Attorney-General for the Northern Territory and Anor v Emmerson and Anor

[2014] HCATrans 6

[2014] HCATrans 006

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Darwin   No D5 of 2013

B e t w e e n -

ATTORNEY‑GENERAL FOR THE NORTHERN TERRITORY

First Appellant

THE NORTHERN TERRITORY OF AUSTRALIA

Second Appellant

and

REGINALD WILLIAM EMMERSON

First Respondent

THE DIRECTOR OF PUBLIC PROSECUTIONS

Second Respondent

FRENCH CJ
HAYNE J
CRENNAN J
BELL J
GAGELER J
KEANE J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 4 FEBRUARY 2014, AT 10.14 AM

Copyright in the High Court of Australia

____________________

MR M.P. GRANT, QC, Solicitor‑General for the Northern Territory:   May it please the Court, I appear with MR R.H. BRUXNER and MS S.L. BROWNHILL for the appellants.  (instructed by Solicitor for the Northern Territory)

MR A. WYVILL, SC:   If the Court pleases, I appear with my learned friends, MR P.W. JOHNSTON and MR N. CHRISTUP, for the first respondent.  (instructed by Ward Keller Lawyers)

MR J.T. GLEESON, SC, Solicitor‑General for the Commonwealth of Australia:   May it please the Court, I appear with MR C.J. HORAN for the Attorney‑General for the Commonwealth, intervening.  (instructed by Australian Government Solicitor)

MR M.G. SEXTON, SC, Solicitor‑General for the State of New South Wales:   If the Court pleases, I appear with my learned friend, MS N.L. SHARP, for the Attorney‑General for New South Wales who intervenes in the proceedings.  (instructed by Crown Solicitor (NSW))

MR W. SOFRONOFF, QC, Solicitor‑General of the State of Queensland:   May it please the Court, I appear with my learned friend, MR G.J.D. DEL VILLAR, for the Attorney‑General of Queensland.  (instructed by Crown Law (Qld))

MR M.G. HINTON, QC, Solicitor‑General for the State of South Australia:   If the Court pleases, I appear with my learned friend, MS A.C. CARTER, for the Attorney‑General for South Australia, intervening.  (instructed by Crown Solicitor (SA))

MR G.R. DONALDSON, SC, Solicitor‑General for the State of Western Australia:   May it please the Court, I appear with my learned friend, MS K.E. McDONALD, for the Attorney‑General for Western Australia, intervening.  (instructed by State Solicitor (WA))

FRENCH CJ:   Yes.

MR GRANT:   Your Honours, the first matter arising is there is an application for leave to file and serve an amended notice of contention which appears at appeal book page 269, and the proposed amended notice of contention appears at appeal book 274 and 275.  There is no objection to that application, your Honours.

FRENCH CJ:   Yes, there will be leave to file the amended notice of contention.

MR GRANT:   Your Honours, the second matter is the order of address.  What we are proposing, your Honours, is that the appellants will address the appeal and the matters in the notice of contention, all except for the acquisition of property issue.  The State interveners would then follow us in relation to all of those issues.  The first respondent would then address in relation to those matters and acquisition of property.  We would then respond, followed by the Commonwealth, subject to what the Court thinks in relation to that proposal. 

FRENCH CJ:   That has been agreed between the parties.

MR GRANT:   Yes, thank you, your Honour.  Your Honours have in terms of the legislation, your Honours, the Misuse of Drugs Act as at 31 August 2011 which is the form of the Act in force at the time of the conviction and the application for the declaration.  There was an earlier version in force at the time of the restraining order in February 2011 but, for these purposes, there is no difference between the two.  Your Honours then have an internet version of the Criminal Property Forfeiture Act as at 1 July 2010 which was the form of the Act in force at the time the restraining order was made in February 2011. 

By the time of the conviction and the declaration, your Honours, there had been a number of minor amendments affected by the Statute Law Revision Act but nothing that is of substance for the purpose of these proceedings.  Your Honours have been provided this morning, I think, with a government reprint version as at 1 January 2013 which is the form of the Act following that statute law revision amendment.  As I say, your Honours, the difference has no bearing on this appeal.

If I could take your Honours first to the scheme appearing in the Criminal Property Forfeiture Act and start with section 3 of that Act which sets out its objective which is to:

target the proceeds of crime in general and drug‑related crime in particular in order to prevent the unjust enrichment of persons involved in criminal activities.

Now, your Honours, there are six different mechanisms in the legislation for achieving that objective and if I could just take your Honours briefly to those six mechanisms.  The first is the “unexplained wealth declaration”, provision for which is made at sections 67 to 72 of the Act; the second is the “criminal benefit declaration”, provision for which is made at sections 73 to 80 of the Act; the third is the “crime‑used property substitution declaration”, provision for which is at sections 81 to 86 of the Act.

Your Honours will see that those three mechanisms may operate in one of two ways.  The amount ordered payable under one or other of those declarations is specified to be an amount due and payable to the Territory and section 87 has provisions for the recovery of the amount payable to the Territory.  Then section 88 has an alternative enforcement provision, if you like, a person who is liable under one of those declarations to pay an amount to the Territory may transfer property, whether or not the subject of a restraining order to the Territory. 

Hand in hand with that, your Honours, the court can order in satisfaction of the Territory’s debt the forfeiture of such property to the Territory under Subdivision C, Division 3 of Part 7, sections 98 through to 101.  So those three mechanisms, your Honours, stand apart in terms of the process for enforcement in that dual mechanism for enforcement, or satisfaction of the debt due and payable. 

The fourth mechanism, your Honours, is the one with which this appeal is concerned and that is the drug trafficker declaration and section 94 is the ultimately relevant provision there.  The fifth mechanism is crime‑used property.  Ultimately, section 96 is the mechanism there by which crime‑used property which is subject to a restraining order is liable to an order for forfeiture to the Territory.  Section 97 deals with the last mechanism which is crime‑derived property, your Honours, a point we will come to shortly.

Sections 96 and 97 differ in their operation to section 94 in that they contemplate an application being made for a forfeiture order and the court actually making a forfeiture order and although there is some difference between the positions of the appellants and at least one of the interveners, it would be our submission that section 94 does not require – certainly in its terms – a forfeiture order in the same way that sections 96 and 97 do.

FRENCH CJ:   Well, the mechanism is for a declaration as to what has actually occurred by operation of section 94.

MR GRANT:   Yes, yes, which, in our submission, your Honours, will only be necessary in certain circumstances where there is some dispute as to that fact.  Bearing in mind, of course, your Honours, that oftentimes – perhaps even in the ordinary course – the property subject to restraint will be in the possession of the Territory in any event.  So there is unlikely to be any dispute in terms of acting on that forfeiture.  But there are provisions where it may be necessary, your Honours, but I will come to those shortly.

If your Honours then turn to section 10 of the Criminal Property Forfeiture Act, that is the section which gives the Act application to certain categories of property and, your Honours, so far as is relevant here, the Act is given application to property “owned or effectively controlled” or “previously owned” by, in subsection (1), paragraph (a):

persons who are involved in or taken to be involved in criminal activities -

Your Honours, subsection (2) provides:

The property (real or personal) of a person who is involved or taken to be involved in criminal activities is forfeit to the Territory ‑ ‑ ‑

FRENCH CJ:   Does that have substantive operation or is that simply an announcement of what is to come?

MR GRANT:   It is an announcement, your Honours, but it is certainly something that is necessary to take into account when considering the operation of section 44 of this Act and section 36A of the Misuse of Drugs Act but it is important for these purposes, your Honours, to identify that there is no limitation on the property that is potentially subject to forfeiture where a person is involved in or taken to be involved in criminal activities, either in subsection (1) or subsection (2).  Subsection (2) provides only that the property is forfeited to the extent provided in the Act.

FRENCH CJ:   Well, there is an objective stated, is there not?

MR GRANT:   Yes.  That is all it is, your Honours.  Section 10(4), your Honours, provides that a person is taken to be involved in criminal activities if, amongst other things:

the person is declared under section 36A of the Misuse of Drugs Act to be a drug trafficker-

Of course that particular categorisation, involvement in criminal activities, your Honours, is also extended to persons the subject of an unexplained wealth declaration or a criminal benefit declaration or a person found guilty of a forfeiture offence.  Your Honours, that directs attention to section 8 of the legislation which defines “declared drug trafficker” as:

(a)a person who is declared to be a drug trafficker under section 36A of the Misuse of Drugs Act, or

(b)a person who is taken to be a declared drug trafficker –

a person who had died before the appropriate – or absconded before the order can be made, your Honours.  You will see there from subsections (2) and (3), so (2) relates to a person who absconds.

FRENCH CJ:   The designation taken to be involved in criminal activities has no separate operation in relation to section 94.  That simply operates directly upon a declaration under 36A.

MR GRANT:   That is so, your Honour.  Section 94, it is one of the integers at the early stage of the process obviously, but section 94(1)(a), your Honour, operates in relation to the existence or otherwise of a restraining order and the scope and ambit of that restraining order.  Your Honours, I will come back to section 36A of the Misuse of Drugs Act shortly. 

If I could deal first with the question of restraining orders and, in general terms, your Honours, in order for property to be forfeited to the Territory by the various mechanisms I outlined at the outset it must be subject to a restraining order.  Your Honours, those provisions start at Part 4 in section 39 of the Criminal Property Forfeiture Act. 

Your Honours, of note here, section 40 of the Act provides that a member of the police force or the DPP can make an application for an interim restraining order to the Local Court.  The applicant there is required to satisfy the court that an application will be made under 43 or 44 and that is in fact what happened in this case.  The DPP made an application to the Local Court.  Your Honours will see that an interim restraining order has effect for three days only, from subsection (4).  An interim restraining order was made in this case. 

Within the currency of that order, an application was made to the Supreme Court in pursuance of section 44.  When the matter came before the court a representative of the DPP and the first respondent were in attendance.  The court made a further interim order for a finite period of time to enable the first respondent to seek legal representation.  The matter came back before the court.  The first respondent was legally represented and ultimately the restraining order was made by consent.

CRENNAN J:   Is there any opportunity at that stage for a third party who has interest in the property to seek to be heard?

MR GRANT:   There would be, your Honour, in accordance with the court’s ordinary procedures, but really the third party’s opportunity to have something to say about the restraining order is within the objection process which is a process which takes place after the order has been made, but certainly there would be nothing precluding an interested party from going along and seeking leave to appear at the restraining order stage.

FRENCH CJ:   I think you say, do you not, that there is a discretion as to whether or not to make a restraining order and there is a discretion as to the extent of the property covered and that that discretion is informed by the objects of the Act?

MR GRANT:   A limited discretion, your Honours.  We would not suggest it is as broad as that which is propounded by New South Wales and the Commonwealth in their submissions.  If your Honours look at section 44 of the legislation, you will see that it is couched in terms of the Supreme Court being able, on the application of the DPP, to make a restraining order in relation to property. 

Now, the exercise of that discretion – and we must admit that “may” permits of a discretion here - is not governed by any express criteria in the statute.  So the fetter on the exercise about discretion is simply that it must be exercised judicially and, as your Honour the Chief Justice said, in accordance with the purposes and objects and provisions of the legislation.

FRENCH CJ:   The purposes being those to be found in section 3 and section 10(2) and (3), I think.

MR GRANT:   Yes, broadly, your Honour.  There are some other purposes which are more explicit and directly related to the question of what can and cannot be included or should and should not be included within the ambit of a restraining order.

CRENNAN J:   What about the leading of evidence on this sort of occasion that identifiable property was not, as it is commonly understood, the direct proceeds of crime?  In other words, the Chief Justice has directed attention to the objects of the Act.  The expression used, I think, is the “proceeds of crime” in general.  Is it your submission that that covers direct and indirect – how should one read that?

MR GRANT:   Your Honours, obviously that objects clause in section 3 cannot govern the substantive provisions of the legislation.  It is clear in the legislation that when one is concerned with an application for a restraining order and ultimately a drug trafficker declaration that there need not be any nexus between the offending and the property, the subject of the restraining order, either in terms of its derivation or its use. 

BELL J:   So that if the application is made for all of the property of the respondent to the application owned or effectively controlled or that has been given away by that person how in the exercise of the discretion does the Territory submit, or what, if any, limits does the Territory propound in terms of the exercise of the discretion, it being accepted for the purposes of this question that none of the property has any relationship to the criminal activities of the respondent who is expected to be the subject of a 36A declaration?

MR GRANT:   First, your Honour, that was common ground except in relation to the $70,500 in cash.

BELL J:   I understand that, but for the purpose of this question what I am putting to you is assuming that an application conforming to the statutory requirements is made in relation to property bearing no connection to the respondent’s criminal activities and the application seeks restraint of all the property owned or effectively controlled or given away by the respondent, does the Territory submit that there is any proper basis for confining the order in some way?  What is the basis?

MR GRANT:   Yes, there are a number of bases, your Honour.  The first is it has been recognised and accepted by both the Court of Appeal and the DPP that the court retains its inherent powers to prevent abuses of process, obviously, so if there was some issue of abuse, which seems unlikely in this context, the court would be able to operate there. 

Part of that power extends to allow the court to exclude from the scope of a restraining order such moneys as are necessary to pay legal expenses.  That was a decision by the Court of Appeal in the matter of Burnett, your Honours.  That is based on the notion that the court can exercise its powers in order to avoid oppression.

There a number of explicit markers in the legislation which operate to allow the scope to be reduced as well, your Honour.  Section 46(1) of the Act allows the Court to make directions about income from property for security and management of property and to provide for meeting reasonable living and business expenses.  We say, your Honours, that that is capable of construction because of the words in the chapeau to subsection (1) “In a restraining order”, capable of a construction which would permit the Court to exclude from the scope of a restraining order certain property for those purposes.  Your Honours will see, particularly, at subparagraph (e) the provision:

for meeting reasonable living and business expenses of the owner of the property.

Having said that, your Honour, that power is unnecessary so far as the use of the property for ordinary daily requirements is concerned because if your Honours go to section 56 of the legislation, you will see 56(1) contains a definition of dealing with property which is proscribed by the legislation – property that is subject to a restraining order – but 56(2) provides that:

a reference to the use of property does not include reasonable and necessary use for ordinary daily requirements of life.

So the property can still be used even when subject to a restraining order for those purposes.  So there is dual mechanism there, your Honour, in that it would be open to the court to exclude property for the purpose of meeting reasonable living and business expenses, for example.  The court could also – or rather the legislation also provides for the use of property even when restrained for the ordinary daily requirements of life.

BELL J:   Can I just query?

MR GRANT:   Yes.

BELL J:   That property is the subject of restraint?

MR GRANT:   Yes.  Property which is subject to that qualification in section 56(2) ‑ ‑ ‑

BELL J:   Yes.

MR GRANT:   ‑ ‑ ‑ is subject to restraint.

BELL J:   Yes, but your point is there can be a carve‑out from that which is restrained in relation to 46(1)(e)?

MR GRANT:   Under the terms of section 46(1).  Of course, your Honours, it is difficult to speculate in a vacuum but, of course, it would be well within the Court’s powers, as recognised by the decision in Burnett, to avoid oppression by and hardship to third parties or financial dependence, and that prospect would be a relevant matter informing the exercise of the discretion as to what property should or should not be included within the ambit of a restraining order. 

BELL J:   Is that submission based on the provisions of 46(1)?

MR GRANT:   It is not, your Honour.  It is based on the provision that the court retains its inherent powers to preclude its process from being an instrument of oppression.  So it is an extension of the Burnett principle.  Your Honour, if the court has power to exclude from the ambit of a restraining order moneys necessary to meet legal expenses it would also have power to exclude moneys necessary to avoid oppression to financial dependence, for example.

FRENCH CJ:   If the discretion were confined by reference to relevant objectives of the Act, the relevant objectives would be, would they not, in section 3:

to prevent the unjust enrichment of persons involved in criminal activities -

and in 2, assuming we are not talking about crime‑used or crime‑derived property – in 2, compensation of:

the Territory community for the costs of deterring, detecting and dealing with the criminal activities.

MR GRANT:   That is so, your Honours, but they are not the only provisions.

FRENCH CJ:   I am not suggesting that they are.  I am just saying if they were, those would be the relevant objectives.

MR GRANT:   Yes, they would be two of the relevant objectives.  Obviously there is specific reference in section 10 to the Misuse of Drugs Act, so that draws in the purposes of section 36A into the objectives of this particular provision, so far as they relate to drug trafficker declarations, so, your Honours, the first point to make is section 3 does not govern the substantive operation of sections 10, 44 or 94, but it does inform the interpretive exercise, and section 10 brings in the purposes which are specified in the Misuse of Drugs Act, or to be divined from the operation of the Misuse of Drugs Act in conjunction with sections 44 and 94. 

HAYNE J:   Just before you part from that, the Act contains a definition of “property”, does it not?

MR GRANT:   It does, your Honour.

HAYNE J:   Many of the submissions you have been making seem to be predicated upon understanding “property” used in the Act as referring to the object rather than to the interest in property.

MR GRANT:   Yes, your Honour.  The definition of “property” comprehends property in both its senses, the ‑ ‑ ‑

HAYNE J:   Well, does it?

MR GRANT:   In our submission, yes, your Honour, in that paragraph (b), speaking of:

legal or equitable interest in any property mentioned in paragraph (a) -

would seem directed to the interest if you like, whereas paragraph (a), in the definition of “property”, which appears in section 5, your Honours, seems to extend to the object itself in that it speaks of:

real or personal property . . . whether tangible or intangible ‑ ‑ ‑

HAYNE J:   That is a view that may further be supported by this notion that property given away, formerly owned by, may be the object of an order.

MR GRANT:   Yes.

HAYNE J:   It is a very, very far‑reaching construction of the Act.  Why should we read it that way?  Why should we read an Act using a term like “property” in a way that impinges upon the rights and interests of wholly innocent third parties?

