Commonwealth DPP v Xu

Crimes Act 1900 (NSW) Criminal Code Act 1995 (C'th) LEGISLATION CITED : Customs Act 1901 (C'th) Proceeds of Crime Act 2002 (C'th)

ASIC v Michalik [2004] NSWSC 909 Commissioner of Australian Federal Police v Cox (1986) 70 ALR 509 Control Consultants v Corporate Affairs Commissioner (1985) 59 ALJR 254 DPP v Logan Park Investments Pty Limited (1995) 37 NSWLR 118 Jeffrey v DPP (1995) 79 ACrimR 514 Police Service Board v Morris (1985) 58 ALR 1 CASES CITED : Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 Mortimer v Brown (1970) 122 CLR 493 Pyneboard Proprietary Limited v Trade Practices Commission & Anor (1983) 152 CLR 328 Reid v Howard (1995) 184 CLR 1 Sorby v The Commonwealth (1983) 152 CLR 281 The Queen v Director of Serious Fraud Office (1993) AC 1 at 40

Commonwealth Director of Public Prosecutions- Plaintiff PARTIES : Cui Mian Xu - Defendant

T Muir - Commonwealth DPP COUNSEL : G Jones/ B Clarke - Def

Commonwealth Director of Public Prosecutions - Plaintiff SOLICITORS : George Sten & Co - Defendant

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

10326/04 - COMMONWEALTH DIRECTOR OF PUBLIC PROSECUTIONS v Cui Mian XU

JUDGMENT 1 HIS HONOUR: Nature of application On 10 March 2005 the defendant moved the Court for the following orders:

(1) That pursuant to s39 of the Proceeds of Crime Act 2002 (Commonwealth) order 2 made ex parte by this Court on 6 February 2004 be vacated.

(2) That pursuant to s39 of the Proceeds of Crime Act 2002, order 2 made ex parte by this Court on 6 February 2004 be amended to read: "2. Pursuant to s39 of the Act, that the defendant give to the plaintiff, within 21 days after completion of the criminal proceedings stated in the affidavit in support of the summons, a statement sworn on oath setting out the particulars of and dealings with the property of the defendant, as specified in the second schedule."

(3) Such other orders as the Court determines. 2 The orders made ex parte by the Court on 6 February 2004 to which the application referred were relevantly:

(1) Pursuant to s17 of the Proceeds of Crime Act 2002 (the Act), that all the property (within the meaning of the word "property" as defined in s338 of the Act) of Cui Mian Xu (the defendant), including the interest of the defendant in the property described in the first schedule, but excluding her interest in the operation of any lawful business, is not to be disposed of or otherwise dealt with by any person ( the restraining order ).

(2) Pursuant to s39 of the Act, that the defendant give to the plaintiff within 21 days after service of this order, a statement sworn on oath setting out the particulars of and dealings with the property of the defendant, as specified in the second schedule ( the ancillary order ). 3 There were other orders made but they are not relevant. The second schedule identified the information required with greater particularity. SECOND SCHEDULE

1. Provide full particulars of the nature and extent of all your property including, in relation to each item of property:

(a) a description of the property, including the nature of your interest in it and, where possible, the estimated value, or in the case of bank accounts or deposits - the estimated balance of that interest;

(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; and

2. Provide full particulars of your current liabilities including, in relation to each liability;

(a) a full description of each liability including the nature of the liability and the amount of the liability;

(b) the name of the person or institution to which the liability is owed.

3. Provide full particulars of any dispositions or dealings with property since 6 February 1998 to date, including:

(a) 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;

(c) the name of the person or institution to which the property was transferred;

(d) the amount and date of payments made to discharge any liability in relation to the property; and

(e) the source of the payments referred to in subparagraph 3(e) above.

Factual background 4 On 6 February 2004 the defendant was arrested, charged and bail refused in relation to the following charges:

(a) That between about December 2002 and 5 January 2003 at Marrickville, Homebush, Ryde, Rozelle and elsewhere in New South Wales Cui Mian (Sally) Xu, did knowingly cause another person to enter into and remain in sexual servitude, namely Rattanavan Kachenchart, contrary to s270.6(1) of the Criminal Code Act 1995 (Commonwealth).

