Commissioner of the Australian Federal Police v Cacu

Court of Appeal (NSW)|2016-08-18|Before: Meagher JA, Gleeson JA, Adams J

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

The confiscation proceedings

On 10 March 2015 the Commissioner commenced POCA proceedings against the respondent. The relief claimed included restraining orders under s 18, custody and control orders under s 38 and forfeiture orders under s 47. Those orders were sought in relation to the property described in three schedules to the summons. Schedule 1 described property registered or recorded as in the respondent's name. It included interests in two strata title apartments in Bondi Junction, as well as funds held in various specified bank and credit union accounts. Schedule 2 described property in the name of Egan Coen, an alias allegedly adopted by the respondent. That property comprised funds held in three specified bank accounts. Schedule 3 described property in the name of the respondent's de facto partner, Ms Kuzniatsova. That property comprised two Mercedes Benz motor vehicles and funds in specified bank or credit union accounts.
The Commissioner's summons also sought an order pursuant to s 39(1)(ca) that the respondent provide a sworn statement concerning all of his interests in property and all of his liabilities, in each case worldwide; an order under s 39(1)(d) that he set out particulars of or dealings with the property specified in schedules 1 and 2 to the summons; and an order pursuant to s 180(1) that the respondent be examined about his "affairs".

Relevant statutory provisions: sworn statement orders

Section 39(1) relevantly provides: 39 Ancillary orders (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;
The asterisks in the text of the section identify terms that are defined in the Dictionary in Ch 6 of the Act (s 338). With respect to the restraining orders made ex parte on 10 March 2015 the respondent is the relevant "suspect". An "interest" in relation to property or a thing is defined in the Dictionary to mean: (a) a legal or equitable estate or interest in the property or thing; or (b) a right, power or privilege in connection with the property or thing; whether present or future and whether vested or contingent.
"[P]roperty" as defined means "real or personal property of every description, whether situated in Australia or elsewhere and whether tangible or intangible, and includes an interest in any such real or personal property".
Section 39A(1) abolishes the privilege against self-incrimination in respect of the giving of a sworn statement under s 39(1)(ca) or (d). However the sworn statement is not admissible in civil or criminal proceedings against the person making it, except in a limited class of proceedings which includes proceedings against the person for giving false or misleading information, or in proceedings for relief under the Act, or enforcement of a confiscation order (s 39A(2)).
Where, as in this case, the orders made under s 39(1) are made ex parte and without notice to the person affected by the order, that person may apply to the Court to have the order revoked, and on the making of such an application the effect of the order is stayed until the Court determines its outcome (s 39B(1), (4)). Such an application must be made within 14 days after the person is notified of the order. The respondent did not make such an application to the primary judge but the fact that no such application was made is not relied on as being relevant to the outcome of the appeal.
Section 266A in Ch 3 Pt 3-6 is in part concerned with the disclosure and subsequent use of information contained in a sworn statement made pursuant to an order under s 39(1). It governs the disclosure by a person of information obtained as a direct result of that person being given a sworn statement. Prior to its amendment in 2016 (by the Crimes Legislation Amendment (Proceeds of Crime and Other Measures) Act 2016 (Cth), s 2, Sch 1, item 1) the section provided that such a person may disclose that information to certain authorities for specified purposes if the person believes on reasonable grounds that the disclosure will serve that specified purpose. The authorities to which disclosure may be made and the purposes for which such disclosure may be made are set out in a table which follows that subsection.
Those authorities include an authority with one or more functions under POCA and an authority of the Commonwealth or of a State or Territory that has a function of investigating or prosecuting offences against a law of the Commonwealth, State or Territory. In the case of the former disclosure may be made for the purpose of facilitating the authority's performance of its functions under the Act. In the case of the latter disclosure may be made for the purpose of assisting in the prevention, investigation or prosecution of a "serious offence" being an offence against such a law that is punishable on conviction by imprisonment for at least three years or for life. The offence with which the respondent has been charged under s 400.3(1) answers that description.
Thus when the primary judge made his decision, s 266A(2) permitted disclosure of any information in the sworn statements to the Commonwealth authority having the function of investigating and prosecuting the offence charged under s 400.3(1). The amendment made to that subsection with effect from 1 March 2016 added (as para (b)) a further condition subject to which information may be disclosed, namely that "a court has not made an order prohibiting the disclosure of the information to the authority for that purpose". That amendment applies in relation to the disclosure of information after 1 March 2016, whether the information was obtained before or after that date. Such an order may only be made by a court having "proceeds jurisdiction" in accordance with s 335.
Accordingly, with respect to information in the sworn statement there is, subject to limited exceptions, direct use immunity in civil or criminal proceedings. However the respondent's right to silence and privilege against self-incrimination in respect of that information are abrogated and, subject to s 266A(2), secondary use might be made of the sworn statement by investigating and prosecution authorities.

