DELLA PATRONA v THE DIRECTOR OF PUBLIC PROSECUTIONS (CTH) [No 1] SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL KIRBY P, PRIESTLEY and MEAGHER JJA 1 September 1995, 1 September 1995 [1995] NSWCA 121 PRACTICE AND PROCEDURE — Court of Appeal — grounds of appeal — raising constitutional grounds for first time on appeal — whether should be permitted — whether any prejudice — held: (By maj): Argument should be permitted in view of late objection and to bring the controversy to a final conclusion. APPEAL — grounds of — new grounds — constitutional challenge — not run at trial — whether permitted on appeal — held: (By maj): In circumstances, allowed. CONSTITUTIONAL LAW — challenge to constitutionality — whether last resort — Lichtman v Grossbard 533 NE 2d 1048 (NYCA) (1988) consd. PRACTICE and PROCEDURE — appeal — new legal grounds of — constitutional and legal issues not run at trial — whether should be permitted in appeal — applicant for relief under Proceeds of Crime Act 1987 (Cth) on appeal raises grounds challenging the constitutionality of that Act — no such challenge at trial in Criminal Division of Supreme Court (James J) — no consideration of issue by primary judge — extension of time sought and obtained by appellant to appeal against orders — no objection raised to grounds challenging constitutionality of Act until immediately prior to appeal hearing — on motion, in effect, to strike out ground raising constitutional points APPEAL — grounds of — new grounds challenge constitutionality of statute — whether should be permitted on appeal for first time CONSTITUTIONAL LAW — challenge to constitutionality of statute — proper approach to — whether should be last resort — whether amendment of grounds to raise constitutional challenge on appeal should be permitted Held: (Kirby P and Priestley JA; Meagher JA dissenting); The appellant should be permitted to argue the constitutional points and the application to strike out such grounds should be rejected - reference made to; (a) the ordinary rule of confining parties to the case fought at trial; (b) the need to avoid any procedural unfairness; (c) the belated application of the objection by the respondent; and (d) the availability to the appellant of other remedies and the desirability of concluding the litigation in the one hearing. Supreme Court Act 1970, s63, referred to. Suttor v Gundowda Pty Ltd (1950) 81 CLR 418; O'Brien and Ors v Komesaroff (1982) 150 CLR 310; Coulton and Ors v Holcombe and Ors (1986) 162 CLR 1, appld; University of Wollongong v Mentally [No 2] (1985) 59 ALJR 481 (HC) testing this. Held: (Kirby P and Priestley JA; Meagher JA dissenting) In the discretion of the Court and in the circumstances. the argument should be allowed. Federal Commissioner of Taxation v Munro (1926) 38 CLR 153; Gazzo v Comptroller of Stamps (Vic) (1981) 149 CLR 227 considered; Lichtman v Grossbard 533 NE2d 1048 (NYCA) (1988) referred to. 2 UNREPORTED JUDGMENTS Australian Constitution, s51(xxxi); s51(xxxix) Supreme Court Act 1970, s63 Kirby P The Court has before it an appeal by Romana Della Patrona (the appellant) against orders of James J in the Criminal Division of the Supreme Court. The appeal has been listed for hearing this day. No question as to the jurisdiction of the Court of Appeal has been raised. It is conceded that there are two grounds of appeal which are properly before the Court (grounds 3 and 4). However, the first two grounds which appear in the notice of appeal present a problem. Those grounds read: "1. The Proceeds of Crime Act 1987 (Comm) is ultra vires s51(39) of the Commonwealth of Australia Constitution Act (UK), in that it provides for the automatic forfeiture of all property regardless of whether that property was related to a Commonwealth criminal offence and is therefore in law a provision more than incidental to the primary head of Commonwealth power. 2. That to the extent that the Proceeds of Crime Act 1987 (Comm) provides for automatic acquisition of property without payment of compensation in cases where the property is not in any way connected with a Commonwealth criminal offence, it is contrary to s51(31) of the Commonwealth of Australia Constitution Act (UK)." The problem which is presented by these grounds, raising as they do constitutional questions, is that neither of the issues raised was litigated when the proceedings were for trial at first instance. In the event, the appellant became out of time to file her notice of appeal. She required leave from the Court to extend time within which to file the notice of appeal. Application to that end was brought before the Court. It was heard by Clarke JA. His Honour provided leave. He did so on the basis of the notice of appeal which is now before the Court containing the first two grounds. The Court has been informed that, in the course of those proceedings, no objection was raised to the first two grounds upon the basis that they presented issues which had not been litigated at first instance. Although the Director of Public Prosecutions (Cth) (the respondent) opposed the grant of the extension of time, the Court has been informed that he did not raise, as one might have expected, as a particular ground of objection, the fact that the first two grounds presented novel constitutional questions which had not been agitated at the trial. The matter therefore proceeded to its hearing day before the