(b) That between about December 2002 and 5 January 2003 at Marrickville, Homebush, Ryde, Rozelle and elsewhere in New South Wales Cui Mian (Sally) Xu, did knowingly conduct a business that involved the sexual servitude of another person, namely Rattanavan Kachenchart, contrary to s270.6(2) of the Criminal Code Act 1995 (Commonwealth).

(c) That between about December 2002 and 5 January 2003 at Marrickville, Homebush, Ryde, Rozelle and elsewhere in New South Wales Cui Mian (Sally) Xu did knowingly intentionally exercise control over a slave, contrary to s270.2(1) of the Criminal Code Act 1995 (Commonwealth).

(d) That Sally Cui Mian Xu between 27 December 2002 and 5 January 2003 at Sydney in the State of New South Wales did detain Rattanavan Kachenchart, with the intention of obtaining an advantage from her to wit, providing sexual services for payment while the said Sally Cui Mian Xu was in the company of other persons, contrary to s86(2)(a) Crimes Act 1900 (NSW). 5 As indicated, on 6 February 2004 the restraining order and the ancillary order were made in relation to the property of the defendant. Those orders were served on the defendant at the Mulawa Correctional Centre by the Federal Police on 18 February 2004. The defendant was released on bail on 24 February 2004. 6 On 5 May 2004 notification was given by the Commonwealth Director of Public Prosecutions to the defendant that charges (a) and (b) above would be withdrawn and replaced with charges pursuant to s80D(1) and 80E(1) of the Crimes Act 1900 (NSW). Charge (c) which had been brought under the Commonwealth Criminal Code Act 1995 remained. 7 The question, the subject of the present application, was first raised by the defendant with the plaintiff on 13 May 2004. It was common ground that an issue at the criminal trial of the defendant would be the defendant's connection or otherwise with premises alleged to have been the location of the alleged offences.

