R v Nousis [2004] VSCA 107

2. Alex Nousis (whom I shall call "the applicant") pleaded guilty in the County Court to one count of handling stolen goods and one count of possession of a drug of dependence. He also pleaded guilty to two summary charges. On 26th June 2002 he was convicted on the count of handling and sentenced to six months' imprisonment, wholly suspended for 18 months. In addition he was fined $2,000. He was convicted and fined on the count of possession and the two summary charges. An application by Southern Cross Underwriting Pty. Ltd. ("Southern Cross") for relief pursuant to Part 4 of the Sentencing Act 1991 was adjourned to a date to be fixed. That application came on again before the learned sentencing judge on 28th August 2002. On that day his Honour made an order in favour of Southern Cross pursuant to s.84(1)(a) of the Sentencing Act ("the restitution order"). I shall refer to its terms later. The next day the applicant gave notice of application for leave to appeal against sentence, limited to the restitution order.[1] It is that application which is before the Court.

5. Before turning to the grounds of appeal and counsel's submissions, it will be convenient to say something briefly about the facts. In October 2000 a red Holden Commodore VT Club Sport sedan with an estimated value, at that time, of $45,000 was stolen. On 29th October 2000 it was recovered, stripped of many parts. Their estimated value, as new, was $26,850. [2] All major bolt-on items had been carefully removed and the wheels had been replaced. Southern Cross, as the insurer, took possession of the rest of the vehicle. In argument it was described as "the shell", but it was not a bare chassis. It included the engine and other parts.

8. The shell, as I shall continue to call it, was sent to an auctioneer to be sold. When the vehicle came up for auction on 6th December 2000, an associate of the applicant successfully bid for it on the applicant's behalf. The price was $16,200. The true value of the shell was more like $8,000. Southern Cross received $15,714 after the auction expenses.

11. The applicant placed the vehicle in storage and then took it to an address in Noble Park. Between 5th and 17th January 2001, with the assistance of a friend, he fitted parts to the vehicle. They were in fact some of the parts that had been stripped. The applicant had come into possession of them, knowing that they had been stolen. They are the goods the subject of the count of handling, namely one boot lid, one rear bumper, one front bumper, front and rear lights, roof lining, boot interior, one bonnet, four car doors, front and rear seats, one glove box lid, one centre console, one gear stick cover, one rear spoiler, one front passenger's side guard and one front driver's side guard. I shall refer to them as "the stolen parts".

14. On 13th January 2001 the applicant took the car to a smash repairer, who quoted him $2,000 to spray-paint the vehicle. While he was at the smash repairer's premises, the police attended with the original owner, who identified the stolen parts as being the original parts of the vehicle. At that stage it would have cost about $6,000 to completely restore it. Search warrants were executed and the applicant was arrested.

17. It was not the prosecution case that the applicant had been involved in the original theft of the vehicle or the stripping of the parts or that he had purchased the vehicle at auction knowing that the stolen parts would be available to restore it. As the judge explained, in the course of his reasons on 28th August 2002:

"The primary application is for the restitution of the stolen car parts. Stolen parts which the respondent handled are now attached to the car. The car shell was apparently purchased without notice by the respondent at public auction. Ordinarily he would be the owner of that shell. He has, however, with full knowledge that the parts were stolen, attached them to the shell. The applicant seeks an order that the vehicle in its present state be restored to it. The respondent submits that the applicant is at most only entitled to the return of the parts and these should be removed, presumably at the applicant's cost, from the car and the shell retained by the respondent."

"The applicant" and "the respondent" in that passage are Southern Cross and the present applicant respectively.

22. Section 84 of the Sentencing Act provides in part:

"84. Restitution order (1) If goods have been stolen and a person is found guilty or convicted of an offence connected with the theft (whether or not stealing is the gist of the offence), the court may make - (a) an order that the person who has possession or control of the stolen goods restore them to the person entitled to them;

...

(4) If the court makes an order under paragraph (a) of sub-section (1) against a person and it appears to the court that that person in good faith bought the stolen goods from, or loaned money on the security of the stolen goods to, the offender, the court may, on the application of the purchaser or lender, order that a sum not exceeding the purchase price or the amount loaned (as the case requires) be paid to the applicant out of money taken from the offender's possession on his or her arrest."

