BETWEEN : THE DIRECTOR OF PUBLIC PROSECUTIONS FOR WESTERN AUSTRALIA

Practice and procedure - Stay of proceedings - Contemporaneous civil and criminal proceedings - Common issue as to whether or not respondent committed "confiscation offences" - Whether civil proceedings should be stayed pending resolution of criminal prosecution

Criminal Property Confiscation Act 2000 (WA), s 16, s 17, s 104

Atkins v Minister of Community Welfare (1988) 34 A Crim R 26

Australian Securities Commission v Kavanagh (1994) 13 ACSR 573

McMahon v Gould [1982] 7 ACLR 202

Mickelberg v The Director of the Perth Mint [1986] WAR 365

Mule v The State of Western Australia (2002) 29 SR (WA) 95

Olbers Co Ltd v Commonwealth (No 2) [2003] FCA 177

Rochfort v John Fairfax & Sons Ltd [1972] 1 NSWLR 16

State of Queensland v Bush [2003] QSC 375

State of Queensland v Shaw [2003] QSC 436

ACCC v FFE Building Services Ltd [2003] FCAFC 132; (2003) 130 FCR 37

AIMH Ltd v McFadden (1993) 31 NSWLR 412

Australian Securities and Investments Commission v ABC Fund Managers Ltd [2001] VSC 92

Baker v Commissioner of Federal Police [2000] FCA 1339; (2000) 104 FCR 359

Boyes v Collins [2000] WASCA 344; (2000) 23 WAR 123

Christmas Island Resort Pty Ltd v Geraldton Building Co Pty Ltd (No 5) (1997) 18 WAR 334

Daniels Corp v ACC [2002] HCA 49; (2002) 213 CLR 543

Deputy Commissioner of Taxation (Cth) v Robinswood Pty Ltd [2001] WASC 191; (2001) 24 WAR 284

Director of Public Proesecutions v Mansfield [2003] WASC 186

Elliott v APRA [2004] FCA 586

Griffin v Sogelease Australia Ltd [2002] NSWCA 421

Guglielmin v Trescowthick (No 3) [2005] FCA 139

Lewandowski v Lovell (1994) 11 WAR 124

Mansfield v Director of Public Prosecutions [2005] WASCA 79; (2005) 153 A Crim R 41

McCleary v Director of Public Prosecutions (Cth) (1998) 20 WAR 288

McKechnie v Connell (1992) 8 WAR 329

Minister for Immigration and Multicultural Affairs v Ali [2000] FCA 1385; (2001) 106 FCR 313

Minister for Immigration and Multicultural Affairs v SRT [1999] FCA 1197; (1999) 91 FCR 234

Norilya Minerals Pty Ltd v Ireland (1991) 5 WAR 411

Permanent Trustee Co Ltd v The State of Western Australia [2002] WASC 22; (2002) 26 WAR 1

Pyneboard Pty Ltd v Trade Practices Commission [1983] HCA 9; (1982) 152 CLR 328

Reid v Howard [1995] HCA 40; (1995) 184 CLR 1

Rich v Australian Securities and Investments Commission [2004] HCA 42; (2004) 220 CLR 129

Roberts v Western Australia [2005] WASCA 37; (2005) 29 WAR 445

Saffron v Federal Commissioner of Taxation [1991] FCA 363; (1991) 102 ALR 19

Smith v Director General of Transport [2004] WASCA 64

The Hancock Family Memorial Foundation Ltd v Fieldhouse [2005] WASCA 93

1 BLAXELL J: These are my reasons for decision on an application by the applicant ("the DPP") for a partial stay of the present proceedings pending the determination of related criminal prosecutions against the respondent ("Mr Mansfield"). The application for the stay is opposed by both Mr Mansfield and the second-named first objector ("Mrs Mansfield").

