Loades v Director of Public Prosecutions (Cth) - [2005] SASC 227

SUPREME COURT OF SOUTH AUSTRALIA
(Appeals to a Single Judge: Civil)
LOADES v DIRECTOR OF PUBLIC PROSECUTIONS (CTH)
Judgment of The Honourable Justice Sulan
24 June 2005
APPEAL AND NEW TRIAL - APPEAL - PRACTICE AND PROCEDURE - SOUTH AUSTRALIA
PROCEDURE - JUDGMENTS AND ORDERS - AMENDING, VARYING AND SETTING ASIDE - SETTING ASIDE BY CONSENT
Appellant charged with multiple offences of dishonesty and importation - order obtained in the District Court pursuant to s 39(1) of the Proceeds of Crime Act 2002 (Cth) requiring the appellant to furnish a statement of affairs - appellant challenged the validity of that order - information sought by the order was subsequently obtained via an alternative section of the Proceeds of Crime Act 2002 (Cth) prior to judgment being delivered - whether the appeal should be dismissed - whether an appeal on theoretical question of law - whether the District Court order should be discharged - whether the appellant is entitled to costs - appeal dismissed without determining validity of the District Court order - no order as to costs.
Criminal Code (Cth) s 400; Customs Act 1901 (Cth) s 233BAA(4); Financial Transaction Reports Act 1988 (Cth) s 24; Proceeds of Crime Act 2002 (Cth) s 16, s 17, s 18, s 19, s 20, s 39, s 180, s 388; Proceeds of Crime Act 1987 (Cth), referred to.
Ainsworth v Criminal Justice Commission (1992) 175 CLR 564; City of Norwood, Payneham & St Peters v Baker [2004] SASC 135; Sarkis v DCT (Cth) (2005) ATC 4205; Swift Australian Co (Pty) Ltd v South British Insurance Co Ltd [1970] VR 368; UTSA Pty Ltd (in liq) v Ultra Tune Australia Pty Ltd [2004] VSC 105, considered.

LOADES v DIRECTOR OF PUBLIC PROSECUTIONS (CTH)
[2005] SASC 227
Appeal to a Single Judge

SULAN J: This is an appeal about costs. On 10 November 2004 a judge of the District Court ordered that the appellant provide certain information about his dealing in property to the Commonwealth Director of Public Prosecutions (“the Director”) pursuant to s 39(1) of the Proceeds of Crime Act 2002 (“the Act”). The appellant obtained a stay of the order, pending an appeal. In January 2005, I heard argument that the order of the District Court judge be set aside. Subsequent to that, but prior to my decision being delivered, I was informed that the information ordered to be provided had been obtained by a compulsory examination of the appellant, pursuant to s 180 of the Act. I was informed by counsel for the Director that the Director does not intend to enforce the order. For reasons which follow, I decline to determine the issue originally argued on the appeal. The question of costs still remains.
Background
The appellant, Caleb John Loades, is charged with multiple offences characterised as both indictable and serious offences under s 338 of the Act. These include importing ephedrine contrary to s 233BAA(4) of the Customs Act 1901 (Cth); four counts of opening an account in a false name contrary to ss 24(1) and 24(6) of the Financial Transaction Reports Act 1988 (Cth); thirty four counts of operating an account in a false name contrary to ss 24(1) and 24(6) of the Financial Transaction Reports Act 1988 (Cth); and nine money laundering offences contrary to s 400 of the Criminal Code (Cth).
An application was made by the Director on 26 August 2003 seeking ex parte restraining orders pursuant to s 18 and s 19 of the Act in respect of certain property of the appellant. An application was also made at that time to examine Mr Loades, pursuant to s 180 of the Act. Restraining orders under Chapter 3 of the Act were made by a judge of the District Court on 2 September 2004. The judge also made an order requiring the appellant to attend for examination.
Subsequent to the orders being made, the Director sought an ancillary order pursuant to s 39(1) of the Act seeking an order that the appellant provide to the respondent a sworn statement setting out his dealing with all real and personal property. On 10 November 2004, the District Court judge granted the application and ordered that a statement of affairs be provided to the Director. The appellant appealed to the Supreme Court.
