DPP v Anderson [2020] VCC 1627

3 I pause here to note that section 86 of the Sentencing Act 1991 provides, in general terms, a mechanism by which a victim of crime, who has suffered loss or destruction of property as a result of the offending, may be awarded any compensation that the Court thinks fit. The victim may make such an application himself or herself, but in addition section 86(5)(ii) makes provision for such an application to be made on behalf of any victim by the Director of Public Prosecutions or (if the sentencing Court was the Magistrates' Court) the informant or police prosecutor.

4 I addressed the question of who was (or were) the victims of Mr Anderson's offending in the context of the sentencing remarks. [1] For the reasons previously stated, I find that Ms Anderson is the sole financial victim of the offending. This finding is apparently also reflected in the fact that the Director, in exercising her power under section 86(5)(ii), made application for a compensation order for Ms Anderson alone. Counsel for Mr David Anderson conceded that a compensation order is the appropriate order in this case.[2]

5 Ms Anderson did not make her own compensation application, but there was nothing to prevent her from doing so. In any event, a section 86(5)(ii) application was made on her behalf by the Director.

6 The second application made by the Director was for a 'Pecuniary Penalty Order' ('PPO') pursuant to section 58 of the Confiscation Act 1997 ('the Act'). The Director sought an order that David Anderson pay the state a pecuniary penalty in the identical sum of $ 542,991,33. This second application was made on the basis that David Anderson had 'derived a benefit' as the result of the commission of the relevant offence.

7 I note here that no property (or money) belonging to David Anderson had been the subject of any restraining order (or any other order contemplated by the Act) in this case.

8 The Director submitted that the purpose of seeking both a compensation order and a PPO was not to double the quantum that Mr Anderson was liable for but rather for the purpose of ensuring, to the highest degree possible, that compensation would actually be made to Ms Anderson. The Director argued that a PPO is a debt owed by the offender and due to the Crown, enforceable by the state. Conversely, a compensation order would result in a civil debt which would need to be enforced personally by Ms Anderson.

9 The DPP submitted that it was desirable in the circumstances of this case that the Court, through making a PPO, create a debt that is due to the Crown and enforceable by the state, given Ms Anderson's vulnerabilities and her potential inability to effectively pursue the debt created by the compensation order.

10 The issues raised by the dual applications were canvassed briefly at the plea hearing. At that hearing I invited Counsel for the Director and Counsel for Mr Anderson to file affidavits that set out evidentiary matters relied on in the applications that were not disclosed by the agreed facts on the plea. The applicant filed the affidavit of Shane Kenna dated 3 September 2020.The respondent filed his affidavit dated 17 September 2020 setting out his financial position. In addition to this, the respondent also filed an outline of submissions dated 17 September 2020.

11 On 18 September 2020 I sentenced David Anderson to a term of imprisonment. Before doing so, the court heard brief submissions from both parties in relation to the applications for compensation and the PPO. Subsequently, I received further submissions from the Prosecution dated 5 October 2020 and Counsel for Mr Anderson filed written submissions dated 7 October 2020.

12 Having received the further submissions, on 8 October 2020 the parties were invited to make further oral submissions but declined to do so. The parties also conveyed their consent to my ruling on this question in chambers.

13 Mr Anderson did not oppose the making of a compensation order in the terms sought and I have made that order. I do so having regard to the factual matters that were agreed as part of the plea, having regard to Mr Anderson's current financial circumstances, and noting that the order was not opposed. The order was made on the application of the Director but in favour of Ms Anderson. I note that Ms Anderson has a power of attorney, Mr David Trevascus, and that through him Ms Anderson was able to file a victim impact statement tendered on the plea.

14 The determination of the application for a PPO is more complex. The Director submitted that the PPO would give greater force and flexibility to the compensation of Ms Anderson by giving the state the power to litigate the debt, thus giving Ms Anderson, who is elderly and in a nursing home, a better chance of recovery. It was submitted that the pecuniary penalty order was sought solely to satisfy the compensation debt and that the apparent duplication of liability was neutralised by the operation of s 31 of the Act:

31 State to pay restitution and compensation out of forfeited property etc.

(b) property is forfeited by or under this Act, or a pecuniary penalty order is made, in relation to the offence in reliance on which the restraining order is made; and

**(c) an order for restitution or compensation is made under the Sentencing Act 1991 in relation to that offence or damages are awarded in relation to that offence - **

the State must satisfy, subject to subsection (2), to the value of the property forfeited or the amount of the penalty paid (less conversion costs), the order for restitution, compensation or damages.

