(a) an order compelling answers to questions or production of documents;
(b) proceedings in which the defendant is not entitled, by statute, to rely upon the privilege against self-incrimination, and
(c) proceedings where the privilege applies, but in practice the defendant will be compelled to reveal information which might otherwise fall within the scope of the privilege.
45 An order under s 180 may fall within the first category; an exclusion order or a revocation order sought by the applicant would fall within the third category. Unlike Reid v Howard, putting aside the examination order, this is not a case in which the plaintiff in civil proceedings seeks to compel disclosure by the applicant of material which may place him in jeopardy of criminal proceedings. Rather, the applicant is placed in jeopardy consequentially by the step taken by the Director of obtaining a restraining order in relation to property in which the applicant has an interest.
(b) examination order
46 The making of an order for examination of a person is discretionary: s 180(1). The person who may be the subject of such an order includes:
"(a) a person whose property is, or a person who has or claims an interest in property that is, the subject of the restraining order; or
(b) a person whom the restraining order states to be a suspect for the offence to which the restraining order relates; or
(c) the spouse or de facto partner of a person referred to in paragraph (a) or (b)."
47 In the present case, the examination order sought in the summons did not state that any person was a suspect for the offence to which it related, nor did it seek to cover any spouse or partner of the applicant.
48 The subject matter of an examination is "the affairs (including the nature and location of any property) of a person referred to" in one of the sub-paragraphs listed above. The order sought in the present case required that the applicant be examined about his affairs (including the nature and location of any property).
49 So far as the examination order is concerned, the present proceedings have an air of prematurity. There are two steps which must occur before the applicant can be examined. First, the Court must make an order permitting the examination; secondly, an approved examiner must give the applicant, once the subject of an examination order, a written notice for his examination: s 183(1). Each of these powers is discretionary and remains to be exercised. Why this Court should interfere to prevent the consideration of the exercise of those powers, in the first instance by a judge of the Court, was not explained in the course of the appeal. Subject to questions of authority, the refusal of the trial judge to grant the relief sought by the applicant merely permits the application for an examination order to be listed for consideration by a member of the Court in the future. Unless there were some legal or factual impediment to the Court properly considering whether to make such an order when sought, it would have been quite inappropriate for the primary judge to grant the relief sought by the applicant in relation to a proposed examination order.
(c) exclusion order
50 An application for an exclusion cannot be heard unless the Director has had a reasonable opportunity to conduct an examination of the applicant. As noted above, the only effective way of resisting a forfeiture order was to seek an exclusion order. But that, it was contended, required him, in practical terms to submit to an examination, without the protection of the privilege against self-incrimination.
51 The last step in the argument does not necessarily follow from the statutory scheme. What it does reveal, however, is that there remains a discretionary order with respect to any examination. The Court might yet refuse such an order, or delay its consideration. On current authority, refusal of an examination order would not mean that the Director had not had a reasonable opportunity "to conduct an examination of the applicant" see Director of Public Prosecutions (Cth) v Chan [2004] ACTSC 101; 185 FLR 399; 150 A Crim R 163 at [29] (Crispin J). Critical to the reasoning in Chan were two elements of the statutory scheme, namely that the Director had no entitlement to examine a person absent an order which lay within the discretion of the Court and, secondly, the unlikelihood that Parliament intended to preclude a person from obtaining an exclusion order because the Court thought it inappropriate to permit an examination. Crispin J variously described the discretionary power conferred by s 180 as requiring the Court to be satisfied that the examination of the particular person is "necessary" - at [26] - or that "there are adequate grounds" for the order - at [27]. Clearly Crispin J was concerned that, merely by seizing property on a suspicion based on reasonable grounds, the Director could establish a basis for conducting an examination of a suspect without the right to refuse to answer questions that might incriminate the person. His Honour considered, no doubt correctly, that the purpose of an examination under s 180 should be limited to circumstances where there were real questions as to the true position with respect to the source and ownership of property subject to a restraining order and, possibly other property which might be the proceeds of crime: at [26]. The conclusion in Chan thus involved treating s 32 as satisfied where the Director had had a reasonable opportunity to seek an examination order and, if the application had been granted, to conduct the examination.