Court. It seems to have taken a great deal of time to come on for hearing. The appeal papers were settled on 27 May 1992. Again, when the papers were settled, no objection was taken by the respondent before the Registrar to the inclusion of the first two grounds. The appellant proceeded to this hearing upon the assumption that the two stated grounds would be agitated and determined in the appeal. She prepared accordingly. As appears by an affidavit of Ms Julie King, solicitor, read before the Court today, notices were given by the appellant, pursuant to s78B of the Judiciary Act 1902 (Cth). Submissions were prepared by the appellant advancing her arguments in support of the first two grounds. Only two days before the hearing did the respondent raise the objection which has now been advanced before the Court by his counsel, namely, that the Court should not entertain the first two grounds on the basis that the application of proper procedural principles would limit the appellant in the appeal to the matters which she had fought at trial. URELLA PATRONA v THE DIRECTOR OF PUBLIC PROSECUTIONS (CTH) [No 1] (Kirby PB When the Court pointed out that this course would involve some unfairness to the appellant who had been preparing for this hearing upon the assumption that the first two grounds of appeal would be argued and determined, counsel for the respondent obtained instructions. Eventually, the respondent offered to pay, whatever the outcome of the appeal, the costs which had been reasonably incurred by the appellant in the preparation for the hearing on the first two grounds. Upon this added basis, he vigorously pressed his objection to the hearing of the constitutional challenges. There are a number of reasons which support the objections of the respondent. I will list them in abbreviated form, without meaning any disrespect to the careful way in which the respondent's counsel has put them: (1) The issues in grounds 1 and 2 were not agitated at trial. In an appeal parties ought, except in exceptional circumstances, be held to the way in which they litigated their case at trial, University of Wollongong v Metwally [No 2] (1985) 59 ALJR 481, 483; Coulton and Ors v Holcombe and Ors (1986) 162 CLR 1, 8; (2) In a real sense, the grounds present issues which involve an attack on the Act and involve claims which are actually inconsistent with the way in which the case was contested before the primary Judge by which the appellant sought relief under the provisions of the Act now impugned, cf Tyson v Brisbane Market Freight Brokers Pty Ltd (1994) 68 ALJR 304 (HC), 310f; (3) The issues raised involve constitutional questions. An attack on the constitutionality of a statute should not be lightly ventured upon. It was suggested that it should, in a sense, be a last resort. cf The Federal Commissioner of Taxation v Munro (1926) 38 CLR 153, 180; Gazzo v Comptroller of Stamps (Vic) (1981) 149 CLR 227, 253. It should not, so it was argued, except in the most rare and exceptional cases, be permitted for the first time before an appellate court when not advanced at trial; (4) The principle just stated is not only found in the jurisprudence of Australian courts. It is also expressed in the most emphatic way in the decisions of courts in the United States of America (see, for example, Lichtman v Grossbard 533 NE2d 1048 (NYCA), (1988); see also 536 NE2d 622 (NYCA) (1989); (5) If the Court were to proceed now it would not have the benefit of the reasons of the primary Judge on the points to be agitated. The procedure would, in effect, convert this Court into a court of first instance on this point; (6) The issues raised in grounds | and 2 are not, in a technical sense, part of the proceedings which have ever been determined. See comments during argument in Brauer v Director of Public Prosecutions, High Court, 7 December 1990, tpt at 4 (Mason CJ). They are entirely new proceedings. In effect, they seek relief the first time in this Court, which is an appellate court with a heavy workload of appeals and other process which it must hear; (7) The appellant would not be put out of court by such an insistence upon proper procedure. The appellant would be entitled, if she so chose, to seek a declaration that the Act is unconstitutional. But she should follow the normal course of doing so before a single judge before troubling the Court of Appeal; and (8) The respondent also asserted that there was no legal merit in either of the constitutional points. This fact would reinforce the hesitation which the Court would feel in permitting the issue to be debated now. I acknowledge the very considerable force of these arguments. I approach the case on the basis that it is only in the exceptional case that the Court would permit, in effect, a redirection of the litigation before this Court. However, for a number of reasons, I am of the view that such an exceptional case is made out here. My reasons are: 4 UNREPORTED JUDGMENTS (1) It is common ground that no evidence is required to permit the Court to address the issues presented by grounds | and 2. Where evidence is required, or where fresh grounds of challenge might have cast a different light upon the way in which the trial was conducted, procedural fairness requires an appellate court to deny the facility which the appellant seeks. Coulton and Ors v Holcombe and Ors (above), 8; O'Brien and Ors v Komesaroff (1982) 150 CLR 310, 319; Suttor v Gundowda Pty Ltd (1950) 81 CLR 418, 438. No such problem arises in this case; (2) The issues presented to this Court are pure questions of law. The Constitution is the supreme law of the land. The Constitution, and the laws made under it, permeate all of the law of this country. This Court is here today to determine the dispute between the parties. It may conveniently do so by addressing and deciding upon the legal argument. cf Connecticut Fire Insurance Co v Kavanagh [1892] AC 473, 480. In my opinion, it is appropriate, convenient and just that it should do so; (3) It is true that the claims now advanced by grounds | and 2 are inconsistent with the claims which were advanced by the appellant at trial. Those claims are raised by the other grounds of appeal. However, it is not at all uncommon for alternative and inconsistent grounds to be advanced in support of a case, either at first instance or on appeal. The fact that this is so in the present case makes no relevant difference. Courts such as this are well able to cope with inconsistency; (4) No specific unfairness has been suggested which would be suffered by the respondent if the Court permitted the disputed grounds to be argued. The respondent has long had notice of the grounds which the appellant wishes to advance. He has, indeed, by written submissions, canvassed, at some length, the merits of the points raised. As the issue has been prepared and is ready for argument, in my opinion the Court should proceed to hear and determine the argument; (5) Whilst it is true that the appellant could be sent elsewhere to seek a declaration, time, further delay and costs would thereby be incurred. This Court is enjoined by s63 of the Supreme Court Act 1970 to grant remedies to bring matters in controversy to a complete and final determination. It is required by Parliament to avoid multiplicity of legal proceedings concerning matters in contest between parties. If there were the slightest suggestion that evidence or detailed and refined argument of highly complex legal questions could detain the Court for a long time or require, for convenience, that the matter proceed to redetermination at first instance, I would not hesitate to so order. However, I do not consider that that is the consequence of permitting grounds | and 2 to be argued now; (6) Most important in my consideration is the fact that until two days before the belated hearing of this appeal the respondent stood by and raised no objection to grounds | and 2. This was after there were a number of opportunities, including at least one before a Judge of the Court, to do so, at a time when, to raise that point, would have been relevant to the resistance to a contested application for an order extending time. This was not done. Steps were taken by the appellant in reliance upon that fact. New steps in the litigation occurred. Those steps have brought the parties to the Court today upon the record as it now stands. It is convenient and just, and avoids the multiplicity of proceedings, now to proceed to a hearing on the merits of the issues raised by grounds | and 2. Those issues are of potential importance. They may be good or they may not be good UWFELLA PATRONA v THE DIRECTOR OF PUBLIC PROSECUTIONS (CTH) [No 4 (Meagher JA) in law. But in potential, they affect, as well as the appellant, many other persons. The appellant is here to argue the entire case raised by her notice of appeal upon all grounds. In my opinion, she should have that opportunity. I would propose that the motion for dismissal of those grounds be refused and that the Court proceed to hear the argument on grounds | and 2 in the notice of appeal. Priestley JA The question which has been raised for decision is one which involves the exercise by the Court of a discretion, as it seems to me. The President has enumerated the considerations to be taken into account for and against the exercising of that discretion. In my opinion the balance of the relevant considerations favours the exercise of the discretion to permit the constitutional grounds to be argued. I, therefore, agree with the President's opinion. Meagher JA I disagree. The appellant has sought to raise two new grounds. The High Court has said in the University of Wollongong v Metwally (No 2) (1985) 59 ALJR 481 at 483: "Tt is elementary that the party is bound by the conduct of his case. Except in the most exceptional circumstances it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which either deliberately or by inadvertence he failed to put during the hearing when he had an opportunity to do so." In the present case there are no exceptional circumstances whatever. The appellant's invitation to us disregards what the High Court said and should be declined. Kirby P: The order of the Court, therefore, is that the Court will not strike out grounds 1 and 2 of the notice of appeal as the respondent, in effect, sought. It refuses the motion to that effect. The Court will continue to hear the appeal on all of the grounds which are presented in the grounds of appeal, including grounds 1 and 2. Motion to strike out grounds 1 and 2 of the notice of appeal refused. Counsel for the Appellant: GD Wendler Counsel for the Respondent (DPP): LS Katz Solicitors for the Appellant: Warwick Hunt Solicitors for the Respondent (DPP): Solicitor for the Director of Public Prosecutions (Cth)