State of Queensland v Cannon (No 2)
[2011] QSC 245
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- Unreported Judgment
- State of Queensland v Cannon (No 2)[2011] QSC 245
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State of Queensland v Cannon (No 2)[2011] QSC 245
State of Queensland v Cannon (No 2)[2011] QSC 245
SUPREME COURT OF QUEENSLAND
PARTIES: | |
FILE NO: | |
Trial Division | |
PROCEEDING: | Originating Application |
ORIGINATING COURT: | |
DELIVERED ON: | 19 August 2011 |
DELIVERED AT: | Brisbane |
HEARING DATES: | Written submissions |
JUDGE: | Applegarth J |
ORDERS: | 1.The respondent pay the applicant’s costs of and incidental to the proceeding, including any reserved costs, to be assessed on the standard basis. 2.The parties have leave to make supplementary submissions on the issue of interest, or that the Court should assess the value of the proceeds derived from the respondent’s illegal activity having regard to the decline in the value of money between the time the proceeds were derived and the date the proceeds assessment order is formally made. |
CATCHWORDS: | CRIMINAL LAW – JURISDICTION, PRACTICE AND PROCEDURE – JUDGMENT AND PUNISHMENT – ORDERS FOR COMPENSATION, REPARATION, RESTITUTION, FORFEITURE AND OTHER MATTERS RELATING TO DISPOSAL OF PROPERTY – FORFEITURE OR CONFISCATION – OTHER MATTERS – where court assessed the value of the proceeds derived from the respondent’s illegal activity – where applicant seeks interest under the Supreme Court Act 1995 s 47(1) in addition to the assessed value of the proceeds derived from illegal activity – whether an application for a proceeds assessment order under ss 77 and 78 of the Criminal Proceeds Confiscation Act 2002 is a “proceeding for the recovery of money” within the meaning of s 47(1) of the Supreme Court Act PROCEDURE – COSTS – GENERAL RULE – COSTS FOLLOW THE EVENT – COSTS OF WHOLE ACTION – GENERALLY – where respondent ordered to pay the value of the proceeds of his illegal activity – where applicant entitled to costs under the general rule – where Court assessed the quantum of the proceeds of illegal activity at substantially less than the amount sought by the applicant – where respondent claims that the disparity justifies an itemisation of costs sought by applicant – whether costs should be itemised |
LEGISLATION: | Criminal Proceeds Confiscation Act 2002, s 77, s 78, s 82 Supreme Court Act 1995, s 47(1) Uniform Civil Procedure Rules 1999, r 681 |
CASES: | Grincelis v House (2000) 201 CLR 321; [2000] HCA 42 cited State of Queensland v Cannon [2011] QSC 75 cited State of Queensland v McGarry [2004] 1 Qd R 562; [2003] QSC 195 cited Victorian Workcover Authority v Esso Australia (2001) 207 CLR 520; [2001] HCA 53 cited Ex parte Workers’ Compensation Board of Queensland [1983] 1 Qd R 450 cited |
COUNSEL: | M D Hinson SC and J S Brien for the applicant No counsel for the respondent |
SOLICITORS: | Director of Public Prosecutions for the applicant Caroll Fairon Solicitors for the respondent |
[1] On 8 April 2011, I published my reasons for judgment[1] in these proceedings, having assessed the market value of the methylamphetamine that was likely to have been produced and sold as a result of the respondent carrying on the business of unlawfully trafficking in that dangerous drug during a period before 7 February 2003. My assessment was based on evidence in relation to the market value of ephedrine and methylamphetamine at the time the drug trafficking occurred, and evidence about the amounts that were ordinarily paid at the relevant time for these illegal drugs. As a result, I assessed the value of the proceeds derived from the respondent’s illegal activity at $4,200,000. When I published my reasons I pronounced an order that pursuant to s 78 of the Criminal Proceeds Confiscation Act 2002 (Qld) (“the Act”) the respondent pay to the applicant the sum of $4,200,000. I directed the applicant to prepare minutes of order and to consult with the respondent’s legal representatives in relation to the issue of costs. I indicated that I would hear from the parties, if required, concerning the form of orders and the question of costs. The parties were unable to agree in relation to the appropriate orders and, as a result, I made directions for written submissions. There have been delays in relation to the provision of submissions because of the need for the respondent to obtain legal aid.
