New South Wales Crime Commission v Lee

[2010] NSWSC 1012

CITATION:	New South Wales Crime Commission v Lee and Ors [2010] NSWSC 1012
HEARING DATE(S):	31 August 2010
JUDGMENT DATE :	9 September 2010
JUDGMENT OF:	Schmidt J
CATCHWORDS:	STATUTES - acts of parliament - operation and effect of statutes - construction and interaction of Criminal Assets Recovery Act 1990 and the Real Property Act 1900 - whether caveat may be lodged pursuant to s 15(3) of the Criminal Assets Recovery Act when plaintiff has no right to lodge caveat under s 74F of the Real Property Act - effect of s 10A restraining order - construction of s 15(3) of the Criminal Assets Recovery Act - caveat may be lodged when NSW Crime Commission has no legal or equitable interest in Real Property Act land - caveat may be challenged under s 10C of the Criminal Assets Recovery Act, not s 74J of the Real Property Act - assets forfeiture order under s 22 of the Criminal Assets Recovery Act incompatible with indefeasible title under Real Property Act - purpose of Criminal Assets Recovery Act must be given effect - REAL PROPERTY - torrens title - caveats - whether caveat should be extended - s 10A restraining order under Criminal Assets Recovery Act - interests in property - whether plaintiff has any legal or equitable interest in the land - whether Real Property Act a code as to caveats - caveats under s 15(3) of the Criminal Assets Recovery Act - whether order sought under s 12 of the Criminal Assets Recovery Act should be made - caveat to be extended - costs
LEGISLATION CITED:	Real Property Act 1900 Criminal Assets Recovery Act 1990
CATEGORY:	Principal judgment
CASES CITED:	Black v Garnock [2007] HCA 31; (2007) 230 CLR 438
PARTIES:	New South Wales Crime Commission - Plaintiff Jason Lee (also known as Do Young Lee) - First Defendant Elizabeth Park - Second Defendant J & Lee Property Investment Group Pty Limited - Third Defendant
FILE NUMBER(S):	SC 2010/118966
COUNSEL:	Mr I Temby QC - Plaintiff Mr C Newlinds SC with Mr G Jones - Third Defendant
SOLICITORS:	New South Wales Crime Commission (John M Giorgiutti) - Plaintiff Nyman Gibson Stewart - Third Defendant

- 23 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

SCHMIDT J

THURSDAY, 9 SEPTEMBER 2010

2010/118966 NSW CRIME COMMISSION v JASON LEE AND ORS

JUDGMENT

: By motion filed in August 2010, the plaintiff seeks an order that:

"1. Pursuant to section 12(1) of the Criminal Assets Recovery Act 1990 ("the Act") the caveats registered by the Plaintiff in respect of the interests in property of the First Defendant in the properties specified in Schedules One and Two hereto be extended to such time as the restraining order made in these proceedings on 13 May 2010 in respect of the interests in property of the First Defendant ceases to remain in force."

2 The application is opposed by the third defendant, J & Lee Property Investment Group Pty Limited (‘the company’), the owner of the properties. The application raises the question of the proper construction of the Criminal Assets Recovery Act 1990, the Real Property Act 1900 and their interaction, questions of construction which appear not to have previously arisen for the Court’s consideration.

3 These questions arise in circumstances where in May 2010, orders were made by Buddin J under s 10A of the Criminal Assets Recovery Act. Those orders dealt in part with Mr Lee’s interest in the company’s land. The order has been challenged by a motion filed in June, which is yet to be determined. The plaintiff is also pursuing other orders in relation to Mr Lee’s interest in that land in the proceedings.

4 On 13 May 2010, the plaintiff lodged a caveat over the company’s land. On 16 August, the company pursued a ‘lapsing notice’ pursuant to s 74J of the Real Property Act. The plaintiff disputes the company’s right to have that notice issued.

5 The effect of the order now sought by the plaintiff under s 12 of the Criminal Assets Recovery Act, is to extend its caveat while the s 10A restraining order remains in force and it pursues these proceedings.

6 The company’s case was that the Real Property Act is a complete code as to caveats and the system of registration of titles and dealings in land generally, which has not been impliedly amended or repealed by the Criminal Assets Recovery Act (see Black v Garnock [2007] HCA 31; (2007) 230 CLR 438 at 469.) The two acts worked perfectly well without one affecting the other.

7 Accordingly, the plaintiff’s entitlement to lodge the caveat was to be found in s 74F of the Real Property Act, not the Criminal Assets Recovery Act. The company argued that it had the right to have a lapsing notice issued under s 74J of the Real Property Act. Thereupon the plaintiff had the right to approach the Court under s 74K, for an order extending the operation of the caveat.