Relevant statutory provisions: examination order

The relevant provisions of Pt 3-1, which concerns the conduct of examinations, are extracted by the primary judge at Judgment [8]. Section 180(1) provides: 180 Examination orders relating to restraining orders (1) If a * restraining order is in force, the court that made the restraining order, or any other court that could have made the restraining order, may make an order (an examination order ) for the * examination of any person, including: (a) a person whose property is, or a person who has or claims an * interest in property that is, the subject of the restraining order; or (b) a person who is a * suspect in relation to the restraining order; or … about the * affairs of a person referred to in paragraph (a), (b) or (c).
The "affairs" of a person include but are not limited to: (a) the nature and location of property of the person or property in which the person has an interest; and (b) any activities of the person that are, or may be, relevant to whether or not the person has engaged in unlawful activity of a kind relevant to the making of an order under this Act.
Within s 180(1)(a), the respondent is a person whose property is the subject of a restraining order, being that made ex parte on 10 March 2015. As will be seen, the property which is the subject of that order is the property described in schedules 1, 2 and 3 to the initiating summons. That property is also the subject of the charge under s 400.3(1) because it is that property which is alleged to be the proceeds of crime and to have been dealt with by the respondent.
The scheme of Pt 3-1 provides for the making of an examination order which permits the responsible authority (in this case the Commissioner) to approach an approved examiner for the issue of an examination notice which fixes a time and place for the conduct of an examination before that examiner. Upon the making of an examination order the relevant authority may request an "approved examiner" to give an "examination notice" to the person who is the subject of the examination order (s 183).
At the time of the application before the primary judge, an "approved examiner" was a person who "holds an office, or is included in the class of people, specified in the regulations" or who is "appointed by the Minister under this section" (s 183(4)). The relevant regulation (Proceeds of Crime Regulations 2002 (Cth), reg 12) specified that class of people as including persons who had held the office of a judge in the Supreme Court or District Court or the office of magistrate; or who were a presidential or non-presidential member of the Administrative Appeals Tribunal; in each case also being a person whose name was on a register kept by the Minister for the purposes of s 183.
The mere fact that criminal proceedings have been instituted or commenced against a person does not prevent the granting of an examination notice or the conduct of an examination (ss 183(3), 186(4)). In the conduct of the examination the approved examiner can require the examinee to answer a question that is put and relevant to their "affairs" (s 187(5)), which in this case include any activities of the respondent relevant to the commission of the charged offence. The examination is to take place in private and the examinee is entitled to have a lawyer present (s 188(1), (3)). In turn that lawyer is entitled to address the examiner as to matters about which the approved examiner has examined the examinee (s 189(1)). The other persons entitled to be present include the responsible authority (s 188(3)). The examiner may give directions preventing or restricting disclosure to the "public" of matters contained in answers given or documents produced in the course of the examination (s 193(1)). In deciding whether or not to give such a direction the examiner is to have regard to matters which include whether the answer, document or matter is of a confidential nature "or relates to the commission, or to the alleged or suspected commission, of an offence" (s 193(2)).
The examinee must not refuse or fail to be sworn or affirmed; to answer a question required to be answered; or to produce documents required to be produced (s 196(1)). This provision applies notwithstanding that answering the question or producing the document would tend to incriminate the examinee or expose the examinee to a penalty, or that the answer would be privileged from being disclosed or the document would be privileged from being produced on the ground of legal professional privilege (s 197(2)). Thus the privilege against self-incrimination and legal professional privilege is abrogated. Section 198 then prevents the use of that material in civil or criminal proceedings against the examinee. That prohibition is subject to the same exceptions as apply in relation to sworn statement orders (see [14] above).
Section 266A also applies to the disclosure and use of information obtained in the course of an examination (s 266A(1)(a)(ii)). Section 266A, as in force at the time the stay order was made, permitted a person who obtains information as a direct result of the conduct of the examination to disclose that information to a Commonwealth or State authority that has the function of investigating or prosecuting offences against a law of the Commonwealth or State for the purpose of assisting in the investigation or prosecution of a "serious offence". Thus notwithstanding that the approved examiner may give a direction preventing or restricting disclosure of information to the "public", such a direction would not prevent persons who are entitled to be present at the "private" examination (who by s 188(3)(c) include the Commissioner), or other persons who receive a transcript of that examination, from disclosing information thereby obtained in accordance with s 266A(2).