26. The order his Honour made was expressed to be pursuant to s.84(1)(a). It was that the applicant "restore to [Southern Cross] the parts of the red Holden Commodore VT Club Sport sedan handled by him by the immediate unencumbered transfer of the motor vehicle." The reason the order took that form was that, subject to one possible qualification[3], Southern Cross was no longer entitled either to the vehicle or to the shell.

"1. That the learned sentencing judge erred in holding that he had power to make an order for restitution under s.84(1)(a) of the Sentencing Act 1991 in the form so made on 28th August 2002. 2. Alternatively, that his Honour erred in the exercise of his discretion."

33. Mr Boyce argued that, as the applicant had good title to the shell, an order under s.84(1)(a) could be made only in relation to the stolen parts and the judge had no power to direct a transfer of the vehicle itself. Alternatively, if his Honour did have such power, it was unjust to order the applicant to restore more than the stolen parts, in the same way that it was unjust to order the appellant in R. v. Parker[4] to make compensation for all the tea that had been stolen when he had handled approximately only one half of it. Mr Klempfner submitted that the mechanism his Honour adopted was an appropriate and permissible mode of restoring the stolen parts. Moreover, Southern Cross had changed its position and the Court's discretion should be exercised against interfering with the order that had been made.[5]

36. Although the applicant attached the parts to the shell with knowledge that the parts had been stolen, that is not enough to extend the class of goods in respect of which an order could be made under s.84(1)(a). Such an order could be made only in relation to "the stolen goods". In the circumstances I have described that meant the stolen parts.[6] It was not like a case where a wheelbarrow is stolen and then painted by the offender. The paint would accede to the wheelbarrow[7] and an order could be made that it be restored, as painted, because that would still be an order for restitution of the stolen goods.

39. In every case s.84(1) imports a discretion.[8] Relief under Division 1 of Part 4 is incidental to the criminal process and intended for relatively straightforward cases.[9] Quite apart from the evidentiary limitations in s.84(7) and (8), a civil court may be better able to do justice between the parties. The stolen goods may have been dealt with in such a way, for example, that the taking of accounts or the moulding of equitable relief may be required.

42. In my opinion, the only order the judge was authorized to make, pursuant to s.84(1)(a), was an order that the applicant restore the stolen parts to Southern Cross and it was not open to his Honour to effect that purpose by directing an unencumbered transfer of the whole vehicle. For reasons that will appear, I need not consider whether that order should have been made or whether it would have been better to grant other relief under Part 4 of the Sentencing Act or to leave the parties to their civil remedies. There would, I think, have been a disinclination to require the parts to be stripped again.

45. That disinclination is all the stronger now, for further work has been done on the vehicle. An agent of Southern Cross took possession of the vehicle, which was in the custody of the police, shortly after the restitution order was made. It was not roadworthy, despite restoration work by the applicant in addition to refitting the stolen parts. In September 2002 mechanical and body repairs were carried out and registration costs were incurred. The mechanical repairs cost $3,284. The body repairs and registration cost a further $11,154. The affidavit to that effect, which we permitted Southern Cross to file, does not establish the exact nature of the body repairs. Nevertheless, it is abundantly clear that Southern Cross has changed its position substantially in reliance on the restitution order. It did not learn of the application for leave to appeal until 8th December 2003, when the applicant's solicitors informed Southern Cross that the application was to be heard by a single judge of appeal two days later.[10]

48. Section 570 of the Crimes Act 1958 provides:

"570. Re-vesting and restitution of property on conviction (1) The operation of any order for the restitution of any property to any person or with reference to any property or the payment of money made on or in connexion with a conviction on indictment or for a relevant summary offence heard and determined by the County Court pursuant to section 359AA shall (unless the court before which the conviction takes place direct to the contrary in any case in which in its opinion the title to the property is not in dispute) be suspended- (a) in any case until the expiration of ten days after the date of the conviction; and (b) in a case where notice of appeal or leave to appeal is given within ten days after the date of conviction until the determination of the appeal - and in cases where the operation of any such order or the operation of the said provisions is suspended until the determination of the appeal the order or provisions (as the case may be) shall not take effect as to the property in question if the conviction is quashed on appeal except by the special order of the Court of Appeal. Provision may be made by Rules of Court for securing the safe custody of any property pending the suspension of the operation of any such order or of the said provisions. (2) The Court of Appeal may by order annul or vary or refuse to annul or vary any order made on or in connexion with a conviction for the restitution of any property to any person or with reference to any property or the payment of money whether the conviction or sentence is or is not quashed; and the order if annulled shall not take effect and if varied shall take effect as so varied."