8 The company also argued that the plaintiff had the onus of establishing that it had an arguable case under s 74J, that it had an interest or estate in the land in question. The plaintiff had conceded that it had no legal or equitable interest in that land. It followed that the caveat which it had lodged had erroneously relied on the restraining order which it had obtained under the Criminal Assets Recovery Act, as entitling it to lodge the caveat. No such right existed. The provisions of the Criminal Assets Recovery Act had not modified the provisions of the Real Property Act, so as to establish such a right.

9 An order under s 10A of the Criminal Assets Recovery Act was nothing more than a restraining order and of itself created no interest in land. The provisions of s 15(3), which dealt with caveats, added nothing further. In its terms, that section only applied if the restraining order itself applied to an interest in land of the kind which would give rise to a registrable interest under the Real Property Act. Section 15 did not otherwise affect the operation of the Real Property Act.

10 For reasons which follow, I am unable to accept the case which the company advances.

The plaintiff has no legal or equitable interest in the land

11 It was common ground between the parties that the order made under s 10A of the Criminal Assets Recovery Act did not give the plaintiff any legal or equitable interest in the company’s land. In its terms the order is directed to Mr Lee’s interest in that land. That he has such an interest is the subject of challenge by another motion, in which the restraining order is sought to be set aside. It was common ground that if that application succeeds, s 15(4)(b) will require the plaintiff to withdraw the caveat.

12 It is in that context that the arguments which the parties advanced as to the proper construction of the Criminal Assets Recovery Act and the Real Property Act, arise for consideration.

Is the Real Property Act a code as to caveats?

13 The Company’s case was that the Real Property Act is a code, unaffected by the Criminal Assets Recovery Act. It relied on Black v Garnock, where the High Court had to consider the interaction between the Real Property Act and the Civil Procedure Act 2005, in relation to the effect of the recording of a writ of execution in the Register. The company relied on the observations of Callinan J at 469-70 as to the Real Property Act, to support its construction of the two legislative schemes here in question:

"78 It can be seen from those provisions that the Act contains a complete code for the lodgment, recording, maintenance, removal, renewal and lapsing of caveats. They mesh neatly with the system of registration of titles and dealings generally. In doing so, they also give effect to the purposes of the Act and the means by which it gives priority to instruments according to their time of lodgment. The provisions of the Act to which I referred in Hillpalm Pty Ltd v Heaven's Door Pty Ltd (2004) 220 CLR 472 at 509-510 [117], s 31B(2) defining the "Register" to include "dealings registered … under this or any other Act", and s 32(7) which requires the Registrar-General to maintain a record of "action taken in respect of, a computer folio and such other information, if any, relating to the folio as the Registrar-General thinks fit" similarly reflect the policy of the Act, of comprehensive notification to, and on the Register.

79 In J & H Just (Holdings) Barwick CJ also said this [(1971) 125 CLR 546 at 554]:

"To hold that a failure by a person entitled to an equitable estate or interest in land under the Real Property Act to lodge a caveat against dealings with the land must necessarily involve the loss of priority which the time of the creation of the equitable interest would otherwise give, is not merely in my opinion unwarranted by general principles or by any statutory provision but would in my opinion be subversive of the well recognized ability of parties to create or to maintain equitable interests in such lands. Sir Owen Dixon's remarks in Lapin v Abigail (1930) 44 CLR 166 at 205 with which I respectfully agree, point in this direction."


80 I must respectfully disagree. What is much more likely to be subversive of the whole of the scheme of the Torrens system is that a person interested in, or entitled to deal with, land, who has not acted fraudulently, might suddenly and unexpectedly be saddled with, or postponed to, an equitable estate or interest in land which could have been, but was not made the subject of protection by prompt lodgment of an instrument or the filing of a caveat pending the lodgment.

81 I am not speaking of course about a contest between two holders of competing equitable interests or estates, neither of whom has thought to avail himself of either of the statutory means of protection of his interest that I have just mentioned. Subject to other registered estates or interest, their respective entitlements will fall to be adjusted according to ordinary equitable and proprietary principles.

82 It is critical to keep in mind, in cases concerning land under the Torrens system, that, as Barwick CJ said on another occasion and Gummow and Hayne JJ repeat in this case [ Breskvar v Wall (1971) 126 CLR 376 at 385]:

"The Torrens system of registered title of which the Act is a form is not a system of registration of title but a system of title by registration."

14 The view that the Real Property Act is a code is one which will, for obvious reasons, not be lightly departed from. Nevertheless, it must also be accepted that the legislature, having enacted such a code, is free to enact other legislation which impacts on the code which it has established. What is here in issue is whether or not the legislature has done so.