52 Because no Court has been asked to adjudicate on the request for an examination order in the present case, the issue as to the correct approach to such an order has not yet arisen. It is not appropriate for this Court to pre-empt the exercise of discretion by a single judge from whom an examination order has yet to be sought in relation to the applicant. Further, the applicant has not yet sought an exclusion order.
(d) forfeiture order
53 Unless the applicant obtains a stay with respect to the Director's application, and disregarding the Director's application for an examination order, the Director will presumably be in a position to obtain a forfeiture order forthwith. As has already been noted, the basis for a forfeiture order will differ depending upon whether an application for an exclusion order has been made and not withdrawn, as opposed to the case in which no such application has been made.
54 It has been accepted in other cases that the applicant for an exclusion order bears the onus of proving the matters necessary to establish the grounds for making the order: see [27] above. However, what is less clear is whether it is sufficient for there to be an application for an exclusion order, which need not necessarily be determined, in order to place on the Director the obligation of satisfying the Court that the property is the proceeds of a relevant offence under s 49(1)(c). If, as appears from the wording of the section, the obligation of the Director to satisfy the Court under s 49(1)(c) that the property is the proceeds of an offence is engaged merely by making an exclusion order, which need not be determined, the legal burden of proof is not on the applicant, but on the Director. Although the applicant's position, forensically, may militate in favour of him giving evidence, there is no provision removing the privilege against self-incrimination for the purposes of such proceedings. In that event, the arguments in favour of a stay are greatly reduced.
(e) exercise of power
55 It may be that the applicant's argument in the present case was intended to be based on the acceptance of a practical, if not legal, burden of establishing by evidence facts sufficient to remove the grounds for suspicion arising from the Director's evidence. In that case, the attempt to stay the proceedings, so as to prevent the Director seeking a forfeiture order, must be based on broad considerations concerning the scheme of the legislation: see Shaw [2003] QSC 436 at [19].
56 The dilemma faced by the applicant is one which must arise frequently, if not usually, in such proceedings. Where s 19 is invoked, it may be assumed that the Director is not in a position to lay charges. Accordingly, a stay on the terms sought, namely until the applicant is advised "that he will be charged with one or more offences to which the restraining order relates, and the precise nature of any such charges" is apt to constitute a permanent stay in practical terms. The restraining order would then remain in place and the property be frozen. The alternative is that the stay remain in place until the Director provides an assurance that the applicant will not be prosecuted in relation to property the subject of the restraining order.
57 In Reid v Howard the joint judgment noted a submission that "prosecution authorities cannot be bound" by an assurance or an order of the Court, at least in proceedings in which they were not parties. The correctness of that view was not determined: at 16. Whether the Director could or should give such an assurance may be doubted in the present case; further, it seems unlikely that he has any power to give such an assurance on behalf of Malaysian authorities, although it might be possible to seek an assurance that no information would be supplied to them. Similar problems might arise in relation to State authorities.
58 In any event, the statutory structure makes such an undertaking, condition or assurance inappropriate. It is clear that the power to proceed under the Proceeds of Crime Act was not intended to put the Director to an election, requiring that he or she first institute criminal proceedings or disclaim an entitlement to proceed later by way of criminal charges. Putting to one side the power to require an examination of the applicant, the statutory scheme is consistent with the applicant being required to make a choice as to whether to seek to defend the forfeiture proceedings, at the risk of revealing incriminating material, or to hold his or her hand and permit the forfeiture of the property. To permit the proceedings under the Proceeds of Crime Act to continue, absent some specific factor, will not generally constitute an abuse of the statutory scheme.
59 Considering the matter at that level of generality, the statutory scheme is inconsistent with a stay, absent a specific justification. A stay for a significant period has potential financial consequences for both sides. No doubt the person with an interest in the property is most severely disadvantaged, but the Commonwealth is also at risk because restraining orders are usually conditioned on an undertaking with respect to payment of damages: Proceeds of Crime Act, s 21. Such an undertaking was given in the present case.
