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  • Unreported Judgment

Kanters v State of Queensland

 

[2010] QSC 107

Reported at [2011] 2 Qd R 79

 

SUPREME COURT OF QUEENSLAND

  

CITATION:

Kanters v State of Queensland [2010] QSC 107

PARTIES:

TROY GARY KANTERS (BY HIS LITIGATION GUARDIAN HELEN MINTON)
(plaintiff)
v
STATE OF QUEENSLAND
(defendant)
ATTORNEY-GENERAL OF QUEENSLAND
(intervenor)

FILE NO:

BS9718 of 2006

DIVISION:

Trial Division

PROCEEDING:

Application

DELIVERED ON:

12 April 2010

DELIVERED AT:

Brisbane 

HEARING DATE:

7 December 2009

JUDGE:

Mullins J

ORDER:

The plaintiff’s application for declaratory relief in respect of part 12B of chapter 6 of the Corrective Services Act 2006 is dismissed.

CATCHWORDS:

HIGH COURT AND FEDERAL COURT – THE FEDERAL JUDICATURE – EXCLUSIVE AND INVESTED JURISDICTION – FEDERAL JURISDICTION OF STATE COURTS – LOCAL LIMITATIONS OF STATE COURT – Queensland – where the plaintiff’s personal injuries claim against the defendant for injuries suffered whilst the plaintiff was a prisoner was settled subject to the sanction of the court – where prior to the settlement agreement the Corrective Services Act 2006 (Qld) was amended to include part 12B of chapter 6 – where any damages awarded under part 12B are to be frozen in a victim trust fund to allow certain civil claims to be made against the frozen funds –whether part 12B is inconsistent with the court’s status as a court exercising federal jurisdiction

STATUTE – ACTS OF PARLIAMENT – INTERPRETATION – CONSIDERATION OF EXTRINSIC MATTERS – previous state of law and mischief to be remedied – s 14A Acts Interpretation Act 1954 (Qld) – interpretation of part 12B of chapter 6 of the Corrective Services Act 2006 (Qld) that best achieves the purpose of the Act – where interpretation given that conforms with the clear terms and the purpose of part 12B

Acts Interpretation Act 1954, s 14A, s 14B

Corrective Services Act 2006, s 319J, s 319L, s 319M, s 319N, s 319P, s 319S, s 319T, s 319U, s 319V, s 319W, s 319X, s 319Y, s 319Z, s 319ZD, s 319ZE, s 319ZF, s 478E

Public Trustee Act 1978, s 59

Fowler v Gray [1982] Qd R 334, considered

International Finance Trust Co Ltd v New South Wales Crime Commission (2009) 84 ALJR 31, considered

Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51, considered

COUNSEL:

M Grant-Taylor SC and C Heyworth-Smith for the plaintiff

A Bailey (Sol) for the defendant

W Sofronoff QC S-G and A McLean Williams for the intervenor 

SOLICITORS:

MurphySchmidt for the plaintiff

Carter Newell for the defendant

Crown Solicitor for the intervenor

  1. Whilst a prisoner at Woodford Correctional Centre, the plaintiff was assaulted by unidentified persons on 31 October 2000 and suffered a severe closed head injury. He commenced this proceeding against the defendant for damages for personal injuries on 13 November 2006. As a result of the impairments caused by the injury, the plaintiff is a person under a legal disability, as defined in s 59 of the Public Trustee Act 1978 (PTA).  On 16 December 2008 the plaintiff’s claim against the defendant was settled, subject to the sanction of the court, for the sum of $1.4m plus $100,000 for costs.
  1. After this proceeding had commenced, but before the parties agreed to settle the claim, the Corrective Services Act 2006 (the Act) was amended by the insertion of part 12B (part 12B) in chapter 6 of the Act which, according to the Explanatory Notes for the Corrective Services and Other Legislation Amendment Act 2008 (the Amendment Act), implemented a scheme to freeze compensation and damages awards made in favour of prisoners and to give victims of crime committed by those prisoners the opportunity to make a civil claim against the frozen funds before they are released to the prisoners.  Part 12B commenced on 7 November 2008. 
  1. In connection with the plaintiff’s application for the sanction of the settlement of his claim against the defendant, the plaintiff applies for a declaration that part 12B is invalid or, alternatively, that it does not apply to any sum payable to or on behalf of the plaintiff pursuant to the terms of settlement.