Pursuant to the examination order which had been made on 2 September 2004, a notice for examination of the appellant was issued on 20 December 2004 requiring him to attend for an examination on 24 and 25 February 2005. The appeal against the order requiring the appellant to provide a statement of affairs was heard by me on 20 January 2005. I reserved my decision. Before judgment was delivered, the examination of the appellant took place as anticipated on 24 and 25 February 2005. At the oral examination, the information which had been sought pursuant to s 39 was obtained from the appellant.
Proceedings in the Supreme Court
The matter was listed at the request of counsel for further argument on 31 March 2005. At that time, I was informed for the first time that an examination of the appellant had taken place, and the information the subject of the appeal had been obtained. It was the respondent’s submission that the Director no longer intended to enforce the order as the information sought had been obtained through the examination. Counsel submitted that an appropriate course would be to dismiss the appeal, return the matter to the District Court judge and request that the order be quashed by consent, and then argue the question of costs before me. Counsel for the appellant submitted that, as I had heard argument, and as the order remained in force, even though the information ordered to be provided had been provided to the respondent, I should nevertheless decide the appeal. Counsel for the respondent sought an adjournment to obtain instructions, and to further consider the matter.
On resumption of the hearing, counsel for the respondent submitted that the appeal should be dismissed. He submitted that, as the Director no longer sought to enforce the order, and as the Director had now obtained the information required to be provided pursuant to the order, time had overtaken the subject matter of the appeal, the appeal was otiose and should not be determined by the Court. Counsel submitted that I should discharge the order of the District Court, dismiss the appeal and make no order as to costs.
Counsel for the appellant agreed that the order should be discharged, but submitted that I should first determine the subject matter of the appeal. The effect of the appellant’s submission would be that if I were to determine that s 39 of the Act did not empower the order to be made, I would allow the appeal and discharge the order. On the other hand, if I determined that s 39 empowered the Court to make the order, I should dismiss the appeal, yet nevertheless discharge the order on the ground that the Director no longer intended to seek the information required pursuant to the order, as it had already been provided in the examination.
In my view, for reasons which follow, it would be absurd to follow that course. If I were to do so, I would be providing an advisory opinion on the operation of s 39.
The legislative scheme
The Act was introduced to provide a statutory scheme for the confiscation of proceeds or benefits gained as a result of criminal behaviour. The Act replaced the Proceeds of Crime Act 1987 (Cth) (“the 1987 Act”).
The underlying purpose of the Act is, inter alia, to invest appropriate bodies with effective powers to deprive persons of the proceeds of offences, the instruments of offences and benefits derived from offences against the laws of the Commonwealth, to punish and deter persons from breaching the laws of the Commonwealth and to provide for confiscation orders and restraining orders in respect of offences against the laws of the States.[1]
[1] See s 5 of the Act
The Act makes significant structural changes to the 1987 Act. The changes were designed to overcome the deficiencies in the applied laws regime operating under the 1987 Act. These deficiencies were referred to by the Attorney-General in his second reading speech:[2]
In particular they have failed to impact upon those at the pinnacle of criminal organisations. With advancements in technology and globalisation, such persons can distance themselves from the individual criminal acts, thereby evading conviction and placing their profits beyond the reach of conviction based laws. In its 1999 report entitled Confiscation that Counts, the Australian Law Reform Commission concluded that Commonwealth conviction based laws were inadequate.
Several states and some other countries have now enacted more effective laws enabling proceeds of crime to be frozen and confiscated through civil proceedings, without the need to obtain a conviction. The Commonwealth’s confiscation regime is in need of improvement and strengthening.
[2] Hansard, Parliamentary Debates, Second Reading Speech, Proceeds of Crime Bill, 2002, The Honourable Daryl Williams
The Act creates chapters specifically dealing with different aspects of the confiscation scheme.
Chapter 1 provides an introduction to the Act. Section 7 gives a description of the Chapter 2 confiscation scheme, and s 8 provides a description of the Chapter 3 information gathering provisions. In the 1987 Act, the confiscation provisions, which included restraining orders and the information gathering provisions, were dealt with in the same part of the Act. Unlike the present Act, there was no division between the confiscation provisions and the examination provisions.
Restraining orders are dealt with under Chapter 2 of the Act. Section 16 of the Act is a simplified outline of Part 2-1. It 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.)
Sections 18 and 19 specifically provide for restraining orders against people suspected of committing serious offences and indictable offences respectively. Under these sections all property of a suspect may be restrained. The order need not relate only to property which is suspected of being related to the criminal conduct.