Preliminary point 8 The defendant's application requires consideration of s39 of the Proceeds of Crime Act 2002 (the Act). "39(1) The court that made a restraining order, or any other court that could have made the restraining order, may make any ancillary orders that the court considers appropriate and, without limiting the generality of this, the court may make any one or more of the following orders: (a) An order varying the property covered by the restraining order; (b) An order varying a condition to which the restraining order is subject; (c) An order relating to an undertaking required under s21; (d) An order directing the owner of the property (including, if the 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; (e) If the Official Trustee is ordered under s38 to take custody and control of property: (i) an order regulating the manner in which the Official Trustee may exercise its power or perform its duties under the restraining order; or (ii) an order determining any question relating to the property, including a question relating to the liabilities of the owner or the exercise of powers or the performance of duties of the Official Trustee; or (iii) an order directing any person to do anything necessary or convenient to enable the Official Trustee to take custody and control of the property; (f) An order giving directions about the operation of the restraining order and any one or more of the following: (i) a forfeiture order that covers the same property as the restraining order; (ii) a pecuniary penalty order or a literary proceeds order that relates to the same offence as the restraining order; (g) An order requiring a person whose property is covered by a restraining order to do anything necessary or convenient to bring the property within the jurisdiction." NOTE: If there is a pecuniary penalty order that relates to the same offence as a restraining order, the court may also order the Official Trustee to pay an amount equal to the relevant pecuniary penalty out of property covered by the restraining order: see s282. (2) The court can only make an ancillary order on the application of: (a) The DPP; or (b) The owner of the property covered by the order; or (c) If the Official Trustee was ordered to take custody and control of the property - the Official Trustee; or (d) Any other person who has the leave of the court. (3) A person who applies for an ancillary order must give written notice of the application to all other persons entitled to make such an application. (4) An ancillary order may be made: (a) If it is made by the court that made the restraining order - when making the restraining order; or (b) In any case - at any time after the restraining order is made. (5) An order that is ancillary to a restraining order does not cease to have effect merely because the restraining order, or part of it, ceases to be in force under subsection 45(4) or (5). Note: A restraining order ceases to be in force under those subsections if a confiscation order covering the same property or relating to the same offence is satisfied. 9 It was common ground that when the ancillary order was made on 6 February 2004 notice had not been given "to all other persons entitled to make such an application" as required by sub-s 39(3). It was also common ground that the defendant was such a person and had not been given notice. 10 The defendant raised as a preliminary point that the requirement in sub-s 39(3) was mandatory and the failure of the plaintiff to comply with it rendered the ancillary order a nullity. 11 In response the plaintiff submitted that there was no requirement for it to provide such written notice because of sub-s 26(4) of the Act. It also relied upon sub-s 39(4)(a) which allowed a court to make an ancillary order at the same time that it made the restraining order. 12 Section 26 is within Division 2 of Pt 2 which deals with how restraining orders are to be obtained. Sub-ss (1), (2) and (3) of s26 specify the notice which the plaintiff must give before applying for a restraining order. Subsection 26(4) reads: "(4) The court must consider the application without notice having been given if the DPP request the court to do so." 13 Despite the detailed requirements for notice in sub-ss (1), (2) and (3) of s26, sub-s 26(4) does enable the DPP to obtain a restraining order on an ex parte basis without giving notice. I do not, however, read sub-s 26(4) as authorising the court to make an ancillary order pursuant to s39 even though written notice has not been given pursuant to sub-s 39(3). Section 26 does not govern s39 which has its own notice provisions. 14 The concepts of "mandatory" and "directory" have largely fallen into disfavour. The test in deciding the validity of an act done in breach of a statutory provision is that set out in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355: "A better test for determining the issue of validity is to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid. This has been the preferred approach of courts in this country in recent years, particularly in NSW. … In determining the question of purpose regard must be had to the "language of the relevant provision and the scope and object of the whole statute"." 15 Applying that approach and taking account of the language of s39, particularly the use of the word "must", I am of the opinion that failure to provide written notice is not to be regarded as an irregularity. Failure to give such written notice rendered the ancillary order a nullity. Section 39(4)(a) does not assist. It does no more than authorise an ancillary order being made at the same time as a restraining order. It assumes other preconditions necessary to the making of the ancillary order have been met. 16 Although the defendant has succeeded on that preliminary point, it does not resolve the question. This is because it was agreed between the parties that even if the ancillary order made on 6 February 2004 was a nullity, an application for the same order could be brought before me in the course of this hearing, pursuant to sub-s 39(4)(b). It seems to me that the only practical benefit for the defendant in succeeding on the preliminary point is that no action can be taken against her for being in breach of the ancillary order to date. The substantive question still needs to be decided. 17 It was agreed between the parties that if the defendant succeeded on the preliminary point, it was open to the plaintiff to apply to me for an ancillary order in identical terms to that made on 6 February 2004. This the plaintiff has done. Accordingly, from a procedural point of view, the substantive question in this application was considered by me on the basis of it being an application by the plaintiff for an ancillary order in the form set out in [2] and [3], which application was opposed by the defendant.

