Commonwealth Director of Public Prosecutions v Adorjany

THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

10751/97 COMMONWEALTH DIRECTOR OF PUBLIC PROSECUTIONS

• v - Leslie Victor Manass ADORJANY Judgment

HER HONOUR : 1 This is an application for costs by the defendant following the resolution and finalisation (in his favour) proceedings under the Proceeds of Crime Act 1987 (Cth) ("The Act"). 2 In 1997 the defendant was charged under s 233(B) of the Customs Act 1904 with possession of a prohibited import, cocaine. He later pleaded guilty and was convicted and sentenced. Consequent upon the charge the plaintiff, the Director of Public Prosecutions (Cth) ("DPP") obtained from this Court under s 43(2)(a) of the Act an order restraining any dealing with or disposition of the defendant's property including specified real estate. Orders under the section are referred to as restraining orders. The ultimate consequence of such an order (where the defendant is convicted of a serious offence) unless it is otherwise brought to an end, is that property to which the restraining order relates is forfeited to the Commonwealth. It may here be noted that forfeiture occurs by operation of the Act and does not require a formal or specific order of the court. 3 Subsequently the defendant filed a notice of motion seeking, relevantly, a declaration under s 48(4) of the Act. Under that sub section a court may declare that a restraining order, so far as it relates to property in which the defendant has an interest, is to be disregarded. Such a declaration may only be made where the court is satisfied that the property was not used in or in connection with any unlawful activity, was not derived directly or indirectly by any person from any unlawful activity and the defendant's interest in the property was lawfully acquired. 4 The defendant supported his claim for a declaration by affidavit which he served on the plaintiff on 4 November 1998. A month later the DPP discontinued the proceedings against the defendant. From the timing it may reasonably be inferred that the DPP accepted the defendant's claim that the property was not relevantly involved in or associated with his offence. It is in these circumstances that the defendant now seeks an order for costs. 5 S 101 of the Act is specifically concerned with costs in relation to proceedings under the Act. It provides as follows: "101(1) Where: (a) a person brings, or appears at, proceedings under this Act before a court in order: (i) to prevent a forfeiture order or restraining order from being made against property of the person: or (ii) to have property of the person excluded from a forfeiture order or restraining order; (b) the person is successful in those proceedings; and (c) the court is satisfied that the person was not involved in any way in the commission of the offence in respect of which the forfeiture order or restraining order was sought or made;

