Cannon, Re [1997] QSC 56 [1999] 1 Qd R 247

IN THE SUPREME COURT OF QUEENSLAND Mot. No. 319 of 1994 Brisbane Before the Hon. Justice Williams CATCHWORDS: Counsel: Solicitors: Hearing Date: This only. IN THE MA TIER OF Part 3 of the Crimes (Confiscation of Profits) Act 1989 - and - IN THE MA TIER OF an application by the Director of Prosecutions for a restraining order against the property of Charles Edward Cannon, Eileen Pearl Cooke, Parkwood Nursery Pty Ltd and Vynne Barker - and - IN THE MA TIER OF an application by Charles Edward Cannon against the Director of Public Prosecutions JUDGMENT - WILLIAMS J Judgment delivered 10/0411997 CRIME - restraining order - undertaking by D.P.P. to pay damages - subsequent acquittal of all charges - whether D.P.P. liable in damages - considerations relevant to recovelY of damages discussed - obligation on applicant to dissociate himself from Clime - no enquilY as to damages ordered - Climes (Confiscation of Profits) Act 1989 ss. 3, 40, 43, 45, 84, 103 and 104 considered - Re Blyce (1996) 1 Qd. R 15 considered. Crowe for applicant Sofronoff QC and D Kelly for respondent TF Wardrobe TIA for McLaughlins for applicant Director of Public Prosecutions for respondent 17 March 1997 Dermission. I J -- 1 of 23 -- IN THE SUPREME COURT OF QUEENSLAND Brisbane Mot. No. 3190f1994 IN THE MA ITER OF Part 3 of the Crimes (Confiscation of Profits) Act 1989 - and - IN THE l\tL<\ ITER OF an application by the Director of Prosecutions for a restraining order against the property of Charles Edward Cannon, Eileen Pearl Cooke, Parkwood Nursery Pty Ltd and Vynne Barker - and - IN THE MA ITER OF an application by Charles Edward Cannon against the Director of Public Prosecutions JUDGMENT - WILLIAMS J Judgment delivered 10/04/1997 Upon the application of the Director of Public Prosecutions an order was made pursuant to s.40 of the Crimes (Confiscation of Profits) Act 1989 (lithe Act") by Mackenzie Jon 10 June 1994 restraining, inter alia, Charles Edward Cannon, the applicant, from dealing with certain specified property. That order was made upon the Director giving an undertaking as to damages, the terms of which will be set out later, and also reserved the question of costs. That order was subsequently varied and extended as will hereinafter appear. The last restraint order lapsed on 8 June 1996 when there was no further extension. The original order was predicated on the fact that the applicant was charged with serious offences under the -- 2 of 23 -- 2 was predicated on the fact that the applicant was charged with serious offences under the Drugs Misuse Act 1986. It is not disputed that the applicant was not convicted of any offence against that Act. Against that background the applicant now applies by motion for the following orders: "I. That the Director of Public Prosecutions pay the Applicant's costs of and incidental to this proceeding to the date hereof; 2. That the Director of Public Prosecutions pay to the applicant damages to be quantified by this Honourable Court; 3. That directions be given to enable determination of the quantification of such damages; and 4. That the Director of Public Prosecutions pay the applicant's costs of and incidental to this Motion." The Director opposes the granting of any relief as sought; it is his contention that no proper basis is made out for an inquiry as to damages, notwithstanding the undertaking, and he seeks an order that the motion be dismissed. Following a police operation the applicant was charged on 2 June 1994 with offences which can be broadly stated as follows: (i) Between 15 July 1993 and 13 January 1994 at Parkwood he unlawfully produced a dangerous drug namely cannabis sativa the quantity of which exceeded that specified in the Third Schedule of the Drugs Misuse Act; (ii) Between 13 July 1992 and 13 January 1994 at Upper Coomera he unlawfully produced a dangerous drug namely cannabis sativa the quantity of which exceeded that specified in the Third Schedule of the Act. Shortly after 7 June 1994 he was also charged with carrying on the business of unlawfullv trafficking in cannabis, producing cannabis at Wongawallan, and having in his possession -- 3 of 23 -- 3 property reasonably suspected of being tainted property namely a 1992 GMC Brahma four- wheel drive motor vehicle. The Director's application under the Act was filed on 2 June 1994 naming the applicant and others as respondents and was supported by an affidavit of Detective Sergeant OJ Hay filed 7 June 1994. That affidavit deposed to the fact that property at 6 Uplands Drive, Parkwood was owned by the applicant's mother, Eileen Pearl Cooke, and police investigations established a large crop of marijuana growing thereon. Photographs of thri\'ing marijuana were exhibited. The affidavit also deposed to facts establishing the deponent's belief that the property was under the applicant's effective control. Then that affidavit referred to property at Old Coach Road, Upper Coomera which was owned by the applicant. Again it stated that police investigations had revealed a large healthy crop of marijuana growing thereon. Photographs were exhibited confirming that. Hay's affidavit then went on to refer to a property at Currey Road, Wongawallan where it was alleged the applicant was constructing a house. The property was owned by Parkwood Nursery Pty Ltd of which the applicant and his brother were the only shareholders. According to the affidavit the applicant was living in a shed on that property whilst the house was being built and was in effective control of the property. The affidavit referred to police investigations suggesting the presence of cannabis in and about that property. Hay's affidavit deposed to the fact