The case-law
60 There remains a question as to whether the foregoing statements of principle are consistent with those adopted by the Queensland Court of Appeal in DPP v Jo: see above at [6]).
61 DPP v Jo is distinguishable. First, the application for leave to appeal sought to challenge the grant of a stay of proceedings (for a limited period). The challenge by the Director was based upon the proposition that the material before the primary judge "did not afford a sufficient basis upon which to grant a stay" and that his Honour took into account an irrelevant consideration, "namely the length of time it was taking for the criminal charges to crystallize": at [9]. Except to the extent that the applicant seeks to obtain assistance from the reasons for granting the stay on the part of the primary judge, limited assistance can be derived from a refusal to interfere with a stay in circumstances where the applicant must establish an error of principle as a basis for interfering with a refusal to grant a stay.
62 Secondly, the restraining order had been obtained by the Director under s 18 of the Proceeds of Crime Act, not s 19. The sections vary in an important respect. The relevant suspicion under s 18 is that a person has committed a serious offence. By contrast, under s 19, the relevant suspicion relates to property, being the proceeds of certain kinds of offences, rather than to the commission of an offence by a particular person. Moreover, the statutory scheme provides separately for a forfeiture order founded on a restraining order made under s 18 (s 47(1)) and a forfeiture order founded on a restraining order made under s 19 (s 49(1)). The requirements that must be satisfied under s 47 and s 49 are quite different. In particular, s 47 has no equivalent to s 49(3). The case for disclosure of the details of a charge is clearly stronger in circumstances where the suspicion relates to the commission of an offence, as opposed to property being the proceeds of an offence.
63 Thirdly, the stay granted was for a period of a little over nine months, it being anticipated that criminal charges were to "crystallize" within that period: at [8] and [23].
64 The applicant accepted that Mr Jo was likely to be charged, but noted that the approach adopted by the Queensland Court of Appeal treated similarly both Mr and Mrs Jo (and a company), even though there appears to have been no indication that Mrs Jo would be charged. The basis upon which the Court of Appeal upheld the reasoning of the trial judge may be found at [20], in the judgment of Wilson J, in the following terms:
"They cannot be precise about how their defending forfeiture proceedings including by bringing exclusion applications - which would expose them to the likelihood of examinations in the course of which they would have to answer questions about their affairs - may prejudice his defence of criminal charges (on which the [Director] will most probably bear the onus of proof) when they do not know what those charges will be. By going into evidence in the forfeiture proceedings they may afford the [Director] an advantage in the criminal proceedings … and they may both waive their privilege against self-incrimination. On present indications, the risk of waiving the privilege against self-incrimination is particularly acute in Mr Jo's case."
65 There are difficulties with this reasoning. First, as noted above, it seems doubtful whether the likelihood of an examination order should be taken into account in circumstances where no judge has considered whether such an order should be made and no approved examiner has been appointed.
66 Secondly, the fact that the Director may obtain a forensic advantage if the person gave evidence is likely to arise in every case in which forfeiture proceedings are sought to be maintained before the completion of any criminal proceedings. Wilson J noted that if charges were laid, then Mr and Mrs Jo "should be able to particularise the prejudice in the criminal proceedings, and unless they do so, they will be unlikely to obtain a further stay": at [23]. Just how the risk would be explained to the Court at any level of particularity, without jeopardising the privilege, is unclear: cf, eg, Shaw [2003] QSC 436 at [11]. The provisions which were said to have been contravened by a tax avoidance scheme had already been identified, as had the dates during which the scheme operated, and the property restrained involved water craft and motor vehicles: [4]-[6]. Much was already known.