52. The legislative history of s.570 may reveal why it refers only to conviction and not sentence, except in sub-s.(2); what is, or was once, meant by "the operation of the said provisions" in sub-s.(1)[11]; and the stipulation of ten days after the date of conviction, in contrast with s.572, which requires notice of appeal or notice of application for leave to appeal to be given not later than 14 days after conviction and sentence.[12] The important point for present purposes is that the date of conviction was 26th June 2002.[13] The restitution order was not made until 28th August 2002 and the notice of application for leave to appeal against sentence was given the next day. In those circumstances there is no room for either paragraph (a) or paragraph (b) of sub-s.(1) to operate. Accordingly, the operation of the restitution order was not suspended by s.570(1).[14]

55. The Court was careful to inquire of Mr Boyce as to the orders sought by the applicant. They were in the alternative. Primarily, it was submitted that the Court should substitute an order that the applicant restore only the stolen parts to Southern Cross. It was contemplated that there would be a direction that Southern Cross return the vehicle, less the stolen parts, to the applicant. I am clearly of opinion that that order should not be made. In the first place, I am disinclined to break up the vehicle again. Secondly, and more importantly, the order would be unjust to Southern Cross. It would have to return a vehicle on which substantial work has been done in good faith and in reliance on a court order. The applicant did not offer to compensate Southern Cross for any of the expenditure that it had incurred. [15]

58. Alternatively, it was submitted that the order below should simply be quashed, leaving the parties to pursue their civil remedies. I have been more troubled by that proposal. It would leave Southern Cross in possession of the

vehicle, facing the likelihood of legal proceedings by the applicant. Such proceedings were foreshadowed by his counsel. On balance, I think justice would be better served by our refusing leave to appeal, now that Southern Cross has changed its position in the manner described[16]. The circumstances are, after all, entirely the applicant's fault. He affixed the stolen parts to the shell, knowing that the parts had been stolen and, for 15 months, took no steps to warn Southern Cross that the order in its favour was to be challenged.[17]

72. For the reasons enunciated by Callaway, J.A. I would also refuse this application. I would just add these comments. As pointed out by Callaway, J.A., the present application is made pursuant to s.567(d) of the Crimes Act 1958 ("the Act") which authorises an application for leave to appeal against sentence. "Sentence" is relevantly defined in s.566 of the Act as including an order under Part 4 of the Sentencing Act 1991 in which the power to order restitution is found (s.84). Accordingly, notice of application for leave to appeal against a restitution order may be made not later than 14 days after conviction and sentence (s.572 of the Act).

75. This process does not operate as a stay of the restitution order. A legislative procedure to preserve the status quo is found in s.570 of the Act. The procedure for the suspension of the operation of an order for restitution found in that section has as its commencing point the date of conviction rather than conviction and sentence.

Moreover, the specified period for activation of the suspension procedure is 10 days rather than the 14 days specified in s.572 of the Act.

79. Whilst there may be historical reasons for enactment in this form, there are now no logical ones. Indeed, the provision could create practical problems. In the first place, fixing the date upon which a conviction is said to have occurred is not always free from difficulty.[18] Secondly, in practice neither the plea nor the sentence may have taken place before the expiration of the 10 days. If this is so then there is unlikely to be any restitution order against which the appeal process could be initiated within the 10 days.[19] Further, if there has been a plea of guilty, an appeal

against conviction referred to in s.570(1)(b) would be highly improbable.

83. Rules 2.22 and 2.23 of the Supreme Court (Criminal Procedure) Rules 1998 may affect the custody and preservation of property the subject of a restitution order. Whatever may be the ambit of the first of these rules, it involves a discretionary exercise and the second would appear to operate only until the expiration of the appeal period (being the 10 days between conviction and any "notice of appeal or leave to appeal" being given).[20]

86. I have limited these comments to the situation of a person subject to an order for restitution. There is no specific appeal mechanism for a person whose application for a restitution order is refused.

89. In light of the foregoing, both the rules and legislation merit attention so that an ordered, rational, and consistent procedure for the appellate review of orders relating to restitution may be achieved.