that $18,900 in bank notes was located in the roller door, on the table and in the ceiling of that shed. Of that $10,000 was recovered by the applicant from the roller door apparently in the presence of the police and handed to them. The affidavit alleged the money was the applicant's. Finally Hay's affidavit dealt with the acquisition by the applicant of a blue GMC Brahma four-wheel drive motor vehicle. The purchase price in about February 1994 was $51,000 plus extras; of the total purchase price $48,250 was paid in cash. The applicant produced the cash but the -- 4 of 23 -- 4 vehicle was registered in the name of Vynne Barker. The affidavit deposed to the belief that the vehicle was "tainted property" within the meaning of that expression as used in the Act. The relevant order was made by Mackenzie J on 10 June 1994, and so far as it is relevant for present purposes it was in the following terms:- "Upon counsel for the Applicant having undertaken to the Court on behalf of the Applicant that the Applicant will pay to any party restrained or affected by this Order any damages or costs, which such party may sustain by reason of the Order and which the Court or a Judge may think the Applicant ought to pay, IT IS ORDERED THAT: I. Pursuant to ss.17(1)(a) and 17(8)(a) of the Crimes (Confiscation of Profits) Act 1989, Charles Edward Cannon, Eileen Pearl Cooke. Parkwood Nursery Pty Ltd. and Vynne Barker (by themselves or by their servants, agents, attorneys or otherwise) and any other person be restrained until further order from disposing of or otherwise dealing with (including varying or creating any manner of charge or mortgage over) any interest held solely or jointly or in common with another person, in the following specified property: 1.1 All that property situated at 6 Uplands Drive, Parkwood ". and all chattels located thereon; 1.2 All that property situated at Lot 72, Old Coach Road, Upper Coomera ... and all chattels located thereon; 1.3 All that property situated at Currey Road, Wongawallan ". and all chattels located thereon; 1.4 A 1992 GMC Brahma Four Wheel Drive Motor Vehicle ". 1.5 A sum of money, namely eighteen thousand nine hundred dollars ($18,900) in cash; 2. Notwithstanding paragraph 1 hereof, each person holding a registered mortgage over that property ... may exercise ... whatever powers of sale or disposal arising under that mortgage ". 3. Notwithstanding paragraph 1 hereof, each of the Respondents shall be at liberty to complete the building of any structure which has already -- 5 of 23 -- 5 been approved by the relevant local authority upon the properties described in paragraphs 1.1, 1.2 and 1.3 hereof: 4. That the 1992 GMC Brahma Four Wheel Drive Motor Vehicle ... be held either in the custody of the Criminal Justice Commission or the Queensland Police Service; 5. That the sum of money namely eighteen thousand nine hundred dollars ($18,900) be held in the safe of the Criminal Justice Commission; 6. The cost of this application be reserved. 7. Each party have liberty to apply on three (3) clear days notice each to the other." The present applicant then applied by notice of motion filed 20 September I 994 for orders varying that of 10 June I 994. Affidavits were filed in support of that application to vary. Ultimately the matter was dealt with by Lee J on 26 September 1994 and his order of that date, so far as is relevant, provides: "Upon the applicant ... by his counsel, undertaking to the Court that until further order: (a) he will pay the sum of Eighteen Thousand Nine Hundred Dollars ($18,900) referred to below, and his share of the net proceeds of realisation of the motor vehicle referred to below. and the net proceeds of realisation of the other chattels located at 6 Uplands Drive. Parkwood as referred to below into a separate bank account he will open ... ( c) he will not, without the prior consent of the Director of Prosecutions draw on that account save for the purpose of meeting legal expenses, living expenses and his debts and liabilities as set out in the letter .,. IT IS ORDERED THAT: 1. The Order of the Honourable Mr Justice Mackenzie made on 10 June 1994 be varied as follows: (a) The sum of Eighteen Thousand Nine Hundred Dollars ($18,900) referred to in paragraph 5 of that order, be forthwith returned to the applicant, Charles Edward Cannon ... (b) The motor vehicle referred to in paragraph 4 of that order be forthwith returned to the applicant, Charles Edward Cannon ... -- 6 of 23 -- 6 so that the applicant can sell such vehicle; subject to the provision that the vehicle can only be sold by the Applicant if the Director of Prosecutions first agrees to the terms of the proposed sale. (c) That in effecting the sale of such vehicle the Applicant cause the said vehicle to be advertised, at least, in the Courier-Mail and Gold Coast Bulletin newspapers. (d) That the net proceeds of the sale of such vehicle, after payment of sale expenses, be paid to Messrs McLaughlins Solicitors Trust Account who are to pay: (i) 65.72(~/o and of such sale proceeds to the applicant, Charles Edward Cannon: (ii) 34.28% and of such sale proceeds to the Director of Prosecutions to be held by the Director of Prosecutions as restrained property pursuant to the said order of Mr Justice Mackenzie; (e) The applicant, Charles Edward Cannon, is entitled to collect and sell the chattels presently owned by him and located on the property situated at 6 Uplands Drive, Parkwood. It is further ordered that the costs of and incidental to this application be reserved." As no other time was specified in the order of Mackenzie J it would expire twelve months after it was made pursuant to s.46(2) of the Act. Because of that the Director applied