The ex parte sworn statement orders and examination order

On the day the proceedings were commenced the Commissioner moved ex parte for restraining and custody control orders (Pt 2-1, Div 1, 5); for orders for the provision of the sworn statements (Pt 2-1, Div 5); and for the examination order (Pt 3-1, Div 1). The affidavit of Mr Steven Daher in support of that application included that he suspected the respondent of having committed offences contrary to ss 136(1) and 140(1) of the Anti-Money Laundering and Counter Terrorism Financing Act 2006 (Cth) (AML Act) and under s 400.3(1) and 400.9(1) of the Criminal Code. Each of these offences is capable of justifying the making of a restraining order under Pt 2-1.
The suspected offences under the Criminal Code involved allegations that the respondent had dealt with money or other property which is, or it was reasonable to believe is, proceeds of crime. The property which was the subject of those suspected offences was that described in schedules 1, 2 and 3 to the summons, including the two strata title properties, the funds held in various bank or other accounts in the name of the respondent or Egan Coen or his de facto, Ms Kuzniatsova, and the two Mercedes motor vehicles. The suspected offences under the AML Act involved allegations that the respondent had provided false or misleading information when opening and using Westpac bank accounts, including in the false name "Egan Coen".
The ex parte orders made by the primary judge on 10 March 2015 included orders 13, 14 and 19a, the operation of which his Honour later stayed: 13. Pursuant to section 39(1)(ca) of the Act, Ergun Cacu is directed to give to the Commissioner of the Australian Federal Police or his nominated delegate within 28 days of the date of service of these orders a sworn statement, in the form set out in Schedule Four to these orders 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 AUD5.000 as at the date of these orders; and b. all of his liabilities, worldwide, not including any liability with a value of less than AUD5.000 as at the date of these orders. 14. Pursuant to section 39(1)(d) of the Act, an order directing Ergun Cacu to give a sworn statement to the Commissioner of the Australian Federal Police or his nominated delegate no later than 28 days after being notified of the making of the order setting out particulars of or dealings with the property specified in Schedules One and Two. … 19 Pursuant to section 180 of the Act, the following persons are to be examined about the affairs of the Defendant: a. Ergun Cacu (DOB 5 August 1971);
The form of sworn statement required by order 13 is set out in schedule 4 to those orders. It is necessary to set that schedule out in full because, as will become apparent, in some respects the information it required be given goes beyond that which might be sought by an order made under s 39(1)(ca). In addition para 3 of schedule 4 appears to have been drawn on the basis that the schedule, or at least that para, was intended to apply to the order made under s 39(1)(d) so as to require the particulars described in that para to be given of dealings with the specified property between 15 May 2009 and the date of the statement.
Neither of these matters is the subject of comment by the primary judge. It would seem that in the stay proceedings his Honour (and the parties) addressed orders 13 and 14 on the basis that order 13 required a sworn statement in the form of paras 1 and 2 of schedule 4 in respect of all of the respondent's property with a value of more than A$5,000; and that order 14 required a sworn statement in the form in para 3 of that schedule in relation to dealings with the property in schedules 1 and 2.
Schedule 4 provides: Schedule Four - Form of Sworn Statement 1. Provide full particulars of the nature and extent of your property or where applicable, the property of the company of which you are a director, including in relation to each item of property: a. description of the property, including the nature of your interest in it and, where possible, the estimated value; b. the location of the property; c. the name of the person or institution in whose custody title documents in respect of the property are believed to be; d. the approximate date of acquisition of the property; e. income earned from the property; f. a full description of any liability in relation to the property and the amount of the liability; g. the amount and date of payments made to discharge any liability in relation to the property; h. the source of the payments referred to in subparagraph 1(g) above; and i. the name of the person or institution to which the liability is owed. 2. Provide full particulars of your current liabilities or where applicable, the liabilities of the company of which you are a director, including, in relation to each liability; a) full description of each liability including the nature of the liability and the amount of the liability; and b) the name of the person or institution to which the liability is owed. 3. Provide full particulars of any dispositions or dealing with property since 15 May 2009 to date including: a) description of the property disposed of or dealt with, including the nature of the disposition or dealing and any proceeds received as a result of the disposition or dealing; b) the location of the property; c) the date of the disposition or dealing, d) the name of the person or Institution to which the property was transferred; e) the amount and date of payments made to discharge any liability in relation to the property; and f) the source of the payments referred to in subparagraph 3(e) above.
Order 13, so understood, appears to go beyond what may be ordered by s 39(1)(ca) in the following respects. First, it requires particulars in relation to property owned by any company of which the respondent is a director. Next by paras 1(b) to (i) it seeks information which goes beyond what is necessary to describe any interest of the respondent in property. Finally, it requires particulars in relation to liabilities of any company of which the respondent is a director.
Order 14, so understood, also appears to go beyond what may be sought by s 39(1)(d). It requires particulars as to the location of any property and, in relation to property which has been the subject of a dealing, the amounts and dates of payments made to discharge any liability in relation to the property, and the "source" of those payments.

The criminal charges against the respondent

On 11 March 2015 the respondent was arrested and charged with 25 offences. Those offences were described in a Facts Sheet subsequently prepared by reference to the sequence in which the charges were laid. Those charges included giving information known to be false or misleading to a reporting entity involving a transaction of at least A$50,000 contrary to s 136(1) of the AML Act (sequence No 1), dealing with money or other property that is proceeds of crime, and/or intended to be used as an instrument of crime, having a value of $1 million or more contrary to s 400.3(1) of the Criminal Code (sequence No 2), as well as a number of gun and drug possession related offences (sequence Nos 3 to 24). The last offence charged (sequence No 25) was using a false document to obtain a financial advantage contrary to s 254(b)(ii) of the Crimes Act 1900 (NSW).

