Cassar v New South Wales Crime Commission

Judgment 1THE COURT: The appellant, Charles Michael Cassar (Mr Cassar) has been charged with a number of drug and other offences. On 31 July 2013, Rothman J, on the application of the New South Wales Crime Commission (the Commission) made an order pursuant to the Criminal Assets Recovery Act 1990, s 31A (the Act) forfeiting to and vesting in the Crown the interest of Mr Cassar in two Swiss bank accounts, one in the name of Carmel Cassar and the other in the name of the Golden Jumami Foundation. 2The forfeiture order was made in circumstances where his Honour found that Mr Cassar had previously given a warranty as to his assets which had not disclosed his interest in the two Swiss bank accounts, thus triggering the operation of the forfeiture provisions in s 31A.

Background 3On 12 December 2007, orders were made pursuant to the Act, s 10, restraining the disposition of all of the interests in property of Mr Cassar and his son, Michael Charles Cassar. The property known to fall within the order was a sum of $340,000 in cash, real estate at Seven Hills and a motor vehicle. 4Subsequently, on 21 April 2008, leave was granted to the Commission to amend its summons to seek an order forfeiting the cash and the real estate to the Crown pursuant to s 22 of the Act. On the same day, the court, in accordance with a document entitled "Consent Order" (the consent order document), made a forfeiture order, forfeiting to and vesting in the Crown the money and the real estate at Seven Hills. The consent order document stated that the orders were made by consent and without admissions. In accordance with para (3) of the consent order document, the court 'noted' the following: "The First Defendant warrants to the Plaintiff that the First Defendant's only interests in property as at the date of the signing of these orders are the First Defendant's interests in the seized cash (together with any interest earned thereon), and the property specified in Schedule Two hereto ('the Seven Hills property') and Schedule Three hereto ('the Holden motor vehicle')." 5In addition to the warranty and the assets forfeiture order, consent orders were made varying the restraining order made on 12 December 2007 so as to exclude the motor vehicle from its terms, to make provision for payment of legal expenses to Mr Goold, solicitor for Mr Cassar, and for the payment of legal expenses of the Commission payable under s 12(1) of the Act. There was a further paragraph in the consent order document relating to a release from any claim for damages arising from the restraining order. 6The consent order document was signed by the Commission's solicitor and by Mr Goold. 7Prior to the consent orders being made, Mr Goold had written to the Commission by letter dated 18 February 2008 in respect of "the settlement of all proceeds of crime matters in relation to [Mr Cassar]". The letter makes accurate reference to the assets subject of the restraining order made on 12 December 2007. There was no reference in the letter to the Swiss bank accounts. 8Subsequent to the Court making the consent orders and noting the warranty and other matters in the consent order document on 21 April 2008, information was obtained by the Commission as to the existence of the Swiss bank accounts. This led to the Commission making an application under s 31A for the forfeiture of assets on 21 July 2010, which is the subject of the present appeal.

The legislation 9Section 3 of the Act, in the form it was at the time of the application, provided: "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." 10"Illegally acquired property" was defined in s 9, as follows: "9 Meaning of 'serious crime derived property' and 'illegally acquired property' (1) An interest in property is serious crime derived property if: (a) it is all or part of the proceeds of a serious crime related activity, or (b) it is all or part of the proceeds of the disposal of or other dealing in serious crime derived property, or (c) it was wholly or partly acquired using serious crime derived property. ... (3) Once an interest in property becomes serious crime derived property it remains serious crime derived property even if the interest is disposed of or otherwise dealt with (including by being used to acquire an interest in property), but this is qualified by subsection (5) ..." 11Section 22 of the Act provided, relevantly: "22 Making of assets forfeiture order (1) The Commission may apply to the Supreme Court for an order forfeiting to, and vesting in, the Crown specified interests, a specified class of interests or all the interests, in property of a person (an assets forfeiture order). (1A) The application must specify that the interest in property is an interest in property of any one or more of the following kinds: (a) an interest in property of a person suspected by an authorised officer, at the time of the application, of having engaged in a serious crime related activity or serious crime related activities, (b) an interest in property suspected by an authorised officer, at the time of the application, of being serious crime derived property because of a serious crime related activity or serious crime related activities of a person, (c) an interest in property held in a false name that is suspected by an authorised officer, at the time of the application, to be fraudulently acquired property that is illegally acquired property. ... (2) The Supreme Court must make an assets forfeiture order in respect of an interest in property referred to in subsection (1A) (a) or (b) if the Court finds it to be more probable than not that the person whose suspected serious crime related activity, or serious crime related activities, formed the basis of the application for the assets forfeiture order was, at any time not more than 6 years before the making of the application, engaged in: (a) a serious crime related activity involving an indictable quantity, or (b) a serious crime related activity involving an offence punishable by imprisonment for 5 years or more. (2A) The Supreme Court must make an assets forfeiture order if the Court finds it more probable than not that interests in property subject to an application are fraudulently acquired property that is also illegally acquired property." 