by notice of motion filed 2 June 1995 for a further restraining order. That motion came before Dowsett Jon 8 June 1995 and he made a further restraining order. That order was not subject to any express undertaking given by the director. Relevantly it restrained the applicant and the other respondents from disposing of or otherwise dealing with the property at 6 Uplands Drive, Parkwood, the property at Old Coach Road, Upper Coomera and all chattels located thereon, the property at 14 Currey Road, Wongawallan and all chattels thereon, and all "that property referred to in paragraph 1(b) to (d) inclusive of the order of the Honourable Mr Justice Lee made in this Honourable Court on the 26th day of September -- 7 of 23 -- 7 1994". Again it gave conditional consent to mortgagees exercising power of sale and gave the applicant liberty to complete buildings on the restrained properties. It also dealt specifically with the Brahma motor vehicle by providing that it was to be retained in the custody of the applicant "for the purposes of selling the vehicle" subject to the terms set out in the earlier order of Lee 1. Finally, the order provided that costs of the application be reserved. That order of Dowsett J, as noted above, lapsed on 8 June 1996 and no subsequent order \vas made. The trafficking charge against the applicant was dismissed at committal in February 1995. He was committed for trial in the Supreme Court of Queensland on three counts of producing a dangerous drug. Counts one and two proceeded to trial and in December 1995 a jury returned verdicts of not guilty to each charge. Then in February 1996 the Crown entered a nolle prosequi with respect to the third count of production. Following that the prosecution offered no evidence in the Southport Magistrates Court on a charge of possession of tainted property. Thereafter solicitors acting for the applicant demanded payment by the Director of damages and costs pursuant to the undertaking recorded in the order of Mackenzie 1. When the Director denied any liability the current proceedings were brought by way of motion. The present application first came before me on 18 February 1997. The applicant then relied solely on an affidavit by his solicitor, MC King, filed 16 January 1997. The Director relied on the affidavit of DJ Hay used in support of the original application. King's affidavit merely recited the three orders, the acquittal of the applicant of all charges, and exhibited correspondence. The only relevant passages in letters emanating from the applicant's solicitors are the following: -- 8 of 23 -- 8 (a) In the letter of 24 July 1996 a claim was made that the "Director of Public Prosecutions ought to pay our client's costs of and incidental to the whole proceedings. Such costs ought to be on a full indemnity basis." It then went on to allege in general terms that our "client has suffered substantial damages and costs by virtue of the making of the orders. Our client intends to pursue such damages or costs." (b) In the letter of 23 September 1996 the applicant's solicitor suggested that the matter should be re-listed so that directions could be given as to the "conduct of our client's claim for damages". Relevantly the Director's response to that correspondence was a denial of any liability to pay either damages or costs. During argument on 18 February 1997 I pointed out to counsel for the applicant that the material then before the court did not prima facie establish any loss or damage such as would enable the court to determine whether or not an inquiry as to damages was justified. As a result of that dialogue counsel for the applicant requested an adjournment to enable further material to be put before the court. When the matter came on again on [7 March [997 the only additional material was a further affidavit from the applicant's solicitor. The only material therein relevant to the relief sought by the motion, and the only material on which the court could determine whether it was just and proper to order an inquiry as to damages is to be found in paragraphs 3 and 4 of that affidavit. Those paragraphs are in the following terms:- -- 9 of 23 -- 9 "3. I am informed by the said Charles Edward Cannon and do verilv believe that: (a) by the Order of Mr Justice Mackenzie on 10 June 1994, a sum of EIGHTEEN THOUSAND NINE HUNDRED DOLLARS ($18,900) was restrained. This sum of money was not returned to Mr Cannon until shortly after Mr Justice Lee's Order of 26 September, 1994. During at least the period from 10 June. 1994 to 26 September, 1994, Mr Cannon was deprived of the opportunity to invest such monies; (b) as a consequence of Mr Justice Mackenzie's Order of 10 June. 1994, a substantial number of chattels, plant and equipment belonging to Mr Cannon were not able to be removed from the property situated at 6 Uplands Drive, Parkwood and sold. Sales of such items occurred soon after Mr Cannon was able to collect them. which only occurred after the Order of Mr JustiCe Lee made on 26 September, 1994. Mr Cannon was deprived of the opportunity of collecting and selling his chattels and utilising the funds that would have been obtained therefrom. for a period of time by virtue of the Order of Mr Justice Mackenzie of 10 June, 1994 until not earlier than 26th September, 199 ..L (c) by virtue of the Order of Mr Justice Mackenzie of 10 June. 1994, the Director of Public Prosecutions retained possession of a 1992 GMC Brahma 4-wheel drive motor vehicle. Such vehicle was valued at approximately $50,000.00. Such vehicle was not returned to Mr Cannon until shortly after 26 September. 