2 These proceedings commenced on 12 July 2002 when the DPP applied to the court for a criminal benefits declaration against Mr Mansfield pursuant to s 15 of the Criminal Property Confiscation Act 2000 ("the Act"). Prior to making that application the DPP obtained an ex parte order pursuant to s 43 of the Act which froze all property either owned or under the "effective control" of Mr Mansfield. Such property included items owned or registered in the name of Mrs Mansfield, and accordingly she has an interest in the outcome of the present application.

3 The present proceedings are deemed to be civil proceedings "for all purposes" (pursuant to s 102 of the Act), but unfortunately have not been subject to case management in the usual way. There has also been a great deal of interlocutory activity between the parties, but this has been focused upon the freezing order and not the substantive application. There have been two appeals from interlocutory decisions, with the High Court reserving its decision on one, and the Court of Appeal still to hear another. In the meantime, the substantive application has languished for nearly four years without getting past the pleadings stage.

4 Mr Mansfield has also been the subject of criminal prosecutions by both the State and the Commonwealth. The Commonwealth charges were originally contained in a single indictment, but have now been split into two separate indictments alleging a total of 63 offences. To all intents and purposes these offences are the "confiscation offences" alleged in the civil proceedings and they comprise:

- 13 offences of insider trading;

- 9 offences of money laundering; and

- 1 offence of procuring another to destroy books.

- 37 offences of insider trading; and

- 3 offences of conspiracy to commit insider trading.

5 The proceedings on both indictments are progressing through the District Court of Western Australia, and it is anticipated that each will be listed for trial at a status conference to be held on 20 June 2006. I understand that the two trials are likely to take place some time in mid-2007, and that each will have a duration of perhaps 10 to 12 weeks.

6 The DPP applies for a stay of the present proceedings, but only to the extent that there be no entry for trial until the determination of the criminal prosecutions by the Commonwealth. This partial stay is sought pursuant to s 16(1)(d)(i) of the Supreme Court Act 1935 (WA), or alternatively under the Court's inherent jurisdiction.

7 The grounds relied upon by the DPP in seeking the stay can be summarised as follows:

(1) There is a substantial overlap in the factual and legal issues to be determined in each of the criminal and civil proceedings. In each of them it will be necessary to prove the elements constituting the same alleged offences against the Corporations Act 2001 (Cth), albeit to different standards of proof.

(2) The criminal proceedings have reached an advanced stage and are ready to be listed for trial.

(3) Mr Mansfield has separate appeals pending in the High Court of Australia and in the Court of Appeal from orders made in the present proceedings.

(4) In any event, substantial and numerous interlocutory matters will need to be attended to before the present proceedings can be entered for trial.

(5) The findings made in any prior civil trial will be inadmissible as evidence of their truth in a subsequent criminal trial. However, evidence of any conviction in a prior criminal trial will be admissible in a subsequent civil trial (see s 16(2) of the Act).

(6) There is a public interest in court resources being used as efficiently as possible, and the total proceedings are likely to be of longer duration if the civil trial precedes the criminal trials. In particular, and following any conviction in a prior criminal trial:

(a) a certificate of conviction would be admissible evidence in the civil trial of the fact of conviction (Evidence Act 1906 (WA) s 47);

(b) such a certificate of conviction would be prima facie evidence of the underlying facts upon which it is necessarily based (Mickelberg v The Director of the Perth Mint [1986] WAR 365, 371 - 372, 383);

(c) the court at the civil trial could have regard to the transcript, statements, depositions, exhibits and other material in the criminal trial (s 107 of the Act);

(d) the convictions would give rise to certain statutory presumptions in the civil proceedings (see s 16(2) and (3), and s 17(2) of the Act).

(7) A prior civil trial might run the risk of prejudice to Mr Mansfield in the criminal proceedings as a result of publicity, or by the prosecution being provided with an unfair forensic advantage.

(8) A further potential disadvantage to Mr Mansfield in any prior civil trial is that he may feel the need to invoke either the privilege against exposure to forfeiture or penalties, or the privilege against self-incrimination.

