By summons filed on 24 April 2014, the plaintiff applied for orders under the Proceeds of Crime Act 2002 (Cth) against several defendants including W (the first defendant) and B (the second defendant). Restraining orders were made ex parte by Campbell J in respect of certain assets on 24 April 2014. By notice of motion filed on 6 November 2014 W sought an exclusion order pursuant to s 31 of the Proceeds of Crime Act in respect of some of the property covered by the restraining order (the exclusion application). On 29 September 2015, with the consent of the parties, the Registrar listed this application for hearing on 23 May 2016. On 2 May 2016 W and B filed an amended notice of motion, which added B's claim for an exclusion order and enlarged the property in respect of which an exclusion order was claimed. Both W and B had, relevantly, been charged with offences contrary to s 400.9 of Sch 1 of the Criminal Code Act 1995 (Cth) for possessing property suspected of being the proceeds of crime. It was common ground that the civil proceedings in this Court covered the same subject matter as the matters which were to be determined in the criminal proceedings, being the trial by jury of W and B in the District Court.
On 23 May 2016, without any prior notice to the plaintiff, W and B applied for a stay of the proceedings. In order to give the plaintiff an opportunity to meet the stay application, I adjourned the motion for exclusion and the application for a stay to 27 May 2016 for hearing. On 1 June 2016 I ordered that the proceedings be stayed until the earlier of: further order; or 31 August 2016 and reserved costs. My reasons for granting the stay are set out in the decision: The Commissioner of the Australian Federal Police v W [2016] NSWSC 683. In substance, I was persuaded that the imminence of the criminal trial of W and B (which was listed for hearing on 15 August 2016) meant that the administration of justice would be better served by granting the stay for a short period, having regard to what I understood to be W and B's interest in protecting their evidence and supporting material from disclosure to the Crown in the criminal trial. I expected, on the basis of the evidence before me, that the criminal trial would conclude during the pendency of the stay, which would have the effect that W and B's exclusion application could proceed in this Court in open court in the ordinary course thereafter.
Commissioner of the Australian Federal Police v W [2016] NSWSC 1554 | Case summary | Zoe
On 5 July 2016 the plaintiff filed a notice of motion for orders that the stay be re-opened and set aside. The principal basis for the plaintiff's application was that, as the plaintiff had learned since the stay was granted, W and B had voluntarily disclosed to the Crown their evidence and supporting material in the exclusion application and intended to rely on it in the criminal trial. W and B filed a notice of motion on 18 August 2016 seeking an extension of the stay.
Both motions (the plaintiff's motion to set aside the stay and W and B's motion to extend it) were listed for hearing on 23 August 2016. In the period between the filing of the plaintiff's motion and its being heard, the plaintiff discovered that, on 8 August 2016, W and B had successfully applied to the District Court for the criminal trial to be adjourned on the basis of the proceedings in this Court. These matters were subsequently confirmed by the transcript obtained from the District Court.
On 29 August 2016 I made an order setting aside the stay of the proceedings ordered on 1 June 2016 and reserved the question of the costs of: the plaintiff's application to set aside the stay; the adjournment of the motion for exclusion; and W and B's application for an extension of the stay. My reasons for making these orders appear from the reasons for decision: The Commissioner of the Australian Federal Police v W (No. 3) [2016] NSWSC 1200 and in particular at [49]-[58]. In substance, I set aside the stay on the basis that I was persuaded that it had been granted on a basis which was revealed to be false: that W and B's right to withhold their evidence and supporting documents from the Crown in the criminal trial needed to be protected. As set out in my reasons for setting aside the stay, W and B had already disclosed this material to the Crown in the criminal proceedings. Another factor in my decision was that neither W nor B had disclosed to this Court that there were any foreseeable impediments to the criminal trial proceeding on the date allocated.
On 23 August 2016 I listed W and B's exclusion application for hearing on 10 and 11 October 2016.
By letter dated 13 September 2016 addressed to my Associate, the solicitors for W and B, Korn MacDougall, wrote to advise that their instructions had been withdrawn. They nonetheless confirmed that W and B no longer pressed the orders sought in the amended notice of motion filed on 2 May 2016. The solicitors also confirmed that they would not be filing submissions on costs although they submitted that the appropriate orders were that each party ought bear its, his or her own costs, as the case may be. The solicitors also said:
"Whilst they [W and B] still maintain that the property is not proceeds of crime, their priority is to preserve their position in their District Court criminal trial proceedings."
The matter came before me again on 28 September 2016 to permit W and B to confirm that they did not press the exclusion application, since the plaintiff had not heard from them and was concerned that their former solicitors were no longer acting when they wrote the letter referred to above. Neither W nor B appeared on that day. I made an order that unless W and B notified the plaintiff and my Associate by 5pm on Friday 30 September that they pressed the exclusion application, the hearing dates of 10 and 11 October 2016 would be vacated and the exclusion application would be dismissed forthwith. W and B were informed by letter of this order. As no notification was given, the order took effect.
