NSW CRIME COMMISSION v GARDINER [1999] NSWSC 1210

New South Wales Supreme Court CITATION : NSW CRIME COMMISSION v GARDINER [1999] NSWSC 1210 CURRENT JURISDICTION : Civil FILE NUMBER(S) : 14814/96 HEARING DATE(S) : 3 December 1999 JUDGMENT DATE : 3 December 1999

New South Wales Crime Commission

PARTIES : v

Sharyn Allana GARDINER JUDGMENT OF : Adams J at 1

COUNSEL : Mr Ian Temby QC with Mr Mark Buscombe (Plaintiff) Mr C Steirn SC with Mr G Jones (Defendant) SOLICITORS : Mr J M Giorgiutti (Plaintiff) Mrs N Blumer (Defendant) CATCHWORDS : Criminal Assets Recovery Act 1990 - s10 - ex parte application for restraining order - existence of reasonable suspicion - further hearing may be made - meaning of ancillary in s12. ACTS CITED : Criminal Assets Recovery Act 1990 Proceeds of Crime Act 1987 (Cth) DPP v Logan Park Investments Pty Limited & Anor (1995) 37 NSWLR 118 CASES CITED : New South Wales Crime Commission v Davies (unreported) [1999] NSWSC 354 McCleary & Ors v The Director of Public Prosecutions (Commonwealth) (1998) ALR 301 DECISION : See paragraphs 27, 28 and 29

