Solicitors:
Australian Federal Police Proceeds of Crime Litigation Unit (plaintiff)
Lincolns Lawyers and Consultants (applicants)
File Number(s): 2016/197077
[2]
Judgment
HER HONOUR: These are proceedings brought by the Commissioner of the Australian Federal Police under the Proceeds of Crime Act 2002 (Cth). On 28 June 2016, the Court made orders under s 19 of the Act restraining certain property, being funds standing to the credit of Ms Indriana Koernia and her husband, Mr Sanko Lordianto, in five Commonwealth Bank accounts. Ms Koernia and Mr Lordianto subsequently filed a notice of motion seeking orders under s 29 of the Act excluding their interest in the restrained property. It is convenient on that basis to refer to them as the applicants.
The exclusion application is listed for hearing on 8 May 2017 with an estimate of two days. By notice of motion filed 26 April 2017, the Commissioner sought to have the hearing date vacated. The application was opposed by the applicants.
The Commissioner's application came before me as Duty Judge on 27 April 2017. On 28 April 2017, I dismissed the application, reserving my reasons. These are my reasons for refusing the Commissioner's application.
The basis for the application was the recent publication by the Supreme Court of Western Australia of a decision thought to have implications for the determination of the present case. The decision is that of Allanson J in Commissioner of the Australian Federal Police v Kalimuthu (No 3) [2017] WASC 108, published on 19 April 2017. The decision concerns the proper construction of s 330(4)(a) of the Proceeds of Crime Act particularly in its application to offences contrary to s 142 of the Anti-Money Laundering and Counter Terrorism Financing Act 2006 (Cth). Justice Allanson made orders excluding from restraint the interests of the respondents in those proceedings in restrained bank accounts.
The Commissioner disputes the correctness of his Honour's decision and proposes to appeal against the decision and to seek expedition of the appeal.
Counsel appearing for the Commissioner on the present application accepted that the prospect of changes in the law might not ordinarily warrant the vacation of an impending hearing date. He submitted, however, that special considerations arise in the present case. The Commissioner relied in that context on the matters set out in the affidavit of Stefan Jerga sworn 26 April 2017.
Mr Jerga stated that, as at 26 April 2017, there are approximately 104 proceedings nationally in which restraining orders have been made under ss 17-20A of the Proceeds of Crime Act. Approximately 22 of those relate to applications which either have given or may give rise to "issues relating to the construction and application of s 330(4)(a) of the Act". Some are proceedings in which judgment has been reserved; others are currently listed for hearing or are in the interlocutory stages but not yet listed for hearing. Mr Jerga estimates that at least 16 of the 22 matters raising issues concerning the construction of s 330(4)(a) relate to offences contrary to s 142 of the Anti- Money Laundering Act and deal with facts and circumstances similar to those considered in Kalimuthu. Seven proceedings are listed for hearing this year including two listed for hearing in May.
Mr Jerga's affidavit annexed a summary of the 22 proceedings. Four are matters in which judgment is presently reserved, including a matter that was heard by Justice Allanson and a matter that was heard by me. In the other two matters in which judgment is reserved, the Commissioner has brought the decision in Kalimuthu to the attention of the judge who heard the matter.
Mr Jerga expressed his concern at the frequency with which first instance judges may potentially be called upon to interpret s 330(4)(a). He considers there is a risk of a multiplicity of proceedings and potentially inconsistent first instance decisions across Australia concerning the proper construction of the section.
As already noted, the applicants opposed the vacation of the hearing dates. Their solicitor affirmed an affidavit setting out the existing arrangements that have been made for the trial, which include the arrangement of an interpreter and travel and accommodation bookings for the applicants and their daughter. The applicants' daughter has applied for leave from her employment to attend the trial so as to be able to assist her parents in communicating in English and finding their way around Sydney.
The solicitor's affidavit also stated that the vacation of the hearing dates would occasion prejudice to the applicants because the funds which have been restrained were intended to provide for their retirement in Australia. The affidavit said "now that the funds have been restrained, they are unable to invest or otherwise utilise the funds for retirement until trial of the proceeding".
The amount restrained is in the order of $6 million.
Mr Jerga's affidavit, which was sworn after the affidavit relied upon by the applicants, provided evidence to the effect that the applicants have a net worth in the order of $167 million. The applicants did not seek to put on further evidence seeking to dispute that evidence. They submitted, however, that the issue is rather a matter of principle. There is force in that argument. The Proceeds of Crime Act authorises significant intrusion on the freedom ordinarily enjoyed by individuals to deal with their own assets. It may be accepted that an indigent person seeking to exclude restrained assets might have a strong case for an expedited hearing; it does not follow that a wealthy person should more readily be expected to suffer delay. The fact that the amount restrained is only a small percentage of the applicants' wealth should not derogate from their entitlement to have proceedings concerning their entitlement to deal with their assets determined promptly, as contemplated by the Civil Procedure Act 2005 (NSW).
Mr Mitchell, who appears for the applicants, relied on two appellate decisions concerning applications to vacate a trial date pending potential changes in the law.
