The Commissioner of the Australian Federal Police v Cranston (No 13)

[2020] NSWSC 1054

Supreme Court

New South Wales

Medium Neutral Citation:

The Commissioner of the Australian Federal Police v Cranston and Ors (No 13) [2020] NSWSC 1054

Hearing dates:

16 July 2020

Date of orders:

13 August 2020

Decision date:

13 August 2020

Jurisdiction:

Common Law

Before:

Wright J

Decision:

(1) The plaintiff and the Commonwealth are released from the undertakings as to costs and damages provided to the Court in these proceedings on 16 May 2017 in relation to the property listed in Schedules One, Two, Four, Five and Six of the amended notice of motion filed by the plaintiff on 12 March 2020.

Catchwords:

CRIME – Proceeds of Crime – Plaintiff released from undertakings as to costs and damages

Legislation Cited:

Proceeds of Crime Act 2002 (Cth)

Cases Cited:

Adam P. Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170; [1981] HCA 39

Application by the Commissioner of the Australian Federal Police [2019] NSWSC 837

The Commissioner of the Australian Federal Police v Cranston and Ors (No 1) [2017] NSWSC 624

The Commissioner of the Australian Federal Police v Cranston (No 12) [2020] NSWSC 508

The Commissioner of the Australian Federal Police v Mac (No 2) [2013] NSWSC 978

Category:

Procedural and other rulings

Parties:

The Commissioner of the Australian Federal Police (Plaintiff)
Adam Michael Cranston (First Defendant)
Jason Cornell Onley (Second Defendant)
Simon Paul Anquetil (Third Defendant)
Dev Menon (Fourth Defendant)
Devyn Hammond (Sixth Defendant)
Prescott Page Recoveries Pty Ltd (Twenty-Fourth Defendant)
Dali Cvek (Twenty-Fifth Defendant)
First to Tenth Respondents

Representation:

Counsel:
G O’Mahoney (Plaintiff)

Solicitors:
Criminal Assets Litigation, Australian Federal Police (Plaintiff)
Hardinlaw (Fourth Defendant)

File Number(s):

2017/146280

Judgment

1. By an amended notice of motion filed on 12 March 2020, the plaintiff, the Commissioner of the Australian Federal Police, sought to vary and vacate a number of orders made, under the Proceeds of Crime Act 2002 (Cth) (the POC Act), by Fullerton J on 16 May 2017, see The Commissioner of the Australian Federal Police v Cranston and Ors (No 1) [2017] NSWSC 624.

2. On 7 May 2020, orders were made in respect of seven of the eight prayers for relief sought by the Commissioner in that amended notice of motion, see The Commissioner of the Australian Federal Police v Cranston (No 12) [2020] NSWSC 508 (Cranston (No 12)). The orders made on that occasion involved the vacation or variation of orders made by Fullerton J relating to: (a) a superannuation fund, which had a nil balance at the time the original orders were made; and, (b) motor vehicles, which had been disposed of by persons who had a security interest in them for less than the amount owed or which had not been under the effective control of a relevant defendant at the time of the original orders. The particular orders made are set out in Cranston (No 12) at [16].

3. The persons affected by those orders were:

1. each of the first, second, third, fourth, sixth, twenty-fourth and twenty-fifth defendants, as the owners or suspected effective controllers of the relevant items of property; and

2. the ten respondents named in the amended notice of motion, who were the security holders and the persons who had acquired the vehicles.

4. The eighth prayer for relief, which was not dealt with in Cranston (No 12), was in the following terms:

“8. The Court Declares that:

The Plaintiff and the Commonwealth are released from the usual undertaking as to costs and damages provided to the Court in these proceedings on 16 May 2017 in relation to the property listed in Schedules One, Two, Three, Four, Five and Six below.”

5. Those Schedules One, Two, Three, Four, Five and Six related to the vehicles and superannuation fund which were the subject of the orders made on 7 May 2020.

6. The respective positions of the parties concerning prayer 8 were explained in Cranston (No 12) at [7] to [10] and [14]. In summary, I was and am satisfied that either by their signing forms of consent orders or their lack of opposition to the making of the orders, after being notified of the terms of the amended notice of motion and the fact that it was to be heard on 1 May 2020, all of the relevant defendants, except the fourth defendant, and all of the respondents to the motion either consent or have no objection to the granting of relief as sought in prayer 8.