MR GRANT:   Simply, your Honours, because, in its literal meaning, paragraph (a) of the definition extends that broadly, and when considering legislation of this nature generally, your Honours, it is no objection to the validity of the legislation that it might operate in relation to –

HAYNE J:   I am not talking about validity, Mr Solicitor, I am talking about basic questions of construction, how you construe the word “property” in an Act of this kind with the effects it has.  Do you read it in a fashion that impinges upon the rights of those whom I deliberately refer to as “wholly innocent third parties”?  If you have to, that I understand, but is that the only reading that is available, I do not know.

MR GRANT:   Your Honours, as a matter of principle it may be susceptible to a different reading if there was an ambiguity but, in our submission, paragraph (a) of the definition of “property” does not give rise to any necessary ambiguity in that respect.  It clearly extends to tangible personal property.  It clearly extends to cash and extends to real property.  So, your Honour, our submission does not go any further than that, that is, there is no ambiguity; therefore there is no room for a reading which would protect, if you like, the fundamental right of the innocent party.  The intended scope of the legislation, we say, is clear on the plain words.

FRENCH CJ:   Serving which objective?

HAYNE J:   Taking the property of an arms‑length third party mortgagee does what?

MR GRANT:   Your Honours, there are various provisions in the ‑ ‑ ‑

HAYNE J:   Taking the property of the person who has received in good faith a transfer for value, taking the property of someone who in good faith has received a gift?  Serving what purpose, Mr Solicitor?

MR GRANT:   Well, your Honours, if the gift is out of the funds of the declared drug trafficker serving the deterrent purpose of the legislation.

HAYNE J:   By deterring the recipient?

MR GRANT:   Well, by deterring the course of conduct that is contemplated by section 36A of the Misuse of Drugs Act.  It may operate harshly on the recipient but that is the mechanism which the legislature has chosen but, your Honours, in terms of innocent third parties and leaving aside the particular question of drug trafficker declarations, there are various provisions in the objection provisions which allow for the interests of innocent parties to be protected.  In particular, your Honour, you will see there is a definition at section 66 of “Innocent party” and it extends quite broadly but we ‑ ‑ ‑

FRENCH CJ:   This is in relation to crime‑used or crime‑derived property so it is ‑ ‑ ‑

MR GRANT:   That is so, your Honour, which is why I was saying it did not have particular application to the drug trafficker declaration mechanism but it is clear that the legislature has turned its attention to the question of innocent parties and made specific provision for the circumstances in which their property interests will be protected or immune from the operation of this legislation.

BELL J:   What provision has it made in relation to innocent parties in the case of an application for a restraining order based on the expectation of a 36A drug trafficker declaration?

MR GRANT:   The only mechanism it has made, your Honour, is that appearing in section 65 which speaks of setting aside restraining orders in relation to other property and your Honours will see that has specific application – subsection (1) has specific application to restraining orders under section 44(1)(a) which ‑ ‑ ‑

BELL J:   But that is only if the order ought not to have been made because it is not more likely than not that the person owns or effectively controls the property, nor has given it away.

MR GRANT:   Yes.  So if it is property in the hands of an innocent party and the restraining order is – or property in the hands of a person and the restraining order is made in respect of that property and that person is able to go along and put the ‑ ‑ ‑

BELL J:   Establish that the order ought not to have been made ‑ ‑ ‑

MR GRANT:   Quite so, your Honour.

BELL J:   ‑ ‑ ‑ by reason of the fact that the property restrained was not under the effective control or had not been given away.  This does not address the situation, for example, of the arms‑length mortgagee.

MR GRANT:   No, it does not, your Honour, but ‑ ‑ ‑

BELL J:   What provision is made for the arms‑length mortgagee?

MR GRANT:   There is provision dealing with mortgages.  If your Honour goes to section 57, there is provision for mortgage payments to be made.

HAYNE J:   For the mortgagee to realise its security and recover its debt, where do I find that?

MR GRANT:   Your Honour, section 94 of the legislation extends to restrained property but it would seem, your Honours, that it would be open to a mortgagee to agitate the question of whether some part of that property should not be forfeited to the Territory and that is one situation in which it may be necessary for the DPP to apply to the Supreme Court for a declaration and it would be open to the Supreme Court to make appropriate orders in that respect.

BELL J:   It would be during the period that the restraining order is in force the mortgagee would commit an offence by endeavouring to realise the security, surely?  It would be a dealing with the property, would it not?

MR GRANT:   If your Honour goes to section 56(3)(b) ‑ ‑ ‑

BELL J:   Yes.

MR GRANT:   ‑ ‑ ‑ your Honour will see that the proscriptions in 56(1) do not prevent:

the issue of a notice of default by a landlord or mortgagee, and the exercise of the landlord or mortgagee’s rights, under the terms of the lease or mortgage, as the case may be -

during the currency of a restraining order.

HAYNE J:   But is it your proposition that forfeiture, once it is made, forfeits the whole of Blackacre regardless of the interest of the mortgagee?

MR GRANT:   No, it is not, your Honour.  No, it is not.

HAYNE J:   So what is forfeit?

MR GRANT:   What is forfeit is the interest, the property the subject of the restraining order which is vested in or owned or effectively controlled by the person who is the subject of the drug trafficker declaration.

HAYNE J:   The equity of redemption?

MR GRANT:   Yes.  Well, in our system, in our new system, what is now the equity of redemption, yes.  So, your Honours, as we say, that is one situation in which there may be an objection taken by a mortgagee in respect of an attempt by the Territory to take a block of land that is subject to a substantial mortgage which would compel the Territory to make an application to the court under section 94(3) and permit the court to make the appropriate orders in terms of the separation of the drug trafficker’s interest from the mortgagee’s interest.

BELL J:   But if the property has been subject to a valid restraining order, the property is forfeit at the point that you are contemplating the mortgagee might bring proceedings in the court.

MR GRANT:   It is forfeit to the extent of, for want of a better word, the drug trafficker’s interest in the property, your Honour; subject to those provisions in relation to effective control and property being given away.

HAYNE J:   But that seems to be a proposition which, if it is right and I am not saying it is wrong - if it is right, that is a proposition that what is restrained is the accused person’s interest in the land, no more.

MR GRANT:   It depends on the nature of the property, your Honour.  In some circumstances where it is a vehicle, your Honour, those issues are unlikely to arise ‑ ‑ ‑

HAYNE J:   Sure.

MR GRANT:   ‑ ‑ ‑ where it is less likely to arise.  Where it is a block of land, one may be dealing with property within its subsection (b) meaning.

HAYNE J:   But we have to begin consideration of these issues, have we not, by construing the Act?

MR GRANT:   Yes, your Honour.

HAYNE J:   Do we have to begin by understanding the way in which the word “property” is used in various places in the Act, or have I started a rabbit running that I should not have started?  Now is the time to tell me, Mr Solicitor.

MR GRANT:   Your Honour, this is the matter that has been subject of some consideration by the Court of Appeal.  So far as it might assist your Honours, the court’s approach to it is, well, property as it is used in the Act is used in both of its senses and one looks to the particular provision in question which has some effect on the property in order to determine whether it is being used in the sense of the legal interest, legal or equitable interest, or used in the sense of the physical article.

FRENCH CJ:   I think some of those issues were canvassed in relation to crime‑used property in substitution orders in White, were they not?

MR GRANT:   Quite, your Honour.  Clearly, in many cases crime‑used property is going to be property in its physical sense rather than in its legal sense.

GAGELER J:   Mr Solicitor, in section 44(2)(a) we are told that:

A restraining order . . . can apply to:

(a)all or any property that is owned or effectively controlled by the person –

Now, you seem to be reading the words “that is owned or effectively controlled” in the sense of meaning to the extent that it is owned or effectively controlled, that is you take “property” to mean or at least include physical property and then read some qualifier into the words “that is”.  Am I understanding you correctly?

MR GRANT:   It is, your Honour, and it is necessary to do so when one considers the provisions dealing specifically with mortgages, for example.

GAGELER J:   But it would not be necessary to do so, would it, if “property” were given its legal meaning?

MR GRANT:   Your Honour, I am just going back to the definition of “effective control” in section 7 before I answer your Honour.  Yes, your Honour, that designation, “property that is owned or effectively controlled”, would extend to real property which was the subject of a mortgage but, of course, when it came to determine what the effect of the forfeiture or the scope of the forfeiture effected by section 94(1) was concerned it is, in our submission, possible to carve out there interests which might best, in a mortgagee, for example, or at least have an order for the sale of the property and the distribution of the moneys owing on the mortgage to the mortgagee.

GAGELER J:   By reference to what statutory criterion?

MR GRANT:   By reference, your Honour, to the fact that the property, or at least that part of the property which is represented by the mortgage debt, is not property which is, at that point, owned or effectively controlled by the drug trafficker.

FRENCH CJ:   Mr Solicitor, can I take you back for a moment to your reference to the objectives of the Act, and we referred to sections 3 and 10 - I am just concerned about what informs the exercise of any discretion that exists under 44 because if otherwise undefined one refers to the scope and purposes of the legislation.  You spoke of objectives of the Misuse of Drugs Act somehow being pulled in as, as I understand it, we have a mechanism under the Misuse of Drugs Act, that is the declaration under 36A, and that mechanism is, as it were, incorporated into the Forfeiture Act as the way in which you effect the automatic forfeiture under section 94 of the property of somebody which is subject to a restraining order.  Now, apart from the objectives identified in sections 3 and 10 of the Forfeiture Act, what wider or other objectives are there which you would import into the legislative scheme from the Misuse of Drugs Act?

MR GRANT:   As a means of ‑ ‑ ‑

FRENCH CJ:   As informing the discretion, for example, under section 44 in relation to the coverage of property, the subject of a restraining order.

MR GRANT:   Your Honours, apart from the specific and narrow provisions that I have identified in section 46 there are none, but perhaps I could answer the question the other way.  Your Honour, it is clear under the terms of the legislation that when one is talking about the operation of a drug trafficker declaration there need not be a nexus between the property subject to forfeiture and the offending or the extent ‑ ‑ ‑

FRENCH CJ:   I understand that and then the question is what is the purpose of the forfeiture of property that is not crime derived or crime used - it has to be referable, does it not, to the objectives of the Act?

MR GRANT:   It does, your Honour, and it is, amongst other things, to compensate the Territory community for the costs of deterring and detecting and dealing with people who are involved ‑ ‑ ‑

FRENCH CJ:   That is section 10.

MR GRANT:   ‑ ‑ ‑ yes, or taken to be involved in criminal activities.  But, your Honours, apart from that there is no other broad objective to be discerned from the provisions of the legislation.  In terms of constraint on the exercise of the discretion outside of the terms of the legislation we have only the notion that the court acts judicially and that the court retains its usual powers to prevent abuses and oppression.

HAYNE J:   But the notion of abuse and oppression necessarily depends upon first identifying what is a proper use of the Act.  There can be an abuse if there is a use of the Act for a purpose other than a proper purpose.  Reference to abuse, I understand, has a rhetorical flourish.  It has content only when you have identified what the proper use of the Act is.

MR GRANT:   Yes.  Well, your Honour, we go back to the example we gave earlier.  In circumstances where property was to be taken and we maintain a position that property extends to both the physical and the legal, where property is to be taken and that would have the effect of impacting on the needs of financial dependants, the court could exercise its powers to exclude that property from the ambit of the restraining order. 

Now, precisely how the court did that and precisely what approach would be taken would depend upon the specie of property that is the subject of the application.  Your Honour, if it is a – we would go so far as to say, if the subject of the application for the restraining order and the subsequent declaration was a married man with four children living in a house that was half owned by his wife and that was the only residence they had it would be open to the court to exclude that property, if it was the subject of an application, from the scope of the restraining order, by way of extreme example.

HAYNE J:   Plainly open, but open as an act of mercy, open as consistent with the purposes of the Act?  If it is the latter, how is it that it is consistent with the purposes of the Act if you have begun from the premise, which seems to be where the Territory begins, the purpose of this property is if somebody meets a particular set of characteristics all of their property is to be forfeited?

MR GRANT:   Yes.  Your Honour, it would not be an abuse of process in the ordinary sense in that the process is provided for in the legislation.  It would have been invoked properly, assuming that there was no relevant delay or improper purpose in its deployment, so the basis upon which it would be done would be to exclude the property in circumstances where the court was of the view that to make the restraint and subject the property to forfeiture would be to allow its process to be used as an instrument of oppression.  That is as specific as we can be in relation to the ambit of that broader discretion.

FRENCH CJ:  Is the court entitled to make a judgment in an application for a restraining order affecting property which is not crime‑used or crime‑derived that on any view, without necessarily getting into detail, the value of the property which it is sought to restrain or make subject to the restraining order is out of all proportion to the costs of detecting and dealing with the criminal activities, that is to say of the person?

MR GRANT:   Yes.  In our submission, no, your Honour, although there is reference of course in section 3 and section 10(2) to notions of unjust enrichment and detection and dealing with criminal activities.  There is nothing in the legislation which suggests that the court’s discretion under section 44 is properly informed or qualified by notions of the cost of gaoling a person for a day, for example, or how long the person, the subject of the application, has been or is likely to confined, or the cost of preventing the particular category of offending which is the subject of the application under section 36A or the value of the drugs, for example, that were the subject of the qualifying offences for the purpose of section 36A.

That, in our submission, would be a step too far.  It is not a matter that is comprehended by the legislation.  It is also, your Honours, we say, inconsistent with the notion that under section 10 the Act is expressed to apply to property without limitation of persons who were involved or taken to be involved in criminal activities.  The fact that there is clearly, in contradistinction to crime‑used property and crime‑derived property, no requirement for a nexus between the offending, either in terms of its seriousness or the use or the derivation of the property from that offending, no need for a nexus between those factors and the property the subject to the application for restraint or is subsequently made the subject of restraint.

Of course, your Honours, you then have in section 44 specific provision which allows the court to apply the restraining order to “all or any property”.  Now, that may be suggestive of a discretion but certainly not a discretion which brings into the calculus the matters that we have just detailed before, so the seriousness of the offending, the cost of gaoling people, the cost of taking preventative measures on the part of police forces or the value of the drugs concerned.

BELL J:   In the event the application is for all the respondents’ property in anticipation of a 36A declaration being made, what criteria does the Court apply in considering whether or not making that order is oppressive?  On the face of things, Mr Solicitor, one might think in common parlance it oppressive to restrain all of the property that a person owns, effectively controls, or has given away.  That would, on one view, seem to be the intention of the scheme.  I am having some difficulty understanding the content of the discretion that the Territory submits the Court has in the case of an application – properly made – in anticipation of the making of a 36A declaration that seeks all of the property of the respondent.

MR GRANT:   Yes.  Your Honour, and in the ordinary course, we would submit that would be the nature of the application made by the DPP in circumstances where the application for the restraining order was brought under 44(1)(a).  I understand the question your Honour is putting to me in that your Honours would like from me a very precise statement of the nature of the discretion but, your Honours, I cannot put it any more specifically than I have, that it is there to prevent oppression.  But, again, by recourse to example, oppression might properly arise in the context of this legislation when one is talking about the operation on financial dependence or third parties.  It is less likely to arise in circumstances where one is considering the question of oppression of the person the subject of the charges, who will be the subject of the application under section 36A of the Misuse of Drugs Act because the clear intention of the legislation, in our submission, is that the mechanism will operate in respect of the totality of that person’s property.

GAGELER J:   Mr Solicitor, does the objective in section 3 explain the operation of section 44 and 94 of the Act, or do you say that those provisions go beyond the objective in section 3?

MR GRANT:   Your Honour, it informs the operation of section 44 and 94, but does not govern their operation.

GAGELER J:   How does the reference to preventing unjust enrichment in section 3 inform the operation of section 44 and 94?

MR GRANT:   In our submission, your Honour, not in the sense that it would allow the Court to conduct some examination or inquiry into what moneys are referrable to criminal activity of the nature comprehended by the offences prescribed in section 36A and what property is not derived from those activities, so I am answering your Honour’s question in the negative.  For the purpose of the misuse of drugs aspect of this legislation, section 3 does not permit that sort of inquiry simply because section 44 proceeds, we say, on an assumption – 44(1)(a) – that all of the property will be subject to restraint and subsequently to forfeiture.

FRENCH CJ:   You spoke of a clear intention.  There are expressly stated objectives in 3, 10(2) and 10(3) which are presented to the Parliament when this is brought in as a Bill for the Parliament to enact, and yet you say the mechanism under section 44 can be applied for purposes that are not those stated in the Act and go beyond those.

MR GRANT:   The mechanism is section 44(1)(a) falls to be applied, we say, your Honours, in accordance with the literal terms of that provision.

FRENCH CJ:   Unconstrained by the stated purposes of the Act.

MR GRANT:   Informed by but not governed by, your Honour, is the phrase that we prefer.

GAGELER J:   Can I just go back?  If you positively assert that they are informed by the stated objectives, can you present us with a positive submission as to how they are informed by the stated objectives?

MR GRANT:   Yes, your Honour.  The objective applies to all six mechanisms obviously, so one cannot, in our submission, properly go through the process of taking the objective and then applying it to each of those six mechanisms and restricting the mechanisms in accordance with the words of section 3.  The objective applies to all of those processes under the legislation and, of course, crime used, crime derived – or crime‑used property, unexplained wealth, criminal benefit declaration mechanisms, are all obviously what have been described by the Commonwealth as in rem type operations which are directed to property which has been derived as a result of criminal activity.

Clearly, the operation of those provisions are informed by, in their express terms, the objective of preventing unjust enrichment.  It is not possible to bring that objective to bear in the same way on the drug trafficker declaration mechanism because it is not designed in the same way in its terms.  It is clear, in our submission, your Honours, that section 44 provides for – 44(1)(a), any or all property of a declared drug trafficker to be subject to restraint and forfeiture.  The purposes underlying that are, we say, informed by section 36A, that is, if a person is of a certain recidivist character in terms of drug‑related offences, there will be a forfeiture of the property.

There are the particular restrictions we have referred to within and without the Act in terms of 46(1) and 56(2) on the scope or ambit of the restraining order and the restriction relating to abuse and oppression but, your Honour, there is no further room in the context of the drug trafficker declaration mechanism for inserting notions of unjust enrichment and permitting the Court to enter into the process of dividing up which of the property is referrable to the drug‑related activities and which is not simply because that objective whilst it might be relevant to other mechanisms gives way to the plain language of 44(1)(a) and 36A and 94(1)(a), in our submission.