12Section 27 of the Act provided, relevantly: "27 Making of proceeds assessment order (1) The Commission may apply to the Supreme Court for a proceeds assessment order requiring a person to pay to the Treasurer an amount assessed by the Court as the value of the proceeds derived by the person from an illegal activity, or illegal activities, of the person or another person that took place not more than 6 years before the making of the application for the order, whether or not any such activity is an activity on which the application is based as required by subsection (2) or (2A). (2) The Supreme Court must make a proceeds assessment order if the Court finds it to be more probable than not that the person against whom the order is sought was, at any time not more than 6 years before the making of the application for the order, engaged in: (a) a serious crime related activity involving an indictable quantity, or (b) a serious crime related activity involving an offence punishable by imprisonment for 5 years or more. (2A) The Supreme Court must make a proceeds assessment order against a person who is 18 years or older if the Court finds it more probable than not that: (a) the person derived proceeds from an illegal activity or illegal activities of another person, and (b) the person knew or ought reasonably to have known that the proceeds were derived from an illegal activity or illegal activities of another person, and (c) the other person was, at any time not more than 6 years before the making of the application for the order, engaged in: (i) a serious crime related activity involving an indictable quantity, or (ii) a serious crime related activity involving an offence punishable by imprisonment for 5 years or more." 13Section 31A of the Act provided: "31A Assets forfeiture orders after interests in property not disclosed (1) This section applies if: (a) an assets forfeiture order or proceeds assessment order is made, and (b) evidence or a warranty or other representation was given or made in proceedings for the order, or examination proceedings under this Act, by a person against whom the order is made (the defendant) as to the defendant's interest in property. (2) The Commission may apply to the Supreme Court for an order forfeiting to, and vesting in, the Crown a specified interest in property of the defendant at the time the evidence, warranty or representation was given or made that was not disclosed in the evidence, warranty or representation." 14Section 55 provided: "55 Conduct of directors, employees or agents (1) If it is necessary, for the purposes of this Act, to establish the state of mind of a body corporate in respect of conduct engaged in, or taken by subsection (2) to have been engaged in, by the body corporate, it is sufficient to show that a director, employee or agent of the body corporate (being a director, employee or agent by whom the conduct was engaged in within the scope of his or her actual or apparent authority) had that state of mind. (2) Any conduct engaged in on behalf of a body corporate: (a) by a director, employee or agent of the body corporate within the scope of his or her actual or apparent authority, or (b) by any other person at the direction or with the consent or agreement (whether express or implied) of a director, employee or agent of the body corporate, if the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the director, employee or agent, is to be taken, for the purposes of this Act, to have been engaged in by the body corporate. (3) If it is necessary, for the purposes of this Act, to establish the state of mind of a person in relation to conduct taken by subsection (4) to have been engaged in by the person, it is sufficient to show that an employee or agent of the person (being an employee or agent by whom the conduct was engaged in within the scope of his or her actual or apparent authority) had that state of mind. (4) Conduct engaged in on behalf of a person other than a body corporate: (a) by an employee or agent of the person within the scope of his or her actual or apparent authority, or (b) by any other person at the direction or with the consent or agreement (whether express or implied) of an employee or agent of the first-mentioned person, where the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the employee or agent, is to be taken, for the purposes of this Act, to have been engaged in by the first-mentioned person. (5) A reference in this section to the state of mind of a person includes a reference to the knowledge, intention, opinion, belief or purpose of the person and the person's reasons for the person's knowledge, intention, opinion, belief or purpose."