**(2) If, in relation to an offence, the value of the property forfeited and the amount of the penalty paid (less conversion costs) are less than the sum of orders for restitution, compensation or damages, the State must pay to each person awarded restitution, compensation or damages an amount calculated in accordance with the formula - **

15 The Director submitted that this provision, in combination with fact that the amounts in the two orders were to be identical, meant that no 'double dipping' could occur as the state was obliged to satisfy the compensation order made in favour of Ms Anderson before it could recover anything in addition; once Ms Anderson recovered that sum, achieved (at least in theory) by the state successfully litigating the debt, the force of the PPO was exhausted.

16 The Director argued that the terms of section 31 did not require a restraining order to be in place over money or property, and that the section also applies to circumstances where a PPO and a compensation order were both made independently but in relation to the same illegally derived money or property. Mr Anderson argued that section 31 only applies where money or property had been restrained under the Act and had no application to the present circumstances. He agreed to the making of a compensation order but resisted the making of a PPO on that basis.

17 In pursuit of her interpretation of section 31, the Director urged a 'purposive' reading of the terms of section 31(1)(b), contending that the section, properly read, operated to enable the state to enforce the debt owed to a victim under an order for compensation by using a pecuniary penalty order as a kind of proxy for an order for compensation, even where no property or money had been restrained.

18 To advance this argument, the Director relied upon a legislative amendment to section 31 of the Act made by the Miscellaneous Acts (Omnibus No 1) Act 1998. The amending Act removed section 31(1)(a). Prior to the amendment, section 31(1) (a) read:

(a) a restraining order is made for a purpose referred to in section 15(1)(e); and

(b) property is forfeited by or under this Act, or a pecuniary penalty order is made, in relation to the offence in reliance on which the restraining order is made; and

(c) an order for restitution or compensation is made under the Sentencing Act 1991 in relation to that offence or damages are awarded in relation to that offence -

the State must satisfy, subject to subsection (2), to the value of the property forfeited or the amount of the penalty paid (less conversion costs), the order for restitution, compensation or damages.

19 Section 15(1)(e) of the Act provides that a restraining order may be made for the purpose of satisfying any order for restitution or compensation that may be made under the Sentencing Act 1991.

20 The Director submitted that the amendment should be interpreted as having specifically removed the requirement of the existence of a restraining order in order to enliven its operation. It was submitted that this intention is evidenced by the content of the Second Reading Speech[3] for the amending Act; I will deal with the second reading speech later in these reasons.

21 The Director acknowledged that the amendment 'does not appear to have made its way to s 31(1)(b)', noting that the section still refers to 'the restraining order'.

22 For the reasons that follow I reject the Director's contention that section 31 of the Act is enlivened the absence of a restraining order. I do so having regard to the plain words of the current iteration of s 31 of the Act, the declared purposes of the Act, the structure of the Act (including where section 31 is located in the overall scheme), and the content of the Second Reading Speech.

23 Section 31(b) retains reference to 'the restraining order', despite having been the subject of legislative consideration in 1998.

31 State to pay restitution and compensation out of forfeited property etc.

(b) property is forfeited by or under this Act, or a pecuniary penalty order is made, in relation to the offence in reliance on which the restraining order is made; and

It is not open to arrive at an interpretation that denies the words 'in reliance of which a restraining order is made' any meaning. The presence of those words in Section 31(b) indicates that the section is and remains, despite the amendment made in 1998, concerned with property over which a restraining order has been made, not property or assets that may be obtained in future. Further support for this position can be found in the structure and purpose of the Act.

24 The purposes of the Act are set out in section 1(a) to (k). Most relevantly, section 1(h) provides that one of the purposes of the Act is:

to preserve assets for the purpose of restitution or compensation to victims of crime...

25 The Act then goes on to create a scheme of orders generally directed at the preservation of money or property that either is, or is suspected of being, derived from, or tainted by, criminal activity. The Act contemplates a range of circumstances where Courts can be asked to intervene to prevent assets in whatever form being dealt with while criminal liability is litigated.