67 More importantly, the premise upon which this reasoning is based is that if a person can identify potential prejudice, in the sense that the Director may obtain a forensic advantage in being able to test their evidence or that of their witnesses, that will constitute a sufficient basis for a stay. That reasoning goes close to requiring the Director to determine the charges and proceed with them before pursuing a forfeiture order, at least where the application for a forfeiture order is made under s 47(1) on the basis of a restraining order in force under s 18. For the reasons indicated above, such an approach would be inconsistent with the apparent purpose and structure of the statutory scheme for confiscation of proceeds of crime, at least under ss 19 and 49.
68 Wilson J also noted that the primary judge "was astute to the objects of the legislation and to the fundamental nature of the privilege against self-incrimination": at [22]. After setting out a passage stating matters of principle, from the judgment of the primary judge, her Honour continued:
"The inherent jurisdiction of the Courts to preserve the privilege against self-incrimination cannot remain paramount in the face of a clear legislative intent to abrogate that privilege by requiring persons such as Mr and Mrs Jo to answer questions at an examination conducted under the Act. But that point has not yet been reached, and the stay application was designed (at least in part) to stop it being reached. In that context, the Court clearly has inherent power to uphold the privilege by granting a stay."
69 The intended scope of this passage may be quite limited. The existence of power to grant a stay can be accepted and indeed was conceded in the present case. However, for reasons given above, it is inappropriate to pre-empt the consideration of whether an examination order should be made and whether the approved examiner will exercise his or her power to give an examination notice. Both the Court, and the approved examiner, in considering the exercise of their powers will no doubt be invited to have regard to the fact that the Act does not permit a person to decline to answer questions on the basis of the privilege. However, an offence is committed only where the person refuses or fails to answer a question "that the approved examiner requires the person to answer": s 196(1)(b). How widely the approved examiner would permit the examination to go, in exploring matters which might be relevant primarily to the person's defence, is a further unknown. The intervention of the court to pre-empt all of these decision-making powers being exercised, should only be contemplated where there is some basis for concluding that there would otherwise be an abuse of process. The statute is inconsistent with the proposition that an abuse of process necessarily arises merely because there are outstanding charges pending or because there is the possibility that charges may later be laid.
70 McMurdo P agreed with the reasons give by Wilson J and with the separate reasons of Lyons J. Lyons J also agreed with Wilson J and added at [26]:
"Courts have an inherent power to uphold the privilege against self-incrimination where it is in the interests of justice to do so particularly to protect the rights of an individual and to prevent an abuse of process."
71 This language adopts an abuse of process test in exercise of power of the Court to grant a stay, to uphold the privilege. The critical issue is the circumstances in which the privilege should be 'upheld'.
72 His Honour continued at [27]:
"In his reasons the primary judge observed that the respondents would defend any criminal prosecutions brought and that the respondents' solicitor had instructions to bring exclusion applications. To pursue those exclusion applications however the respondents bear the onus of satisfying the court that the restrained property was not the proceeds of criminal activity."
73 Lyons J then identified the test which appears to have been adopted by the primary judge, namely "that there was a real risk that the prosecution case may benefit from any evidence that may support a defence to any charges or from evidence that is adduced by the respondents on the exclusion proceeding": at [29]. The primary judge also appears to have held that no specific evidence of prejudice had been made out: at [30]. Given the structure of the statute, discussed above, the mere fact that the Director may benefit from steps taken by the persons interested in the property to protect their property does not demonstrate an abuse of process in allowing the forfeiture proceedings to continue.
74 Lyons J also upheld the view of the primary judge that "to allow the proceedings to continue in the circumstance where the possibility of any criminal charges being laid is and remains - despite the effluxion of what seems to me to be an inordinate period of time - uncertain (or at least unknown) amounts to an abuse of process sufficient to grant a stay, at least temporarily": at [30].
75 Underlying this last proposition is the assumption that the forfeiture proceedings will be, or become, an abuse of process if no charge is laid within a reasonable time. However, the availability of proceedings based on s 18 of the Act is not conditioned on the laying of charges nor the existence of circumstances which would justify the laying of charges.