That is highly and as specifically as we can put, your Honour, the answer to the question why is it unjust enrichment does not inform the 44(1)(a) process or the objective of unjust enrichment because it is not in the scheme of this Act read as a whole, a matter that is material or relevant to the process under 44(1)(a), 36A of the Misuse of Drugs Act and 94 of the Criminal Property Forfeiture Act.

HAYNE J:   Then you leave us, Mr Solicitor, with this conundrum.  All provisions of the Act according to section 3 are to target proceeds of crime.  All are, for the purposes of 10(2), is it, to compensate for certain things.  Some are, but only some are, to deter.

MR GRANT:   They are all to deter, your Honours, but some are ‑ ‑ ‑

HAYNE J:   No.  Why are all to deter on 10(2) and 10(3)?  Section 10(3), I said some are to deter because 10(3) picks out crime used and crime derived to deter and that stands in sharp contrast with 10(2) and (3).  Now, we have then got to grapple with the consequences but it seems to me, at least at the moment, that an available reading of the Act is that there is a conundrum presented in that way.  If there is not a conundrum I would be glad of a submission about it, not immediately perhaps but at some point in your submissions; if there is some solution let me know.

MR GRANT:   Yes, your Honour.  I see the distinction drawn there in 10(2) and 10(3), but relevant to that issue and the point raised by his Honour the Chief Justice 10(5), your Honour, goes on to make a stipulation about the liability of property to ‑ ‑ ‑

HAYNE J:   I understand.

MR GRANT:   ‑ ‑ ‑yes, to forfeiture under the Act.  It is liable to forfeiture without limitation in that subsection.

FRENCH CJ:   What substantive operation does 10(5) have?  Does it inform the applications for an order for forfeiture?  It does not inform the section 94/36A interaction.

MR GRANT:   No, it would inform though, your Honour, 44(1)(a) in the scope of the restraining order because it, as we submit, your Honour, without limitations, says that property “owned or effectively controlled” or given away by a declared drug trafficker is liable to forfeiture and that, in our submission, your Honours, is the starting point ‑ ‑ ‑

FRENCH CJ:   Under this Act.

MR GRANT:   Yes, yes.

HAYNE J:   One other purpose I had in raising the property issue with you, Mr Solicitor, was looking down the track to something that you tell us you are going to deal with much later in the argument, and that is the acquisition question.  If this Act bites at property that has been validly given way ‑ that is, in the hands of a third party ‑ if this Act bites at property of innocent third parties, for example, the arm’s‑length mortgagee, taking away its proprietary rights, it will be interesting to see how the acquisition argument then develops in relation to those interests which are affected, but you need to understand early in the argument that the questioning about property was not mere captious inquiry from someone who is harking back to Yanner v Eaton which seems not have been before the drafter when he or she was putting this Act together.

MR GRANT:   Yes, I understand, your Honour.

GAGELER J:   Mr Solicitor, could I just ask you a question about the construction of section 44(1)?

MR GRANT:   Yes, your Honour.

GAGELER J:   The Supreme Court may make a restraining order in relation to “the property of a person”.  How do we read that reference to “the property of a person”?  Is it all of the property of a person or is it specified property and, if so, how is that property identified?

MR GRANT:   Well, your Honour, the starting point, in our submission, is the application, the property which is identified in the application.  The court then applies the sorts of qualifications and discretions that we have discussed, but in terms of that term “property” in 44(1), that is subject to further elucidation, your Honour, in subsection (2) which says:

A restraining order under this section can apply to:

(a)all or any property that is owned or effectively controlled by the person at the time of the application for the restraining order, whether or not any of the property is described or identified in the application ‑

So it is effectively property that is owned or effectively controlled, your Honour, and one of the anomalies in the Act is there is no provision for a restraining order to have application to property given away, for example, under 44(1)(a).  It also applies, your Honour, in subparagraph (b), or can apply, to all property – and we presume that is property that is owned or effectively controlled by the person – that is acquired by that person or another person after the restraining order is issued.  But, of course, there is a logical end point to that process of acquisition, your Honour, in that once the drug trafficker declaration is made, section 94(1)(a) comes into operation and forfeits the property the subject of the restraining order.  After that time, there is no room for the operation of section 44(2)(b) in terms of property acquired after the making of the restraining order.

FRENCH CJ:   Just to tie up a loose end, property effectively controlled can include property in which a person has neither a legal nor an inequitable interest but there is a judgment about a relationship between them perhaps and the person who actually holds the property.

MR GRANT:   That is so, your Honour.  If your Honour goes to section 7(2), there is contemplation of equitable interests, obviously, but then contemplation of something less than a legal interest, so family, domestic, or business relationships and other relevant matters which might extend broadly.  But, in answer to your Honour Justice Gageler’s question, property, for the purpose of 44(1) is property owned or effectively controlled by the person who is the subject of the charge, or the impending charge, at the time the application is made.

KEANE J:   And it may be some or all of the property.

MR GRANT:   Any or all, and it may be property that is not, as your Honours have seen, specifically described or identified in the application.

KEANE J:   But if it can be some but not all of the property ‑ ‑ ‑

MR GRANT:   Your Honours, that is the only way we can read the term “any or all” – “all or any”, rather, in (2)(a).

KEANE J:   So in deciding whether it should be some or all, there is a discretion to be exercised.

MR GRANT:   Yes, but to be exercised judicially, in our submission, your Honour, in accordance with the sorts of relevant matters that we have put in submission, it is not an unfettered discretion to ‑ ‑ ‑

KEANE J:   No.  Is there some instruction given in that regard in 44(3) which says:

The court must not refuse to make a restraining order . . . only because the value . . . exceeds . . . the amount that the person could be liable to pay ‑ ‑ ‑

MR GRANT:   Not in relation to drug trafficker declarations, your Honours, because that only operates in respect of restraining orders made under (1)(b)(ii), (iii) or (iv).  Your Honour will see that they are “unexplained wealth declaration”, “criminal benefit declaration”, “crime‑used property substitution declaration”, so we cannot suggest, your Honour, that that has any knock‑on effect, if you like, in respect of the discretion under 44(1)(a) for restraining orders for the purpose of the Misuse of Drugs Act.  Certainly it operates to restrict the operation of the discretion in relation to those other sorts of mechanisms, but not the drug trafficker declaration mechanism.

HAYNE J:   Does sections 44 empower the making of an order of the kind in fact made in this case in which you have a general catch‑all provision at the end not identifying the property which is the subject of the restraint?  First, the question of power, then second, the question of proper formulation of judicial orders, but first the question of power.

MR GRANT:   Certainly, it is within power, your Honour, expressly under 44(2)(a).

HAYNE J:   Well, (2)(a), a restraining order can apply to various classes of property, but the application must be for a restraining order in relation to the property of a “person named in the application”.  Why should that not be read as “identified property”?

MR GRANT:   Because it is expressly qualified, your Honour, by 44(2)(a), and we cannot put any answer other than that.  There is an express provision to the effect that it need not.  In terms of whether an order should be couched in those terms, if the legislation permits it, and there is no apparent reason not to, then it may, there may be circumstances where a person who owns property the subject of restraint goes back to the court and specifies why it is that an order in those terms would be unjust.

HAYNE J:   Well, people go to gaol for breach of orders like this, people ought to be able to look at the order to know whether their conduct is permitted or not permitted.  They should not be left to form nice legal judgments about whether their conduct is lawful or unlawful.  Now, that may be no more than a question of proper judicial practice in formulating restraining orders but it is, I think, a matter of no little difficulty to make an order, breach of which is penalised with the full force of, presumably at least, the law of contempt, which leaves the person affected by the order, whether directly or indirectly, to form some nice legal judgment.

MR GRANT:   Well, your Honour, we make two submissions in relation to that.  It is a matter of judicial practice rather than a question of ‑ ‑ ‑

HAYNE J:   It is also a matter of the DPP’s practice and what the DPP ought to be applying for, Mr Solicitor, which is part of the reason I raise it.

MR GRANT:   Yes.  Your Honour, the second point is, so far as there are questions of fine legal judgment, whether a person owns or effectively controls property will in the ordinary course be a matter within their clear and certain knowledge, in our submission.

HAYNE J:   I have in mind, again, the third party, the third party who wishes to deal with property which may be affected by the restraining order, but may not be.  What is the third party to do?  Anyway, I have detained you long enough.

MR GRANT:   We should, your Honours, just make one further point in relation to the operation of section 44(1)(a).  It speaks of the court being able:

on application by the DPP, make a restraining order in relation to the property of a person named in the application if:

(a)the person has been charged, or it is intended that within 21 days after the application the person will be charged –

That language, your Honours, is prospective and it does not contemplate an application for a restraining order being made after the third qualifying conviction under 36A.  So there is no scope, your Honours, for an application for a restraining order being sought further down the track or well after the third conviction.  So, your Honours, the only property liable to forfeiture would be that acquired prior to the restraining order and that acquired between the making of the restraining order and the declaration, assuming that there was some further provision in the order which attracted the operation of section 44(2)(b), that is, property acquired after the restraining order is issued.

BELL J:   Well, that is in accord with the order made in this case at appeal book 78.

MR GRANT:   Yes.  So, your Honours, there is no concern in respect of an open‑ended – temporarily open‑ended operation in terms of the legislation.

BELL J:   Well, all other property acquired by the respondent or by another person at the request or direction of the respondent after the orders were made, subject to the exception of lawfully derived income or benefits payable under statute, was the subject of restraint.

MR GRANT:   Yes, but the natural end point of that, your Honour, is when the declaration ‑ ‑ ‑

BELL J:   Is the forfeiture.

MR GRANT:   Yes, quite.

BELL J:   Well, yes.

FRENCH CJ:   Just one other matter in terms of the order that was made, I notice that at page 79, paragraph 6:

The restrained property is restrained until further order –

Ordinarily, 51(1) says:

A restraining order . . . has effect for the period set by the court when the order is made.

Is it normal practice to make it until further order or to actually fix a finite date for expiry, because there are extensions then contemplated under 51(2).

MR GRANT:   Yes, that is the usual practice, your Honour.  Whether it is strictly necessary having regard to the provisions of the legislation is another thing.

FRENCH CJ:   Whether it complies with the requirements of the legislation is the question, I suppose.  That may be a bit of a red herring.

MR GRANT: Well, your Honour, section 51(2) provides that:

On application, the court that made a restraining order may extend the duration of the order for a further period.

CRENNAN J:   Is it right to assume that the restraining order followed the property specified in the interim order, which I do not think we have in the appeal book because ‑ ‑ ‑

MR GRANT:   I will have to confirm that and come back to your Honour but in my understanding, yes, there was no ‑ ‑ ‑

CRENNAN J:  ‑ ‑ ‑ it appears by the respondent by their lawyers consented to the application being made.  I am not sure just what that means in the context of a match between the interim order and the eventual restraining order.

MR GRANT:   Yes.  The first respondent consented to the final, if you like, restraining order through his solicitors when it became before a court for the third time so the first time was before the Local Court, ex parte, the second time the first respondent appeared unrepresented and the court extended it for a short period and the third time the first respondent was legally represented and there was a consent to the restraining order in the terms which appear at page 75 of the appeal book in volume 1.

Your Honours, we should also say something about the question of discretion in the context of the Kable argument.  In our submission, the existence or otherwise of a discretion in the court at the restraining order stage or indeed at the drug trafficker declaration stage is irrelevant to the Kable calculus in the circumstances of this legislation. 

Your Honours would be aware – I do not need to take your Honours to these paragraphs but there is recognition by this Court recently that a discretion is not necessary to preserve validity.  I refer your Honours to International Finance Trust v New South Wales Crime Commission (2009) 240 CLR 319 and the relevant paragraphs are paragraphs 49, 77 and 157.

I would also refer your Honours in that respect to Gypsy Jokers Inc v Commissioner of Police (2008) 234 CLR 532 and particularly at paragraph 39 where reference is made to Nicholas – obviously in the context of federal jurisdiction – where the Court said that a provision which required evidence not to be rejected because of the unlawful conduct of law enforcement officers, whilst it no doubt removed a discretion of the court was not something that gave rise to an invalidity in the context of Chapter III.

Your Honours, our submission is that the question of whether or not there is a discretion at this point is relevant only where there is a procedural provision which would otherwise be inconsistent with the usual curial processes.  International Finance Trust is an example of that where the Court had to operate on an ex parte basis or, your Honours, where there is a natural justice issue which can only be ameliorated by providing for some sort of discretion.  Pompano was an example of that type of legislation but this is not legislation of that order or structure.

Related to that point, your Honours, and to illustrate the fact that the court retains its usual curial processes, the judges of the court have made criminal property forfeiture rules in order 92 of the Supreme Court Rules and I have provided your Honours with a photocopy of the relevant order.  Your Honours will see within rule 1 of Order 92 specific reference to the Criminal Property Forfeiture Act as the Act to which it has application.  Rule 2 applies Chapter 1 which are the normal and extensive rules of the Supreme Court procedures, applies that chapter:

to the practice and mode of procedure in relation to matters dealt with –

under the Criminal Property Forfeiture Act subject to some exclusions that we say are not relevant for these purposes.  In Order 92.03, your Honours, you will see that there is provision for ex parte applications requiring evidence and permitting such applications:

to be heard to a Judge who may make such order or declaration that the Judge thinks fit –

in relation to the disposition of the ex parte order.  Of course, your Honours, as this case illustrates the usual course is that an interim order is made for a fixed period to allow the respondent to appear and make submissions when it comes back on the adjourned date.  Of course, there is requirement for notice and provisions in relation to affidavits and service and discovery in examination.  Your Honours, all of the proceedings under the Criminal Property Forfeiture Act are subject to those rules specifically and the general rules of procedure of the Supreme Court generally.

If I could then take your Honours to finally sections 52 and 65 of the Criminal Property Forfeiture Act ‑ finally, in terms of these restraining order provisions, your Honours.  Perhaps section 50 first - section 50(2) requires:

The applicant in relation to a restraining order –

so that, in this case, your Honours, is the DPP –

under 44(1)(a) must request the court that made the order to set the order aside if the person could not be declared to be a drug trafficker.

Section 52(2) provides in relation to section 44(1)(a) that where the person has not been charged with the offence within the 21‑day period, the restraining order ceases to have effect.  Then section 52(3) which is the subject of an issue raised in the notice of contention, the restraining order ceases if the declaration is not made or the charge is withdrawn or dismissed.  Then, your Honours, section 65(1) provides that:

The court that made a restraining order under section 44(1)(a) may set the order aside –

That is the provision I took your Honours to earlier –

if the court finds that it is more likely than not that the person who is or will be charged with the offence does not own or effectively control the property, and has not at any time given it away.

If I could turn then briefly, your Honours, to section 36A of the Misuse of Drugs Act.  Subsection (1) again provides for application by the Director of Public Prosecutions, and we note here, your Honours, that this section was inserted into the Misuse of Drugs Act by the Criminal Property Forfeiture (Consequential Amendments) Act in 2002, so it operates, and is intended to operate, your Honours, only in conjunction with the Criminal Property Forfeiture Act, and that is apparent, your Honours, from the provisions of 44(1)(a), of course, where there is a direct linking between 36A and section 44(1)(a).  If your Honours then look at subsection (3) of section 36A, the section is cast in mandatory terms in that:

the court must declare a person to be a drug trafficker if –

they have been found guilty of a proscribed offence in circumstances where they have previously been found guilty of two or more proscribed offences –

in the 10 years prior to the day on which the [operative] offence was committed –

And, of course that, your Honours, sets up the adjudicative exercise that the court has to undertake when it is considering an application under section 36A, it must find the qualifying offence, it must find the two previous offences, it must find that they have occurred within the relevant timeframe.

Your Honours, the proscribed offences are set out, or stipulated, in subsection (6) of section 36A, and perhaps the most convenient place to identify what the offences there described are, your Honours, is in the attachment to the appellant’s submissions, the annotated submissions, starting at page 23 of those submissions, in our version, your Honours.  Your Honours will see that section 5 of the Misuse of Drugs Act, which is referred to in section 36A(6)(a) of the Misuse of Drugs Act, is unlawful supply of a dangerous drug to another person.  Section 7, with the aggravating factors in (a) and (b) are where:

A person who unlawfully cultivates, or takes part in the cultivation of, a prohibited plant . . . 

(a)Where the number of prohibited plants . . . is a commercial quantity . . . 

(b)        . . . a traffickable quantity –

An offence under section 8, your Honours, involves the unlawful manufacture or production of a dangerous drug.  Section 9, with the aggravating circumstances at paragraphs (2)(a), (b), (d) or (e) is the unlawful possession of a dangerous drug where it is a commercial quantity or it is a traffickable quantity or it is a Schedule 2 dangerous drug in a commercial quantity or a Schedule 2 dangerous drug in a traffickable quantity.

Then, your Honours, there are the offences against sections 233B of the Customs Act and Division 307 of the Criminal Code and your Honours will see in the appendix to our submissions starting at page 27 there is the notation that section 233B of the Customs Act was repealed in 2005 and Division 307 was inserted into the Commonwealth Criminal Code and the provisions of Division 307, your Honours, are concerned, essentially, with the import and export of commercial quantities, or marketable quantities, border control drugs and plants and those species of offences, your Honours.  So they are the offences, your Honours, which attract the designation, or the order, of a drug trafficker declaration.

FRENCH CJ:   Is it correct to say that the declaration has no legal consequences other than those that are provided for in the Forfeiture Act?

MR GRANT:   In our submission, yes, your Honour; and the declaration operates as an issue estoppel in relation to the particular issue that is determined by the court, whether or not the requirements of section 36A are satisfied in respect of that person.  That is the only other legal effect it has.  That does not do anything, but it is a legal effect.

