Director of Public Prosecutions (Cth) v Corby [2007] QCA 58 [2007] 2 Qd R 318

SUPREME COURT OF QUEENSLAND CITATION: DPP (Cth) v Corby [2007] QCA 58 PARTIES: DIRECTOR OF PUBLIC PROSECUTIONS (COMMONWEALTH) (applicant) v SCHAPELLE CORBY (respondent) FILE NO/S: Appeal No 1365 of 2007 DC No 577 of 2007 DIVISION: Court of Appeal PROCEEDING: Application for Leave to Appeal ORIGINATING COURT: District Court at Brisbane DELIVERED ON: 2 March 2007 DELIVERED AT: Brisbane HEARING DATE: 2 March 2007 JUDGES: Williams JA, Keane JA and Helman J Separate reasons for judgment of each member of the Court, each concurring as to the orders made ORDER: 1. Leave to appeal granted 2. Appeal allowed and the order of His Honour Judge McGill SC made 15 February 2007 dismissing the Amended Originated Application dated 15 February 2007 is set aside and in lieu thereof, Upon counsel for the applicant having undertaken to the Court on behalf of the Commonwealth that the Commonwealth will pay to any person adversely affected by the making or operation of this order such damages, if any, as may have been incurred by the making or operation of this order as the Court deems appropriate 3. Pursuant to s 20 of the Proceeds of Crime Act 2002 (Cth) the following specified property of the respondent, namely any money or property held on behalf of the respondent by the respondent’s brother-in-law, I Wayan Widyartha or by the respondent’s sister, Mercedes Corby, up to the value of AUD $267,750, must not be disposed of, or otherwise dealt with by any person except in the manner and circumstances specified in this order 4. Pursuant to s 20 of the Proceeds of Crime Act 2002 the 1 -- 1 of 10 -- 2 following specified property of the respondent, namely any payments to be made after the date of this order by Pan Macmillan Australia Pty Ltd (ACN 001 184 014) to I Wayan Widyartha, Mercedes Corby, or to the respondent (or her agent) in respect of the publication “My Story SCHAPELLE CORBY with Kathryn Bonella” published in 2006 by Pan Macmillan Australia Pty Ltd, and otherwise identified with ISBN 9781405037914 and ISBN 1 40503791 1, must not be disposed of, or otherwise dealt with by any person except in the manner and circumstances specified in this order 5. Pursuant to s 20 of the Proceeds of Crime Act 2002 the following specified property of the respondent, namely the sum of $15,000 paid or payable to Mercedes Corby or nominee pursuant to letter dated 20 December 2006 from Editor-in-Chief of New Idea magazine, Robyn Foyster, addressed to Mercedes Corby, care of Kathryn Bonella, must not be disposed of, or otherwise dealt with by any person except in the manner and circumstances specified in this order 6. Pursuant to s 38 of the Proceeds of Crime Act 2002, the Official Trustee in Bankruptcy shall take custody and control of the property referred to in order 2 and 3 above 7. The Official Trustee in Bankruptcy may, in the exercise of its powers and the performance of its duties pursuant to an order granted herein, deposit or invest any monies coming into its hands or under its control by paying the same to the credit of an account in its name and under its control at such bank or other financial institution as it may consider proper, and make any payments required to be made under s 292 of the Proceeds of Crime Act 2002 8. Leave is given to the Applicant to serve outside Australia pursuant to r 127 of the Uniform Civil Procedure Rules 1999 (Qld) this order, the amended originating application and all supporting affidavits including exhibits, the application for leave to appeal, and the notice of appeal 9. Leave is also given to the Applicant to serve outside Australia pursuant to r 127, an application for a literary proceeds order made pursuant to s 162 of the Proceeds of Crime Act 2002 together with any supporting affidavits and exhibits and notices The Court Directs that:- 10. The Applicant effect personal service of the documents referred to in order 8 above as soon as reasonably practicable on the respondent, Mercedes Corby, and I Wayan Widyartha -- 2 of 10 -- 3 11. The Applicant serve a copy of this order on Pan MacMillan Pty Ltd and Pacific Magazines Pty Ltd. 12. There is to be no public access to this Court of Appeal file and the District Court file relating to this matter, until the Applicant has effected service in accordance with orders 10 and 11 of this order 13. The Applicant will advise the Registrar of the Court of Appeal in writing when service in accordance with paragraph 10 and 11 of this order has been effected, and upon such written notification to the Registrar, the restriction on access referred to in order 12 above, is lifted 14. No order as to costs 15. Any consequential proceedings are to be brought in the trial division of the Supreme Court CATCHWORDS: STATUTES – ACTS OF PARLIAMENT – INTERPRETATION – PARTICULAR WORDS AND PHRASES – SPECIFIC INTERPRETATIONS – where application made for interim order pursuant to s 20(1)(d) of the Proceeds of Crime Act 2002 (Cth) - whether relevant proceeds "derived" in Australia - whether interim order should be granted Proceeds of Crime Act 2002 (Cth), s 20, s 26(4), s 153 District Court of Queensland Act 1967 (Qld), s 118 Uniform Civil Procedure