76 Underlying the reasoning in DPP v Jo there appears to have been a concern that an examination under Pt 3-1 of the Act could constitute an illegitimate attempt by the Director to obtain material sufficient to allow delaying of charges, or to bolster an existing charge. There are two difficulties with that approach. The first is the need to identify the limits of a legitimate examination under Pt 3-2; the second is to justify the grant of a stay without permitting the examination to go ahead in any form, or even permitting the court to consider whether to make an examination order. If there is a further assumption that an examination will always be an abuse of process where charges have not been laid, or possibly where they have been laid but have not been determined, such a view is inconsistent with the express purposes of the Proceeds of Crime Act. If some form of examination is thought to be legitimate, but there is a fear that the boundaries of legitimacy will be exceeded (again ignoring the fact that there are other mechanisms which would allow a person protection), a real risk of such an outcome, absent a stay of the forfeiture proceedings, must be demonstrated before a stay is appropriate.
77 It is sufficient for present purposes to accept that the reasoning in DPP v Jo is not directly applicable to the present proceedings for the reasons noted above. It is not necessary, therefore, to consider whether the reasoning underlying the decision is "plainly wrong". However, in part it appears to embrace a view of the statutory scheme which is inconsistent with that outlined above and may therefore be doubted.
78 It remains to note a decision of Mackenzie J in the Supreme Court of Queensland, to which the primary judge was taken in the present case and which he declined to follow: at [22]. Shaw was clearly distinguishable: it was a case in which there were concurrent proceedings on foot under the Criminal Proceedings Confiscation Act 2002 (Qld) and for offences under the Drugs Misuse Act 1984 (Qld). After a careful analysis of the relevant principles, Mackenzie J posed the question, at [23], "where the issues are identical in the forfeiture proceedings and the [criminal] proceedings, should the State be afforded the opportunity to use the civil proceedings to test and potentially improve the case that it will rely upon in the criminal proceedings which involve identical issues?" His Honour continued:
"[24] In my view it is not appropriate to do so. Firstly, as the law stands, the respondent is in a more favourable position in the [criminal] proceedings with regard to disclosure of the material upon which his exculpatory explanation is based. Secondly, there are penal consequences flowing from a conviction.
[25] The case is one where there is a well defined and real advantage available to a person in criminal proceedings in respect of [not?] revealing evidence in advance. Depriving a defendant of such an advantage by requiring him to undergo prior proceedings where the State may, in effect, test-run the same case it proposes to lead in the prosecution proceeding and if necessary improve it if it can prior to that time is in my view sufficiently of the character of a demonstrated reason why the interests of justice would not be served by the forfeiture proceedings being heard in advance of the criminal proceedings. In my view the circumstances in which a stay is justified are established by the particular facts of the case."
79 In his concluding remarks, Mackenzie J noted that a "rigorous analysis of the evidence … will generally be of importance in determining whether the requirements for a stay are made out": at [26]. That view, which is not to be doubted, correctly limits the assistance which can be obtained by reference to the outcome in earlier cases. The reasoning was approved by Wilson J in DPP v Jo at [17]-[18]. Without doubting his Honour's approach and the decision in that case, it did not mandate any particular outcome in the present case.
Conclusions on grounds of appeal
80 The first ground of appeal asserted that the trial judge was in error in seeking to distinguish the decision in DPP v Jo. In fact the trial judge expressly noted that the restraining orders in Jo were made under s 18 of the Proceeds of Crime Act and that the forfeiture order was sought under s 47. For that reason, and the further reasons noted above, Jo was distinguishable. Whether his Honour should nevertheless have applied the principles upon which it appears to be founded is more doubtful. Arguably his Honour was wrong not to identify and apply the relevant principles established in the decision of an intermediate court of appeal in respect of Commonwealth legislation. Nevertheless, for the reasons given above those principles cannot be maintained as applicable under s 19 in the light of the statutory scheme. It is therefore not inappropriate to take a different approach to that adopted in DPP v Jo.
81 To the extent that his Honour declined to follow MacKenzie J in Shaw at [25], quoted by the primary judge at [17], his Honour did not err.