15 In Black v Garnock the High Court did not have to consider the provisions of the Criminal Assets Recovery Act and the question of what impact it may have had on the system of caveats established by the Real Property Act, particularly whether it created a new right to lodge a caveat as to an interest in land, which does not exist under the Real Property Act.

16 That question must be approached in the context of the rules of statutory construction which arise for consideration whenever the legislature has enacted both general and specific legislation dealing with a particular subject matter. The general legislation in this case is the Real Property Act, which deals with title to land and caveats generally. The specific legislation is the Criminal Assets Recovery Act, which deals with caveats in circumstances where the plaintiff is pursuing the recovery of criminal assets, and the Court makes a s10A order as to a defined interest in Real Property Act land. (See the discussion in Statutory Interpretation in Australia, 6^th Edition Pearce and Geddes at [7.9] to [7.21].) In construing the two legislative schemes, the Court must strive to give them each effect.

17 The question which arises for determination is thus whether s 15(3) of the Criminal Assets Recovery Act, is a special provision intended to empower the plaintiff to lodge a caveat in circumstances where it has no right to lodge a caveat under s 74F of the Real Property Act, in respect of land to which a s 10A restraining order is directed.

18 For reasons which I will explain, I have concluded that the section may not be construed in the way for which the company contended. The conclusion which I have reached rests on a consideration of aspects of the Real Property Act; the purpose of the Criminal Assets Recovery Act; a consideration of the terms of s 15 itself; of other provisions of the Criminal Assets Recovery Act and by a consideration of the consequences of the constructions for which the parties respectively contended.

Caveats under the Real Property Act

19 Section 74K provides relevantly:

" 74F Lodgement of caveats against dealings, possessory applications, plans and applications for cancellation of easements or extinguishment of restrictive covenants

(1) Any person who, by virtue of any unregistered dealing or by devolution of law or otherwise, claims to be entitled to a legal or equitable estate or interest in land under the provisions of this Act may lodge with the Registrar-General a caveat prohibiting the recording of any dealing affecting the estate or interest to which the person claims to be entitled."

20 As I noted, it was common ground between the parties that the plaintiff itself has no equitable or legal interest in the company’s land. It follows that the plaintiff had no right to lodge a caveat under s 74K.

21 Consistently with this recognition, the plaintiff’s caveat noted that the ‘nature of the estate or interest’ which the plaintiff had was:

"Restraining order granted by his Honour Mr Justice Buddin Supreme Court of NSW on 13 May 2010 pursuant to s 10A of the Criminal Assets Recovery Act 1990 (NSW)"

22 The facts which were relied on were noted in the caveat to be:

"The Caveator is entitled to register its interest pursuant to section 15(3) of the Criminal Assets Recovery Act 1990 (NSW)"

23 The company’s submission that the plaintiff’s entitlement to lodge the caveat was found in s 74F of the Real Property Act, may not be accepted. The plaintiff neither had, nor claimed to have, such an entitlement. The plaintiff did not purport to lodge a caveat under s 74F of the Real Property Act. Any right to lodge a caveat can only have flowed from s 15(3) of the Criminal Assets Recovery Act. That is the basis on which the plaintiff purported to lodge its caveat.

24 It also follows that the company could not exercise any rights under s 74J, to make application to the Registrar-General for issue of a lapsing notice in respect of the plaintiff’s caveat, because the plaintiff had not lodged the caveat under s 74F. Section 74J provides relevantly:

"74J Lapse of caveat on application of proprietor of estate or interest

(1) Where a caveat lodged under section 74F remains in force, the Registrar-General shall, on an application being made in the approved form by the registered proprietor of an estate or interest in the land described in the caveat, prepare for service on the caveator a notice to the effect that, unless the caveator has, before the expiry of 21 days after the date of service of the notice:

(a) obtained from the Supreme Court an order extending the operation of the caveat for such further period as is specified in the order or until the further order of that Court, and

(b) lodged with the Registrar-General the order or an office copy of the order,

the caveat will (subject to evidence of due service of the notice on the caveator) lapse in accordance with subsection (4)."

25 While the plaintiff’s caveat presently remains in force, it was not ‘a caveat lodged under s 74F’ and, accordingly, the Registrar-General had no power to issue a s 74J lapsing notice to the plaintiff. The reference in s 74J to ‘a caveat lodged under s 74F’ itself, encompasses the possibility that a caveat might be lodged by some other means. Such means are provided elsewhere in the Real Property Act and now also by s 15(3) of the Criminal Assets Recovery Act, which itself provides a mechanism whereby a caveat lodged under s 15(3) might be removed, on approach to this Court.

