NSW Crime Commission v MacDonnell [2000] NSWSC 913 | Case summary

1 HIS HONOUR: This matter came before the Court on 11 September 2000 as a matter of urgency, by reason of the impending trial date in the District Court of the respondent. 2 The subject application is an unusual one in that it is an application by the New South Wales Crimes Commission ("the applicant"), pursuant to s 10(5)(b) of the Criminal Assets Recovery Act, 1990 (as amended) ("the Act"), that the restraining order made on 3 March 1998 in relation to assets of Glen Lawrence MacDonnell ("the respondent") be further varied to provide for the payment of not more than $75,000 out of the sale of the interest of the respondent in the property, 73 McKenzie Street, Concord West, for the reasonable legal expenses in connection with the criminal trial of the respondent, such payment to be made to the Legal Aid Commission. 3 The respondent was charged with conspiracies to supply large commercial quantities of heroin and methylamphetamine. Following a committal proceeding in the Local Court, which occupied some nineteen days, the respondent was committed for trial in the District Court on 5 April 2000. The trial date was originally fixed for 9 October 2000, with an estimated duration of six weeks. However, on the application of the respondent, Justice Blanch, the Chief Judge of the District Court, on 8 September, relisted the hearing to commence on 23 October 2000. 4 The respondent is married to Tania Lee MacDonnell, although they have been separated since 1999. There are two young daughters of the marriage aged 7 years and 5 years respectively. 5 Since August 1999, the respondent has been represented by Mr Chris Watson, solicitor, and Mrs MacDonnell and the children have been represented by Mr John Bettens, solicitor. Prior to August 1999, Mr Watson appeared for both the respondent and Mrs MacDonnell. 6 On 3 March 1999, a restraining order was made pursuant to s 10 of the Act, over the property of the respondent and Mrs MacDonnell which included their respective interests in the matrimonial home ("the home") at 73 McKenzie Street, Concord West. 7 On 30 August 1999, an application for summary judgment was made by the New South Wales Crime Commission to this Court in respect of the interests in the home of Mrs MacDonnell. 8 On that date, an ex parte order was made, pursuant to s 22 of the Act, that the interests of Mrs MacDonnell in the home be forfeited and vest in the Crown (the assets forfeiture order). 9 Execution of the assets forfeiture order was stayed for six months after it took effect and in the event of an application being made under either s 25 or s 26 (or both) of the Act. 10 Leave was granted to Mrs MacDonnell to apply for orders under s 25 or s 26 (or both) of the Act within six months after the assets forfeiture order took effect. 11 I merely note, without comment, that the present respondent contends that such orders were irregularly obtained. 12 The respondent's solicitor requested the applicant to agree to the setting aside of those orders but it has declined to do so. 13 However, on 28 August 2000, an application was filed in this Court by Denise Elaine Boyde as tutor for the children of the marriage (the interveners) for an order that the forfeiture orders of 30 August 1999, relating to the assets of Mrs MacDonnell be set aside. Further, pursuant to s 24 of the Act, an amount of $550,000 be paid out of the proceeds of sale of the home to prevent hardship to the children of the marriage. It is proposed that such amount be paid into a trust fund for the children with Denise Elaine Boyde as trustee. That application is set down for hearing on 9 October 2000. 14 Pursuant to the order of this Court on 30 August 1999, the Public Trustee is now on the title in place of Mrs MacDonnell, with the Public Trustee and the respondent now being registered as joint tenants. 15 Mrs MacDonnell and the children are presently living in the home and their occupation is secure, despite the proposed sale of the home, until at least 15 February 2001. 16 Mr Temby QC, who appears for the applicant in these proceedings, and Mr Watson, who appears for the respondent, agree that the value of the respondent's interest in the home is estimated to be between $350,000 and $400,000. 17 The restraining order with respect to the respondent's property has already been varied, by consent, to make provision for the costs of the respondent's legal representation in the committal proceedings. The present proceedings are concerned with the costs of his legal representation in the District Court trial. Mr Watson has estimated that, on the basis of a six weeks trial, with himself instructing a competent junior counsel, an allowance of $215,000 should be made for legal representation. 18 On 29 August, Mr Watson wrote to the applicant requesting its consent to the restraining order being varied to allow provision for the "reasonable legal expenses" of the respondent in the sum of $215,000, pursuant to s 10(5)(b) of the Act. Such request was refused. 19 It is convenient to note at this stage that, at an earlier date, the respondent had applied to the Legal Aid Commission for representation at the trial. However, by letter dated 21 August 2000, the Commission refused the application "after careful consideration" in reliance upon s 34(1) of the Legal Aid Commission Act, 1979, because the respondent was not eligible under the Commission's means test. No appeal to the Legal Aid Review Committee was lodged by the respondent against that refusal. 