Rules 1999 (Qld), r 127, r 763(1) DPP (Cth) v Hart (No1) [2004] 2 Qd R 1, cited DPP (Cth) v Jeffery (1992) 58 A Crim R 310, applied Esquire Nominees Pty Ltd v Federal Commissioner of Taxation (1971) 129 CLR 177, cited J v L & A Services Pty Ltd (No 2) [1995] 2 Qd R 10, applied COUNSEL: P J Flanagan SC for Director of Public Prosecutions (Commonwealth) for the applicant SOLICITORS: Director of Public Prosecutions (Commonwealth) for the applicant KEANE JA: The Commonwealth Director of Public Prosecutions, ("the DPP") has applied to this Court, pursuant to s 20 of the Proceeds of Crime Act 2002 (Cth) ("the Act") for an order that any payments made by Pan MacMillan Australia, after the order is made, to Schapelle Corby or her sister or brother-in-law or -- 3 of 10 -- 4 any other agent, in respect of the publication, "My Story - SCHAPELLE CORBY with Kathryn Bonella", must not be disposed of otherwise than into the custody and control of the Official Trustee in Bankruptcy. A similar order is sought in respect of payments made by Pacific Magazine Pty Ltd to Schapelle Corby's sister in respect of an article published in the magazine, "New Idea". Further orders are sought to freeze these, and any further such payments, until the determination of the DPP's claim that these moneys should be paid to the Commonwealth. The application is brought ex parte, as permitted by s 26(4) of the Act, because the moneys in question might be easily disposed of before any order could be made if notice of the application were to be given to the respondent. The same concern, namely, that the DPP's application might be rendered nugatory if this application were heard in public, led the court to hear the application in camera. See J v L & A Services Pty Ltd (No 2) [1995] 2 Qd R 10. It should be said this application is in no way determinative of the substantive rights of the parties. The orders sought by the DPP are interim orders. They may be made on the basis of reasonable suspicion on the part of the deponents upon whom the DPP relies as to the facts upon which the DPP's claim is based. The factual basis for a final order for the payment of moneys to the Commonwealth must be established on the balance of probabilities. It should also be noted that Schapelle -- 4 of 10 -- 5 Corby, or any other person affected by the order, may apply for its revocation pursuant to s 42 of the Act. The full terms of the order sought were contained in the draft proffered by the DPP and marked ex 1 in these proceedings. In this regard, the Court was informed by Mr Flanagan SC, who appeared for the DPP, that the DPP intends to serve Schapelle Corby, her sister and brother-in-law, the publisher of the memoir, and the owner of New Idea with any order made by this Court, its reasons and the reasons of the learned District Court judge, as well as all material filed in support of this application. The application was originally made by the DPP to a judge of the District Court, who, on 15 February 2007, refused the application for reasons which I will mention. The DPP's application is renewed before this Court by way of appeal pursuant to r 763(1) of the Uniform Civil Procedure Rules 1999 (Qld) ("the UCPR"). The rule relevantly provides: "If a judge refuses an application made in the absence of a party, the party who made the application may renew the application in the absence of the other party by way of appeal to the Court of Appeal." Leave to appeal is necessary under s 118 of the District Court of Queensland Act 1967 (Qld). See DPP (Cth) v Hart (No 1) [2004] 2 Qd R 1 at [3]. This is clearly an appropriate case -- 5 of 10 -- 6 for the grant of leave because an important question of law arises. Section 20(1)(d) of the Act provides for the making of the order sought by the DPP if, relevantly: "there are reasonable grounds to suspect that a person has committed a foreign indictable offence, and that the person has derived literary proceeds in relation to the offence". Section 153 of the Act provides relevantly: “(1) Literary proceeds are any benefit that a person derives from the commercial exploitation of: (a) the person's notoriety resulting ... from the person committing an indictable offence or a foreign indictable offence; ... (2) The commercial exploitation may be by any means, including: (a) publishing any material in written or electronic form ... (3A) If the offence is a foreign indictable offence, then the benefit is not treated as literary proceeds unless the benefit is derived in Australia or transferred -- 6 of 10 -- 7 to Australia.” The DPP seeks to intercept payments which the affidavit of a Federal agent, Ms Corkery, suggests were made by Pan MacMillan Australia Pty Ltd ("the publisher of the memoir"), a company incorporated in Australia, in exchange for Schapelle Corby's story of her arrest, imprisonment and conviction in Indonesia for the importation of cannabis into that country. Ms Corkery's affidavit suggests that payments have been made from the publisher of the memoir from Australia by telegraphic transfer to the bank account in Indonesia of Schapelle Corby's brother-in-law, as advances due on the Schapelle Corby memoir, a book written in cooperation with Schapelle Corby. Ms