Supreme Court of WA|2004-06-30|Before: Smith J

Re Smith; Ex Parte Director of Public Prosecutions for Western Australia (No 1) [2004] WASC 145 (30 June 2004)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : RE SMITH; EX PARTE DIRECTOR OF PUBLIC PROSECUTIONS FOR WESTERN AUSTRALIA (NO 1) [2004] WASC 145

DIRECTOR OF PUBLIC PROSECUTIONS FOR WESTERN AUSTRALIA against BRIAN MILLWOOD SMITH

DIRECTOR OF PUBLIC PROSECUTIONS FOR WESTERN AUSTRALIA

Criminal law - Confiscation of property - Property freezing order and examination order made ex parte under Criminal Property Confiscation Act 2000 (WA) - Confidential affidavit in support - Inadvertently disclosed to interested party - Confidentiality - Whether disclosure proper - Interested party objecting to jurisdiction to make freezing order - Whether confidential affidavit should be disclosed

Criminal law - Confiscation of property - Freezing order - Grounds for making order to be stated - Meaning of "grounds" - Whether includes evidence of facts supporting making of order

Criminal law - Confiscation of property - Freezing order - Examination order - Applicability of statutory secrecy requirements - Public interest immunity

Rules of the Supreme Court, O 59 r 3, O 67 r 11, O 81FA

Australian Securities Commission v Zarro (No 2) (1992) 34 FCR 427

Boys & Ors v Australian Securities Commission, unreported; FCA; 9 May 1996

Commonwealth v Rhind [1966] HCA 83; (1966) 119 CLR 584

CTC Resources NL v Australian Stock Exchange Ltd [2000] WASCA 19; (2000) 22 WAR 48

John Fairfax Publications Pty Ltd v AttorneyGeneral for the State of New South Wales [2000] NSWCA 198; (2000) 181 ALR 694

Kable v Director of Public Prosecutions (NSW) [1996] HCA 24; (1996) 189 CLR 51

Maloney v NSW National Coursing Association Ltd [1978] 1 NSWLR 60

News Corporation Ltd v National Companies & Securities Commission [1984] FCA 400; (1984) 5 FCR 88

Oamps Ltd v Porter [1999] NSWSC 1200

Permanent Trustee Co Ltd v The State of Western Australia & Anor [2002] WASC 22

Somerville v Australian Securities Commission (1995) 60 FCR 319

1 ROBERTS-SMITH J: This is a very unusual application. It concerns the confidentiality of action taken under the Criminal Property Confiscation Act 2000 (WA) ("the Confiscation Act").

2 The application is made by the Director of Public Prosecutions of Western Australia ("the DPP") by way of chamber summons, first filed on 11 February 2004. It has since been amended and in its current form is headed:

"AMENDED SUMMONS FOR AN ORDER FOR CONFIDENTIALITY PURSUANT TO ORDER 67 RULE 11 OF THE RULES OF THE SUPREME COURT 1971 AND SECTION 70(1) and 70(2) OF THE CRIMINAL PROPERTY CONFISCATION ACT 2000".

3 The application is supported by a confidential affidavit of one ABT, an investigator with the Australian Securities and Investments Commission ("ASIC"), sworn and filed on 10 February 2004 and an affidavit of Fiona Anne Humphries also sworn and filed on that date.

5 In 1998 ASIC commenced an investigation into the conduct of directors and shareholders of the Welcome Stranger Mining Company NL ("WSMC") and Hallmark Gold NL ("Hallmark"). Those investigations were subsequently amalgamated. They are still ongoing.

6 One of the directors of WSMC, Mr Stuart Adrian Corp, was arrested on 6 January 2004 and is currently charged with some 85 offences.

7 Centurion Trust Co Ltd ("Centurion") is a company registered and domiciled in Jersey, in the Channel Islands. Centurion is the trustee of a trust called the "Goldcoast Trust". In its capacity as trustee, Centurion held legal but not beneficial interests in more than 6 million shares in WSMC.

8 By notice dated 4 June 1998, ASIC executed orders pursuant to s 73 Pt 3 Div 8 of the Australian Securities & Investments Commission Act 2001 ("the ASIC Act") against Centurion and others. The effect of the order in respect of Centurion was to restrain that company from voting, selling, dealing or otherwise disposing of its interest in, the shares.

9 On 9 December 1998, ASIC wrote to Centurion offering to vary the s 73 orders for the purpose of allowing Centurion to participate in a buy-back of shares by WSMC and/or to sell its WSMC shares on the market, on condition that the proceeds of the sale of the shares (less borrowings) be placed in an interest bearing ASIC trust account.

10 On 15 November 1999, ASIC made two orders varying the original orders affecting Centurion, permitting the sale of two parcels of WSMC shares.

11 On 9 December 1999 varying orders were made in relation to a third parcel of WSMC shares. Each of the varying orders contained a condition that the proceeds from any sale be deposited in a trust account maintained by ASIC pending finalisation of its investigations.

12 All Centurion's shares in WMSC were sold on-market and the proceeds ("the Funds") were placed in a Westpac Bank account in the name of "ASIC Welcome Stranger Mining Company NL (Trust A/C)".