1994. Mr Cannon suffered loss and damage in that he was deprived of the opportunity of using such motor vehicle during at least such period of time. Furthermore, in respect of such motor vehicle and by virtue of the Order of Mr Justice Lee of 26 September, 1994, Mr Cannon was obliged to advertise such vehicle for sale. Mr Cannon incurred costs and expenses in causing advertisements to be placed and having his solicitors. Messrs Mclaughlins, report to the Director of Public Prosecutions with regard to the advertising of such vehicle for sale; (d) as at 10 June, 1994, Mr Cannon was the owner of a large rural property at Old Coach Road, Upper Coomera. By virtue of the Orders of Mr Justice Mackenzie of 10 June, 1994, Mr Justice Lee of 26 September, 1994 and Mr Justice Dowsett of 8 June. 1995, Mr Cannon was deprived of the opportunity of offering for sale such property, up to and including 8 June, 1996. I am informed by Mr Cannon, and do verily believe, that the Old Coach Road area of Upper Coomera is and was during the period of 1994, 1995 and 1996, an area in which there was a -- 10 of 23 -- 10 number of large property transactions whereby rural properties were being acquired by developers for subdivision and resale. I am informed by Mr Cannon and do verily believe that he was deprived of the opportunity of obtaining a sale of his property to such investors by virtue of the making of such restraining orders. 4. By virtue of the matters referred to in the last preceding four sub- paragraphs, I am informed by Mr Cannon and do verily believe he has suffered loss and damage by virtue of the restraining Orders made in this matter from time to time since June, 1994 and Mr Cannon seeks directions from this Honourable Court as to the conduct of an inquiry to determine the extent of such damages and the Director of Public Prosecution's liability to pay such damages to him." The issues raised by the application have to be considered In the light of variolls provisions of the Act. Section 40 empowers the court to make a restraining order. Before doing so it must be satisfied that there were reasonable grollnds for a police officer holding the beliefs specified in subsections (6) to (9). There is no need to refer in detail to those requirements; it was not suggested during argument that the original order of 10 June 1994 was not made on adequate grounds. Subsection (10) also makes it clear that a restraining order may be made whether or not there is "any risk of the property being disposed of or otherwise dealt with, in such manner as would defeat the operation of this Act." The effect of subsection (16) is that the court must make a restraining order where the alleged offence is a "serious drug offence", as was the position here, and it is satisfied the matters particularized in subsections (5) to (9) are established, unless the court is "satisfied that it is not in the public interest to make the order". That is also subject to subsection (20) which is of critical importance here; that subsection is in these terms: "The court may refuse to make a restraining order if the Crown, or the applicant on behalf of the Crown, refuses or fails to give to the court such undertaking as the court thinks appropriate concerning the payment of damages or costs, or both, in relation to the making and operation of the order." -- 11 of 23 -- I I Section 43 empowers any person, including the accused person against whom a restraining order has been made, to apply to the court for an order that specified property be excluded from the restraining order. The applicant's motion of 20 September 1994 was clearly lodged in reliance on that provision. The court also has wide powers pursuant to s.45 to vary a restraining order by making such orders as it "considers just about the property". Section 94( I) provides that a proceeding on an application with respect to a restraining order "is not a criminal proceeding"; effectively that must mean that the proceeding is civil and the court has all the powers that it may exercise in a civil proceeding save such as are inconsistent with the provisions of the Act. Section 96 gives a right of appeal with respect to a restraining order to the Court of Appeal. Section 103 is not of direct relevance for present purposes but by implication it is of some significance. It deals with costs on the variation of a restraining order on the application by third parties where some interstate element is involved. There are some express provisions relating to costs of such applications and then subsection (5) goes on to say: "Nothing in this section limits the powers of the Supreme Court to award costs under any other law." That strongly suggests that in exercising its jurisdiction with respect to the making of a restraining order the court may exercise its general powers with respect to the awarding of costs. Finally s.1 04 should be noted - it is also of critical importance: "Where - (a) a person brings, or appears at, proceedings under this Act; and (b) the person is successful in those proceedings; and (c) the court is satisfied that the person was not involved in any way in the commISSIOn of the offence in respect of which the proceedings are related; -- 12 of 23 -- 12 the court may order the Crown to pay all costs incurred by the person in connection with the proceedings or such part of those costs as is determined by the court." Counsel for the Director also placed some reliance on s.3 which deals with the object of the legislation. It is not necessary to set out the provisions thereof in full, but it is interesting to note the reference to "persons innocent of unlawful activity" in subsection (3 )(b) thereof. Both counsel were agreed on at least one proposition - the Director's undertaking is the only source of the court's power to award damages in