Protection against self- incrimination 18 The defendant submitted that although s39 granted a broad discretion in making ancillary orders and specifically gave power (s39(1)(d)) to order the owner of property to furnish an affidavit of assets and liabilities, the exercise of that discretion was constrained by the fundamental common law privilege against self-incrimination. 19 An order requiring from the defendant a sworn statement setting out the particulars of and dealings with her property would inevitably be linked to the criminal charges which she was facing. The charges related to the use of premises by the defendant to commit acts upon others and the sworn statement which was sought would require her to give an account of her assets, liabilities and dealings in property. Conceptually the link to the charges was clear. I did not understand the plaintiff to disagree with that proposition. 20 It was submitted that unlike other sections of the Act (s197 and s271), s39 did not make any provision for protection against self-incrimination. The section was silent on that issue. The privilege against self-incrimination was of such fundamental importance that it should only be regarded as abrogated if the statutory regime under consideration said so in clear terms. (Reid v Howard (1995) 184 CLR 1 and DPP v Logan Park Investments Pty Limited (1995) 37 NSWLR 118.) 21 Since s39 was silent on the question of self-incrimination, no ancillary order as sought by the plaintiff should be made. Alternatively, if an ancillary order as to a statement was made, it should be so crafted that it did not breach the privilege against self-incrimination. It was for this reason that the defendant proposed an alternative ancillary order to that sought by the plaintiff. 22 The plaintiff relied upon the principal objects of the Act as set out in s5. Apart from the general purpose of depriving persons of the proceeds of crime, s5(e) identified as a principal object of the Act "to enable law enforcement authorities effectively to trace proceeds, instruments, benefits and literary proceeds;". Section 39 was to be interpreted against the background of the principal objects of the Act. 23 Section 39 authorised in terms the making of an order of the kind sought by the plaintiff (s 39(1)(d)). There was no qualification or restriction on the order such as in ss197 and 271, which had specific regard to protection against self-incrimination. Since ss197 and 271 made it clear that the legislature had given attention to protection against self-incrimination in certain circumstances, the absence of any such protection in s39 was a telling indicator that the legislature did not intend s39 to be restricted in that way. 24 The plaintiff relied upon cases such as Sorby v The Commonwealth (1983) 152 CLR 281, Pyneboard Proprietary Limited v Trade Practices Commission & Anor (1983) 152 CLR 328 and Mortimer v Brown (1970) 122 CLR 493 to support the proposition that even though a statute does not by express words abrogate the privilege against self-incrimination it can do so by necessary implication if the legislative intent to do so clearly emerges. When one took into account the principal objects of the Act (s5(e)) together with the obvious purpose behind sub-s 39(1)(d) the clear legislative intent was to take away the privilege against self-incrimination in relation to that subsection. 25 The plaintiff further submitted that it was fundamental to this legislation that such effect be given to sub-s 39(1)(d). The scheme of the Act was such that the provision of a statement pursuant to sub-s 39(1)(d) was the first step in other investigative options available under the Act and logically preceded such steps. Subsequent steps under the Act depended upon a suspect accurately disclosing assets and liabilities so that restraining orders might be extended or varied. To make s39 subject to the privilege against self-incrimination would render the section largely inoperative. 26 The plaintiff referred specifically to the decision of Pincus J in Commissioner of Australian Federal Police v Cox (1986) 70 ALR 509. That case concerned s243F of the Customs Act, as it then was. That section was similar to subsection 39(1)(b) in that it directed "the defendant to furnish to the Official Trustee, within time specified in the order, a statement, verified by oath or affirmation of the defendant, setting out such particulars of the property of the defendant as the Court deems proper;". 27 In relation to that sub-section Pincus J said: "Typically, and not unusually, revelation of the extent of the defendant's property is likely to give "reasonable grounds to apprehend danger" to him. In those circumstances, it seems unlikely that the legislative intention was that the defendant should be entitled to refuse to supply a statement under s243F(1)(d) on the grounds of likely self-incrimination."

The plaintiff urged a similar approach to sub-s39(1)(d). 28 The Court was also asked to have regard to the fact that a defendant was not entirely without protection under s39 in that the section contained a broad judicial discretion in the making of any orders under it.

Decision 29 The defendant relied upon the statements of principle in DPP v Logan Park Investments and Jeffrey v DPP (1995) 79 A Crim R 514 to the effect that an intention to abrogate or curtail fundamental property rights will not be imputed by the courts unless it be "clearly manifested by unmistakable and unambiguous language". In doing so, the defendant was really submitting that the privilege against self-incrimination was of such fundamental importance that it should not be impliedly revoked but express language was required. 30 That of course is not the law. The privilege has been held to have been abrogated implicitly without express words to that effect. Mortimer v Brown (public examination under the Companies Act), Control Consultants v Corporate Affairs Commissioner (1985) 59 ALJR 254 (production of books under the Securities Industry Code), Police Service Board v Morris (1985) 58 ALR 1 (internal police inquiry) and Commissioner of Australian Federal Police v Cox (pecuniary penalties under the Customs Act) are examples. 31 A useful statement of principle is in The Queen v Director of Serious Fraud Office (1993) AC 1 at 40: "That there is a strong presumption against interpreting a statute as taking away the right of silence, at least in some of its forms, cannot in my view be doubted. Recently Lord Griffiths (delivering the opinion in the Privy Council in Lam Chi-Ming v The Queen (1991) 2 AC 212 at 222) described the privilege against self-incrimination as "deep rooted in English law", and I would not wish to minimise its importance in any way. Nevertheless it is clear that statutory interference with the right is almost as old as the right itself. Since the sixteenth century legislation has established an inquisitorial form of investigation into the dealings and assets of bankrupts which is calculated to yield potentially incriminating material, and in more recent times there have been many other examples, in widely separated fields, which are probably more numerous than is generally appreciated. These statutes differ widely as to their aims and methods. In the first place, the ways in which the overriding of the immunity is conveyed are not the same. Sometimes it is made explicit. More commonly, it is left to be inferred from general language which contains no qualification in favour of the immunity. Secondly, there are variations in the effect on the admissibility of information obtained as a result of the investigation. The statute occasionally provides in so many terms that the information may be used in evidence; sometimes that it may not be used for certain purposes, inferentially permitting its use for others; or it may be expressly prescribed that the evidence is not to be admitted; or again, the statute may be silent. Finally, the legislation differs as to the mode of enforcing compliance with the questioner's demands. In some instances failure to comply becomes a separate offence with prescribed penalties; in others, the Court is given a discretion to treat silence as if it were a contempt of Court. In the light of these unsystematic legislative techniques there is no point in summarising the various statutes drawn to our attention. They do no more than show that the legislature has not shrunk, where it has seemed appropriate, from interfering in a greater or lesser degree with the immunities grouped under the title of the right to silence." 32 It seems clear therefore that the privilege against self-incrimination can be implicitly abrogated. There is no requirement for express words to that effect. An intention to do so, however, must be clear from the character and purpose of the provision and statute under consideration. 33 That was the approach followed by the High Court in Pyneboard: "The privilege will be impliedly excluded if the obligation to answer, provide information or produce documents is expressed in general terms and it appears from the character and purpose of the provision that the obligation was not intended to be subject to any qualification. This is so when the object of imposing the obligations is to ensure the full investigation in the public interest of matters reasonably involving the possible commission of offences which lie peculiarly within the knowledge of persons who cannot reasonably be expected to make their knowledge available otherwise than under a statutory obligation." (p 341)