13 On 17 September 2001, Centurion applied to ASIC for revocation of the orders and for payment to it of the Funds. The application was refused. On 8 February 2002 Centurion applied to the Administrative Appeals Tribunal seeking release of the Funds on a number of grounds, including that ASIC did not have power to make either the original orders or the varying orders.

14 On 13 November 2003 the DPP filed in this Court an ex parte notice of originating motion for examination order and freezing order.

15 In support of those applications there were filed an affidavit of Vicki Anne Prentice sworn 13 November 2003 and two affidavits of KLP sworn 13 and 14 November 2003 respectively.

16 The applications by the DPP were heard ex parte by Scott J on 14 November 2003 pursuant to s 43 and s 57 of the Confiscation Act.

17 His Honour made the orders sought, on the stated grounds that:

(a) the DPP had applied for an examination order in relation to the Funds (s 43(1)(b)); and

(b) the DPP was likely to apply against Brian Millwood Smith ("Smith") for:

(i) a crime-used property substitution declaration; and

within 21 days after the freezing order was made (s 43(3)(b)(c)).

18 Shortly after 2 pm that same day, the AAT handed down its reasons for decision on Centurion's application for an order that ASIC release the Funds. The judgment of the Tribunal was that ASIC had no authority to retain the proceeds of the sale of the shares and ordered that the Funds be released to Centurion.

19 Section 46 of the Confiscation Act requires that, as soon as practicable after a freezing order is made, the applicant for the order must arrange for a copy of it and a notice which complies with s 46(6) of the Confiscation Act, to be served personally on any person who is, or may be, or claims to be, an "interested party".

20 "Interested party" in relation to frozen property means "a person who has an interest in the property that would enable the person to succeed on an objection to the confiscation of the property" (s 3 and Glossary, Confiscation Act).

21 The DPP took the view (obviously correctly) that Centurion, as trustee for the Goldcoast Trust, is an interested party and so on 14 November 2003, faxed to Centurion's solicitors, Messrs Bennett & Co, a letter together with a copy of the freezing order made that morning and a notice in terms of s 46(6). The letter indicated the DPP's understanding that Bennett & Co had acted for Centurion in relation to other matters and enquired whether they would be acting for the company in relation to this matter. If so, the letter requested the solicitors to advise whether Centurion accepted service of the freezing order and would provide a written acknowledgement of service.

22 By letter dated 18 November 2003 Bennett & Co advised the DPP they had instructions to act for Centurion in the matter but on preliminary consideration were seeking to ascertain whether the application for the freezing order had been properly instituted under the legislation. They requested details of which persons the DPP intended to apply for an examination order against and which confiscation offences were being alleged against Smith.

23 In a faxed reply dated 26 November 2003 the DPP noted that the Confiscation Act required that Centurion be served with a copy of the freezing order as it was, or may be, an interested party within the meaning of the Act. He said however, that information requested in the solicitor's letter was not relevant to the issue of service and that in relation to the request for information about examinations, advised that s 70(1) of the Confiscation Act prohibits the disclosure of such information. He further pointed out that the ability of Centurion to provide the statutory declaration required by s 47(3) of the Confiscation Act did not depend on it being provided with the information requested.

24 The DPP filed an application for a crime-used property substitution declaration pursuant to s 22 of the Confiscation Act and an application for a criminal benefits declaration pursuant to s 16 and s 17, on 4 December 2003, which was within the 21 days required by s 43(3)(b)(c).

25 On 15 December 2003, Centurion filed a notice of motion seeking an order setting aside the freezing order made on 14 November 2003.

26 On 9 January 2004 Heenan J granted the DPP leave to serve a copy of the freezing order and s 46(6) notice on any person in the United Kingdom who is, or may be, or claims to be, an interested party within the meaning of the Confiscation Act, including Centurion. That order was apparently sought by the DPP in the belief that the Channel Island of Jersey (which is the domicile of Centurion's registration as a corporate entity) is in the United Kingdom.

27 A copy of the extracted order was provided to Bennett & Co on 12 January 2004. On 23 January 2004 the Viscount's Department in Jersey effected personal service of the freezing order on Centurion.

28 In the meantime, Centurion's motion to set aside the freezing order had come before Heenan J on 13 January 2004, at which time his Honour gave directions regarding the determination of the jurisdictional issues raised by Centurion's notice of motion. Those directions included orders that Centurion enter a conditional appearance and serve notice of that on the DPP within 24 hours and as to the filing and service of affidavits by Centurion and the DPP.

29 A conditional appearance was filed on Centurion's behalf on 14 January 2004.

30 On 15 January 2004, Bennett & Co wrote to the DPP requesting copies of the ex parte application and affidavits in support so as to finalise their submissions. The DPP advised that the requested documents could not, and therefore would not, be provided.

31 It appears that on the same date an officer of the DPP was advised by telephone by the Court Registry that although Court documents under the Confiscation Act were not normally provided to the general public, they were provided to those involved in the particular proceedings. The DPP officer is said to have informed Registry that the application and the examination order in this matter could not be provided to any of the parties involved because of the provisions of s 70 of the Confiscation Act. The Registry staff requested a letter be sent to that effect.