KEANE J:   Would it have made any difference to the substantive operation of these provisions if, in the Forfeiture Act, section 10(4)(a) had said “the person is declared under section 36A of the Misuse of Drugs Act to be a person involved in criminal activities”?  And if 36A of the Misuse of Drugs Act had said – 36A(1) – “the Director of Public Prosecutions may apply to the Supreme Court for a declaration that a person is a person involved in criminal activities for the purposes of section 10 of the Criminal Forfeiture Act”.

MR GRANT:   Yes.  It would have made no difference at all, your Honour.  That is simply just a status, or a legal label, that has been attached by section 36A.

FRENCH CJ:   And section 36A could have been inserted directly into the Forfeiture Act, could it not?

MR GRANT:   It could have.

FRENCH CJ:   There is no particular reason for putting it in the Misuse of Drugs Act.

MR GRANT:   The only reason, your Honour, is the fact that the proscribed offences are sitting there in the Misuse of Drugs Act as well and there is a certain coherency in placing it there.  As my junior reminds me as well, your Honour, by putting it in the Misuse of Drugs Act it also picks up the 36A and its operation picks up the objects in the long title of the Misuse of Drugs Act, which is to make provision for the prevention of the misuse of drugs and for other purposes.

BELL J:   Does that submission involve the contention that one divines as an object in relation to forfeitures arising from a 36A declaration of deterrence, notwithstanding the provisions of section 10(2) and (3) of the Forfeiture Act?

MR GRANT:   Yes, deterrence in addition to, in our submission, your Honours.

FRENCH CJ:   It seems to involve a shift from an answer you gave to me earlier.  I did not think you were saying there was a broader purpose imported from the Misuse of Drugs Act but you are now saying that.

MR GRANT:   Yes, your Honour, insofar as one can derive a purpose from the long title of the Misuse of Drugs Act.  It does not add much to it, but certainly it puts prevention as one of the purposes, but again does not govern the express provisions of section 44 and 94 of the legislation.  Your Honours, what is apparent from the operation of section 36A is that the question whether there is the relevant number and configuration of proscribed offences is one which falls exclusively to the Supreme Court to determine and those proscribed offences are offences that in respect of which there has been a finding of guilt in the ordinary course of the judicial processes by a court of competent jurisdiction.

So the predicates or the integers for the making of a declaration under section 36A are not the invention of the Executive in the sense of any Executive fact‑finding exercise.  They are provisions, findings of guilt, which have been made by courts of competent jurisdiction and it is the decision of the Supreme Court in relation to the satisfaction of those criteria which ultimately determines whether or not there is a declaration.  It is not the fact that the DPP may have made application for a declaration.  That determination is only to make an application.  The question of the declaration is within the exclusive province of the court and, of course, the court in making that determination applies all of the usual safeguards concerning owner error and rules of evidence and rights of appeal and the determination of the case on its merits, in accordance with the legislation.

FRENCH CJ:   What is the legal distinction between the form in which 36A is cast and an alternative in which it simply says, “a person is a drug trafficker if” and then (a), (b) et cetera under subsection (3) and then – I mean, that is how it really works, does it not, that the legal effect of satisfaction of those conditions is that a person is a drug trafficker and then you seek a declaration of that consequence?

MR GRANT:   Yes, that is so; seek that the court declare the person to be a drug trafficker.  If all of those matters are satisfied the court makes the declaration.

KEANE J:   So if you did not have the provision here expressly providing for a declaration to be made, if you just had a provision which said, “If these requirements for three offences within a prescribed period are satisfied a person is deemed to be a drug trafficker”, if there were a dispute about it, as between the DPP and the person the subject of the application, you could go to court and get a declaration resolving that dispute?

MR GRANT:   Precisely, your Honour, or make an application for judicial review.  One way or another the matter would end up before the court and the court would determine whether the criteria set out in subsection (3) had been satisfied in the circumstances.  In a sense, your Honour, this is a way of shortcutting that process but more importantly making ‑ ‑ ‑

KEANE J:   It is a way of putting the issue beyond dispute.

MR GRANT:   It is a way of having the question whether the criteria are satisfied determined by an impartial arbiter and that is, in our submission, as we have said in our written submissions, an entirely appropriate role for the court to take.  The fact that the compass of the determination is relatively narrow does not detract from the fact that it is a proper adjudicative process and one that properly engages judicial power.

KEANE J:   And certainly more transparent than a provision that said, “If in the opinion of the DPP the person has been convicted on three occasions within the specified period”.

MR GRANT:   Without doubt, your Honour, and, of course, one of the features of this mechanism is its transparency, it is clear the criteria upon which a declaration is made, it is clear what the intention of the legislature is in relation to the confiscation of the assets of declared drug traffickers and it is also clear, in our submission, that the forfeiture is effected by the operation of the legislation, it is not effected by the court’s order.

FRENCH CJ:   Incidentally, I am reminded that there is a legal consequence of 36A other than that in the Forfeiture Act.  That is in section 22(2) of the Misuse of Drugs Act, if you are “charged with an offence” under 36A(6), conviction of which could lead to a declaration being made you cannot “be tried summarily”.

MR GRANT:   Yes.  That is a procedural matter but it is, in fact, a procedural safeguard, an added procedural safeguard for a person who is potentially subject to this regime.  I apologise, your Honour.  That is in our written submissions.  My mind was not directed there to your Honour’s question but the way we put it and the way it operates, in our submission, is as a procedural safeguard because there cannot be a summary determination of an offence, a conviction for which would expose somebody to the consequences of forfeiture.

BELL J:   Can I just take you back for a moment to the purposes of forfeiture as provided in section 10(2) and (3) of the Forfeiture Act, subsection (3) dealing with:

a person who is involved or taken to be involved in criminal activities ‑

Now, that concept takes up not only the section 36A declaration, but persons subject to “an unexplained wealth declaration or a criminal benefit declaration” and persons “found guilty of a forfeiture offence”.  A forfeiture offence is under section 6:

(a)an offence against a law in force anywhere in Australia that is punishable by imprisonment for 2 years or more; or

(b)       any other offence that is prescribed for this section.

MR GRANT:   Yes.

BELL J:   So that one is liable to the forfeiture of property owned or effectively controlled or previously owned if you have been convicted of an offence punishable by imprisonment for two years or more.  Is that right?

MR GRANT:   Just let me track that through, your Honour.  Your Honour, the answer is in subsection (5).

BELL J:   Yes, where?

MR GRANT:  

Property is liable to forfeiture under this Act –

if either it is “a declared drug trafficker” situation or there is “unexplained wealth” or a person “has acquired a criminal benefit” or there is “crime‑used property” or it is “crime‑derived property” and:

(b)whether the relevant forfeiture offence was committed:

(i)in the Territory or elsewhere; and

(ii)before or after the commencement of this Act; and

(c)whether or not –

Now, your Honour, the forfeiture offence is really just an integer of crime‑used and crime‑derived property.  It does not have any independent operation.

BELL J:   That is how it comes in?

MR GRANT:   Yes, that is right.

BELL J:   But the matter that drew my attention to it was the question of the submission that one has regard to the object in the long title of the Drug Act when considering the objects of forfeiture in the case of a 36A declaration, and on the face of it subsection (2) is expressing a purpose that is wider than concerned with 36A declarations, but that may not be right in light of what you say.

MR GRANT:   No, that is right, your Honour.

BELL J:   So one comes back to the circumstance that it is curious that one would read in that wider objective from the Drug Act, having regard to the specificity of 10(2).

MR GRANT:   Yes, but, again, your Honour, to inform, not to govern, but the other point to make in respect of section 10(2) of the Criminal Property Forfeiture Act is that it is a statement of purpose rather than a statement directed to the scope of the restraint or the forfeiture.  The properties forfeit to the Territory when one is talking about a person involved or taken to be involved in criminal activities simply to compensate the Territory without need for there to be any nexus or proportionality between the nature of the criminal activity or the particular pattern of the criminal activity and the amount of the restraint order forfeiture. 

So whilst there is a statement that it is for the purpose of “deterring, detecting and dealing with the criminal activities” that is not a statement which properly informs the decision whether or not to restrict the extent of the restraint or – with the consequence that the extent of the forfeiture would be restricted.

BELL J:   For present purposes, the significance is the absence of reference to “deterrent” purpose in 10(2).

MR GRANT:   Well, it is to “compensate the Territory community for the costs of deterring, detecting and dealing with the criminal activities.”  So, your Honour, in our submission, that does bring in a deterrent purpose in relation to a person who is involved or taken to be involved in criminal activities to the extent provided in the Act, and when one is speaking of declared drug traffickers, 44(1)(a) and 94 comprehend that in the ordinary course all of that property will be forfeit without need to establish the sort of nexuses that we have been speaking of. 

Your Honours, if I could turn then to section 94 of the legislation.  As we have said, your Honour, it is our submission that 94(1)(a) operates such that forfeiture takes place upon the declaration being made under section 36A by operation of section 94, and that effect is not contingent on any further order.  We differ from Western Australia in that respect, but the difference is not material. 

If your Honours then go to section 94(3) that permits the DPP to apply to the court “for a declaration that property has been forfeited by operation of this section.”  That provision would only be invoked, in our submission, your Honours, in circumstances where there is some subsequent contention that in relation to whether or not the property had been subject to the restraining order, whether or not the property had been given away.  It might also, your Honour, come into contention for reasons stipulated in section 102 of the legislation.

FRENCH CJ:   So the declaration contemplated by subsection (3) would be a declaration granted in the exercise of the general powers of the Supreme Court, not a specific statutory creature of the kind, for example, that we find in 36A?

MR GRANT: Yes, a declaration of right under section 19(1) of the Supreme Court Act, I think it is, your Honour, or 18, which confers that jurisdiction.  Your Honours, there may also be need for a declaration in those terms for the purposes of section 102 which provides that:

If a court declares or orders under this Division that land –

or some other registrable interest –

has been forfeited, the DPP must lodge an instrument to that effect with the Registrar‑General.

Of course, your Honours, section 131 speaks of lodging an instrument of forfeiture together with a copy of the forfeiture order.  So when one is speaking of registrable property under the Land Title Act it may be necessary to get an order under 94(3) to comply with those requirements if the Territory - or an order for the Territory to obtain an indefeasible interest in the forfeited property which is land or other registrable property, so not withstanding that the forfeiture would take effect by operation of 94(1) it may be necessary to seek a declaration for that purpose.

HAYNE J:   The registration would point with some clarity to the need to identify what is to happen to the mortgage.

MR GRANT:   Precisely, your Honour, precisely and that is ‑ ‑ ‑

HAYNE J:   Is it registration subject to or registration somehow swamping the interest of the arms‑length mortgagee?

MR GRANT:   Is it registration?  Is there an ancillary order providing for registration and subsequent sale with the apportionment of the proceeds between the Territory and the mortgagee?

HAYNE J:   Well, I would not have thought the question was one of apportionment.  The question is whether the mortgagee is satisfied?

MR GRANT:   Yes.  Your Honour, on that point, section 131(2) ‑ ‑ ‑

HAYNE J:   Justice Bell draws attention to 131(3).

MR GRANT:   Yes, and (4) as well, your Honour.  There are provisions there. 

BELL J:   And (2)(e).

HAYNE J:   It seems to suggest that the mortgagee is left lamenting so we look forward with interest to your acquisition argument in due time.

MR GRANT:   Yes, and that ties in, your Honour, as my friend for the first respondent draws to my attention, section 103(1)(d) which provides:

If forfeited property is sold by or for the Territory under this Act, the value of the property is taken to be the remainder (if any) of the proceeds of the sale after the proceeds are applied to…

(d)fourthly, any bona fide charges or other encumbrances on the property.

HAYNE J:   Which rather suggests, does it, that the mortgagee has lost its power of sale, lost control of its power of sale?

MR GRANT:   Yes.

HAYNE J:   Proprietary interest, possibly?

MR GRANT:   For the purposes of 51 (xxxi) possibly ‑ ‑ ‑

HAYNE J:   Hours of innocent amusement await us on acquisition, do they not, Mr Solicitor?

MR GRANT:   Yes, apparently so, your Honour.  Your Honour, just to complete that submission, section 148 of the legislation contains provision for a common fund and subsection (2) provides:

Money that has been paid into a common fund in accordance with subsection (1) may be paid out by the Public Trustee:

. . . 

(d)to a bona fide mortgagee or encumbrancee of property sold under this Act ‑ ‑ ‑

BELL J:   Coming back to an earlier submission you made, you directed our attention with respect to the prohibition on dealing in property that is the subject of a restraint to section 56(3), as I understand it the submission being that it would be open to the mortgagee to exercise such rights as may be available ‑ ‑ ‑

MR GRANT:   Up until the time ‑ ‑ ‑

BELL J:   ‑ ‑ ‑ up until forfeiture.

MR GRANT:   Precisely, your Honour, precisely.  Once there is forfeiture ‑ ‑ ‑

BELL J:   Yes, yes.

MR GRANT:   Yes.

BELL J:   The prudent mortgagee would move quickly upon the restraint.

MR GRANT:   Yes.  Yes, your Honour.

HAYNE J:   Assuming restraint provokes default.  If the mortgage is well drawn perhaps restraint does equal an event of default, but maybe not.

MR GRANT:   Yes, but ultimately there is no reason to consider, your Honours, that the Territory exercising the power of sale under the Act is going to derive any lesser price for the property than the mortgagee.

HAYNE J:   “We are from the government; we are here to help you”.  Indeed, Mr Solicitor.  Some mortgagees might wish to have control of the sale.

MR GRANT:   Yes, your Honour.  Well, as her Honour Justice Bell says, they would have to move quickly.  Then finally, your Honours, in relation to section 94, where an application is made for the reasons that we have just detailed that may make such an application necessary:

If the court . . . finds that the property specified in the application has been forfeited to the Territory . . .  the court must make a declaration to that effect.

But, of course, subject to the provisions that we have just gone to in relation to bona fide third party interests which goes some way to addressing the concerns your Honour Justice Hayne expressed at the outset, some way.

HAYNE J:   Mr Solicitor, just to add to this shopping list that seems to be building up, a question might arise about how a mortgagee could enter into the possession of the rents and profits and it may well be that there are properties and circumstances where the mortgagee would ordinarily choose to exercise that remedy rather than exercise some other remedy to enforce its security, so at some point in due time we will come to these issues.

MR GRANT:   Well, again, your Honour, that is something that would be facilitated or certainly permitted by 56 (3), again up to the point of forfeiture.  Your Honours, if I could then just briefly touch upon the basis for the Court of Appeal’s decision, principally by simply giving your Honours the paragraph references, if I could start with Justice Kelly, her Honour characterises the scheme at paragraph [84] of the reasons, that is starting at appeal book page 206.  She sets out three particular features which characterised the scheme. 

We would simply observe, your Honours, that paragraph (b) is characteristic of the general prosecutorial discretion and paragraph (c) introduces into her Honour’s determination of validity the notion of subjective legislative intent.  A more neutral way, in our respectful submission, of rendering that feature in subparagraph (c), your Honour, would be upon satisfaction of conditions determined judicially.

GAGELER J:   If you take the concern expressed in that paragraph but look not to section 36A but to section 44 is it the case on your submission that whether some of the property of the person or all of the property of a person or any of the property of a person that is to become the subject of a restraining order under section 44(1) depends on a choice that is made by the DPP?

MR GRANT:   That is the natural starting point but not the end point, your Honour.  The application will, it is contemplated, identify certain property.  That application is made to the court.  The court then applies the processes that have been the subject of submissions earlier in order to determine whether the ambit of the restraint should be greater or lesser than the property identified in the application.  But certainly we cannot resile from the proposition that the starting point is the property identified by the DPP in the application made pursuant to 44(1)(a), but that identification of property does not govern the scope of the ultimate – the restraining order as ultimately made by the court.

FRENCH CJ:   That is because you say the court has a discretion.

MR GRANT:   That is so.  We say it has a limited discretion.  My friends for the Commonwealth and New South Wales would suggest it is much broader than we would admit.  But, yes, in one sense, but of course, your Honour, that is not unusual in that, as Western Australia says, it is axiomatic that all proceedings have to be implemented – proceedings before a court – instituted by a party.  In this case the legislature has identified the Director of Public Prosecutions as the instituting party.

GAGELER J:   Is it the DPP, on your submission, in exercising the discretion to determine what property is to be made the subject of an application for a restraining order who turns his or her mind to the section 3 objective of the Act?

MR GRANT:   In our submission, your Honour, the DPP would, in the ordinary course, put all property owned or effectively controlled by the person who is the subject of the application into the application unless there was some very good reason not to because, in our submission, your Honour, that is the result that is directed by the fact there is no need for a nexus – that section 10 refers to all property being liable to forfeiture in these circumstances and the fact that section 44 is couched in those terms as well.  But, yes, your Honour, that must be how it works both as a matter of practicality and under the legislation. 

So we do not resile from that particular concession.  Nor does it bear on the question of validity for the various reasons set out in the written submissions.  But, your Honours, the key to Justice Kelly’s finding is at paragraphs [88] through to [92].  It is appeal book 208 through to 211.  In summary, it is the proposition that your Honour Justice Gageler has just put to me, that the DPP’s decision to apply for a declaration is determinative of the forfeiture.  Her Honour’s central conclusion is at paragraph [92], your Honours, at appeal book 210.  Her Honour says:

This legislation seems to me to be functionally equivalent to the legislation under consideration in Totani . . . It represents a substantial recruitment of the judicial function of this Court to an essentially executive process -

and her Honour goes on to describe that as a process -

in which the DPP decides which people . . . should be declared to be drug traffickers -

which enlists -

this Court to implement decisions of the executive –

and gives the neutral colour of judicial processes to that executive decision.

FRENCH CJ:   The critical functions of the DPP, if one looks at the scheme as a whole, is first of all, application for a restraining order which is subject to a discretion of contested width; secondly, prosecution of the person for a 36A offence, the outcome of which, of course, is determined by the court and, thirdly, application for a declaration under 36A which depends upon criteria which, if satisfied, mandates such a declaration.

MR GRANT:   That is correct, your Honour.  That is the sole engagement of the DPP prior to ‑ ‑ ‑

FRENCH CJ:   That is the whole scheme.  It is not just 36A, it is the restraining order, because that defines the scope of the property; it is the prosecution and it is the declaration application.

