Lee v DPP

Luna Park Ltd v the Commonwealth (1923) 32 CLR 596 CASES CITED : Huddart Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 Shell Co of Australia Ltd v FCT (1930) 44 CLR 530

PARTIES : Kee Sien Lee (applicant) Director of Public Prosecutions (Cth)(respondent)

COUNSEL : J Sackar QC with R Orr (applicant) I Temby QC with T Muir (respondent)

SOLICITORS : Baker & McKenzie (applicant) Commonwealth Director of Public Prosecutions (respondent)

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

2007/013850 Kee Sien Lee (applicant) v Director of Public Prosecutions (Cth) (respondent)

JUDGMENT 1 HIS HONOUR: On 30 July 2007, on an application to this Court made ex parte, the Director of Public Prosecutions obtained a restraining order under s19 of the Proceeds of Crime Act 2002 (Cth) in respect of property of Kee Sien Lee. Among the statutory conditions required to obtain the order was that there were reasonable grounds to suspect that the property was the proceeds of an indictable offence or a foreign indictable offence: s19(1)(d). Those expressions are defined in s338 of the Act, but their precise meaning is not material for present purposes. 2 The order was sought by summons, which also sought orders that Mr Lee be examined about his affairs, pursuant to s180 of the Act, and that the property the subject of the restraining order be forfeited to the Commonwealth, pursuant to s49. That forfeiture order could not be made until the restraining order had been in force for at least six months: s49(1)(b). 3 Before me is a motion by Mr Lee, joining the Director as respondent, seeking a declaration that the restraining order ceased to be in force 28 days after it was made, and orders that the Director's applications for examination under s180 and forfeiture under s49 be struck out. The notice of motion seeks other relief which, although it was not abandoned, was not pressed at the hearing. 4 The central argument of Mr Sackar QC, who appeared with Ms Orr for Mr Lee, is that the restraining order ceased to be in force by virtue of s45(2) of the Act. The submission that the Director's application for forfeiture should be struck out is ancillary to that argument. It is common ground that, if the restraining order has ceased to be in force, the Director's application for examination under s180 could not be pursued because, by the terms of that section, an order for examination can be made only while a restraining order is in force. 5 It is unnecessary to examine the background to these proceedings because the motion, as it was argued, turns purely upon questions of statutory construction. Those questions require examination of a number of sections of the Proceeds of Crime Act. Those sections are fairly lengthy, and it would be tedious to set them out in full. I shall deal with them succinctly, confining my attention to the provisions which are directly relevant. 6 Restraining orders, preventing a person from disposing of or dealing with property, are dealt with in Part 2-1 of the Act. Section 17 provides for a restraining order where a person "has been convicted of, or has been charged with, an indictable offence, or it is proposed that he or she be charged with an indictable offence": subs(1)(d). Such a person falls within the definition of "suspect" in s338. The order can affect property of the suspect, property of another person "that is subject to the effective control of the suspect", or property of another person that is "proceeds of the offence": subs(2). 7 Section 18 provides for a restraining order where there are reasonable grounds to suspect that a person has committed a "serious offence". The definition of that expression, which need not concern us, is also found in s338. Such a person is also a "suspect". Again, an order under the section can be made not only in respect of property of the suspect, but also property of another person subject to the effective control of the suspect or which is proceeds of the offence: subs(2). 8 Although it was not referred to by Mr Sackar in his submissions, s20 should also be noted. It provides for a restraining order where there are reasonable grounds to suspect that a person has committed an indictable offence or a foreign indictable offence, and that the person has derived literary proceeds in relation to that offence. The meaning of "literary proceeds" is to be found in s153. Again, the person against whom the order is sought is a "suspect". In this case, an order may be made against the property of another person that is subject to the effective control of the suspect: subs(2)(c). 