Caveats under the Criminal Assets Recovery Act

Section 15(3)

26 A construction of this section must have regard to the purpose of the legislation. The objects of the Act are found in s 3:

"3 Principal objects

The principal objects of this Act are:

(a) to provide for the confiscation, without requiring a conviction, of property of a person if the Supreme Court finds it to be more probable than not that the person has engaged in serious crime related activities, and

(b) to enable the proceeds of serious crime related activities to be recovered as a debt due to the Crown, and

(b1) to provide for the confiscation, without requiring a conviction, of property of a person that is illegally acquired property held in a false name or is not declared in confiscation proceedings, and

(c) to enable law enforcement authorities effectively to identify and recover property."

27 The statutory scheme is directed to allowing the plaintiff to pursue orders which may ultimately result in the confiscation of property (see Part 3 Confiscation). Such asset forfeiture orders may finally be directed to Real Property Act land.

28 Beforehand, restraining orders may be made under s 10A, which provides, relevantly:

"10A Proceedings for restraining orders

(1) Application for order


The Commission may apply to the Supreme Court, ex parte, for a restraining order in respect of:

(a) specified interests, a specified class of interests or all the interests, in property of a person suspected of having engaged in a serious crime related activity or serious crime related activities, including interests acquired after the making of the order and before the making of an assets forfeiture order affecting the interests that are subject to the restraining order, or

(b) specified interests, or a specified class of interests, in property that are interests of any other person, or

(c) interests referred to in both paragraphs (a) and (b).

(2) The Commission may apply to the Supreme Court, ex parte, for a restraining order in respect of specified interests, or a specified class of interests, in property that are held in a false name.

(3) The Commission may only apply for a restraining order that relates to interests in property derived from external serious crime related activity if the person who has the interests is domiciled in New South Wales or the property is situated in New South Wales.
...


(5) Determination of applications

The Supreme Court must make a restraining order if the application for the order is supported by an affidavit of an authorised officer stating that:

(a) in the case of an application in respect of an interest referred to in subsection (1) (a)—the authorised officer suspects that the person has engaged in a serious crime related activity or serious crime related activities and stating the grounds on which that suspicion is based, and

(b) in the case of an application in respect of an interest referred to in subsection (1) (b)—the authorised officer suspects that the interest is serious crime derived property because of a serious crime related activity or serious crime related activities of a person and stating the grounds on which that suspicion is based, and

(c) in the case of an application in respect of an interest referred to in subsection (2)—the authorised officer suspects that the interest is fraudulently acquired property that is illegally acquired property and stating the grounds on which that suspicion is based,

and the Court considers that, having regard to the matters contained in any such affidavit and any evidence adduced under subsection (4), there are reasonable grounds for any such suspicion.

(6) The Supreme Court may grant an application under this section for a restraining order for interests in property derived from external serious crime related activity only if the application is supported by an affidavit of an authorised officer stating that the officer has made due enquiry and is satisfied that no action has been taken under a law of the Commonwealth or any place outside this State (including outside Australia) against any interests in property of the person concerned that are the subject of the application as a result of the external serious crime related activity."

29 Section 10A(1) permits orders to be made in respect of the interests in property of a person suspected of having engaged in a serious crime related activity, as well as in respect of the interests in property of other persons. The term ‘interest in property’ is given a particularly wide meaning. So far as land is concerned, such an interest is not confined to legal or equitable interests of the kind with which the Real Property Act is concerned. ‘Effective control’ is sufficient to give a person a relevant interest. Section 7 provides:

" 7 Meaning of “interest in property”

(1) In this Act, a reference to an interest of a person in property is a reference to:

(a) an interest the person has in real or personal property, or

(b) a chose in action enforceable at the suit of the person, or

(c) an interest of the person that is within a class of interests prescribed as interests in property for the purposes of this Act.

(2) Without limiting the generality of subsection (1), a reference in this Act to an interest of a person in property includes a reference to:
(a) the person’s money, and

(b) an interest that the person has in the goodwill of a business, and

(c) an interest that the person has in a licence required to be held in order to carry on a business.

(2A) A reference in this Act to an interest of a person in property includes a reference to an interest of a person in property situated outside New South Wales (including outside Australia).

(3) For the purposes of this Act, if:

(a) but for this subsection, a person would have an interest in property as provided by subsection (1), and

(b) the interest is subject to the effective control of another person,

the interest is an interest of the person who has effective control and is not an interest of the person referred to in paragraph (a).

