Commissioner of Australian Federal Police v Dickson and Ors

Supreme Court of NSW|2012-06-21|Before: Bellew J, McCallum J

Solicitors: Australian Federal Police - Proceeds of Crime Litigation Unit - plaintiff Johnson Winter Slattery - first and fourth defendants Peter Shield Lawyers, by their agents Uther Webster and Evans - second and ninth defendants File Number(s): 2012 / 00108692

INTRODUCTION

On 5 April 2012, on the application of the plaintiff, orders were made by McCallum J pursuant to the Proceeds of Crime Act 2002 (Cth) ("the Act") against a number of persons. Those orders included: (a) an order against the first defendant in the following terms: Pursuant to s 39(1)(ca) of the Act, the first defendant is directed to give to the plaintiff, within 14 days of the date of service of these orders, a sworn statement setting out: a. all of his interests in property within the meaning of the Act, worldwide, not including any asset or interest in property with a value of less than AUD $5000 as at the date of these orders; and b. all of his liabilities, worldwide, not including any liability with a value of less than AUD $5000 as at the date of these orders. (b) an order against the second defendant in the following terms: Pursuant s 39(1)(ca) of the Act, the second defendant is directed to give to the plaintiff, within 14 days of the date of service of these orders, a sworn statement setting out: a. all of his interests in property within the meaning of the Act, worldwide, not including any asset or interest in property with a value of less than AUD $5000 as at the date of these orders; and b. all of his liabilities, worldwide, not including any liability with a value of less than AUD $5000 as at the date of these orders. (c) an order against the fourth defendant in the following terms: Pursuant s 39(1)(d) of the Act, the fourth defendant is directed to give to the plaintiff, within 14 days of the date of service of these orders, a sworn statement setting out all of her dealings with item of property specified at Item 10a of Schedule 1. (d) an order against the ninth defendant in the following terms: 17 Pursuant s 39(1)(d) of the Act, the ninth defendant is directed to give to the plaintiff within 14 days of the date of service of these orders a sworn statement setting out all of her dealings with items of property specified at Items 8a, 9a, 10, 11 and 12 of Schedule 2.

FACTUAL BACKGROUND

The first and fourth defendants are husband and wife respectively, as are the second and ninth defendants. Pursuant to a summons filed on 5 April 2012, a number of orders (including those which are the subject of the present applications) were made ex parte in favour of the plaintiff by McCallum J. The evidence which was before her Honour included an affidavit from an authorised officer who deposed to a suspicion that each of the first and second defendants had committed serious offences within the meaning of the Act.
Following the making of the orders, each of the first and second defendants was charged by the plaintiff with offences pursuant to the Criminal Code (Cth) ("the Code") alleging that: 1. in contravention of s 135.4(3) of the Code, they each conspired to dishonestly cause a loss to the Australian Taxation Office ("the tax fraud offence"); and 2. in contravention of ss 11.5 and 400.3(1) of the Code, they each conspired to deal with the proceeds of the tax fraud offence ("the money laundering offence").
The plaintiff's allegations in respect of those charges may be summarised as follows.
During the financial years from 2007 to 2009 each of the first and second defendants was a director of a company called Neumedix Health Australasia Pty Limited ("Neumedix"). In taxation returns lodged with the Australian Taxation Office for each of the financial years within that period, Neumedix fraudulently claimed losses in excess of $275 million in respect of the depreciation of intellectual property rights. Such rights had allegedly been previously purchased by Neumedix from various offshore companies.
Through a complex trust arrangement, Neumedix subsequently donated those depreciation losses to other entities, and in return received what have been described as "incentive payments" in excess of $63 million. Such monies were then channelled through a series of offshore bank accounts back to Australia, where they were used for the acquisition of assets for the benefit of the first and second defendants. Importantly for present purposes, it is alleged that some of the assets so acquired are owned nominally by the fourth and ninth defendants, but are subject to the effective control of the first and second defendants respectively.
The estimated value of the assets restrained to date is approximately $53 million and the estimated value of the funds which have been traced is approximately $34 million. There is, therefore, a substantial shortfall between the sum of $63 million allegedly obtained by the first and second defendants by reason of the commission of the tax fraud offence, and the estimated value of the assets which are presently restrained.

THE EVIDENCE IN THE PRESENT APPLICATIONS

The first and fourth defendants relied upon an affidavit of Mark Geoffrey O'Brien sworn 18 May 2012 which was admitted without objection. Annexed to that affidavit was a copy of a statement of facts prepared on behalf of the plaintiff outlining the allegations giving rise to the charges which have now been laid.
The second and ninth defendants relied upon the affidavit of Peter Joseph Shields sworn 8 May 2012. Objection was taken by Mr Sullivan QC to paragraphs (16) and (17) of that affidavit, and those paragraphs were not pressed.
The plaintiff relied upon affidavits of Adam Thomas Sandon sworn 4 April 2012, and Rosanna Celona sworn 7 June 2012. The affidavit of Mr Sandon contained the evidence upon which the plaintiff originally relied before McCallum J in support of the making of the orders.
Ms Celona is a forensic accountant and a special member of the Australian Federal Police. Since early 2007 she has been a member of the Criminal Assets Confiscation Task Force, a division which is involved in identifying, restraining and confiscating property pursuant to the Act. In that capacity, she has been directly involved in the investigation of the alleged activities of the first and second defendants.
Ms Celona was cross-examined by Mr Wigney SC who appeared for the first and fourth defendants. The following passages from that cross examination are relevant in light of Mr Wigney's submissions: Q. May we take it that if it is the case that the first defendant, to give one example, is required to swear a statement setting out his interests in property, you are likely to be at least one of the persons who will access and consider the contents of that statement relating to his properties? A. At this stage I would expect that, yes. Q. And is it the case that if property is disclosed in such a sworn statement made by, for example, the first defendant that you, by which I mean the AFP, is not already aware of, that that would set in train, wouldn't it, a course of investigation to ascertain such matters as when that property was acquired, how it was acquired, and the like? A. That is correct, I would then do a further analysis on that particular asset. Q. You would endeavour to trace the acquisition of the interest in any such property disclosed in the statement back to the Neumedix account which received, as you believe it, the $63 million which was the product of the alleged tax fraud if I can put it in simple terms? A. Yes. Q. Is it also the case that since early June of 2011 you have been assisting in the investigation of the alleged offences by Mr Dickson and Mr Issakidis? A. Only on a part time basis. Q. The case officer, that is the officer with the primary conduct of the criminal investigation, is Federal Agent Ben Wheels-Johnson (sic), is that right? A. That is correct. Q. And you have been assisting him as and when required, as you put it on a part time basis, in relation to the investigation of the offences alleged against Mr Dickson and Mr Issakidis? A. It is not so much in that it's more in relation to tracing of and doing the flow analysis, that part of the investigation only. Q. But you have been assisting Federal Agent Ben Wheels-Johnson, the case officer, in relation to that aspect? A. Yes. Q. That is, I think you suggested, in part forensic accountancy support in relation to the criminal investigation, is that right? A. That is correct. Q. You have also at various stages liaised with members or officers of the Australian Tax Office in relation to the investigation have you not? A. I have in the earlier part of late last year, or middle of last year, but I haven't in recent months. Q. But you have also been involved in, have you not, or at least assisted in the execution of a number of search warrants relating to the criminal investigation? A. A couple, yes. Q. Would it be fair to say, Ms Celona, and I am not being critical of this one way or another, that you have been involved in both assisting the criminal investigation side of the matter and also the proceeds of crime aspect of the matter? A. In relation to the tracing of the moneys, yes.