Relevant legislation

  1. Consistent with s 14B of the Acts Interpretation Act 1954, reference was made during the submissions to extrinsic material, including the Explanatory Notes and the second reading speech for the Amendment Act, to confirm the interpretation conveyed by the ordinary meaning of the provisions in part 12B.  In interpreting these provisions, it is also necessary to comply with s 14A of the Acts Interpretation Act 1954 and give the interpretation that will best achieve the purpose of part 12B. 
  1. It was noted in the Explanatory Notes for the Amendment Act that a victim who was injured as a result of criminal conduct may wish to make a civil claim against the offender, if the offender were in a position to pay damages. One of the policy reasons for part 12B was explained as follows:

“In many cases offenders are unable to pay any damages resulting from a civil claim at the time of conviction.  If, however an offender receives compensation as a result of an incident that occurs in prison, a civil claim may then be viable.  It is important that the victim is made aware of the offender's new circumstances.”

  1. Another expressed policy objective in the Minister’s second reading speech for the Bill that became the Amendment Act was to prioritise the claims that could be met from the damages due to an offender for a civil wrong committed against the offender in prison:

“Part 12B of the Bill creates ‘Victim trust funds’ which consists of money awarded to offenders for complaints of discrimination and personal injuries.  This fund which is held by the Public Trustee effectively quarantines this money from the offender and any creditors of the offender so that victims can be given the opportunity to make a claim against the money held in the trust fund.”

  1. Part 12B applies to an “offender”. That term is defined in schedule 4 of the Act and includes a prisoner which covers a person who is in custody, whether on remand or as a sentenced prisoner.
  1. The restrictions on the receipt by a prisoner of damages or compensation from a protected defendant (which is defined in s 319A of the Act, but relevantly means the State in relation to a matter arising out of the administration of the Act) are set out in s 319L and s 319M of the Act:

319LNo property or interest in causes of action

(1)This section applies if a protected defendant commits a civil wrong against a person while the person is an offender.

(2)The person may bring a proceeding in a court in relation to the civil wrong.

(3)However, the person has no property or interest in-

(a)a cause of action for the civil wrong; or

(b)any relevant money awarded in a proceeding                   mentioned in subsection (2).

(4)If, in the proceeding, the person establishes the liability of the protected defendant for the civil wrong, the court-

(a)may order the protected defendant to pay damages               for harm or injury suffered by the person because of                             the civil wrong; and

(b)must order that the damages be dealt with under this               part.

(5)The Civil Liability Act 2003 and the Personal Injuries Proceedings Act 2002 apply to the proceedings.

 

319MNo property or interest under agreements

(1)This section applies if a protected defendant enters into an agreement with a person about the liability of the protected defendant to pay an amount of damages or compensation, however described, in relation to a civil wrong committed by the protected defendant against the person while the person was an offender.

(2)The agreement contains the following implied terms-

(a)the damages or compensation that must be paid by the protected defendant must be dealt with under this               part;

(b)the person has no property or interest in the damages or compensation.

(3)An agreement between the protected defendant and the person to deal with the amount of damages or compensation other than as provided by this part is void.

(4)In this section-

damages or compensation includes any interest payable on the damages or compensation.”