The stay application and order

On being notified of the ex parte orders, the respondent filed two notices of motion. The first, filed 1 April 2015, sought orders staying the operation of specific orders made on 10 March 2015, including orders 13 and 14. The second motion, filed 24 April 2015, sought an order that the confiscation proceedings "be stayed until further order". As the primary judge observed, that stay was sought "until after Mr Cacu's criminal proceedings had been determined": Judgment at [4].
At the time of the contested hearing before the primary judge (13 May 2015) the charges which remained current (in the sense that they had not been withdrawn and were not the subject of a guilty plea) were those charged as sequence Nos 1 and 2 and a series of drug related offences. The offence charged as sequence No 1 (giving false or misleading information contrary to s 136(1) of the AML Act) was subsequently withdrawn so that the respondent presently stands charged with dealing in the proceeds of crime contrary to s 400.3(1) of the Criminal Code and with a series of drug related offences. Those charges are listed for trial in the District Court commencing on 5 June 2017, with an estimated hearing time of 20 days.
At the time of the application before the primary judge, s 319 of POCA provided: 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.
In Commissioner of the Australian Federal Police v Zhao (2015) 255 CLR 46; [2015] HCA 5, the Court (French CJ, Hayne, Kiefel, Bell and Keane JJ) observed at [35]-[36] of s 319 as enacted in those terms: …but a provision of this kind is strictly unnecessary. Courts will not grant a stay of civil proceedings merely because related charges have been brought against a person and criminal proceedings are pending. More is required. To warrant a stay of the forfeiture proceedings, it must be apparent that the person whose property is in question is at risk of prejudice in the conduct of his or her defence in the criminal trial. Section 319 impliedly acknowledges what is in any case true: that the courts have the power to control their proceedings and to order a stay in an appropriate case. It will be appropriate to do so where the interests of justice require such an order. Section 319 is not expressed to refer specifically to a circumstance where the issues in the forfeiture proceedings and the criminal proceedings are substantially identical. The POC Act does not presume to say what a court should do in such a circumstance.
That section was amended by the same Act as is referred to in [16] above and the amendment applies to proceedings instituted or commenced before or after 1 March 2016. Whilst acknowledging that a court may stay proceedings under POCA if it considers that it is in the interests of justice to do so, in its amended form s 319 describes grounds on which the court "must not" stay such proceedings. Those grounds include that criminal proceedings have been instituted or commenced against the person who is subject to the POCA proceedings, even if the circumstances pertaining to the POCA proceedings are the same as or substantially similar to the circumstances pertaining to the criminal proceedings (s 319(2)(a), (3)). It also provides that in considering whether a stay is in the interests of justice, the court must have regard to specified matters, including whether any prejudice that might be suffered if the proceedings are not stayed may be addressed by means other than a stay.
On 15 September 2015, the primary judge made the following order which, except in so far as it relates to order 20(a), is the subject of the Commissioner's application for leave to appeal: 1. Orders 13, 14, 19(a) and 20(a) of the Orders made in these proceedings on 10 March 2015 (as corrected on 12 March 2015) be stayed until further order of the Court.

The reasoning of the primary judge

The respondent and Ms Kuzniatsova were the defendants and applicants for the stay. Their case for a general stay was, in reliance on Zhao, that the confiscation proceedings should be stayed until the pending criminal proceedings against the respondent were determined because the issues in those proceedings (which were likely to be heard first) and in the criminal proceedings were substantially the same. The Commissioner's answer was, as the primary judge records at Judgment [14], that although forfeiture orders were sought by the summons, it was not proposed to press for that relief until after the conclusion of the criminal proceedings.
Their alternative claim was that there should be a stay of the orders for sworn statements and the examination order. In response the Commissioner submitted that there was no real risk that the execution of those orders would result in any interference with the administration of justice. The fact of the pendency of the criminal proceedings was not of itself sufficient to justify the grant of a stay. In this respect the Commissioner relied on Zhao at [35] (extracted in [40] above). Furthermore the Commissioner contended that the present case was quite different from Zhao where the "offences and the circumstances" relevant to the forfeiture and criminal proceedings were substantially identical: Zhao at [42]. In addition, in the absence of a stay, Mr Zhao would have had to give evidence either in defence of the forfeiture proceedings or in support of an earlier application to exclude specified property from the restraining order. In either case that evidence would be admissible against him in the criminal proceedings, and was likely to be given in open court and accordingly to be known to the prosecution well before his criminal trial. The present case was different as the Commissioner did not propose that the forfeiture proceedings be heard before the criminal proceedings. Accordingly there was no risk that the respondent would have to give evidence before his trial.
The primary judge is to be taken to have accepted the Commissioner's submission in relation to the application for a general stay of the proceedings. Having referred to the decisions in X7 v Australian Crime Commission (2013) 248 CLR 92; [2013] HCA 29, Lee 1 and Zhao, his Honour at Judgment [40] described the question for determination as follows: … It is not disputed in this case that the Act authorised the orders [referring to the sworn statement orders and examination order] … . The real question is whether these orders must be complied with despite the pending criminal trial against Mr Cacu. Another way of putting this question is whether that part of the investigation of their affairs comprising compliance with the orders should be delayed until after the trial.
In addressing that question the primary judge did not separately consider the risk of prejudice arising from the making of the sworn statement orders, as distinct from the examination order. His Honour proceeded at Judgment [41]: The question here is whether the Act has so adjusted the incidents of trial according to law that the investigative processes ordered to occur must proceed without delay or impediment despite the pendency of Mr Cacu's trial. Although the statement of affairs and the examination are processes set in motion by orders of the Court, the examination is not conducted by the Court or the Registrar as distinct from the situation in Lee 1. The powers of the Court to control the use of the statement and the conduct of the examination and the information Mr Cacu might disclose, obviously enough, cannot be delegated to the appointed examiner, nor in any sense can the examiner be regarded as acting judicially: he or she is the agent of the executive. It is not altogether clear whether, in light of s 266A, the Court could make it a condition of its orders to the effect that neither the statement nor the information provided by Mr Cacu at the examination be disclosed to the prosecution, though I rather think it could. Certainly such a condition could not be imposed by the examiner in respect of matter disclosed in any examination. However, no party submitted that this might overcome the prejudice that would otherwise subsist were the stay not granted. In this regard, I should mention the point made by French CJ in Lee 1 at [54] (supra) to the effect that keeping material disclosures secret from the prosecution would not remove the forensic disadvantage an accused person would suffer in the conduct of his or her trial from compulsory disclosure, in this respect not disagreeing with the characterisation of the disadvantage stated by Hayne and Bell JJ in X7 at [124] (supra, cf Kiefel J, with whom Bell J agreed, in Lee 1 at [164], [211]-[213] and [240], Crennan J at [ibid 141] where her Honour seemingly implied that secrecy might be sufficient, as did Gageler and Keane JJ at [340]).
In some respects his Honour's reasoning in this passage is not easy to discern. The reference to the powers of "the Court to control the use of the statement and the conduct of the examination" appears to be to such powers as might exist if the processes (of requiring a sworn statement and of examination) were carried out under the supervision of the court. The observation that any power (of a relevant court) could not be delegated to an appointed examiner was obviously correct. His Honour's statement that no party submitted that "this" might overcome the prejudice that otherwise might exist seems to be a reference to the possibility that the Court would impose as a condition of its orders that no information be disclosed to the prosecution. Prior to the 2016 amendments, s 266A(2) did not expressly confer such a power on the Court, although the power may have existed independently of s 266A(2). In any event, his Honour's observation focusses on the "prejudice" which the person making the sworn statement or being examined suffers as a result of being required to divulge information where there is a real risk that it may be used against him or her in the prosecution of a pending criminal charge.
Having noted that the Commissioner did not submit that there was any particularly urgent need for the sworn statements and examinations to proceed before the criminal trial, his Honour concluded at Judgment [42]: … This must be balanced against the real and substantial risk that the legitimacy of the administration of criminal justice will be prejudiced by breach of the fundamental principles to which I have referred (and which, despite the differing results reflecting varying interpretations of relevant legislation, are not significantly controversial) that the Court not only has the power but also the duty to maintain as far as it is able. I am also minded that, in this Court, Button J has made orders staying examinations pending completion of a trial. Where, perhaps, no bright line distinctions can be made, judicial comity should in a comparable case (which this substantially is) lead me to the same result. Accordingly, in respect of Mr Cacu, I propose to order a stay of the orders requiring him to provide statements of his affairs and to order that examination not take place until his impending trial has been completed.
His Honour's reference to the "real and substantial risk" of prejudice is to the same prejudice arising from an accused being compelled to make sworn statements or answer questions on oath in advance of the criminal trial where the information provided relates to the subject matter of the pending charge and may become available to the prosecution. That is tolerably clear from the statements of the primary judge at Judgment [17] and [40]. The reference to the decision of Button J is to the decision which was the subject of the appeal in McGlone (see [6] above).