The relevant legislative provisions

There are a number of provisions of the Act to which I was referred in submissions, and which bear upon the matters I am required to determine.
The principal objects of the Act are set out in s. 5 as follows: 5 Principal objects The principal objects of this Act are: (a) to deprive persons of the proceeds of offences, the instruments of offences, and benefits derived from offences, against the laws of the Commonwealth or the non-governing Territories; and (b) to deprive persons of literary proceeds derived from the commercial exploitation of their notoriety from having committed offences; and (ba) to deprive persons of unexplained wealth amounts that the person cannot satisfy a court were not derived from certain offences; and (c) to punish and deter persons from breaching laws of the Commonwealth or the non-governing Territories; and (d) to prevent the reinvestment of proceeds, instruments, benefits, literary proceeds and unexplained wealth amounts in further criminal activities; and (e) to enable law enforcement authorities effectively to trace proceeds, instruments, benefits, literary proceeds and unexplained wealth amounts; and (f) to give effect to Australia's obligations under the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime, and other international agreements relating to proceeds of crime; and (g) to provide for confiscation orders and restraining orders made in respect of offences against the laws of the States or the self-governing Territories to be enforced in the other Territories.
The general structure of the Act is set out in s. 6: 6 General This Act establishes a scheme to confiscate the proceeds of crime. It does this by: (a) setting out in Chapter 2 processes by which confiscation can occur; and (b) setting out in Chapter 3 ways in which Commonwealth law enforcement agencies can obtain information relevant to these processes; and (c) setting out in Chapter 4 related administrative matters. It concludes with miscellaneous provisions and with definitions and other interpretive material.
Section 7 makes specific provision for the confiscation scheme: 7 The confiscation scheme (Chapter 2) Chapter 2 sets out a number of processes relating to confiscation: (aa) freezing orders limiting withdrawals from accounts with financial institutions before courts decide applications for restraining orders to cover the accounts (see Part 2-1A); and (a) restraining orders prohibiting disposal of or dealing with property (see Part 2-1); and (b) forfeiture orders under which property is forfeited to the Commonwealth (see Part 2-2); and (c) forfeiture of property to the Commonwealth on conviction of a serious offence (see Part 2-3); and (d) pecuniary penalty orders requiring payment of amounts based on benefits derived from committing offences (see Part 2-4); and (e) literary proceeds orders requiring payment of amounts based on literary proceeds relating to offences (see Part 2-5); and (f) unexplained wealth orders requiring payment of unexplained wealth amounts (see Part 2-6).
Section 18 makes provision for the making of restraining orders against persons, such as the first and second defendants, who are suspected of committing serious offences: 18 Restraining orders--people suspected of committing serious offences When a restraining order must be made (1) A court with proceeds jurisdiction must order that: (a) property must not be disposed of or otherwise dealt with by any person; or (b) property must not be disposed of or otherwise dealt with by any person except in the manner and circumstances specified in the order; if: (c) a proceeds of crime authority applies for the order; and (d) there are reasonable grounds to suspect that a person has committed a serious offence; and (e) any affidavit requirements in subsection (3) for the application have been met; and (f) the court is satisfied that the authorised officer who made the affidavit holds the suspicion or suspicions stated in the affidavit on reasonable grounds. Note: A court can refuse to make a restraining order if the Commonwealth refuses to give an undertaking: see section 21. Property that a restraining order may cover (2) … (3) The application for the order must be supported by an affidavit of an authorised officer stating: (a) that the authorised officer suspects that the suspect committed the offence; and (b) if the application is to restrain property of a person other than the suspect but not to restrain bankruptcy property of the suspect--that the authorised officer suspects that: (i) the property is subject to the effective control of the suspect; or (ii) in any case--the property is proceeds of the offence; or (iii) if the offence to which the order relates is a serious offence--the property is an instrument of the offence. The affidavit must include the grounds on which the authorised officer holds those suspicions. (4) … (5) … (6) …
Section 39 of the Act provides (inter alia) as follows: 39 Ancillary Orders 39 (1) The court that made a restraining order, or any other court that could have made the restraining order, may make any ancillary orders that the court considers appropriate and, without limiting the generality of this, the court may make any one or more of the following orders: … (ca) an order directing the suspect in relation to the restraining order to give a sworn statement to a specified person, within a specified period, setting out all of his or her interests in property, and his or her liabilities; (d) an order directing the owner or a previous owner of the property (including, if the owner or previous owner is a body corporate, a specified director of the body corporate) to give a sworn statement to a specified person, within a specified period, setting out particulars of, or dealings with, the property; (da) if the court is satisfied that there are reasonable grounds to suspect that a person (other than the owner or a previous owner) has information relevant to identifying, locating or quantifying the property--an order directing the person to give a sworn statement to a specified person, within a specified period, setting out particulars of, or dealings with, the property; …
In the present case, the orders against the first and second defendants were made pursuant to s. 39(1)(ca) and the orders were made against the fourth and ninth defendants pursuant to s. 39(1)(d).
Section 39A is in the following terms: 39A Privilege against self-incrimination etc. does not apply (1) A person is not excused from giving a sworn statement under paragraph 39(1)(ca), (d) or (da) on the grounds that to do so would tend to incriminate the person or expose the person to a penalty. (2) However, in the case of a natural person, a sworn statement is not admissible in civil or criminal proceedings against the person who made the statement except: (a) in criminal proceedings for giving false or misleading information; or (b) in proceedings on an application under this Act; or (c) in proceedings ancillary to an application under this Act; or (d) in proceedings for enforcement of a * confiscation order.
Section 39B is in the following terms: Application to revoke ancillary order (1) A person may apply to the court that made an ancillary order under section 39 to revoke the order if: the person is affected by the order; and the application for the ancillary order was heard without notice having been given under subsection 39(3) following a request under subsection 39(3A). (2) The application must be made within 14 days after the person was notified of the ancillary order. (3) The applicant must give written notice of the application, and the grounds on which the revocation is sought, to any person who was entitled to make the application for the ancillary order (see subsection 39(2)). (4) The effect of the ancillary order is stayed until the court determines the application. (5) The court may revoke the ancillary order on application under subsection (1) if it considers it appropriate to do so. (6) The court may have regard to any matter it considers appropriate in determining the application. (7) If: (a) the ancillary order directed a person to do a thing within a particular period; and (b) an application is made to revoke the order under this section; the court may, if it considers it appropriate to do so, vary the order to extend that period by a specified period.
The present applications for revocation of the orders are made pursuant to s. 39A(5). Alternatively, they are made pursuant to the inherent jurisdiction of the court. However, counsel made it clear that although the application was made on these alternative bases, reliance was placed upon the same submissions. Moreover, it was not suggested that there was any difference in the relevant principles to be applied.
Section 266A of the Act is in the following terms: 266A Disclosure (1) This section applies if a person obtains information: (a) as a direct result of: (i) the person being given a sworn statement under an order made under paragraph 39(1)(ca), (d) or (da); or (ii) the exercise of a power (by the person or someone else), or performance (by the person) of a function, under Part 3-1, 3-2, 3-3, 3-4 or 3-5; or (b) as a result of a disclosure, or a series of disclosures, under this section. (2) The person may disclose the information to an authority described in an item of the following table for a purpose described in that item if the person believes on reasonable grounds that the disclosure will serve that purpose: Recipients and purposes of disclosure Item Authority to which disclosure may be made Purpose for which disclosure may be made 1 Authority with one or more functions under this Act Facilitating the authority's performance of its functions under this Act. 2 Authority of the Commonwealth or, of a state or Territory, that has a function on investigating or prosecuting offences against a law of the Commonwealth, State or Territory Assisting the prevention, investigation or prosecution of an offence against that law that is punishable on conviction by imprisonment for at least 3 years of life 2A` Authority of a foreign country that has a function of investigating or prosecuting offences against a law of the country Assisting in the prevention, investigation or prosecution of an offence against that law, constituted by conduct that, if it occurred in Australia, would constitute an offence an offence against a law of the Commonwealth, or a State or Territory, punishable on conviction by imprisonment for at least 3 years of for life. 3 Australian Taxation Office Protecting public revenue