Evidence on the forfeiture application 15In an affidavit dated 21 February 2013, sworn in opposition to the Commission's application for a forfeiture order under s 31A, Mr Cassar stated that he had instructed Mr Goold to represent him in relation to the offences, being primarily drug related offences, with which he was charged. He said that in about January 2008, whilst he was in Silverwater Gaol, a police officer provided him with papers which related to the cash, the car and the real estate. He said that he subsequently read the documents and became aware he was restrained from using those assets. 16Mr Cassar further stated that he did not see "any further documents relating to the forfeiture proceedings". He also said that he saw Mr Goold in Silverwater Gaol approximately six times. He then said: "I understood the car was going to my daughter, Goold was going to [be] paid his legal fees (relating to the charges) from the cash and balance of the cash together with the property was going to NSW Crime Commission. Goold did not ask me any questions about my assets. I did not give him any instructions to sign any consent orders nor make any warranty as to my assets." 17Mr Cassar did not state what the documents with which he was served were, nor did he explain the basis of this understanding. Mr Cassar was not cross-examined on his affidavit and did not otherwise give evidence on the forfeiture application. 18Piet Baird, an Investigations Manager for the Commission, gave evidence on the Commission's application for the forfeiture order. In his affidavit of 20 October 2011, Mr Baird deposed to a conversation he had with Mr Cassar at the Commission's offices on 4 August 2010 relating to the Swiss bank accounts and the consent orders made on 21 April 2008. Mr Cassar told Mr Baird that Mr Goold had no authority to sign the consent order. He also advised Mr Baird that the name "Carmel Cassar" was his Maltese name. In para (8) of his affidavit, Mr Baird also deposed to a conversation he had with Mr Goold on the same day. That part of Mr Baird's evidence was objected to and rejected by the trial judge. 19Mr Goold did not give evidence in the proceedings either by way of affidavit or orally.

Reasons of the primary judge on the forfeiture application 20The application before the primary judge raised two legal questions, both being questions of statutory construction, and one factual question. The first legal question was whether a warranty of the kind to which s 31A refers must be personally given by a defendant. If the answer to this question was in the negative, so that the warranty could be given by an agent, the second legal question was whether the agent was required to have actual authority, or whether apparent or ostensible authority was sufficient. If actual authority was required, the factual question was whether Mr Goold had actual authority to give the warranty contained in the Consent order dated 21 April 2008. 21The primary judge held, at [15], that s 55(4), relating to agency, was a complete answer to Mr Cassar's contention that a solicitor was disentitled from giving a warranty on behalf of a client. His Honour further held, at [45], that apparent or ostensible authority was sufficient for the purposes of s 31A, and that, on the evidence, Mr Goold had apparent authority to give the warranty. Accordingly, his Honour held, at [46], that jurisdiction to make the order had been established and that there was no reason to refuse the application.

The appeal 22Mr Cassar's notice of appeal contained six grounds of appeal which raised the following issues: (1) Whether his Honour erred in basing his finding of actual authority on evidence that he had rejected as inadmissible, being para (8) of Mr Baird's affidavit (ground 1). (2) Whether a warranty for the purposes of s 31A must be given personally by the person subject to an assets forfeiture order or proceeds assessment order (ground 4). (3) If the warranty does not have to be given personally, whether the ostensible or apparent authority of the agent giving the warranty is sufficient for the purposes of s 31A (ground 5). (4) Whether Mr Goold had ostensible or apparent authority to give the warranty (ground 6). (5) If actual authority is required: (a) did the trial judge err in rejecting Mr Cassar's unchallenged affidavit evidence; (b) was there evidence, in any event, that Mr Goold had actual authority (grounds 2 and 3).

Question 1: error in reliance upon excluded evidence 23Mr Cassar submitted that the primary judge, having rejected para (8) of Mr Baird's affidavit relating to the conversation he had with Mr Goold on 4 August 2010, then relied upon that evidence to find first, that Mr Cassar had seen the consent order document and secondly, that Mr Goold had actual authority to sign the consent orders made in accordance with that document: see judgment at [33]. 24As has been noted above at [18], his Honour had rejected para (8) of Mr Baird's affidavit. Accordingly, his Honour erred in making findings based upon it. Ground 1 of the notice of appeal, therefore, has been made out. However, the Commission contended by its notice of contention that his Honour's finding that Mr Goold had actual authority was supportable on the admitted evidence. There is also the question whether ostensible or apparent authority is sufficient for the purposes of s 31A. These questions are considered below.

