Restraining orders
32The predecessor to s.10B(3)(b) was s.10(5)(b) which was the subject of observations made in New South Wales Crime Commission v Bazi [2009] NSWSC 88 (Hislop J).
33In that case, orders had been made on the application of the Commission against the defendant under s.10 and s.10(4) of the Act. On a later date, an order was made pursuant to s.22 of the Act forfeiting to and vesting in the Crown the interests in property of Mr Bazi.
34The defendant filed a Notice of Motion seeking various orders including an order relating to "the making of provision for reasonable legal expenses pursuant to s.10(5) of the Act" at [5(a)].
35An alternative order was sought for "provision for reasonable legal expenses pursuant to the ancillary provisions in s.23(4) of the Act " at [5(b)].
36The Commission opposed the order sought by the defendant. Its submissions were directed solely to the question of whether the Court had power to make the order sought.
37The defendant and his solicitor had each apparently filed affidavits and reference was made to the fact that neither the defendant nor his solicitor were required for cross-examination on their affidavit: Bazi (supra) at [9]. Further, no submissions were made that, if there was power to make the order sought, the order and declaration should not be made. In particular, it was not submitted that the application should be refused on the basis of the restrictions in s.16A. The provisions of s.10(5) were in similar form to those now to be found in s.10B(3)(b).
38One issue that had to be determined in that case was whether the defendant's interest in property was subject to a restraining order that had been made. A concession had been made on behalf of the plaintiff that confirmed the defendant's interest in the property and which was one that continued to be held pursuant to the restraining order made on 17 January 2006.
39It was against that background that Hislop J concluded that the Court had power to make an order under s.10(5) of the Act "... in the circumstances of this case" .
40I do not consider that the issue that presently arises in the present case was one that fell for determination by Hislop J in Bazi (supra).
41In New South Wales Crime Commission v Fleming (1991) 24 NSWLR 116, the Court of Appeal (Gleeson CJ, Kirby P and Hope AJA) considered the provisions of s.10 and s.17 of the then Drug Trafficking (Civil Proceedings) Act 1990. Section 10(5) of that Act provided for the making of a provision in a restraining order, for meeting out of the property in question or a specified part (a) the reasonable living expenses of the relevant person and (b) the reasonable legal expenses of the relevant person. In respect of the latter, there was, at the time Fleming (supra) was decided, no imposition of a requirement before making an order for expenses for consideration to be given to the restrictions now to be found in s.16A of the Act. As discussed below, such restrictions were later inserted.
42Gleeson CJ, however, noted at 120-121 that the Court was required, when considering the subject of living expenses or legal expenses, to address the question of reasonableness having regard to the evident legislative policy behind the provisions. In that respect, the Chief Justice observed:-
" The policy behind this is obvious. The property involved is potentially subject to confiscation and forfeiture , and, whilst justice may dictate that the owner should not be deprived of the necessary means of meeting living expenses or legal expenses, that qualification only operates insofar as the expenses in contemplation are reasonable. Finally, except in one important respect which is the occasion of the present appeal, no standard or measure of reasonableness in relation to either living expenses or legal expenses is provided by the Act. The exception to that proposition is that, in the case of legal expenses, there is a provision whereby the resolution of actual or potential disputes as to what is reasonable may be facilitated by resort to a well-established procedure for dealing with disputes of that kind, that is to say, taxation of costs." (emphasis added)
43The present jurisdiction and power of the Supreme Court under the Act to make a restraining order is conferred by the provisions of s.10A(5) of the Act, Proceedings for restraining orders . The Court is required by those provisions to make such an order on an application made under that provision if the application is supported by an affidavit that meets the requirements specified in s.10A(5) or s.10A(6).
44Section 10B, on the other hand, is concerned with the scope or contents and effect of restraining orders. As such, it is not, in my opinion, a jurisdictional provision. It is a facultative provision that confers a discretionary power on the Supreme Court to make provision in a restraining order for either or both of the two kinds of expenses identified in s.10B(3)(a) and (b) - living expenses and legal expenses (see relevant extracts of s.10B(3) set out in paragraph [14] above).