circumstances such as this. It appears from the judgment of Jessel M.R. in Smith v. Dav (1882) 21 Ch. D. 421 that the undertaking was invented by Lord Justice Knight-Bruce and was originally inserted only in ex parte orders for injunctions. Initially the procedure was designed to protect the court and defendants from improper applications for injunctions, but it was gradually extended so that it applied to all cases of interlocutory injunction and even to situations where such an inj unction was wrongly granted owing to the mistake of the court. Even as early as 1882 it was recognised that not all damage could be recovered pursuant to the undertaking. Jessel M.R. at 425 recognised that the court would not be justified in directing an inquiry as to damages where they were trifling or remote. Historically injunctions were the creature of the courts of equity and equitable concepts, such as the doctrine of clean hands, always played a part not only in determining whether an interlocutory injunction should be granted but in determining whether or not an inquiry as to damages should be ordered. That is, in my view, reflected in the wording of the usual undertaking as to damages adopted generally by the courts when granting interlocutory injunctions; Practice Direction 5 of 1982 issued by this court dealing with undertakings as to damages speaks of "damages which such party may sustain by reason of the injunction and which the Court or a judge, may think he ought to -- 13 of 23 -- 13 pay". The very expreSSIOn "he ought to pay" indicates that not all damage sustained III consequence of the granting of an interlocutory injunction will be compensable. The undertaking in question here was not required by the court in the exercise of its equitable jurisdiction. Rather, in exercising a statutory jurisdiction to grant a restraining order it made the order conditional, as it was empowered to do by the statute, upon the giving of the undertaking in question. It follows that the effect of the undertaking and its consequences must be determined in the light of the objects of the legislation and must be considered in the statutory context. However it is not unreasonable to assume that the legislature in providing for the undertaking intended that by analogy, the court would have regard to that body of law which has grown up around the granting of an interlocutory injunction subject to an undertaking as to damages. Indeed it has been recognised that under the general law the damages in question are distinguishable from damages which may be awarded for breach of contract or tort. Stephen J in Air Express Limited v. Ansett Transport Industries (Operations) Ptv Ltd (1981) 146 CLR 249 at 319 observed: "Damages awarded under such an undertaking are, therefore, of a rather different nature from those awarded at common law. Their special character appears from the fact that their sources lies in the plaintiffs own voluntary undertaking, given as the price of obtaining an injunction. It may also be seen in the words of the common form of the undertaking, they must not only be sustained by reason of the grant of the injunction but the court must form the opinion that the plaintiff "ought to pay" them." He went on to point out (at 320) that to succeed the claimant under an undertaking must establish by evidence a prima facie case both that the grant of the injunction was a cause of his damage and that but for it he would not have suffered that damage. That statement must be applied here in the context of the legislation. In order to deter the commission of serious offences by removing the financial gain associated therewith -- 14 of 23 -- 14 parliament has decreed that the courts have power to grant restraining orders where there are reasonable grounds for a police officer holding the belief that the property in question was used in connection with the commission of a serious drug offence. The counterbalancing factor referred to in the Act is that property rights honestly acquired by persons innocent of unlawful activity should be protected. It will often be the situation, as was indeed the case here with 6 Uplands Drive, that property owned by a person probably innocent of any criminal conduct or intent will be used, or allegedly used, by another in the commission of a serious offence. That property may be restrained initially, but if the owner can establish innocence and loss and damage consequent upon the making of the order it would only be just that such innocent person should be compensated for such loss. In those circumstances one can readily see why provisions such as s.40(20) and s.l 04 were inserted in the legislation. The real difficulty, as is epitomised by this case, arises when there are reasonable grounds for suspecting that a person has committed a serious drug offence justifying the making of a restraining order, but subsequently that person is found not guilty by a jury of the alleged offence. There are many reasons why such a result may occur. It may be, and this is not the present case so far as is revealed by the evidence, that a critical prosecution witness through death or otherwise was unable to give evidence at the trial. It may be, for example, that the jury were satisfied that a dangerous drug was being produced on the restrained property but they were not satisfied beyond reasonable doubt which of two possible persons was responsible for the production. It is trite to say that a jury does not have to given reasons for its verdict, and any attempt to rationalise a particular decision can never be more than speculation. The High Court in Darby (1982) 148 CLR 666 at 676-7 set out the -- 15 of 23 -- 15 true effect of an acquittal by