Question 2: whether a warranty under s 31A must be given personally 25Mr Cassar submitted that in order for a warranty to trigger the operation of s 31A, it must be given personally by the person the subject of the assets forfeiture or proceeds assessment order. He submitted that this followed from the express words of s 31A, viz that: "... a warranty ... was given ... in proceedings for [an assets forfeiture or proceeds assessment order] by a person against whom the order is made (the defendant) as to the defendant's interest in property." (emphasis added) 26Mr Cassar submitted that the Criminal Assets Recovery Act, including s 31A(1)(b), should be given a strict, literal interpretation given that the Act was penal in nature, conferred wide powers on the Commission and imposed severe consequences upon persons subject to orders made under it. Mr Cassar also submitted that a strict interpretation was warranted given the scope for unintentional non-disclosure of property to be made, having regard to the wide meaning of "interests in property" as defined in s 7 of the Act. It was integral to this submission that the requirement that the warranty be given personally was not subject to or qualified by s 55. 27Principles of statutory interpretation require that the language of the provision be construed having regard to its purpose and its context: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; 239 CLR 27; Federal Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; 87 ALJR 98; Certain Lloyd's Underwriters Subscribing to Contract No IH00AAQS v Cross [2012] HCA 56; 248 CLR 378; Commissioner of Taxation v Unit Trend Services Pty Ltd [2013] HCA 16; 87 ALJR 588 at [47]. The place that context and purpose played in the construction of a provision was explained in Certain Lloyd's Underwriters v Cross by French and Hayne JJ, at [24]: "The context and purpose of a provision are important to its proper construction because, as the plurality said in Project Blue Sky Inc v Australian Broadcasting Authority, '[t]he primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute' (emphasis added). That is, statutory construction requires deciding what is the legal meaning of the relevant provision 'by reference to the language of the instrument viewed as a whole', and 'the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed' ..." (citations omitted) 28Mr Cassar's submission, that penal statutes were subject to "higher statutory interpretation principles" cannot stand in the light of these authorities. The approach, that criminal statutes are to be construed strictly or according to some "higher interpretation", was the subject of comment in Beckwith v The Queen [1976] HCA 55; 135 CLR 569 where Gibbs J observed, at 576: "The rule formerly accepted, that statutes creating offences are to be strictly construed, has lost much of its importance in modern times. In determining the meaning of a penal statute the ordinary rules of construction must be applied, but if the language of the statute remains ambiguous or doubtful the ambiguity or doubt may be resolved in favour of the subject by refusing to extend the category of criminal offences: see R. v. Adams [1935] HCA 62; (1935) 53 CLR 563, at pp 567-568 ; Craies on Statute Law, 7th ed. (1971), pp. 529-534. The rule is perhaps one of last resort." 29The same approach was applied in R v Lavender [2005] HCA 37; 222 CLR 67 at [94], where Kirby J stated: "The ordinary rules of construction are now first applied, including in the ascertainment of the meaning of penal and taxing legislation. In such categories, as much as anywhere else, it is the duty of a court to ascertain, and give effect to, the purpose of the legislature as expressed in the language enacted by Parliament. To some extent the demise in the attractiveness of the former rule of construction has followed the recognition by courts of the legitimacy of modern Parliaments, elected as they now are by universal suffrage. Artificial categories and exceptions are now less in favour than they formerly were. Nevertheless, somewhat like the contra proferentem rule (the occasionally useful principle of construction of insurance and like documents) the principle suggesting a stricter approach to the interpretation of penal legislation may sometimes prove useful when ambiguity seems intractable." (footnotes omitted) See also Roads and Traffic Authority (NSW) v Baldrock [2007] NSWCCA 35; 168 A Crim R 566 at [24] per Spigelman CJ. 30In accordance with the principles of statutory construction to which we have referred, it is necessary to ascertain the legal meaning of the particular provision under consideration, in this case s 31A, by reference to the language of the section having regard to its purpose and the context in which it appears. The purpose of the Act is to deprive individuals of serious crime derived property and the provisions of the Act, such as ss 22, 27 and 31A aid in achieving that purpose. The context in which s 31A is to be construed is one in which a forfeiture order may be made without the necessity for the court to be satisfied of the prerequisites for otherwise making a forfeiture order in s 22 of the Criminal Assets Recovery Act and where, as submitted, "interest in property" is widely defined. In particular, it is not necessary for the Court to be satisfied that the property in respect of which there has been non-disclosure is serious crime derived or illegally acquired property. The section must also be construed in the context of the other provisions of the Act, including s 55. 