Division 5 of the Act, which is found under ‘Part 2-1 – Restraining Orders’ provides for ‘Further orders’. Section 39 is found in this division and empowers the Court to make ancillary orders. Section 39(1) of the Act provides:
(1)The court that made a restraining order, or any other court that could have made the restraining order, may make any ancillary orders that the court considers appropriate and, without limiting the generality of this, the court may make any one or more of the following orders:
(a)     an order varying the property covered by the restraining order;
(b)     an order varying a condition to which the restraining order is subject;
(c)     an order relating to an undertaking required under section 21;
(d)     an order directing the owner of the property (including, if the owner is a body corporate, a specified director of the body corporate) to give a sworn statement to a specified person, within a specified period, setting out particulars of, or dealings with, the property;
(e)     if the Official Trustee is ordered under section 38 to take custody and control of property:
(i)an order regulating the manner in which the Official Trustee may exercise its powers or perform its duties under the retraining order; or
(ii)an order determining any question relating to the property, including a question relating to the liabilities of the owner or the exercise of powers or the performance of duties of the Official Trustee; or
(iii)an order directing any person to do anything necessary or convenient to enable the Official Trustee to take custody and control of the property;
(f)     an order giving directions about the operation of the restraining order and any one or more of the following:
(i)a forfeiture order that covers the same property as the restraining order;
(ii)a pecuniary penalty order or a literary proceeds order that relates to the same offence as the restraining order;
(g)     an order requiring a person whose property is covered by a restraining order to do anything necessary or convenient to bring the property within the jurisdiction.
Restraining order means an order under ss 17, 18, 19 or 20 that is in force under the Act.[3] Sections 17-20 provide that 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.[4]
[3] See s 338 of the Act
[4] Section 16
The information gathering provisions are found in Chapter 3 of the Act. The relevant section is s 180. That section provides:
(1)If a restraining order is in force, the court that made the restraining order, or any other court that could have made the restraining order, may make an order (an examination order) for the examination of any person, including:
(a)     a person whose property is, or a person who has or claims an interest in property that is, the subject of the restraining order; or
(b)     a person whom the restraining order states to be a suspect for the offence to which the restraining order relates; or
(c)     the spouse (including de facto spouse) of a person referred to in paragraph (a) or (b);
about the affairs (including the nature and location of any property) of a person referred to in paragraph (a), (b) or (c).
(2)The examination order ceases to have effect if the restraining order to which it relates ceases to have effect.
It is clear that the section is intended to have a wide operation and is not limited in its application to property the subject of the restraining order. However, in all cases, a person subject to an examination under s 180 must have some connection, either directly or indirectly, with the property the subject of the restraining order. If an examination order is sought under s 180(1)(a), it can only apply if the examinee is the owner of property restrained under ss 18 or 19, or otherwise claims an interest in the restrained property. In the case of s 180(1)(b), the prospective examinee will need to have been allegedly complicit in the crime realising the impugned proceeds.
The order of the District Court judge required the appellant to:
… 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.
Counsel for the appellant submitted that there was no power to make the order, as s 39(1) relates only to property which is the subject of a restraining order under Part 2 of the Act. Counsel for the respondent submitted that a restraining order having been made, the power of the court to order the owner of property to provide a sworn statement as to his dealings with property is not restricted to the property the subject of the restraining order.
For reasons which follow, I decline to decide that question.
Application to dismiss the appeal
In The City of Norwood, Payneham & St Peters v Baker[5], the Full Court considered a development application under the Development Act 1993 (SA). The application sought approval to demolish an existing residence and erect a new residence. The question before the trial judge was whether the approval which had been classified as a Category 1 development should have been treated as a Category 3 development. The issue arose in the Full Court as to whether the application, insofar as it included an application to approve the demolition of a building and the construction of a new residence, should have been the subject of separate applications and, in any event, whether the proposed development or developments could properly be classified as a Category 3 development.
[5] [2004] SASC 135
It transpired that whilst judgment was reserved by the trial judge, a further development application had been lodged by the respondent. The further development application sought to demolish the existing buildings and to remove them from the land. After approval of the application and subsequent demolition of the buildings, a further application was approved for a provisional development plan for construction of a detached dwelling on the land.
The effect of the events was that the development the subject of the original application, being the demolition of an existing building and construction of a new one, could no longer proceed. The original development and the application for its approval, was effectively abandoned when a separate application for demolition was made and when the demolition took place in accordance with that approved application.