the court may order the Commonwealth to pay all costs incurred by the person in connection with the proceedings or such part of those costs as is determined by the court. (2) the costs referred to in subsection (1) are not limited to costs of a kind that are normally recoverable by the successful party to civil proceedings." 6 Both parties agree that the defendant's application does not come within the terms of s 101 but for very different reasons. On the DPP's part, that contention arises because paragraph (c), requiring the satisfaction of the court that the defendant was not involved in the commission of the offence in relation to which the restraining order was made plainly cannot be met by the defendant, he having been convicted of that very offence. On this basis alone the defendant is not eligible to an award of costs under this section. He does not claim that he is. He advances a more complex argument. He argues that s 101 is limited in its application to the circumstances specified in paragraph (a): that is, for the section to be applicable to him he must be a person who brings or appears at a proceeding under the Act in order either to prevent a forfeiture order or restraining order being made, or to have property excluded from a forfeiture order or restraining order, and that, for the technical reasons explained below, he is not such a person. The disqualification contained in paragraph (c) therefore does not affect his entitlement. 7 A forfeiture order is defined in s 4 as a forfeiture order made under s 19(1). That sub section provides for the making of an order by a court on application of the DPP in circumstances there stipulated. Such an order is to be distinguished from forfeiture of property by operation of s 30 to which reference has already been made. It is common ground that the DPP did not make any application for a forfeiture order under s 19(1). The defendant was therefore not a person who appeared before a court in order to prevent the making of a forfeiture order against his property or to have property excluded from a forfeiture order. Nor was he a person who appeared before a court or brought proceedings to prevent a restraining order being made (the restraining order having been made ex parte). So much is common ground. On the defendant's argument he also was not a person who appeared before a court to have property excluded from a restraining order. It is at this point that the positions of the parties diverge. The defendant's only active involvement was to seek a declaration under s 48(4). This, he argues, is to be distinguished from an application to have property excluded from a restraining order, provision for which is expressly made in s 48(3). It is true that s 48(3) provides for circumstances in which a court is empowered to make an order to exclude the interest of a person in property from a restraining order. The language of s 48(3) - relevantly "exclude" - is to be contrasted with the language of s 48(4) - "disregarded". 8 On that basis, the defendant argued, s 101 (the terms of which would have excluded him by reason of paragraph (c)) has no application to his case. He therefore invoked ordinary provisions relating to the award of costs, specifically SCR Part 52 rule 16(1) which provides: "16(1) where, pursuant to Part 21 rule 2, a party to any proceedings discontinues the proceedings without leave as to the whole or any part of the relief claimed by him against any other party, the discontinuing party shall, unless - (a) the court otherwise orders; or (b) the notice of discontinuance contains a statement under Part 21 rule 5(3), pay the costs of the party against whom the discontinued claim is made, occasioned by the discontinued claim and incurred before service of notice of the discontinuance." 9 No argument was directed towards the various exceptions contained in the rule and it may be assumed that, prima facie, in the absence of s 101, the defendant would have a strong claim for his costs under this rule. The significant question is whether is s 101 is the section which governs his entitlement, and excludes the rule. 10 The defendant's argument can only succeed if the word "exclude" in s 101(1)(a)(ii) is construed as relating solely to an application for an order under s 48(3), and is not wide enough to encompass an application for a declaration under s 48(4). There is, it may be admitted, something to be said for the defendant's argument. The Act is carefully and tightly (if somewhat densely) worded. The concept of exclusion appears in s 48(3); the legislature chose different language to reflect its intention in relation to property that may be "disregarded" under s 48(4) and "excluded" under s 48(3). The change in language must be taken to have been deliberate, particularly since both concepts appear in different parts of the same section. The reason for the change in language is not apparent from the statute itself and I was not referred to any extrinsic material that might assist, but that does not alter the fundamental premise that the two concepts are somehow different in their nature and were intended to be different by the legislature. 11 There is (unsurprisingly) no definition of "exclude" and the expression, as it is used in s 101(1)(a)(ii) does not purport to be tied to an exclusion order as provided for in s 48(3). 12 After some wavering, I have come to the view that the phrase "to have property of a person excluded from a forfeiture order or restraining order" is used in its ordinary sense, is not intended to be confined to the kind of order envisaged by s 48(3), and is wide enough to encompass a declaration that property is to be disregarded for the purposes of a restraining order - which, put another way, is, in ordinary language, exclusion of property from the effect of a restraining order or forfeiture order. That conclusion is sufficient to bring the defendant's application within s 101(1)(a) and it is clear that his conviction and the effect of sub paragraph (c) disentitles him to an award of costs. 13 The view I have reached is consistent with that of Hayne J, when sitting as a judge of the Supreme Court of Victoria, in Bissett v DPP (Cth), unreported, 24 February 1993. It does not appear that the present argument was put to his Honour, but he had something to say about the legislative intent underlying s 101. That, he held, was that the Commonwealth should pay costs where property is excluded from a restraining order and the court is satisfied of the other relevant matters including the non involvement of the defendant in the commission of the offence in respect of which the order was made. 14 I am satisfied that, by reason of s 101, the defendant is not entitled to an award of costs. I might add that that conclusion is also consistent with the general tenor of the Act. A restraining order may be made even before a person has been charged with an offence. Property of that person is restrained pending the procedures relevant to the charge and to the proceeds of crime legislation. Guilt of the offence precludes a costs order, even where an exclusion order is made; it cannot be thought that the legislature intended to, or did, leave open an avenue for an award of costs in the specific circumstances that here appertain. 15 The application for costs is refused.

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