(4) In this section:
interest , in relation to property, means:

(a) a legal or equitable estate or interest in the property, or

(b) a right, power or privilege in connection with the property,


whether present or future and whether vested or contingent."

30 ‘Effective control’ is defined in s 8 as:

8 Meaning of “effective control of interest in property”

(1) An interest in property may be subject to the effective control of a person within the meaning of this Act even if:

(a) the person does not have a legal or equitable estate or interest in the property, or

(b) the person has no direct or indirect right, power or privilege in connection with the interest.

(2) In determining whether or not an interest in property is subject to the effective control of a person, regard may be had to any relevant matter, including (without being limited to) the following matters:
(a) shareholdings in, debentures of, or directorships of, a company that has the interest,

(b) a trust that has a relationship to the interest,

(c) family, domestic, business and other relationships between that person and other persons having an interest in the property, or in companies of the kind referred to in paragraph (a) or trusts of the kind referred to in paragraph (b).

31 There was no issue between the parties that a restraining order made under s 10A, which is directed to Real Property Act land, does not grant the plaintiff itself any interest in the land the subject of the order. That view of the legislation must be accepted. A s 10A order, if addressed to land, is concerned with a person’s existing interest in property, as defined in s 7. The order creates no new legal, equitable or other interest in the land in the plaintiff.

32 It is in that light that the s 10A order directed to Mr Lee's interest in the company’s Real Property Act land must be understood. The order provided:

"Upon the Plaintiff giving the usual undertaking as to damages (the giving of which by its solicitor being noted) and considering that, having had regard to the matters contained in the affidavit of Jonathan Lee Spark sworn 12 May 2010, there are reasonable grounds for the suspicions stated therein

The Court orders:

1. Pursuant to section 10A of the Criminal Assets Recovery Act 1990 no person (other than any registered mortgagee dealing with its right to do so under the registered mortgage) is to dispose of, or attempt to dispose of, or otherwise deal with or attempt to otherwise deal with any interest in property (within the meaning of "interest in property" as defined in section 7 of the Criminal Assets Recovery Act1990) of Jason Lee (also known as Do Young Lee) including the interest in property in the property described in Schedules One, Two and Three hereto.

2. Pursuant to section 10A of the Criminal Assets Recovery Act1990 no person (other than any registered mortgagee dealing with its right to do so under the registered mortgage) is to dispose of, or attempt to dispose of, or otherwise deal with or attempt to otherwise deal with the interest in property (within the meaning of "interest in property" as defined in section 7 of the Criminal Assets Recovery Act1990) of Elizabeth Park in the property described in Schedule Four hereto.

3. Pursuant to section 12(1) of the Criminal Assets Recovery Act 1990 there shall be an examination on oath of the following persons before a Registrar concerning their own affairs and the affairs of each other including the nature and location of any property in which any of them have an interest:-


(a) Jason Lee (also known as Do Young Lee); and

(b) Elizabeth Park.

4. Pursuant to section 12(1) of the Criminal Assets Recovery Act1990 there shall be an examination on oath of the following persons before a Registrar concerning the affairs of Jason Lee (also known as Do Young Lee) and Elizabeth Park including the nature and location of any property in which Jason Lee (also known as Do Young Lee) or Elizabeth Park has an interest:-
(a) Seong Won Lee; and

(b) Brendan Pak.

5. Leave is granted to the Plaintiff to obtain from the Registry dates for the examinations ordered in Orders 3 and 4 above.

6. Pursuant to section 12(1)(c1) of the Criminal Assets Recovery Act1990 Jason Lee (also known as Do Young Lee) shall furnish to the Plaintiff, within twenty one (21) days after service of a sealed copy of these orders on Jason Lee (also known as Do Young Lee), a statement verified by oath of Jason Lee (also known as Do Young Lee) setting out the particulars sought in Schedule Five hereto.

7. Pursuant to section 12(1)(c1) of the Criminal Assets Recovery Act1990 Elizabeth Park shall furnish to the Plaintiff, within twenty one (21) days after service of a sealed copy of these orders on Elizabeth Park, a statement verified by oath of Elizabeth Park setting out the particulars sought in Schedule Five hereto.

8. Liberty is granted to the Plaintiff, Jason Lee (also known as Do Young Lee) and Elizabeth Park to apply on three (3) days' notice.

9. The costs of obtaining these orders shall be costs in the cause.

10. Pursuant to Rule 36.4 (3) of the Uniform Civil Procedure Rules2005 these orders are to take effect as of the date hereof."

