Director of Public Prosecutions (Cth) v Hart
[2007] QDC 26
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- Unreported Judgment
- Appeal Determined - Special Leave Refused (HCA)
- Director of Public Prosecutions (Cth) v Hart[2007] QDC 26
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Director of Public Prosecutions (Cth) v Hart[2007] QDC 26
Director of Public Prosecutions (Cth) v Hart[2007] QDC 26
![Director of Public Prosecutions (Cth) v Hart [2007] QDC 26](/judgmentview/image?name=316652.001.png&id=316652)
DISTRICT COURT OF QUEENSLAND
CITATION: | Cth DPP v Hart & Ors [2007] QDC 026 |
PARTIES: | COMMONWEALTH DIRECTOR OF PUBLIC PROSECUTIONS Applicant v STEVEN IRVINE HART First Respondent FLYING FIGHTERS PTY LTD ACN 067 895 005 as trustee for FLYING FIGHTERS DISCRETIONARY TRUST Second Respondent MERRELL ASSOCIATES LIMITED Third Respondent NEMESIS AUSTRALIA PTY LTD ACN 010 225 537 as trustee for NEMESIS DISCRETIONARY TRUST Fourth Respondent MERRELL ASSOCIATES (AUSTRALIA) PTY LTD ACN 084 706 329 Fifth Respondent YAK 3 INVESTMENTS PTY LTD ACN 010 623 560 as trustee for YAK 3 DISCRETIONARY TRUST Sixth Respondent BUBBLING SPRINGS OLIVE GROVE PTY LTD ACN 010 281 866 as trustee for BUBBLING SPRINGS DISCRETIONARY TRUST Seventh Respondent LAURA ELIZABETH HART Eighth Respondent |
FILE NO/S: | BD1416 of 2003 |
PROCEEDING: | Application to strike out part of claim |
DELIVERED ON: | 5 March 2007 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 23 February 2007 |
JUDGE: | Judge Brabazon QC |
ORDER: | Application allowed |
CATCHWORDS: | PROCEEDS OF CRIME – TIME LIMITATIONS – PROPERTY COVERED BY RESTRAINING ORDER. Proceeds of Crime Act 2002 (Cth), ss 17, 116, 338, 43, 55, 61. Cth DPP v Hart & Ors (2004) QDC 121 DPP (Cth) v Hart (No 2) [2005] QCA 51 Hart v The Queen (2006) 8 HCA |
COUNSEL: | Mr P Davis SC and Mr M Dight for first respondent Mr P Flanagan SC and Ms J Brien for the applicant |
SOLICITORS: | Ryan & Bosscher Lawyers for the first respondent Commonwealth Director of Public Prosecutions for the applicant |
- [1]By early 2003 the Commonwealth Director of Public Prosecutions had charged Mr Steven Hart with several counts of income tax fraud. On 8 May 2003 the DPP applied for a restraining order, according to s 17 of the Proceeds of Crime Act 2002 (Cth) (“the Act”). The application was based on the assertion that Mr Hart had effective control over property owned by the other respondents. An ex parte restraining order was made.
- [2]Mr Hart challenged the assertion about his effective control of that property. This court found that he was in effective control - see Cth DPP v Hart & Ors (2004) QDC 121, 14 May 2004. An appeal against that finding was dismissed by the Court of Appeal - see Cth DPP v Hart & Ors (2005) QCA 51, (4 March 2005).
- [3]On 5 May 2004 Mr Hart was convicted of several counts of income tax fraud. An appeal against his conviction and sentence was dismissed by the Court of Appeal - see R v Hart CA 166 of 2005 and 167 of 2005, (24 February 2006). On 21 June 2006 the High Court of Australia refused special leave to appeal - see Steven Irvine Hart v The Queen (2006) 8 HCA Trans 345.
- [4]On 17 July 2006 the DPP filed an application in this court, asking that pecuniary penalty orders be made against Mr Hart, according to s 116 of the Act. Details of the DPPs’ claims are set out in Points of Claim filed on 23 October 2006.
- [5]The present application was filed on behalf of Mr Hart on 15 December 2006. It asks that some paragraphs of the DPP application and Points of Claim be struck out. It is submitted for Mr Hart that those parts of the DPP’s claims are clearly untenable, as a matter of law, and that they should be brought to an end.
- [6]It is common ground that the application for pecuniary penalty orders is properly made, because of Mr Hart's convictions in May 2004. The court can make an order, because of any benefits that Mr Hart derived from the commission of those offences - see s 116(1)(b)(i) of the Act.