MR GRANT:   Yes, and then potentially after forfeit, your Honour, not that it is relevant for these purposes, the 94(3) application as well.

FRENCH CJ:   For a declaration as to what has happened, yes.

MR GRANT:   Yes.

CRENNAN J:   Is there some commonality between the decision to apply for a restraining order and the decisions – a range of decisions:  one, the decision to prosecute; two, the charges upon which the prosecution will be made; and, three, what witnesses will be called during the course of that prosecution?  Is there any degree of commonality in terms of the decision making there?  I have in mind Whitehorn v The Queen, for example, the precise citation of which I cannot bring to mind.

MR GRANT:   Yes.

CRENNAN J:   In the context of a whole range of decisions which a prosecutor is required to make.  True it is that case was not concerned with an application for a restraining order, but it was concerned with decisions about what witnesses to call, for argument’s sake, after an antecedent decision about what charges should be laid.

MR GRANT:   Yes.  I can answer that question in two parts, your Honours.  In terms of the practical circumstances, the DPP makes its decision within its offices in relation to criminal prosecutions.  So far as the operations of the Criminal Property Forfeiture Act are concerned, there is a separate office within the Solicitor for the Northern Territory where these proceedings are conducted and the Solicitor for the Northern Territory effectively has the conduct of these matters on behalf of the DPP, so there is no operational overlap, if you like, between the two processes.  There is no doubt, however, that, as is obvious in the legislation, an application for a restraining order can only be made in circumstances where a person has been charged or is to be charged with a qualifying offence under section 36A.

CRENNAN J:   I was really pointing to those other decisions in the context of there being no co‑opting or recruitment, challenging that notion.

MR GRANT:   Yes, not in practice and not that we can see in theory either, your Honour, in the circumstances of this mechanism, particularly when one considers, your Honour, that the scope of the curial process under section 36A is limited to identifying qualifying offences and timeframes which in the ordinary course will not involve witnesses at all.  It will involve usually the receipt of certificates of conviction, and it is a process which in this case and in the ordinary course occurs after the criminal conviction.

CRENNAN J:   Just as a prosecutor, by making a decision about what charges to lay, has no responsibility in relation to the convictions which ultimately result from those charges ‑ ‑ ‑

MR GRANT:   Precisely.

CRENNAN J:   ‑ ‑ ‑ in this case the application for the restraining order has no – it does not result automatically in a forfeiture being made.

MR GRANT:   No.

CRENNAN J:   There has to be intervening curial process.

MR GRANT:   Yes.  The application is made under section 36A.  There is a curial process that is full in terms of all of the usual safeguards and then the court makes an order which is, in terms of outcome, unrelated to the DPP’s decision to make the application.  The court has to satisfy itself.  Thereafter section 94 operates.  But, in our submission, your Honours, that is unrelated to the decision to prosecute in relation to the offence which might operate as the qualifying offence for the purposes of section 36A.

Your Honours, the basis for Justice Barr’s finding appears at paragraph [127] of the reasons starting at appeal book 230 where his Honour identifies five matters of concern.  In the second and third matters his Honour identifies there the fact that there is an “absence of statutory criteria” governing the exercise of the DPP’s discretion and the selective engagement of the court’s jurisdiction are common features of the administration of justice, in our submission.  It is apparent, your Honour, that it was factors 4 and 5 that were most significant in his Honour Justice Barr’s determination, that is that:

the Supreme Court may be bound by the legislation to make a declaration contrary to the actual facts –

and that the nomenclature adopted may:

obscure or conceal the true facts –

And that these were the most significant matters in his Honour’s determination is apparent from paragraph [131] at appeal book 233 where his Honour says:

Of all the matters of concern listed in [127] above, the fact that the Supreme Court may be required under s 36A Misuse of Drugs Act to make a declaration that a person is a ‘drug trafficker’, contrary to the evidence, is the most telling point against the validity ‑ ‑ ‑

His Honour goes on in a way that makes it plain that the gravamen of his decision is that the court’s declaration operates to justify the forfeiture in the public perception, married to the fact that the declaration may be contrary to the evidence, and it is on that basis that his Honour says at paragraph [132] that there has been a cloaking effect.  So, your Honours, there are different bases, or at least emphases, in the majority decisions.

Justice Kelly is more concerned with the recruitment of the court by the Executive and Justice Barr is more concerned by the purported effect of the declaration which was to require the court to make a declaration contrary to evidence, but in making that finding his Honour Justice Barr has clearly put an inordinate weight on the label “drug trafficker” and for the reasons expressed by Justice Keane earlier that is a matter that is irrelevant in terms of assessing the validity according to Kable principles.

If I could deal first, your Honours, with this question of recruitment and cloaking?  The vice to which that particular aspect of the Kable doctrine is directed is where the legislation either gives the impression that the process is something which it is not, so it is a sham or a charade, or where the court is compelled to adopt or implement some antecedent Executive determination that is inscrutable, a fact‑finding determination as considered in Totani.  In those circumstances, your Honours, the focus, for Kable purposes, is necessarily on the independence and impartiality of the court, and that was a point made by the plurality in Pompano, your Honours, at paragraph 169.

That was not a cloaking case obviously, that was a procedure case, but their Honours there made the point that when one is looking at assertions of recruitment in the context of Kable the ultimate criterion for determining validity is whether the legislative scheme operates to impair independence and impartiality, independence and impartiality from the will of the Executive or the legislature.  But, of course, your Honours, as your Honours observed, as this Court observed recently in the Public Service Association Case, all judicial enforcement of legislation involves giving effect in some sense to the policy expressed in the legislation, but it does not compromise the court’s integrity to do that, rather it enhances the court’s integrity for the reasons given by Chief Justice Gleeson in Fardon at paragraph 21, and the reason that the integrity of the court is founded on interpreting the legislation passed by the legislature and applying the law accordingly.

The fact that occasionally that process – or quite frequently that process will involve considering and enforcing legislation that has an overtly political purpose is not such as to undermine the independence or impartiality of the court.  Here the operation of the legislation is entirely transparent, as we have submitted.  It provides that people who commit a third qualifying drug offence are liable to have their property confiscated.  It provides that the applications made by the DPP, which is entirely unremarkable.  It provides for the court to be involved effectively at two stages, the restraining order stage and the drug trafficker declaration stage, leaving aside the ordinary criminal processes.  And it provides, in our submission, that the court will have a limited discretion at the restraining order stage and no discretion in the making of a drug trafficker declaration, assuming that the statutory criteria are satisfied by the DPP.

Now, your Honours, all of those matters are explicit on the face of the legislation.  It is also clearly legislation which is of general application, in that it applies to any member of the community who comports themselves in a fashion so as to attract the operation of section 36A.

GAGELER J:   But of that class of persons, those who are to be the subject of a declaration under section 36A and the extent of the property of that subclass, or individual members of that subclass, that is forfeited then by reason of the operation of section 94, turns entirely, does it not, on the discretion of the DPP?

MR GRANT:   It does, your Honour, but there is no – in our submission, no reason to assume that the DPP is exercising some sort of selective determination, just as there is no reason to consider that the DPP is exercising a selective determination in terms of bringing criminal offences, except so far as that process of selection is governed by the ordinary prosecutorial discretion, questions of public interest and prospect of success and those sorts of matters.  So what your Honour says is quite correct but there is nothing sinister in that, and one should not assume that there is any element of selective determination on the part of the DPP.

GAGELER J:   Could the question ever be tested on your submission?

MR GRANT:   Your Honour, if there were – this is similar to but different to the exercise of the prosecutorial discretion in the criminal context.  We do not suggest that it is unreviewable in the same way that that discretion is resistant to review when one is talking about the criminal processes.  So if there was – it would be open to somebody like Mr Emmerson to apply for judicial review of the determination on the basis of improper purpose or bad faith or some similar consideration.  Of course, there would be an argument about the amenability of that sort of determination to judicial review but one would have thought it hard to keep a court out or the court would be resistant to being kept out of examining that sort of assertion in the context of judicial review proceedings.

So, yes, your Honour, it could be tested in appropriate circumstances, and of course the ordinary prosecutorial discretion is no longer entirely insusceptible of review now as well, as your Honour knows, and of course, your Honour, for the reasons I expressed before, one should not assume that the DPP is making any sort of selective determination so far as the ambit of the application for a restraining order is concerned. 

The starting point for the DPP is that all of the property owned or effectively controlled is up for grabs and that that is the property appropriately identified in the application.  That application is then subject to the curial processes and may result in a restraint that is either broader or narrower than the property identified in the application. 

Back to the court’s processes, the court is not called upon in either section 44 or section 36A of the Misuse of Drugs Act to apply criteria that are inapt to the engagement of the judicial process.  There are clearly specified criteria that ground the making of a restraining order and that ground the making of a drug trafficker declaration under section 36A.  Nor do those processes involve the court having to adopt any sort of executive determination or fact‑finding process by way of a front‑end loading, if you like.

So, those being the essential features of the scheme, it cannot be said that there is any recruitment of the court to the whim or object or purpose of the Executive beyond the usual result that judicial enforcement of legislation gives effect to the policy in that legislation.  The court under these processes is no more - and probably much less so – no more implementing government policy than was the court by the involvement of the Industrial Court in the PSA Case.

If those propositions are accepted, your Honours, that leaves simply the question whether cloaking can be considered to have occurred by reason of the content of a 36A declaration, the relevant question there being is the court impermissibly recruited because of its involvement in the making of the declaration that someone is a drug trafficker and the possible public perception that that is a justification for the consequence that follows – the legislative consequence that follows under section 94.

The answer to that, in our submission, your Honours, is twofold.  The first is the court is doing precisely what courts do in the discharge of the 36A function which is to find facts and apply the statutory criteria.  The second submission is that public perception, as this Court has recognised on many occasions, is simply not a criterion of invalidity.  It may be one of the matters that is taken into account in determining whether there is invalidity.

FRENCH CJ:   But you would say there is no distinction for the purposes of this limb of the argument between a declaration that a person is a drug trafficker under 36A or, if 36A were otherwise worded, a declaration of persons being involved in criminal activities, which I think Justice Keane might have put to you before, or that a person is deemed to be a drug trafficker.

MR GRANT:   Yes, precisely, your Honour, and in addition, applying the criterion of public perception gives rise to difficulties in terms of attributing states of knowledge to observers.  In this context anyway, it is explicit in the legislation that section 94 is the feature of the legislation rather than – a legislative effect rather than a direct consequence of the judicial declaration. 

Your Honours, if I could then round up very briefly questions concerning the role of the DPP which have already been subject to submission.  There is no discriminatory enforcement permissible under this legislation, any more than there is discriminatory enforcement in the function of commencing criminal prosecutions.

Again, the criteria for bringing an application are explicit in the legislation.  An application for a drug trafficker declaration, three prescribed offences in a 10‑year period, the assumption will be that barring any extraordinary circumstance the DPP will bring an application in respect of all people who satisfy those criteria.  There is no basis for any apprehension, either generally or in terms of the materials before the court, that somehow there is this wide class of persons who satisfy the criteria in section 36A, but the DPP is making a selection of a very narrow number of those people from that wide class.  Of course, that was the apprehension to which Justice Kelly gave voice, but there is simply no basis for that apprehension.

KEANE J:   Well, there is a possibility of discriminatory or whimsical exercise of the discretion, but that possibility is inherent in a prosecutorial discretion, and we tolerate the existence of that possibility because it is controlled by political mechanisms.

MR GRANT:   Yes, your Honour.

KEANE J:   The existence of that possibility is not a reason for declaring the exercise of that discretion, or legislation which contemplates the exercise of that discretion, invalid.

MR GRANT:   Yes, your Honour.  One would have thought that if the mechanism in Magaming was not one that attracted the application of the Kable principle, then ‑ ‑ ‑

KEANE J:   A fortiori.

MR GRANT:   Precisely, your Honour.  Quite apart from those political mechanisms that operate as a control, there is the prospect, as I submitted to Justice Gageler, that there could be curial control of the exercise of that discretion as well by an application by way of judicial review, in circumstances where it did appear that there was some sort of whimsical or discriminatory approach being taken in respect of a particular application.

HAYNE J:   Well, the whimsical or the discriminatory might be seen as the extreme or distorting example, and there are difficulties in testing validity against the extreme or the distorting example.

MR GRANT:   Yes, we accept that, your Honour.

FRENCH CJ:   That might be a convenient moment, Mr Grant.

MR GRANT:   If it please the Court.

FRENCH CJ:   The Court will adjourn until 2.15.

AT 12.44 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.14 PM:

FRENCH CJ:   Yes, Mr Solicitor.

MR GRANT:   Your Honours, in aid of the submission that we made earlier this morning about the term “property” having a protean meaning in the context of this legislation can I refer your Honours to White v Director of Public Prosecutions (WA) (2011) 243 CLR 478? The case is instructive, your Honours, because the definition of property in the Western Australian Act is in precisely the same terms as the definition in the Northern Territory Act. That is set out in the reasons of your Honour the Chief Justice and Justices Crennan and Bell at paragraph 5. Your Honours will see there:

A key term in the Act is “property”, defined in the Glossary –

and in exactly the same terms as the Territory definition.  If I could then direct your Honours to paragraphs 10 to 12 in the reasons of your Honours Chief Justice French and Justices Crennan and Bell where your Honours make the very point that the meaning to be attributed to the term will depend upon the provision in which it appears, particularly paragraph 12 where your Honours say:

The term “property” used in a statute may take its ordinary meaning, its legal meaning, or both meanings.  The interpretation of the term depends upon the context and purpose of the provision in which it is found.

FRENCH CJ:   I think Justice Gummow says something to similar effect at paragraph 28.

MR GRANT:   Yes, your Honours, so when one is considering whether or not “property” meets the definition or description of being “crime used” one may well be looking at “property” in its physical aspect because notions of storage and similar considerations come in.  When one is looking at property in another context, one might be considering the legal interest, the fee simple in a piece of land, for example.

Your Honours, where there is a restraint and the restraint is of something like a motorcycle, clearly that restraint extends to the bundle of rights comprising the ownership and the physical object that is the motorcycle.  When considering the restrictions which are imposed on property that is restrained, that may depend upon the nature of the restriction.  Where the restriction is against moving the property, obviously that is a reference to the physical aspect of the property.  Where it is to the sale of the property, it is more directed to the bundle of rights or the legal ownership of the property, the title to the property, if you like.

So, your Honours, that is the appropriate approach to take to property.  The question of mortgagee interest, of course, is subject to specific provision and, of course, those specific provisions will obviously govern what meaning is to be attributed to the term “property” in each of the provisions in which it appears that are relevant to this case.

Your Honours, before the luncheon adjournment, I dealt with the involvement of the DPP and essentially the relevant considerations are that the Director of Public Prosecutions does not in any respect dictate the performance of the court’s functions and the court is not required to, or even permitted to decide other than in accordance with the law, both in terms of substantive issues and the processes that are adopted.  There is no requirement to depart in a material degree from the usual characteristics of the exercise of judicial power.

If I could turn, then, your Honours to the question of the drug trafficker declaration, particularly whether it is contrary to fact in the manner discussed by Justice Barr?  Your Honours, it is no objection to the validity of legislation that it requires the court to make a finding which in itself has no consequence or no dispositive effect but then to have that finding given some adverse consequence by legislation. 

Effectively, your Honours, that is what a mandatory sentencing regime does in the Northern Territory and in other jurisdictions.  In the Traffic Act, for example, there are provisions which impose a minimum period of disqualification for repeat offences, purely on the basis of a finding of guilt in relation to a qualifying offence.  This legislation, insofar as it requires the court to make a declaration, does not have any materially different effect.

To take another example, under section 325 of the Fair Work(Registered Organisations) Act, the Federal Court may issue a certificate that a person has acted reasonably in making an application for relief.  That certificate does not, of itself, have any dispositive or legal effect.  It operates simply as a pre‑condition to the Commonwealth Minister authorising the payment of financial assistance in relation to a person’s costs in the proceedings that were brought under the Act.

So the fact that this declaration does not of itself have any dispositive effect is not a ground for complaint.  In fact, when one looks at curial declarations or declarations of right generally – and this keys into a point that your Honour the Chief Justice made – they say something but they do not do anything in the sense that their only legal effect is to operate as – to dispose of the legal controversy that is the subject of the application for the declaration and to operate then as a res judicata or an issue estoppel in relation to that controversy.  But the declaration of itself does not do anything apart from have that legal effect.  So, your Honours, there are clearly similarities between drug trafficker declarations under this legislation and declarations of right generally in terms of their substantive effect.

If I could then, your Honours, address the complaint that the label attributed to this declaration is not strictly reflective of the finding that is made by the court, again that is not unusual in that we have legislation that requires the court to declare offenders, for example, dangerous criminals under the Tasmanian legislation, which I think is adverted to in the Western Australian submissions. 

Now, a person is declared a dangerous criminal under that legislation simply if they are convicted for a crime involving violence or an element of violence and there is one previous conviction for a similar sort of crime.  Of course, the declaration made upon satisfaction of those statutory criteria is that the person is a dangerous criminal.  It is a pejorative label.  One might argue it is not strictly reflective of the facts.  But it is not an effect which is wont to give rise to invalidity in the application of Kable principles and the fact that statutory constructs or labels may not be strictly reflective of the finding of fact is not unusual in the course of the judicial process.

One might say the same about declarations that certain breeds are taken to be menacing dogs under the various Dog Acts regardless of the particular characteristics of the dog concerned.  If the dog is an American pit bull terrier or a cross, it is declared to be a menacing dog for the purpose of that legislation, possibly not strictly reflective of the fact, but not objectionable in terms of legislative authority.

FRENCH CJ:   You say this is a statutory status which the court declares on the basis of criteria?

MR GRANT:   That is exactly right, your Honours, and in fact in that respect we adopt what Queensland says in their submissions at paragraphs 28 to 31.  We cannot put it any better than that.  That is all it is.  It is a statutory construct in the same way that this Court dealt with the deeming provision that was the subject of consideration in Silbert v Director of Public Prosecutions (WA) (2004) 217 CLR 181, and the relevant paragraphs, your Honours - I do not need to take you to them - are 13 in the plurality, and 43 to 44 in the reasons of Justice Kirby. But, there, your Honours, the legislation operated such that a person who had absconded or died prior to the determination of a forfeiture offence was deemed to have been convicted.