(3) In civil or criminal proceedings against a person who gave an answer or produced a document in an examination, none of the following that is disclosed under this section is admissible in evidence against the person: (a) the answer or document; (b) information contained in the answer or document. (4) Subsection (3) does not apply in: (a) criminal proceedings for giving false or misleading information; or (b) proceedings on an application under this Act; or (c) proceedings ancillary to an application under this Act; or (d) proceedings for enforcement of a confiscation order; or (e) or civil proceedings for or in respect of a right or liability the document confers or imposes. (5) In a criminal proceeding against a person who produced or made available a document under a production order, none of the following that is disclosed under this section is admissible in evidence against the person: (a) the document; (b) the information contained in the document. (6) Subsection (5) does not apply in a proceeding under, or arising out of, section 137.1 or 137.2 of the Criminal Code (false or misleading information or documents) in relation to producing the document or making it available. (7) To avoid doubt, this section does not affect the admissibility in evidence of any information, document or thing obtained as an indirect consequence of a disclosure under this section. (8) …

Finally, s. 319 of the Act is in the following terms: 319 Stay of proceedings The fact that criminal proceedings have been instituted or have commenced (whether or not under this Act) is not a ground on which a court may stay proceedings under this Act that are not criminal proceedings.
The Act was amended by the Crimes Legislation Amendment (Serious and Organized Crime) Act 2010 ("the first amending Act") and the Crimes Legislation Amendment (Serious and Organized Crime) Act (No. 2) 2010 ("the second amending Act"). In particular: (i) s. 266A was inserted by the first amending Act; (ii) ss. 39(1)(ca), 39(1)(da), 39A and 39B were each inserted by the second amending Act; and (iii) s. 39(1)(d) was amended by the second amending Act by inserting the words "or previous owner" after the word "owner".