The arguments raised in opposition to a stay

8 Mr Mansfield points out that there has been a protracted delay in all proceedings both civil and criminal, and he contends that he is not in any way responsible for this situation. In the meantime, and for the whole of the period since 12 July 2002 and continuing, he has been deprived of his property and assets, all of which are subject to the freezing order.

9 Although there has been a release from the frozen assets of "reasonable living and business expenses" pursuant to s 45(e) of the Act, these expenses do not include Mr Mansfield's legal costs. Accordingly, he lacks the means to properly defend himself in the forthcoming criminal trials.

10 I was also informed from the bar table that Mr Mansfield was unable to obtain legal aid, and I granted leave for further affidavits to be filed which would clarify the situation. The materials presently before me indicate that in June 2005 Mr Mansfield was granted limited aid in respect of the criminal proceedings, but that this grant was later "pended ... to await the outcome of civil proceedings". I understand this to mean that the Legal Aid Commission is unwilling to grant assistance in respect of the criminal prosecution until the outcome of the present civil proceedings is known.

11 It is not clear to me whether Mr Mansfield has exhausted whatever rights of appeal there might be within the Legal Aid Commission in respect of this decision. Nevertheless, it is a fair assumption that the continued operation of the freezing order does hamper his ability to be adequately represented in the criminal proceedings. Accordingly, he contends that he will be prejudiced if he is denied the opportunity of successfully defending the civil proceedings and having the freezing order lifted prior to the criminal trials taking place.

12 Mr Mansfield also disavows the prospects of him being prejudiced in the criminal proceedings if the civil trial is heard first. His counsel points out that questions such as the potential for harmful publicity, or of possible forensic advantage to the Commonwealth Crown, are "matters that we don't raise".

13 Finally, Mr Mansfield submits that s 104 of the Act prohibits any stay of the present proceedings: That section provides:

"104. The fact that criminal proceedings under this Act or any other enactment have been instituted or have commenced is not a ground on which the court may stay proceedings under this Act that are not criminal proceedings."

Whether s 104 prevents a stay being granted

14 It is appropriate that I firstly deal with the question of whether or not s 104 prohibits a stay in the present circumstances. So far as I am aware, the only previous occasion when s 104 was judicially considered was in Mule v The State of Western Australia (2002) 29 SR (WA) 95 where Hammond CJDC held that it should not be construed as "leaving no residual discretion whatever to the court".

15 However, there have been a number of decisions in the Supreme Court of Queensland concerning an identical provision (s 93) in that State's Criminal Proceeds Confiscation Act 2002. In State of Queensland v Bush [2003] QSC 375 MacKenzie J held:

"[4] The form of s 93 does not suggest, in my view, that in no circumstances can a respondent to a forfeiture application gain a deferral of the forfeiture proceedings until after the criminal proceedings have been resolved. The concept underlying it is that the mere fact that a criminal proceeding has been started against a person is not a ground for staying the forfeiture proceedings. It is not useful to try to define, by resort to particular adjectives or phrases, what might suffice to justify deferral of the proceedings. In my view at the minimum, it would require that it be demonstrated by reference to circumstances of the particular case, why the interests of justice will not be served by the forfeiture proceedings being heard in advance of the criminal proceedings."

16 In State of Queensland v Shaw [2003] QSC 436, MacKenzie J noted that the provision had been construed in a similar way in two other cases and went on to state:

"[25] [This] case is one where there is a well defined and real advantage available to a person in criminal proceedings in respect of revealing evidence in advance. Depriving a defendant of such an advantage by requiring him to undergo prior proceedings where the State may, in effect, test-run the same case it proposes to lead in the prosecution proceeding and if necessary improve it if it can prior to that time is in my view sufficiently of the character of a demonstrated reason why the interests of justice would not be served by the forfeiture proceedings being heard in advance of the criminal proceedings. In my view the circumstances in which a stay is justified are established by the particular facts of the case.