- [7]The Act allows an application for such orders even when there has been no conviction. It is enough if a person has committed "a serious offence" - see s 160(1)(b)(ii). The Points of Claim assert that Mr Hart has committed many such offences, from 1 June 1998 through to June 2003. The DPP says that it has a right to recover any benefits, back to 8 May 1997. That is six years before the making of the restraining order on 8 May 2003.
- [8]On behalf of Mr Hart, it is submitted that the DPP has the right to go back only as far as 17 July 2000. That is six years before the application for pecuniary penalty orders was made on 17 July 2006.
- [9]The Commonwealth is most concerned to maintain its position. It seems that the bulk of any benefits to Mr Hart were made before 17 July 2000. It is said that the DPP might recover around an extra $18m if the claims back to 1 June 1998 can be maintained.
- [10]The contest here arises from the meaning of another part of s 116 of the Act:
"(2)Subparagraph (1)(b)(ii) does not apply in relation to a serious offence . . . unless the court is satisfied that the offence was committed:
- (a)within the 6 years preceding the application (or, if some or all of the person's property is already covered by a restraining order, preceding the application for the restraining order); or
- (b). . .
- (3)In determining whether a person has derived a benefit, the court may treat as property of the person any property that, in the court's opinion, is subject to the person's effective control.
. . ." (emphasis added)
- [11]So, the issue is this - was Mr Hart's property covered by the restraining order of 8 May 2003? If so, then the DPP may maintain the claims back to 1 June 1998. If not, the DPP would be restricted to claims back to 17 July 2000, and parts of the Points of Claim should be struck out.
- [12]It has already been found that Mr Hart had effective control over the property of the other respondents. For the purposes of this application, it is assumed that such control amounted to "a right power or privilege" in connection with the property. That assumption would mean that he had an "interest" in "property" because of the definitions in s 338 of the Act:
"interest", in relation to property or a thing, means:
(a)a legal or equitable estate or interest in the property or thing; or
(b)a right, power or privilege in connection with the property or thing;
whether present or future and whether vested or contingent.
"property" means real or personal property of every description, . . tangible or intangible, and includes an interest in any such real or personal property."
- [13]It is necessary to turn to the restraining order of 8 May 2003. Paragraph [1] can be taken as a model:
“The order of the court is that:
Pursuant to s 17 of the Proceeds of Crime Act 2002 (Cth) the following specified property of (Flying Fighters Pty Ltd, as trustee for the Flying Fighters discretionary trust), that is subject to the effective control of Mr Hart:
(6 aircraft and a motor vehicle)
not be disposed of, removed from their present storage location or otherwise dealt with by any person except in the manner and circumstances specified in this order."
- [14]Then follow similar orders dealing with various pieces of property, real and personal, owned by the other respondents. Mr Hart was a beneficiary of each of the four discretionary trusts.
- [15]That order was made under s 17 of the Act:
"1.A court with proceeds jurisdiction must order that:
- (a)property must not be disposed of r otherwise dealt with by any person; or
- (b)property must not be disposed of or otherwise dealt with by any person except in the manner and circumstances specified in the order; . . .
Property that a restraining order may cover
2. The order must specify, as property that must not be disposed of or otherwise dealt with, the property specified in the application for the order, to the extent that the court is satisfied that there are reasonable grounds to suspect that that property is any one or more of the following:
- (a)all or specified property of the suspect;
- (b)all property of the suspect other than specified property;
- (c)specified property of another person (whether or not that other person's identity is known) that is subject to the effective control of the suspect. . ."
- [16]It is clear that the application for the restraining order was made under s 17(2)(c). Specified property of the respondents was set out. It said that the property was subject to the effective control of Mr Hart. Mr Hart was the "suspect" mentioned in s 17(2)(a).) The application did not specify any of his property. In that respect, it was submitted on behalf of the DPP that:
"The restraining order does not expressly state that Hart's property is restrained, nor does it specify Hart's proprietary interests. Rather it identifies specified property under Hart’s effective control. That does not mean that none of Hart's property is restrained. What is restrained is specified things. When specified property is restrained it is not just a thing, it is all proprietary rights and interests in relation to thing. Consistent with the Court of Appeal's decision in DPP (Cth) v Hart (No 2) [2005] QCA 51, the restraining order does not specify each interest in the thing, for example a mortgagee release. It is not necessary to break the property into component parts."