The proposed grounds of appeal

The draft notice of appeal contains four grounds. The principal grounds relied on are grounds 2 and 3 which found the arguments summarised in [5] and [6] above. These grounds challenge the primary judge's conclusion that there was a substantial risk of prejudice to the respondent's defence of the pending charge under s 400.3(1) if the orders were not stayed.
Ground 1 is that the primary judge erred in construing order 19a and para 3(f) of schedule 4 to the summons (see [30] and [33] above) as requiring, by the latter's reference to the "source" of any payment made to discharge a liability in relation to property, that the respondent identify the "mode (even if criminal, say by drug dealing) by which he acquired the funds" to make the payment as distinct from that the respondent merely identify the provider or payer of the funds or assets applied. At Judgment [12] the primary judge expressed the view that the former and broader construction is the correct one. The remaining ground 4 asserts more generally that the primary judge erred in concluding that there was a real risk of prejudice to the respondent in the conduct of his defence of the principal criminal charge if the orders were not stayed. It does not identify any further bases supporting that assertion.

Decision

Section 67 of the Civil Procedure Act 2005 (NSW) confers a general power on the Supreme Court to stay proceedings before it "either permanently or until a specified day". This Court also has inherent power to stay civil proceedings in the Court where such an order is necessary in the interests of justice; as would be the case if, by the pursuit of those proceedings or some aspect of them, there is a risk of prejudice to a person in the conduct of his or her defence in a criminal trial.
Furthermore, as was recognised in Zhao at [35]-[36], s 319 acknowledges that courts have inherent power to control their proceedings, and to order a stay in an appropriate case. See also Lee v Director of Public Prosecutions (Cth) (2009) 75 NSWLR 581; [2009] NSWCA 347 at [38] (Basten JA, Macfarlan JA and Sackville AJA agreeing). However it is not sufficient to justify a stay in such a case merely that criminal charges related to the civil proceedings have been brought and are pending.
In the course of argument a question arose as to whether the reference in s 319 to "proceedings under this Act" (see [39] above) includes an application for an order under s 39(1) or for an examination under s 180. That question is only relevant if it becomes necessary for this court to re-exercise the discretion to grant a stay, in which event it would be necessary to address the current (and relevant amended) form of s 319. It does not arise in relation to the primary judge's exercise of that power because his Honour did not do so merely on the ground that criminal proceedings had been instituted against the respondent.
In ordinary language an application for a restraining order or for a sworn statement or examination order answers the description of "proceedings", which in each case would be proceedings "under the Act". Provisions such as ss 315 and 318 confirm, by their references to "proceedings" on an application for a restraining order or on an application for an order under the Act, that when used in s 319 this should be given its ordinary meaning. In McGlone, Beazley P proceeded (at [90]) on the basis that s 319 applied to an application for a stay of proceedings for an examination order.
The primary judge considered that the subject matter of the charge of dealing with money or other property which is or is believed to be the proceeds of crime, and the potential subject matter of the sworn statement orders and examination order are substantially the same (Judgment [17]). That conclusion is not, and could not be, challenged in the proposed appeal.
The charge under s 400.3(1), as particularised, and as the subject of the suspicion deposed to by Mr Daher in his affidavit, includes that the property specified in schedules 1, 2 and 3 to the summons was, and was believed by the respondent to be, the proceeds of crime.
The sworn statement and examination orders were made against the respondent, Mr Cacu, in two capacities; namely, as the person suspected of having committed that "serious offence"; and as owner of the property covered by the restraining order made on the basis of that suspicion. That property included the property described in schedules 1, 2 and 3 to the summons.
By order 13 the respondent was required to provide a sworn statement identifying his property and liabilities at the time of that statement. In respect of any such property he was required to give details of the date of acquisition, the amount and date of payments made to discharge any liability in relation to the property and (construing "source" narrowly) the identity of the provider or payer of those funds. That statement had to identify all property of the respondent with a value of A$5,000 or more, including but not limited to that alleged to be owned or controlled by him and specified in schedules 1, 2 and 3 to the summons.
By order 14 the respondent was required to provide a statement setting out details of any dispositions or dealings with the property specified in schedules 1 and 2 which occurred between May 2009 and March 2015. Those details included the date of the disposition or dealing, the amount of any proceeds received as a result of the dealing, the amount and date of any payments made to discharge a liability relating to the property and (again construing "source" narrowly) the identity of the provider or payer of such funds.
That information was required to be given notwithstanding that it might incriminate the respondent. Subject to certain exceptions, the information was not admissible in the criminal proceedings against him (s 39A(2)). It was not however the subject of any restriction on disclosure to or use by the authority responsible for prosecuting the offence under s 400.3(1). On the contrary, s 266A permits that information to be disclosed and used for the purpose of assisting in the investigation or prosecution of that offence.
By order 19a (by the width of the term "affairs") the respondent was able to be examined as to the nature and location of any property owned by him or in which he has an interest. He could also be questioned about the circumstances in which he acquired or disposed of the property described in schedules 1, 2 and 3 and as to whether illegal activities involving the supply of prohibited drugs generated the funds which constituted or were used to acquire that property. Questions directed to these matters were required to be answered notwithstanding that the answers might incriminate the respondent and, again subject to exceptions, were not admissible in the criminal proceedings against him (s 198). However it remained the case that those answers and any documents produced by the respondent could be disclosed and used for the purpose described above. That was the position notwithstanding that the examination would take place in "private" and that the approved examiner was able to make directions preventing or restricting disclosure to the "public". Disclosure to an "authority" in accordance with s 266A(2) is not disclosure to the "public" (that word understood as referring to the world at large).