[26] This outcome is consistent with that in Mule v State of Western Australia (2002) 29 SR (WA) 95 where a provision identical to s 93 was considered by Hammond CJDC. The report does not contain much detail concerning the facts before the learned judge. I would only observe that the present application has probably involved perhaps a more rigorous analysis of the evidence than was thought necessary in that case. In my view, such analysis will generally be of importance in determining whether the requirements for a stay are made out."

17 In the present instance, and somewhat unusually, it is not Mr Mansfield as the accused in criminal proceedings who is the applicant for a stay of concurrent civil proceedings. Nevertheless it is easy to conceive of circumstances in which an accused person applying for such a stay would be significantly prejudiced if the same was not granted. In my view, s 104 must necessarily be construed as meaning that the mere fact that criminal proceedings have been commenced cannot of itself ground a stay. If in combination with that fact there are other circumstances present (such as potential prejudice) which make it just to grant a stay, then the court has power to do so.

The principles governing the discretion to order a stay

18 The court has an extensive inherent jurisdiction to stay proceedings when it is in the interests of justice to do so. However, it is a jurisdiction which is not exercised lightly, and civil proceedings will ordinarily be allowed to progress to trial and determination unless the legitimate interests of the parties and the administration of justice require otherwise (Rochfort v John Fairfax & Sons Ltd [1972] 1 NSWLR 16, 19).

19 It is also a deep-rooted ethos of the common law system that it is always preferable that criminal proceedings, involving risk to personal liberty and allegations of a more serious nature, be dealt with first. That is not simply in the interests of an accused person, but also in the interests of the community, in that its criminal laws are thereby promptly vindicated if in truth an offence has been committed (Australian Securities Commission v Kavanagh (1994) 13 ACSR 573, 581).

20 The discretion to order a stay must be exercised in accordance with the circumstances of each particular case. Circumstances vary, and it is not possible to draw up a list of factors which will govern the exercise of the discretion in every instance. However, in a long line of authorities commencing with McMahon v Gould [1982] 7 ACLR 202, the courts have recognised that there are a number of factors which are usually relevant. These factors are by no means exhaustive (Atkins v Minister of Community Welfare (1988) 34 A Crim R 26, 27) but in Olbers Co Ltd v Commonwealth (No 2) [2003] FCA 177 were summarised by French J as follows:

"1. Prima Facie a plaintiff is entitled to have his action tried in the ordinary course of the procedure and business of the Court;

2. It is a grave matter to interfere with such an entitlement;

3. The burden is on the defendant, in a civil action, to show that it is just and convenient that the plaintiff's ordinary rights be interfered with;

4. Neither an accused nor the Crown is entitled as of right to have a civil proceeding stayed because of pending or possible criminal proceedings;

5. The Court's task is one of 'the balancing of justice between the parties', taking account of the relevant factors;

6. Each case must be judged on its own merits and it would be wrong and undesirable to attempt to define in the abstract what are relevant factors;

7. One factor to take into account when there are pending or possible criminal proceedings is what is sometimes referred to as the accused's 'right of silence', and the reasons why that right, under the law as it stands, is the right of a defendant in a criminal proceeding;

8. The plaintiff in a civil action is not debarred from pursuing action in accordance with the normal rules simply because to do so would, or might, result in the defendant, if he wished to defend the action, having to disclose what his defence is likely to be in the criminal proceedings;

9. The Court should consider whether there is a real and not merely notional danger of an injustice in the criminal proceedings;

10. In this respect factors which may be relevant include:

(a) the possibility of publicity that might reach and influence jurors in the civil proceedings;

(b) the proximity of the criminal hearing;

(c) the possibility of a miscarriage of justice, either because the disclosure of the defence allows the fabrication of evidence by the prosecution witnesses or interference with the defence witnesses;

(d) the burden on the defendant preparing for both sets of proceedings;

(e) whether the defendant has already disclosed his defence to the allegations; and

(f) the conduct of the defendant.