FRENCH CJ:   I think a person who died was taken to have absconded, is that how it worked, and then deemed to be convicted on that basis.

MR GRANT:   Yes, and the court was obliged to act upon that deeming in subsequent forfeiture proceedings but there was no resultant travesty of the judicial process because this label of conviction had been attributed as a statutory construct to the person concerned and then adopted by the court under the terms of the legislation.

Your Honours, one must also, when considering the first respondent’s complaint about this label, bear in mind that under the modern approach courts can make declarations by consent or on admissions.  That was not considered to be the case previously but there is a discussion of the evolution of the authorities by the Federal Court reasons of Justice Kiefel in Australian Competition and Consumer Commission v Dataline (2006) 236 ALR 665 which traces that particular development in the law.

It is therefore possible and conceivable, your Honours, that a court might declare as a fact something that might not have been proved to be such had the facts been investigated.  But in the context of declarations of right, that particular possibility is not inimical to the judicial process or the usual judicial process.  So assertions that the label is not strictly reflective of the fact have to be considered in that context in our submission. 

Of course, your Honours, there is the discussion of declarations of a particular sort, novel types of declarations in Momcilovic which has limited applicability to these circumstances, but if I could just refer your Honours in Momcilovic to paragraphs 84, 89, 589, 597 and 602.

So, your Honours, whilst this declaration may be of a novel kind, and whilst there might be room for different opinions in relation to the accuracy of the label, it is not about a hypothetical matter.  It is not dispositive, so it cannot be in and of itself implementing the policy of the Executive and it is not a matter that attracts any finding of invalidity, in our submission. 

If I could, then, your Honours, deal briefly with ground 1B of the notice of contention?  Your Honours, that appears at page 275 in volume 2 of the appeal book.  Your Honours will see that ground 1B proposes that:

The Court of Appeal erred in failing to hold that the statutory scheme –

was invalid or -

an invalid exercise of the legislative power –

in circumstances where the law gave the Executive -

an open‑ended, unconstrained and unreviewable discretion to levy a significant financial imposition on persons with a particular attribute –

and -

a discretion to impose an additional and distinct punishment –

It is unclear from the manner in which it is framed whether those two conditions are intended to be cumulative or read separately, but we take it that the proposition that either/or will provide the necessary ground for a finding of invalidity.

We make two submissions in relation to that ground, your Honour.  The first concerns the “open‑ended, unconstrained and unreviewable discretion” limb of the ground.  The assertion is that it is constitutionally impermissible to clothe the Executive with that form of discretion.  Your Honours, even leaving aside the proper characterisation of the discretion in these circumstances, which has already been the subject of submission, there is no such constitutional principle.

The cases advanced by the first respondent in support of the existence of such a principle are concerned with the question whether a law is capable of characterisation as one with respect to taxation.  The only constitutional principle identified is that citizens cannot be taxed otherwise than in accordance with an enacted law in a taxing act which does not designate the person, the subject of the liability, and does not clearly define the amount of the taxation liability is not a validly enacted law.  That is as far as those authorities go.  They do not have anything to say, your Honours, about legislative authority generally or in this context specifically. 

So far as there is reference to a general principle that the legislative authority or the exercise of legislative authority requires certain matters to be satisfied, there can be no doubt that the scheme comprised by 36A of the Misuse of Drugs Act and section 94 specifies a rule of conduct and attaches rights and powers and liabilities to breaches of that rule and therefore must necessarily be a valid exercise of the legislative authority so far as this particular principle propounded is concerned.

Your Honours, the second limb of ground 1B is the assertion that it is unconstitutional to impose an additional and distinct punishment or penalty on offenders already sentenced.  Your Honours, there is no doubt, in our submission, that the confiscation of assets is a penalty, but legislation providing for that result does not implicate the common law principle of double jeopardy for the reasons, your Honours, articulated by Justice Gummow in Fardon at paragraph 74.

Your Honours, Justice Gummow there observes that where a scheme is set up to operate by reference to a particular status unrelated to the ordinary criminal processes and then imposes its own normative structure on that status, there is no room for the operation of the principle of double jeopardy.  It is simply not implicated.  Of course, in this case, your Honours, the scheme operates by reference to the first respondent’s status deriving from the three separate convictions and then sets up its own normative structure.  That is at paragraph 74 in Justice Gummow’s reasons.  I will also refer your Honours to some further paragraphs in that ‑ ‑ ‑

FRENCH CJ:   It really reduces back, albeit it is said to be outside the framework of Kable and its sequelae, to a characterisation of the function of the DPP as, in effect, determining the outcome of the applications.

MR GRANT:   It is an outcome case, not a manner case, and that is the essence of the first respondent’s case, your Honour.

FRENCH CJ:   That is in both limbs of the argument.  It is really all about what discretion the DPP has.

MR GRANT:   Yes, your Honour.

FRENCH CJ:   I am looking at paragraphs 28 to 30 of the first respondent’s submissions.

MR GRANT:   Yes, but it is expressed to be, your Honour, a constitutional principle that operates separately from Kable.

FRENCH CJ:   Yes, there is some sort of limiting – implied limitation on the grant of power to the Northern Territory.

MR GRANT:   Essentially it boils down to a Kable argument and the same issues arise, in our submission.  So, your Honours, where a scheme sets up a normative structure like this, quite distinct from the sentencing process in terms of criteria and purpose, the principle of double jeopardy is not implicated and, of course, that is consistent with Pearce v The Queen, the fact that that common law principle can be displaced by legislative intervention, in any event.

Your Honours, so far as there is complaint that the penalty operates as a punishment, the significance of punishment in the Kable context, and in this context by extension, we say, is directed specifically and particularly to deprivation of liberty, not to punishments generally, even if one assumes that the first respondent gets over the first hurdle. 

The concern of course there, and in the Chapter III context generally, is that deprivation of liberty without an adjudication of guilt as part of the curial process naturally gives rise to problems in terms of consistency with the ordinary judicial process and the distinct roles of the legislature, the Executive and the judiciary in that respect.  The concern is not directed to whether or not the penalty is imposed for a punitive purpose.  The concern is with the deprivation of liberty in the context of Australian legal history and the usual dichotomy between curial processes or exclusive judicial functions and legislation functions. 

So, your Honours, the imposition of a civil penalty contingent on, additional to whatever penalty might have been imposed as part of the criminal conviction and punishment does not attract the operation of the double jeopardy principle or give rise to any separate constitutional principle.  This sort of confiscation in addition to criminal penalties has long been part of the common law and the involvement of the courts in those schemes has long formed part of the ordinary processes, the ordinary judicial processes.

If your Honours were to consider the scheme in Theophanous v The Commonwealth (2006) 225 CLR 101, that provides a recent and classic example of the imposition of a civil penalty contingent on and additional to the criminal conviction. Your Honours, under that scheme application was made by the DPP after a conviction for a qualifying offence.

As is similar to the scheme under consideration here, your Honours, the legislation empowered the responsible Minister to authorise the DPP to make the application.  So whether or not to make application was entirely within the purview of the Executive and subject to the sorts of political controls that your Honour Justice Keane was referring to earlier before lunch.

Section 19 of the legislation under consideration in Theophanous required the Court to satisfy itself that the offences were corruption offences and then to make declarations, or a declaration, that the person had been convicted of corruption offences and that the Act had application as a result of the conviction of those corruption offences.  Following a declaration in those terms, your Honours, section 21 of the legislation operated to confiscate or forfeit the superannuation benefits.

So, all rights and benefits payable to the person in the future under the superannuation scheme were confiscated.  All employer contributions that had been made to the scheme, over the life of the scheme, regardless

when they were made, whether they were made before or after the relevant offending, were confiscated and all contributions previously paid by way of periodic payments to the person the subject of the declaration, became a debt due and payable to the Commonwealth. 

So, your Honours, in the sentimental sense at least, the similarities between that scheme and the scheme that is under consideration in this appeal were stark.  So, if it please, your Honours, there is nothing particularly novel about the operation of this legislation and certainly not in the sense that would attract the operation of the Kable doctrine.

Your Honours, noting the time, what I had proposed to do in relation to the construction question, that is the construction of 52 (3) was simply to rely on the submissions that we make in our reply and deal with anything by way of law that comes up during the first respondent’s submissions when we deal with the acquisition point.  If it please the Court.

FRENCH CJ:   Yes, thank you, Mr Solicitor.  Solicitor‑General for New South Wales.

MR SEXTON:   If the Court pleases.  Without wanting to revisit what has been covered by the Solicitor‑General for the Northern Territory, we wanted to look briefly at the three steps that are taken under the two pieces of legislation in this case that have led to the forfeiture here of the property in question and look at those steps in the context of the Kable doctrine.

The first step is the making of the restraining order under section 44 (1) of the Criminal Property Forfeiture Act upon the application of the DPP and the making of the orders by the court in certain circumstances specified in the legislation, and the relevant circumstances here are that the person in question had been charged with an offence that on conviction could lead to that person being declared to be a drug trafficker under section 36A of the Misuse of Drugs Act. 

It is to be noted that the court may, to use the words of the statute, make the restraining order in relation to the relevant property under section 44 (1) and that the restraining order can, again to use the words of the statute, apply to all or any property that is owned or effectively controlled by the person in question under section 44(2)(a). 

That discretion that exists would be exercised, as has already been noted in a sense prior to luncheon, in the context of the objects that are set out in the legislation, particularly in section 3 and section 10(2) and (3) - I will not take your Honours to those again - but the discretion would be governed by those objects that are set out in the legislation.

BELL J:   How is the discretion governed by the object in section 3 when one is looking at the discretion to make a restraining order with respect to a 36A declaration that does not relate to property that is said to be associated with the criminal activity?

MR SEXTON:   How the discretion would operate in any particular case will, of course, depend upon the facts of that instance.

BELL J:   But what is the significance of the section 3 object in such a case to the task at all?  How does it inform the task?

MR SEXTON:   We would say that it enables the court to take the whole circumstances into account.  The words of the discretion, “may”, “can”, “all” or “any” that looking in the context of those objects it would then have to make a decision as to what extent the property would be the subject of the restraining order.  It is hard to look at it in the abstract.  I do not want to pre‑empt your Honour’s question except to say that we do not really try and define the boundaries of the discretion in our submissions.  Our point is really to say that the discretion is certainly sufficient to avoid any contravention of the Kable principle.  From our point of view, that
is the significance of the discretion.

GAGELER J:   Could the court say, “I am satisfied that this particular property that is sought to be made the subject of the restraining order was given to the person involved by a relative and could not possibly be the unjust enrichment of that person within the meaning of section 3”?

MR SEXTON:   We would say it is open to the court, depending on the exact circumstances of the case, to make that decision because the objects talk about “proceeds of crime”, “unjust enrichment” it seems to us that there is room there to take account of the sorts of factors that, for example, your Honour has just raised.  Whether it would happen in the particular case, of course, might depend on a lot of other factors but on its face the discretion, combined with the objects of the legislation, seems to give the court some room to move.

BELL J:   The legislation makes provision for the forfeiture of property owned, effectively controlled or previously owned of a person who is the subject of a 36A declaration.  There is no requirement that that property had any association with the criminal activities that led to the making of the declaration.  Taking that into account, it is rather difficult to see the basis upon which the court might in relation to a valid application made to restrain all of the person’s property determine – I am going to leave out of the equation parts of the property because there is no connection with criminal activity and therefore no question of unjust enrichment arises.

MR SEXTON:   The court might take that view in a particular case.

BELL J:   In what circumstances would the court be authorised, having regard to the statutory scheme, to decline to make the application that is sought taking into account the absence of a factor of unjust enrichment?

MR SEXTON:   Your Honour, the combination of the discretionary words in section 44 together with the objects, section 3, section 10, leave it open to the court in particular cases to exclude, we would say, some property.  The principles on which that might occur – one of the problems is that perhaps the statute – that not all of the provisions of the statute point in the same direction but we would say that the discretion that is available is sufficient at least to meet any problems of the Kable doctrine.  How it might be exercised in any particular case could prove a very difficult exercise for the court in question for the very reasons that your Honour has just put forward.

Just to continue with that notion of the first step, that is, in the exercise, the proceedings are, of course, civil in nature and may but not must be heard ex parte, section 41(3) and section 136(1), and it was held in Burnett (2007) 21 NTLR 39 at paragraph 73 that the court has been given an unfettered discretion in determining whether to accede to the application to proceed ex parte. A person may object to a restraining order under section 59. It may be set aside under section 65. An appeal lies with leave from the decision to make a restraining order, sections 51 and 53 of the Supreme Court Act (NT). There would also be, as has been pointed out, the ability to seek judicial review of the restraining order in the appropriate circumstances.

So, in our submission, it cannot be said that the conferral of this power on the court, that is, the restraining order power, affects its institutional integrity in contravention of the Kable doctrine.  It will be recalled that in IFTC the problem was that the power conferred embodied a denial of procedural fairness, and in Wainohu an absence of reasons on the part of the eligible judge, but by contrast here the usual incidence of the judicial process are available in relation to the making of the restraining order.

I should just say as a footnote to that first step that there was some question raised before lunch about whether the restraining order needed or should specify the property in question.  There are some provisions of the Act that suggest that that would normally occur, I will not take your Honours to them in detail, but sections 47(1)(c), 47(2), 53 and 48, which are circumstances where there would need to be identification.  Now, coming to the second step, which is the declaration by the court under section 36A of the Misuse of Drugs Act, again on the application of the DPP, under section 36A(3) the court must make the declaration if the circumstances provided in the subsection are established.

Insofar as the court is required to make a finding of fact under that section as to whether the person in question has been found guilty of an offence corresponding to one of the offences listed in section 36A(6) the court will have to make a judgment as to whether or not this term, which is not defined in the Act, is satisfied by the earlier offences.  In many ways, of course, the relevant circumstances will be a matter of record, but the underlying convictions will be the product of the judicial process for determining criminal guilt, and the order can only be obtained if the relevant facts are established, and this must be done to the satisfaction of the court to the normal civil standard of proof; rights of appeal and review are retained and the Supreme Court’s inherent powers to prevent an abuse of process.

So, again, in our submission, there is no contravention by this provision of the Kable doctrine in any of the ways identified in IFTC, Wainohu or Totani.  I will not give your Honours the citations at the moment, they are all too familiar perhaps, except for one which I will come to now.  In particular, the outcome of this judicial process is not dictated, we would say, by a prior Executive decision, as was the problem in Totani.  The judicial process yielding the prior convictions supplies the conditions for the making of the declaration which amounts to a determination that the person meets the statutory criteria.

Justices Gummow and Bell said in IFTC (2009) 240 CLR 319 at paragraph 77, and it is referred to but I think not quoted by the Solicitor‑General for the Northern Territory, that a law imposing a duty to exercise a power, if the Supreme Court decides the attached conditions are satisfied:

is not to be stigmatised on that ground alone as an attempt to direct the Supreme Court as to the outcome of the exercise of its jurisdiction ‑

The chosen statutory label in section 36A(1) does not transform the nature of the process into one that compromises the court’s decision or independence or departs impermissibly from the ordinary judicial processes of an independent impartial Tribunal.

The third step in the exercise is the actual forfeiture of the property, subject to the restraining order that is owned or effectively controlled by the person in question.  That occurs, of course, under section 94(1) of the Criminal Property Forfeiture Act if the person in question has been

declared by the court to be a drug trafficker.  The forfeiture, however, occurs by operation of statute and not by court order.

FRENCH CJ:   You invite us to look at the three steps together for the purpose of the cavil argument but does it matter to your argument whether the first step involves the exercise of a discretion?

MR SEXTON:   Well, it is a good question.  Arguably, the same principle in relation to Kable would be applicable, that is, that the doctrine would not be contravened even if that discretion did not exist, but it seems to us that because that has been an element in a number of the Kable cases, that at least it reinforces the argument, we would say, if there is a discretion present in relation to the making of the restraining order.  I understand what your Honour says, that you can make the argument without it.  I think the Solicitor for the Northern Territory makes the argument without it.

The forfeiture – because it occurs by operation of statute, not by court order – is not, of itself, subject to scrutiny under the Kable doctrine because there is no conferral of any power on a court; that position is unaffected by the fact that under section 94(3) the DPP may apply to the court for a declaration that the property has, in fact, been forfeited.  But if one takes the steps individually or, indeed, collectively, we would say that no question of the application of the Kable doctrine is raised in this case and that it is a very different exercise from any of the three instances where, before this Court, there has been an application of the Kable doctrine and the statute has been invalidated on that basis, but we would say this is a very different case and that, looking at the steps individually, or collectively, that the doctrine is simply not in any way contravened by the two statutes that are present here.  Those are our submissions, your Honours.

FRENCH CJ:   Thank you, Mr Solicitor.  The Solicitor‑General for Queensland.

MR SOFRONOFF:   Your Honours, our oral submissions are premised upon the proposition that a law – a State or Territory law – which provides for the forfeiture of the property of a person convicted of a criminal offence is valid because if such a law is stated as baldly as that, invalid, then that is the end of the case.  But assuming that such a law is otherwise valid, then our submissions examine the significance of the making of the restraint order and the making of the – sorry, I will start again ‑ the significance of the making of the 36A declaration and the significance of the making of the forfeiture declaration if one is sought for the purposes of the Kable doctrine.

In our respectful submission, if one asks the question why do those two otherwise apparently curious requirements exist, it is because at the end of the process the effective forfeiture by virtue of the statute itself is that there is a transfer of property from the original owner to the State – or to the Territory rather – and the consequence of that raises some transactional practical difficulties which have to be sorted out. 

Some of these difficulties arise because of the nature of the preconditions for forfeiture to take effect.  Others arise because in due course the effect of the statute is that the Public Trustee must manage the property and deal with it and will need as a practical matter to demonstrate authority and title to the property in the Territory so as to be able to deal with third parties, and how is that to be achieved under a regime like this?