45Section 10B(2), accordingly, confers a discretionary power upon the Supreme Court to, in effect, exempt out of the "property" or a part of the property, legal expenses incurred for the purposes specified in the section. Similar provisions appeared in s.10(5) of the former Drug Trafficking (Civil Proceedings) Act , New South Wales Crime Commission v Younan (1993) 31 NSWLR 44 at 47. In that case, the Court noted the purposes of that Act, observing (at 49):-
"What is required in each case is an exercise of the judicial discretion pursuant to the subsection. That discretion will take into account the purposes of the Act ( including the preservation of property allegedly derived in whole or in part from criminal activities ) and correlatively, the reasonable demands of a person for access to that person's own property for legal expenses incurred in defending criminal charges." (emphasis added)
46The power to exempt specified "property" from the operation of a restraining order under s.10B(3)(b) is not at large. That is evident, inter alia, from the phrase "subject to s.16A" appearing in s.10B(3)(b).
47It is to be noted that, unlike s.10B(3)(b), s.10B(3)(a), which is concerned with "reasonable living expenses" , is not subject to restrictive provisions of the type to be found in s.16A.
48The legislative history of s.16A may be briefly stated. The Drug Trafficking (Civil Proceedings) Amendment Act 1997 (No 68), Schedule 1, inserted into s.10(5)(b) of the Drug Trafficking (Civil Proceedings) Act the phrase "subject to section 16A" before the phrase "the reasonable" . The provisions of s.10 of the Criminal Assets Recovery Act included a similar provision (that now appears in s.10B(3)) in s.10(5).
49Section 16A is structured in terms of the restrictions specified in sub-paragraphs (a) to (e) therein. Each of the sub-paragraphs (a) to (d) commence with the phrase "no provision is to be made ..." . In relation to sub-paragraphs (a), (b) and (c), the Court is required to consider the specified matters as indicated by the phrase "is satisfied" . The Court must, in other words, act on evidence or other material that makes it possible for the Court to reach the required state of satisfaction in relation to the matters to which sub-paragraphs (a), (b), (c) and (d) refer. Given the possible effect of any exemption upon the achievement of the purposes of the Act, which includes restraint on the disposal of property to abide orders under the Act, the Court has a designated role to be performed in that respect. It must have a proper basis upon which it can be satisfied of those matters. That is, in my opinion, consistent with the underlying rationale underpinning s.16A.
50Section 27 is different in its terms, function and operation to s.10B(3)(b). It requires the Court to make a proceeds assessment order if the Court "finds" the matters to which reference is made in s.27(2). This includes that "the person" engaged in: "(a) a serious crime related activity involving and indictable quantity, or (b) a serious crime related activity involving an offence punishable by imprisonment for 5 years or more" .
51The Court is also required to have regard to the earlier provisions set out in s.27.
52In International Finance Trust Company (supra), the Court of Appeal held that the preconditions to which s.27 referred could be satisfied by the consent of the parties. Accordingly, a "person" may make the necessary admissions in relation to the relevant "serious criminal related activity" .
53However, as a matter of statutory construction, the mere fact that the Commission may reach agreement with a person referred to in s.10B(3)(b) as to legal expenses and consent to an order to give effect to such an agreement, cannot provide the required basis for the Court to reach the necessary state of satisfaction of the matters specified in s.16A or otherwise conclude that that section has been complied with in other respects.
54The matters to which s.16A(1) are directed are not matters for which a person seeking provision for legal expenses can make any "admission" . They differ from matters to which an admission may be made of having engaged in a particular type of criminal activity as in an application for a s.27 proceeds assessment order.
55Section 16A(1)(c) requires the Supreme Court, on an application made under s.10B, to be satisfied of the existence of discrete factual matters that enable the Court to conclude that the "restrictions" specified in s.16A(1) do not apply. Section 16A, in particular, makes it a mandatory requirement that a verified Statement of Affairs, addressing specified matters, is filed. The Court will be required to take into account the disclosed property interests and the liabilities of the person in question before any provision for legal expenses is made.
