— WH gs - "JUDGMENT No. TSA f.621.. CATCHWORDS CUSTOMS AND EXCISE - narcotics dealing ~ application seeking penalty - jurisdiction regarding ownership of property under control - whether control order ambulatory - whether examination before criminal proceedings. STATUTE - presumption against self-incrimination. EQUITY - transfer of funds - no consideration - whether presumption of resulting trust. Commissioner of the Australian Federal Police v. William Bruce Kirk & Ors. Qld GI75 of 1987 PINCUS J. BRISBANE 24 DECEMBER 1987 IN THE FEDERAL COURT OF AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY ) QLD G175 of 1987 GENERAL DIVISION ) BETWEEN: COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE Applicant AND: WILLIAM BRUCE KIRK (Also known as William Albert Jenkins) First Respondent AND: RICHARD SHIER LEETH (Also known as James Robert Delaney) Second Respondent AND: DALE STEWART KIRK (Also known as Donald Paterson) Third Respondent AND: MICHAEL ALAN BOCKOFF Fourth Respondent AND: DONNA JANE SCHLINKERT (Also known as Donna Jane Paterson) Fifth Respondent AND: VALERIE ELIZABETH SCOTT Sixth Respondent AND: ROBYN ANNE GUNDERS Seventh Respondent AND: PAUL JOSEPH DONOVAN Eighth Respondent AND: TERRE REBECCA TUCKER Ninth Respondent AND: CAROL ANN POWELL Tenth Respondent MINUTES OF ORDER JUDGE MAKING ORDER: PINCUS J. DATE OF ORDER: 24 DECEMBER 1987 WHERE MADE: BRISBANE THE COURT ORDERS pursuant to s.243F of the Customs Act 1901 that: l. Upon the filing of an undertaking by or on behalf of the Director of Public Prosecutions not to tender the same in whole or in part in the criminal proceedings pending against the defendants in relation to alleged narcotics offences, each defendant furnish to the Official Trustee within 28 days of the filing of the said undertaking, a statement verified by the Oath or affirmation of the defendant, identifying all of his/her property whether real or personal, wheresoever situated, and giving, in relation to each item of property, the following particulars: (a) The location of the property; (b) In whose custody the property is; (c) The identity of the person or other entity in whose name the property 1s held; (d) The nature of the interest which each defendant has in such property; and (e) If the interest of such defendant in any property 1s held jointly or in common with any other person, the name of such other person or persons. 2. Warren Douglas Howell of "The Seament", Cairns Harbour, Cairns be examined before the Registrar of the Court on a date to be fixed by the Registrar concerning the nature and location of the property of each of the defendants. 3. Each of the defendants be examined before the Registrar of the Court, on a date to be fixed by the Registrar, not being a date earlier than the completion of the committal proceedings in the Magistrates Court at Brisbane pending against the defendants in relation to narcotics offences, concerning the nature and location of the property of each of the defendants. AND _ IT IS DECLARED: 4. That the orders of the Honourable Mr. Justice Sheppard of 28 September 1987 and 19 October 1987 relate to the property of Resorts Pacific Ltd., Development Industries Limited and Willesden Development Limited and that such property includes: (a) any sum standing to the account of Resorts Pacific Ltd. with the Melanesia International Trust Company Ltd. as at 30 September 1987; (b) any sum transferred on or about 25 September 1987 from the account of Resorts Pacific Ltd. with the Melanesia Inernational Trust Company Ltd. to the account of Vanguard Ltd. with the Melanesia International Trust Company Ltd.; (c) any sum standing to the account of Development Industries Limited with the Melanesia International Trust Company Ltd. ; (d) any sum transferred on or about 7 October 1987 from the account of Development Industries Limited with the Melanesia International Trust Company Ltd. to the account of Vanguard Ltd. with the Melanesia International Trust Company Ltd. That the Official Trustee in Bankruptcy has a charge over the proceeds of the sale on the 28 and 29 September 1987 of the shares and units heid in the name of the second defendant and referred to in the following schedule to secure payment to the Commonwealth of any pecuniary penalty that may be made pursuant to s.243B of the Customs Act 1901. SCHEDULE Description of Shares/Units No. of Shares Net Proceeds Ordinary fully paid units 5,000 $14,385.60 in the Mirage Resorts Trust Ordinary fully paid shares in 18,000 $5,632.40 Gold Copper Exploration Limited Ordinary fully paid shares in 15,000 $4,689.60 Gold Copper Exploration Limited Ordinary fully paid shares in 17,000 $5,289.70 Gold Copper Exploration Limited TOTAL $29,997.30 AND IT IS FURTHER ORDERED THAT 6. = The first, second, third, fourth, fifth, sixth, eighth, ninth and tenth defendants pay the applicant's costs of and incidental to the Notices of Motion filed on the 26th day of November 1987, payable as to 80% of the said costs by the second, fourth, elghth, ninth and tenth defendants, and payable as to 20% of the said costs of the first, third, fifth and sixth defendants. The order of the Honourable Mr. Justice Sheppard of 19 October 1987 be varied by deleting the word "first day of the" in paragraph 3(b)(iv) thereof. Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY ) QLD G175 of 1987 GENERAL DIVISION PINCUS J. BETWEEN: AND: AND: AND; AND: AND: AND: AND: AND: AND: AND: COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE Applicant WILLIAM BRUCE KIRK (Also known as William Albert Jenkins) Pirst Respondent RICHARD SHIER LEETH (ATso known as James Robert Delaney) Second Respondent DALE STEWART KIRK (Also known as Donald Paterson) Third Respondent MICHAEL ALAN BOCKOFF Fourth Respondent DONNA JANE SCHLINKERT TAIso known aS Donna Jane Paterson) Fifth Respondent VALERIE ELIZABETH SCOTT Sixth Respondent ROBYN ANNE GUNDERS Seventh Respondent PAUL JOSEPH DONOVAN Eighth Respondent TERRE REBECCA TUCKER Ninth Respondent CAROL ANN POWELL Tenth Respondent 24 DECEMBER 1987 REASONS FOR JUDGMENT An application has been made under Division 3 of Part XIII of the Customs Act 1901; it has two aspects. 1. Property The applicant seeks a declaration pursuant to s.243F of the Customs Act that certain property referred to in orders of this Court includes a sum transferred on or about 25 September 1987 from the account of Resorts Pacific Ltd. with the Melanesia International Trust Company Ltd. to the account of Vanguard Ltd. and also includes the proceeds of the sale of certain shares. The former sum will be referred to in these reasons as the Vanguard money. The general purpose of the legislation in question is to enable civil proceedings to be brought for recovery and penalties for dealings in narcotic goods; it is briefly analysed in Commissioner of Australian Federal Police v. Cox (1986) 70 A.L.R. 509. For present purposes, 1t 1S necessary to note that under s.243E, where proceedings under the Division have been brought, an application may be made to the Court for an order directing the "Official Trustee to take control of property specified in the application or of all the property of the defendant". The expression "Official Trustee" 1s defined in s.243A(i) to mean the Official Trustee in Bankruptcy. Under s.243E, as sub-section (1) which has been partly quoted indicates, orders of two sorts may be made, namely orders to take control of a specified property or to take control of all the defendant's property. The orders in question in this case were of the latter kind. On 28 September 1987 Sheppard J. made an order at Hobart that "Until further order, the Official Trustee in Bankruptcy take control of all of the property in which the Defendants have a beneficial interest whether situate in the Commonwealth of Australia or elsewhere". The order was not precisely in the terms contemplated by s.243E ("all the property of the defendant"). That was so, I infer, because s.243A(4) says that a reference in the Division "to the property of the person shall be read as a reference to the property in respect of which the person has a beneficial interest", a definition discussed in Cox's case at p.516. The first question I have to determine is whether the fund discussed below (the Vanguard money) is within or outside that order made by Sheppard J. - i.e. whether it 18 "property in respect of which the person has a beneficial interest", the words "the person" referring to any or all of the defendants. The argument advanced by Mr. O'Regan Q.C., with whom Mr. S. Herbert appeared for certain of the defendants, was that it should not be held that any of them had a beneficial interest, at the date of the order of Sheppard J., in the Vanguard money. Mr. O'Regan also argued that the declaration sought would be equivalent in effect to an order under s.243E(2)(c)(1) - i.e. an order directing the Official Trustee to take control of specified property and that the procedural pre-conditions to the making of such an order were not satisfied. Counsel for the applicant argued that if granted, the order would be justified under s.243F(1)(c) as being one - "determining any question relating to the property to which the original order relates, including any question relating to the liabilities of the defendant, and the exercise of the powers, or the performance of the duties, of the Official Trustee, with respect to the property to which the original order relates". In Cox's Case I held (p.513) that - ",.. if a court makes an order with respect to all the defendant's property, it may ... then or later, determine by declaration specific questions as to what property is caught by the order ..." Although challenged by Mr. O'Regan Q.C., that view 1s, in my opinion, correct; I can see no good reason to read