Initial submissions of the parties

Mr Wigney SC, who appeared for the first defendant, relied upon a number of fundamental principles which he summarised as follows: (i) common law privilege against self incrimination applies equally to the requirement to produce a written statement or affidavit as it does to examinations or other oral evidence, and extends to the derivative use of such material; (ii) I nteracting with that common law privilege is the right of an accused person to a fair trial; (iii) it is inconsistent with the right of an accused person to a fair trial to be compelled to answer questions, or to be required to disclose information in a written form, if it would tend to incriminate him, or otherwise prejudice his defence or the accusatorial nature of a criminal trial. Any such requirement would constitute an improper interference with the due administration of justice in criminal proceedings, and would amount to a contempt of court; (iv) although privilege against self incrimination can be abrogated by Parliament, a statute will not ordinarily be construed so to authorise action that would otherwise amount to a contempt of court, i.e. that would otherwise give rise to a significant risk of interference in a criminal proceeding; (v) the requirement of an accused person to produce information in a written form relevant to the charges against him can be stayed, even where the statute prevents the information from being used until the trial against the accused takes place, and even when there are other safeguards, if there is nonetheless a risk, notwithstanding those safeguards, of a tendency to interfere with the course of justice in a criminal trial; and (vi) such a stay can be granted even though other matters of public interest are at stake.
By reference to these principles, Mr Wigney submitted that if the right of a person accused of committing a criminal offence was sought to be interfered with by seeking to compel the person, under threat of criminal penalty, to give up his right to silence, such an attempt would prejudice that person's defence to the criminal charges and would amount to an improper interference with the due administration of justice in the criminal proceedings. In support of that submission he relied upon the decision in Hammond v Commonwealth (1982) 152 CLR 188 at 198 where Gibbs CJ observed: "Once it is accepted that the plaintiff will be bound, on pain of punishment, to answer questions designed to establish that he is guilty of the offence with which he is charged, it seems to me inescapably to follow, in the circumstances of this case, that there is a real risk that the administration of justice will be interfered with. It is true that the examination will take place in private, and that the answers may not be used at the criminal trial. Nevertheless, the fact that the plaintiff has been examined, in detail, as to the circumstances of the alleged offence, is very likely to prejudice him in his defence".
Mr Wigney submitted that the principles articulated by Gibbs CJ were not restricted to the giving of evidence, but extended to the provision of a written statement which could be used derivatively by someone else (see Reid v Howard (1995) 184 CLR at 6 -7 per Deane J).
Mr Wigney further submitted that the orders against the first defendant gave rise to a real risk of interference with both the administration of justice, and the right of the first defendant to a fair trial. Whilst he accepted that any statement provided pursuant to the order made against the first defendant could not be directly used against him in any prosecution, he cited the potential derivative use of the statement as the source of the risk to which he referred. He submitted that in light of the plaintiff's allegations, the disclosure by the first defendant of interests in property could result in particulars of those interests being included in the particulars of the money laundering charge. He argued that in these circumstances, the present order had the effect of compelling the first defendant to give up his right to silence by requiring him to provide a statement which included information relevant, or potentially relevant, to the charges. This, he submitted, amounted to an improper interference with the due administration of justice. He also submitted that the provision of any such statement would require the first defendant to address the central allegations made in respect of the money laundering offence or, more specifically, the allegations in relation to the interest held by the first defendant in property allegedly acquired with monies derived from the tax fraud offence. This, he submitted, would be directly relevant to the charges laid against him.
Mr Wigney accepted that the terms of the order do not require the first defendant to deal with, or disclose, the circumstances of his acquisition of any interest in property. However he submitted that inevitably, and particularly in light of the evidence of Ms Celona, the derivative use of any statement provided pursuant to the order would necessarily set those inquiries in train.
Mr Wigney acknowledged that the statutory scheme created by the Act was directed to the public interest in restraining property suspected of being the proceeds of crime. He also acknowledged that I was required to have regard to that scheme in the exercise of any discretion. However, he submitted that neither the statutory scheme, nor its underlying intent, should be interpreted as excusing, justifying or permitting an interference with the criminal justice system of the kind to which he had referred.
Ms Bashir who appeared for the second defendant adopted the submissions of Mr Wigney. In addition, she took me to the decision in Environmental Protection Authority v Caltex Refining Co. Pty Limited (1992) 178 CLR 477 in support of the proposition that it any abrogation of the privilege against self incrimination would require clear language on the part of the Parliament.
Mr Sullivan QC, who appeared with Ms Cheeseman for the plaintiff, took no issue with the general principles cited by Mr Wigney. However, he submitted that it was clearly open to the Parliament to modify or abrogate common law rights, and that in the present case the Parliament had seen fit to do so by the enactment of s. 39A of the Act. He submitted that the real question for determination in the present case was whether the orders against the first and second defendant gave rise to a real risk, as opposed to a theoretical possibility, of interference of the kind asserted beyond the extent to which the Parliament had intended the balance be struck. He submitted that no real risk had been demonstrated.
By reference to the various provisions of the Act which I have outlined, Mr Sullivan submitted that the scheme of asset confiscation created by the Act was both unique and rigorous, and was reflective of a deliberate legislative intention to ensure that wrong doers would be deprived of the fruits of their wrong doing. He submitted that the scheme was a matter to which, in the exercise of my discretion, I should have pre-eminent regard.
In circumstances where the additional provisions which came into force by virtue of the first and second amending Acts have thus far not been the subject of any judicial consideration, Mr Sullivan took me to extrinsic materials, including relevant Explanatory Memoranda, in support of his submissions as to the underlying legislative intention. He submitted that s. 39A of the Act abrogated the right to silence by the clearest of language and thus removed any right to rely upon self incrimination in order to be excused from providing a sworn statement under s. 39(1)(ca), (d) or (da). He also submitted that the Parliament, having considered the issue, specifically excluded, by the introduction of s. 266A, any derivative use immunity in respect of such a statement.
Mr Sullivan also relied upon the terms of the orders themselves in support of his submission that no real risk of interference had been demonstrated. He pointed out that the period of time specified in the orders did not correspond directly with the periods in which offences had allegedly been committed. He also pointed out that the terms of the orders were limited and, in particular, did not extend to imposing a requirement that either the first or the second defendant provide any information at all about (inter alia) the circumstances of the acquisition of any interest in property.

