State of Queensland v Shaw[2003] QSC 228

[1] HIS HONOUR: This is an application for a restraining order, pursuant to section 28 of the Criminal Proceeds Confiscation Act 2002.

[2] The order seeks to restrain dealings in the property of the respondent, Matthew Shaw, upon whom the application has been served.

[3] Shaw was legally represented on the last occasion, when the matter was before the Court and gave undertakings not to deal with the property on that occasion.

[4] The application was then adjourned until today. Today he has not appeared. The relevant factual matters set out in the section and in section 31 have been proved by the affidavit material, as have the matters necessary to support orders under section 38, in respect of oral examination and a sworn statement of particulars of property.

[5]  However, one collateral point has arisen in the course of the helpful submissions made by Mr Hinson SC on behalf of the applicant. The material discloses that among the respondent's property is an interest in a block of land located at 66 Korumburra Road, Ashmore. That interest is an interest as co-owner of that property, the other co-owner being Melissa Mortlock. I apprehend Ms Mortlock is Mr Shaw's partner. The land is mortgaged to Suncorp Metway Limited and by reason of the terms of the proposed order, it is clear that that company is a person which would be affected by the order. It would not be affected in its capacity to deal with its mortgage. The way in which it would be affected is in its capacity to deal with the land. That capacity would fall for exercise, if there were a default in the mortgage repayments. Suncorp Metway might then wish to exercise a power of sale. The evidence before me discloses that at the present time, there has been no such default, but one might expect that the risk of a default in the future is increased if the whole burden of making the payments of $800 per month is transferred to Ms Mortlock.

[6] Suncorp might, therefore, wish to exercise a power of sale of the land, which would of course include the respondent's interest in it. That caused me to question whether the application ought to be served on it. On behalf of the applicant Mr Hinson submitted that it was unnecessary to effect such service. He submitted that the scheme of the legislation is to permit the State to bring the application without giving notice to persons affected (as opposed to persons whose property is affected) and to allow such persons, particularly mortgagees or other encumbrances as defined, to make an exclusion application under section 49 of the Act.

[7] I was referred also to sections 45 and 47 and to sections 63 and 64 in further support of the proposition regarding the scheme provided in the Act.

[8] In the alternative Mr Hinson submitted that if it is held that scheme of the Act does not envisage the course which he contended, the Court had a discretion to allow the matter to proceed without service on persons affected and that this was a case for the exercise of the discretion. He referred me this regard to section 28(2)(b) of the Act.

[9] The applicability of that section is not immediately obvious. One might have thought that the person to whom the application relates is the respondent. However I am satisfied that the order which is sought does more than simply affect Suncorp. Its effect is to restrain Suncorp from dealing with its own property as defined. That result comes about because the proposed order will prevent Suncorp from exercising the statutory power of sale conferred by the Property Law Act.

[10] At first sight one would not think that such a power of sale was property. However, as Mr Hinson pointed out, "property" is defined in section 36 of the Acts Interpretation Act to mean "any legal interest whether present or future vested or contingent or tangible or intangible in real property" and "interest" is there defined to mean in relation to land "a right over or in relation to the land".

[11] It follows therefore that the power of sale is property as defined in the Act and that the effect of the order which prevents the exercise of the power of sale, by reason of its impact on the property of the respondent, also makes it relate to the property of Suncorp.

[12]In the course of his helpful submissions, Mr Hinson's attention was drawn to the possibility that section 28(2)(b) might be interpreted to confer an entitlement upon the State of Queensland, rather than to describe the process which would take place in this Court when an application was made. If the former interpretation were correct, that is if the State had an entitlement to proceed without notice to any person to whom it relates, the Court would have no discretion to require notice to be given.

[13] Mr Hinson, rightly in my view, disclaimed any reliance upon such a submission. He submitted that if his first submission failed, the matter was one within the discretion of the Court. In this regard he was, I think, supported by a passage in the judgment of Williams JA in S v. M [2003] QCA 249 in paragraph 9. There, his Honour referred to section 28 and said that it would permit an application to be brought on notice to affected parties or to be brought ex parte the first instance as that expression is generally understood if the circumstances justified that course. The condition to which his Honour referred would be inconsistent with the existence of an unqualified right in the applicant to proceed ex parte.

[14] I therefore approach the two questions which are raised in the order in which I have referred to them. In my judgment, the Act does not disclose a scheme whereby the State has a right to proceed without notice to anyone who is affected by the order, particularly to anyone whose property is the subject of the order, either expressly or by the effect of the operation of the order.

[15] It is true that the Act requires the order to be served on any reason who is affected by order: see section 45. And it is also true that provision is made for such a person to apply an exclusion order. It does not seem to me, however, that these sections and the others to which I was referred necessarily indicate a right to proceed without notice. They indicate the course to be followed in all cases and they make sense when one realises in most cases one would expect what has happened today to occur. That is, one would expect mortgagees not to be interested in engaging lawyers to attend applications such as this. To make them bound by the order or at least to make the order enforceable against them it is necessary that it be served upon them.

[16] Those sections do not, in my view, indicate a statutory scheme which dispenses with the requirement for service. The right to be heard is a fundamental right and it is recognised in the requirement for service. The right has been discussed recently in the decision of the Court of Appeal in Greig and Duff v. Stramit Corporation Pty Limited [2003] QCA 298. It would take more than the collection of sections to which Mr Hinson referred to persuade me that the statutory scheme envisages proceeding in that way.

[17] As far as the discretionary point is concerned, during the course of an adjournment granted for the purpose, the applicant has procured evidence from Suncorp Metway Limited that it does not wish to be heard in respect of the application.

[18] That being so, it seems to me it would be futile to require the application to be served upon it. There is no other person demonstrated as having an interest. In particular, there is no reason to think that the co-owner is such a person as the restraint does not, as far as I can see or as far has been drawn to my attention, in any way impact upon her rights as a co-owner.

[19] It might, of course, be different if the property were held jointly rather than as tenant in common and about that situation I say nothing.

[20] I therefore am content to proceed in this case without service of the application on Suncorp Metway Limited. The elements of the section having been demonstrated by the affidavit material, there will be an order in accordance with the draft initialled by me and placed with the papers.