20 Thus, in a reply dated 1 September to the letter dated 29 August from Mr Watson, Mr Giorgiutti, the solicitor to the applicant, stated that he had spoken to Mr Humphries from the Legal Aid Commission who indicated to him that Legal Aid would be granted on the basis of a 100 per cent contribution from the respondent and on a condition that the Legal Aid Commission had security for the contribution. In those circumstances, all that would be necessary would be for the present consent orders permitting sale of the property to be varied to provide "for payment to the Legal Aid Commission for the extent of the contribution". 21 Mr Watson responded on 4 September in the following terms:- "Thank you for your letter dated 1 September 2000 which I saw this morning. I see that your powers of persuasion have been bought to bear on Doug Humphries. As my client has an equity of apparently $350,000.00 in the jointly owned property, and is well able to pay his own legal costs, I am at a loss to understand why this firm should be required to underwrite Mr. MacDonnell's legal costs by conducting the trial on legal aid, when Mr. MacDonnell is well able to afford to pay normal legal costs. If Mr. MacDonnell is able to enter into the appropriate security for legal aid, he could well do so for this firm's costs and expenses. The 100% contribution by him to the Legal Aid Commission rather than this office may have the effect of preserving a larger fund for other competing claims but it does so at our expense and reduces the available pool of Counsel willing to accept a brief. I am sure that most Counsel prefer to be paid full fees, albeit at a later date, than legal aid rates, for payment of which they invariably have to wait in any event. If the Orders are to be varied as proposed, please advise by return facsimile whether there is any objection to varying the Orders to enable our normal fees to be paid as set out in my letter to you. I will thereafter seek the views of the legal representatives of Mrs. MacDonnell and the children if there is no objection." 22 The applicant has taken the view that by reason of the application on behalf of the children which is presently on foot, it is unable to consent to an order for "reasonable legal expenses" in the sum of $215,000 as sought by the respondent. The applicant takes the view that, assuming the application by the children is successful, there would, in relation to the respondent, remain in his estate only an amount of $75,000. Accordingly, the Commission took the view that it is only able to consent to an order for reasonable legal expenses for the trial up to $75,000. 23 The applicant then sought an assurance from the Legal Aid Commission that it would grant legal aid for the respondent's trial on the basis of a 100 per cent contribution from the respondent's estate and that would be the maximum contribution which the respondent would be required to make regardless of the ultimate cost of the legal representation. 24 On 8 September, Mr Humphries, on behalf of the Legal Aid Commission, wrote to the applicant in the following terms:- "I refer to your letter of 7 September 2000 in respect of the abovementioned matter. I confirm that the Legal Aid Commission is prepared to grant legal aid for Mr MacDonnell's trial on the basis of a 100% contribution from Mr. MacDonnell's estate. I confirm that the contribution sought will be the cost to the Legal Aid Commission which has been estimated as not exceeding $75,000.00. Should this amount be exceeded, the Commission will not seek any further contribution from MacDonnell's estate. I would be grateful if you could confirm, following your appearance in Court today, that all necessary steps have been put in place to ensure the Commission's contribution is secured." 25 Thereupon, as a matter of urgency, the applicant filed the subject Notice of Motion. The application has been strenuously resisted by Mr Watson on behalf of the respondent. However, Ms Backman of counsel, who appeared before me on behalf of the interveners has raised no objection to the application. It is convenient to note at this stage that Ms Backman is of the view that there is a distinct possibility that the interveners' application will not be in a position to proceed on 9 October because she considers that it will probably be necessary to join the State of New South Wales as a respondent. 26 In summary, Mr Temby submitted that there were three possibilities that could be identified. Firstly, that there will be no provision made for funding in which event, presumably, the trial will simply not proceed. 27 Secondly, that the applicant "should be ordered to pay the estimated cost of the trial on a fully-funded basis, which is the figure of $215,000", although there is no application to that end before the Court. That, it was submitted, would be an unsatisfactory situation because it would severely diminish the available funds, the subject of the restraining order. It would constitute nearly two-thirds of the available restrained but unforfeited property. 