33 In his judgment of 13 May, Buddin J referred to the affidavit in support of the plaintiff's application sworn by Jonathon Lee Spark on 12 May, in which Mr Spark explained the basis of his suspicion that Mr Lee had engaged in serious crime related activity, namely the supply of prohibited drugs. The material on which Mr Spark’s suspicion rested, included documentation which connected Mr Lee with the company, of which he is sole director and majority shareholder, and that suggested that Mr Lee had a relevant interest in the company's land. Buddin J concluded that reasonable grounds for Mr Spark’s suspicion had been established and accordingly made the restraining order sought, as s 10A(5) required.

34 On the face of s 15, upon the making of that order, it identifying that Mr Lee had an interest in the company’s land, the plaintiff was entitled to lodge a caveat, or to take certain other steps, in respect of the land. Section 15 provides:

" 15 Recording of restraining order

(1) If a restraining order applies to an interest in property of a particular kind and the provisions of any law, whether or not a law of the State, provide for the registration of title to, an interest in or a charge over, property of that kind, the authority responsible for administering those provisions must, on application by the Commission, record in the register kept under those provisions the particulars of the restraining order.

(2) If the particulars of a restraining order are so recorded, a person who subsequently deals with or attempts to deal with the property is, for the purposes of section 16, to be taken to have had notice of the restraining order.

(3) If a restraining order applies to an interest in land under the provisions of the Real Property Act 1900, a caveat may be lodged under that Act in relation to the order.

(4) If a restraining order recorded under this section ceases to have effect in relation to an interest in property in respect of which it was made, the Commission must:

(a) apply for cancellation of the recording, and

(b) withdraw any caveat lodged in relation to the order."

35 The company argued that despite its plain terms, s 15(3) would be construed so that a caveat could only be lodged by the plaintiff in circumstances with which s 74F of the Real Property Act was concerned. Given the scheme of the Criminal Assets Recovery Act and its purpose, that view of s 15(3) may not be accepted.

36 By its terms, s 10A permitted a restraining order to be made in respect of Mr Lee’s interest in the land of which the company is registered proprietor under the Real Property Act. The nature of that interest was specified in the order itself, by reference to s 7. Such interests are not confined to legal or equitable interests, with which s 74 of the Real Property Act is concerned. The case which the plaintiff pursues in the proceedings is that Mr Lee has a controlling interest in the land, in accordance with s 7(3) and s 8.

37 It follows that the company's submission that a proper construction of s 15(3) led to the conclusion that it created no right in the plaintiff to lodge a caveat in respect of its land, may not be accepted. Consistently with the purpose of the Criminal Assets Recovery Act, the nature of the interests in property with which the Act is concerned, is not merely legal or equitable interests of the kind with which the Real Property Act is concerned. The circumstances in which s 15(3) of the Criminal Assets Recovery Act empowers the plaintiff to lodge a caveat, are not those with which s 74F of the Real Property Act is concerned.

38 To the contrary, the plaintiff will itself never have a legal or equitable interest in land the subject of a s10A order. Nor does the Criminal Assets Recovery Act confine itself to interests of that kind. It follows that the right to lodge a caveat granted the plaintiff by s 15(3) is similarly not so confined. Granting the plaintiff the right to lodge a caveat once a s 10A order has been made, is necessary in this legislative scheme, precisely because the plaintiff itself has no interests in the property and thus no right to lodge a caveat under the Real Property Act in respect of land the subject of the order.

39 The caveat is concerned with notifying in the Register maintained under the Real Property Act the interest in the land identified in the s 10A restraining order which the plaintiff is pursuing in the proceedings it has brought under the Criminal Assets Recovery Act in respect of that interest. The plaintiff itself has no legal, equitable or other interest in the land the subject of the s 10A order. Nor is a s 10A order confined to legal or equitable interests in the land. The caveat rests on the Court’s s 10A order, not the plaintiff’s interest in the land, or even merely the equitable or legal interest in the land of the person to whom the s 10A order is directed.

The consequences of the construction urged

40 In considering the proper construction of the two legislative schemes and their interaction, the consequences of the respective constructions urged must be considered. A construction which gives both statutory schemes the work which each is seemingly intended to do, is one which must be preferred. It follows that the company's construction of the Criminal Assets Recovery Act, is one which would not be lightly reached. Were s 15(3) to be construed in the way in which the company urged, it would appear to have little, if any work to do.

41 This is because the plaintiff itself will never have the right to lodge a caveat under s 74F in respect of land the subject of a s 10A order, it having no legal or equitable interest in the land. If the interests of the person to whom the s10A order is directed has no legal or equitable interests in the land, a caveat could not be lodged under s74F in respect of their interest. In that event, if what is provided by s 15(3) were to be read down in the way contended for the company, by reference to s74F, what the legislature seemingly intended by enacting s15(3) would not be achieved.

