Act, 1986](/cgi-bin/viewdoc/au/legis/vic/hist_act/copa1986313/) ss 4, 6. Director of Public Prosecutions (Cth) v Saxon

JUDGE1 KING CJ The defendant in this action was arrested on 14th November 1992. Subsequently he was committed for trial on a charge of taking part with several other persons, in the production of methylamphetamine. 2. The defendant was the owner of three properties in Victoria and one in Queensland. The Director of Public Prosecutions instituted this action for an order pursuant to s.6 of the Crimes (Confiscation of Profits) Act 1986 for an order restraining the defendant from dealing with those properties. That order was made on 12th February 1993. The order was subsequently varied to permit the sale of the properties. The proceeds were paid into a bank account and the proceeds are now the subject of the restraining order. 3. The defendant has applied for the variation of the order to give him access to the funds for the purpose of these proceedings and his defence to the criminal charge. When the matter came before Nyland J she referred the following questions to the Full Court; "(a) does the Court have power under the Crimes (Confiscation of Profits) Act 1986 to vary or revoke the restraining order made under that Act to allow payment, out of property the subject of that order, of legal expenses incurred or to be incurred by the defendant in relation to the offence or offences in respect of which the order was made, and/or in relation to the proceedings taken under the Act itself? If 'yes' to question (a), (b) in accordance with what rate or rates should those expenses be paid out of the property subject to the order?" 4. The Crimes (Confiscation of Profits) Act 1986 provides for the forfeiture of tainted property. "Tainted property" is defined as: "(a) property acquired for the purpose of committing a prescribed offence or used in, or in connection with, the commission of a prescribed offence; or (b) property that is the proceeds of a prescribed offence." 5. Section 4(3) is as follows: "A person who commits, or is a party to the commission of, a serious drug offence is liable to forfeit all property except property as to which the court is satisfied, on evidence given or adduced by that person, that the property is not, and was not derived from, the proceeds of offences against the law of this State or any other law." 6. Section 6 authorizes the making of a restraining order where "there are reasonable grounds to suspect that property is forfeitable property". The order may prohibit, "subject to the exceptions stated in the order, any dealing with the property". Subsection (3) provides that a restraining order may "provide for payment of specified expenditure, or expenditure of a specified kind out of property subject to the order". 7. I have no doubt that the Act confers power on the Court to authorize the payment of legal expenses. Section 6 authorizes exceptions from the prohibition against dealing with the property, contained in a restraining order. The express authority "to provide for the payment of specified expenditure" is clearly wide enough to cover the payment of legal expenses. The Solicitor-General argued that that provision should be read down because there is no specific authority for the payment of legal expenses. I am unable to find anything in the context or in the purpose of the Act which would permit the implication of such a restriction on the amplitude of the power to authorize specified expenditure. 8. The second question reserved requires some consideration of the principles which should govern the exercise by the Courts of the power to authorize the payment of legal expenses. The fundamental principle relevant to the issue, to my mind, is that a person accused of crime is entitled to employ, out of his own resources, the legal representation of his choice. The fundamental importance of that principle is emphasised by its inclusion in the International Covenant on Civil and Political Rights to which Australia is a party. I quote a passage from the judgment of Kirby P in Director of Public Prosecutions v Saxon (1990) 28 NSWLR 263 at 274: "Australia is a party to the International Covenant on Civil and Political Rights. It is now a party to the Optional Protocol to that Covenant. Under Art.14.3(d) of the Covenant in the determination of a criminal charge against a person he is entitled to the 'minimum guarantee' (relevantly) to 'defend himself ... through legal assistance of his own choosing'." 9. We are not dealing in this case with property which may not be in truth the property of the accused person but may be the property of another. Where the property the subject of the restraining order can be identified, at least prima facie, as property which was obtained by theft or in other circumstances which left the victim's title to the property intact, other considerations would apply. The words of Kirby P in Director of Public Prosecutions v Saxon supra at p.274 apply to the present case: "It is, ostensibly, (the accused's) own property which is restrained by the orders made under the Act. How he accumulated that property may be a matter of speculation. Doubtless it may be the subject of evidence and argument as his criminal proceedings unfold. But he should not be deprived of the use of his property for the proper defence of those proceedings unless the Act obliges such a course." 