32 Accordingly, on 16 January 2004, the DPP wrote to the Supreme Court Registry requesting there be no disclosure in relation to the examination order, the application, or the affidavits in support in these proceedings and that they be kept secure and not provided to any person. Reference was made to s 70 of the Confiscation Act.

33 As it happened however, a member of Bennett & Co attended at the Supreme Court Registry that day to inspect the documents and the file was produced with no objection nor restriction. Further, on 20 January 2004 the solicitors requested and obtained (upon payment of a fee) a copy of the affidavit of KLP sworn 13 November 2003 ("the KLP affidavit").

34 On learning of this disclosure the DPP wrote to the Acting Principal Registrar of the Court on 21 January 2004 setting out that office's understanding of the position, advising that the DPP had written to Bennett & Co requesting return of the documents to the Court and requesting that any necessary action be taken to ensure that files of proceedings under the Confiscation Act be kept secure and information in relation to them not be disclosed.

35 On 23 January 2004 the Acting Principal Registrar wrote to Bennett & Co advising that the copy KLP affidavit had been supplied in error and in contravention of the Confiscation Act and requesting its immediate return to the Court.

36 Although Bennett & Co subsequently returned the document under cover of a letter dated 23 January 2004, they maintained the position that the Court was not in error in providing access to it, nor that the provision of a copy of the document was in contravention of the Confiscation Act.

37 Centurion's notice of motion dated 15 November 2003 was the subject of a separate hearing and my reasons for decision in relation to that are also handed down today (Re Smith; Ex parte Director of Public Prosecutions (No 2) [2004] WASC 147).

38 By his amended summons for an order for confidentiality, the DPP seeks orders that (inter alia):

"1. Without leave of the Court all documents filed herein on 13 and 14 November 2003 except the Affidavit of Vicki Anne Prentice, and the Examination Order made herein before the Honourable Justice Scott on 14 November 2003 remain confidential, be kept in a secure place, and no person search for, inspect, take or bespeak a copy.

2. Within 24 hours of the date of the Order:

a) All copies made of any of the contents of the Affidavit;

b) All notes made in relation to any of the contents of the Affidavit; and

c) All notes made in relation to the existence and contents of the Examination Order;

be surrendered to this Honourable Court by Bennett & Co.

3. Within 24 hours of the date of the Order, Bennett & Co provide the Applicant with the names of all persons, if any, to whom Bennett & Co have disclosed the existence of the Affidavit, its contents or any part thereof, or any other information in relation to the Affidavit.

4. All members of Bennett & Co, who have any knowledge of the Affidavit, namely:

a) Martin Lawrence Bennett;

b) Stuart Kenneth Shepherd;

c) Thaw Thaw Htin; and

d) David Grant Sanders;

undertake not to disclose to any person the deponent, purpose or contents of the Affidavit or any part thereof nor to use its contents or any part thereof to provide advice to Centurion Trust Company Limited or any other person nor make any other derivative use of its contents or any part thereof."

39 I note that in fact those persons at Bennett & Co who had read the KLP affidavit gave undertakings satisfactory to the Director that they would not convey any information in it to their client or to anyone else and would confine any use of it to their submissions in these proceedings, pending the decision of this Court.

40 On the present application I have had the benefit of multiple written outlines of submission from the DPP and Centurion's solicitors, as well as oral argument. The written materials go to both to the present application for a confidentiality order and to Centurion's separate application.

41 The ABT affidavit goes to the adverse impact which it is claimed disclosure of the KLP affidavit would have on the continuing ASIC investigation.

42 It is necessary at this point to say something in a general way about the content of the KLP affidavit. For obvious reasons I do not descend to the substance of it.

43 That affidavit provided the evidentiary background as to why the orders were being sought and the grounds upon which the DPP would likely apply against Smith for a crime-used property substitution declaration and a criminal benefits declaration.

44 The background so set out includes comprehensive detail of the ASIC investigation. It concerns a number of allegations including that persons under investigation have deliberately concealed the acquisition and beneficial ownership of significant shareholdings in both Welcome Stranger and Hallmark. The investigation has focused upon various allegations of contraventions of the law, including ss 232(2), 232(6), 243ZF, 615, 709, 710, 995, 1308 and 1309 of the Corporations Law and ss 63(1)(b), 64(1)(b), 65(1)(a), 66(1)(a) and 67(1)(a) of the ASIC Act. Contraventions of some of these offence provisions attract significant penalties including imprisonment.

45 It is submitted by the DPP that the material contained in the KLP affidavit is confidential in nature and disclosure of it would have a materially adverse effect upon the investigation being conducted by the DPP and ASIC, ASIC's criminal case against Corp, ASIC's procedures and methodology and the proposed examinations under the Confiscation Act. The submission is that the likely impact upon both the DPP and ASIC investigations which would flow from disclosure, also gives rise to public interest immunity.

46 On behalf of the DPP, it is accepted that not all documents which may be obtained by law enforcement bodies or regulators in the course of their investigation, are necessarily confidential. However, it is submitted that in this case the affidavit discloses all information and evidence that has been obtained or seized by ASIC from individuals and entities, both voluntarily or compulsorily, as part of ASIC's investigation and disclosure of it would prejudice the ongoing investigation.