Supplementary submissions of the parties

On 6 September 2012, during the period in which I had reserved judgment, the Court of Appeal handed down its decision in New South Wales Crime Commission v Jason Lee [2012] NSWCA 276. Those proceedings involved an appeal against a refusal to make orders, pursuant to s. 31D of the Criminal Assets Recovery Act 1990 (NSW) ("the NSW Act"), for the examination of the respondents (along with a third person) concerning their affairs, at a time when the trial of one of the respondents in respect of money laundering charges was outstanding, and when both respondents had appeals pending against their convictions in respect of drug supply charges. In the course of submissions in the present matter Counsel had referred to the fact that the hearing of the appeal in Lee was to be considered by a five member bench of the Court of Appeal and that it involved issues which were not dissimilar to those in the present case. In these circumstances, I invited the parties to make such further submissions if they wished to do so in the light of the Court of Appeal's decision.
On behalf of the first and second defendants, it was submitted that the decision in Lee was neither binding nor determinative in relation to the applications in the present proceedings, because it involved the consideration of a different statutory regime. Accordingly, it was submitted that the decision did not compel me to refuse to exercise my discretion in favour of the revocation of the orders. It was submitted, in particular, that it remained open to me to exercise the discretion contained in s. 39B(5) in favour of the first and second defendants in circumstances where the statements which would be provided pursuant to the orders might impinge on future criminal proceedings, or where the degree of the potential interference in the system of justice was unacceptably or unreasonably high. It was submitted that nothing said by the court in Lee was to the contrary.
Counsel further submitted that unlike the position in Lee, the interference with the proceedings currently pending against the defendants was not speculative because of the overlap between the matters to be addressed in the statements which were ordered to be provided, and the allegations made by the plaintiff.
On behalf of the plaintiff it was conceded that the decision in Lee was not directly binding upon me because it concerned the provisions of the NSW Act. However, counsel submitted that the decision was nevertheless highly relevant to the determination of the present applications. In particular, it was submitted that the decision confirmed the general approach that should be taken in exercising a discretion such as that contained in s. 39B(5), in circumstances where the legislature had weighed competing public interests and had seen fit to abrogate established common law rights.
It was further submitted on behalf of the plaintiff that although the manner in which the issue had arisen in Lee was different in terms of procedure, there was no relevant difference in terms of the principles which should be applied, and that the Court in Lee had made it clear that when exercising a discretion of a kind contained in s. 39B I should have pre-eminent regard to the statutory expression of public purpose, and to the express interference, by the Parliament, with common law rights.