down s.243F(1)(c) so as to exclude the possibility of making orders of the kind here sought, thereby determining a "question relating to the property to which the original order relates ..." within the meaning of that provision. To come now to the substantive question relating to the Vanguard money, for present purposes the story begins in May 1987 when the second defendant lodged bank drafts totalling $990,200 with Melanesia International Trust Company Ltd. in Vanuatu. On 14 May, Mr. Turner, the managing director of Melitco, as I shall call it, wrote to the second defendant enquiring as to the source of the funds. The reply, dated 9 June, was that "all funds are personal investments from U.S. citizens on our Pacific resorts projects". This raises the possibility that the money in question was beneficially owned by those citizens, but neither side before me so contended. As senior counsel for the applicant, Miss Kiefel Q.C., pointed out, any declaration made by me in the absence of those citizens could not bind them. The moneys were held by Melitco on account of Resorts Pacific Ltd., a company managed by Melitco, but of which the second defendant and tenth defendant were beneficial owners. On 22 September 1987, Mr. Anthony Bailey, a solicitor of the firm of Bailey and Bailey, was asked to act for certain of the defendants, who had been charged with offences relating to dealings in narcotics. Mr. Anthony Bailey says that on 23 and 24 September 1987, he discussed with his clients the question of fees, and his evidence about that is analysed below. On 24 September 1987, Mr. John Bailey, Mr. Anthony Bailey's partner, phoned Vanuatu and spoke to a Mr. Ivamy, an officer of Melitco. He referred to the money held to the account of Resorts Pacific Ltd. and said the beneficial owners wanted it transferred as soon as possible. He enquired if anyone had been "sniffing around" and said his principals were anxious to have the funds moved because "something had turned up". On the same day, he sent an authority signed by the second and tenth defendants requesting that the funds in question be transferred to an account in the name of Vanguard Ltd., another company managed by Melitco. On 25 September, Sheppard J. made an order, under the provisions mentioned above, "that the Official Trustee in Bankruptcy take control of all the property in which the Respondents have a beneficial interest situate in the Commonwealth of Australia." That order, it will be noted, had no application to property outside this country. On the same day, Melitco advised Mr. Bailey that the transfer had been effected, a sum of $1,080,944.43 having been transferred. On 28 September 1987, Sheppard J. made a further order, that the Official Trustee take control of all the property in which the defendants have a beneficial interested whether situated in the Commonwealth of Australia or elsewhere. That order, having extra-territorial effect, is said by counsel for the defendants to have been made too late to catch the Vanguard money; it is said on behalf of certain of the defendants that that money was then held by Vanguard Limited for Bailey and Bailey, the solicitors. On 28 and 29 September, certain shares were sold and a separate question, discussed below, arises in relation to them. On 8 October 1987, the second, fourth, eighth, ninth and tenth defendants made a written agreement with Messrs. Bailey and Bailey which, apart from recitals, read as follows: "lL. The Clients shall forthwith pay to the Solicitors the sum of One Million Two Hundred Thousand Dollars ($1,200,000). 2. The Solicitors agree to act for the Clients in the proceedings on the basis of all necessary preparation of Trial and subsequent Appeals to the Court of Criminal Appeal and High Court including payment for Counsel." A suggestion was made during the hearing that this agreement might have been predated. In my opinion, it was correctly dated; that is I accept the evidence of the solicitors that it was executed on the date which it bears. af @ According to the case which the applicant has to meet, before that retainer was executed the Vanguard money had passed from the beneficial ownership of the second and tenth defendants and had become beneficially owned by Vanguard Ltd. Mr. O'Regan Q.C. argued that Vanguard Ltd. had an obligation to account to Bailey and Bailey for the money. If that was so, then there should of course have been no problem about legal fees in October, the Baileys having had ample funds paid to Vanguard Ltd. for their account, in September. However, on 15 October 1987, Mr. Anthony Bailey made an affidavit in this Court in which he said that applications made to Sheppard J. were such as to be likely to gravely disadvantage his clients "in the proper presentation of their defence in view of the fact that their funds have been, in effect, frozen". The expression "their funds" one