And in Sorby v The Commonwealth: " Mortimer v Brown (1970) 122 CLR 493 furnishes a compelling illustration of a statute which abrogates the privilege by necessary implication. There it held that s250 of the Companies Act 1961 (Q) excludes the privilege in the public examination by a judge of directors of the company involved in voluntary liquidation. In Pyneboard we concluded that it is less difficult to show the privilege has been impliedly abrogated in the ordinary case where a statute imposes an obligation to answer questions otherwise on oath, provide information or produce documents in the course of an administrative investigation than in the case of an examination on oath before a judicial officer whether or not an object of that examination is preliminary to committal for trial or summary prosecution. As we said there, in deciding whether a statute impliedly excludes the privilege much depends on the language and character of the provision and the purpose which it is designed to achieve." (p 309) 34 For the purpose of preventing criminals from benefiting from the proceeds of crime the Act provides a significant inroad into fundamental property rights. As part of that purpose the Act provides for the obtaining of information before any confiscation or forfeiture of property occurs. Subsection 39 is part of Chapter 2 which sets out the confiscation scheme. It makes provision for orders in relation to specific matters there referred to and generally, which are ancillary to the primary restraining order in respect of property. Subsection 39(1)(d) needs to be interpreted against that background and against the background of the principal purpose of the Act (s5(e)). 35 The power to make an order requiring a statement of assets and liabilities is clearly expressed. To qualify that power by having regard to the privilege against self-incrimination would largely nullify the power. As a matter of practicality, such privilege would be claimed in almost every case. ASIC v Michalik [2004] NSWSC 909 provides a good example of the way in which the sub-s 39(1)(d) power would be nullified if it were subject to the privilege against self-incrimination. 36 By reference to the nature of the Act and the purpose which it is designed to achieve, and by reference to the language and character of sub-s 39(1)(d) and the part it plays in the making of a restraining order, I am of the opinion that the sub-section does impliedly exclude the privilege against self-incrimination.

Orders 37 It follows from that analysis that I am not prepared to make the orders sought in the defendant's Notice of Motion and I dismiss that motion. 38 Because in my opinion order 2, as originally made on 6 February 2004, was a nullity for failure to provide written notice as required by sub-s39(3) of the Act, I have dealt with the plaintiff's submissions as an application, pursuant to sub-s39(4)(b) for an order in the form of order 2. I grant that application and I make an order in the following terms:

Pursuant to s39 of the Act, I order that the defendant give to the plaintiff within 21 days a statement sworn on oath setting out the particulars of and dealings with the property of the defendant as specified in the Second Schedule as set out in para [3] of this judgment. 39 The question of costs was not argued before me and accordingly, I reserve the question of costs. **********

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