[1] If an extension of time is necessary, I would grant it. Compare s.572 of the Crimes Act 1958.

[2] Here and elsewhere in these reasons I have ignored cents.

[3] Mr Klempfner submitted that Southern Cross might still have been entitled to the vehicle, as such, if the shell had become merged in the stolen parts, but that is not the basis on which the order was made. It is unnecessary to consider that submission.

[4] [1970] 1 W.L.R. 1003 at 1004 and 1007-1008.

[5] Counsel expressed the latter point in terms of the issue having become "moot", but I prefer the formulation in the text, which was fully explored in the course of argument. If the applicant was wrongly deprived of his property, that issue is not moot. The question is whether anything can or should be done about it.

[6] See especially [6] and [8] above.

[7] As to the respective roles of intention and accession when goods are added to, or mixed with, other goods, see Rendell v. Associated Finance Pty. Ltd. [1957] VicRp 88; [1957] V.R. 604 at 606-610 and McKeown v. Cavalier Yachts Pty. Ltd. (1988) 13 N.S.W.L.R. 303 at 309-312. To the references in Rendell's case at 606 may be added Nicholas_, An Introduction to Roman Law_ (1962), at 133-138.

[8] Interpretation of Legislation Act 1984, s.45(1) and (3).

[9] Compare the observations of the Full Court, in relation to the former compensation provisions, in R. v. Aitken [1981] VicRp 27; [1981] V.R. 241 at 245-246.

[10] The application before a single judge of appeal did not proceed.

[11] Since writing these words, Mr Leckie has, by leave, drawn our attention to the legislative provisions that explain at least this mystery. Between 1914 and 1973, s.570 and its predecessors referred to a provision of the Sale of Goods Act, later the Goods Act, providing for the re-vesting of stolen property on conviction: Criminal Appeal Act 1914, s.6; Crimes Act 1915, s.596; Crimes Act 1928, s.596; Crimes Act 1957, s.566; Crimes Act 1958, s.570. Section 2(1)(n) and (2) of the Crimes (Theft) Act 1973 repealed the reference to s.83(1) of the Goods Act 1958 at the beginning of s.570(1) and substituted a new section for s.83 of the Goods Act but inadvertently left intact the references to the former s.83(1) later in s.570(1).

[12] Section 7 of the Criminal Appeal Act 1914, the predecessor of s.572, required notice to be given "within ten days of the date of conviction". It would appear that s.570 has simply not been updated.

[13] A statute may operate differently in changed circumstances, but I do not think we can read "conviction" in paras (a) and (b) as if they said "conviction and sentence". "Conviction" has not relevantly changed its meaning since 1914. A person in whose favour a restitution order is made should be able to rely on the words of the section. As to a statute operating differently in changed circumstances, see R. v. Ireland [1997] UKHL 34; [1998] A.C. 147 and Roodal v. State of Trinidad and Tobago [2003] UKPC 78; [2004] 2 W.L.R. 652 at [13] and [48].

[14] The application comes to the Court pursuant to s.567(d). Section 566 defines "sentence" to include, among other things, any order made under Part 4 of the Sentencing Act. Compare R. v. Jones [1929] 1 K.B. 211 at 214-215. The disposition of an appeal against sentence, where leave is granted, is governed by s.568(4). In R. v. Braham [1977] VicRp 11; [1977] V.R. 104 at 107 it was said that s.570(2) would operate concurrently. See also R. v. Aitken, especially at 244; R. v. Tilev [1998] 2 V.R. 149 at 153 and Supreme Court (Criminal Procedure) Rules 1998, rr. 2.21-2.24.

[15] Compare McKeown v. Cavalier Yachts Pty. Ltd. at 308-309 and 312-314.

[16] That was the order sought by Southern Cross. Counsel made no submissions in relation to the parties' respective rights if that course were taken, so I say nothing about them.

[18] See, for example, Maxwell v The Queen (1995) 184 C.L.R. 501.

[19] Even under s.572 there may, depending on the timing of the restitution application, be a need to give two notices of application for leave to appeal; one relating to the substantive sentence imposed and the other relating to the deemed sentence constituted by the restitution order.

[20] Section 570(1)(b); if "leave to appeal" means an application for leave to appeal against sentence, it may be deprived of any effective operation if the sentence (however defined) has not been pronounced within the 10 day period.