In these circumstances the question for the primary judge was whether, in the absence of a stay of the relevant orders, the respondent was at risk of prejudice in the conduct of his defence in the criminal trial: Zhao at [35]; McGlone at [89]. That risk has two aspects. The first is not controversial and arises if the information which an accused is compelled to divulge may be used against him or her by the prosecuting authority.
That prejudice was described, in the respondent's affidavit in support of his stay applications, as follows: 15. To the extent that the provision of the sworn statements, and the taking of other steps in the confiscation proceedings, involve the provision of information that might be construed by the police or prosecutors as inculpatory, I am fearful that the police or prosecuting authorities may conduct further investigations directed at obtaining admissible evidence to prove those matters in my criminal proceeding. 16. To the extent that the provision of the sworn statements, and the taking of other steps in the confiscation proceedings, involves the provision of information that might be construed by police or prosecutors as exculpatory, I am fearful that the police or prosecuting authorities may conduct further investigations directed at obtaining admissible evidence to disprove those matters in my criminal proceeding.
The position may have been different in relation to this prejudice if the Commissioner, when seeking the ex parte orders, had also sought and obtained an order prohibiting the disclosure of any information for these purposes (assuming such a power existed prior to the 2016 amendments to s 266A(2)). However that did not occur.
In Zhao the Court at [18] described as a fundamental principle of the common law that "the prosecution is to prove the guilt of an accused person and cannot compel a person charged with a crime to assist in the discharge of its onus of proof". That the prosecution must do so is an aspect of the accusatorial nature of the criminal trial in our system of criminal justice: per the Court (French CJ, Crennan, Kiefel, Bell and Keane JJ) in Lee v The Queen (2014) 253 CLR 455; [2014] HCA 20 (Lee 2) at [32].
The second potential prejudice, as the primary judge noted at Judgment [41], may be more controversial. It is the prejudice referred to by Hayne and Bell JJ in X7 at [124] which is said to arise notwithstanding that the accused's answers given at a compulsory examination are kept secret: No longer could the accused person decide the course which he or she should adopt at trial, in answer to the charge, according only to the strength of the prosecution's case as revealed by the material provided by the prosecution before trial, or to the strength of the evidence led by the prosecution at the trial. The accused person would have to decide the course to be followed in light of that material and in light of any self-incriminatory answers which he or she had been compelled to give at an examination conducted after the charge was laid. That is, the accused person would have to decide what plea to enter, what evidence to challenge and what evidence to give or lead at trial according to what answers he or she had given at the examination. The accused person is thus prejudiced in his or her defence of the charge that has been laid by being required to answer questions about the subject matter of the pending charge.
See also Lee 1 at [34] per French CJ and [163] per Kiefel J.
Although the primary judge at Judgment [41] adverts to both of these prejudices, his decision to grant the stay was based on there being a risk of the first, described as "the prejudice that would otherwise subsist were the stay not granted". That risk, of derivative use by the prosecution, was not removed or addressed by the approved examiner's power to make directions preventing or restricting disclosure to the "public" of matters contained in answers given or documents produced in the course of the examination. Such a direction would not apply to any sworn statement and would not prevent disclosure in accordance with s 266A(2).
In that respect (as the primary judge recognised at Judgment [41]) the position of the examiner is to be contrasted with that of the judge or officer of the Court before whom the examination in Lee 1 was to be conducted. Gageler and Keane JJ at [340] described the significance of the Court's ability to supervise and control the conduct of that examination and disclosure and use of information obtained, in circumstances where the subject matter of the proposed examination overlapped with that of the pending criminal proceedings: That is the significance of the ability of the Supreme Court, or officer of the Supreme Court before whom the examination is conducted, to control the course of questioning and to make suppression or non-publication orders limiting the timing and scope of any use or dissemination by the Commission of answers given or documents produced. When it is appreciated that the conduct of the examination remains at all times subject to the supervision and protection of the Supreme Court, the possibility that the implementation of the examination order might give rise to an interference with the administration of justice does not rise to the level of a real risk merely because the subject-matter of the examination will overlap with the subject matter of pending criminal proceedings against the person to be examined.
Turning to the proposed grounds of appeal, by ground 2 the Commissioner contends that the primary judge wrongly took into account that there was a material difference between an examination conducted subject to the supervision and control of the Court, as was the case in Lee 1, and an examination conducted by an approved examiner appointed in accordance with s 183. That there was such a material difference was said to be inconsistent with dicta of this Court in McGlone at [58]-[64].