31The precondition to making an order under s 31A is that an assets forfeiture order or a proceeds assessment order has been made: s 31A(1)(a). Subject to that pre-condition, s 31A(1)(b) refers to three circumstances which trigger the forfeiture provisions of the section, namely, if the person against whom an order of the type specified in s 31A(1)(a) fails to disclose a specified interest in property in (i) giving evidence, (ii) giving a warranty, or (iii) making a representation in proceedings for the order or in examination proceedings under the Act. 32Although this case concerns the giving of a warranty, the provision as a whole needs to be considered to determine whether the text, context and purpose of s 31A(1)(b) require that a warranty be given personally. 33The first circumstance raised in s 31A(1)(b) in which a non-disclosure may occur is the giving of evidence. Section 31A refers to evidence given in proceedings for an order specified in subs (1)(a) by the defendant against whom such order is made. This wording turns attention to the person against whom the order is made. 34An assets forfeiture order may be made in proceedings against an individual in respect of an interest in property of that individual person who is suspected at the time of the application of having engaged in serious crime related activity: s 22(1) and s 22(1A)(a). If an assets forfeiture order is made under these provisions, then, for the purposes of s 31A, the person who gave evidence must be the person against whom the assets forfeiture order was made. 35An assets forfeiture order and a proceeds assessment order may also be made against a corporation: see s 22(1) and s 22(1A)(b) and (c) and s 27(1). Mr Cassar accepted that this was so. A corporation acts through individuals. Depending upon a person's role or position within the company, a particular individual may act as the corporation in the sense of being the directing mind of the company: Tesco Supermarkets Ltd v Nattras [1972] AC 153 (especially at 171 per Lord Reid); Hamilton v Whitehead [1988] HCA 65; 166 CLR 121. A corporation has the same capacities and powers as an individual: see the Corporations Act 2001 (Cth), s 124 and accordingly may appoint agents and act through them. 36Mr Cassar contended that it was only the evidence of the former, that is, an individual acting as the corporation, that could trigger the operation of s 31A. There is nothing in the language of s 31A(1)(b) that confines the evidence given by a corporation to evidence of a person who acts as the company. An act by an agent on behalf of a principal is as much the act of the principal is if the principal had done the act personally. 37A warranty is different in nature from evidence. Evidence is given on oath in a proceeding. Depending on the matter in issue in the proceeding, it is a statement to the court by a person as to a state of affairs known to a person, or as to that person's actions, knowledge, observations or state of mind. By contrast, a warranty is a promise as to the existence or state of affairs or status of something. For example, a person may warrant or represent that goods are fit for purpose, that there are no defects in a property or that goods will be delivered on a particular day. In the ordinary course of things, a warranty may be given by an agent. 38A representation is a statement about something, not amounting to a promise. For example, a representation may be made during the course of negotiations for the sale of a business, or for a lease of premises for a business, that the location will attract passing trade. There may be a representation that business will increase because of the location. Other examples can easily be brought to mind. Likewise, in the ordinary course, a representation may be given by an agent. 39For the purposes of determining the proper construction of s 31A, it is also relevant to have regard to the person to whom the warranty or representation is given. As already indicated, s 31A only operates if evidence was given in proceedings for one or other of the orders specified in s 31A(1)(a). However, there is nothing in the text of s 31A that indicates that the warranty or representation must be given to the court. This may be contrasted with an undertaking, which may be given either to the court or inter partes with differing consequences. An undertaking given to another party to litigation may in the ordinary course be given personally or by an agent and is governed by the ordinary rules of contract. By contrast, an undertaking given to the court operates in the same way as a court order so that breach will constitute a contempt: see Thomson Australian Holdings Pty Ltd v Trade Practices Commission [1981] HCA 48; 148 CLR 150 at 164-165 per Gibbs CJ, Stephen, Mason and Wilson JJ; Pang v Bydand Holdings Pty Ltd [2011] NSWCA 69 at [51]. Importantly for the purposes of the question presently under consideration, an undertaking to the court may be, and is frequently, given by an agent, usually the person's legal representative. Where an undertaking is given to the Court by an agent, the serious consequence of breach still attaches to the person upon whose behalf the undertaking is given. 40However, it is difficult to see that a warranty could be given or a representation made "to the court", in the sense that an undertaking may be given to the court, for the simple reason that no consequence would thereby attach. The consequence that attaches where property is not disclosed is a consequence imposed by s 31A itself. If there is nothing in the nature of a warranty or representation that requires that it be given personally and if the serious matter of giving an undertaking to the Court may be given by an agent, the question becomes whether there is anything in the language of s 31A(1)(b), having regard to the context and purpose of the section, that requires the warranty or representation to be given personally. 