would naturally read as referring primarily to the Vanguard money, but the case advanced before me was that the Vanguard money was not at material times the property of the defendants, or any of them, and therefore could not have been "frozen". On 16 November 1987, Bailey and Bailey instructed Melitco to remit all funds deposited to "our account" on 25 September 1987, and certain other moneys, to the firm's general account at Westpac Banking Corporation, The Gap, Brisbane. On 18 November, Bailey and Bailey sent Melitco a copy of the retainer of 8 October. I find that at no time before 16 November did Bailey and Bailey suggest to Melitco that the funds in question belonged to them, or had been paid to them as fees. fThere were plainly occasions on which claims of that sort might have been made. One which should receive passing mention is that on 6 or 7 October 1987, Mr. John Bailey asked Mr. Turner to transfer funds froma company called Development Industries Limited to Vanguard Ltd. That transfer is now said also to have been by way of payment of fees, having been effected on the authority of the fourth defendant. When Mr. Turner asked Mr. John Bailey "why that was being transferred, or what Vanguard's interest was in it", Mr. Bailey replied to the effect, "You would ask me that. I am not an accountant. I will get back to you." Ultimately, Melitco treated the transfers as loans and prepared a minute, which was in fact drawn up some time after 22 October 1987 but predated. There is no evidence that the moneys transferred were in truth loans. Prima facie, the resolution of the question of their true nature and in particular the true nature of the Vanguard moneys depends in large part upon the evidence of Mr. Anthony Bailey. He made a number of affidavits in these proceedings. In the first of those, sworn on 15 October 1987, he mentioned that he was then acting in the criminal proceedings which were likely, he thought, to be lengthy. He said he had had considerable experience of such cases and (as mentioned above) that his clients were likely to be "gravely disadvantaged in the proper presentation of their defence in view of the fact that their funds have been, in effect, frozen." He asked that the Court make an order concerning reasonable legal expenses. According to the case now advanced, there was then no problem with respect to legal expenses, as Mr. Bailey's firm had been put in funds in the sum of about $1,200,000. That case first emerged on 27 November 1987, when Mr. Bailey swore that on 23 or 24 September 1987 he entered into an agreement with certain of his clients - "to act for them only on the basis of a retainer i.e. that I would act in the matter for a certain fee which would be paid forthwith, and become the property of my firm. It was agreed that arrangements would be made forthwith for funds to be paid to my firm, or to its benefit pursuant to that agreement." Mc. Anthony Bailey's second affidavit went on to explain that a written retainer was prepared to formalise the agreement. In the meantime, on 18 November, Mr. Bailey had sent a bill to the applicant for $7,500 for legal fees as contemplated by orders of Sheppard J. On his later version of events, that was apparently an error, because nothing was due to his firm then for fees from the applicant. Mr. Bailey's affidavit of 27 November said the agreement made on 23 or 24 September was to act for defendants "for a certain fee which would be paid forthwith", by which I take it he meant a fee which was fixed, not one which was uncertain or to be fixed. That is consistent with the written retainer agreement made on 8 October 1987, clause 1 of which requires the clients to 10. pay the solicitors $1,200,000. It is odd that in Mr. Bailey's account of the oral agreement in his affidavit, he does not say what the "certain fee" was. That omission turns out to be of some significance. In his oral evidence, Mr. Anthony Bailey was given a number of opportunities to explain precisely what the oral agreement was. It has to be said that his oral account nowhere included the assertion that he had agreed to do the whole of the work for a fee of $1,200,000, such agreement having been made in September 1987. Indeed, Mr. Bailey distinctly denied that there was then any agreement fixing the costs in a set or specific sum. In response to a question whether he had a discussion "with respect to obtaining some funds on account of those costs", he replied in the affirmative. When asked by Miss Kiefel whether he was concerned with the particular sum "or simply to ascertain the Property generally available to the defendants which might be used to meet your costs as they became due from time to time?" Mr. Anthony Bailey answered: "Well I was - I was concerned to ensure that while I was working, the matter of fees was being addressed." When asked again whether he discussed a particular