47 It is submitted that the filing of the KLP affidavit in support of the DPP's application for an examination order was an authorised disclosure made in compliance with the Confiscation Act itself. Such disclosure did not change the character of the document and nor did it render the confidential material no longer of that character.

48 It is submitted there are cogent and persuasive reasons why it is not in the public interest to disclose the content of the KLP affidavit to Centurion nor anyone else. The broad and compulsory nature of the investigative powers of the examination orders and the s 70 secrecy provisions (which protect this information under the Confiscation Act) reflect the legislative recognition of the use of examinations as a mechanism to discover information. It is said that the powers of ASIC reflect the public's concern to ensure the honest conduct of the affairs of corporations and the effective regulation of corporate activities, and the legislative intent that in some circumstances public interest is to be prioritised ahead of the private interests of individuals. It is submitted that any rules of court or general principles requiring that a party to a proceeding have access to all materials on the Court file in relation to those proceedings, is overridden by s 70 of the Confiscation Act.

49 The submissions advanced on behalf of Centurion begin with the proposition that the Confiscation Act does not contemplate an application for an examination order being made on the same motion and at the same hearing as an application for a freezing order and the fact that that was the procedure adopted by the DPP in this instance has in part resulted in a situation in which the evidentiary material so relied upon has necessarily become subject to disclosure (at least to Centurion). The argument proceeds on the assumptions that the reasons for the application for an examination order were also the grounds on which it was suspected that the property was confiscable.

50 The freezing order was made pursuant to s 43 and s 44 of the Confiscation Act. I have already set out the grounds expressed in the formal order of 14 November 2003.

51 The relevant provisions are contained in Div 3 of Pt 4 of the Confiscation Act. Part 4 is headed "Preventing dealings in confiscable property". Division 3 is headed "Freezing orders for confiscable property".

52 Section 41 provides that the DPP may apply to the Court for a freezing order for property and such an application may be made ex parte.

53 By s 42 it is provided that:

In proceedings for a freezing order, the court may do any or all of the following -

(a) order that the whole or any part of the proceedings is to be heard in closed court;

(b) order that only persons or classes of persons specified by the court may be present during the whole or any part of the proceedings;

(c) make an order prohibiting the publication of a report of the whole or any part of the proceedings or of any information derived from the proceedings."

54 So far as is presently relevant, s 43 provides:

"43. Freezing orders

(1) The court may make a freezing order for property if -

(a) an examination order, a monitoring order or a suspension order is in force in relation to the property; or

(b) the DPP advises the court that an application for an examination order, a monitoring order or a suspension order has been made in relation to the property, or is likely to be made in relation to the property within 21 days after the freezing order is made.

(2) The court may make a freezing order under subsection (1) whether or not the person against whom the examination order, monitoring order or suspension order is made, or is to be sought, owns or effectively controls the property.

..."

55 Centurion relies particularly on the provisions of s 44:

When considering an application for a freezing order, the court must -

(a) consider each matter that is alleged by the applicant, either in the application or in the course of the proceedings, as a ground for making the order; and

(b) set out in the order each ground that the court finds is a ground on which the order may be made."

56 I have already mentioned the requirement to serve interested persons with a copy of the freezing order and a notice under s 46(6). The regime is that once a freezing order is made, the applicant is required to serve a copy of it, together with the s 46(6) notice, personally on the person from whom the frozen property was taken and any other person who, at the time the freezing order is made, the applicant is aware of who is, or may be, or claims to be, an interested party.

57 A person who is so served must give a statutory declaration to the DPP within seven days after service (s 47(1) and (2)). In that statutory declaration, the declarant must state the name and address of any other person who is, or may be or may claim to be an interested party in the property, or alternatively state the declarant is not aware of any such person.

58 If, by reason of such declaration, the applicant becomes aware that there is some other person who is, or may be, or claims to be an interested party, then the applicant must arrange for a copy of the freezing order and notice to be served on that person.

59 Division 5 is headed "Secrecy requirements". It contains only three sections. It is as well I set them out in their entirety:

"70. Restricted disclosures

(1) A person must not make a disclosure to anyone, except as permitted under section 71, about -

(a) the fact that a financial institution, or an officer of a financial institution, intends to give or has given information to the DPP under section 53;

(b) the nature of any information given under section 53;

(c) the fact that a requirement or a response to it has been or is to be made under section 54;

(d) the content of a requirement or response made under section 54;

(e) the fact that the person or anyone else is or has been subject to a production order, an examination order, a monitoring order or a suspension order; or

(f) the contents of any examination order, production order, monitoring order or suspension order.

Penalty: $100 000, or imprisonment for 5 years, or both.

(2) Without limiting subsection (1), a person makes a disclosure for the purposes of the subsection if the person -

(a) discloses information to a person from which the person could reasonably be expected to infer that a requirement or response under section 54 has been or is to be made;

(b) discloses information to a person from which the person could reasonably be expected to infer anything about the nature or contents of a requirement or response under section 54;

(c) makes or keeps a record of any information about a requirement or response under section 54;

(d) discloses anything about the existence or operation of an examination order, a production order, a monitoring order or a suspension order;

(e) discloses information to a person from which the person could reasonably be expected to infer anything about the existence or operation of an examination order, a production order, a monitoring order or a suspension order; or

(f) makes or keeps a record of any information about the existence or operation of an examination order, a production order, a monitoring order or a suspension order.