41The essence of Mr Cassar's argument in this regard was that, having regard to the wide meaning of "interest in property" in the Act, there was a real risk of non-disclosure and that as the deprivation of property was such a serious consequence, the legislature must have intended that the language of s 31A, that the evidence, warranty or representation must be given by the person against whom an order is made, be read literally. However, as orders under ss 22 and 27 may be made against a corporation, this argument can only be advanced in respect of an order made in proceedings against an individual. 42That in turn raises the question whether, on its proper construction, s 31A is to be read distributively, so that when an order under s 22 or s 27 is made against an individual, such as in this case, not only must the evidence be given by the person against whom the order has been made, but a warranty or representation must be given or made personally by that individual. If one of the means by which non-disclosure occurs is personal to the defendant, there is an argument that coherence requires that the section be construed so that it applies in a consistent manner. On this approach, where an order is made against an individual, the evidence, warranty or the representation given or made would be required to be given or made personally whereas, in the case of a corporation, the evidence, warranty or representation would be made or given by an agent. 43An indication that this is the proper construction of s 31A is in the words "given or made by the person against whom the order is made". In our opinion, however, there is nothing in the purpose or context of s 31A that would require that the warranty be given or the representation be made personally by the person against whom proceedings are brought. Nor does the text of the section compel that answer. The language that a warranty be given or a representation made "by the person against whom the order is made", does not, as a matter of language, necessarily exclude the operation of the principles of agency. In this regard, the construction of the provision has to be determined in the context of the legislation as a whole: see Project Blue Sky; Certain Lloyd Underwriters above at [27]. 44It is necessary, therefore, to turn to s 55. 45Section 55 relates to "conduct of directors, employees and agents". It has, in effect, two parts. Subsections (1) and (2) deal with the position of a body corporate. Subsections (3) and (4) relate to the conduct of individuals. Pursuant to ss 55(1) and 55(2), the state of mind of a body corporate, or conduct engaged in by a body corporate, is not limited by reference to the state of mind or conduct of officers of the corporation. Provided that conduct is engaged in within the scope of a director's, employee's or agent's actual or apparent authority, the state of mind or the conduct is taken to have been engaged in by the corporation, and the corporation's state of mind will be that of the director, employee or agent engaged in the conduct. 46Mr Cassar did not argue that s 55(1) and (2) had no application to a corporation. Rather, on his submission, those provisions clarified the usual understanding of the relationship between a corporation and its directors. He contended, however, that the reference to agency, including the agency of employees of a company, was there "to catch criminal acts". He submitted that s 55(1) and (2) did not apply to the situation of an employee or agent giving a warranty or making a representation within the meaning of s 31A. This argument was an elaboration of the submission referred to above at [26]. 47In essence, Mr Cassar's argument was that for the purposes of s 31A, the only conduct that could trigger its operation was conduct of someone who could be equated with the defendant identified in the section. In the case of a corporation, that was a director or officer of the corporation. In the case of an individual, it was the individual. However, dealing for the moment with s 55(1) or (2), there is nothing in the context or in the purpose of those provisions that requires them to be construed in this way. Indeed, that construction is contrary to the plain text of the section and we would reject it. 48That then led to Mr Cassar's argument in respect of s 55(4). Mr Cassar's primary submission remained that s 55(4) did not apply to s 31A. Again, it is necessary to have regard to the language of the provisions, having regard to the purpose of the Act as a whole and of these provisions in the context of the Act. We have already referred to the purpose of the Act and the function of s 31A within that context. The purpose of s 55 is apparent on the face of the terms of the section and its language is plain, as indicated below. 49As already indicated, at [43] above, although there are indications in the language of s 31A that evidence, a warranty or representation must be given or made by the person against whom the order is made, there is also nothing in the language which excludes that this may occur through an agent. In particular, neither s 31A nor s 55 excepts its operation from the other. If the legislature intended that s 55 was not to apply to s 31A, the provision could expressly have, and might have been expected to have, so stated. Not only does the provision not except s 31A from its operation, it expressly provides that conduct engaged in by an agent within the scope of the agent's authority "is to be taken, for the purposes of this Act, to have been engaged in" by the principal (the Court's emphasis). 50When that circumstance is considered in conjunction with the fact that an order under s 31A can be made against a corporation and that a corporation can only act through its agents, given the interaction of ss 55(1) and (2) with s 31A that we consider those provisions have, we are of the opinion that an agent may give a warranty for the purposes of s 31A.