The first was the decision of the Victorian Court of Appeal in Geelong Football Club Ltd v Clifford [2002] VSCA 212. Mr Clifford had brought proceedings against Geelong Football Club seeking damages for personal injury after he fell down stairs at the Club premises. The fall occurred after Mr Clifford had consumed "excessive quantities of liquor" supplied by the Club; he submitted that the Club had breached a duty of care to keep persons consuming liquor reasonably safe. The proceedings had been fixed for trial. The judge at first instance vacated the hearing date and adjourned the proceedings, effectively indefinitely, on the basis that an application for special leave to appeal to the High Court had been brought in proceedings determined by the New South Wales Court of Appeal similarly involving a claim for damages for personal injury caused to a person who became intoxicated at a football club. The plaintiff in the New South Wales proceedings had wandered drunkenly from a rugby club and was hit by a car: South Tweed Heads Rugby League Football Club Ltd v Cole [2002] NSWCA 205.
The Court of Appeal of Victoria found that the judge at first instance had erred in vacating the hearing date. The Court held that a party is entitled to a trial of proceedings ready for hearing unless it is clearly shown that injustice is likely to be caused if the adjournment is refused. The Court acknowledged that the existence of an appeal in a test case, the resolution of which will directly affect the outcome of the matter listed for trial, may warrant the vacation of a trial date, adding "the sooner the appeal is likely to be resolved, the stronger may be the argument in favour of delay, especially in terms of convenience to parties and the trial court itself". However, the Court expressed the view that, generally speaking, a possible change in the law is not to be treated as justification for failing to hear a case fixed and ready for trial.
It must be acknowledged that, in the Geelong Football Club case, the putative prospect of a change in the law was quite speculative. It was said to arise from the fact that an application for special leave had been filed. The application had not even been determined at the time of the decision of the Court of Appeal. I acknowledge that the position is different in the present case, since (I assume) an appeal lies as of right in the Western Australian proceedings.
The second case relied upon by the applicants was the decision of the New South Wales Court of Appeal in City of Sydney Council v Satara [2007] NSWCA 148. The Court in that case cited the decision in the Geelong Football Club case.
Both decisions reinforce the principle that the Court should deal with the law as it is rather than speculate about changes in the law. The Court in Satara said at [31]:
31 A case which has been specially fixed for hearing at a date some months in the future should proceed to hearing unless to refuse an adjournment would prejudice a party to the point of denying justice: Watson v Watson (1968) 70 SR (NSW) 203 at 206 per Asprey JA; at 210 - 211 per Holmes JA. This principle is accentuated by ss 56 and 57 of the Civil Procedure Act. Section 56(1) sets out the overriding purpose of the Civil Procedure Act and the Rules of Court being to facilitate the just, quick and cheap resolution of the real issues in the proceedings. Section 56(2) requires the Court to seek to give effect to that overriding purpose when it exercises any power given to it by the Act. Section 57 requires the Court, for the purpose of furthering the overriding purpose, to manage proceedings in the Court having regard to the objects set out therein which include the efficient disposal of the business of the Court (s 57(1)(b)), the efficient use of available judicial and administrative resources (s 57(1)(c)) and the timely disposal of the proceedings, and all other proceedings in the Court, at a cost affordable by the respective parties. Section 57(2) requires that the Act be applied as best to ensure the attainment of the objects referred to in s 57(1).
Ultimately, applications such as the present must be determined on a case by case basis, balancing the competing interests established. The factors which persuaded me to refuse the Commissioner's application in the present case were as follows:
1. The principle reiterated in the decisions relied upon by Mr Livingston that the Court should deal with the law as it is rather than speculate about changes in the law. It may be accepted, having regard to the number of matters waiting in the wings concerning the proper construction of s 330(4)(a) of the Act, that the appeal in Kalimuthu may be regarded as something of a test case. I do not think it follows that the jurisprudence must necessarily grind to a halt, to the detriment of individual applicants. On one view, the very number of cases involving the construction of the section reveals the extent of disruption that would follow if Courts were to bend too readily to speculation as to prospective changes in the law.
2. The closeness of the hearing date and the practical inconvenience that would flow from vacating those dates. The Commissioner proffered an undertaking to meet the costs and expenses thrown away by reason of the vacation of the dates, but the Court should also have regard to the personal inconvenience that flows to individual litigants when a hearing is deferred.
3. The inconvenience to the Court and other litigants when a two day fixture is lost.
4. Finally, I was not persuaded that refusal of the adjournment would prejudice the Commissioner to the point of denying justice. Putting the matter at its highest, the judge who hears the present matter may be disinclined, for reasons of comity, to depart from the construction of the section preferred by Allanson J, but he or she could appropriately do so if persuaded that his Honour's decision was plainly wrong. As noted on behalf of the applicants, the Commissioner's application rather assumed that Allanson J is wrong and that the appeal will succeed. Even if that is the case, it does not follow that justice will be denied to the Commissioner in the meantime. And, of course, if Allanson J is held to have been right all along, it will have been a disservice to justice to delay other proceedings on the basis that the Commissioner contended otherwise.
For those reasons, I made the following orders:
1. Grant leave to the Commissioner to file in Court the notice of motion dated 26 April 2017.
2. Dismiss the application.
[3]
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: 09 May 2017
Parties
Applicant/Plaintiff:
Commissioner of the Australian Federal Police
Respondent/Defendant:
Kalimuthu
Legislation Cited (3)
Anti-Money Laundering and Counter Terrorism Financing Act 2006(Cth)