Consideration of the authorities

As previously noted, reliance was placed by counsel for the first and second defendants on the decision of the High Court in Hammond v Commonwealth of Australia. That decision was referred to in a subsequent judgment of the High Court in Hamilton v Oades (1989) 166 CLR 486, a judgment to which I was not referred in the course of argument. In that case, the respondent had been charged with various offences arising out of his dealings with a particular company and an order was made pursuant to s. 541 of the Companies (NSW) Code requiring him to attend for examination by a Registrar of the Supreme Court of NSW. Section 541 provided (inter alia) that a person was not excused from answering a question put to him at such examination on the ground that the answer might tend to incriminate him. However, the section further provided that where privilege was claimed before answering the question, the answer would not be admissible in any criminal proceedings brought against the examinee, other than in respect of the falsity of the answer. Mason CJ relevantly observed (at 494): "It is plain that an examination under s. 541 while charges are pending may expose the witness to the risks mentioned. To the extent only that under the section rights of an accused person are denied and protections removed, an examination may even amount to an interference with the administration of criminal justice. But is well established that Parliament is able to "interfere" with established common law protections, including the right to refuse to answer questions, the answers to which may tend to incriminate the person asked".
His Honour went on to observe (at 496): "Of course the section gives no protection to the witness against the use in criminal proceedings of derivative evidence, i.e., evidence which is obtained from other sources in consequence of answers given by the witness in his examination. It would be difficult for Parliament to provide for specific protection against derivative use of such answers given by a witness. Immunity from derivative use tends to be ineffectve by reason of the problem of proving that other evidence is derivative. But in any case, by enacting s 541 without providing such specific protection, Parliament has made its legislative judgment and such action is not required and has limited specific protection to the possible consequences of direct use in evidence of the answers of the witness, thereby guarding against the possibility that the witness will convict himself out of his own mouth - the principal matter to which the privilege is directed. Thus the legislative resolution of the competition between public and private interest is to provide for a compulsory examination and to give specific protection in relation to the principal matter covered by the privilege but not otherwise, except in so far as a judge, in the exercise of a wide statutory discretion, may see fit in the particular circumstances of a case to give directions as to the matters to be inquired into."
His Honour also referred to the judgment of Windeyer J in Rees v Kratzmann (1965) 114 CLR 63 at 80: "The honest conduct of the affairs of companies is a matter of great public concern today. If the legislature thinks that in this field the public interest overcomes some of the common law's traditional consideration for the individual, then effect must be given to the statute which embodies this policy".
In Hamilton v Oades Dawson J, having referred to both Rees v Kratzmann and Mortimer v Brown and Beames (1970) 122 CLR 493, made specific reference to the passage in Hammond to which I was taken in the course of argument (at [28] above) and observed (at 509): "But that passage is preceded by the observation that the urgency of the matter then before the Court required an immediate decision and that cases such as Rees v Kratzmann, Mortimer v Brown and Mitcham v O'Toole were not discussed. Moreover, the legislation in question in Hammond v The Commonwealth was of a different kind, being concerned in general terms with executive inquiry by means of a Royal Commission or Board of Enquiry without reference to subject-matter or purpose. And the privilege against self incrimination is not under our system of law inviolable, however clearly the legislature will need to express itself before the courts will discern an intention to abrogate or even weaken such an ingrained principle of the common law. In the case of s. 541, as I have pointed out, the legislature could hardly have expressed itself more clearly".
In New South Wales Crime Commission v Hung Sun Choi [2012] NSWSC 658 (a decision handed down only a matter of days before I heard argument in the present matter) McCallum J considered an application, pursuant to the provisions of s. 31D of the NSW Act, for an order that the defendant be examined and that he provide a verified statement of property. Her Honour declined to follow the primary Judge in Lee and, having considered the decisions in Hamilton v Oades, Rees v Kratzmann and Mortimer v Brown and Beames observed (at [47]): "In Mortimer the High Court held that an examinee under s. 250 of the Companies Act may not decline to answer a question on the ground that the answer may tend to incriminate him. The judgments in that case give sober recognition to the obligation of the court to construe a statute so as to give effect to the clear intention of the legislature and without sentimental regard for any incursion upon centuries of closely guarded notions of criminal justice".
Her Honour also observed (at [51] - [53]): "The Criminal Assets Recovery Act is replete with unambiguous indications that Parliament intended the Commission to be able to pursue confiscation orders notwithstanding the existence of pending criminal proceedings and with the aid of powers that would infringe upon a defendant's right to remain silent. [52] As already noted, the objects of the Act expressly contemplate the pursuit of confiscation orders without requiring a conviction. Section 13A (set out above) clearly contemplates the conduct of an examination in circumstances in which self-incrimination may occur. There is no need to draw any inference as to Parliament's intention in that respect, as the High Court was prepared to do in Mortimer. The Act expressly abrogates the privilege and provides compensatory protection against direct use of the answers given. Whether to extend that protection to derivative use was a matter for Parliament, which it also addressed (s 13A(3)). Examination orders under s 31D are governed by those provisions (s 31D(3)) and so must also be taken to have been intended to be available in the face of pending criminal proceedings. It is also significant that the existence of criminal proceedings is not a ground on which this Court may stay proceedings under the Act: s 62. [53] The risk of interference with the administration of justice must be assessed in that statutory context."
Her Honour went on to observe (at [54] - [55]): "However, as was acknowledged by the High Court in Hamilton v Oades, the legislature can authorise the compulsory interrogation of a person facing a criminal charge about matters relevant to that charge. As unpalatable as it may be to a common lawyer, the right to resist such interrogation invoking the privilege against self-incrimination is precisely what Parliament has abrogated by the legislation. It is the duty of the court to give effect to such legislation, which informs the assessment as to what the interests of the administration of justice demand. [55] That is not to say that the court must always accede to an application by the Commission for ancillary relief. The making of orders under s 31D is discretionary, but the discretion must be exercised having regard to the objects of the Act".
Her Honour concluded (at [57]): "I have concluded, however, that it would not be appropriate to refuse to make the orders sought only on the basis that the examination would compel the defendant to answer questions relevant to the criminal proceedings against him. To do so would frustrate the clear purpose of the legislation."
The proceedings in Lee similarly involved an application pursuant to s. 31D of the NSW Act for an order that the respondents be examined. Basten JA (at [24]) identified the principle that under the general law, a court will grant an injunction to restrain an inquiry undertaken in the exercise of executive power if it carries with it a real risk that the conduct of the inquiry will interfere with the administration of justice in criminal proceedings. He observed that such interference would constitute contempt of court and, accordingly, an injunction may lie to prevent a threatened contempt. His Honour went on to observe (at [34]): "Once it is accepted that the legislature may authorise a scheme of investigation and inquiry which has the potential to diminish common law protections for an accused in criminal proceedings, the question becomes one of of statutory construction: does the relevant legislation authorise such conduct and, if so, to what extent? Some assistance may be obtained in answering such questions from answers given in relation to other legislation having similar provisions, purposes or effects; however, the focus of the analysis must be the particular legislation in question ..."
His Honour then proceeded to consider the provisions of s. 13A of the NSW Act, which applied to any examination so ordered, and which provided that: (i) a person being examined was not excused from answering any question or producing any document on the ground that the answer or production might incriminate, or tend to incriminate, the person; (ii) any answer given, or document produced, was not admissible in criminal proceedings, other than proceedings for an offence under the NSW Act or regulations; and (iii) further information obtained as a result of answer being given or the production of a document was not inadmissible in criminal proceedings, on (inter alia) the ground that the answer given or document produced might tend to incriminate the person.
Having set out the provisions in full, his Honour observed (at [43] and [44]): "Three aspects of this provision are significant. First, it expressly removes the operation of the general law principle that a person cannot be compelled to answer a question on the ground that the answer might incriminate, or tend to incriminate, the person. Secondly, it provides what is commonly described as 'use immunity' for the answer, so long as objection was taken at the time of answering on the ground of self-incrimination. Thirdly, there is an express rejection of what is commonly described as derivative use immunity. The legislature evidently gave consideration to the consequences of removing the immunity from self-incrimination. There was no attempt to condition the removal of the immunity upon the existence or otherwise of outstanding criminal charges. No doubt that was because the confiscation of assets did not depend on a criminal conviction and, even if charges have not been laid, they might be laid in the future. The possibility, at least, of criminal charges was recognised by the conferral of use immunity in sub-s(2). [44] In respect of the third point, what is significant is not merely the rejection of such an immunity, but the fact that it was expressly addressed. The legislature evidently appreciated that answers given under compulsion might "set in train a process which may lead to incrimination or may lead to the discovery of real evidence of an incriminating character": Rank Film Distributors Ltd v Video Information Centre [1982] AC 380 at 443 (Lord Wilberforce). The decision not to preclude the use of such information may have followed the reasoning of Mason CJ in Hamilton v Oades at 496 …"
His Honour then concluded (at [49]): "The appropriate conclusion is that the statutory purposes revealed by the Criminal Assets Recovery Act were intended to be available and proceedings to give effect to them were intended to be maintained despite the possibility of adverse consequences for criminal proceedings otherwise on foot".
In the same case Meaghar JA (at [94]) said: "Where the Parliament, in furtherance of a particular public interest, has abrogated the privilege against self-incrimination, effect must be given to the statutory provisions which do so: Rees v Kratzmann [1965] HCA 49; 114 CLR 63 at 80; Mortimer v Brown [1970] HCA 4; 122 CLR 493 at 495, 499; Hamilton v Oades at 494-495, 507".
His Honour went on to say (at [99]): "The position under the Act is in many respects similar to the legislative regime considered in Hamilton v Oades. Section 13A gives no specific protection to the examinee against the use in criminal proceedings of further information obtained as a result of answers given or documents produced. However, by not providing specific protection against that use (and by providing expressly that such information is "not inadmissible"), the Parliament has made its legislative judgment that specific protection against the risk of that use is not required."
Finally his Honour observed (at [101]): "The exercise of the discretion arises in a context where the Act provides for an examination to take place notwithstanding that there remain risks of adverse consequences in relation to criminal proceedings which have been commenced but not completed".