10. The rates at which legal expenses should be authorized will be determined, as Gleeson CJ pointed out in NSW Crime Commission v Fleming and Heal (1991) 24 NSWLR 116 at 128, by "the current market for legal services". I should note at this point that while considerable assistance can be gained from the New South Wales cases cited above, some of the reasoning is not applicable in this State by reason of an important difference in the statutory provisions. Section 10 of the Drug Trafficking (Civil Proceedings) Act (NSW) under which those cases were decided expressly authorizes provision for the payment of "the reasonable legal expenses of any person whose interests in property are subject to the restraining order". That provision places on the Court an obligation to make an objective assessment of what constitutes "reasonable legal expenses". There is no such provision in the South Australian legislation and I do not think that it is the role of the Court under our legislation to limit a person's access to his own property for the cost of his defence to what the Court, as distinct from the accused person, considers to be reasonable. 11. The Solicitor-General argued that if the defendant were to be given access to his property at all for his defence, that access should be restricted to costs on some limited scale, by reason of the State's contingent interest in the property arising under the statute. I do not think that that is the correct approach. The restrained property is not property of which the State has or may have been deprived by the alleged criminal activity, nor is it a fund which may be required to compensate the State in respect of any loss which it has sustained. The purpose of the legislation is not restitution or compensation but the deprivation of an offender of the fruits of his criminal activity. The financial benefit to the State accruing from a forfeiture order is a mere by-product of that legislative purpose. The legislative purpose is not defeated by an accused person's access to his property to the extent necessary to secure legal representation of his choice. If he is found not guilty, he has merely used his own money. If he is convicted and an order for forfeiture is made, the amount of the legal expenses, although not available for forfeiture, is nevertheless money of which the offender has been deprived by the proceedings against him, by reason of the necessity of paying for his defence. An expensive defence, which does not go to the point of being wasteful, is not to be thought of as a luxury to which an accused person is not entitled out of property subject to forfeiture. The importance of a professionally conducted defence in our adversarial criminal justice system has recently been stressed by the High Court in R v Dietrich [1992] HCA 57; (1992) 109 ALR 385, especially per Mason CJ and McHugh J at p.396. It is an assumption of the adversarial system that the more highly skilled the presentation of the case on either side, the more likely it is that a just result will be achieved. 12. In general, I consider that the defendant should be entitled to engage the solicitor and counsel of his choice and to have his defence conducted in the manner which he and his legal advisers wish. He should have access to his property to the degree necessary for that purpose, that is to say to the degree necessary to pay the fees ordinarily charged by the solicitor and counsel of choice for a case of this kind. I do not think that it is the role of the Court to regulate the fees charged on the basis of what it considers to be reasonable. I think that the role of the Court should be restricted to ensuring that the property potentially liable to forfeiture is not depleted wastefully or dishonestly. It therefore has a role in relation to the number of lawyers employed on the case, to ensure that they are not wastefully employed. It would be proper for the judge to determine whether it would be wasteful to employ more than two lawyers, or whether the defendant would not be sufficiently represented by either counsel and solicitor or two counsel supported by a solicitor's clerk. It would be necessary for the judge to be satisfied of the bona fides of the fees charged, that is to say that they are the fees ordinarily charged for that class of work by the counsel and solicitor chosen by the defendant. Subject to those considerations of waste and bona fides, I think that the defendant ought to be left to negotiate his own agreements with his legal representatives. 13. I would answer the questions reserved as follows: (a) Yes. (b) The rate or rates ordinarily charged for the relevant class of work by the legal practitioners engaged by the defendant.