  1. The definitions for the purpose of part 12B are found in s 319J of the Act. The term “relevant money” when awarded in relation to a person is relevantly defined to mean “an award of damages in relation to the person against a protected defendant.” An “award of damages” in relation to a person is also defined in s 319J to mean:

“(a)an award of damages (including any interest), that has been finally decided, in relation to the person by a court for a civil wrong committed by a protected defendant against the person while the person was an offender; or

  1. an obligation to pay damages in relation to the person under an agreement between the person and a protected defendant relating to a cause of action by the person against the protected defendant for a civil wrong committed by the protected defendant against the person while the person was an offender.”
  1. Section 319N creates a victim trust fund (which is defined in s 319N(2)) in relation to an award of relevant money. Section 319N(1) provides:

(1)Relevant money awarded in relation to a person—

(a)is held in trust by the protected defendant liable to pay the relevant money for the payment of the following—

(i)any awards on eligible victim claims against the person;

(ii)any amounts of eligible entity claims against the person; and

(b) may be paid out only as allowed under this part.”

  1. The protected defendant is required by s 319P(1) to transfer the victim trust fund to the Public Trustee:

(1)A protected defendant liable to pay an award of relevant money must transfer the victim trust fund to the public trustee within 1 month after the protected defendant—

(a)knows the amount of the relevant money that is required by an Act of the State or the Commonwealth to be paid to someone else; or

(b)is satisfied that none of the relevant money is required by an Act of the State or the Commonwealth to be paid to someone else.”

  1. The Public Trustee is required by s 319P(2) to hold the victim trust fund under part 12B and pay an amount out of the victim trust fund only as allowed under that part. Section 319P(3) provides that interest or other money received or realised on the investment on the victim trust fund is payable to and forms part of the victim trust fund.
  1. Division 4 of part 12B regulates the distribution of the victim trust fund. There are two types of claims: a victim claim which is defined in s 319S and an entity claim which is defined in s 319Z.
  1. Under s 319S(1), a person has a victim claim against the offender, if the victim has a cause of action against the offender for an injury to the victim caused by the conduct of the offender that, on the balance of probabilities, constitutes an offence. This provision is specified by s 319S(2) to apply whether or not the offender is prosecuted for, or convicted of, an offence in relation to the conduct or even if the offender is found to have been suffering from unsoundness of mind in relation to the conduct or was unfit for trial.
  1. The chief executive must, within one month after being notified by the Public Trustee of the receipt of the victim trust fund give notice to each potential claimant of the existence of the victim trust fund in relation to that offender and that the potential claimant may have a victim claim against the offender which may be payable from the victim trust fund: s 319T. The definition of “potential claimant” is set out in s 319J:

potential claimant, for the chief executive, means a person who, from documents held by the chief executive or made available to the chief executive under section 319U in relation to offences committed or allegedly committed by the person in relation to whom the relevant award was made, appears to have a victim claim against the person in relation to whom the relevant award was made.”

  1. Section 319U deals with consultation by the chief executive with the Commissioner of Police, the Director of Public Prosecutions and the chief executive of the department in which the Criminal Offence Victims Act 1995 is administered.  If the chief executive is satisfied there are no potential claimants for a victim trust fund, the chief executive is required by s 319U(5) to give written notice of that fact to the Public Trustee, as soon as reasonably practicable after being so satisfied.  Section 319V provides for the chief executive to give information to a potential claimant, when a request is received from a potential claimant.  The limitation period for a potential claimant’s action against the prisoner is extended until six months after the chief executive has given the potential claimant the written notice under s 319T(1).
  1. If the potential claimant wishes to pursue the victim claim against the victim trust fund, s 319X requires that the claimant must prosecute any proceeding that was commenced against the prisoner before the award was made that constituted the victim trust fund or start a proceeding within six months after the chief executive gave the notice under s 319T(1). Section 319X also requires that the potential claimant give written notice of such proceeding to the Public Trustee and the victim claim that is the subject of such proceeding is then described as an eligible victim claim. Section 319Y regulates the payment by the Public Trustee of eligible victim claims from the victim trust fund for the particular prisoner after the proceedings on eligible victim claims have been finally decided.
  1. Subdivision 2 of division 4 deals with entity claims which can be made by the collection entities that are defined in s 319J. The entity claims extend to criminal injuries compensation paid by the State in respect of an act committed by the prisoner, and amounts owed by the prisoner to SPER or to the child support registrar under the Child Support (Registration and Collection) Act 1988 (Cth).  Under s 319ZD the Public Trustee must pay any eligible entity claim against the prisoner from the victim trust fund, after paying all awards made on eligible victim claims in relation to the victim trust fund. 
  1. Under s 319ZE, the Public Trustee must work out the amount left in the victim trust fund and within one month after working out that amount pay the amount to the offender, either personally if the person is no longer a prisoner or to the chief executive for the payment into the relevant person’s account in the prisoners trust fund administered under the Act, if the person continues to be a prisoner. Section 319ZF expressly provides that the Public Trustee must pay the amount of the victim trust fund to the offender within two months after giving notice to the collection entities, if the Public Trustee is not notified of the amount of any entity claim in relation to the victim trust fund.
  1. Division 5 deals with certain items included in the calculation of damages payable by a protected defendant to an offender which are excluded from the victim trust fund that is otherwise created in respect of the damages award.