Question 3: whether apparent authority is sufficient 51Mr Cassar accepted that if s 55(4) did apply, the giving of a warranty or a representation could be "conduct" within the meaning of s 55(4) and thus could be made or given by an agent with either actual or apparent authority. He contended, however, that such an act, on its own, could not constitute a warranty for the purposes of s 31A, unless done with the necessary state of mind. According to Mr Cassar, the forfeiture provisions of s 31A did not operate unless the person giving the warranty knowingly made a false warranty. In this regard, it was submitted that a warranty was a "high level promise" which necessarily required a state of mind before such promise could operate as a warranty. 52Section 55(3) provides that if it is necessary to establish the state of mind of a person in relation to conduct taken by subs (4) to have been engaged by the person, it is sufficient to show that an employee or agent, acting within the scope of actual or apparent authority, had that state of mind. Mr Cassar submitted that it had not been shown that Mr Goold had that relevant state of mind, even if he was otherwise found to have actual or apparent authority. 53We do not agree with Mr Cassar's submission that a warranty for the purposes of s 31A must be given with a particular state of mind. The language of s 31A is plain and only requires that property was not disclosed at the time that the evidence, warranty or representation was given or made in the relevant proceedings. There is no requirement that the person knowingly gives false evidence or knowingly gives a warranty or makes a representation that is false. 54It follows on the view we have taken of the construction of s 31A and the interaction of s 31A and s 55 that a warranty does not have to be given personally, but may be given by an agent with actual or apparent authority.

Question 4: whether Mr Goold had apparent authority to give the warranty 55Mr Cassar accepted that the warranty given in the consent order handed to the court on 21 April 2008 was an integral part of the settlement recorded in that document. In other words, he did not assert that the fact that the warranty was contained in the first part of the document prior to the other orders sought in the document meant that the warranty was not given in proceedings for an assets forfeiture order. Accordingly, subject to the question of Mr Goold's authority, s 31A had been satisfied. Mr Cassar had also conceded in the court below that the agreement to that part of the consent orders relating to how the money sum of $340,000 was to be dealt with was within Mr Goold's "ostensible or apparent authority". Mr Cassar did not seek to resile from that concession in this Court. However, he did not concede that the giving of the warranty was within Mr Goold's ostensible or apparent authority. He had, of course, expressly denied that he had given Mr Goold actual authority. 56It is useful at the outset to understand the terminology. The terms apparent authority and ostensible authority are generally used as synonyms in the law of agency: see Freeman and Lockyer v Buckhurst Park Properties (Mangal) Limited [1964] 2 QB 480 at 503 per Diplock LJ. Mr Cassar submitted that a person has apparent authority if held out by another as having authority to engage in conduct including the particular act in question. That submission states the law too narrowly. In general terms, the scope of an agent's apparent authority is that which the principal represents or holds out to third parties: G D Dal Pont, Law of Agency (3rd ed 2013, LexisNexis Butterworths), 8.1. 57Apparent authority is to be contrasted with the actual authority of an agent. An agent's actual authority may include such authority as is implied by the nature and terms of the actual authority conferred on the agent by the principal. The scope of an agent's implied authority in a particular case will depend upon what is necessary or incidental to the performance of the express terms of the agency. An agent may, of course, have both implied and apparent authority. The implied and apparent authority of a legal practitioner was explained by Brightman LJ in Waugh v HB Clifford & Sons Ltd [1982] Ch 374 at 387 as follows: "The law thus became well established that the solicitor or counsel retained in an action has an implied authority as between himself and his client to compromise the suit without reference to the client, provided that the compromise does not involve matter 'collateral to the action'; and ostensible authority, as between himself and the opposing litigant, to compromise the suit without actual proof of authority, subject to the same limitation ..." 58His Lordship added that a compromise, which contained a term the court could not have ordered, did not constitute a "collateral matter" for the purpose of the principle just stated. 