71. Making restricted disclosures

(1) A corporation, or an officer of a corporation, may make a restricted disclosure to any one or more of the following -

(a) the DPP or a police officer;

(b) an officer of the corporation, for the purpose of giving information under section 53;

(c) an officer of the corporation, for the purpose of ensuring that a requirement under section 54 is complied with;

(d) an officer of the corporation, for the purpose of ensuring that an examination order, a production order, a monitoring order or a suspension order is complied with;

(e) a legal practitioner, for the purpose of obtaining legal advice or representation in relation to giving information under section 53 or complying with a requirement under section 54;

(f) a legal practitioner, for the purpose of obtaining legal advice or representation in relation to an examination order, a production order, a monitoring order or a suspension order.

(2) An individual who is not acting in the capacity of an officer of a corporation or of a legal practitioner may make a restricted disclosure to either or both of the following -

(a) the DPP or a police officer; or

(b) a legal practitioner, for the purpose of obtaining legal advice or representation in relation to an examination order.

(3) A legal practitioner to whom a restricted disclosure is made under subsection (1) or (2) may make a restricted disclosure to a person to whom the disclosure could have been made under the respective subsection for the purpose of giving legal advice or representing a person in relation to the matter disclosed.

(4) A person (except a legal practitioner) to whom a restricted disclosure is made under subsection (1) or (2) may make a restricted disclosure to a person to whom the disclosure could have been made under the respective subsection.

(5) However, if a restricted disclosure about a particular matter may only be made under subsection (1) or (2) in particular circumstances or for a particular purpose, then a person must not make a restricted disclosure under subsection (4) about the matter except in those circumstances or for that purpose.

(6) If a person to whom a restricted disclosure about a particular matter is made under this section stops being a person of a kind to whom the disclosure may be made, the person must not, in any circumstances, make a restricted disclosure about the matter to anyone.

72. Disclosure to court

A person is not required to make a restricted disclosure to any court for any purpose."

60 Part 6 deals with objections to confiscations.

61 A notice of objection must be filed within 28 days after service on the person of a copy of the notice or that time at which the objector became aware (or could reasonably be expected to have become aware) that the property has been frozen, or within any further time allowed by the Court (s 79).

62 By s 81, on hearing an objection to the confiscation of frozen property, the Court may set aside freezing order to the extent permitted under s 82, s 83 or s 84. Section 81(2) provides that:

"(2) However, if the property was frozen on 2 or more grounds, but the court does not set aside the ... freezing order in relation to both or all the grounds, the ... freezing order continues in force as if it had been made on each remaining ground."

63 It remains finally to make some reference to the provisions of Pt 8, which deal with court jurisdiction and evidentiary matters.

64 By s 101(1) the Supreme Court has jurisdiction in any proceedings under the Confiscation Act.

65 Proceedings on an application under the Confiscation Act are taken to be civil proceedings for all purposes (s 102(1)) and to be proceedings to which the rules of evidence applicable in civil proceedings apply (s 102(2)(b)).

66 Against that statutory background, I return to the submissions advanced on behalf of Centurion.

67 The submission that when an application is made for a freezing order, the applicant must file an affidavit setting out the facts and circumstances on which it is based, as required by O 81FA r 4 of the Rules of the Supreme Court ("RSC") must be accepted.

68 Order 81FA is specifically directed to confiscation of property under the Confiscation Act.

69 An ex parte application for a freezing order or an examination order is to be made by originating motion (O 81FA r 3(3) RSC). That was the procedure adopted here.

70 An application in chambers must state the ground of the application (O 59 r 3(3)).

71 It is at this point that Centurion relies upon the requirements of s 44 of the Confiscation Act that when considering an application for a freezing order the Court must consider each matter alleged by the applicant as a ground for making the order and set out in the order, each ground that the Court finds to be a ground on which the order may be made.

72 That goes directly to one of the arguments advanced by Centurion on its own application, but it bears upon the DPP's application for an order for confidentiality in that, it is said that without disclosure of the KLP affidavit, Centurion will be denied the opportunity to properly prosecute its application to set aside the freezing order or any objection.

73 As to s 70 of the Confiscation Act, Centurion submits that provision only restricts certain disclosures by a person of, relevantly, the existence and contents of examination orders and does not create a general regime of confidentiality for proceedings under the Confiscation Act. Nor, it is said, does it restrict disclosure by the State, nor restrict disclosure of information required by the Court before making a freezing order and does not relieve the Court of its obligation to make disclosure of all matters relied upon as grounds for a freezing order pursuant to s 44.

74 It is submitted that the only parts of the KLP affidavit which "might arguably" be restricted from disclosure by s 70 are any paragraphs which disclose the fact that an application for an examination order has been made and the operation of such order.

75 So far as the submission by the DPP that the KLP affidavit discloses the reasons why the DPP was applying for an examination order is concerned, it is submitted that if there was a concern to keep the material confidential, it ought not to have been included in the affidavit filed in support of the application for a freezing order - to the extent it discloses the existence or operation of an examination order, that is the result of the DPP's "improper joinder" of an application for an examination order with an application for a freezing order.

