Director of Public Prosecutions (Commonwealth) v Cranney [2019] NSWDC 859

District Court New South Wales

Medium Neutral Citation: Director of Public Prosecutions (Commonwealth) v Cranney [2019] NSWDC 859 Hearing dates: 29 August 2019 Date of orders: 29 August 2019 Decision date: 29 August 2019 Jurisdiction: Civil Before: Neilson DCJ Decision: See [20] Catchwords: SUPERANNUATION – RECOVERY OF EMPLOYER CONTRIBUTIONS.

Commonwealth employee – Corruption offences – Court has no discretion to limit recovery mandated by Act of Parliament – Retrospective legislation. Legislation Cited: Crimes (Superannuation Benefits) Act 1989 (Cth) Crimes Legislation Amendment (Serious Drugs, Identity Crime and Other Measures) Act 2012 Cases Cited: Director of Public Prosecutions (Commonwealth) v Della-Vedova [2010] NSWSC 8; (2010) 75 NSWLR 602 Director of Public Prosecutions (Commonwealth) v Roper [2015] VCC 1969 Category: Principal judgment Parties: Director of Public Prosecutions (Cth) – Plaintiff Christopher Cranney – Defendant Representation: A. Vo (CDPP) – Plaintiff In person – Defendant File Number(s): 2019/00106232 Publication restriction: Nil.

Judgment 1. HIS HONOUR: This is an application under s 19 of the Crimes (Superannuation Benefits) Act 1989 (Cth). The proceedings were commenced by a summons filed by the Director of Public Prosecutions of the Commonwealth on 2 April 2019. Although he has not filed an appearance to the summons, the defendant has appeared before me today via audio-visual link from Wellington Correctional Centre and there have been put before me written submissions which he provided to the Commonwealth Attorney General on 19 December 2018, and written submissions which he forwarded to the Commonwealth on 22 August 2018, which contain essentially what he wants to put before me on this application. I have also heard from the defendant orally. 2. The defendant was an employee of the Australian Customs and Border Protection Service, known in shorthand as a "Customs officer." At all material times he was serving at the Sydney International Airport. According to the material put before me by Ms Vo on Mr Cranney's behalf, he commenced working for the Commonwealth in May 2001 and resigned from that employment in early 2016. 3. The defendant was charged with a number of criminal offences. He was convicted on three counts contained in the relevant indictment. Count 2 alleged that between about 1 January 2012 and about 30 June 2012 the defendant did conspire to import a substance, intending to use or believing that another person intended to use, any of the substance to manufacture a controlled drug, the substance being a border controlled precursor, namely pseudoephedrine, and the quantity imported being a commercial quantity. That is an offence contrary to ss 11.5(1) and s 307.11(1) of the Commonwealth Criminal Code and carried a maximum penalty of 25 years' imprisonment and/or a fine of 5000 penalty units. Count 4 in the indictment was this: "Between about 1 January 2012 and about 30 June 2012, the defendant, being a Commonwealth public official, namely an Australian Customs and Border Protection Officer, dishonestly agreed to receive or obtain a benefit for himself with the intention that the exercise of his duties as a Commonwealth public official would be influenced." That is an offence contrary to s 141.1(3) of the Commonwealth Criminal Code and carried a maximum penalty of 10 years' imprisonment and/or a fine of 10,000 penalty units. Count 5 in the indictment was of another offence contrary to the same section. It alleged that: "Between about 1 April 2012 and about 30 June 2012 the defendant, being a Commonwealth public official, namely, an Australian Customs and Border Protection Officer, dishonestly agreed to receive or obtain a benefit for himself with the intention that the exercise of his duties as a Commonwealth public official would be influenced." 1. The defendant was tried by Judge Whitford and a jury. He was convicted by the jury of the three offences which I have recited. His Honour sentence the defendant on 20 November 2015. In respect of count 2, his Honour sentenced the offender to imprisonment for 14 years, commencing on 12 May 2014. In respect of count 4, his Honour sentenced the defendant to imprisonment for four years and six months, commencing on the same day, and in respect of count 5, he sentenced the defendant to imprisonment for five years commencing on the same day. Therefore, the total sentence was 14 years' imprisonment. His Honour fixed a non-parole period of eight years and nine months commencing on 12 May 2014 and expiring on 11 February 2023. 2. The evidence before me contains his Honour's reasons for judgment and a certificate of conviction issued pursuant to s 178 of the Evidence Act 1995. On 29 September 2017 the Court of Criminal Appeal dismissed the offender's appeal against his conviction. There was no appeal against the sentence imposed by Judge Whitford. On 19 March 2018, Justice Gordon and Justice Edelman sitting in the High Court of Australia refused the defendant's application for special leave to appeal to that Court. 