There could have been a number of policy choices to deal with it, but the way that this Act seeks to deal with it is to make provision for two things, relevantly.  The first is a document emanating from a court which shows that the particular person who was the owner now has a certain status and a court order, having the quality that a court order does, as unchallengeable subject to appeal, that is the best evidence you can have; it is a certificate.

The second aspect of it, the declaration of forfeiture, may or may not be necessary to be obtained by the DPP or for the benefit of the Public Trustee.  That is because in the case of something like cash, possession is enough, having been seized and possession having been taken by the Public Trustee that is the end of the matter and it is somebody else who would then have to challenge the possession and asserted ownership of the Public Trustee.

But not so in the case of land or interest in land and not so in the cases of some choses in action such as shares or bank deposits and not so in the cases of interests in other contracts which might exist for the benefit of the former owner.  In the case of those sorts of things, like any receiver of property or any liquidator, the person concerned has to be able to point to some document of authority in his or her dealings with third parties and at the end of it the ultimate document of authority may have to be a declaration by the court that particular property has been forfeited and that then becomes the warrant for a third party to surrender the property or to deal with the property at the direction of the Public Trustee.

Could I take your Honours as quickly as I can through the relevant provisions?  Your Honours are aware, of course, that the forfeiture is effected by force of the statute itself upon the preconditions having been satisfied.  Then, once that occurs, section 106 of the Forfeiture Act imposes responsibility upon the Public Trustee to deal with the forfeited property.  I will ignore restrained property for the moment.  As I have said, the responsibility and therefore the duty of the Public Trustee will extend to real estate, choses in action, chattels, cash, contracts and so on.

Section 108 of the Forfeiture Act invokes Part VIII of the Public Trustee Act except for some immaterial exceptions.  We have annexed that section to our oral outline and your Honours will see section 60 in the usual way of such legislation.  It is sufficient, your Honours, to look at section 60(1)(a):

to take or to recover possession of the property and to recover all money, damages and mesne profits payable to the owner –

One can easily see that the Public Trustee might require a form of written authority to justify a demand made.  Then subparagraph (m) on the next page:

to bring any action or other proceeding relating to the property –

and again, something else other than the Public Trustee’s own assertion of authority might be called for.  So that is the position that the Public Trustee might find himself or herself in. 

Now, the actual rights and duties of the Public Trustee depend upon circumstances existing and the first is the status of the former owner as a person who has been convicted of the defined offences.  If your Honours would look at – your Honours are familiar with section 36A of the Drugs Misuse Act which provides for a certificate by the court which would be handy in proving status.  But if your Honours would look at the Forfeiture Act, section 8, we can see that, for example, subsection (2):

A person is taken to be a declared drug trafficker for this Act if:

(a)       the person is charged with an offence ‑

but absconds.  Section 9, a person is taken to be a declared drug trafficker if the person is charged and dies and a court hears an application for a declaration and makes a finding about the probability.  So the first step is for the Public Trustee to establish status of the owner as a person whose property has been forfeited and that might be enough and it might be enough to show the certificate under section 36A.  That is why, one apprehends, there is provision made for a court to issue such a certificate.

The second thing that the Public Trustee will have to show in due course under section 94 is that the property over which the Public Trustee asserts authority is property that is the subject of a restraining order, section 94(1)(a).  That is property that is subject to restraining order relevantly under section 44 of the Forfeiture Act or 45 – I am sorry, 43 or 44.  Section 43 involves the court in a fact‑finding task, 43(2), in determining whether there are reasonable grounds for a particular suspicion, relevantly. 

Section 44 is simpler in terms of the preconditions but wider in terms of the discretion.  So 44 requires, relevantly, as a minimum precondition for the exercise of the jurisdiction to make a restraining order that the person has been charged or it is intended to charge such a person with an offence that could lead to a declaration under section 36A.  That is the minimum condition. 

But there is a discretion connoted by the word “may” and also in terms of the scope of the property to be restrained in subsection (2) it is inherent in the word “can” – a restraining order “can” apply to all or any of the property.  We contrast section 44 which uses the words “may” and “can” with section 94(4) which provides that the court “must” make a declaration.

So, in due course, a restraining order having been made in relation to property, the property need not have been identified in the DPP’s application, but it would be a remarkable order made by a Supreme Court in relation to property that did not identify the particular property.  This one does not, actually, but that, in our respectful submission, is an error upon which nothing turns.

HAYNE J:   That being a particular application of principles of the kind dealt with in Morris v Redland Bricks (1970) AC 652, particularly at 666 by Lord Upjohn, I think suggesting that above all else in orders people have to know what they are bound to do or bound not to do.

MR SOFRONOFF:   Quite, your Honour.

HAYNE J:   People go to gaol.

MR SOFRONOFF:   Of course.  Could I say something about that in a moment, your Honour, but in addition nothing in section 44, the Act as a whole, obliges a judge to make an order otherwise than in the orthodox way.  So if there had been a provision of the kind we have seen in other statutes that require a judge or permit a judge not to give reasons or something of that kind there would be a problem but here there is a discretion, may make an order, restraining order, that order can apply to all or any of the property.  The application need not identify it.  It is going to have to be identified at some point otherwise there might not be any property to make the subject of a restraining order and in the usual way a judge would seek to identify.

CRENNAN J:   The service obligations that are imposed on the applicant under section 47 would also suggest that you clearly have to specify and identify the property because until you do that you obviously cannot comply with the service obligation.

MR SOFRONOFF:   Yes, your Honour, and so the first ordinary practice grounded in law would require the order to specify the property and practicality would require specification of property to identify that there is any property to make an order about.  In addition, your Honour Justice Hayne refers to the possibility of penal consequences and consequences in respect of contempt.  For a person to be guilty of an offence of dealing with property the subject of a restraint it would be hard to imagine a successful prosecution that did not involve proof that the person knew of the order, knew the property was affected by it.

Certainly, for common law contempt one would have to prove those things, and absent knowledge of the order which identified those matters a prosecutor would get nowhere.  So, in our respectful submission, section 44 confers a discretion on the Supreme Court and would operate in the usual way in which discretions conferred apparently at large are always read as restricted by the four corners of the statute, relevantly here, section 3 that your Honours have heard debated before you and, relevantly, section 10(2).

HAYNE J:   Are you going to tell us how 3 and 10(2) affect the discretion, Mr Solicitor?

MR SOFRONOFF:   I do, your Honour, because – I do not want to delve too deeply into this because others are more concerned with it but I want to touch upon it because it seemed controversial listening to argument this morning.

BELL J:   It would be useful for someone to delve deeply into it.

MR SOFRONOFF:   Well, could I deal with it in this way, your Honours?  There are, relevantly, two preconditions to forfeiture, one is that a restraint order has been made and continues to exist in respect of particular property, and the second is that the person is a declared drug trafficker ‑ I put that to one side.  Unless a restraining order has been made in respect of the property sought to be forfeited there will be no forfeiture, so the judge before whom the application for a restraining order comes will know that this is the pivotal decision which if the person is in due course found guilty of the relevant offence and declared to be a drug trafficker will lead to statutory forfeiture, so that is the point at which the decision may be made by a judge.

The discretion is at large, subject to the four corners of the Act, but one can easily imagine circumstances in which an alleged drug trafficker has two pieces of property as registered owner, the first is a Gold Coast home unit for which cash was paid, by that I mean no mortgage was involved, entirely paid for and bought in the last two years over the course of a period when it is going to be alleged the person was trafficking in drugs to a large degree, to take an extreme case, and at the other end of the spectrum that person is also the holder of a pastoral lease, obtained by way of inheritance, of a valuable property that has been in the family for two generations and has been worked on and improved, and in no way can be said to have any link to any bad activities.

When our black sheep is then charged with an offence that might lead to forfeiture a judge might well take the view that in respect of the Gold Coast home unit it would be fitting, having regard to 10(2), to make a restraining order so that that property might in due course be sold to compensate the Territory community for the costs of deterring, et cetera, crime, but that it would not be right in any sense to taint the rural property, and one can think of examples but it is enough, in our submission, to think of one in order to demonstrate, which we hope we have done, that the discretion has actual work to do.

BELL J:   But that submission invites the view that forfeiture is appropriate in an instance when there is a reasonable basis for thinking the property is in some way connected to the criminal activity of the respondent.

MR SOFRONOFF:   Well, that would be one reason why it would be appropriate, but there might be other reasons.

BELL J:   But if one accepts that the scheme of the Act appears to be to catch property in respect of which it cannot be said there is a link to the illegal activities of the respondent why does it become appropriate for the judge to take into account the absence of nexus to criminal activities as a reason for not granting a valid restraining order that identifies the pastoral property?  The pastoral lease might be worth a considerable amount of money and it might be thought that it would go towards the achievement of 10(2).

MR SOFRONOFF:   It might, your Honour, it might, but ‑ ‑ ‑

BELL J:   But the judge has to – when you say “operate within the four corners of the statute” one has to give some rational operation to the statute.

MR SOFRONOFF:   Yes.

HAYNE J:   What does the judge write down in his or her reasons, if it seems fair?

MR SOFRONOFF:   It would depend, your Honour, upon the circumstances but, for example, if one is dealing with a property that in no sense is connected to criminal activities and in which other people have an interest, not a legal interest, but have an interest and there would be harsh consequences for third parties, I do not wish to put up a simple fact in order to colour the exercise of the discretion, but it is easy to see in an adversarial proceeding, a party appearing with a view to resisting an order over all property and putting forward a coherent set of reasons which would engage the discretion to decline to include particular property. 

The rules, for example, for common law interlocutory injunctions, while dealing with principles and guidelines, permit of many factual circumstances which a judge could in his or her reasons write down as the particular reasons for declining to enjoin property and that is what we point to. 

The discretion must be constrained by the purposes of the Act and although one of the purposes of the Act is, let me say, condign retribution by way of forfeiture to fund policing and criminal deterrence that is one of the purposes which will affect the kinds of arguments a respondent would be able to make.  But those arguments can be made and the force of them will depend upon the circumstances.

So, in our submission, there is, as has been submitted by others, there is a discretion conferred in plain terms by the use of the two expressions, “may” and “can” in section 44 and that discretion must be informed by the purposes of the Act and that means there must be circumstances in which a restraining order will be refused for purposes which are proper, having regard to the purposes of the statute in conferring that discretion upon the court.  Now, could I ‑ ‑ ‑

FRENCH CJ:   Just before you move on, you describe this step, as it were, the pivotal decision and what follows under 36A and 94, I think you characterise as essentially a certification process by the court and having regard to the mandate under 36A and the, as it were, automatic effect of forfeiture under 94, that function could as easily have been entrusted to, say the DPP ‑ ‑ ‑

MR SOFRONOFF:   Which function, your Honour?

FRENCH CJ:   ‑ ‑ ‑ of certification.

MR SOFRONOFF:   Yes, your Honour.  Yes.

FRENCH CJ:   “I certify that this person has satisfied the conditions to be deemed a drug trafficker because of X, Y and Z convictions and this person having been declared and convicted under section 94, the property which is named in the restraining order, made on such and such a date, is forfeited” and then produce those to whoever he has to deal with - the Public Trustee has to deal with.

MR SOFRONOFF:   It could be done by any officer.  However, if one looks at - could I ask your Honours to look at section 36A of the Misuse of Drugs Act?  There is a small practical difficulty that arises under it.  If your Honours look at 36A, the DPP applies to the Supreme Court and subsection (3) requires two things – first:

the person has been found guilty by the court of an offence referred to in subsection (6) -

The words, “has been found guilty by the court”, that must mean has been found guilty by the Supreme Court, not a court but by the Supreme Court.  “The court” refers back to subparagraph (1), the Supreme Court, so we have just had a proceeding and the court has found the person guilty of the ultimate offence.  The second requirement in subsection (2) has a temporal component and also a component in respect of the quality and number of offences:

10 years prior to the day on which the offence was committed –

not the conviction – which is a fact that has to be determined –

the person has been found guilty –

of certain things, relevantly, subsection (i) –

on 2 or more occasions of an offence corresponding to an offence referred to in subsection (6) –

If one looks at subsection (6), subparagraphs (a) to (d) refer to offences under the Misuse of Drugs Act – I will come back to that in a minute – but over the page, subsection (f) -

an offence against a law of a State or another Territory corresponding to an offence mentioned in paragraphs (a) to (e) inclusive –

So there is going to be a requirement for the construction of the offence alleged to have been committed elsewhere and its correspondence with the Territory offences referred to in (a) to (e).  Somebody has to do that.  Submissions might be made – one can expect they would be made in an appropriate case – by the defendant to the contrary.  Somebody has to determine that.  The DPP could do it, your Honour, by hearing – like any other administrator – submissions from both sides.  But it is convenient to deal with it in a court where all of the documents can be presented and dealt with.

So it is true that the certification and, indeed, the declaration of forfeiture might easily have been provided for by administrative act by an officer, not a judge, but the provision is made to have that done – I will come to the declarations in a moment – in open court at a time when it is convenient to do it.  One would expect, although the section does not say so, shortly after the relevant ultimate conviction when an examination can take place into the record of the convicted person to determine whether he or she satisfies the preconditions in subsection (3).

So, in our submission, it makes sense for the task to be instructed to the criminal judge, or a criminal judge, or a judge, in the court where the ultimate offence has been determined.  It is a little much, in our respectful submission, to say that the Supreme Courts of the States and Territories are so precious that an examination of this kind leading to those consequences strikes at the heart of their integrity.  It is really, in our submission, too much to say that.  This is a determination of a person’s status within an act and nothing more.

GAGELER J:   It is more, is it not? 

MR SOFRONOFF:   Sorry, your Honour?

GAGELER J:   The status does not exist absent the declaration.

MR SOFRONOFF:   Yes, that is right.

GAGELER J:   This is double‑function legislation.

MR SOFRONOFF:   Yes, your Honour, but one could envisage legislation that provided that if a person, in terms of section 36A(3)(a) and (b), if a person has been found guilty and the person has in the 10 years, but there is ‑ ‑ ‑

GAGELER J:   We would not be having the Kable argument.  

MR SOFRONOFF:   No, no, but what I mean is, one could imagine that the policy initiative that drove the enactment of this might have resulted from somebody saying but there might be arguments then about whether that is satisfied.  Well, let us have the argument in an authoritative place where an authoritative document will be issued and then there will be no question because it is a court document, subject to appeal.  There can be no question about it.

CRENNAN J:   Are you saying better a court than a bureaucrat to make this decision?

MR SOFRONOFF:   Yes.  Could I put it, without being insulting, much more convenient and useful in a practical way to have an open examination, if there is to be any examination, followed by, if fitting, an authoritative document, more authoritative than any other document that can issue from an arm of government.

HAYNE J:   Implicit in that is the very important proposition that these are matters which may be controverted, often will not be because they are blindingly obviously resolved.

MR SOFRONOFF:   Local offences.

HAYNE J:   But these are matters of a kind which may be controverted.

MR SOFRONOFF:   Yes, that is right, your Honour.

KEANE J:   Given that we are taking people’s property away from them, if they can be controverted they will be.

MR SOFRONOFF:   That is right.  Next to liberty the right of ownership comes very close, and to some people, more close.

HAYNE J:   Do not go there, Mr Solicitor.

MR SOFRONOFF:   In any event, in our respectful submission, these are, without downplaying it, because of the effect upon a person’s property, these are machinery provisions to give rise to conclusive evidence that title has passed to the Territory.  If one comes then to the application for the declaration then the particular property that is susceptible to forfeiture is property that was the subject of a restraining order, which raises the need for the restraining order to specify property, otherwise there will be trouble down the track.  The application for the declaration under section 94(4), the application itself must specify in the application the property that has been forfeited to the Territory.

HAYNE J:   Now, how does that deal with the fact that there can be a restraint, can there not, with respect to after‑acquired property.

MR SOFRONOFF:   Yes, and the property forfeited also includes property that was given away, the forfeiture applies to property the subject to a restraining order and property that was given away, so there can be a controversy about after‑acquired property by the owner himself or herself, there can be a controversy about whether after‑acquired property was acquired by a third party at the direction of the convicted person, and there can be a controversy about whether property in the hands of a third party was given away by the accused person, the respondent, so each of those is a matter which, when the Public Trustee comes to take possession of the property, or wants to, or to manage or deal with it, might become the subject of controversy, hence the second stage of the evidentiary process, which is the application in the usual way for a declaration in the court’s general jurisdiction and, indeed, if subsections (3) and (4) had not appeared in this statute one could apply in any event for a declaration if it was useful and necessary to obtain one.

FRENCH CJ:   You can have a controversy notwithstanding the making of the prior restraining order if the property the subject of the order is not owned, not effectively controlled by the person.

MR SOFRONOFF:   Yes, or it is after‑acquired property acquired by a third party and the DPP says, “Well, that was done at your direction”.

FRENCH CJ:   So specification in the restraining order was not conclusive of the issue.

MR SOFRONOFF:   That is right, so ‑ ‑ ‑

FRENCH CJ:   Or maybe there is an estoppel of some kind if the order was contested in the first place.

MR SOFRONOFF:   Well, the greater problem as we see it, your Honour, is that although the order would identify the property affected, the statute makes provision for property not restrained to be forfeited, namely property given away and so on.

FRENCH CJ:   Yes.

MR SOFRONOFF:   So that is – the property given away has echoes of a liquidator’s task in looking for transactions within a certain time period of the liquidation.  This is open‑ended but will raise the same kinds of problems and controversies if the property that has been given away is valuable.

HAYNE J:   But the give‑away property extends to given away before the commencement of the Act, so are we dealing with a reach of property that must have been the subject of express identification in the restraining order before 94(1)(b) is engaged, or can 94(1)(b) be engaged in respect of property which was the subject of not specific identification but catch‑all words of the kind that would say “and also any other property which the accused has given away at any time before or after the commencement of this Act”?

MR SOFRONOFF:   Your Honour, the restraining order will only refer to property that at the date of the order is owned or effectively controlled by the respondent.  That is 44(2)(a).

HAYNE J:   Yes.