quoting with approval from the judgment of Lord Salmon in Shannon (1975) A.C. 717 at 772: "An accused is entitled to be acquitted unless the evidence satisfies the jury beyond reasonable doubt that he is guilty. A verdict of not guilty may mean that the jury is certain that the accused is innocent, or it may mean that, although the evidence arouses considerable suspicion, it is insufficient to convince the jury of the accused's guilt beyond reasonable doubt. The verdict of not guilty is consistent with the jury having taken either view. The only effect of an acquittal, in law, is that the accused can never again be brought before a criminal court and tried for the same offence. So far as the Crown is concerned, the accused is deemed, in law, to be innocent. His acquittal cannot, however, affect anyone but himself and indeed would not be admissible in evidence on behalf of or against anyone else. Anyone acquitted of a criminal conspiracy may still be sued in damages for the conspiracy of \vhich he has been acquitted at his triaL" Clearly in appropriate civil proceedings dealing with property the subject of a restraining order a person acquitted of the criminal offence could be asked whether or not. for example. he was responsible for the growing of cannabis on the property. As s.94 of the :\ct provides that question of fact would be "decided on the balance of probabilities". In appropriate proceedings under the Act a person found not guilty of the criminal offence could be found on the balance of probabilities to have been responsible for the production of cannabis on the property subject to the restraint. Though one tends to recoil from the prospect. there is no reason why in this area of the law the OJ Simpson scenario could not be repeated in Australia. If as here, there was a restraining order made subject to an undertaking and there \Vas subsequently a proceeding seeking to recover damages pursuant to the undertaking that would be a "proceeding on an application for a restraining order" within s.94( 1) and questions of fact on that application would be decided on the balance of probabilities. Bearing in mind the philosophy behind the legislation, and the limitation imposed on the recovery of damages by the expression "ought to pay", one of the issues of fact that might be raised would be whether -- 16 of 23 -- 16 or not the person seeking to recover damages was involved in the suspected criminal activity. Clearly if the court found as a fact that the property was "tainted" or that the applicant had been involved in the production of marijuana on the property damages pursuant to the undertaking would not be recoverable; in such circumstances the acquittal on criminal charges would be of little or no relevance. It is clear, at least from the cases under the general law, that the court will not direct an inquiry as to damages unless it is of the view that it ought to do so. Jessel M.R. in Smith v. Dav (at 425) spoke of the overriding discretion in the court and indicated that such an inquiry would not be ordered where the amount of damage was trifling or so remote that the court would not be justified in directing such an inquiry. That approach was approved of by Aickin J in Air Express at 262-3. Such a discretion was also recognised by Gibbs J in that case at 311-2. He referred to the discretion not to enforce the undertaking where the defendant had been guilty of conduct that would render it inequitable to enforce it. In that regard I would also refer to the judgment of Peter Gibson L.J. in Cheltenham and Gloucester Buildin2: Society v. Ricketts (1993) I WLR 1545 at 1555-7. There is also a relevant passage in the principal judgment of the Court of Appeal delivered by Fox L.J. in McDonald's Hambumers Limited v. Bur2:er Kin2: (UK) Limited (1987) FSR 112 at 118: "In my view the court must have a degree of discretion to refuse such an inquiry, with its attendant trouble and expense, if it is satisfied that such an inquiry would prove to be fruitless. The mere fact that an injunction has been granted does not establish that damage has been suffered." Finally in this regard I would refer to an observation by Mason J, though dissenting, in Air Express at 323: "But the discretion is to be exercised according to well settled principle. Generally speaking, so long as the claim for damages is not trivial or trifling an inquiry should be directed and the defendant will be entitled to recover the loss which is the natural consequence of the grant of the inj unction. The Supreme Court of Canada has held that the court will be entitled to refuse a -- 17 of 23 -- 17 reference as to damages where there are special circumstances, i.e. when the plaintiff is a public body and acts in the public interest to hold the situation until the rights are determined or where the defendant having succeeded on technical grounds, has been guilty of misconduct (Vieweger Construction Co Ltd v. Rush and Thompkins Construction Ltd (1964) 48 D.L.R. (2d) 509 at 519)." This is also a case where a public official (cf. s.IO of the Director of Public Prosecutions Act 1984) was making an application in the public interest pursuant to the provisions of the legislation in question. In my view before the applicant could establish a basis for an inquiry as to damages for breach of the undertaking he would have to show that some identifiable legitimate loss was caused to him. Whether or not he was obliged to swear to his innocence of any criminal conduct, it is not sufficient merely to point to his acquittal on the criminal charges. I turn now to consider the applicant's claim to recover costs of the proceedings; effectively the applicant is seeking his costs of appearing before