, his Honour noted that in his case counsel had not focussed on the matter before him, and the materials did not readily enable him to make any such assessment. I consider myself to be in the same position.
85 Accordingly, I consider my discretion to require the DPP to provide an undertaking as to damages to be enlivened in the present case. I propose to require such an undertaking as a condition of the continuance of the freezing order. Of course, the freezing order might no longer be in force, by virtue of s 8 of the Confiscation Act, as I have already explained. In addition, there is no application for an undertaking from those responsible for the estate of Hoddy. In those circumstances I consider the undertaking should relate only to such loss or damage as flowed or will flow from the application of the freezing order to the Property.
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86 In any event, I will hear from the parties as to the appropriate terms of the undertaking.
Conclusion and orders
87 For the reasons I have given, I would grant the applications in each of the matters, CIV 1888 of 2002 and CIV 2049 of 2002, except in respect of the application respect of the contents of the file in the latter matter.
88 I will hear from the parties as to the appropriate orders to be made, as I have indicated.
89 I would also be prepared to hear from the parties as to orders I might be asked to make for the consolidation of the files for CIV 1088 of 2002 and CIV 2049 of 2002, and any consequential orders, including orders for the joinder of parties.
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