28 The third possibility is that the application be granted and that the $75,000 be made available to the Legal Aid Commission out of the proceeds of sale of the home when the sale is effected. That, the applicant contends, is the appropriate outcome. 29 Thus, Mr Temby contended, the application should be granted which would leave the respondent in a position to decide what he was going to do. The matter next comes before the District Court for mention on 15 September. The matter will then be within the province of the District Court Judge presiding over the directions hearing, and it will be a question for the respondent as to what application he is minded to make to the Judge. 30 I turn then to the matters raised by Mr Watson for the respondent in argument. 31 Firstly, it was argued that this application should be stood over until after the interveners' proceedings have been resolved in this Court. It was argued by Mr Watson that if the interveners are successful, there will be a larger fund available to them from which an appropriate allowance to mitigate their hardship will be available. Further, that the sum of $215,000, estimated to be the reasonable legal expenses of the respondent if privately represented, would necessarily represent a smaller percentage of the enlarged fund than by reference to the existing fund still the subject of the restraining order. 32 Ms Backman realistically outlined to the Court difficulties, from a legal point of view, which the interveners face by reason of the particular provisions of the Act and the events which have occurred, in successfully pursuing the proceedings, which in all probability would not be in a position to proceed, for the reasons I have mentioned earlier, on 9 October 2000. 33 It is not appropriate for me to attempt to resolve the various legal complications which flow from the interveners' proceedings, their likely success or otherwise, and the impact which success or failure will have on the quantum of funds ultimately available to the interveners and the respondent. 34 To my mind, it is out of the question to stand the instant proceedings over until such time (whenever that may be) as the interveners' proceedings will have ultimately been resolved. This matter must be dealt with in the light of the existing circumstances. 35 It was then argued that the order which the applicant seeks is not open upon a proper construction of s 10(5)(b) of the Act. I cannot accept that submission. In all the circumstances, the order sought can be categorised, in my opinion, as one to make provision for meeting out of the property, to which the restraining order applies, the reasonable legal expenses of the applicant incurred in defending a criminal charge, to use the words of the subsection. 36 It was then contended that, in effect, the applicant has made an application to the Legal Aid Commission on behalf of the respondent, which it did not have the standing to make. I am unable, however, to find anything in the Legal Aid Commission Act which would prohibit the steps which the applicant has taken with regard to the Legal Aid Commission. Indeed, it is clear from a letter, dated 10 September 2000, from Mr Humphries to Mr Watson, that there is a sensible modus vivendi between the Legal Aid Commission and the New South Wales Crime Commission, insofar as the provision of legal aid is concerned to persons subject to restraining orders. It is not necessary to consider the detail of those arrangements for present purposes. 37 It was also submitted that this application could not be granted by reason of the provisions of s 16A(1)(b) of the Act which provide that it is a restriction to a restraining order making provision for the payment of any legal expenses of a person in relation to any particular interest in property if the Supreme Court is satisfied that the interest is illegally acquired property. 38 I do not consider that this is an impediment in the instant case because there is no evidence before me upon which I could be satisfied that the relevant property is "illegally acquired property". 39 One other matter is worthy of mention and that is that it should not be overlooked that the applicant, himself, made an application to the Legal Aid Commission for legal aid. There is no evidence before me to explain why, from his point of view, his attitude has now changed to one in which he is averse to accepting legal representation on a legally aided basis. 40 It should also be reiterated that there is no opposition by counsel for the interveners, whose interests she would be sedulous to protect, to the order sought by the applicant being granted. 41 Other matters were raised during the course of argument, all of which I have considered. Time constraints prevent a more detailed elaboration of the competing propositions which were put to the Court. However, they have all been considered. 42 I am satisfied that there is no legal impediment to my making the order which is sought by the applicants and in the circumstances as they are presented to me, I consider it prudent that the application be granted, and my discretion should be exercised to that effect. Accordingly, there will be orders in terms of paragraphs 1 and 2 of the Notice of Motion dated 8 September 2000, namely:

NSW Crime Commission v MacDonnell

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Judgment (11 paragraphs)

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