Hicks and disgorging profits II

By Legal Eagle

Almost a year ago, I speculated on this blog that the Federal government would not move to strip David Hicks of the profit he gained from the royalties on his book, saying:

…it seems the Australian government is caught between Scylla and Charybdis. On the one hand, if it leaves Hicks with the money, it implicitly concedes that the Guantanamo process does not stand up to independent legal scrutiny. On the other hand, if it decides to pursue Hicks, it may open up inquiries about the process of his detainment and guilty plea in an Australian court which it would rather not ventilate. As always, I shall watch with interest to see what happens, if anything…they may decide this one is best left alone…

For non-Australians or people living under a rock, Hicks was the sole Australian to plead guilty and to be convicted of providing material support for terrorism under the United States’ Military Commissions Act. He was interned in Guantanamo Bay from 2001 to 2007, when he was repatriated to Australia after a long campaign by his family and others. Last year, he wrote memoirs entitled Guantanamo: My Journey, which has sold 30,000 copies. Hicks’ publisher, Random House, will not disclose the profits Hicks has made.

Well, it seems that I was wrong in my prediction that the Federal Government would leave this one alone. On 20 July 2011, the Commonwealth Director of Public Prosecutions served him with a notice of application for an order to restrain the royalties derived from the sale of the memoirs (presumably pursuant to s 20 of the Proceeds of Crime Act 2002 (Cth)). The CDPP will then move to seize the restrained royalties as being proceeds of crimes. The Australian reports:

…An Australian Federal Police spokeswoman said the matter would be heard by the NSW Supreme Court on August 3. The CDPP’s decision ends a long-running game of chicken involving Hicks, publisher Random House and commonwealth authorities, whom many assumed would not seek to recoup Hicks’s earnings for fear the military commission would not be recognised. Hicks’s father, Terry, savaged the move, describing it as “absolutely disgusting”.

“He’s a person who signed a piece of paper to get out of a hellhole,” he told The Australian. “I think it’s the most disgusting thing.” Hicks was sent to Guantanamo Bay in late 2001 after he was captured in Afghanistan by the Northern Alliance and handed over to US forces.

He was returned to Australia in May 2007 after he signed a pre-trial agreement pleading guilty to terror offences. Under the terms of the deal, Hicks was required to spend a further seven months in Adelaide’s Yatala prison before his release in December 2007.

Then attorney-general Philip Ruddock amended the proceeds of crime act to recognise US military commissions, a move designed to anticipate any attempt by Hicks to profit from his experience. However, that clause was later removed after the US congress passed legislation recognising the commissions.

University of NSW law professor George Williams said the CDPP would have a strong case. “But that is subject to a court giving weight and recognising the validity of Hicks’s plea and the conviction. This may well be an opportunity for David Hicks to open up questions about those matters,” Professor Williams said.

I’m presuming that the CDPP will now seek a literary proceeds order under s 152 of the Proceeds of Crime Act 2002 (Cth). Sub-section (2) provides that applications for proceeds of crimes orders can be made where a person has committed a “foreign indictable offence” (regardless of whether the person has actually been convicted of the offence). Section 337A describes “foreign indictable offence” thusly:

(1)  If:

(a)  an application (the current application ) is made for a * freezing order, * production order, * search warrant, * restraining order or * confiscation order in relation to conduct that constituted an offence against a law of a foreign country; and

(b)  if the conduct had occurred in Australia at the testing time referred to in subsection (2), the conduct would have constituted an offence against a law of the Commonwealth, a State or a Territory punishable by at least 12 months imprisonment;

then, for the purposes of the current application, the conduct is treated as having constituted a foreign indictable offence at all relevant times.

Example:    X commits an offence against a law of a foreign country at a time when the conduct is not an offence against Australian law. X then derives literary proceeds in relation to the offence and transfers the proceeds to Australia. After the proceeds are transferred, a new Commonwealth offence is created that applies to the type of conduct concerned. An application is then made for a literary proceeds order. For the purposes of the proceedings for that order, the original conduct is treated as having constituted a foreign indictable offence at all relevant times and accordingly an order can be made in respect of those proceeds.

(2)  The testing time for the current application is:

(a)  if the current application is an application for a * freezing order, * production order, * search warrant or * restraining order–the time when the current application was made; or

(b)  if the current application is an application for a * confiscation order (other than a * literary proceeds order) in relation to a restraining order–the time when the application for the restraining order was made; or

(c)  if:

(i)  the current application is an application for a literary proceeds order; and

(ii)  an earlier restraining order has been made in respect of the same offence;

the time when the application was made for that earlier restraining order; or

(d)  if the current application is an application for a literary proceeds order but paragraph (c) does not apply–the time when the current application was made.