The present case

For the same reasons as those outlined by Basten JA in Lee (at [34]) the present matter necessarily involves a question of statutory construction. In Australian Crime Commission v OK (2010) 185 FCR 258 Emmett and Jacobsen JJ (at [102]) observed (by reference to the decision of the High Court in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [69] -[ 71]: "The primary object of construction of a legislative instrument is to ensure that each relevant provision will be given a meaning and effect that is consistent with the language and the purpose of all of the provisions of the instrument. That is to say, each provision must be construed by reference to the language of the instrument viewed as a whole, on the assumption that its provisions are intended to give effect to harmonious goals. A statutory instrument should be construed in such a way as will ensure, as far as possible, that all of its provisions are useful and pertinent, none of its provisions is superfluous, void or insignificant. If there is conflict between the language of different provisions, the conflict is to be alleviated, so far as is possible, by adjusting the meaning of the competing provisions to achieve a result that will give effect to the purpose and language of the provisions, but at the same time maintain the unity or harmony of the instrument as a whole. That will sometimes require a determination of what are the leading provisions and what are subordinate provisions, such that one must give way to the other. By determining the hierarchy of the provisions, it will often be possible to give each provision a meaning that best gives effect to its purpose and language, while maintaining the unity and harmony of the scheme of the instrument".
The present orders were made against the first and second defendants, and the applications for their revocation are brought, in the context of a legislative scheme directed towards the confiscation and forfeiture of proceeds of crime. The strict nature of that scheme has been observed on more than one occasion (see for example Lee v Director of Public Prosecutions (Cth) (2009) 70 NSWLR 581 at [16], [17] and [21]). One of its primary objects is to deprive those who offend against the laws of the Commonwealth of the proceeds of their offending. In pursuit of that object, the Parliament has specifically authorised the making of the present orders.
The enactment of additional provisions by the first and second amending Acts has had the effect of further strengthening what was an already rigid scheme. In particular, s. 39A expresses what is, in my view, a clear and unequivocal abrogation by the Parliament of the privilege against self incrimination in respect of orders made pursuant to s. 39(1)(ca), (d) and (da). It is trite to observe that the privilege against self incrimination is a well entrenched principle of the criminal law. However what is also clear, is that such privilege can be abrogated by statute (see Environmental Protection Authority v Caltex Refining Co Ltd (supra) at 503). In my view, the abrogation of the privilege as it applies to a statement ordered to be provided under s. 39(1)(ca), was made clear by the enactment of s. 39A.
Similarly, the introduction of s. 266A(7) is, in my view, a clear reflection of the fact that the Parliament specifically considered the question of the disclosure of statements provided pursuant to ss. 39(1)(ca), (d) or (da). The Parliament concluded (inter alia) that information obtained as a direct result of being given such a statement could be disclosed in certain circumstances and that further, the admissibility of any such information obtained as an indirect consequence of such disclosure would not affect its admissibility in evidence.
Section 39B(5) of the Act gives the court power to revoke orders made under s. 39(1)(ca) if it considers it appropriate to do so. Section 39B(6) further provides that in determining any such application, the court may have regard to any matter it considers appropriate. The discretion is therefore a wide one. However, having regard to the various authorities to which I have referred, it is one which must be exercised having regard to the objects of the Act, and the scheme of asset confiscation which it creates.
It is not enough for the first and second defendants, in support of the revocation of the orders made against them, to rely upon the fact that criminal proceedings are pending against them. To permit such reliance would fail to have regard to the provisions of s. 319. This was acknowledged by counsel for each of the first and second defendants.
Further, the fact that derivative use can be made of a statement provided pursuant to the orders does not, of itself, justify the exercise of the discretion in favour of revocation. Such use is expressly authorised by the Act. If an applicant for revocation needed only to point to that fact in order to justify a basis for revocation of an order made under s. 39(1)(ca), one of the purposes of the Act would be frustrated and rendered largely unworkable.
In my view, the critical question in the present case is whether, in circumstances where the Parliament has expressly authorised the making of orders which impinge upon common law rights, and has enacted particular provisions governing the disclosure of information which is provided, it has been demonstrated that if the orders are not revoked there is a real risk, as opposed to a theoretical possibility, of interference with the system of criminal justice and the rights of the first and second defendants.
In circumstances where the Parliament, in conferring power to make the present orders, has specifically legislated to abrogate the privilege against self incrimination in a particular and relevant respect, I do not accept the submission advanced on behalf of the first and second defendants that any attempt to interfere with the rights of an accused person by seeking to compel that person to give up his or her right of silence will amount to an improper interference in the administration of justice in the criminal proceedings. That submission adopts, in a general sense, the language used in Hammond. Quite apart from the fact that there has been, as I have outlined, subsequent consideration of the decision in Hammond, the present case must be considered in the context of statutory provisions which were not applicable in Hammond, and which: (a) specifically abrogate the privilege against self incrimination in respect of the provision of the statements under s. 39(1)(ca); (b) permit, in certain circumstances, the disclosure of such statements; (c) make it clear that the admissibility in evidence of information obtained as an indirect consequence of such disclosure is not affected; and (d) are part of a statutory scheme which is specifically directed to an important matter of public interest, namely the confiscation of assets acquired from criminal activity.
Further, I do not accept the submission that orders against the first and second defendants give rise to a real risk that by providing the statements they would be required to address the central allegations made against either of them. The terms of the orders do not extend beyond requiring each of the first and second defendants to provide a statement setting out their interests in property, and their liabilities. In particular, the orders do not require either defendant to disclose matters such as: (i) the circumstances in which any particular asset or interest was acquired; (ii) when it was acquired; (iii) how it was acquired; (iv) why it was acquired; or (v) with what proceeds it was acquired.
It is, of course, the case that derivative use will be made of the statements in the manner alluded to by Ms Celona in the course of her evidence, which will set further enquiries in train. However, that issue was specifically considered by the Parliament, and s. 266A was enacted permitting that course.
Further, I do not accept that there is a real risk of interference with the rights of the first and second defendants on the basis that material contained in the statements to be provided pursuant to the orders would be directly relevant to the charges, and would therefore be able to be used against them in a way which was prejudicial. The nature and extent of what might be disclosed is similarly not known.
For all of these reasons, it is my view that the orders against the first and second defendants should not be revoked.