3. Commencing at [100] Judge Whitford said this: "Throughout the period of the conspiracy, Mr Cranney occupied relatively senior, supervisory roles within the Customs service that encompassed the supervision at different times of different areas of the airport, including the ABS [Air Border Security] room, the control room and client services. His position gave him the capacity to monitor what was occurring in other areas of the airport and to allocate staff, in particular, on some of the days of the four importations. The fact that he might be described as being less 'hands on' than other lamella or Valsamakis on the days of the importations does not reduce his criminal probability. He had expressed a calculated intention to remain 'at arm's length.' Rather, the senior positions that he occupied permitted him to misuse his authority to facilitate the objects of the conspiracy. I am satisfied that he was standing by, ready to do anything within the scope of the capacity afforded him by his seniority to assist successful execution of the importations. This misuse of his position, and his seniority, increases his criminal culpability in my assessment. 101. The evidence establishes that over an extended period Mr Cranney, motivated solely by personal gain, used his position as a senior Customs officer of 11 or more years standing to actively corrupt a central and frontline investigative unit at SIA [Sydney International Airport]. He did so in order to minimise the risk of the couriers, and by extension himself and the other conspirators, being detected and apprehended, and to ensure, insofar as he was able to, the successful importation of substantial quantities of pseudoephedrine into Australia. Given that his official duties were primarily concerned with the prevention of such importations, his conduct involved a gross breach of trust. 102. Ultimately, Mr Cranny received about $55,000 for the 9 March 2012 importation and $85,000 for the June 2012 importations - a total of $140,000. 103. Throughout the period of the conspiracy, he blatantly abused his privileged position and access to sensitive information and he ignored his specific responsibilities, which included counteracting 'threats to the border posed by illegal activity involving persons travelling through or employed in the environs of the airport.' This conduct was considered and pre-meditated, and was not committed in a sudden lapse of judgment." 1. I have quoted those remarks because I am required to be satisfied that the offences to which the current application relates were "corruption offences," as that term is defined in the Crimes (Superannuation Benefits) Act 1989 to which I shall hereafter refer to merely as "the Act." In s 2(1) of the Act, the words "corruption offence," are defined thus: "'Corruption offence,' means an offence by a person who was an employee at the time when it was committed being an offence: a) whose commission involved an abuse by the person of his or her office as such an employee; or b) that, having regard to the powers and duties of such an employee, was committed for a purpose that involved corruption; or c) that was committed for the purpose of perverting, or attempting to prefer, the course of justice." The Act also defines the word "offence" to mean an offence either at common law or against the law of the Commonwealth or of a State or a Territory, being an offence punishable by imprisonment for life or for a term longer than 12 months. Each of the three offences, of which the offender has been found guilty, carried a penalty of a term of imprisonment longer than 12 months. The word "employee" is defined as the meaning given to it by s 7 of the Act. It is uncontroversial that the defendant was an employee of the Commonwealth. 1. Section 19 of the Act is in the following terms: (1) Subject to subsection (2), where an application is made for a superannuation order in respect of a person, the court must, if satisfied that the offence to which the application relates is a corruption offence, by order, declare: (a) that the person was convicted of a corruption offence; and (b) that this Part applies in relation to the rights of, and benefits paid or payable to or in respect of, the person under any superannuation scheme. (2) Where a person is, because of paragraph 6(1)(b), to be taken to have been convicted of an offence, a court must not make a superannuation order in relation to the person unless the court is also satisfied, on the balance of probabilities, that the person has absconded and: (a) the person has been committed for trial for the offence; or (b) the court is satisfied, having regard to all the evidence before it, that a reasonable jury, properly instructed, could lawfully find the person guilty of the offence. (3) Where: (a) employer contributions or benefits made or payable by the Commonwealth or a Commonwealth authority in respect of the person under any superannuation scheme for any period of employment (not just a period during which the offence was committed) have been paid into, and are held in, a fund under the scheme; and (b) the person would, but for subsection 21(1), become entitled, subject