Like all legislation, this is a little circuitous. But the essence of it is this: if Hicks is found to have committed a foreign indictable offence, and at the time when the application is made for a restraining order, the conduct is a crime under Australian law punishable by at least 12 months imprisonment, the court may grant the literary proceeds order pursuant to s 152(2) of the Act. Working out whether or not Hicks committed a foreign indictable offence may well open the whole Guantanamo process to judicial scrutiny in Australian courts. However, it is worth noting that Hicks’ conviction is not determinative of whether he committed a foreign indictable offence. So s 152(2) states:

             (2)  A court with * proceeds jurisdiction may make an order requiring a person to pay an amount to the Commonwealth if:

(a)  the * DPP applies for the order; and

(b)  the court is satisfied that the person has committed a * foreign indictable offence (whether or not the person has been convicted of the offence); and

(c)  the court is satisfied that the person has derived * literary proceeds in relation to the offence.

The court will have to decide for itself whether it is satisfied that Hicks committed an indictable offence under American law.

The other possibility (which I mentioned in the previous post) was that the Australian government could attempt to enforce the agreement Hicks entered into with the US government when he was released to Australia, whereby he agreed that any profits from any memoirs or media appearances would go to the Australian government. The difficulty with enforcing the agreement is that the Australian government was not a  party to the contract, and arguably has no standing to enforce it, unless they can argue an exception to the contractual doctrine of privity (perhaps pursuant to Beswick v Beswick?). But Hicks would attempt to argue that he entered the contract under duress, out of his desire to get out of Guantanamo Bay and home to Australia, and thus the contract should not be binding.

What do you think? Should Hicks be stripped of his profits or not? Has the CDPP opened up a can of worms which it would have been better off leaving unopened, or is this a good idea?

P.S. Regardless of the merits or otherwise of this particular application, I must confess to some general discomfort with the lack of judicial discretion and harshness of the Proceeds of Crime Act 2002 (essentially along the lines mentioned here).

33 Comments

  1. derrida derider
    Posted July 23, 2011 at 5:53 pm | Permalink

    Should Hicks be stripped of his profits or not?

    “Should” in the moral sense or “should” in the sense of what the law is? In the moral sense it’s a bloody outrage – it reminds me why I’ll never vote for the Liberals again. In the legal sense I wouldn’t criticise the DPP for enforcing the law, truly rancid though it is.

    Has the CDPP opened up a can of worms which it would have been better off leaving unopened?

    Time, as they say, will tell. If the High Court finds a way to undermine this law then it will have been a Good Thing. If not …

  2. Posted July 23, 2011 at 6:15 pm | Permalink

    Stripped of his profits? Yes.

    Great opportunities are sometimes missed. It may not have been clear at the time he was captured, but boy-oh-boy it would have been so much better had he instead been found face down in a ditch, sans pulse.

  3. Joe Lewis
    Posted July 23, 2011 at 10:08 pm | Permalink

    My problem is the willingness of the current CDPP (an executive decision under the current Labor government – not a Liberal government) to call a decision of a United States Military Tribunal a “foreign indictable offence”. Surely that phrase would only cover findings of guilt for indictable offences in criminal jurisdictions?

    Just on a random, unrelated point:

    I wouldn’t exactly call Hicks, whom survived all those years at Guantanimo, a “weak man”. I think there’s weaker men who’ve never served such time – but making such judgments of character really are beyond me!!!!

    Great article, ‘Eagle.

  4. Patrick
    Posted July 24, 2011 at 12:15 am | Permalink

    There’s weak and there’s weak, Joe, let’s just settle for cowardly prick.

    Not sure why this reminds DD why he won’t vote for the liberals again, either. Labor introduced complete excision of judicial review in immigration cases (or tried to, the High Court disagreed) and you obviously got over that? Seems a bit odd …

  5. Posted July 24, 2011 at 6:19 am | Permalink

    Morally I can see no reason why Hicks should keep any profits from the book and I’m pleased to see that the government has finally found the courage to seize the profits.

    Like a lot people unaffected by an addiction to latte sipping I have been willing to see Hicks live a normal life but I think that for him to trade on his notoriety is grossly offensive and should not be allowed.

  6. kvd
    Posted July 24, 2011 at 6:44 am | Permalink

    Trying to stay at some remove from the particular individual, I’m wondering why these particular ‘profits’ are any different from, say, the authors of the book about the Port Arthur killer? Or, more closely, Chopper Reid or that crooked Sydney policeman doing standup in pubs? What about a filmmaker, taking on Hicks’ story?

    Hicks could have employed any number of people around him to tell his story; so would those profits be at risk? If not, and if those other persons decided at a later stage to formally gift to Hicks (or his wife) some part of those profits, would that gift be forfeit?

    Somewhere along the line I think Hicks or his advisers have decided to make an issue of this – no doubt in the hope of increasing his sales. If that is true, then we are just playing his game.

  7. Posted July 24, 2011 at 6:51 am | Permalink

    Chopper Reid has always made me wince, particularly after he dedicated one of his books to me. I could have done without that, to be honest.

  8. kvd
    Posted July 24, 2011 at 7:06 am | Permalink

    Really!? Was not aware of that. Otherwise I’d have highlighted it 😉

  9. Posted July 24, 2011 at 7:50 am | Permalink

    The idea that a gangster’s profits can be seized seems straightforward. Profits from a memoir does not really seem to be the same case.

    After all, no illegal act was engaged in in writing the book, and it is something offered openly and legally for sale.