The plaintiff’s submissions

  1. The plaintiff’s argument that the wording of s 319M did not make it clear that it was intended to operate retrospectively to a civil wrong committed prior to the commencement of part 12B (including reliance on the present tense of the verb “commits” in s 319L(1)) is disposed of by the application of the express terms of s 478E of the Act.
  1. The plaintiff challenges the validity of part 12B on a number of constitutional grounds, some of which overlapped. The main grounds can be summarised as:

(a)part 12B creates ownerless property and requires the courts to adjudicate relevant proceedings in accordance with part 12B which is inconsistent with the requirements of Ch III of the Commonwealth Constitution;

(b)part 12B results in the deprivation of property and imposes a penalty which is not judicially determined and is contrary to the implied rights in the Commonwealth Constitution;

(c)Section 319L(4) of the Act requires the court to exercise its jurisdiction under s 59 of the PTA or its parens patriae jurisdiction in a particular manner which is beyond the power of the Parliament.

  1. To support the submission that part 12B was draconian in its application, Mr Grant-Taylor SC who appeared with Ms Heyworth-Smith of counsel prepared a timeline that applied where potential victim claimants did not exist and a timeline where potential victim claimants did exist to illustrate the length of time which could pass before a person, such as the plaintiff, could expect to receive the damages that are caught by part 12B. The prosecution by a claimant of proceedings in respect of an eligible victim claim against the prisoner could result in a delay of years in finalising the application of part 12B to the award of damages in favour of the offender, if the victim claim were defended and involved an appeal.

The Attorney-General’s submissions

  1. The Attorney-General submits that the relevant event for determining the application of part 12B is the liability of the State to pay the damages to the plaintiff and that liability did not crystallise, at the earliest, until the compromise agreement had been reached between the State and the plaintiff in respect of his claim for damages for personal injuries, and that event occurred before the commencement of part 12B.
  1. The Attorney-General takes issue with the plaintiff’s submission that “ownerless property” has been created and relies on the details of the regime that is created by part 12B for the treatment of relevant money, as defined in s 319J.
  1. With respect to the plaintiff’s argument based on part 12B having the effect of imposing a penalty, the Attorney-General submits that it is within the power of a State Parliament to legislate to impose a penalty, but that part 12B does not, in fact, impose a penalty.
  1. The Attorney-General disputes that part 12B has interfered in any way with the power of the court to sanction a settlement of a claim made on behalf of a person under a legal disability.

Is “ownerless property” created by part 12B?