This ground assumes that the primary judge considered that an approved examiner otherwise had sufficient power to control the conduct of the examination, and the use of answers given or documents produced, to enable any risk of interference with the administration of justice to be addressed in the course of the examination. If that was the case the statutory provisions might be seen to be inconsistent with this Court pre-empting the exercise of such powers in circumstances where there is no good reason to suppose that the approved examiner will not exercise them to diminish or prevent prejudice which is beyond that clearly authorised by POCA. See McGlone at [60]-[61], [64] citing Basten JA in NSW Crime Commission v Lee (2012) 84 NSWLR 1; [2012] NSWCA 276 at [81].
However the primary judge did not consider the examiner to have such power. Rather he concluded, correctly in my view, that the power of an approved examiner to prevent or restrict disclosure does not extend to prohibiting disclosure which is in accordance with s 266A(2). That being the position, subject to the matter referred to below, there remained a real risk of prejudice, by reason of disclosure to the prosecutor, which could not be diminished or prevented by the examiner in the conduct of the examination.
It was not contended on behalf of the Commissioner that the examiner could control and avoid the risk of disclosure by declining to require the respondent to answer any question put to him which might be relevant to his "affairs" as a person able to be examined under s 180(1)(a) and (b). That is understandable because the subject of that questioning was likely substantially to overlap with the subject of the pending criminal charge under s 400.3(1) so as to make the examination order of no practical consequence if the examiner proceeded on that basis. In the Commissioner's written summary of argument the respects in which it was suggested that the examiner might control the course of questioning and the disclosure of information were limited to the making of directions as to who may be present during the examination (s 188(2)); the referring of questions of law to the Court (s 192); and the giving of directions preventing or restricting disclosure (s 193). None of these outcomes would control or avoid the principal risk of prejudice identified by the primary judge. For these reasons ground 2 does not identify any material error of the primary judge in concluding that there was substantial risk of prejudice.
By ground 3 it is said that the primary judge erred in proceeding on the basis that "judicial comity" suggested that he should reach the same conclusion as was reached by Button J in McGlone at first instance. The Commissioner submits that the primary judge erred in treating that as a "comparable case". The respondents in McGlone opposed the making of examination orders under s 180 until their pending criminal trial had concluded. The charges against those respondents included importing prohibited substances and dealing with property reasonably suspected to be the proceeds of crime contrary to s 400.9 of the Criminal Code. The reasons relied on by Button J for declining to make an examination order included that the respondents would be prejudiced by the examinations proceeding because answers given and documents produced could well lead to the discovery of other relevant evidence that might be tendered in their trial.
The Commissioner submits that there are three significant differences between the present case and McGlone at first instance which had the consequence that it was not "comparable". The first is that the question in that case was whether examinations should be ordered under s 180. That is so. However in the present context that was not a material difference. Ultimately the question for Button J and for the primary judge was whether the relevant examination should proceed in the face of a real risk of prejudice to the examinee in the defence of criminal proceedings and notwithstanding the powers available to the examiner to diminish or prevent that prejudice.
The second difference is that, as Beazley P explained in McGlone at [118], to defend a charge under s 400.9 the accused will generally need to adduce evidence to prove that there were no reasonable grounds for suspecting that the money or property was derived or realised from some form of unlawful activity. For that reason it was said that the respondent's position is to be distinguished because there is no similar onus on the respondent making it likely that he would have to give evidence. Again that may be so. However in each case the prejudice is that material may become available to the prosecutor by the compulsory process of examination. That material may be used in either of the ways suggested by the respondent in his affidavit (see [64] above). That is so notwithstanding that the respondent may not have to give evidence. As Beazley P observed in McGlone at [119] that circumstance may render the risk of prejudice "more substantial". However its absence does not mean that there is no prejudice.
The final difference suggested is that because the property that was the subject of the charge in McGlone was cash, the examination was likely to assume greater forensic significance than in the present case. That may or may not be so. However any such difference was not material to the correctness of the primary judge's observation that Button J's refusal to make the orders gave effect to the principle that an accused should not be required, in the absence of a clear statutory provision, to provide information which may assist the prosecution to prove its case.
No material error is revealed in the primary judge's description of Button J's decision as one in a "comparable" case. Perhaps more significantly, it is not apparent that the primary judge relied on that decision as other than confirming the correctness of his own conclusion. In each case the accused asserted a real risk of prejudice that would arise from the conduct of a compulsory examination under s 180. In each that prejudice was said to arise because the offences and underlying circumstances relevant to the POCA and criminal proceedings were substantially the same. And in each the prejudice was that the answers given and documents produced became available for use by the prosecution. Ground 3 also should be rejected.
There remain grounds 1 and 4. Ground 1 does not identify a matter which was material to his Honour's conclusion that there was a real risk of prejudice to the conduct of the respondent's defence. The existence of that risk did not depend on whether his Honour adopted the narrower or broader construction of "source" as used in schedule 4, para 3(f). Accordingly ground 1 is rejected.
Finally ground 4 asserts, apparently on the basis that these earlier grounds are made out, that the primary judge erred in concluding that there was a real risk of prejudice. None of those grounds is made out and accordingly this ground falls away.

