New South Wales Crimes Commission v Warren Richards

• 7 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

JUDGMENT - Application for restraining order 1 HER HONOUR: Before the Court is an ex parte application by the New South Wales Crime Commission for a restraining order under s10A of the Criminal Assets Recovery Act 1990 against Mr Warren Richards. I have determined that the application must be granted, for reasons to which I shall come shortly. Before doing so, I should say something on the subject of the obligation of the Court to give reasons for making such an order.

2 In International Finance Trust Company Limited v New South Wales Crime Commission [2008] NSWCA 291, the Court of Appeal decided, by majority, that this Court was required to give reasons for granting a restraining order under s10 of the Act as it then stood: at [50] per Allsop P, Beazley JA agreeing at [56]. Separately, the Court unanimously rejected an argument that s 10 was constitutionally invalid in that it invested the Court with a power repugnant to judicial power under Chapter III of the Commonwealth Constitution: at [100] - [101] per McClelland CJ at CL; Allsop P agreeing at [2]; Beazley JA agreeing at [56]. 3 That decision subsequently went on appeal to the High Court where it was held that the section was constitutionally invalid per French CJ at [59], per Gummow and Bell JJ at [98]-[99] on the grounds that it engages the Supreme Court in activity which is repugnant to the judicial process as understood and conducted throughout Australia: at [98]-[99] per Gummow and Bell JJ; at [160] and [170] per Heydon J; Hayne, Crennan and Keifel JJ disagreeing at [136]. In those circumstances, there was no occasion for the High Court to consider the obligation to give reasons for granting an order under that section. 4 The legislation was subsequently amended. The present application is made under the amended legislation, as to which Ms Bishop, on behalf of the Crime Commission, has drawn my attention to a decision of Garling J in which his Honour concluded that reasons are no longer required to be delivered by the Court when an ex parte application is made for a restraining order under s10A: see New South Wales Crime Commission v Meads [2010] NSWSC 1145 at [33] and following.

5 With great respect to Garling J, I do not agree. In my view, the reasons on the strength of which the majority of the Court of Appeal in International Finance concluded that there is an obligation to state reasons obtain in the face of the Act as amended.

6 Central to the reasoning of the President was the proposition that the giving of reasons is not only a normal incident of the judicial process but that it derives from the principle that justice must not only be done but be seen to be done: at [45]. The President noted at [48] the possibility that, under the legislation in question, a person might have all of his or her property: "frozen indefinitely without notice by an order of the judicial branch of government at the request of the Executive branch of government and without an opportunity to be heard and without an opportunity to persuade the judge to the contrary on a review after the event" …

7 His Honour expressed the view that such a person is entitled to a statement by the judicial branch of government as to why that had happened and how it could happen in accordance with law.

8 I acknowledge that the amendments do confer (in s 10C) an opportunity after a successful ex parte application by the Crime Commission for the person against whom the order was obtained to have the order reviewed, but the opportunity is constrained. 9 First, there is a requirement that the application be made within twenty-eight days after the person is notified of the order (or at any time with the leave of this Court). It is frequently the case in applications of this kind that the defendant is, either before or at around the same time as the making of the order under the Criminal Assets Recovery Act, arrested and remanded in custody. Plainly, a person in custody, some of whose assets have been frozen by the very restraining order he or she may wish to have reviewed, will have less opportunity to investigate the utility and prospects of a challenge to the order made than citizens who are at liberty within the community. A statement of reasons from the Court is an important aid to that process.

10 Secondly, the review provided by s10C, whilst affording an opportunity to revisit the order inter-partes and explicitly enabling a person to adduce evidence, continues to be governed by the same test as is contained in s10A. The only real issue the Court has to consider, assuming that the application is supported, as it must be, by an affidavit of an authorised officer stating a suspicion that the person has engaged in a serious crime related activity, is whether there are reasonable grounds for that suspicion. If the Court does consider that there are reasonable grounds for the suspicion, the making of the order is mandated by s10A (5).

11 In his reasons for decision in Meads, Garling J placed some reliance on the express reservation at [50] of the judgment of Allsop P in International Finance, where his Honour said: "In my view, reasons were required. Nothing in these reasons is directed, or should be taken as relevant, to the usual practice in dealing with urgent ex parte applications for relief in civil proceedings where the defendant will be brought before the Court for an inter-partes interlocutory hearing promptly."