- [17]It is true that someone may own a physical object, or other proprietary rights and interests in that thing. The Court of Appeal, in deciding whether or not Mr Hart was in effective control of property owned by the respondents, had to consider such a division of ownership. It was submitted on behalf of the Hart interests that the word "property" as defined ins 338 of the Act, meant not the aircraft or land or such "things', but rather some right or interest over which Mr Hart may have exercised effective control. As McPherson JA put it, from paragraph [20]:
"I am, however, quite unable to accept this proposition. The word "property" is plainly capable of meaning either or both of the thing owned or ownership of the thing; as one once says of something that "that property is my property.
In Yanner v Eaton (1999) 201 CLR 351, the relevant provision under consideration, which was s 7(1) of the former Conservation Act 1974 provided that all fauna, meaning or including wild animals, is "the property of the Crown". In that context, "property" referred to ownership and not to the wild animal itself which was, or was claimed by the Crown under the Act, the subject of its ownership. It is plainly not in this sense but in the sense of a thing or object . . . that the word "property" is used in s 338. To ascribe to it in that context the meaning "ownership" would make nonsense of the statutory definition, as well as the related definition of the word "interest" which speaks of an estate or interest "in the property or thing". . . Taken together the statutory meanings of the "property" and "interest" are perhaps capable of referring to either or both of the objects owned and the ownership of or interest in it. But the primary meaning of "property" in s 338(1) is the thing itself.
Hence, when s 337 speaks of property being subject to the “effective control” “of a person, it refers in the case primarily to the effective control by Hart of or over the things, such as the aircraft and land which are the targets of the restraining order of 8 May 2003 …”.
- [18]The other two members of the court agreed with those statements.
- [19]The Act recognises the importance of other interests. If a restraining order is revoked, the DPP must give written notice of the revocation to the owner of any property covered by the restraining order, and also to "any other person the DPP reasonably believes may have an interest in the property" (s 43). In making a forfeiture order, the court may also specify other interests in the property - s 55. When there is an application for a forfeiture order, the DPP may give written notice of it to any person who claims an interest in property covered by the application, and any person whom the DPP reasonably believes may have an interest in that property - s 61.
- [20]One a forfeiture order is made certain property may be excluded from the scope of that order. In this case, by consent, the interest of some mortgagees has been excluded from the original order. See also s 102, where the court made it clear the nature and extent of an applicant's interest in the property, with a view to its being recovered from the forfeiture.
- [21]It is also true, as submitted for the DPP, that the restraining order of 8 May 2002 affected Mr Hart's property. Assuming that his effective control amounted to an interest in property, he is forbidden from exercising that power, in disposing of or otherwise dealing with any other property. The order is directed to "any person". That would include Mr Hart.
- [22]The question is, whether or not Mr Hart's limited interest in the property was covered by the restraining order of 8 May 2003. The property that must not be disposed of or otherwise dealt with has to be specified in the application for the order.
- [23]It was submitted for the DPP that "covered" in s 116(21(a)), means all property in relation to which the restraining order operates. That would include all interests, as defined, including rights, powers and privileges in connection with the property. It is said that such a construction would promote the purpose of the Act, rather than frustrate it. Section 5 of the Act sets out the principle object of the Act:
"(a)to deprive persons of the proceeds of offences, the instruments of offences, and benefits derived from offences, against the laws of the Commonwealth . . .
- (b)to punish and deter persons from breaching laws of the Commonwealth . . ."
- [24]Any court order should be clear and precise. Those who are likely to read it should be left in no doubt as to its effect. There should be no ambiguity. The order should be expressed in language which is readily understood. This order restricts what any person may do with certain specified property of the named respondents. It is true that the order may affect the interests of others, whose identity may not be known - such as a mortgagee or someone having an interest in the property. The order will operate upon those interests, and restrain enjoyment of them. However, the reader of the order would not think that it "covered" such interests. To affect them is one thing, but to cover them is another. The specified property is owned by the other respondents and not by Mr Hart. The order does not mention Mr Hart, except to assert that he has effective control of the property. A reader, even with a working knowledge of the Act, would not understand that the order covered Mr Hart’s property.
- [25]The proper conclusion is that the order does not cover Mr Hart's property, in this case. It covers property of the other respondents. It follows that the cut-off point for the recovery of any benefits will be 17 July 2000.
- [26]Subject to any further submissions about the precise form of the order, the application should be allowed. If there are any questions about costs, counsel can make submissions about them as well.