offence; (b) either - (i) the offender has been convicted and in consequence of the conviction a local or interstate forfeiture order may be made against a particular person; or (ii) if the offender were convicted of the offence, a local or interstate forfeiture order might be made against a particular person; and (c) the property is - (i) property of that person; (ii) held on behalf of that person; or (iii) in the effective control of that person. (2) A restraining order may be made on the basis of an ex parte application but, in that event, the court shall allow the owner of the property a reasonable opportunity to be heard on the question of whether the order should continue in force and, if after hearing the owner, the court is not satisfied that there is good reason to continue the order in force, the order shall be revoked. (3) A restraining order may - (a) confer on the Administrator powers relating to the getting in, management or control of property subject to the order; (b) make any other provision for management or control of the property; (c) provide for payment of specified expenditure, or expenditure of a specified kind out of the property subject to the order; (d) allow the owner of the property subject to the order to use the property in a manner and to an extent specified by the court as a security for raising money; (e) make any other provision in relation to the property subject to the order that may be necessary or desirable in the circumstances. (4) Where a person deals with property that is subject to a restraining order contrary to the terms of the order - (a) the dealing is void; and (b) the person is guilty of an offence. Penalty: $5 000 or imprisonment for 2 years. (5) A restraining order may be varied or revoked at any time. (6) Subject to subsection (7), a restraining order lapses - (a) if at the expiration of the prescribed period from the date of the order, a charge of the offence in respect of which the order was made has not been laid under the law of this State or the law of another State, or a Territory, of the Commonwealth; (b) if the charge of the offence in respect of which the order was made is withdrawn and a new charge of the commission of another offence (being either a prescribed offence or an offence against the law of another State, or a Territory, of the Commonwealth in consequence of which property is liable to forfeiture under a corresponding law), arising out of the same circumstances as the first charge, has not been laid within 7 days of the first charge being withdrawn; (c) if the person charged with the offence in respect of which the order was made is acquitted; (d) if the person charged with the offence in respect of which the order was made is convicted of the offence but proceedings for forfeiture of the property are not commenced within the prescribed period after the date of the conviction; or (e) proceedings for forfeiture of the property subject to the restraining order are determined. (7) A restraining order does not lapse under subsection (6)(a) if within the prescribed period proceedings for forfeiture of the property to which the order relates are commenced under this Act or a corresponding law. (8) In this section - 'prescribed period' means the period of one month or such longer period, not exceeding 2 months, as may be determined, on application by the Director of Public Prosecutions, by the court by which the restraining order was made." 11. It is not in dispute that the alleged offence as to which Vella is presently awaiting trial is a "relevant offence" for the purposes of the section. It is also a "serious drug offence" within the meaning of subsection (3) of section 4 of the Act. 12. Section 6 falls to be interpreted in light of the fact that the Act, in its short title, has, as its stated object, the aim of providing for the confiscation of profits of crime. 13. The basis of actual liability to forfeiture is spelt out in section 4 of the Act. This stipulates that:- "4(1) A person involved in the commission of a prescribed offence is liable to forfeit property as follows: (a) the person is liable to forfeit tainted property; (b) if the person has received or enjoyed at any time an accretion of property or other benefit in anticipation or in consequence of the commission of the offence, he or she is liable to forfeit property of equivalent value, (but where a person is liable to forfeiture under both paragraphs, an appropriate reduction in the value of property to be forfeited under paragraph (b) will be made if that is necessary to prevent double forfeiture in respect of the same accretion or benefit). (2) If a person who commits or is a party to the commission of a prescribed offence - (a) obtains any benefit in respect of the publication, or prospective publication, of material concerning the circumstances of the offence; (b) obtains any benefit in respect of the publication or prospective publication of material concerning his or her opinions, exploits or life history, or the opinions, exploits or life history of any other person who committed or was a party to the commission of the offence (being a benefit attributable in whole or part to notoriety achieved through commission of the offence); or (c) obtains any benefit by commercial exploitation in any other way of notoriety achieved through commission of the offence, that person is liable to forfeit that benefit or property of equivalent value under subsection (1). (3) A person who commits, or is a party to the commission of, a serious drug offence is liable to forfeit all property except property as to which the court is satisfied, on evidence given or adduced by that person, that the property is not, and was not derived from, the proceeds of offences against the law of this State or any other law. (4) Where a person not involved in the commission of a prescribed offence receives tainted property by way of gift from a person who was so involved that person is liable to forfeit the gift or property of equivalent value. (5) Where - (a) a person holds property on behalf of a person involved in the commission of a prescribed offence; or (b) a person holds property that is in the effective control of a person involved in the commission of a prescribed offence, the property will be treated for the purposes of this Act as property of the person involved in the commission of the offence and the person by whom the property is held should (where appropriate) be joined as a party to proceedings under this Act." 14. The phrase "tainted property" is defined in section 3 of the Act as under:- "'tainted property' means - (a) property acquired for the purpose of committing a prescribed offence or used in, or in connection with, the commission of a prescribed offence; or (b) property that is the proceeds of a prescribed offence." 15. It is at once apparent that the question of any forfeiture of property will have to abide the outcome of the pending trial in the District Court. If Vella is convicted then questions will need to be explored as the extent to which (if at all) section 4 operates in relation to the several properties which were the subject of the original restraint order and the proceeds of the subsequent sale of two of them. 16. It only remains to recite that, in an affidavit sworn by Vella, he deposes that, apart from the subject assets, he has no assets or access to funds to satisfy or secure payment of his legal costs of defending the charge against him or prosecuting the civil proceedings. However, he supplies no details as to his present income, expenditure and the means by which he is currently living. 17. I first turn to the question of the power to make an order as sought. 18. In essence it is the contention of the DPP that, unlike relevant express provisions to be found in a series of comparable statutes elsewhere, nowhere in the Act is there to be found a specific grant of power to exclude property to be used for legal costs from a restraining order or to release property already subject to such an order for that purpose. The Solicitor-General argues that the essential thrust of section 6 is the preservation of potentially forfeitable property. Thus, he contends, subsection (3) of that section ought to be read as limited to projected expenditure directed to the maintenance and preservation of property under restraint