Conclusion

The proposed appeal raises issues of general importance in relation to the staying of proceedings under POCA. For that reason there should be a grant of leave to appeal. That appeal should be dismissed.
GLEESON JA: I agree with Meagher JA. Without detracting from his Honour's reasons, I would add one brief comment. This concerns the second type of potential prejudice to an accused in the conduct of his or her defence in a criminal trial (which his Honour identifies at [67] of his reasons), being that referred to by Hayne and Bell JJ in X7 v Australian Crime Commission (2013) 248 CLR 92; [2013] HCA 29 at [124]. Their Honours remarked that an accused person would have to decide the course to be followed at trial (such as enter a plea, challenge evidence, or to give or lead evidence) in light of the material the subject of compulsory disclosure, including any self-incriminating answers compelled to be given at an examination after charges have been laid.
As Meagher JA has noted (at [27] and [47]) at the time of the application before the primary judge, s 266A of the Proceeds of Crime Act 2002 (Cth) (POCA) did not expressly confer a power on a court to impose a condition of its orders for the provision of a sworn statement by an accused under s 39(1), or a compulsory examination under s 180, that no information obtained from an accused by compulsion be disclosed, relevantly, to the prosecution.
Section 266A(2) now provides that a person may disclose that information to certain authorities for specified purposes if the person believes on reasonable grounds that the disclosure will serve the specified purpose and "a court has not made an order prohibiting the disclosure of the information to an authority for that purpose". This section commenced on 1 March 2016 and applies to the disclosure of information after the commencement of the amended provision, whether the information was obtained before or after that commencement (Crimes Legislation Amendment (Proceeds of Crime and other Measures) Act 2016 (Cth), s 2, Sch 1, items 1 and 5).
Further, the amendment to s 266A occurred at the same time as a new s 319 was introduced in March 2016 conferring power on a court to stay proceedings under the POCA (POCA proceedings) that are not criminal proceedings if the court considers that it is in the interests of justice to do so (Crimes Legislation Amendment (Proceeds of Crime and other Measures) Act 2016 (Cth), s 2, Sch 1, item 4). Importantly, s 319(6) now provides that in considering the question of a stay of POCA proceedings, the court must have regard to, among others: … (e) any orders (other than an order for the stay of the POCA proceedings) that the court could make to address any prejudice that a person (other than a proceeds of crime authority) would suffer if the proceedings were not stayed. Note: Examples of orders the court could make to address any prejudice that a person (other than a proceeds of crime authority) would suffer if the POCA proceedings were not stayed include an order under section 319A (closed court) or an order prohibiting the disclosure of information.
It is, at least, arguable when s 266A and s 319 are read together with the whole of the POCA, that a disclosure prohibition order by a court under the s 266A(2)(b) might preclude the potential prejudice to an accused in the conduct of his or her defence rising to the level of a real risk of interference with the administration of justice. However, whether that would be so is not a question which needs to be determined in the present case.
SACKVILLE AJA: I agree with Meagher JA.

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: 03 February 2017

Anti-Money Laundering and Counter Terrorism Financing Act 2006(Cth)

Crimes Legislation Amendment (Proceeds of Crime and Other Measures) Act 2016(Cth)

Overview The Proceeds of Crime Act 2002(Cth)

(Proceeds of Crime Regulations 2002(Cth)

(Crimes Legislation Amendment (Proceeds of Crime and other Measures) Act 2016(Cth)

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