56An agreement between the Commission and the relevant person cannot operate to overcome or set at nought the intractable terms of s.16A(1). It would, in my opinion, be open to argument that a consent order for legal expenses of a person referred to in s.10B(3)(b) made in a case where no verified Statement of Affairs as specified in sub-paragraph (d) has been filed would be invalid.
57In International Finance Trust (supra), the sole question was whether, where the two affected parties consented to the orders, it was necessary for the Court to carry out its own inquiry as to the satisfaction of any statutory preconditions.
58Basten JA noted in that case that the High Court in Thomson Australian Holdings Pty Limited v Trade Practices Commission [1981] HCA 48; 148 CLR 150 at 164 had stated that a superior court generally has powers to make orders by consent without inquiry.
59The circumstances in International Finance Trusts Company (supra), however, were such that it was clear that there was an admission as to the relevant matters under s.27(2) and from the record it was apparent that s.27(2B) did not have operation on the facts of that case. However, it is not possible, in my opinion, to conclude that Mr Sim's letter of 16 August 2011 (Exhibit A) or the terms of the proposed consent order contain either admissions or other material that satisfy the preconditions or the exemptions from the restrictions in s.16A(1).
60It is appropriate at this point to examine the nature of the issue and the analysis of the High Court in Thomson Australian Holdings (supra).
61There, the then Trade Practices Commission sued a number of persons alleging facts which would have constituted contraventions of s.45 of the Trade Practices Act 1974 (Cth). The defendants were corporations which sold liquor by retail from licensed hotels and from certain persons. It was alleged that the defendants were parties to and gave effect to an arrangement or understanding in restraint of trade or commerce whereby they recommenced to each other prices for the sale of liquor to the public from licensed hotels.
62The parties to the proceedings agreed on terms of settlement which involved five defendants giving undertakings to the Court in similar terms and to the making against each defendant of consent orders in similar terms.
63The appellant in that case disputed that s.80 of the Trade Practices Act authorised the grant of an injunction where the injunction is not limited to the contraventions of s.45.
64The High Court determined that the provisions of the Trade Practices Act did not empower the Federal Court to grant injunctions restraining, or relating to, contraventions of the Trade Practices Act in situations falling outside the boundaries drawn by s.80 of that Act.
65The Court held that the parties, by consent, could not confer power upon a Court to make orders which the Court lacked power to make.
66It was stated in Thomson Australian Holdings (supra) at 164:-
"... In deciding whether consent orders sought are in conformity with legal principle, the Court is entitled to treat the defendant's consent as involving an admission of all facts necessary or appropriate to the granting of the relief sought."
67However, this observation is not applicable, in my opinion, to the basis upon which an order may be made under s.10B(3)(b). As earlier discussed, there are, and can be, no "admissions" in the proposed consent order for the purpose of the Court determining whether the restrictions under s.16A apply or not. It is not, as earlier indicated, for the parties to determine whether or not the statutory restrictions apply. That is a matter that can only be resolved by a determination by the Supreme Court (as indicated, for example, by the use of the phrase "is satisfied" in the abovementioned sub-paragraphs of s.16A(1)).
68In Thomson Australian Holdings (supra), Gibbs CJ, Stephen, Mason and Wilson JJ observed at 163:-
"... However, we should not wish it to be thought that it was necessary for the appellant to show an absence of jurisdiction or power in order to succeed. The appellant as a party to the proceedings is entitled to argue that any order made by the Court should conform to legal principle. In the ordinary case where a third party in the appellant's situation is not a party to the proceedings, the Court will be justified in making consent orders, if it has jurisdiction and power to do so and the orders are such as to be capable of enforcement. Even in such a case, the Court would be justified in refusing to make the orders if they do not conform to legal principle. And in a case such as the present, when the third party has been joined in the proceedings, the Court should consider and decide whether the orders sought conform to principle ... " (emphasis added)
69It is, in my opinion, equally necessary for an order under s.10B(3)(b) to conform with the specified statutory requirements.