7. As to the fourth defendant, on 1 May 2020, his counsel, Mr Bruckner, informed the Court that his client consented to the making of orders in accordance with prayers 1 to 7 but opposed the making of an order in terms of prayer 8, at that stage. The property relevant to the fourth defendant was a Mercedes Benz SLK 350 (VIN WDD1724472FO67676), formerly registered in the name of Mr Menon, referred to in Cranston (No 12) at [11] and in Schedule Three of the amended notice of motion.

8. As a result of the fourth defendant’s opposition, the question of the granting of relief sought in prayer 8 of the amended notice of motion was stood over to the directions hearing on 16 July 2020.

9. On 16 July 2020, Mr O’Mahoney of counsel, who appeared for the Commissioner, informed the Court that he was also authorised to mention the matter for Mr Hardin, who is the solicitor for the fourth defendant. It was the joint position of the Commissioner and the fourth defendant that the question of whether the relief sought in prayer 8 of the amended notice of motion in so far as it related to the fourth defendant and the property in Schedule Three should be stood over for directions on 10 September 2020. In these circumstances, an order to that effect was made in relation to the fourth defendant and the property referred to in Schedule Three. There was then no reason why the question of the granting of relief as sought in prayer 8 in relation to the other relevant defendants and respondents to the amended notice of motion and the property listed in Schedules One, Two, Four, Five and Six could not be dealt with and I reserved my decision in that regard.

10. By prayer 8, the Commissioner seeks that he and the Commonwealth be released from the undertakings as to costs and damages, of the type referred to in s 21 of the POC Act, given at the time the relevant restraining orders were made in 2017.

11. Section 21 of the POC Act provides that the Court may refuse to make a restraining order if the Commonwealth refuses or fails to give the Court an appropriate undertaking, with respect to costs and damages, and that a responsible authority may give such an undertaking on behalf of the Commonwealth. “Responsible authority” is defined by s 338 of the POC Act to mean the proceeds of crime authority that made the application. In this instance, it was the Commissioner.

12. As outlined above, it appears to me that all of the relevant defendants, excluding the fourth defendant, and all of the relevant respondents to the amended notice of motion have either consented to, or do not oppose, the granting of relief in terms of prayer 8.

13. Such undertakings as to costs and damages given in relation to applications under the POC Act have been released in cases such as The Commissioner of the Australian Federal Police v Mac (No 2) [2013] NSWSC 978 and Application by the Commissioner of the Australian Federal Police [2019] NSWSC 837.

14. Even where not all parties consent to the release of an undertaking, the Court still has power to release a party from such an undertaking: Adam P. Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 178; [1981] HCA 39 (Gibbs CJ, Murphy, Aickin, Wilson and Brennan JJ). There it was held:

“Considerable argument was directed to the question whether a court has power, otherwise than in the case of mistake operative at the time of giving it to release a party from an undertaking, at least in the absence of consent of the other party. But in our opinion a court undoubtedly has such a power. Just as an interlocutory injunction continues ‘until further order’, so must an interlocutory order based on an undertaking. A court must remain in control of its interlocutory orders. A further order will be appropriate whenever, inter alia, new facts come into existence or are discovered which render its enforcement unjust ….”

15. The situation of a court releasing an undertaking given in relation to the interlocutory orders, while not the same as the present case, is analogous because restraining orders under the POC Act have an interlocutory quality and serve a similar purpose to interlocutory orders, being to preserve assets or property pending the disposition of the substantive proceedings or the making of final orders dealing with the assets or property.

16. Given the circumstances and what has occurred in relation to the relevant property, as explained in Cranston (No 12), it is most unlikely that any affected party would make an application based on the Commissioner’s and the Commonwealth’s undertakings and, if that did occur, that such an application could be successful. Thus, even in relation to those parties who have not consented to the release of the undertakings, there will be little if any risk of substantial prejudice to them, if the undertakings are released.

17. Further, if the undertakings are released, it will put an end to the involvement of the respondents to the amended notice of motion in these proceedings and obviate the need for the Commissioner to keep them informed of any further developments. This slight practical benefit also weighs in favour of granting the relief sought in prayer 8 even where the respondents to the amended motion have not expressly consented.

18. Accordingly, the Court orders:

1. The plaintiff and the Commonwealth are released from the undertakings as to costs and damages provided to the Court in these proceedings on 16 May 2017 in relation to the property listed in Schedules One, Two, Four, Five and Six of the amended notice of motion filed by the plaintiff on 12 March 2020.

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Decision last updated: 13 August 2020