Mackenzie J on 14 June 1994, before Lee J on 26 September 1994, and before Dowsett J on 8 June 1995. Counsel for the applicant argued that those costs were "sought pursuant to the undertaking given to the court". In all the circumstances I agree that it is better to approach the claim on that basis. It may well be that as the proceedings are civil (s.94 of the Act) the court would have jurisdiction to award costs either pursuant to s.221 of the Supreme Court Act 1995 or 0.91 r.1 of the Rules of the Supreme Court. But pursuant to either of those provisions costs would be in the discretion of the judge and that discretion would, in my opinion, be exercised in the light of the same considerations as would apply to a claim for an inquiry as to damages pursuant to the undertaking. The applicant placed great reliance on the decision of Ambrose J in Re Bryce (1996) Qd. R. 15. Whilst that case has some similarity to the present there are significant points of distinction. There the restraining order was made after a conviction for offences relating -- 18 of 23 -- 18 to dishonesty. On appeal a retrial was ordered and at the retrial a verdict of not guilty was returned. The restraining order had been in place for some time and contained an undertaking in substantially the same terms as that given here. In the course of his reasons the learned judge said at 16: "Although it may amount to being wise after the event, it is now clear that the restraining order ought not to have been made. It ought not to have been made because although the respondent had been convicted of the offences charges against him, it emerged upon his appeal that he had been wrongly convicted. Upon the retrial ordered he was in fact acquitted." The clear inference is that the only ground on which the order was made was the conviction at the first trial. Once that was removed there was no basis at all for the order. That, in my view, clearly distinguishes Brvce from the present case. The acquittal in this case did not detract from the clear evidence before Mackenzie J that there was a large healthy crop of marijuana growing on the Old Coach Road property owned by the applicant. That fact itself provided a sufficient basis for making a restraining order and was in no way affected by the subsequent acquittal of the applicant on the production charge. The best scenario for the applicant is that he was found not guilty of producing the large marijuana crop which was growing on land which he owned. In his reasons Ambrose J made no reference to s.l 04 of the Act and it may not have been necessary for him to do so given the circumstances of that case. Strictly construed each of the three provisions prescribed in that section are cumulative and it is difficult to see how a person in the position of the applicant here could satisfy the second; he was not successful in the proceedings before Mackenzie J, Lee J, or Dowsett 1. For that reason it is difficult to give the section effective operation in the circumstances of this case. But if it is correct to consider the applicant as the owner of property on which some other person was growing marijuana then the legislative intention would appear to be that the applicant should only -- 19 of 23 -- 19 recover costs if the court is satisfied that he was not involved in any way in the commission of that offence. While s.l 04 is not in my view decisive of the present application, it indicates to the court that in exercising its discretion whether or not to award costs it is relevant to consider whether or not the applicant has satisfied the court that he was not involved in the growing of the marijuana (so clearly depicted in the photographs) on his property. The affidavit of the solicitor for the applicant alleges that the applicant has suffered loss and damage because he was restrained from dealing with four items of property. It is necessary to refer to the evidence relied on by the applicant with respect to the alleged loss and damage relating to each item of property, and also to consider the contents of Hav's affidavit relevant to each of those particulars. Firstly, the applicant claims that he incurred loss because he was deprived of the opportunity of investing the $18,900 from 10 June 1994 to 26 September 1994. Counsel for the Director contended that there was no evidence that this money was in fact the property of the applicant, but that argument must be rejected. The money was returned to the applicant pursuant to the order of Lee J and the only basis on which that order could have been made was that the court was satisfied that the money was the property of the applicant. What is relevant for present purposes is that a large amount of money, namely $10,000 in cash, was apparently being kept by the applicant in the roller door of the shed in which he was living. Human experience would suggest that funds held for investment purposes would not ordinarily be kept in such a place. Whilst one might readily draw the inference that a reasonable person would ordinarily wish to invest a large sum of money not otherwise immediately needed, that inference can less readily be drawn when the evidence establishes that the money in question was stored in cash in the circumstances outlined in Hay's affidavit. Even taking paragraph 3(a) of the solicitor's affidavit quoted above at face value it does not -- 20 of 23 -- 20 assert that as at 10 June 1994 the applicant had a then present intention to invest the funds. In any event he was only deprived by the order of the capacity to invest those funds for a period of some fourteen weeks. The affidavit of the solicitor does not satisfy me that the applicant suffered any identifiable loss as a result of