Submissions of the parties

The principal submission made by Mr Wigney on behalf of the fourth defendant was that in light of the limited evidence concerning any dealings by her with the relevant property, the public interest in not compelling her to make a sworn statement which may be used to incriminate her spouse (the first defendant) outweighed any demonstrated reason for the order against her to remain operative. In developing that submission, Mr Wigney referred me, in particular, to the judgment of Heydon J in Australian Crime Commission v Stoddart (2012) 282 ALR 620 especially at [154]-[164].
In that case, the spouse of a suspect had attended before an examiner of the Australian Crime Commission in response to a summons. In the course of answering questions put to her about her husband's business activities, she claimed to be entitled to the "privilege of spousal incrimination", which, she argued, amounted to a right not to give evidence that might incriminate her husband. The relevant legislation made no provision for any such privilege.
Heydon J concluded (at [152]) that the common law has, for some time, recognised that a person has a privilege not to answer questions where such answers may tend to incriminate his or her spouse. However, his Honour was in dissent. French CJ and Gummow J (at [41]) concluded that it could not be said that the common law in Australia recognised the privilege which had been asserted. Crennan, Kiefel and Bell JJ concluded (at [233]) that the spouse was a competent witness to be examined under the legislation, was compelled by its provisions to do so, and that no privilege of the kind claimed could be raised in answer to that obligation.
Mr Wigney also submitted that in the exercise of my discretion, I should have particular regard to what he described as the "the natural repugnance of the public at the prospect of a wife giving evidence against her husband" (see Hoskyn v Metropolitan Police Commissioner [1979] AC 474, referred to by Heydon J in Stoddart at [159]). He submitted, in particular, that this consideration should be weighed against what he argued was the paucity of the evidence which was available to support the making of the order.
In making these submissions, Mr Wigney acknowledged that the various statements made by Heydon J were made other than in the context of the scheme of the Act. He also accepted that the nature and purpose of the Act would be a relevant factor in the exercise of my discretion.
Ms Bashir, who appeared for the ninth defendant, adopted the submissions of Mr Wigney.
In response, Mr Sullivan firstly pointed out that the proceedings brought by the plaintiff were civil proceedings and that accordingly, a spouse was compellable having regard to s. 12 of the Evidence Act. He argued that although, in light of the provisions of s. 18 of that Act, it was open to a spouse to elect to exercise a right of silence in a criminal proceeding, such an election was not available in civil proceedings.
Mr Sullivan submitted, in particular, that it was important for the plaintiff to be able to identify the net asset position of the first and second defendants in respect of properties which may be controlled by one of them, and to know their worth. He also submitted that when it came to seeking a forfeiture order, the Act required the plaintiff to adduce evidence over and above a reasonable belief or suspicion, and to establish that the first or second defendant effectively had control over the relevant property. He submitted that in order to be able to do that, it was both appropriate and proper that the plaintiff have, in respect of each of the fourth and ninth defendants, some detail of relevant dealings to see whether or not it was possible to make a more effective case so as to convert the reasonable suspicion into evidence of control. In advancing that submission, Mr Sullivan again relied on the scheme of asset confiscation created by the Act.

Consideration of the issues

There are a number of important distinctions between the position of the first and second defendants on the one hand, and that of the fourth and ninth defendants on the other.
Firstly, neither the fourth nor the ninth defendant is accused of committing any offence. As a consequence, the issue of the privilege against self incrimination, being one of the fundamental bases of the applications brought by the first and second defendants, is not applicable.
Secondly, having regard to the views of the majority in Australian Crime Commission v Stoddart there is no common law spousal privilege which is available to be claimed by either the fourth or ninth defendant.
Thirdly, having regard to the provisions of s. 12 of the Evidence Act a spouse is compellable in civil proceedings. That section is in the following terms: Competence and compellability Except as otherwise provided by this Act: (a) every person is competent to give evidence, and (b) a person who is competent to give evidence about a fact is compellable to give that evidence.
The fact that there may be limited evidence of dealings, by the fourth and/or ninth defendants, with the relevant property during the period in which criminal offences were allegedly committed does not, in my view, outweigh the public interest which underlies the Act. It was not submitted that the making of the orders was not supported by the evidence. Moreover, one of the fundamental purposes of the making of the orders against the fourth and ninth defendants is to assist in determining whether particular items of property are subject to the effective control of a person charged with criminal offences. It is not difficult to envisage a situation in which a dealing with a particular property may be relevant, notwithstanding that it occurred outside the period of alleged criminal activity.
It was accepted by counsel for each of the fourth and ninth defendants that the nature and purpose of the Act were necessarily relevant factors to be taken into account in considering the exercise of the discretion contained in s. 39B(5). I have already made a number of observations regarding the fundamental objects of the Act and the scheme of asset confiscation which it creates. In an effort to achieve those objects, the Parliament has seen fit to enact a number of particular provisions to enable the relevant authorities to investigate whether or not persons suspected of having committed criminal offences have entered into arrangements which have the effect of concealing their ownership of property. These provisions include empowering the court to make orders requiring persons other than the owner of property to provide information. Such provisions exhibit, in my view, a clear legislative intention that enquiries and investigations into the acquisition of property not be limited to enquiries and investigations of the suspects themselves.
In my view, for these reasons, the public interest in achieving the objects of the Act clearly outweighs what was submitted to be the "natural repugnance" at the prospect of a wife giving evidence against her husband. This is particularly so in circumstances where, having regard to s. 12 of the Evidence Act, each of the fourth and ninth defendants would be compellable to give evidence against their respective spouses in any event.

ORDERS

I make the following orders: (i) I dismiss paragraphs (2) and (3) of the Notice of Motion filed on behalf of the first defendant. (ii) I dismiss paragraphs (5) and (6) of the Notice of Motion filed on behalf of the second defendant. (iii) I dismiss paragraph (2) of the Notice of Motion filed on behalf of the fourth defendant (iv) I dismiss paragraphs (2) and (3) of the Notice of Motion filed on behalf of the ninth defendant. (v) I order that the first, second, fourth and ninth defendants pay the plaintiff's costs.

Amendments 19 October 2016 - Judgment previously published with duplicate MNC [2012] NSWSC 2. 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: 19 October 2016

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