Hu v Commissioner of the Australian Federal Police

[2023] VSCA 50

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCI 2022 0015

QUEENIE HU	Appellant
v
COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE	Respondent

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JUDGES:	PRIEST, T FORREST and KAYE JJA
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers
DATE OF JUDGMENT:	9 March 2023
MEDIUM NEUTRAL CITATION:	[2023] VSCA 50
JUDGMENT APPEALED FROM:	[2021] VCC (Judge Murphy)

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PROCEEDS OF CRIME – Costs of appeal – Appeal succeeded in part – Appellant ordered to pay the respondent 60 per cent of the respondent’s costs at first instance and 60 per cent of the costs of the appeal.

Proceeds of Crime Act 2002 (Cth) ss 94.

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Counsel
Appellant:		Mr T Mitchell
Respondent:		Mr R Craig KC with Ms R Burton
Solicitors
Appellant:	FCG Legal
Respondent:	Criminal Assets Litigation, Australian Federal Police

PRIEST JA
T FORREST JA
KAYE JA:

1. In this matter, we have delivered judgment by which we allowed the appeal in part.[1] The parties have now provided written submissions on the question of costs.

   [1]Hu v Commissioner of the Australian Federal Police [2023] VSCA 32.

2. In determining that question, it is not necessary for us to set out in detail the background to the appeal. In short, in August 2018, a judge of the County Court, on the application of the respondent, made a restraining order pursuant to s 18 of the Proceeds of Crime Act 2002 (Cth) (‘the Act’) in respect of a number of items of property, including a bank account in the name of the appellant with the St George Bank (‘the bank account’). At the time of the restraint, the balance of that account was $797,640.34. The restraining order was made on the basis that thirteen deposits that had been made into the account, totalling $734,300, were the proceeds of crime. The appellant made an application to a judge of the County Court for an exclusion order in respect of the account under s 94 of the Act, or, alternatively, for compensation under s 94A of the Act. That application was dismissed.

3. On the substantive appeal, the appellant relied on six grounds of appeal. The first four grounds contended that the judge erred in holding that the appellant had not established, pursuant to s 330(4)(a) of the Act, that she had acquired the deposits in the account without knowing, and in circumstances which would not arouse a reasonable suspicion, that the property was the proceeds of an offence or an instrument of an offence. Each of those four grounds of appeal did not succeed. Under the fifth and sixth grounds of appeal, it was contended that the judge ought to have found that at least $276,030.34 were not the proceeds of crime, and that sum should either have been excluded from forfeiture, or should have been the specified proportion in a compensation order, pursuant to s 94A of the Act. Those grounds have succeeded in part. In short, we held that the judge erred in failing to determine that the appellant was entitled to a compensation order, pursuant to s 94A, in the sum of $63,340.34.

4. Based on those conclusions, it has been contended on behalf of the appellant that she is entitled to an order for costs in her favour, both in relation to the hearing before the trial judge and the appeal. It has been submitted that, by successfully appealing, and thus gaining an award of compensation in her favour, the appellant has significantly improved her position and recovered the value of the part of her bank balance that should have been the subject of an order in her favour in the County Court. Thus, it is submitted that costs should follow the event.

5. In response, counsel for the respondent have submitted that there is no principled basis for depriving the respondent of any of his costs at the hearing of the appeal, and that the appellant should be ordered to pay the Commissioner’s costs of the application and the appeal, leaving the costs order which was made by the County Court judge undisturbed. In support of that submission, it was noted that, in her application in the County Court, and this Court, the appellant claimed almost $800,000. Accordingly, she has succeeded in recovering less than ten per cent of the amount claimed. Further, at the hearing at first instance, the appellant did not concede at the time that the funds in the St George Bank account included proceeds of crime, and the Commissioner incurred significant costs of trial gathering evidence in order to prove that fact. Counsel further noted that, on the appeal, a significant part of the argument was directed to the first four grounds on which the appellant failed. Ultimately, the issue on which the appellant has partially succeeded occupied little attention on the appeal (and in the judgment).

6. It is quite clear that both at the trial of the proceeding, and on this appeal, it was the respondent who substantially succeeded. At the trial, a number of matters were in issue, including the proof by the respondent that the deposits into the St George account constituted the proceeds of crime, and, if so, whether, pursuant to s 330(4)(a) of the Act, they were deemed not to be such proceeds, so not to be amenable to a restraining order. The respondent succeeded on both those issues at the trial. On appeal, the appellant did not take issue with the conclusion by the judge that the thirteen deposits were derived from the proceeds of crime, but did (under the first four grounds) seek to impugn the judge’s conclusions relating to the applicability of s 330(4)(a) of the Act. As noted, the appellant did not succeed on those grounds.

7. On the appeal, most of the argument was directed to the first four grounds of appeal. Further, insofar as submissions were directed to the two grounds on which the appellant succeeded, that success was only partial. On the other hand, it must be acknowledged that at the trial of the proceeding, the respondent could have accepted that the amount ultimately awarded in favour of the appellant — $63,304.34 — was payable by way of a compensation order under s 94A of the Act. That concession was not made by the respondent, either at trial or on this appeal. To that extent, counsel for the appellant is correct in maintaining that she did succeed on the appeal in establishing that the judge erred by not finding in her favour to that extent of her claim.

8. Notwithstanding that consideration, it is clear that the substantial victor in the proceeding, and on this appeal, is the respondent. It would be inappropriate to make an order for costs in favour of the appellant simply on the basis that she had a limited success on appeal, which she should have enjoyed at first instance. Rather, pursuant to the discretion, the appropriate approach to the award of costs in a case such as this would, we consider, be constituted by making an award of costs in favour of the respondent, but discounting that award by taking into account that the appellant did have some success on appeal, which she ought to have had at first instance.

9. Taking those considerations into account, in our view, the appropriate order in this case is that the order for costs made by the primary judge should be set aside, and that, in lieu, the appellant should be ordered to pay the respondent 60 per cent of the respondent’s costs at first instance and 60 per cent of the costs of the appeal.

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