11. The effect on the plaintiff must also be considered and weighed against the effect on the defendant; and

12. In an appropriate case the proceedings might be allowed to proceed to a certain stage and then be stayed."

In nearly all instances, it is of course the defendant in the civil proceedings who is concurrently the accused in criminal proceedings who seeks the stay, and the above guidelines reflect that fact. In the present instance there is the unusual circumstance that it is the applicant or plaintiff in the civil proceedings who applies for the stay, and the defendant/accused who opposes it. It follows that the possibility of prejudice to Mr Mansfield in the criminal proceedings is not a factor which carries great weight.

21 In my view, it is also of little moment that the applicant/plaintiff is willing to abandon its entitlement to have the proceedings tried in the ordinary course of business of the court. From the DPP's point of view, an indefinite continuation of the status quo under the freezing order will totally protect its interests. The reality is that Mr Mansfield has a greater interest in seeing the civil proceedings progressed, because pending a final determination there is no hope of him obtaining a return of his property. It follows that Mr Mansfield is in the position usually occupied by the plaintiff when the court is considering whether or not to grant a stay.

22 In the end it is the DPP that bears the onus of showing that the requirements of justice necessitate an interference with Mr Mansfield's right to have the proceedings tried and determined in the ordinary way. In deciding whether the DPP has discharged that onus I need to have regard to all relevant factors and to balance the justice between the parties. I also need to have regard to Mrs Mansfield's separate right and interest in having the civil proceedings completed.

23 There can be little doubt that it will be more convenient and efficient for the court system if the criminal trials precede the civil trial. In the event of acquittals in the criminal proceedings it is likely that the civil trial would not then proceed. Alternatively, in the event that there were convictions, the statutory presumptions arising in the civil proceedings would leave very few issues alive.

24 On the other hand, if the civil trial is held first, a successful outcome for the DPP will be unlikely to have any impact on the criminal trials. However, in the event that Mr Mansfield was successful it is reasonable to expect that the criminal prosecutions might then be discontinued. In this regard one would think that the prospects of conviction would be somewhat bleak if the case against Mr Mansfield could not be proven on the balance of probabilities.

25 Although the above considerations are matters of significance to the court system, they cannot be in any way determinative of the application. In the end, it is the balancing of the interests of the parties in order to ensure justice that is the paramount consideration.

26 The DPP undoubtedly has a legitimate interest in seeking to conserve its resources by delaying the civil trial pending anticipated convictions. If the DPP was a private litigant with very limited pockets this would be a very weighty consideration for me to take into account. However, in circumstances where the litigant is effectively the State, this factor is of much lesser significance.

27 As Mr Mansfield disavows the potential for prejudice in the criminal proceedings, there is really little else to be found amongst the grounds raised by the DPP which might favour the exercise of my discretion. As against this, and in the particular circumstances of the present case, Mr Mansfield can validly point to the potential for prejudice to him if the criminal prosecutions are determined ahead of the civil proceedings.

28 In my view, the most compelling factor affecting the exercise of my discretion is the present impact of the freezing order on Mr Mansfield. Pending the determination of the civil proceedings, he cannot access his assets and lacks the means to fully defend himself in the criminal proceedings. If the civil claim is heard first and Mr Mansfield successfully defends the application for a criminal benefits declaration, his assets will then be released and he will have the funds to pay the costs of defending the criminal prosecutions. Alternatively, if a criminal benefits declaration is granted and Mr Mansfield's assets are confiscated, then it is likely that the Legal Aid Commission will consider granting aid for the criminal proceedings.

29 For these reasons I am not persuaded that it would be in the interests of justice to grant a stay of the present proceedings, and the application will accordingly be refused.