Corkery suspects that these amounts are held on behalf of Schapelle Corby. It is also suggested that $15,000 is payable to Schapelle Corby's sister or nominees pursuant to arrangements made as a result of a written offer from Pacific Magazines Pty Ltd ("the owner of New Idea"), a company incorporated in Australia, to Mercedes Corby for an exclusive interview, with photographs, for an article containing entries from Schapelle Corby's diary. It is not presently apparent whether this money has been paid, and if so, to whom. The learned District Court judge, to whom the Department of Public Prosecutions applied, was satisfied that the requirements of s 20 of the Act were met, save the requirement -- 7 of 10 -- 8 that the relevant benefit be derived in Australia or transferred to Australia. His Honour referred to the concept of "derivation", as that notion has been expounded in cases concerned with the derivation of income for the purposes of income tax law, and concluded: "But if the respondent's income was simply as a result of work done or other things done by the respondent outside Australia, then the benefit - that is any remuneration paid to the respondent for doing those things - was not, in my opinion, derived in Australia. There is nothing in the present material to give rise to a reasonable suspicion that any payment made to the respondent (or more relevantly to third parties, but one might reasonably suspect for the benefit of the respondent) was derived from property of the respondent in Australia. In those circumstances the material does not provide a proper basis for concluding that the benefits identified in the material were to be treated as literary proceeds within Section 153(3A) of the Act. On the material presently available, therefore, in my opinion there were not reasonable grounds to suspect that the respondent has derived literary proceeds in relation to the offence, because there are not reasonable grounds to suspect that any literary proceeds have been derived in Australia." The Department of Public Prosecutions submits that it is not necessary to satisfy s 153(3A) or s 153(1) of the Act, that a benefit sought to be intercepted under the Act be generated from the respondent's property in, or personal exertion in, Australia: all that is required is that the benefit be derived in Australia in the sense that the benefit has its geographic origin or source in Australia. -- 8 of 10 -- 9 In my respectful opinion, this submission should be accepted. The word "derived" is defined by the Macquarie Dictionary to mean: "To receive or obtain from a source or origin; to trace as from a source or origin". As Hunt CJ at CL observed of an analogous provision in the Proceeds of Crime Act 1987 (Cth), the "ordinary English meaning (of 'derived') is to show the origin or the source of the thing said to have been derived... The word should be interpreted in its ordinary sense." See DPP (Cth) v Jeffery (1992) 58 A Crim R 310 at 320. I agree. There is no indication in the language of the Act, and in particular s 153(3A), that the interception provisions of the Act are to be trammelled with the complexities which have attached to the concept of derivation as a result of judicial exegesis of provisions of the Income Tax Assessment Act 1936 (Cth), which are concerned to identify the locale of the rights or activities which caused the production of the taxable income, or assessable income. Compare Esquire Nominees Ltd v Federal Commissioner of Taxation (1973) 129 CLR 177. The Act is not concerned with where the commercial exploitation which has produced the benefit has occurred: that is apparent from the very language of s 153(1). This is readily understandable: there may be many acts constituting commercial exploitation which may occur in different places, the variety of locations where particular acts occur having little to do with the policy which informs the Act. That this is so is confirmed by the clear geographical focus in -- 9 of 10 -- 10 s 153(3A) of the Act upon benefits "derived in Australia or transferred to Australia". This description is apt to catch any benefits sourced from, or received in, Australia. There is no reason to read down either s 153(1) or s 153(3A), by importing complexities from a different field of discourse. For these reasons, I am respectfully of the opinion that the learned District Court judge erred in taking too narrow a view of s 153(1) and, consequently, of the scope of s 20(1)d) of the Act. I would therefore give leave to appeal, allow the appeal and make orders in terms of ex 1, with the addition of an additional direction as paragraph 15 in the following terms: 15. Any consequential proceedings are to be brought in the trial division of the Supreme Court. WILLIAMS JA: I agree. In my view, literary proceeds were generated in Australia in consequence of the publication in Australia of both the book and the article. That is sufficient to satisfy the test that a benefit was derived in Australia for purposes of the legislation. I agree with the reasoning of Keane JA. The order sought should be made. Any consequential proceedings should be brought in the trial division of the Supreme Court. HELMAN J: I agree. -- 10 of 10 --