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OF NEW SOUTH WALES COMMON LAW DIVISION ADAMS J

FRIDAY 3 DECEMBER 1999 14814/96

NSW CRIME COMMISSION v SHARYN ALLANA GARDINER

JUDGMENT

1 HIS HONOUR: An order was made by Newman J of this Court on 12 December 1996 pursuant to the powers residing in this Court under s10 of the Criminal Assets Recovery Act 1990 (the Act). In accordance with usual practice those orders were made ex parte in reliance upon an affidavit of Michael Charles Luland sworn 12 December 1996. 2 The essence of the case put to his Honour on behalf of the New South Wales Crime Commission (the Commission) was that on the search of property occupied by the present applicant money and drugs were found. Orders were sought and obtained relating to a number of items of property, funds in various bank accounts and $40,000 in cash. None of the property was shown to have been owned, in any sense, by Sharyn Allana Gardiner from whose criminal activities alone Mr Luland suspected they were derived. 3 As I understand it, the reasonable suspicion necessary to the exercise of the Court's discretion under s10 of the Act was engendered by the relationship of Sharyn Allana Gardiner to the applicant, namely, she was his ex-wife, and to James Keith Gardiner in particular, their son, added to her conviction in respect of the possession and cultivation of a large quantity of Cannabis plants. 4 Although this evidence was exiguous it seems to me, with unfeigned respect for his Honour, that it was sufficient to engender the reasonable suspicion to which s10(3)(b) of the Act refers. Indeed Mr Steirn SC for the applicant did not seek to maintain the contrary. 5 This application is brought to permit the applicant to show by other evidence, including his own and that of an accountant, that no reasonable suspicion could presently exist that the property is relevantly derived. 6 Without conceding that the applicant is in a position to call such evidence Mr Temby QC for the Commission submits that even were such evidence available this Court either could not or should not permit the question to be litigated. He submits, and rightly, that even if the order made by Newman J was in error this could be corrected only by appeal. He submits that the power to make ancillary orders or vary a restraining order conferred on the Court by s12 of the Act cannot permit an enquiry of the fundamental kind sought by the applicant directed to undermining the continuance of the restraining order and hence cutting short the appropriate succession of hearings involving an application for a forfeiture order under s10, the making of a forfeiture order under s22 and the consideration of any application under s25 of the Act. 7 The significance of this point is of some real substance. Having regard to the questions posed for consideration by ss22 and 25 of the Act and the differing onus which those provisions place upon the parties, the scheme of the Act appears to be that if there is a reasonable suspicion of criminal derivation of assets, a restraining order may be made ex parte which will subsist for more than 48 hours, providing, amongst other things, an application for a forfeiture order is made. That application is determined by the considerations in s22 of the Act which contains two significant elements. The first is that the onus of proof of the relevant crime-related activity is on the Commission, though the standard of proof is the civil standard, namely, a matter of probability; the second is that this enquiry does not concern itself with any link between the crime-related activity and the property in question but, rather, with the existence of a specified criminal history. 8 A person who wishes to obtain relief from an asset forfeiture order must (for relevant purposes) proceed under s25. That provision enables such a person to establish that the property was not illegally acquired. If the person succeeds in establishing this more probably than not then, in substance, it must be returned to the person. 9 The philosophy underlying the Act appears to be that if it is established, first of all, that there is a reasonable suspicion that property is derived from crime-related activity and that some crime-related activity - not necessarily that to which the suspicion attaches - occurred within six years of the application under s22, it is reasonable and appropriate that the property should be forfeited unless the person with an interest can show more probably than not it was innocently acquired. 10 It will be seen, therefore, that a reasonable suspicion under s10(3) of the Act is not only an essential legal requirement to the continuation of proceedings but also provides a basis in justice for requiring a person to establish innocent acquisition of property which is their own and which the Act seeks to expropriate. I refer to the justice of the scheme, not because the Act requires consideration of any such requirement as such, but because in the exercise of any available judicial discretion the justice of the order sought, or sought to be amended in the light of subsequent circumstances, is in a shorthand way material to a consideration of its due exercise. 11 It is not sought to be controverted and could not be controverted that an order which restrains the property of any person is a most serious interference with their civil rights. To go to the next step of expropriating that property is a fortiori so. Accordingly, one should not approach the exercise of the jurisdiction given to this Court under s10 of the Act on the basis that the order is of trivial significance, to be looked at only as a trigger for setting the procedure of the Act in motion. 12 Section 10(2) of the Act permits the Commission to apply to this Court ex parte for a restraining order in specified circumstances. It is conceded by Mr Temby QC for the Commission, if I might say so properly, that the Commission is not required so to proceed and that in an appropriate case the person affected by any restraining order might well be given notice of the application and be present and participate in the hearing at which the order is sought. Indeed, as is accepted, the Act itself envisages the possibility that a person interested in property sought to be restrained might be notified of the application before the order is made: see s11 (2)(b). 13 It was weakly suggested by Mr Steirn SC for the applicant that the Commission in this case should have given notice of its application to the present applicant but this submission did not long survive examination. In order to protect the assets sought to be restrained it is clear that proceeding ex parte was appropriate. Mr Steirn SC submits that by analogy with similar proceedings arising otherwise in the Court an ex parte order should be interim or temporary only and that a person affected by a restraining order should be able to be heard on its continuation in respect of the issues raised by s10(3) in particular. 14 A difficulty facing this submission is that there appears not to be, in terms, any jurisdiction for that to occur if the Judge when first making the order did not so qualify it. Mr Steirn SC concedes that he cannot argue that the order made by Newman J erred in failing so to do. Rather he says there is a prima facie basis upon which those orders are now seen to be inappropriate in an unqualified form and should be varied, pointing to the provisions of s12(1) of the Act as a source of power to do so. 15 Mr Temby QC, for the Commission, rightly points out that if the restraining order be not continued then the application for a forfeiture order upon which it depends must fall since it is a necessary condition of such an application that a restraining order be in existence. I do not find this argument persuasive since it would only be in the event that there was no relevant reasonable suspicion that the restraining order would not be continued and if there were no reasonable suspicion the basis for the proceedings under s22 of the Act would be rightly removed. 16 The more substantial argument is that the scheme of the Act envisages that once the initial obstacle is past and an order obtained so that the reasonable suspicion as to the derivation of the property is established, though only ex parte the resolution of any outstanding questions must be left, as the Act, it is argued, clearly envisages, to the procedures provided in s22 and (relevantly) s25. 17 Where the relevant criminal activity is that of the person whose interest is sought to be expropriated this argument is fairly strong. However, where the person who is the owner of the property must answer for the actions of another which is the effect in this case of s25 it is, to my mind, somewhat weakened. Of course, the specific provisions of the Act must override any such misgivings which, in the end, are based upon policy considerations, admittedly both longstanding and very important but which the Legislature has undoubted power to qualify, especially so where it is grappling with an extremely dangerous attack upon the integrity of the civil community. 18 The judicial approach to this legislation has been set out both eloquently and accurately, if I may say so with respect, in DPP v Logan Park Investments Pty Limited & Anor (1995) 37 NSWLR 118 by Kirby P (as he then was) at 125, the correctness of which is not in question in this case, and which was heeded by Studdert J in New South Wales Crime Commission v Davies (unreported) [1999] NSWSC 354, a case in which the Act in question before me required consideration. 19 If Mr Steirn's application is to succeed it can only do so if s12(1) of the Act permits it. That subsection relevantly is as follows -