and that it should not be construed so as to permit its dissipation. Whilst he acknowledges the draconian result necessarily attendant on that construction, he submits that this is in line with the clear, albeit stringent, intention of the legislation.

It seems to me that the short answer to such an argument is that espoused by Mr Abbott QC, of senior counsel, for Vella. The provisions of subsections (1), (3) and (5) of section 6 are quite unqualified and expressed in the widest possible manner. They invest the Court with a discretion to make any orders considered desirable not only as to the management of restrained property, but also for payment of specified expenditure or any other provision considered necessary or desirable in the circumstances. They also permit a discretionary exclusion of assets from the operation of the order.
Bearing in mind that a restraining order is, in some respects at least, conceptually akin to a Mareva injunction and is made at a time when the merits of any application made by the DPP under the Act are quite unresolved and unresolvable, I consider that this Court ought to favour such construction of the Act as works the least potential injustice upon an alleged offender, consistent with the patent intention of the legislature. There is force in the contention of Mr Abbott QC that what is essentially penal legislation ought to be construed in a manner which wreaks least hardship upon a citizen

especially where that hardship goes directly to the capacity of a citizen to mount a proper defence to a serious criminal charge. (Director of Public Prosecutions (Cth) v Saxon (1992) 28 NSWLR 263 at 270-1, 274.) This is the more so when one considers the rationale underlying the reasoning of the High Court in Dietrich v R [1992] HCA 57; (1992) 109 ALR 385. 21. Although any discretion to make such an order as is sought by Vella ought clearly to be exercised in a particular case with considerable circumspection, so as to ensure that the intendment of the legislature will not be thwarted, I entertain no doubt that such a discretion is conferred by subsection (3) of section 6. There is, in my opinion, simply no compelling reason why the normal meaning of the expressions employed ought to be read down or limited, and it is not difficult to envisage patent situations of injustice which could arise if a contrary view was to prevail. The powers conferred by subsection (3) are complemented by the provisions of subsections (1) and (5). I would therefore answer the first question posed by Nyland J in the affirmative. There would appear to be no logical reason for differentiating between costs of the defence and costs associated with proceedings under the Act. Indeed no-one has suggested to the contrary. 22. That leaves for consideration the residual submission of the DPP that, if funds can and ought to be released to meet legal costs then, having regard to the objects of the Act, the Court ought to proceed with caution. In some situations, of which the present case is not asserted to be one, the proper exercise of discretion as to any application for permission to resort to restrained assets will have to reflect the very nature of the assets in question and their alleged history. It would, for example, be unthinkable that, as was reiterated by the Court of Appeal in the, as yet, unreported case of New South Wales Crime Commission v Younan and Anor (delivered 2 July 1993) the Court would countenance the making of substantial inroads into assets patently derived, wholly or substantially, from criminal activities to defray the legal costs of an alleged offender. As was somewhat dramatically, but accurately, declaimed by counsel, it is scarcely likely that a proper exercise of judicial discretion would extend to approving the use of bank notes with the blue dye still on them, to defray the legal expenses of an alleged offender charged with stealing the money. However, such a consideration, plainly, is not applicable to the instant case. 23. Two considerations naturally arise, in the context of the matter before the Court. 24. For myself, I have no difficulty with the proposition that, in general, funds ought not to be released unless and until the Court is satisfied that it is, indeed, the situation that an applicant will otherwise not be able to fund a proper defence at all, or will only be able to do so with undue hardship and difficulty. Clearly a full disclosure will need to be made, in each instance, as to the residual assets and liabilities of the person concerned and any funds which that person might indirectly control. In the instant case an order ought not to be made until Vella makes full and detailed disclosure of his residual income, assets and liabilities and the Court is satisfied that he has no means of securing proper and adequate legal representation which ought to be reasonably acceptable to him, other than by way of resort to the subject assets. 