42 On the face of s 15(3) the construction for which the company urges is a construction directly inconsistent with the clear words of the section and the purpose of the legislation, directed as it is to the pursuit and recovery of the proceeds of crime, even when it is someone other than the criminal who has obtained a legal or equitable interest in the property in question. That the legislature might adopt a new approach to the pursuit of such assets, even in the case of Real Property Act land, notwithstanding the resulting impact on the code which that legislation has established, must be accepted. That this was its intention is apparent from a number of provisions other than s 15(3) itself, including that by s 10A, a restraining order may be directed at a person other than the person suspected of having engaged in a serious crime related activity.

43 That this is a part of the purpose of this legislation is confirmed by the provision made in s 22 of the Criminal Assets Recovery Act. Ultimately in proceedings brought under this Act, that section empowers the Court to make an assets forfeiture order in relation to Real Property Act land. That is a power overwhelmingly and directly inconsistent with the scheme of indefeasibility of title created by that legislation.

Review mechanisms

44 Further support for the conclusion which I have reached as to the proper construction of s 15(3) may be found in other parts of the two legislative schemes, particularly the regimes respectively established to deal with caveats, once lodged.

45 The Real Property Act establishes a system whereby caveats lodged under s 74F may be removed by a system of lapsing notices under s 74J. Once such a notice is issued, the caveator is entitled to approach this Court under s 74K for orders extending the caveat. The caveator must then show that it has its claim ‘has or may have substance’.

46 The Criminal Assets Recovery Act also provides a mechanism whereby a caveat may be removed, but it is an entirely different system, requiring the person seeking to have the caveat removed to approach to the Court for relief in relation to the restraining order which underpins the caveat.

47 Section 10C provides:

" 10C Review of restraining orders

(1) The Supreme Court may, on the application of a person whose interest in property is affected by a restraining order, set aside the order on any of the following grounds:

(a) that, having regard to the affidavit supporting the restraining order application and any other evidence adduced, the Commission has failed to satisfy the Court that there are reasonable grounds for the relevant suspicion referred to in section 10A (5),

(b) that the applicant has established that the order was obtained illegally or against good faith.

(2) An application under this section by a person is to be made not later than 28 days after the person is notified of the order or may be made at any time with the leave of the Supreme Court.

(3) If an application is made under this section, the restraining order concerned remains in force unless and until an order is made by the Supreme Court to set aside the order.

(4) A person who applies for an order is entitled to adduce evidence at the application."

48 It was common ground that the company has the right to make a s 10C application, given its legal interest in the property. Such an application has been made. If the Court orders that the retraining order be set aside, s 15(4) takes effect and the plaintiff is thereupon obliged to withdraw the caveat.

49 That the legislature established such a mechanism for removal of caveats lodged under s 15(3), rather than leaving them to be dealt with by the system of lapsing notices established by the Real Property Act, gives further force to the construction of s 15(3) which I favour.

50 In any application under s 10C, consideration will have to be given to Mr Spark’s affidavit and any other evidence adduced, which sheds light on the nature of the interest in the land which the plaintiff claims that Mr Lee has. This is revealed by the nature of the relief claimed by the plaintiff in the proceedings, which includes orders under s 27 of the Act, as well as a declaration under s 8 and s 7(3), that Mr Lee has effective control of the interests in the land in question.

51 In such proceedings, it is only if the Court is convinced that the plaintiff has failed to satisfy it that there are reasonable grounds for the relevant suspicion referred to in s 10A (5),or if it is established that the s 10A order was obtained illegally or against good faith, that the Court will set aside the restraining order so that thereby, the plaintiff will be obliged to withdraw the caveat under s 15(4).

52 The matters which s 10C requires to be established before a restraining order will be set aside, are entirely different considerations to those which arise when an application is made for extension of a caveat lodged under s 74F of the Real Property Act. That also lends force to the conclusion that the legislature did not intend that caveats lodged under s 15(3) would be removed by the process of lapsing notices established by the Real Property Act and that the construction of s 15(3) for which the company contends may not be accepted.

Further caveats

53 Further support for the conclusions which I have reached flows from a consideration of the provision made in s 74O of the Real Property Act, which deals with lodging further caveats:

"74O Restrictions on lodgement of further caveats if earlier caveat lapses or is withdrawn

(1) This section applies if a caveat lodged under a provision of this Part in respect of any particular estate or interest in land or any particular right arising out of a restrictive covenant:

(a) subsequently lapses, or

(b) is, after an application is lodged with the Registrar-General for the preparation of a notice under section 74C (3), 74I (1) or (2), 74J (1) or 74JA (3), withdrawn under another provision of this Part, or

(c) is withdrawn or lapses under section 74MA,

and the same caveator lodges a further caveat with the Registrar-General in respect of the same estate, interest or right and purporting to be based on the same facts as the first caveat.