82 Grounds 2 and 3 challenged the test applied by the primary judge with respect to a stay of proceedings which sought both the examination of a person under s 180 and the forfeiture of property under s 49, in circumstances where the person was suspected of, but had not been charged with, committing criminal offences in relation to property to which the restraining order related.
83 The primary judge did not in terms formulate a test, nor did he distinguish between the elements of relief sought by the Director. There would have been reason to take a more particular approach with respect to the different elements of relief sought, as noted above. To do so would not have resulted in a different outcome.
84 Ground 3 alleged that the primary judge had failed to give "any practical consideration" to the impact that the refusal of a stay would have on the appellant's privilege against self-incrimination and right to silence in any criminal proceedings for an offence to which the restraining order related.
85 That ground assumes that criminal proceedings may be laid and that it is possible to know what response the applicant will have to the laying of the charges. If the ground were intended to cover the potential benefit which might accrue to the Director from pursuing either an examination order or a forfeiture order, the ground must nevertheless fail. What may have been missing from the reasoning of the primary judge was a full consideration of the statutory scheme, dealing with different powers separately. However, such consideration should not lead to a different conclusion in the circumstances.
86 Ground 4 challenged his Honour's conclusion that the attempt to limit the stay to the period until the applicant was informed "that he would not be charged with any offence to which the restraining order relates" was so broad as to be impracticable: at [25]. For the reasons noted above, there was no error in rejecting a stay conditioned in that way. Neither in his notice of motion in the Court below, nor in his notice of appeal, did the applicant attempt to formulate some more specific order. To the extent that a degree of specificity was provided in the written submissions before the primary judge, the proposed conditions were, as his Honour noted, impracticable, or inconsistent with the statutory scheme. That conclusion was not show to be erroneous.
87 Ground 5 alleged that the primary judge erred in applying the guidelines taken from McMahon v Gould. Those guidelines, it was asserted, were no longer good law. As the trial judge noted, the guidelines dealt with the exercise of the discretion to grant or refuse a stay of civil proceedings "where an offender was charged with a related criminal offence": at [24]. Hidden J considered it unnecessary to set the guidelines out, merely stating that he accepted them "as a useful guide". It is unclear to what extent reliance was placed upon them, given that this was not a case in which the defendant had been charged with a related criminal offence.
88 Further, it would not have been appropriate for his Honour to dismiss the guidelines as requiring reconsideration in circumstances where they had obtained at least implicit approval from a majority in this Court in Yuill v Spedley Securities Ltd (In liq) (1992) 8 ACSR 272, despite the variation in the common law with respect to the "felony tort rule", effected in Halabi v Westpac Banking Corporation (1989) 17 NSWLR 26. Even Kirby P in Yuill, having expressed the view that the guidelines should await further attention at a later date, accepted in Halabi that they "were now applied not only in this State but elsewhere", noting the express approval given to them by McHugh JA and Samuels JA in Halabi. Kirby P concluded that the primary judge in Yuill, having expressly followed and applied those guidelines, had "conformed to the existing law": at 274. See now Niven v SS [2006] NSWCA 338 at [2] (Beazley JA); at [25]-[37] (Tobias JA, Beazley and Giles JJA agreeing).
89 For reasons given above, the guidelines in McMahon v Gould may give too limited a weight to the general law immunity from compulsion to incriminate oneself, but the context of the Process of Crime Act renders it inappropriate to undertake a broad reconsideration of the terms of the guidelines or the circumstances in which they should properly apply.
90 The appellant has failed to establish grounds for this Court to intervene to grant a stay. The power to grant a stay required satisfaction of the Court that to allow the Director's application to proceed would constitute an abuse of process. There is no suggestion that the present proceedings were instituted, or are sought to be pursued, for a purpose extraneous to those permitted by the Proceeds of Crime Act: see [58] above.
91 For these reasons, the application for leave should be granted, but the appeal dismissed and the applicant ordered to pay the respondent's costs of the proceedings in this Court.
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