    Unless we think people are more likely to engage in illegal acts in some expectation of profiting from the memoirs, it seems to be confusing matters of taste with matters of criminality.

  10. Posted July 24, 2011 at 8:18 am | Permalink

    [email protected] How is Hicks agreement different from any ‘plea bargain’ agreement?

  11. kvd
    Posted July 24, 2011 at 9:31 am | Permalink

    LE …. questionable ….

    Totally agree with this word. Sounds like a job for (a lot of) lawyers. And why not the lawyers proceeds be subject to disgorgement as they will be ‘the proceeds of crime’? We need more lawyers.

  12. Posted July 24, 2011 at 10:25 am | Permalink

    This will surely be a case with a million issues if it ever gets to trial.

    Lorenzo @14: plea bargains are not contractually enforceable in Australia and are probably against public policy so I doubt if an analogy to the contractual aspect of Blake would hold. Even in the US, I think their efficacy arises as a result of criminal law process rather than by force of any private contract.

    I hope the DPP fails. In my opinion what is really notorious is not Hicks himself or what he did or is said to have done but the treatment he received at the hands of the US Government and (or alternately failed to receive) from the Australian Government. Not only is Hicks entitled to speak out about this (the confiscation of proceeds cutely does not prevent him actually speaking/[writing], merely from profiting from doing so). There is also a Lange-type public interest in enabling or at least allowing us to hear about it from him. To use literary proceeds of crime legislation in the way the DPP is using it is to make a collateral attack on our right to hear about it.

    Ironically, with the present High Court (should things go so far), assuming that a finding about a foreign indictable offence is upheld, Hicks’s best chance will be if the cigarette manufacturers are successful in their plain packaging case and Hicks is then able to maintain an argument that there is an acquisition of property other than on just terms.

  13. Henry2
    Posted July 24, 2011 at 10:31 am | Permalink

    LE, Each time I read something you write I am more convinced that one of the charachters in the series Crownies is based on you :)….
    Just sayin ..

  14. Henry2
    Posted July 24, 2011 at 10:32 am | Permalink

    characters

  15. Patrick
    Posted July 24, 2011 at 11:11 am | Permalink

    LE, isn’t the court just going to defer to the executive’s definition of ‘foreign indictable offence’? I suspect you might get bored as a restitution lawyer in this case…

  16. Posted July 24, 2011 at 11:12 am | Permalink

    Le, yes, Hicks can still speak about it. The law does nothing directly to prevent him.

    That’s what’s invidious and what drew me to the cigarette companies’ argument. If he can do it and it’s not against law, does he not have a right to payment for it (indeed, the legislation assumes he does in drawing the connection) which is sufficiently in the nature of property to attract constitutional protection?

    If he won’t do it because there is no incentive for him to do so, how has my right to hear about it – rights of free speech on political matters are for the benefit of the listeners and society as a whole as well as of the speaker.

    Answer may be that there is no right. That might come as a shock to many if they were told or really thought about it. If legal reasoning reaches a surprising outcome it is often wise to go back and check the steps by which you got there.

  17. Posted July 24, 2011 at 11:36 am | Permalink

    “how has my right to hear about it”

    should be:

    “how has my right to hear about it suddenly slipped away?”

    And yes I know that conventionally there is no private law right to hear about it. There is a political right not to be stopped from hearing about it which has some legal effects.

  18. Posted July 24, 2011 at 2:54 pm | Permalink

    [email protected] That is helpful, thanks.

    That reinforces my view that I hope the DPP loses: that I think Hicks is a thoroughly unattractive piece of work is not relevant. (It falls into the same category as the ACLU arguing for the rights of neo-Nazis.)

    Marcellous introducing the cigarette manufacturers provides extra reason–given I would like to be able to continue to enjoy the occasional cigar. (And no, I don’t inhale. 🙂 )

  19. Henry2
    Posted July 26, 2011 at 8:49 pm | Permalink

    LE @ 22
    The character I was thinking of is exceedingly clever. That she is raunchy as well is secondary.

  20. Patrick
    Posted July 27, 2011 at 7:50 am | Permalink

    LE, agree, but that doesn’t stop the Court deferring to the executive’s judgement.

  21. Posted August 6, 2011 at 1:41 pm | Permalink

    LE: maybe you should explain that the freezing of the proceeds is an interim step and does not determine the issue on a final basis.

    Strictly it seems to be a restraining order under section 20, which doesn’t need much at all, just, as a minimum, the Court’s satisfaction that the authorised officer swearing an affidavit holds the suspicion on reasonable grounds, in which case with only very limited exceptions, the court must make the order.

    I hope the Court required the Commonwealth to offer the undertaking under section 21.

    This whole matter is a typical case of prosecutorial bloody-mindedness, which ultimately must be the bloody-mindedness of the Commonwealth DPP himself, as the government itself has disclaimed any responsibility for the decision. All we’ve got is the slim chance of the Parliamentary Joint Committee on Law Enforcement requiring the DPP to give evidence before it under section 197U.

  22. Posted August 6, 2011 at 6:38 pm | Permalink

    Correction: 179U.

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