76 I note that notwithstanding that the DPP could have applied for an order under s 42(a) of the Confiscation Act that the hearing of the application before Scott J be in a closed court, no such application was made. I am informed that was because counsel believed the proceedings and evidentiary material would be confidential in any event, particularly because of s 70 of the Confiscation Act.

77 I shall deal first with the submission that the combined effect of s 44 of the Confiscation Act and O 59 r 3(3) was to require the grounds upon which the application for the freezing order was sought and made, to be set out in the freezing order itself. This is the first step in the development of the submission that Centurion should be entitled to know the content of the KLP affidavit.

78 The submission construes "grounds" as meaning the argument and evidence establishing a prima facie case for the making of the order. That is to say, a sufficient explanation of the factual basis upon which it is made, to enable an objector to address that factual basis by way of evidence and argument in support of their objection. It is put therefore, that Centurion is entitled to know (because it should have been included in the freezing order itself), what evidence was relied upon by Scott J to find a prima facie case that the property is, or is likely to be, crime-used and/or crime-derived.

79 In passing, I note that submission misapprehends the grounds in fact expressed in the order made by Scott J. They are set out at [17] above. Nonetheless, that does not affect the substantial point of the submission.

80 The word "ground" or "grounds" is not defined in the Confiscation Act. To some extent, it appears to be used interchangeably with the word "basis". Thus, for example, "grounds" is used in s 43(8) ("Reasonable grounds for suspecting" property is crime-used or crime-derived); the expression "ground" for making the order is used in s 44(a) or "grounds" on which the order may be made in s 44(b); two or more "grounds" for making a freezing order (s 48(3)); whereas s 48(4) refers to a freezing order made under s 43(1) "on the basis" that another order has been, or is likely to be made and "... on the basis of advice given to the court ..."; and s 48(7) speaks of a freezing order made "... on the basis that the property was suspected of being crime-used or crime-derived...".

81 As there is no statutory definition of the word "ground" in the Confiscation Act, it must be given its ordinary dictionary meaning. The "Macquarie Dictionary" (2nd Revised Ed) defines "ground" as "the foundation or basis on which a theory or action rests; motive; reason ..." The word is also to be construed in the context of the particular provision in which it appears and the statute as a whole and having regard to the purpose and objects of the legislation. The preamble states the purpose of the Act is "... to provide for the confiscation in certain circumstances of property acquired as a result of criminal activity and property used for criminal activity ..."

82 The scheme of the Confiscation Act is that once a freezing order has been made, an interested party may file a notice of objection to confiscation of the property frozen (s 79). If the objection is upheld, the freezing order may be set aside. However, it can only be set aside if the objector succeeds in respect of each ground upon which the order was made (s 81(2)). It is clear that this is the reason s 44 requires the order to state each ground on which it is made.

83 Section 82 then provides that the court may set aside a freezing order for property that was frozen on the ground that it is crime-used, if the objector establishes that it is more likely than not that the property is not crime-used.

84 Thus the statutory onus under that provision is on the objector to show it is more likely than not that the property is not crime-used.

85 There are other circumstances in which the court may set aside a freezing order made on the ground that the property is crime-used. Even if unable to satisfy the court on the balance of probabilities that the property is not crime-used, an objector may nonetheless succeed in having the freezing order set aside if they can satisfy the court of the circumstances adumbrated in s 82(3) or (4). Under subs 3 it is necessary for the objector to show that he or she is the innocent spouse or dependent of an owner of the property or is less than 18 years old, was usually resident on the property, has no other residence at the time of hearing the objection, would suffer undue hardship if the property is confiscated and it is not practicable to make adequate provision for the objector by some other means. Under subs 4 it is necessary to establish that the objector is the owner or one of two or more owners of the property, that the property is not effectively controlled by a person who made criminal use of it, the objector is an innocent party in relation to the property and each other owner (if there are more than one) is an innocent party in relation to the property.

86 Section 83 deals with freezing orders in respect of crime-derived property in a way similar to that in s 82(4). Again, s 83(1) states that:

"(1) The court may set aside a... freezing order for property that was frozen on the ground that it is crime-derived if the objector establishes that it is more likely than not that the property is not crime-derived."

87 In my view the word "ground" in s 44, used in reference to each matter alleged by the applicant as a ground for making the order, means each statutory foundation which would enable (or require) the court to make a freezing order under s 43. They are, that:

(a) an examination order, a monitoring order or a suspension order is in force in relation to the property (s 43(1)(a));

(b) advice from the DPP that an application for an examination order, a monitoring order or a suspension order has been made in relation to the property, or is likely to be made in relation to the property within 21 days after the freezing order is made (s 43(1)(b));

(c) in respect of property that is owned or effectively controlled by a person or that the person has at any time given away, that the person has been charged with an offence, or the DPP advises the court that a person is likely to be charged with an offence within 21 days after the date on which the freezing order is made, and the person could be declared to be a drug trafficker under s 32A(1) of the Misuse of Drugs Act 1981 if he or she is convicted of the offence (s 43(5));

(d) there are reasonable grounds for suspecting that the property is crime-used or crime-derived (s 43(8)).