25. Secondly, it would clearly be inappropriate for the Court to confer a carte blanche on Vella, if he truly has no means of otherwise funding his defence. Once again, bearing in mind the intention of the legislature, the quantum of legal costs to be funded - both as to the daily and hourly rates and specific cost items on which they ought to be based and also their ultimate total amount needs to be the subject of careful evaluation and oversight. In that regard I do not think that it is appropriate, or even practical, for the Court to adopt any rigid policy applicable to all cases. 26. The circumstances of each case will necessarily dictate the proper mode of exercise of discretion. There will need to be a reasonable balancing of the consideration of promoting the reasonable freedom of an offender to seek representation of his or her own choosing, on the one hand, with the need to ensure that assets potentially subject to forfeiture are not unduly dissipated on the other. 27. In my opinion it will need to be the responsibility of the Judge dealing with the matter, having been supplied by the applicant with full information and having sought and received appropriate input from the DPP, to sanction what is considered to be expenditure of such amount as is reasonably necessary to fund an adequate, but not extravagant, defence of the criminal proceedings in question. 28. In absence of relevant prescribed scales of costs and counsel fees a value judgment will be required in each instance. In some cases it may be appropriate to seek the assistance of the costs Master to pursue enquiries as to current market rates for counsel fees. In this regard it is difficult to perceive any justification for the scale allowed by the Legal Services Commission as having the status of more than one possible check against gross error. In essence the legal representatives of and counsel for the alleged offender ought to be paid the going average market rate for the services which need to be rendered to mount a proper defence. The number and seniority of counsel at the trial will have to be assessed having regard to the nature and complexity of the individual case. 29. In some situations it may be appropriate to stipulate for either an "all up" total sum, whilst, in others, there may be a warrant for allowing ongoing rates of expenditure, subject to review by a Judge or Master at critical stages and during the trial, with or without some outer limit. 30. In the instant case I would favour a transmission of this matter back to Nyland J for determination by her, consistently with the views above expressed. She may be disposed to refer the quantum issue to a Master for enquiry and recommendation by him, after investigation of the likely requirements for preparation and presentation of the defence case and proper prosecution of the proceedings in this Court already referred to. However, that is entirely a matter for her discretion. At the end of the day the issue will demand an act of judgment on her part. 31. I would respond to the second question posed in the following manner:- "Any legal costs authorised to be met from the subject assets ought to be assessed on the basis of current market rates applicable to the securing of adequate and reasonable legal representation for the fair presentation of the defence case, either by way of lump sum allowance for the total work to be done or by way of specified rates or amounts for identified and stipulated work to be done, upon the footing that a mechanism acceptable to the Court be established to monitor and approve actual expenditure and from time to time to review the propriety of the work done or proposed still to be done. Such mechanism could properly envisage payment by instalments and review by the

At a glance

Court

Decision date

Before

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Judgment (8 paragraphs)

DPP (SA) v. SAVIOUR JAMES VELLA No. SCGRG 93/110 Judgment No. 4353 Number of pages - 11 Confiscation - property of criminal offenders (1993) 61 SASR 379 (1993) 70 A Crim R 241 [1993] SASC 4353 (23 December 1993)

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Legislation Cited (2)

Cases Cited (7)