to and in accordance with the scheme, to the benefit, or to a benefit attributable to the employer contributions, as the case may be; the court must: (c) work out, and specify in the superannuation order, the amount that it thinks reflects the value of the sum of those contributions or benefits as at the day on which the order is made, plus the interest on those contributions or benefits accrued under the scheme before that day; and (d) include in the superannuation order an order that the amount so specified be paid to the Commonwealth or Commonwealth authority, whichever the court considers appropriate. (4) Where any benefits have been paid to the person under any superannuation scheme (whether before, on or after the commencing day), the court must: (a) specify in the superannuation order the amount worked out using the formula: where: AB (amount of benefits) is the amount that the court thinks reflects the value of the sum of the benefits paid by the Commonwealth or Commonwealth authority to the person under the scheme for any period of employment (not just a period during which the offence was committed) as at the day on which the order is made. EC (employee contributions) is the amount that the court thinks is equal to the part of AB that is attributable to the sum of the employee contributions paid under the scheme by the person as at that day plus the interest on those contributions accrued under the scheme before that day; and (b) include in the superannuation order an order that the person pay the amount so specified to the Commonwealth or Commonwealth authority, whichever the court considers appropriate. (5) For the purposes of subsection (4), the value of an amount of employer contributions or benefits, and of accrued interest, is their value worked out having regard to any decline in the purchasing power of money between the day on which the contributions or benefits were made or paid, or the interest accrued, as the case may be, and the day as at which their value must be worked out. (6) The DPP must give written notice of a superannuation order to the person's superannuation authority. 1. I am particularly concerned with subs (1) and (3). The proviso at the commencement of subs (1) is inapplicable as the defendant has been convicted of the three offences which I have recited and there is no need to apply the deeming provision referred to in section 6(1)(b) of the Act. Accordingly, for current purposes, I can look at subs (1) in these terms: "Where an application is made for a superannuation order in respect of a person, the court must, if satisfied that the offence to which the application relates is a corruption offence, by order, declare: a) that the person was convicted of a corruption offence and b) that this Part applies in relation to the rights of, and benefits paid or payable to or in respect of, the person under any superannuation scheme." 1. There is no dispute that the defendant was a member of the Public Sector Superannuation Scheme (PSS) of the Commonwealth, and that Scheme was administered by the Commonwealth Superannuation Corporation, Trustee of the Public Sector Superannuation Scheme (PSS). The name of the fund was the same as the name of the superannuation scheme. 2. The operative verb in subs (1) is the word "must." Once upon a time statutes would have used the word "shall" instead of "must." However, as has been pointed out in the House of Lords, the courts over many years decided that "shall" might mean "may" and "may" might mean "shall." Therefore, Parliament adopted the course of using the word "must" instead of the word "shall." It is important to note that the use of the word "must" denies the Court any discretion. For a discretion to be imported, the operative verb must be the word "may," the grounds have accordingly been made out for the operation of subs (1). 3. There has been an amendment to subs (3). As initially enacted, the subs (3)(a) provided this: "a) employer contributions or benefits made or payable by the Commonwealth or a Commonwealth authority in respect of the person under any superannuation scheme have been paid into, and are held in, a fund under the scheme; and" In other words, the words "for any period of employment (not just a period during which the offence was committed)", were inserted after the Act was enacted. They were in fact inserted into the Act by the Crimes Legislation Amendment (Serious Drugs, Identity Crime and Other Measures) Act 2012, being Act number 167 of 2012 of the Commonwealth. Schedule 3, Pt 3, cl 12 of that Act inserted those words. Clause 15 of the same Schedule and Part provides this: "Section 19 of the Crimes (Superannuation Benefits) Act 1989, as amended by this Schedule, applies in relation to a Superannuation Order applied for on or after the commencement of this item, whether an offence to which the order relates was committed before, on or after that commencement." That Act came into force on 29 November 2012. The defendant pointed out that his crimes were committed between 1 January 2012 and 30 June 2012, that is, before the commencement of the Amending Act. However, this application was commenced by the summons filed on 2 April 2019. Therefore, the relief sought was applied for after the commencement of Act number 167 of 2012 and the amendment made to s 19 is applicable to the current defendant despite the fact that his offending conduct preceded the enactment of the amendment. 