the making of the order on 10 June 1994 restraining dealing with the money. Any loss sustained by the applicant with respect thereto would, in my opinion, be trivial or remote. The next claim is with respect to chattels on the property owned by the applicant's mother at 6 Uplands Drive, Parkwood. Again it is significant that the restraining order only affected these chattels for the approximate fourteen week period from 10 June 1994 until 26 September 1994. The order of Lee J permitted him to collect and sell those chattels. but the evidence does not establish whether or not they were in fact sold and if so for how much. There is nothing in the solicitor's affidavit which indicates that as at 10 June 1994 the applicant had an intention to dispose of those chattels. One suspects that if the chattels were sold after the order of Lee J that was done for the purpose of obtaining funds to provide for the applicant's defence to the charges. Paragraph 3 (b) of the affidavit of the solicitor does not satisfy me that the applicant suffered any identifiable loss that could sound in damages recoverable pursuant to the undertaking. The position is much the same with respect to the four-wheel drive motor vehicle. The loss alleged in paragraph 3(c) of the solicitor's affidavit is primarily that the applicant was deprived of the opportunity of using the vehicle during the fourteen week period from·t 0 June 1994 to 26 September 1994. But there is no evidence from the applicant that he would have used the vehicle during that period. The evidence does not establish that this was the only vehicle available to the applicant and there is no evidence as to the basis on which the applicant would have used it seeing that it was registered in the name of somebody else. The -- 21 of 23 -- 21 bald statement I have referred to in the solicitor's affidavit does not establish any loss at all with respect to the motor vehicle. The only other matter referred to is the cost of advertising the vehicle for sale pursuant to the order of Lee 1. Again it would appear that the applicant benefited from the sale of the vehicle in that funds became available to meet his living and legal expenses. In the circumstances the material does not establish any basis on which the Director ought to pay those costs by way of damages. The last item of restrained property said to have resulted in some loss or damage to the applicant is the large rural property at Old Coach Road, Upper Coomera. This property was restrained for a two year period from 10 June 1994 to 8 June 1996. According to the solicitor a number of rural properties in the area were sold during that period and it is asserted that the applicant was deprived of the opportunity of offering the property for sale for the two years in question. Again there is no evidence from the applicant that he had any intention prior to 10 June 1994 to sell the property. It is not suggested that it was initially purchased for investment purposes. There is nothing said about the use made of the property by the applicant immediately prior to June 1994; all that the court knows is that there was a healthy crop of marijuana then growing on it. The restraining order did not prevent the applicant from using the property as he had done prior to the order being imposed. In consequence there was no loss suffered because of any interference with the applicant's general user of the land. It is, in my view, important for the applicant to dissociate himself from the marijuana growing on the property in June 1994 before the court could consider whether or not he had suffered any loss by being deprived of the opportunity of selling the land during the two year period in question. That follows from the discretionary and statutory considerations discussed above. -- 22 of 23 -- 22 It should also be pointed out that there is nothing said about fluctuation in value of the land. For all that is revealed by the material before the court the property could have doubled in value between June 1994 and June 1996. There is just no evidence establishing any loss which ought to be the subject of an inquiry as to damages. In any event even if there was some loss prima facie established by the applicant this would not be an appropriate case for the exercise of the court's discretion in favour of the applicant. Before the court could hold that the Director "ought to pay" damages suffered by the applicant it would be necessary, in my view, for the applicant to demonstrate that he was not involved in the illegal activity being carried out on his property in the period immediately prior to June 1996. He has not attempted to do that and in consequence there is no proper basis on which an inquiry as to damages could be ordered. Bearing in mind the intention of the legislature as revealed by the provisions of the Act referred to herein, and the general principles applicable to ordering an inquiry as to damages pursuant to an undertaking given to the court discussed above I have come to the conclusion that the material does not establish circumstances justifying an order that the Director "ought to pay" damages which may have been suffered by the applicant. But even if, in all the circumstances, the applicant was otherwise entitled to an inquiry as to damages I am not satisfied that the evidence establishes a prima facie case of identifiable legitimate loss such as would justify the court in taking the step of ordering such an inquiry. Those conclusions apply equally to the applicant's claim to recover his legal costs incurred on appearing when each of the .three orders in question was made. The application should be dismissed with costs including reserved costs. -- 23 of 23 --