88 All s 44 requires therefore is that the ground or grounds of a freezing order be stated in the order by reference to those matters, eg there are reasonable grounds for suspecting the property is crime-used. Contrary to the submissions advanced on behalf of Centurion, s 44 does not require the order to set out nor to refer to the evidence or factual material nor any argument relied upon to support the particular ground or grounds.

89 Order 59 r 3(3) RSC does not affect this conclusion and in any event concerns only the application for the order, not the order itself - and the application was properly made ex parte.

90 Furthermore, this construction of s 44 - which I consider to follow from the plain meaning of the words - does not deny an objector the opportunity to properly prosecute their objection within the legislative framework. The order shows the ground (or grounds) upon which it is made and it is then for the objector to show either that the ground does not apply or that one of the other circumstances set out in the relevant provisions has been made out. That does not require disclosure of the evidentiary material which satisfied the court that there were grounds on which the order should be made.

91 It follows from the above, that so far as this point is concerned, the fact the application for the freezing order was made at the same time as the application for an examination order, does not advance Centurion's argument that it is entitled to disclosure of anything more than the grounds upon which the freezing order was made.

92 I turn now to Centurion's argument that there is nothing in the Confiscation Act which makes an application for a freezing order confidential and nor does it permit the DPP to seek orders ex parte without disclosing the evidence in support.

93 It may be accepted that the obligation to sit in open court is an ordinary incident of the character of hearings in the Supreme Court (Coulter v The Queen (1988) 164 CLR 350 at 356-7; Russell v Russell; Farrelly v Farrelly (1976) 134 CLR 495 at 532 per Gibbs J). But that is by no means an invariable principle. Indeed, it is apparent from O 59 r 2(1) RSC that proceedings commenced by originating summons will ordinarily be heard in private chambers. That sub-rule states that in such a case if it appears to the Court at any stage of the proceedings that they should for any reason be heard in open court, the Court may order that the hearing be so held, and may give all necessary directions for the further conduct of the proceedings. Sub-rule 2 of the same rule provides that proceedings commenced by originating summons which are brought on for hearing or further hearing in open court, may, if the Court thinks fit, be adjourned into chambers.

94 As the learned author of "Seaman: Civil Procedure in Western Australia" points out at [59.0.2], the general principles which require that proceedings in court should be open to the public are not necessarily applicable to all proceedings in chambers. The interests of justice may require an application be heard in closed chambers so that there is no public disclosure of matters which are confidential between the applicant and the court (Re Bell Group Ltd (In liq); Ex parte West Australian Newspapers Ltd [2000] WASC 94 at [8]).

95 As I have already noted, s 41 of the Confiscation Act expressly permits an application for a freezing order to be made ex parte. The rationale for that, for the powers given to the Court by s 42 and for the secrecy requirements in Div 5 of Pt 5 of the Confiscation Act is clear. The investigatory or confiscatory process of the Act could readily be defeated if the owner or person in control of confiscable property were to learn of an intention to apply for an examination or freezing order in advance. So too, I accept the applicant's submission that the conduct of an investigation into whether property is confiscable or into the commission of offences concerning or relating to such property, would be likely to be prejudiced if information as to, inter alia, the making of an examination order were to be disclosed. That is patently the sort of mischief these provisions are intended to avoid.

96 That being said, it must always be borne in mind that whether or not particular legislative provisions do effectively address the mischief the legislature intended, will depend upon the wording of the legislation itself, which is not to be construed as having that effect if the words used do not actually do so. To put it perhaps more accurately, the starting point for discerning the legislative intention must be the words of the statute themselves; what the correct construction is must depend upon the particular words used (see Kelly v The Queen [2004] HCA 12; (2004) 205 ALR 274 per Gleeson CJ, Hayne and Heydon JJ at [43], [51-52], cf McHugh J at [84], [98], [103-105] and Kirby J at [142-144] and [163]).

97 No order was sought nor made in respect of the hearing before Scott J on 14 November 2003 under s 42. The only other provision of the Confiscation Act upon which the DPP relies is s 70.

98 The provisions dealing with freezing orders as in Pt 4 of the Confiscation Act. Section 70 is in Pt 5, which deals with investigations and search. The Pt 5 provisions cover the obtaining of information from financial institutions (s 53 - s 56), orders for the examination of individuals (s 57 - s 61), production of documents (s 62 - s 66), orders for monitoring or suspending financial transactions (s 67 - s 69) and powers of detention, search and seizure (s 73 - s 78).

99 In its terms, s 70(1) restricts disclosure of matters concerning or relating to the exercise of any of the powers under s 63 or s 54 or to any production, examination, monitoring or suspension order. Subsection 2 does not widen the operation of s 70(1) beyond those matters, but merely expands the meaning of disclosure. Sections 71 and 72 refer to "restricted disclosures" - which are those specified in s 70(1).

100 There is nothing in s 70(1) about freezing orders made under Pt 4. I accept Centurion's submission that s 70 has no application to freezing orders, nor to proceedings in relation to freezing orders.

101 That brings me to the point that the applications for a freezing order and examination order were made together and apparently supported by the same affidavit material. Disclosure of any information relating to the examination order would have been in breach of s 70(1)(e) and (f).

