CRIMINAL CONFISCATION Restraining Orders

The Scope of the Discretion of the Court An application for a restraining order brought pursuant to either the Proceeds of Crime Act 2002 (Cth) or Criminal Proceeds Confiscation Act 2002 (Qld) (the “Commonwealth Act” and “Queensland Act”) is accompanied by a series of procedural requirements. Once those requirements are met the discretion of the court to refuse an application for a restraining order is, with certain exceptions, extremely limited.

The Scope of the Discretion of the Court The court must make a restraining order in proceedings brought pursuant to the Commonwealth Act and the Queensland Act (excepting offences other than serious offences under Chapter 3 of the Queensland Act) unless:  The court is satisfied it is not in the public interest to make the order and, in the case of the Commonwealth Act, it is not a serious offence: respectively ss. 17(4), 19(3), 20(4) and 31(2)(a), and122(2);  The crown fails to give the court the undertakings the court considers appropriate for the payment of damages or costs, or both, in relation to the making and operation of the order: respectively, ss. 21 and 31(2)(b) and 122(4)

Scope of property to be covered by the restraining order Under both the Commonwealth Act and the Queensland Act applications for a restraining order have proceeded on the basis that, once the jurisdiction to make a restraining order has been enlivened, all of the property the subject of the application will be restrained. Provision is made in each Act for the exclusion of property on satisfaction of certain criteria and/or the imposition of conditions for the payment of reasonable living and business expenses out of restrained property. However, in each case the Act expressly prohibits the imposition of conditions for the payment of legal expenses incurred in connection with the Act or criminal proceedings: respectively ss. 24(2)(ca) and 32(4).

Mansfield v DPP (WA) (2006) 226 CLR 486 In July 2002, on the application of the DPP (WA) a restraining order was made ex parte against Mr Mansfield pursuant to the Criminal Property Confiscation Act 2000 (WA) (“the WA Act”), inter alia, on the basis of substantive proceedings for a criminal benefits declaration alleging a series of insider trading offences. On 14 August 2002, Mr Mansfield was first charged with offences, including offences against the Crimes Act 1914 (Cth). In 2004, Mr Mansfield unsuccessfully applied for orders:  That the DPP provide an undertaking as to damages as a condition for the continuation of the restraining order pending final disposition of the substantive proceedings. It is of note that there is no specific provision under the WA Act for the provision of such an undertaking;  Authorising the release of funds to enable Mr Mansfield to retain an expert and to fund his defence proceedings generally On 23 September 2005, new indictments were signed by the Commonwealth DPP. In 2006, the High Court heard the appeal against the unsuccessful application for an undertaking and release of funds. As at the date of this hearing, neither the application for a criminal benefits declaration nor the criminal proceedings were ready for trial.

Mansfield v DPP (WA) (2005) 31 WAR 97 Pullin JA upheld by the High Court as correct “Section 43(3) [of the WA Act] states that the court may make a [restraining] order for ‘all or any’ property that is owned or effectively controlled by the person. The court may make a [restraining] order over all property owned by a person and in that [restraining] order make provision for ‘meeting the reasonable living and business expenses of the owner of the property’...I will assume this will not allow the court to make provision for legal expenses. However, the court in the exercise of its discretion may also refuse to make a [restraining] order over some property. The court could therefore make a [restraining] order with respect to certain property, and refuse to make one in relation to sufficient property to allow legal expenses to be paid. In other words the [restraining] order would not cover property to be used to pay legal expenses.” (my emphasis)

Application of Mansfield v DPP to the Queensland Act The Queensland Act is cast in somewhat different terms to the WA Act:  ss. 43(3) WA Act: “The court may make a [restraining] order for all or any property that is owned or effectively controlled by the person…” ;  ss. 31(1) Queensland Act: “The Supreme Court must make a restraining order in relation to property…”

DPP (Cth) v Bowerman (2006) 67 NSWLR 695 “The majority of the Court [in Mansfield] held that those words [‘living and business expenses’] are wide enough to embrace allowance for the payment of legal expenses. In doing so their Honours said…: ‘The unique and essential function of the judicial branch of government is the quelling of controversies by the ascertainment of the facts and the application of the law. This is done by an adversarial system of litigation. It is plain that the operation of that system is assisted by the presence of legal representation, and may be severely impaired by its absence... The Act…is draconian in its operation and complex in various of its provisions. There is not readily to be implied a denial of the powers of the Supreme Court when making or varying a [restraining order] to mould its relief to permit the use of funds to obtain legal assistance. Such assistance is for the benefit not only of the individual but …also for the benefit of the State and the public.’ With respect, the force of those observations cannot be denied. However, again, the case was dealing with legislation significantly different from the Proceeds of Crime Act 2002 (Cth). Unlike s 24 of that Act, s 45 of the Criminal Property Confiscation Act (WA) does not expressly prohibit the allowance for legal expenses out of frozen assets” (my emphasis)

Application of Mansfield v DPP to the Commonwealth Act cont… The Commonwealth Act is also cast in somewhat different terms to the WA Act:  ss. 43(3) WA Act: “The court may make a [restraining] order for all or any property that is owned or effectively controlled by the person…” ;  ss. 17(2), 18(2), 19(2) and 20(2) Commonwealth Act: “The order must specify, as property that must not be disposed of or otherwise dealt with, the property specified in the application for the order…”

Undertaking as to Damages The question of an undertaking as to damages has not been in issue in proceedings under the Commonwealth Act as the DPP has, as a matter of course, proffered an undertaking; This has not always been the case in proceedings under the Queensland Act and, in Rodd v DPP (2004) 149 A Crim R 329, Atkinson J was called upon to determine whether an undertaking was required

Rodd v DPP (2004) 149 A Crim R 329 “Section 31 of the Act does not grant the court the power to require an undertaking nor does it specify the situations in which an undertaking should be sought or provided... … It is...in my view, open to conclude that the legislature did not intend to displace the commonplace power of the court to require an undertaking as to damages and costs before it will exercise its power to restrain a person from dealing with property...That is the assumption on which s 31(2)(b) of the Act is based. The existence of an undertaking would tend...‘to satisfy any concerns the court might have that the making of the restraining order might cause innocent persons to sustain damage in a context in which, upon acquittal of the person charged, it could well be regarded as unfair and unjust for such persons to be without means of recovering such damage.’ There may well be circumstances in which the applicant would be able to show that an undertaking was not necessary, but this is not such a case.” (my emphasis)

“In Kirklees Metropolitan Borough Council v Wickes Building Supplies, Lord Goff of Chieveley...said of [F-Hoffman-La Roche & Co AG v Secretary of State for Trade and Industry]: ‘It was decided, first, that in actions brought by the Crown to enforce or protect its proprietary or contractual rights, it should be...required to give an undertaking in the usual way. But,...different principles applied in cases where the Crown brought a law enforcement action, in which an injunction was sought to restrain a subject from breaking a law where the breach would be harmful to the public or a section of it.’ In the latter circumstances, the propriety of requiring an undertaking was to be considered in the light of the particular circumstances of the case It is more difficult to categorise the [restraining order] procedure purely as “a law enforcement action” in the sense used in the House of Lords. The statutory regime is sui generis. The situation is sufficiently dealt with by holding that, within the authority conferred by....the Act, the Supreme Court had the power (albeit not the duty) to require the provision of an undertaking and, if this was not offered or was offered in unsatisfactory terms, the Supreme Court was at liberty to refuse the [restraining order] sought by the DPP.” (my emphasis)