amount to be made available to his firm, he spoke of a "figure, in a ballpark sense of, as I was instructed by him, slightly short of a million dollars". That is not inconsistent, as I understand it, with the earlier answer that the agreement did not set costs at a specific sum and is consistent with the notion that a sum, the amount of 11. which was not precisely defined, would be paid on account of costs. He agreed with Miss Kiefel that he wanted the moneys brought "into a position where Bailey and Bailey could have recourse to them". He again denied that his firm were to be "acting for a particular figure at that date - that is $1,000,000". He then said, "It had been agreed that the funds available to Mr. Delaney would be made available to Bailey and Bailey for legal fees". That seems to be a suggestion that whatever sum Delaney had - said to be nearly a million dollars - would be paid for legal fees. Mr. Bailey was asked: "But the reason why you did not agree on a fee was because you simply did not know how much work would be involved?" and answered, "No." Then he was asked, "But it could have been more than a million?" and said, "It could have been" and explained that he simply did not know. He told Miss Kiefel that he had not set an ultimate fee at that stage, but certainly wanted to see that his clients had placed some funds and later said that it was agreed to send the funds to an account "Vanguard, and the authority stipulated the account and the number, and that there was no further agreement other than that. Mr. Bailey's evidence did not seem to me to fix on any very precise version of the conversation. Being unclear as to what the case put forward was, I asked him to tell me the conversation about the fees, in substance, and the answer included the following: 12. "... I explained to them that in order for me to be secured, in relation to fees, they had to pay in advance. I had previously explained to Leeth that I would not accept any fees into the trust account -.- On the basis of that I explained that I would require a retainer before I would act for them. They agreed that they would inject their available capital into the retainer. I did not know, nor did they, exactly how much funds were available. There was, then, an agreement reduced to writing that I would act in relation to the matter for the fee of $1,200,000, and that the moneys were the property of Bailey and Bailey." One might derive from this evidence a number of possible agreements and I think it is desirable to set them out: 1. An agreement simply to do all the work for $1,200,000. An agreement to do all the work for a payment unascertained in amount but consisting of the defendants' "available capital". An agreement to do all the work for a fee payable in advance, which costs to be fixed later, and was in fact fixed on 8 October. I did not find Mr. Anthony Bailey's evidence impressive. Having had ample time to consider the central point, the alleged oral agreement made on 23 or 24 September 1987, an agreement whose importance must have been obvious to him at an early date, he gave before me no coherent or consistent account of it. Precisely what was said on the subject is a matter about which I feel no confidence, but my impression is that something was said on 23 or 13. 24 September about paying or assembling money as quickly as possible to meet the expenses of the criminal proceedings. I could not find that there was an agreement on 23 or 24 September to do all the criminal work for $1.2 million or any other certain sum; I am quite satisfied that the contrary is so. It was contended by Miss Kiefel that for reasons derived from the Queensland statutes governing solicitors' costs and solicitors' trust accounts, if an agreement was made that $1,200,000 would be paid by way of fees in advance, it was unenforceable. I have not found it necessary to determine that question. The point which must first be determined is: Who was the beneficial owner of the fund immediately after it was transferred to Vanguard Ltd.? Mr. O'Regan Q.C. says the beneficial owner was Vanguard Ltd., but that Bailey and Bailey had a right to call on Vanguard Ltd. to account to them for it. Itais clear that the answer to the question just posed depends upon the conversations between the second defendant and Mr. Anthony Bailey, understood in the light of the surrounding circumstances. It was in consequence of those conversations, according to the defendants' case, that the money was transferred. Mr. John Bailey said he asked for the transfer to be made "acting on information received from my partner regarding partial fulfilment of the agreement aforesaid". The "agreement aforesaid" was not made by Mr. John Bailey, but he says that Mr. Anthony Bailey told him that it was one "whereby in consideration of an advance payment of one million two hundred thousand dollars ($1,200,000) Bailey and 14. Bailey would act for the defendants in all criminal proceedings relating to charges faced by them". I have found that there was no such agreement and I do not believe Mr. Anthony Bailey told Mr. John Bailey there was one. The second defendant has given no evidence and I have only the unsatisfactory account given by Mr. Anthony Bailey on which to base my conclusion. There is, however, little difficulty 1n rejecting Mr. O'Regan's contention that the fund was transferred to Vanguard on the basis that it would become the beneficial owner. There is nothing in the evidence to support that. The choice appears to be between finding that on the transfer's being made, the beneficial ownership was in Bailey and Bailey and finding that it remained where it had been — in the second and tenth defendants. Where property is transferred without consideration, there 1s ordinarily a presumption of a resulting trust in favour of the transferor: Charles Marshall Pty. Ltd. v. Grimsley (1956) 95 C.L.R. 353 at p.363, Napier v. Public Trustee (Western Australia) (1980) 32 A.L.R. 153 at p.158. It is not clear, however, whether the same principle applies with respect to a mere payment of money: Joaquin v. Hall [1976] v.R. 788. In the absence of any reliable account of the conversations which led to it, ome must rely to a substantial extent upon inferences from facts, some of the more important being that: 1. Before the transfer it appears that the fund was beneficially owned by the second and tenth defendants. 15. 2. The request to transfer the funds to Vanguard was made by a member of the firm of solicitors acting for those defendants. 3. No suggestion was made to Melitco at or about the time of the transfer that the intention was that the solicitors were to own, or have a right to be paid, the money in question. I find that Mr. John Bailey had directly, or through his brother, the authority of the second and tenth defendants to have the money transferred for two purposes: firstly, to have it in an account of which the defendants were not shown as beneficial owners in Melatco's records and, secondly, to provide a fund out of which costs, and perhaps other expenses, might be paid. Although Mr. John Bailey was but one of three beneficial owners of Vanguard Ltd., I am satisfied that he had, in a practical sense, control of the company and used 1t as a convenient receptacle for the funds. I find that the money remained, after the transfer, the property, beneficially, of the second and tenth defendants, although it was understood that part or all of 1t would be used for payment of fees. The remaining question concerning property, briefly referred to above, relates to shares sold. The applicant seeks, in relation to then, a declaration as to ownership. Unfortunately, the application does not identify the shares in 16. question, but presumably when the order in this matter is taken out, that can be done. The point is quite a short one. After the orders of Sheppard J. referred to above were made, the shares were sold and the proceeds banked. It is common ground that the shares have now passed from the control of the applicant. Section 2433 of the Act, however, creates a charge on the property in question "to secure the payment to the Commonwealth of any pecuniary penalty that the person may be ordered to pay in the relevant proceeding". The question is the present status of the proceeds. Miss Kiefel argued that they are caught by the orders of Sheppard J. as being part of the property of the defendants. She referred to the definition of "property" in s.243A(1) as meaning - "real or personal property of every description, whether situated in Australia or elsewhere, and ancludes any estate, interest or profit, whether present or future, vested or contingent, arising out of or incident to any such real or personal property." In my opinion, the word "future" qualifies "estate, interest or profit". The notion of a presently held interest in future property is a comprehensible one. Clearly, no such interest was held by the defendants in respect of the proceeds of sale of the shares at the date of the orders. No further order as to control is presently claimed. 