[2] The applicant applies for orders that:
(a)the respondent pay the applicant’s costs of and incidental to the proceeding for a proceeds assessment order on the standard basis;
(b)the respondent pay interest on the sum of $4,200,000 from 1 November 2000 to 3 March 2011.
Costs
[3] The proceeding for a proceeds assessment order is not a criminal proceeding.[2] The Uniform Civil Procedure Rules 1999 (UCPR), to the extent they are not inconsistent with the Act, apply to a proceeding under the Act.[3] Costs in respect of proceedings under Chapter 2 of the Act (such as the present proceeding) are to be dealt with under the UCPR.[4]
[4] Rule 681(1) provides that the costs of a proceeding are in the discretion of the court, but follow the event unless the court otherwise orders. Rule 698 provides that if the court reserves the costs of an application in a proceeding, the costs reserved follow the event unless the court orders otherwise. The event here is a judgment in favour of the applicant.
[5] The respondent concedes that the applicant is entitled to the costs of and incidental to the proceeding, including reserved costs, unless the court orders otherwise. He submits that, taking into consideration the disparity between the claim made by the applicant and the amount that was assessed, the respondent is entitled to “an itemisation of those costs sought by the applicant”, and that he would be prejudiced if not provided with the opportunity to respond to an itemised costs assessment. This submission does not provide a satisfactory reason not to order the respondent to pay the applicant’s costs of and incidental to the proceeding, including any reserved costs, on the standard basis. It is unnecessary to dwell on the issue of the amount sought by the applicant in the proceeding. During the hearing, the applicant acknowledged that the amount sought by it was based upon acceptance of assumptions concerning quantities of drugs that were most favourable to its case. Mr Goody’s affidavit expressly stated that the assumptions made in his affidavit were “at the upper range for all variables” and that the findings of the Court on the factual evidence would impact on these calculations. I am not persuaded that the difference between the amount sought by the applicant and the amount that I assessed warrants a departure from the ordinary order as to costs.
[6] Rule 687(1) provides that if, under an order of the court, a party is entitled to costs, the costs are to be assessed costs. Rule 687(2) makes additional provision for the court to order, instead of assessed costs, that a party pay to another party:
“(a)a specified part or percentage of assessed costs; or
(b)assessed costs to or from a specified stage of the proceeding; or
(c)an amount for costs fixed by the court; or
(d)an amount for costs to be decided in the way the court directs.”
The respondent does not seek such an order. I am not persuaded that I should make an order for an itemised costs assessment. The assessment of costs should follow the ordinary course provided for in the UCPR.
[7] Accordingly, the order for costs will be:
“The respondent pay the applicant’s costs of and incidental to the proceeding, including any reserved costs, to be assessed on the standard basis.”
Interest
[8] The respondent seeks an order for interest pursuant to s 47(1) of the Supreme Court Act 1995. The respondent concedes that the applicant is entitled to interest pursuant to that provision. However, that concession does not remove the need for me to consider whether s 47 applies in the present case and whether it is appropriate for me to exercise my discretion under that section if it applies.
[9] Section 47(1) of the Supreme Court Act provides as follows:
“In any proceedings in respect of a cause of action that arises after the commencement of the Common Law Practice Act Amendment Act 1972 in a court of record for the recovery of money (including proceedings for debt, damages or the value of goods) the court may order that there shall be included in the sum for which judgment is given interest at such rate as it thinks fit on the whole or any part of that sum for the whole or any part of the period between the date when the cause of action arose and the date of judgment.”
The applicant submits that an application under s 77 of the Act “is a proceeding in respect of a cause of action in a court of record for the recovery of money.” It submits that the cause of action is created by the Act and accrues whenever proceeds are derived from illegal activity within the six year period before the day the application is made.[5] It submits that the cause of action accrued between March 1999 and October 2000.
[10] I am not presently persuaded that the proceeding is in respect of a cause of action for “the recovery of money” as that term is used in s 47(1) of the Supreme Court Act. Unless and until the Court makes a proceeds assessment order pursuant to s 78 of the Act there is no obligation upon the respondent to pay to the State the amount that is assessed by the Court. The proceeding is not so much one for the recovery of money as a proceeding by which the applicant seeks an order for the payment of money.