  1. Although s 319L(2) acknowledges that an offender may bring a proceeding in a court in relation to the civil wrong committed by a protected defendant against a person while the person is an offender, s 319L(3) expressly states that the person has no property or interest in a cause of action for the civil wrong or any relevant money awarded in a proceeding in favour of the person. The counterpart provision where the offender has settled the claim for damages in relation to a civil wrong committed by a protected defendant is found in s 319M(2). The compromise agreement is subject to a statutorily implied term that the offender has no property or interest in the damages. The court is bound under s 319L(4) to order that the damages that the protected defendant is ordered to pay in respect of the offender’s claim for damages for a civil wrong are dealt with under part 12B. Under s 319M(2), there is a statutorily implied term that any compromise agreement in relation to the damages that must be paid by the protected defendant must be dealt with under part 12B.
  1. The offender’s immediate right to claim the fruits of the proceeding against a protected defendant are displaced by part 12B, but there is no windfall to the protected defendant, as such, as the damages must still be paid to the Public Trustee and set aside in a victim trust fund under s 319N from which moneys may be paid out only in accordance with part 12B and in respect of which the offender may be the contingent beneficiary under s 319ZE or s 319ZF. Even if the victim trust fund is exhausted in meeting the offender’s obligations in respect of eligible victim claims and eligible entity claims, the victim trust fund has been spent on account of the offender in the manner that is statutorily mandated.
  1. Although part 12B imposes a statutory regime for the disposal of the damages that are ordered to be paid by the court or are the subject of a compromise agreement, it is not accurate to describe the chose in action that the offender pursues against the protected defendant in order to obtain those damages as ownerless property. The regime preserves the right of the offender to pursue a court proceeding in relation to the civil wrong alleged to have been committed by a protected defendant, but the creation of the victim trust fund in respect of those damages also facilitates the payment from those damages of the offender’s debts which the Parliament has decided should have priority and quarantines those damages from the offender and other creditors of the offender, until those priorities for payment under part 12B are satisfied. The plaintiff’s suggestion that the damages should be classed as bona vacantia is based on the deeming provisions in s 319L and s 319M, without allowing for the operation of the balance of part 12B.
  1. The vice which the plaintiff identified in respect of the exercise of judicial power in relation to adjudicating on the offender’s proceeding for a civil wrong against the protected defendant was that the court was required to determine whether judgment should be given for the offender or the protected defendant in respect of a cause of action that was ownerless property. That argument does not give effect to the detailed provisions within part 12B that apply to the treatment of any damages to which the offender has shown that he or she is entitled to receive from the protected defendant for the civil wrong.
  1. The plaintiff’s argument that part 12B infringes Ch III of the Commonwealth Constitution depends on a finding that part 12B renders the chose in action that represents the offender’s claim against a protected defendant for a civil wrong committed against the offender whilst in prison as ownerless property.  The plaintiff argues that to compel the court to adjudicate a case where there are no property rights in question is to compel the exercise of judicial power in a way that is not contemplated by Ch III of the Commonwealth Constitution.  In view of my conclusion that the chose in action is not accurately described as ownerless property, it is not necessary to deal with this aspect of the plaintiff’s argument based on Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 (Kable).  In any case, part 12B does not affect in any way the judicial processes that apply to the determination of the offender’s civil action against a protected defendant.  
  1. If the plaintiff were correct in characterising the substantive effect of part 12B as creating what the plaintiff describes as ownerless property, the plaintiff says that is inconsistent with the proper exercise by the State Parliament of its power to legislate. That argument ignores the plenary power of the State Parliament: Union Steamship Co of Australia Pty Ltd v King (1988) 166 CLR 1, 10.

Does part 12B deprive the offender of property and impose a penalty?