12 I do not think the amendments to the Criminal Assets Recovery Act yet bring applications under that Act within the class of urgent ex parte applications for restraining orders in civil proceedings. In such applications, the defendant will ordinarily be brought before the Court for an inter parties interlocutory hearing promptly, the order made ex parte extending only until that happens. Upon the resumed hearing, the applicant for the order is called upon afresh to establish a case for the making of further orders. That is not the case under s10A of the Criminal Assets Recovery Act.

13 Consideration of the content of the obligation to state reasons requires the Court to consider the function to be served by the giving of reasons. It is customary to refer, in that context, to the need for a party to exercise his right of appeal or such other rights as he may have to contest the decision.

14 In my view, an important consideration in that context is that a proper statement of reasons may equally conduce an unsuccessful party to accept that the decision was properly made and that an application for review is not warranted. Either way, a statement of the reasons for the decision will have served an important function in the administration of justice.

15 For those reasons, in my view, the considerations which prompted the majority in International Finance to conclude that this Court should give reasons under the old s10 of the Act apply with equal force to applications under s10A as it now stands.

16 I turn to state my reasons for granting the application against Mr Richards.

17 Section 10A (1) of the Act provides: "The Commission may apply to the Supreme Court, ex parte, for a restraining order in respect of specified interests, a specified class of interests, or all the interests, in property of any person (including interests acquired after the making of the order)."

18 Section 10A(5) provides that the Court must make the order, inter alia, if (i) the application is supported by an affidavit of an authorised officer stating that he or she suspects that the person has engaged in a serious crime related activity or serious crime related activities and stating the grounds on which that suspicion is based; and (ii) the Court considers that, having regard to the matters contained in the affidavit, there are reasonable grounds for any such suspicion.

19 The application against Mr Richards is supported by the affidavit of Inese Holz, who is an authorised officer within the meaning of the Act. She deposes to her suspicion that Mr Richards has engaged in the serious crime related activity of supplying a commercial quantity of a prohibited drug, namely methylamphetamine, contrary to s25(1) of the Drug Misuse and Trafficking Act 1985. That is a serious criminal offence within the meaning of the Act.

20 Ms Holz identifies, as the grounds on which she holds that suspicion, the fact that she received from Detective Sergeant Shane Richards of the State Crime Command Organised Crime Targeting Squad a copy of a draft fact sheet prepared by him in relation to Mr Richards.

21 Ms Holz had a conversation with Detective Sergeant Richards in which he confirmed that he was the author of that fact sheet and that, to the best of his knowledge and belief, its contents were true. He also confirmed to Ms Holz that the fact sheet was prepared on the basis of information obtained by police as a result of the investigation described therein.

22 Detective Sergeant Richards also told Ms Holz that he anticipates arresting and charging Mr Richards with the charges described in the draft fact sheet on 8 December 2010.

23 Ms Holz read the draft fact sheet and she believes in the truth of its contents.

24 I have considered the contents of the facts sheet and, in my view, the information there set out, if accepted as true, plainly affords reasonable grounds for the suspicion deposed to by Ms Holz.

25 Further, having regard to the source of the information Ms Holz had and the content of her conversation with Detective Sergeant Richards, I am satisfied that it was reasonable for her to proceed in forming her suspicion on the assumption that the contents of the fact statement were true.

26 For those reasons I consider that there are reasonable grounds for Ms Holz's suspicion. 27 I should note that s10A (4) provides that, despite an application being made ex parte, the Court may, if it thinks fit, require the Crime Commission to give notice of the application to a person who the Court has reason to believe has a sufficient interest in the application.

28 I have considered whether I should require the Commission to give notice of the application to Mr Richards in advance of my making the order. Having regard to the contents of the fact sheet and the matters deposed to in the supporting affidavit, I have concluded that there is no need for the Commission to give notice of the application to Mr Richards and that to give such notice may indeed undermine the efficacy of the order. 29 It follows that in accordance with s10A(5) I must grant the application for a restraining order.

30 Related orders sought in the summons seek orders for the examination on oath of Mr Richards and his wife, Michelle Richards, I am satisfied that it is appropriate to make those orders, together with the ancillary orders sought in paragraphs 4, 5, 6, 7 and 8 of the form of orders provided to me by Ms Bishop. I direct that a copy of these reasons be served together with the orders. **********

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