Final development approval in respect of the subsequent development application was given the day after judgment at first instance was delivered. This left the issue being determined by the Full Court as no more than an advisory opinion. The Court said: [6]
To answer the questions posed by this appeal is to give an answer to what has now become a theoretical or hypothetical question. It can affect no-one’s rights.
[6] [2004] SASC 135 at [9]
The Court declined to exercise its jurisdiction under the circumstances, and dismissed the appeal.
It is not appropriate for this Court to deliver a decision when the outcome is purely academic.[7] The High Court of Australia considered this issue in Ainsworth v Criminal Justice Commission[8], where it concluded: [9]
Hence, declaratory relief must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions. The person seeking relief must have “a real interest” and relief will not be granted if the question “is purely hypothetical”, if relief is “claimed in relation to circumstances that [have] not occurred and might never happen” or if “the Court’s declaration will produce no foreseeable consequences for the parties”.
[7] Swift Australian Co (Pty) Ltd v South British Insurance Co Ltd [1970] VR 368; Ainsworth v Criminal Justice Commission (1992) 175 CLR 564; UTSAPty Ltd (inliq) v Ultra Tune Australia Pty Ltd [2004] VSC 105; Sarkis v DCT (Cth) (2005) ATC 4205
[8] (1992) 175 CLR 564
[9] (1992) 175 CLR 564 at 582
The respondent, having now obtained the information sought in the order, has informed me that there is no need to enforce the order of the District Court. The position is analogous, although not identical to the situation in Baker. Any decision of the Court will have no effect, as the respondent has the information sought. To determine the appeal when individual rights are no longer in question is contrary to law and against the public interest.
The appeal is dismissed.
Power to set aside the order
Both the appellant and the respondent seek an order discharging the order of the District Court judge. Rule 97 of the Supreme Court Rules applies to all appeals to the Supreme Court, other than those which are to be heard by the Full Court. This is an appeal against an interlocutory judgment of the District Court and is, therefore, to be heard by a judge of this Court. Rule 97.18 provides:
On the hearing of an appeal governed by Rule 97 the Court:
…
(d) may amend, set aside or discharge any judgment appealed from;
…
(i) may reverse or vary any interlocutory orders on the appeal.

As both the appellant and respondent seek an order setting aside the order of the District Court, I set aside and discharge the order made on 23 November 2004.
Costs
Counsel for the appellant seeks costs on an indemnity basis. He submitted that the application before the District Court and the necessity to institute the appeal was always unnecessary, as the information could always have, and should properly have, been obtained under s 180 of the Act. As it transpired, the information was obtained pursuant to s 180. He submitted that the appellant was compelled to challenge the application and orders of the District Court, and to appeal the decision.
The respondent submitted that the application to obtain the statement of affairs under s 39 was brought at a time when the Director considered that the provision of the information prior to the examination would have assisted in the examination of the appellant. By affidavit dated 26 April 2005, a Principal Legal Officer of the respondent with the care and conduct of the proceedings stated that at the time of applying for the order pursuant to s 39, she had submitted that the order was necessary to assist in the examination of the appellant, and to ascertain the appellant’s overall financial position prior to the examination.
Counsel for the Director submitted that it was a proper exercise of the Director’s powers to make an application pursuant to s 39 in order to obtain the information prior to a compulsory oral examination. The Director has, at all times, contended that the District Court was empowered to make the order. He has never resiled from that position. Counsel submitted that the Director had good reason to pursue the order under s 39 and, through no fault or conduct of the Director, it had transpired that time had overtaken the necessity to enforce the order. He submitted that in all the circumstances it was appropriate that each party bear their own costs.
I do not agree with the submission of the appellant that the order pursuant to s 39 ought never to have been sought. It was the appellant’s decision to challenge the order. He was not required to do so, but rather elected to do so as he was not satisfied with the decision of the District Court. I reject the appellant’s contention that the Director acted improperly in obtaining the order.
I consider that when the respondent brought the application under s 39 he did so for reasons which, at the time, were valid. The respondent was also entitled to seek the examination order under s 180 of the Act. There is nothing to suggest that the respondent deliberately or unnecessarily delayed the proceedings. Through no fault of either party, it became unnecessary to pursue the enforcement of the order of the District Court.
As it is unnecessary to determine the substantive question and, as neither party is responsible for time having overtaken the need to enforce the order, I decline to make an order for costs. Each party is to bear their own costs.