102 I do not accept Centurion's submission that it was impermissible for the DPP to apply for an examination order and a freezing order in the same application. There is nothing in the Confiscation Act which would preclude that course.

103 Insofar as the pre-condition or ground for the freezing order was that the DPP had applied for an examination order in relation to the Funds, that was the fact. Scott J was entitled to be satisfied of that fact because the application was made to him at the same time as the application for the freezing order. The notice dated 13 November 2003 was headed "Ex Parte Notice of Originating Motion for Examination Order and Freezing Order." In the body of the document the Examination Order was sought first. The freezing order was then sought on the grounds subsequently as set out in that order.

104 Centurion was not prejudiced by that because as an interested party with respect to the freezing order, it was entitled only to know the grounds on which the order was made, in the sense I have already explained.

105 Centurion contends that disclosure of the KLP affidavit to its solicitors was mandated by O 67 r 11 RSC. I do not accept that.

"(1) Any person shall, on payment of the prescribed fee, be entitled during office hours to search for, inspect and take a copy of any of the following documents filed in the Central Office, namely -

(a) the copy of any writ, and the statement of claim (if any) indorsed thereon under Order 6 Rule 3;

(b) the copy of any petition under the Companies Act 1961;

(c) any judgment or order given or made in court or the copy of any such judgment or order_;_ and

(d) with the leave of the Court or a Registrar, any other document.

(1a) Rule 1 does not apply in relation to documents filed, or judgments or orders made, in any cause or matter under the Witness Protection (Western Australia) Act 1996 or the Surveillance Devices Act 1998.

(2) An application under paragraph (1)(d) may be made ex parte.

(3) Nothing contained in this Rule shall be construed as preventing any party to a cause or matter searching for, inspecting, and taking or bespeaking a copy of any affidavit or other document filed in the Central Office in that cause or matter or filed therein before the commencement of that cause or matter, but made with a view to its commencement."

107 Neither the application by the DPP nor the confidential affidavit in support is a document which falls within O 67 r 11(1).

108 Centurion was not, and is not, a party to the proceedings. I deal with this aspect more particularly in my reasons for decision on Centurion's application to set aside the freezing order. Consequently, r 11(3) does not assist it.

109 As "Seaman" (op cit) points out (at [67.11.1]) r 11 in large measure expresses the general law that judgments and orders of the court are public documents which the public have a general right to inspect, but pleadings, affidavits and other documents filed in court are not open to public inspection (Titelius v Public Service Appeal Board [1999] WASCA 19; (1999) 21 WAR 201 at 223, 225). Furthermore, if a Registrar gives leave to a member of the public to inspect documents in that category without cogent reasons, that order may be set aside and the court may of its own motion grant injunctions compelling the return of the documents and restraining the member of the public from making any further use of the information which they contained (De Hass v Murcia & Associates, unreported; SCt of WA (Templeman J); Library No 980633; 14 September 1998).

110 In the present case, Bennett & Co did not seek leave of the Court Order Registrar to inspect or copy the KLP affidavit. Even if their request for it could be so construed, it is clear no Registrar gave leave. The production was inadvertent. When the situation was brought to the attention of the Acting Registrar, he immediately required return of the copy documents.

111 In my opinion there is no cogent reason why Centurion should be permitted to inspect the documents filed by the DPP on the application for the examination order or the freezing order. Disclosure of any information or material concerning the examination order would be a breach of s 70 of the Confiscation Act as I have said, and the confidential information provided to the Court in support of the freezing order should be kept confidential because of the adverse impact disclosure of it would be likely to have on the continuing conduct of the investigation. Having read the KLP affidavit and the ABT affidavit (see Zarro & Ors v Australian Securities Commission (1992) 36 FCR 40; Sankey v Whitlam (1978) 142 CLR 1; Alister v The Queen (1984) 154 CLR 404) I am satisfied that disclosure of the content of the KLP affidavit would prejudice the conduct of the investigation and prosecution (Spargos Mining NL v Standard Chartered Australia Ltd (No 1) (1989) 1 ACSR 311) and that such disclosure would be contrary to the public interest. On the other hand, Centurion has no sufficient forensic interest urging disclosure; non-disclosure of this material to Centurion would not in my view, impair the proper administration of justice having regard to Centurion's position as an interested party (that is to say, an "interested party" as defined in the Confiscation Act, not in the sense of a party to the proceedings), to the nature of its contest to the jurisdiction and to the forensic options open to it under the legislation.

112 I would uphold the applicant's claim of public interest immunity in respect of those parts of the KLP affidavit going to matters relating to the freezing order as distinct from the examination order.

113 I conclude that Centurion was not, and is not entitled to production of the KLP affidavit, nor to any of the evidentiary material filed in support of the application for either the freezing order or the examination order.

114 I would grant the application by the DPP and make the orders sought.

Property Confiscation Act 2000

Investments Commission Act 2001

Protection (Western Australia) Act 1996

Re Smith; Ex Parte Director of Public Prosecutions for Western Australia (No 1) [2004] WASC 145 (30 June 2004)

At a glance

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Judgment (172 paragraphs)

Re Smith; Ex Parte Director of Public Prosecutions for Western Australia (No 1) [2004] WASC 145 (30 June 2004)

Legislation Cited (5)

Cases Cited (14)