9 Section 19 provides for a restraining order where there are reasonable grounds to suspect that property is, among other things, the proceeds of an indictable offence or a foreign indictable offence, whether or not the identity of the person who committed the offence is known: subs(1)(d). The section makes no reference to a "suspect" and does not require the identification of any person said to have committed, or to be suspected of having committed, an offence. It was under this provision that the restraining order against Mr Lee was made. 10 Section 45 deals with the cessation of restraining orders. As I have said, the cornerstone of Mr Sakar's argument is s45(2). However, it is also necessary to consider subs(3), to which I shall turn later. 11 Section 45(2) provides: Restraining orders if there is no conviction etc . (2) A restraining order ceases to be in force if, within 28 days after the order was made: (a) the suspect has not been convicted of, or charged with, the offence, or at least one offence, to which the restraining order relates; and (b) there is no confiscation order or application for a confiscation order that relates to the offence. 12 The period of 28 days after the restraining order against Mr Lee was made expired on 27 August 2007. It is common ground that by then he had not been convicted of, or charged with, any relevant offence. "Confiscation order" is defined in s338 and includes a forfeiture order under s49. As I have said, the Director applied for such an order in the summons which sought the restraining order. 13 Does subs(2) apply to Mr Lee? Mr Sakar submitted that it does and that both paragraphs (a) and (b) were satisfied. As to par(b), he argued that the Director's purported application in the summons for a forfeiture order was not valid because, as I have said, s49 provides that no such order can be made until a restraining order has been in force for at least six months. That period had still not expired at the time of the hearing of this motion. 14 Mr Sakar noted that this Court exercises the judicial power of the Commonwealth when making a forfeiture order. He relied upon authorities to the effect that the exercise of that power requires a decision which is final and conclusive of a dispute between the parties and is a binding and authoritative determination of their rights. The power cannot be exercised to answer a hypothetical question or to provide an advisory opinion based on a hypothetical situation. He cited cases such as Luna Park Ltd v the Commonwealth (1923) 32 CLR 596 at 600, Huddart Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 at 357, and Shell Co of Australia Ltd v FCT (1930) 44 CLR 530 at 543. Drawing on that line of authority, he argued that this Court could not exercise its judicial power to make a forfeiture order until the occasion to do so had arisen, and to apply for such an order prematurely would be to seek "the exercise of a non-existent power". 15 Provision for the cessation of restraining orders, Mr Sakar said, is to ensure that the Director has a "limited window of opportunity" to restrain a person's property in the course of the procedures under the Act, so that that property would not be "tied up indefinitely". Should the Director have proper reason to seek the continued restraint of property after the expiration of 28 days, he argued, the Director could seek an extension of the order by invoking the power of the Court under s39 to make ancillary orders. The Director did not seek such an extension in the present case. 16 Attractive as these arguments might at first seem, I am persuaded by the submissions of Mr Temby QC, who appeared with Mr Muir for the Director, that they cannot stand with the language of the relevant provisions and the scheme of the legislation. Obviously, Part 2-1 of the Act is directed to the restraint of dealings with property. However, ss17, 18 & 20 focus upon a known suspect, that is a person suspected of having committed a relevant offence. The significance of that for present purposes is not diminished by the fact that under those three sections there can be restraint of the property of another person which is subject to the effective control of the suspect or, in the case of ss17 & 18, property of another person that is proceeds of the offence in question. 17 Section 19, on the other hand, focuses upon property suspected of being the proceeds of a relevant offence, and it matters not whether there is a known suspect. In this context, the note to s22(1) is worthy of attention:

(1) A restraining order must only relate to one suspect. Note: A restraining order might not relate to any suspect if the person who is suspected of committing the offence is not known and the restraining order only restrains proceeds of the offence. The restraining order may also cover the property of one or more other persons who are not the suspect.

Obviously, it is the first sentence of that note which is of immediate significance. 18 Accordingly, Part 2-1 evinces a legislative intention to deal differently with those two situations, and that intention is replicated in other Parts of the Act. Section 49 takes its place in Part 2-2, dealing with forfeiture orders. Sections 47 & 48 are also to be found in that Part. Section 47 is directed specifically at property which has been restrained, upon suspicion of a serious offence, under s18. Section 48 provides generally for the forfeiture, after a person has been convicted of an indictable offence, of property found to be proceeds of that offence. For the purpose of that section, there need not have been a restraining order in force. 19 Section 49 applies only to property which has been restrained by an order under s19: subs(1)(b). A forfeiture order under the section can be made if the court is satisfied, among other things, that the property is proceeds of an indictable offence or a foreign indictable offence: subs(1)(c). Importantly, subs(2) provides: (2) A finding of the court for the purposes of paragraph (1)(c): (a) need not be based on a finding that a particular person committed any offence; and (b) need not be based on a finding as to the commission of a particular offence, and can be based on a finding that some offence or other of a kind referred to in paragraph (1)(c) was committed. 20 Let me turn, then, to the structure of section 45. Subsection (1) is concerned with a restraining order "that relates to one or more offences". Subject to certain exceptions, it provides that such a restraining order cease to be in force 28 days after any relevant charge is withdrawn, the suspect is acquitted of any relevant offence, or the suspect's conviction for such an offence is quashed. I should mention, in passing, subs(4), which provides that a restraining order ceases to be in force to the extent that property covered by it vests in the Commonwealth upon forfeiture. 21 It is subs(3) which is important for present purposes. To understand the scope of that subsection, it is sufficient to set out the first paragraph of it: (3) A restraining order ceases to be in force in respect of property covered by the restraining order if: (a) either: (i) the court refuses an application for a forfeiture order that would have covered the property; or (ii) the court excludes the property from a forfeiture order; or (iii) a forfeiture order that covers the property is discharged or ceases to have effect; or (iv) the court excludes the property under section 94 from forfeiture under Part 2-3; …

There is no need to turn to s94 or Part 2-3, referred to in subpar(iv). 22 Several things should be noted about the subsection. It makes no reference to a "suspect" or a specific offence. It provides for cessation of a restraining order not by reference to the expiry of a period of time but, rather, upon the occurrence of specified events. I accept Mr Temby's submission that it is only this subsection which could apply to a restraining order under s19. I am not persuaded by Mr Sackar's argument that it is simply another mechanism by which any restraining order might cease to operate, and that subs(2) also applies to a section 19 order. The reference in subs(2)(a) to a suspect not having been convicted of, or charged with, any offence to which the restraining order relates is clearly inconsistent with the terms of s19. 23 Accordingly, I would refuse the declaration concerning the operation of s45(2) of the Act sought in para (2) of the notice of motion. I would also refuse the order, sought in para (3), that the Director's application for the examination of Mr Lee under s180 of the Act be struck out. While Mr Sackar's argument about the validity of the Director's application for forfeiture under s49 was ancillary to his submission about the effect of s45(2), it needs to be decided because para (1) of the notice of motion seeks an order that that application also be struck out. On this issue I am again persuaded by Mr Temby's response. 24 As he put it, the practice of applying for forfeiture at the same time as a restraining order is sought demonstrates that the Director "is seriously intent upon pursuing the matter". Section 49(1)(a) requires that there be an application under the section by the Director, but is silent as to when it should be made. The application in the present case was made recognising that it could not be dealt with by the court until the necessary period of time had elapsed. It was not intended that the court's jurisdiction under s49 would be invoked until that time had passed. It does not appear to me that making such an application before the court has power to deal with it falls foul of the principles expounded in the cases to which Mr Sackar referred. I would also refuse the order sought in para (1) of the motion. 25 In the event, it becomes unnecessary to decide whether the court's power to make ancillary orders under s39 of the Act could embrace an application by the Director for the extension of a restraining order. Mr Temby questioned whether it could, given the terms of subs(1) of that section. I shall not set out the provision or deal with the competing arguments about it. It is neither necessary nor desirable that I express a concluded view about the matter. 26 As I said at the beginning of these reasons, other relief sought in the notice of motion was not pressed at the hearing. Given the time which has elapsed since the hearing, it may be that Mr Lee wishes to pursue it. That being so, I shall not make formal orders disposing of the motion as a whole until he has had the opportunity to consider the course he wishes to take. If necessary, I shall hear argument on costs, whether it be upon delivery of this judgment or at some later time.

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