1. Despite the terms of subs (3), in particular the use of the word "must," after par (b), the defendant submits that the Court has a discretion to limit the recovery of the employer's contribution to his superannuation fund to the period of his offending conduct, that is, to the six months between 1 January 2012 and 30 June 2012, rather than the whole period of his employment. 2. There is strong evidence that the amendment was made to overcome the decision of Harrison J in Director of Public Prosecutions (Commonwealth) v Della-Vedova [2010] NSWSC 8; (2010) 75 NSWLR 602. At [3] Harrison J recited these facts: "The defendant joined the Australian Defence Force ('ADF') on 6 June 1978 and resigned on 5 June 1984. He rejoined the ADF on 18 February 1985 and resigned on 20 February 1999. He rejoined the ADF on 21 June 1999 and resigned on 10 August 2008. The offences were committed during his third period of service with the ADF." At [11] his Honour recited the submission on behalf of the plaintiff in that case that all three periods of employment were to be considered in ascertaining the superannuation contributions that were to be recovered. His Honour then at [12] set out the second reading speech in the Senate and ultimately determined as a matter of statutory construction that only the period of employment in which the offending conduct occurred should be taken into account. It appears that the amendment was made to overcome the decision in Della-Vedova. 1. Indeed, Ms Vo for the plaintiff has put before me a number of extrinsic aids to statutory interpretation. The first was the explanatory memorandum for the bill which became Act number 167 of 2012. That explanatory memorandum was circulated by the then Attorney General, the Honourable Nicola Roxon MHR. On p 13 of the explanatory memorandum the following is recorded: "Part 3 of Schedule 3 to the Bill amends both Acts to clarify that a Superannuation Order can be made in relation to employer funded contributions and benefits accrued during all periods of Commonwealth employment, regardless of whether an employee had a continuous period of employment or several separate periods of employment. The scheme was not intended to operate so that a forfeiture and recovery of employer funded contributions and benefits is restricted to the particular period of employment in which an employee committed a corruption offence." Ms Vo also placed before me the Second Reading Speech of the then Attorney General given in the House of Representatives on 10 October 2012. That speech contains this matter: "The bill will clarify that a superannuation order made under this Act relates to employer funded contributions made or payable in relation to the person's total period or periods of Commonwealth employment, not just the particular period of employment in which the corruption offence was committed. Although these orders had always been intended to operate in this way, it is desirable to more clearly express this intention in response to a judicial decision in the New South Wales Supreme Court." 1. The matter with which I have just been dealing was considered by Judge Smith sitting in the County Court of Victoria in Director of Public Prosecutions (Commonwealth) v Roper [2015] VCC 1969. Commencing at [9] his Honour said this: "9. Mr Roper presented both written and oral submissions. 10. He submitted that such an Order would only apply in respect of superannuation contributions or entitlements relating to the period of employment during which the offences were committed. He relied on the judgment of the New South Wales Supreme Court in DPP (Commonwealth) v Della-Vedova. There, Harrison J held that recovery was limited to benefits paid or contributions made by the Commonwealth to a specific superannuation scheme during the period of employment when the corruption offences were committed. 11. However, I accept that amendments made by the Crimes Legislation Amendment (Serious Drugs, Identify Crime and Other Measures) Act 2012 ('the amending Act') legislatively overturned the effect of that decision. 12. The amending Act amended s 19(3)(a) and (4)(a) of the CSB Act so as to make it clear that a Superannuation Order will apply in respect of a person under any superannuation scheme for any period of employment, 'not just the period during which the offence was committed.' 13. The amending Act applies in relation to a Superannuation Order applied for on or after the commencement of the amendment Act, whether an offence to which the order relates was committed before, on or after that amendment. 14. The relevant parts of the amending Act commenced operation on 29 November 2012. 