17. Mr. O'Regan argued that the orders of Sheppard J. directing the Official Receiver to take control of all the property of the defendants did not have an ambulatory effect, but applied only to property in which the defendants then had an interest. In my opinion, that contention 1s correct. The natural reading of the expression "all the property of the defendant" is such as to encompass all property the defendant then has, not all property of which he may at any time in the future, however remote, obtain ownership. In my opinion, then, the proceeds of sale were not when they came into existence caught by Sheppard J.'s order for control. But the Official Trustee had a charge on the shares which were sold to produce the proceeds. In my opinion, the use of the word "charge" conveys the notion that the interest held shall have the properties of the security ordinarily called a charge; under the general law, the holder of a security over property is entitled to security over money representing "a conversion of part of the capital value of the property" - per Williams J., Syme v. The Commonwealth (1942) 66 C.L.R. 413 at p.430. This rule applies so as to make the charge on the shares, sold in breach of Sheppard J.''s orders, attach to the proceeds. I should add that the evidence does not show that the breach was deliberate. In accordance with these reasons, there will be a declaration that the property referred to in the orders of this Court made on 25 September, 28 September and 19 October 1987 include any sum tranferred on or about 25 September 1987 from the 18. account of Resorts Pacific Ltd. with the Melanesia International Trust Company Ltd. to the account of Vanguard Ltd. with the Melanesia International Trust Company Limited. There will also be a declaration that the applicant has a charge on the proceeds of sale of the shares referred to in the application to secure the payment to the Commonwealth of any pecuniary penalty which may be ordered to be paid in these proceedings. 2. Obtaining Information The applicant also sought orders under s.243F(1)(d) and (e) of the Customs Act, which paragraphs, with the introductory part of the sub-section, read as follows: "Where the Court makes, or has made, an order (in this section referred to as the "original order") under sub-section 243E(1) directing the Official Trustee to take control of specified property, or all of the property, of a person (in this section referred to as the 'defendant'), the Court may, at the time it makes the original order or at any subsequent time, make such orders in relation to that property as the Court considers just and, without limiting the power so conferred on the Court, the Court may, at any time or from time to time, make an order - (ad) directing the defendant to furnish to the Official Trustee, within a time specified in the order, a statement, verified by the oath or affirmation of the defendant, setting out such particulars of the property of the defendant as the Court deems proper; (e) for the examination of the defendant or another person before the Court or the Registry of the Court concerning the nature and location of the property of the defendant; or 19. Counsel for the defendants argued, in effect, that the defendants should not be required to furnish such statements as are mentioned in para.(d), or examined under para.(e), because of the pendency of criminal proceedings and that the applications, so far as they related to the defendants, should be adjourned sine die. Mr. O'Regan Q.C. and Mr. Glynn also argued that the solicitors should not be examined under para.(e) because of the pendency of the criminal proceedings. I am of opinion that the latter contention is correct; there is no reason to think that this is an appropriate case in which to make such an order. Further, Mr. Glynn argued that Cox's Case should not be followed insofar as it was there held that the privilege against self-incrimination 1S inapplicable to the furnishing of a statement under para.(d); he further contended that the facts were such, here, as to make it clear that the furnishing of a statement would be likely to incriminate the defendants and therefore none of them should be ordered to furnish a statement. It must be accepted that there would at least be a significant risk that the content of a statement under para.(d) might incriminate its maker. As to the sum of $990,000 in bank drafts, the Melitco officers suspected that it might be connected with narcotic dealings and one of the defendants gave Melitco what may well have been a false explanation as to its origin. More generally, as was said of a similar matter in Cox's Case at p.521: "Typically, and not unusually, revelation of the extent of the defendant's property is likely to 20. give 'reasonable ground to apprehend danger' to him." The expression "reasonable ground to apprehend danger" was used as a test by Gibbs C.J. in Sorby v. The Commonwealth of Australia (1983) 46 A.L.R. 237 at p.241. Mr. Glynn relied upon Sorby's Case as demonstrating the incorrectness of the conclusion arrived at, as to this aspect, in Cox's Case. He contended, in effect, that strong language is necessary to override the privilege against self-incrimination. I find it difficult to agree with that contention; the recent High Court cases do not support it. To hold that the power to direct the furnishing of a statement under para.(d) is subject to the privilege against self-incrimination would, as a practical matter, frustrate the general intention of the legislature in many cases of this sort. Further, 1t is striking that provision 1s made (in s.243F(3)) protecting defendants from admission against them of their answers in examinations under para.