26 In that scheme, section 31, the section the Director now invokes in this case, is contained in Part 2. Part 2 has the heading: "Restraining orders other than civil forfeiture restraining orders and unexplained wealth restraining orders". After defining restraining orders in section 14, section 15 then sets out the purposes for which a restraining order may be made. In making a restraining order, a Court must state in its order the purpose for which the property is to be restrained.[4] There are five possible purposes contemplated in section 15:

(a) to satisfy any forfeiture order that may be made under Division 1 of Part 3;

(b) to satisfy automatic forfeiture of property that may occur under Division 2 of Part 3;

(c) to satisfy automatic forfeiture of property that may occur under Division 4 of Part 3;

(d) to satisfy any pecuniary penalty order that may be made under Part 8;

(e) to satisfy any order for restitution or compensation that may be made under the Sentencing Act 1991. (emphasis added)

27 The purposes of the Act, and the location of section 31 in Part 2 of the Act, supports Mr Anderson's contention that the operation of section 31 is confined to circumstances where a restraining order has been made for one or other of the purposes set out in section 15 of the Act. Further, the purposes of a compensation order and PPO are distinct:

A [compensation order] runs in favour of the victims of an offence. An order of the second kind - which is discretely dealt with by s.15(1)(d) of the Confiscation Act - provides for payment of a pecuniary penalty to the State out of the assessed value of benefits derived by a defendant in relation to an offence. [5]

28 What then, is to be made of the argument that the legislative amendment removing s 31(a) changed this ambit?

29 Both parties called upon the text of the Second Reading Speech to support their argument: The relevant part of the speech reads:

The act will significantly assist victims of crime to recover compensation for pain and suffering from the defendant. The act enables victims of crime to have a compensation order satisfied by the state to the value of the property which has been confiscated, provided that a restraining order was obtained for the purposes of satisfying a restitution or compensation order. The bill amends the act by extending the situations in which a victim's compensation order will have priority over the state's interest in confiscated property. It will no longer be necessary for a victim to have a restraining order for the purposes of satisfying a compensation order before the victim's interests take priority over the state's interests. Victims interests will now always have priority over the state's interests.

This bill will further assist victims of crime by empowered the Assets Confiscation Office to take action against property which has been restrained for the purpose of satisfying a victims compensation order in certain circumstances. For instance, rather than having both the victim and the ACO taking action against one item of property, the ACO will be able to take action on behalf of the victim as well as the state, thereby avoiding unnecessary duplication of the work and costs to the victim.

30 The Director argued that the words in bold indicate Parliament's intention that the section operate even in the absence a restraining order. I disagree. It is clear from the content of the Second Reading Speech that Parliament intended to remove the requirement of a restraining order made pursuant to section 15(1)(e); that is, the presence of a restraining order made for the purpose of satisfying any order for restitution or compensation that may be made under the Sentencing Act 1991. It is clear that Parliament intended that a restraining order made for any one of the purposes in section 15(1)(a) - (e) is sufficient to enliven the operation of the section. Previously, there needed to be a restraining order made for the purpose referred to in section 15(1)(e). After the amendment, that is no longer the case; victims' interests will always have priority over the state's interests, even where a restraining order was made for one of the purposes in s 15(a) to (d) as well as when a restraining order was made for the purpose in s 15(1)(e).

31 This change appears to address the potential unfairness to victims where his or her right to compensation is diminished because an order for restitution was made for a purpose under a different limb of s15 and not in specific contemplation of a potential compensation (or restitution) claim by a victim. In considering the interaction between compensation claims and restitution orders in the context of the Confiscation Act, the Court in DPP v McEachran said:

The Act, by giving priority to satisfaction of [compensation and restitution orders], gave some assurance, where a restraining order had been made, that such an order would translate into a compensation order which was worth powder and shot. [6]

32 For this priority to operate however, there must be a restraining order in place. This conclusion also resolves any difficulty with reading the clear language of the current section 30(1)(b) which includes clear reference to 'the restraining order', and is in harmony with the purpose and structure of the Act. I therefore find that section 31 does not operate in the way contended by the Director, in circumstances where no restraining order has been made. That being the case, I also find that to make a PPO for the same quantum as the compensation order would have the effect of creating liability for twice the amount that was the subject of the plea of guilty; I decline to make such an order.

33 Finally, the Director proposed that any ambiguity in the section could be avoided by making a PPO subject to a condition requiring the State to satisfy the payment of the compensation order in favour of Veronica Anderson. Having found no ambiguity in the section as set out above, and having made an order in favour of Ms Anderson, and being aware that she has a power of attorney, I decline to make such a conditional PPO.

[1] See DPP v Anderson [2020] VCC 1435 at [23]- [25].

[2] See [4] of Further submissions filed for Mr David Anderson, dated 7 October 2020.

[3] Hansard, Legislative Assembly, 23 April 1998, 1168, per W. D. McGrath

[4] See DPP v Cheryl McEachran, Victoria Legal Aid and County Court of Victoria [2006] VSCA 286 at [14] per Nettle, Ashley JJA and Smith AJA.