59Waugh v H B Clifford & Sons Ltd was cited by White J in Across Australia Finance v Bassenger [2008] NSWSC 799, where his Honour was also concerned with the extent of a solicitor's authority to compromise proceedings. His Honour, at [78], referred to the authority of a legal practitioner to compromise proceedings in the following terms: "A solicitor or barrister retained to conduct litigation ordinarily has implied as well as ostensible authority to bind his or her client to a compromise of the proceedings provided that he or she does not act contrary to instructions, the circumstances do not otherwise indicate that express instructions are required, the compromise does not include matters collateral to the action, and the compromise is effected in a fair and reasonable manner so that it is fairly within the limits of authority (Donellan v Watson (1990) 21 NSWLR 335 at 342; Prestwich v Poley (1865) 18 CB (NS) 806; 144 ER 662; Waugh v H B Clifford & Sons Ltd [1982] Ch 374 at 387)." 60Although Mr Cassar accepted that a solicitor had implied authority to settle proceedings as an aspect of the solicitor's actual authority, he resisted the suggestion that Mr Goold's implied authority to settle the proceedings for an assets forfeiture order brought by the Commission clothed him with apparent authority to give a warranty as to Mr Cassar's assets. He contended that the giving of the warranty as to his assets was collateral to the settlement of the proceedings. He relied upon In re a Debtor [1914] 2 KB 758 to support this proposition. 61In In re a Debtor, a judgment debtor sought to resist execution at the instance of a judgment creditor. The debtor sought to rely upon a deed of assignment to a trustee for the benefit of his creditors, which the judgment creditor's solicitors, without instructions, had voted in favour of at a meeting of creditors. The judgment creditor claimed she was not bound by the deed of assignment. Horridge J, at 761, considered that a solicitor's implied authority to compromise proceedings was limited to a compromise between the client and the other party to the litigation. Atkin J was of the same opinion. In his view, the solicitor's implied authority did not extend so far as entering into a deed of arrangement which involved the creation of relationships not only with the judgment debtor but with the trustee and other creditors who were strangers to the action. In other words, the solicitor's conduct in engaging with persons not party to the litigation was collateral to the retainer. 62As In re a Debtor demonstrates, it is a question of fact whether the conduct of the agent falls within the bounds of the agency. This includes whether a person has apparent authority and, more particularly, the extent of that authority. As Mr Cassar acknowledged that Mr Goold had implied authority to compromise the proceedings for the assets forfeiture order sought by the Commission on 21 April 2008, the question is whether Mr Goold's apparent authority extended to giving the warranty, or whether that was a matter collateral to the settlement of the proceedings. For the reasons already explained, the warranty was an integral part of that settlement and was not in any way collateral to it. Accordingly, we have concluded that Mr Goold had apparent authority to give the warranty as to assets contained in the consent order document. 63Mr Cassar's counsel also accepted that he could not make out the first qualification in the quoted passage from Across Australia Finance, namely, that Mr Goold acted contrary to instructions, because there was no evidence of any contrary instructions. However, he contended that the second qualification, namely, that the circumstances otherwise indicated that express instructions were required, was made out, because s 31A was to be read literally, unqualified by s 55. However, for the reasons given, we consider that s 55 applies to s 31A. It follows that this argument should also be rejected. 64Given the Court's determination that a warranty may be given by a person with apparent authority to do so and given the conclusion that Mr Goold had such apparent authority, the appeal should be dismissed with costs.

Question 5: whether Mr Goold had actual authority 65The conclusion reached in respect of Mr Goold's apparent authority makes it unnecessary to deal with the question of actual authority. However, given that the Commission argued that there was material to support a finding that Mr Goold had actual authority to give warranty, it is appropriate to deal with it briefly. The Commission relied upon a submission made by counsel for Mr Cassar before the primary judge that: "Whether or not Mr Cassar, as he swears in his affidavit gave Mr Goold instructions to sign any consent orders, he is caught by the solicitor retainer and actual or ostensible authority in that regard. I concede that." 66Given the generality of this concession, we are not inclined to treat it as a concession that Mr Goold was expressly instructed to give the warranty. As there was no other material upon which a finding of actual authority could be made, we would not uphold the Commission's argument on this ground. 67The Court makes the following orders:

1. Appeal dismissed;
2. The appellant to pay the respondent's costs of the appeal.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 20 October 2014