(e), except 1n perjury proceedings and in assessments of the amounts of pecuniary penalties. It 1s difficult to believe that Parliament antended that protection, rather similar in its purpose and derived from the common law, should be afforded to those furnishing statements under para.({d). I therefore propose to adhere to the view which was expressed in Cox's Case; a similar view was taken by Burchett 3. in Commissioner of Australian Federal Police v. McMillan (1987) 70 A.L.R. 203. That is, I again hold that the power to require furnishing of a statement under para.(d) is not subject to the common law rule protecting against self-incrimination. 21. It was suggested during the course of the hearing that perhaps the Court should, in the particular circumstances of this case, provide some privilege against self-incrimination in respect of the furnishing of statements under para.(d). In McMaillan's Case (above), Burchett J., discussing the possibility of adjourning the examination of a particular witness under para.(e) pending a criminal trial, said that in the exercise of that discretion ~ "... the Court should be careful to ensure that the examination ... is not oppressive to a defendant facing serious criminal charges. Of course, circumstances may readily be imagined where it might appear that a failure to proceed promptly with an examination could jeopardise the objectives of the legislation by facilitating evasion. But it has not been suggested that anything of that kind 18 involved in this matter." Here, there certainly is such a suggestion. Miss Kiefel Says that the evidence clearly shows prompt movement of funds, immediately charges were laid. Where, as here, the case 1s said to involve importation of narcotics on a substantial scale, to delay use of the remedies contemplated in paras.(d) and (e), for perhaps a year or more while criminal proceedings are pursued, might lessen the prospect that the defendants' property might be brought under control and ultimately made available for recovery of the contemplated penalties. I agree with the view of Burchett J. that the section in question "appears to contemplate the possibility of more or less contemporaneous proceedings of a criminal nature and for a penalty" (70 A.L.R. at p.213). Counsel before me relied, as did 22. Burchett J., upon the considerations mentioned by Deane J. in Hammond v. The Commonwealth (1982) 152 C.L.R. 188 at p.206. I do not, however, regard the statements Deane J. there made as necessarily providing proper guidance in applying the statute with which I am concerned which, on its face, contemplates that civil proceedings for a penalty may be pursued before resolution of the question of criminal liability. It is my opinion that there is no general rule that the furnishing of statements under para.({d) or examinations under para.(e) must await the conclusion of criminal proceedings, increasing the difficulty of locating any property desired to be brought under control. I propose to make orders under paras.(d) and (e) against the defendants and not to defer their operation until the conclusion of the criminal proceedings. Counsel for the applicant suggested that the convenience of the defendants might be served by deferring the examinations under para.(e) until the conclusion of the committal proceedings, which are to commence very shortly. I propose to adopt that suggestion. There appears to be no good reason, however, to defer the furnishing of statements under para.(d). It remains to be considered whether a condition should be attached to the order under para.(d), protecting the makers of the statements against their tender in the criminal proceedings. I suggested during the course of the hearing that such a protection needed consideration, but counsel for the defendants did not appear to favour it. Mr. O'Regan argued in effect that the imposition of a condition protecting the defendants against the tender of the statements in 23. the criminal proceedings would be less than perfect protection. That appears to be so, but nevertheless, in this case at least, it would seem inappropriate to permit the use of such statements as part of the proof in the criminal proceedings; the only purpose of a statement under para.(d) is to assist the civil proceedings. I intimate that I will make an order for the furnishing of statements under para.(d) on the filing of an undertaking by or on behalf of the Director of Public Prosecutions not to tender the same, in whole or in part, in the criminal proceedings. My intention is that the order will require the furnishing of the statement within a reasonable time after filing of the undertaking and that it must set out the particulars referred to in the notice of motion.