(2) A further caveat to which this section refers has no effect unless:

(a) the Supreme Court has made an order giving leave for the lodgement of the further caveat and the order or an office copy of the order accompanies the further caveat when it is lodged with the Registrar-General, or

(b) the further caveat is endorsed with the consent of the primary applicant or possessory applicant for, or the registered proprietor of, the estate or interest affected by the further caveat."

54 This provision is limited in its terms to the lodgement of further caveats, ‘if a caveat lodged under a provision of this Part in respect of any particular estate or interest in land’ subsequently lapses. Such a further caveat only has effect in the circumstances provided in s 74O(2), where the Court gives leave to lodge a further caveat. On its face, that is not a provision which can apply to a caveat lodged by the plaintiff in accordance with the provision made in s 15(3) of the Criminal Assets Recovery Act. Such a caveat, whether a first, or even a subsequent caveat, lodged after withdrawal of the original caveat under s 15(4)(b), can only be the consequence of the plaintiff exercising the right granted by s 15(3), after the Court has made a restraining order under s 10A, and not as the result of the Court making an order ‘granting leave for lodgement of a caveat’.

55 The CriminalAssets Recovery Act does not impose any requirement that the plaintiff first obtain the Court’s leave, before lodging a caveat, once a s 10A order has been made. That right is granted by force of the statute itself.

The Acts can work together .

56 It seems to me that the effect of the two legislative schemes is clear and that they are entirely capable of working together.

57 Once the Court is satisfied of the matters specified in s 10A(5) of the Criminal Assets Recovery Act, a restraining order must be made. Such an order can be directed to a legal or equitable interest in land, as well as other types of interest specified in s 7, with which the Real Property Act is not concerned. If that restraining order ‘applies to an interest in land under the provisions of the Real Property Act 1900’, the plaintiff may then take the steps contemplated by s 15(3), namely, by lodging a caveat under the Real Property Act, notwithstanding that the restraining order does not itself grant the plaintiff any interest in the land.

58 The purpose for which that right is granted is obvious, given the Court’s powers under the Criminal Assets Recovery Act, which incudes the power to make asset confiscation orders under s 22, whereby the assets to which the orders are directed are forfeited to the Crown (s 23). By lodging a caveat, relevant notice of the proceedings is given to those who might wish to deal with property affected by a s 10A restraining order. A landholder like the company, as a person ‘whose interest in property is affected by a restraining order’, may then apply to the Court to have the order set aside under s 10C. If the landholder establishes the matters provided in s 10C(1)(a) or (b), the Court will set the order aside. Thereupon, s 15(4)(b) will require the plaintiff to withdraw the caveat.

Conclusion

59 There was no issue that the company’s land is ‘land under the provisions of the Real Property Act 1900’. It follows that by s 15(3) Criminal Assets Recovery Act, the plaintiff was entitled to lodge a caveat under that Act, ‘in relation to the order’ made by Buddin J in May 2010, under s 10A. That order was concerned with Mr Lee's interest in the property. The caveat which the plaintiff lodged, in accordance with s 15(3), thus properly disclosed that the nature of its interest in the land was that that which had flowed from the s 10A order and the operation of s 15(3). The plaintiff had no right to have a lapsing notice issued under s 74 of the Real Property Act in respect of that caveat. The caveat was not lodged under s 74F of that Act, but pursuant to s 15(3) of the Criminal Assets Recovery Act.

Should the order sought under s 12 of the Criminal Assets Recovery Act be made?

60 Strictly, the order sought by the plaintiff may be unnecessary, as merely replicating the effect of s 15(4) of the Criminal Assets Recovery Act. At the conclusion of the hearing of the motion, however, the parties agreed to an order that the caveat be extended pending this judgment being given. Given that the Registrar-General has issued a lapsing notice and that the consent order has been made, it appears that a further ancillery order ought to be made under s 12 of the Criminal Assets Recovery Act to deal with that situation and the conclusions which I have now reached. It seems to me that such an order would provide that the caveat be extended until withdrawn by the plaintiff pursuant to s 15(4)(b) of the Criminal Assets Recovery Act, or further order of the Court.

Orders

61 The parties should have the opportunity to consider this judgment and bring in short minutes of the order to reflect the conclusions reached.

62 The usual order as to costs would be that the company bear the plaintiff's costs as agreed or assessed. If there is any disagreement, the parties have liberty to approach.

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