[11] In the absence of further submissions, I am prepared to assume that the expression “the recovery of money” in s 47(1) of the Supreme Court Act embraces a wide range of proceedings in which a claim for money is made, including a cause of action created by statute that does not expressly or impliedly override the application of s 47(1) and which is enforceable by a claim for money.[6] However, I am not presently persuaded that a proceeding for a proceeds assessment order is of such a character. The entitlement to be paid the amount that is assessed is created by the order. Until the proceeds assessment order is made the applicant has not been deprived of money and has no entitlement to recover it. The proceeding is not the same as a proceeding based on a statutory cause of action that is enforced by a proceeding to recover money.
[12] The applicant points to authority to the effect that the purpose of an award of interest is to compensate a plaintiff for the loss or detriment suffered by being kept out of his or her money during the relevant period.[7] An award of interest seeks to compensate for a decline in the value of money over time where that value is assessed at a past time.[8] However, these propositions do not answer the threshold question of whether the current proceeding is in respect of a cause of action for the recovery of money.
[13] The decline in the value of money over time is addressed in s 82(2) of the Act. It provides:
“(2)The court—
(a)may treat as the value of the proceeds the value the proceeds would have had if derived when the valuation is being made; and
(b)without limiting paragraph (a), may have regard to any decline in the purchasing power of money between the time the proceeds were derived and the time the valuation is being made.”
[14] It seems to me that s 82(2) addresses the issue of the assessment of the value of proceeds where the proceeds are assessed by reference to historic rather than present values. In a proceeding such as this there are sound practical reasons to have reference to the market value of the drugs at the time of the illegal drug activity. Evidence is given of the price paid for the drugs and suitably-qualified law enforcement officers are able to give evidence about the market value at that time of a particular kind of dangerous drug and the amount, or range of amounts, ordinarily paid for them.[9]
[15] If, as in this case, the assessment of proceeds is undertaken on the basis of those historic values, then s 82(2) permits the Court to have regard to any decline in the purchasing power of money between the time the proceeds were derived and the time the valuation is being made.
[16] I assessed the value of the proceeds derived from the respondent’s illegal activity by reference to historic rather than present values. The matters underlying the applicant’s submissions in relation to interest justify a reconsideration of my assessment, having regard to the decline in the purchasing power of money between the time the proceeds were derived and the time the proceeds assessment order is made.
[17] The proceeds assessment order that I pronounced has not been taken out. Given my reluctance to conclude that the present proceeding is one to which s 47(1) of the Supreme Court Act applies, I consider that the appropriate course is to allow the applicant to make any further submissions on that issue and also to apply, in the alternative, for the Court to assess the value of the proceeds derived from the respondent’s illegal activity, having regard to the decline in the value of money between the time the proceeds were derived and the date the proceeds assessment order is formally made. Permitting the applicant to do so does not appear to prejudice the respondent. The respondent conceded the issue of interest, and did not contest the applicant’s submissions in relation to the decline in the value of money between the time the proceeds were derived and the present.
[18] I will hear the parties, if required, or receive supplementary written submissions, if requested.
Footnotes
[1] State of Queensland v Cannon [2011] QSC 75.
[2] The Act, s 8(2).
[3] The Act, 8(6).
[4] State of Queensland v McGarry [2004] 1 Qd R 562 at 564, [2003] QSC 195 at [7].
[5] Section 77(1) of the Act; cf Ex parte Workers’ Compensation Board of Queensland [1983] 1 Qd R 450 at 459-460 concerning a cause of action created by statute, in that case one for an indemnity.
[6] Cf Victorian Workcover Authority v Esso Australia (2001) 207 CLR 520 at 538, [2001] HCA 53 at [41], which concerned Victorian legislation that permitted an award of interest in proceedings in “any proceeding for the recovery of debt or damages”.
[7] Grincelis v House (2000) 201 CLR 321 at 328, [2000] HCA 42 at [16].
[8] Ibid at [17] to [19].
[9] The Act, s 85.