  1. Because part 12B applies to an offender, the plaintiff seeks to characterise that regulation of the offender’s right to benefit from an award of damages as amounting to a deprivation of the offender’s interest in the chose of action that results in that award of damages and the damages itself, so as to amount to a penalty. The problem with this argument is that it overlooks the detail of the provisions in part 12B. The regulation imposed by part 12B may be characterised as a deferral of the receipt of the damages by the offender, until after statutorily authorised payments are made from those damages on account of awards on eligible victim claims or amounts of eligible entity claims. The removal by s 319L(3) or s 319M(2) of the offender’s right to claim the immediate payment of the damages is not arbitrary, but for the purpose of giving effect to the policy objectives that underpin part 12B and may not be permanent in relation to the entire amount of the damages, if the amount of any awards on eligible victim claims or any amounts of eligible entity claims do not exhaust the victim trust fund that is constituted by those damages. In addition, any award on an eligible victim claim must be established in the usual manner of a court proceeding for a civil wrong and any amount of an eligible entity claim must accord with the amount of the relevant statutory debt that can constitute such an eligible entity claim.
  1. It is not a proper characterisation to describe the effect of part 12B as depriving the offender absolutely of the offender’s right to receive damages for the action against the protected defendant for the civil wrong.
  1. The fact that the offender is in prison when the cause of action for the civil wrong against the protected defendant arose is a necessary pre-condition for the application of part 12B, but it does not follow that the application of 12B imposes a punishment or a penalty on the offender. Comparison can be made with other statutory provisions that regulate the rights or property of prisoners, such as those in Part 7 of the PTA
  1. Even if part 12B were characterised as a penalty (which I reject), it is within the legislative competence of the State Parliament to enact a penalty. The plaintiff relies on numerous authorities about the restriction on the powers of the Commonwealth Parliament to impose a legislative penalty on a citizen, but those authorities have no application to the Queensland State Parliament.

Does part 12B intrude upon the exercise of judicial power?

  1. Because the plaintiff is under a legal disability, as a result of the civil wrong committed against him by the State, the relationship between the court’s role in sanctioning the settlement of a personal injuries claim by a person under a legal disability and part 12B must be considered.
  1. The nature of the role of the court in sanctioning the settlement of an action for damages for personal injuries suffered by a person who was under a legal disability was described in Fowler v Gray [1982] Qd R 334, 349.  There is nothing whatsoever in part 12B that affects the usual role undertaken by the court in considering the appropriateness of the amount for which the parties have agreed to settle the claim of a person under a legal disability. 
  1. There is an express restriction in s 59(1) of the PTA that no damages recovered by a plaintiff under a legal disability, as a result of the settlement of the claim, shall be paid to the next friend of the plaintiff or the plaintiff’s solicitor or to any person, other than the Public Trustee, unless the court otherwise directs.  The subsequent enactment of s 319M(2) modifies the operation of that restriction in s 59(1) of the PTA.  That is within the legislative competence of a State Parliament.  It has nothing to do with a restriction on judicial power or processes that would affect the integrity of the Queensland court in exercising its judicial power:  compare Kable at 103, 114-118 and 132 and International Finance Trust Co Ltd v New South Wales Crime Commission (2009) 84 ALJR 31 at [49], [55], [98], [140] and [155].

Orders

  1. The plaintiff’s submissions emphasise the unfair operation of part 12B in the light of the personal circumstances of the plaintiff where his entitlement to receive the damages (which the defendant has agreed to pay because of the significant injury suffered by the plaintiff whilst in custody) will be effectively deferred whilst the steps to ascertain any victim and entity claims are undertaken. The terms of part 12B are clear and the interpretation must be given to them which gives effect to those terms which is consistent with the expressed intention of the Parliament, despite the consequences for the plaintiff.
  1. Because the plaintiff has been unsuccessful in establishing the invalidity of part 12B or its lack of application to the plaintiff’s agreement to settle his personal injuries claim against the defendant, it follows that the application made by the plaintiff for declaratory relief in respect of part 12B must be dismissed. I will give the parties an opportunity to make submissions on the appropriate order as to costs.
Close

Editorial Notes

  • Published Case Name:

    Kanters v State of Queensland

  • Shortened Case Name:

    Kanters v State of Queensland

  • Reported Citation:

    [2011] 2 Qd R 79

  • MNC:

    [2010] QSC 107

  • Court:

    QSC

  • Judge(s):

    Mullins J

  • Date:

    12 Apr 2010

Litigation History

Event Citation or File Date Notes
Primary Judgment [2011] 2 Qd R 79 12 Apr 2010 -

Appeal Status

No Status