Directions were made for the serving of any application for costs and written submissions in support of any such application in order that the matter could be determined on the papers.
The plaintiff applied for the costs of: the stay application; the plaintiff's application to set aside the stay; the defendant's application for an extension of the stay; and the costs thrown away by the adjournment of the application for exclusion on an indemnity basis. The plaintiff applied for the costs of the exclusion application on the ordinary basis. The plaintiff submitted that any costs orders ought provide that the costs be payable forthwith. As foreshadowed by Korn MacDougall, neither W nor B filed submissions on costs.
[2]
The costs of the exclusion application
W and B have abandoned their exclusion application. I am not persuaded that there is any reason why costs ought not follow the event. Although their former solicitors suggested in their letter of 13 September 2016 that the financial position of their former clients was at least in part responsible for their forensic decisions, there is no evidence to that effect. In these circumstances the plaintiff is, in my view, entitled to its costs of the application: Uniform Civil Procedure Rules 2005 (NSW), rr 42.19 and 42.20.
[3]
The costs of the stay application, the plaintiff's application to set aside the stay and W and B's application for an extension of the stay
Had W and B disclosed the true position (that they had already provided the relevant material to the Crown in the criminal trial), the stay would not have been granted, since it was granted on the basis of the imminence of the criminal trial and a misapprehension that no relevant disclosure had been made to the Crown. Accordingly, the stay application proceeded, and was determined, on a false basis. This arose through the fault of W and B, who in the absence of evidence to the contrary, can be taken to have instructed their solicitors accordingly. I note that no criticism can be made of their counsel who had been briefed solely on the exclusion application and were neither aware of what W and B had voluntarily provided to the Crown, nor the intentions of W and B with respect to the criminal trial.
The effect of the stay application was to compel an adjournment of the exclusion application since otherwise the stay application would have been rendered nugatory. In effect, W and B's non-disclosure of the true position made the stay application an expensive, but hypothetical, exercise which, in turn, led to the plaintiff's application to set the stay aside.
In these circumstances, W and B have not merely been unsuccessful in maintaining the stay, such as would warrant a costs order on the ordinary basis, but they have also been complicit in misleading the Court and, in so doing, have wasted time and costs.
The discretion to order costs under s 98 of the Civil Procedure Act 2005 (NSW) is broad and must take account of the circumstances of each case. Neither W nor B has explained their non-disclosure in the stay application or provided any material by way of mitigating circumstances. Their non-disclosure came to light only because it was discovered fortuitously by the plaintiff, who brought it to the attention of this Court. Furthermore, the plaintiff only became aware that the criminal trial had been adjourned and the basis for the adjournment when he investigated what had transpired in the District Court in the criminal trial and obtained a copy of the transcript which revealed what counsel instructed by W and B in the criminal trial had submitted to the District Court. Moreover, W and B resisted the application to set aside the stay, in circumstances where they were responsible for the stay having been made on a false basis.
In the particular circumstances of the present case, I consider that the conduct of W and B in applying for the stay; resisting its being aside; and seeking its extension warrants an order for indemnity costs. The costs thrown away by the adjournment of the exclusion application ought also be included in this category since the adjournment of the exclusion application was an inevitable consequence of their application for a stay.
The plaintiff seeks an order that the costs be payable forthwith. The basis for this application is that the proceedings involve a number of defendants. There is an application for an exclusion order by another defendant, Diverse Property Constructions Pty Ltd, which is yet to be determined. There is no rational reason why the determination of the aspect of the proceedings which concerns W and B should await the determination or prior resolution of the claim for an exclusion order by Diverse Property Constructions Pty Ltd or any claim by any other defendant in the proceedings. For all practical purposes, the role of W and B in these proceedings is over. Their solicitors, in the letter of 13 September 2016, accepted that the result of their former clients no longer taking any active role in the proceedings was that the property the subject of the restraining order would be forfeited.
As referred to above, there is no evidence of W and B's financial position such as would enable an inference to be drawn that an order that costs be payable forthwith would cause undue hardship, either generally, or with respect to legal representation at the criminal trial.
I am persuaded, on the basis of the plaintiff's submissions, that it is appropriate that W and B be ordered to pay the plaintiff's costs forthwith.
[4]
Orders
For the foregoing reasons I make the following orders:
1. Order the first and second defendants (the defendants) to pay the plaintiff's costs of the notice of motion filed on 6 November 2014 and amended on 2 May 2016 (the exclusion application) forthwith.
2. Order the defendants to pay the plaintiff's costs of:
1. the defendants' notice of motion for a stay of proceedings filed on 23 May 2016;
2. the plaintiff's notice of motion to set aside the stay filed on 5 July 2016;
3. the defendants' notice of motion for an extension of the stay filed on 18 August 2016; and
4. the costs thrown away by the adjournment of the exclusion application which was listed for hearing to commence on 23 May 2016
5. forthwith on an indemnity basis.
[5]
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 November 2016