15. I accept that s 19 of the CSB Act, as amended, applies in relation to a Superannuation Order applied for on or after 29 November 2012, regardless of when the relevant corruption offences occurred. Here, the application was made on 31 October 2014, well after the commencement of the amending legislation." Later in his reasons his Honour rejected a contention that his Honour should apply the principles enunciated in Della-Vedova because the Commonwealth could have but did not make the application for the Superannuation Order before the commencement of the amending Act. 1. The defendant, however, submits that the Court does have a discretion and would apply the Della-Vedova principle relying upon the defendant's submissions as to the meanings of the words "for any period" in subs (3)(a), and the use of the word "thinks" in subs (3)(c). I am unable to accede to either submission. The words "for any period of employment" cannot be construed as meaning, "for any part of any period of employment." That is, in effect, the submission that has been made to me by the defendant, albeit that he did not express it in those terms. A period of employment is just that, a period in which a person is employed. It does not mean part of a period of employment. The use of the verb, "thinks" in par (c) of subs (3), again, in my view does not import the discretion. Use of the verb "thinks" is unusual in my experience in legislation. Generally, words such as "finds" or "determines" or "forms an opinion that" are used, but the Court is required to consider the value of the sum of the contributions, not the periods in which the contributions were made by the Commonwealth. I am afraid that I cannot find in subs (3) of s 19 any discretion to reject the submissions made to me by the plaintiff. 2. The defendant submitted that I would take into account the matters referred to in his submission to the Attorney General's Department in his letter 19 December 2018, matters which he said he was asked to comment upon by the Attorney General himself. However, what the Commonwealth does administratively does not necessarily reflect what must happen legally. In his submissions, the defendant pointed out that he had two dependent children, then aged 16 and 13, who might now be 17 and 14. He described his future employment as "limited" and, certainly, he would not obtain any position of employment where trust was required. However, I note that from later in his letter he refers to gaining qualifications in the building and construction industry, and employment in that field would not be denied to him because of the current convictions. The defendant also pointed out that he has no other superannuation or pension entitlement, and I accept that, but the policy of the Act is clear. The defendant also stated his financial position, which could properly be described as "poor." He has had to repay $140,000 to the Commonwealth, being the proceeds of the crimes which he committed, and he still has a mortgage of over $300,000. There is clearly a large financial burden affecting him, but he could not use his superannuation benefits at his age in any event to overcome his current financial problems. The defendant also refer to his cooperation with the authorities and, in particular, referred to his making an agreement with the Commonwealth to pay to it $140,000 for the proceeds of his crime. 3. Those are all valid considerations which I would have to take into account had I a discretion, but I have not. The only thing that I should point out is this. Under subs (3)(c) of s 19, I am required to work out an amount which reflects the value of the sum of the contributions made by the Commonwealth as at the day that the order is made, plus the interest on those contributions accrued under the Scheme before that day. However, there is in evidence a certificate from the Commonwealth Superannuation Corporation stating that the sum of the employer contributions as at the date of the certificate, plus the amount of interest on these contributions, is the sum of $49,494.43. There has been no submission made that the amount ought be anything other than that certified on the certificate which is exhibit B2. 4. For these reasons, I make the following declarations and orders: 1. I declare pursuant to s 19(1)(a) of the Crimes (Superannuation Benefits) Act 1989 that the defendant Christopher Phillip Cranney was convicted in the District Court of New South Wales of one offence contrary to ss 11.5(1) and 307.11(1) of the Criminal Code (Commonwealth) and two offences contrary to s 141.1(3) of the same Code, each being a "corruption offence" within the meaning of the Crimes (Superannuation Benefits) Act 1989; 2. I declare pursuant to s 19(1)(b) of the said Act that Part 2 of that Act applies in relation to the rights of and benefits paid or payable to or in respect of the defendant under the Superannuation Scheme established by the Commonwealth of Australia pursuant to the Superannuation Act 1990 (Commonwealth) and known as the "Public Sector Superannuation Scheme"; 3. I specify that the amount determined pursuant to s 19(3)(c) is $49,494.43. 4. I order pursuant to s 19(3)(d) of the Act that the Scheme pay $49,494.43 to the Commonwealth of Australia. HIS HONOUR: Do you seek costs? VO: No, your Honour. HIS HONOUR: There will be no order as to costs.