MR SOFRONOFF:   A restraining order can also be phrased to restrain dealings with subsection (2)(b), after‑acquired property.  The restraining order will say nothing about property that has been given away in the past.

HAYNE J:   Yes, I see that.

MR SOFRONOFF:   The forfeiture of that is affected by 94(1)(b) and the scope of that – let others argue about that – but that is ‑ ‑ ‑

FRENCH CJ:   Does it pick up Christmas presents?

MR SOFRONOFF:   It would pick up Christmas presents unless they fall within the exception of family portraits and household goods and – shall I go there, your Honour?

FRENCH CJ:   No.

MR SOFRONOFF:   So one can easily see that the Public Trustee upon whom duties are imposed – rights are conferred upon the Public Trustee by the Public Trustee statute but only rights in order to permit the Public Trustee to fulfil duties.  The Public Trustee may require a declaration in respect of particular property either because of a doubt about whether the property was given away or whether it was after‑acquired property or for some other reason and the court is entrusted with that task.

GAGELER J:   Would the Public Trustee have standing independently of section 94?

MR SOFRONOFF:   To apply?

GAGELER J:   To apply?

MR SOFRONOFF:   Yes, why not, in our submission, why not?  The only matter of interest, in our submission, in 94 is the word “must” in subsection (4) but it is not a great burden because, in our submission, why would a court move to make a declaration about ownership of property due to forfeiture?  Why would a court ever refuse that if the application has been made properly for proper purposes and what harm could such an application – what harm could such a declaration do, in any event, in circumstances where the property has been forfeited?  So, in our submission ‑ ‑ ‑

FRENCH CJ:   If the restraining order is not conclusive of ownership or effective control, for example, putting aside the other arguments, you could have a very substantial debate in relation to the application of the forfeiture provision.

MR SOFRONOFF:   Yes.  And also, your Honour – no, I will not pursue it, but that is right, your Honour, it is not conclusive.  In our respectful submission, the argument that these provisions affect the integrity of the court is asking too much of Kable in circumstances where there is practical purpose for the existence of the provisions evidently to aid in the administration of the process of forfeiture by an independent third party, the Public Trustee.

Could I say something very brief, your Honours, about calling somebody a drug trafficker in this context?  If your Honours would go to section 36A(6), that sets out the offences which would trigger the declaring of a person to be a drug trafficker.  Could I leave subsection (6)(a) out for the moment?  Subsection (6)(b):

an offence under section 7 that is punishable under section 7(2)(a) or (b) –

that is cultivation of plants of a commercial or trafficable quantity.  Subsection (c), section 8, that is manufacturing Schedule 1 drugs which are the most serious ones, cocaine and the powdery drugs.  Schedule 2 has cannabis and other less serious drugs.  Section 8 is concerned with manufacture of drugs and one does not normally speak about manufacturing for one’s own consumption.  Subsection (d):

section 9 that is punishable under section 9(2)(a), (b), (d) or (e) –

Section 9(2)(a) refers to Schedule 1 drugs in commercial or trafficable quantities – sorry, 9(2)(a) refers to commercial quantities of Schedule 1 drugs, (b) refers to trafficable quantities of Schedule 1 drugs.  Subsections (d) and (e) refer to commercial and trafficable quantities of Schedule 2 drugs.  Subsection (d), therefore, excludes dealings in non‑commercial or non‑trafficable quantities of 1 or 2 drugs.  In respect of subparagraph (b) cultivation of commercial or trafficable quantities, could I ask your Honours to look at section 20A and following?  That part, Part IIB makes provision for offences of cultivation and possession for personal use to be dealt with by the equivalent of traffic tickets, infringement notices.

So, in the Territory possession of a minor quantity, which is defined, of cannabis and cultivation of a small quantity, no more than two plants of cannabis, is dealt with by an infringement notice, the equivalent of a traffic ticket, and section 20E, payment of the ticket your Honours will see in the last line, “expiated the offence” so you are not convicted of anything. 

Could I come back then to section 36A(6)?  We can see in (b), (c) and (d) then that the offences that are picked up are offences relating to the cultivation and manufacture and so on of commercial or trafficable quantities of drugs.  The exception is (6)(a) which is the offence of supply created by section 5. 

Section 5 makes it a crime to supply a dangerous drug and subsection (2) provides for heavy punishment for supplying a child, heavy punishment for commercial and trafficable quantities, a lesser penalty, section 5(2)(a)(iv) for the supply of a dangerous drug in Schedule 2 which would include cannabis.

Notice, your Honours, subsection (2) contains the words “subject to section 22”.  Section 22 permits certain offences to be dealt with summarily.  Your Honours need not go there for the moment, but it remains true that in respect of section 5 – an offence against section 5 – the supply by one person to another of a very minor quantity of marijuana would constitute a relevant offence for the purposes of section 36A(6).  So that remains then, and as one of the judges in the Court of Appeal pointed out, one person giving a joint of marijuana to another person might qualify as an offence.

That is so but that is an extreme case and it would be remarkable if such a person found himself or herself dealt with under 36A as having within the last 10 years supplied three times and the DPP then makes an application for restraint of all the property of that person, or valuable property of that person and so on.  It remains true that there is a small area where supply can be very unimportant and yet qualify.  That being so, though, one can see that the intent discerned from the category of offences in subsection (6) is to catch traffickers and cultivators at a serious level of enterprise and therefore true drug traffickers.  Those are our submissions, your Honours.

FRENCH CJ:   Thank you, Mr Solicitor.  Solicitor‑General for South Australia.

MR DONALDSON:   If your Honours do not mind, my learned friend and I have agreed that I might go before him.

FRENCH CJ:   Yes, very well, Mr Donaldson.

MR DONALDSON:   Your Honours, we have provided a short outline of oral submissions.  Your Honours, before dealing with that could I make one or two observations about matters of construction that go to the Kable issue?  At the expense of being seen to disagree with my learned friend, Mr Grant, it seems, with respect, that section 3 plays no particularly substantial role in relation to the power exercised under section 44 and I will come to that in a moment.

In our submission, when the court is seeking to determine the considerations to which it can properly have regard in section 44, the matters to guide the court there are those set out in subsection (2) of section (10).  If I could direct your Honours to subsection (4) of section (10), your Honours will see that the matter in ‑ that is, who is a person involved or:

is taken to be involved in criminal activities –

is picked up in (4) as a person who ‑

is declared under section 36A –

That is not to say, of course, your Honours, that the making of these sorts of restraining orders and forfeiture will not have a substantial effect on deterrence.  No doubt, they will.

Could I then go, your Honours, to section 44 to make this observation?  There is obviously a power or discretion in the court under section 44(1) because the word “may” is used.  In our submission, that discretion would be limited.  A court would certainly not be able to inform itself in exercising that power as to whether the making of the order was fair or something of that kind.  It could only be exercised having regard to the object and purposes of the Act which, in our submission, are those prescribed in section 10(2).

KEANE J:   So that if there were a number of properties identified by the application for the restraining order and they were obviously very valuable the court could say – being instructed by section 10(2) – that it would not restrain – or not make an order in respect of some properties – because to do so would not be necessary to enable the forfeiture to the Territory because that would not be necessary because the forfeiture to the Territory is only to the extent provided to compensate the Territory community?

MR DONALDSON:  Yes.  That is the process that must be gone through, in our submission.

KEANE J:   So there would be a point at which, you could say, there is ample property, I do not need to restrain the family home, for example?

MR DONALDSON:   Well, except that, your Honour, it would not be looked at, in our submission, under 10(2) as to what are the costs of deterring you, or compensating us in respect of you.  It is a more general inquiry, in our submission.

KEANE J:   Well, it is the property of a person who is involved, or taken to be involved, in criminal activities is to forfeit to the Territory to the extent provided in this Act to compensate the Territory for the costs of deterring, detecting and dealing with the criminal activities.  That does rather look like it is the criminal activities of the person.

MR DONALDSON:   Yes.  In that sense, your Honour, it is more informative of the discretion which is to be exercised under section 44.  Could I make this observation also in relation to section 44?  Your Honours will notice that the section operates in relation to what is described as the property ‑ ‑ ‑

HAYNE J:   Just before you go on, Mr Solicitor.  If that is right, what do we end up with?  Do we end up with the DPP putting on some estimate of the costs of the investigation or something?  Really – is that the kind of construction it leads to?

MR DONALDSON:   Your Honour, in our submission, it would be easy for the DPP to contend that the order being sought fell within that particular purpose, unless there was some extraordinary countervailing fact against it, as it were.  But that seems to us, with respect, to be the identifiable purpose in relation to the exercise of power under section 44.

GAGELER J:   I just do not understand why you exclude section 3.  Is it a textual argument or ‑ ‑ ‑ 

MR DONALDSON:   Perhaps in relation to section 3, your Honour, for a start it is not:

proceeds of crime . . . in order to prevent the unjust enrichment of persons involved in criminal activities.

Well, then that brings us into the definition under section 10(4), so it may be, your Honours, that that broader purpose is also a matter to which the Court can have regard under 44, but, your Honour, in our submission, there are going to be limited circumstances in which a court would not exercise the power under 44.  We do not see that at the section 44 stage, your Honour, that there would be any wide‑ranging inquiry in relation to whether the power ought to be exercised or not. 

In relation to section 44, your Honours, could I also state that your Honours will see that it relates to what is referred to as “the property of a person”, and that is to be distinguished, your Honour, from section 43 which deals with restraining orders in different circumstances, that is property that is crime‑used or crime‑derived, and in relation to an application under section 43 there has to be specified in the application what the property is that is going to be the subject of the order.

Under section 44, your Honours, it seems to be broader and as your Honour Justice Hayne has pointed out in this matter, there is a certain lack of specificity as to the property which is the subject of this order.  Your Honours, the property to which the restraining order can apply is set out in subsection (2), which is mirrored in section 94. 

Can I also just say, your Honours, section 65 appears to be the only provision that would enable the setting aside of a restraining order in the circumstance of the making of an order under section 44(1)(a).  Now, can I say this, your Honour, it is, and this goes to the Kable matter directly, your Honours will note that under 44(1)(a) there are facts which need to be determined, so, that “the person has been charged, or it is intended that within” a particular period of time that “the person will be charged”.

In our submission, that is why it is important for the Court to be involved at this stage of the process rather than a decision as to forfeiture or restraint being made, for instance, by the DPP.  There is there a requirement for the DPP making the application to prove to the court that there have been, or that there is a charge or an intention to charge the person within a particular period of time.

If a restraining order is made and it is not set aside under 44, we then go to 94 which, as the Chief Justice noted a moment ago, section 94 can only operate in respect of property that is owned or effectively controlled by a person.  So even if property is the subject of a restraining order, if it is not owned by, or effectively controlled by the person or it has not been given away by the person, it is not forfeit. 

So a person who is the owner of property which is the subject of a restraining order erroneously, could apply to the court undoubtedly, for a declaration that that property is not owned or effectively controlled by the respondent, nor was it given to the applicant by the respondent and seek a declaration to that effect and a declaration that the property is not forfeit.

So in that circumstance there is the process available to the court to protect the person whose property does not fall within the definition of the forfeited property and that is simply to note for the purposes of completion.  That process undoubtedly exists as the Chief Justice noted and it is to be contrasted with a statutory process in Part 9 of the Act, commencing at section 119, to which I will not take your Honours, which deals with applications being made by innocent parties where there have been orders for forfeiture under really section 95 and onwards.

But, your Honours, when one has regard to the fact that in section 44 there are qualifying characteristics that need to be proved by the DPP who is the maker of the application, it is, in our submission, entirely appropriate for the court to be involved in that process and for the court to be available to make declaration if application is made under section 94, that property is not forfeit. 

Your Honours, in our outline of oral submission we make the point, which is clear from the Act, that the process in this scheme is one in which procedural fairness is accorded to all parties.  The court deals with these matters openly and reasons are given by the court for its decision.  So every indicia of the way in which a court, a Chapter III court, goes about its business in exercise of its ordinary jurisdiction is present in this scheme.

That being the case, in our respectful submission, it would be rare for a conclusion that this scheme or a scheme like it would offend the Kable principle.  So long as a court is exercising power, even if pursuant to a statute or statutory invoked application by the Executive, where it exercises that power openly, is required to give reasons and accords procedural fairness to both sides, it will be rare indeed for Kable to intrude in that circumstance.  Of course, a court cannot be denied, or have taken from it, decisional independence but in relation to both section 44 and in the forfeiture mechanism of the Act your Honours will see that the court is involved in making a decision. 

Your Honours, I have outlined at point3 of the oral submissions a short extract from Justice McHugh’s judgment in Kable which derives from the joint judgment in Pompano, a footnote there.  The reason for that, your Honour, extracting that, is to make this observation.  In our respectful submission, it will be more likely that reasonable members of the public will have a concern about a role which a court will pay where the role of a

court in statutory processes such as this is open‑ended, where the court does not have a clearly defined role in the process and where the court’s powers and discretions are not clearly stated.

In this particular scheme, your Honours, the role which the court plays at each particular stage of the process is clearly stated and would be clearly understood.  On that basis, your Honours, the Kable principle simply does not apply.  We obviously deal with these matters in more length in our written submissions, your Honours.  May it please the Court.

FRENCH CJ:   Yes, thank you.  Solicitor‑General for South Australia.

MR HINTON:   If the Court pleases, I wish to concentrate on the discretion vested in the Director of Public Prosecutions to choose to apply for a restraining order under section 44 which, ultimately, feeds into the application for a drug trafficker declaration under section 36A and then the consequence of forfeiture under section 44(1).  I want to do two things.  I want to answer your Honour Justice Crennan’s question about commonality between the exercise of the discretion to choose to apply for a restraining order under section 44 and by contrasting this legislative regime with Totani demonstrate that the exercise of the discretion at both those points by the Director in neither instance infects the decision of the Supreme Court of the Northern Territory such that it can be said that its decisional independence is compromised.  Can I do so without making any submissions about the construction question?

Can we assume for the purposes of the construction question something that passed from my learned friend the Solicitor‑General for the Northern Territory and that was that in answer to your Honour the Chief Justice, the purposes of the Criminal Property Forfeiture Act are more expansive, he said at one point, than section 2 and 3 – sorry, section 10(2) and section 10(3) and section 3 itself.  The extreme, on one construction, is that you can under section 44(1) restrain everything.

In my submission, even if that is the appropriate construction and everything can be restrained that a drug trafficker, someone liable to be declared a drug trafficker, owns or the proscription of the Act fits them, even if it is that extreme and you get the house that was gifted to him by his grandmother 20 years before and could not possibly have been the proceeds or in any way derived from trafficking of drugs, even if that is the proper construction then it remains the case, nonetheless, that the decisional independence of the Supreme Court of the Northern Territory is not compromised such as to trigger invalidity.

I turn to your Honour Justice Crennan’s question, focusing upon that choice that the Director may make here, whether or not to apply for a restraining order with respect to a person who is charged with an offence that falls within section 36A(6) and, having been charged with that offence, or within 21 days is to be charged with that offence, will be liable to be declared a drug trafficker.  Your Honour Justice Crennan asked is there any commonality between that sort of decision made by the Director and the many other prosecutorial decisions that are made.  In my submission, there is.

The choices that are vested in the Directors of Public Prosecution around the country are no different.  A Director does not prosecute everyone who commits an offence.  A Director does not prosecute everyone who commits a similar act to another person for the same offence.  A Director does not prosecute all offending, fraud is the primary example.  You could have 3,000 transgressions, but they will not prosecute all.  A Director does not call every witness.  There are many reasons why you do not call some witnesses.  A Director does not seek compensation in every case.  A Director does not seek confiscation in every case wherever possible.  A Director does not seek bonds to be estreated in every case, or suspended sentences to be revoked.

Those decisions are made upon complex competing factors that we entrust to the Executive, fairness, a benefits analysis of the costs involved against the benefit of proceeding, the public interest, the interests of victims, complainants, the prospects of success and policy reasons.  There are occasions when the Directors have refused to prosecute, such as back during the Vietnam demonstrations, particularly in Adelaide. 

They are all choices that can impact upon liberty and property, all choices where the Director chooses who and what.  They are all choices that have procedural and substantive consequences for the accused, for third parties and for the courts, and those consequences include the gravity of the penalty.

That complex decision‑making process, in my submission, is not one readily reviewable.  My learned friend, the Solicitor‑General for the Northern Territory, suggested that – and I stand to be corrected – in particular the choice of charge or the choice of whom to charge is potentially reviewable.  In my submission, they are not.  There are some discretions that may be reviewable where a power is statutorily conferred subject to certain conditions, but the decision as to who to charge and with what has never been held to be reviewable to date, and, in my submission, is not. 

There are separation of powers arguments there to underpin that reason why, and there are also derived from that in the States good Kable arguments that could be made.  That does not mean that you are without a remedy.  Of course you can appeal if a witness was not called.  You can apply for a stay if it is the wrong charge or if it is an oppressive or vexatious.  Of course some States still have the tort of malicious prosecution lying there.

So yes, if your Honours please, there is a commonality between those choices and this and there is no co‑opting of the judicial power in entrusting the Director with that power to determine whether to make an application under section 44 and whether to make it with respect to everything or just some.  There are other controls, your Honours.  Justice Keane is quite right, with respect - the political control.  There are also other reporting requirements for Directors under their various Acts and annual reports and so on.

Your Honour Justice Gageler pointed out specifically that here the Director chooses not just who, but what.  In my submission, the answer remains the same.  Choosing who to prosecute, what offence, whether to pursue it summarily or on indictment, all have the same sort of consequence as here.  They dictate those decisions - a process.  They give rise to a possible outcome depending upon the exercise of judicial power. 

Here, as my learned friends have already indicated, there is that important adjudication under section 36A.  In my submission then, the discretion vested in the Director does not infect the exercise of judicial power under section 44, nor under section 36A.

I then take your Honours to my first three propositions in our oral outline.  They have been put by my learned friends in various ways.  They focus upon here section 36A and what is required to be established.  I do not want to retrace those steps that my other learned friends have taken.

We are concerned with determining whether or not a particular person is of a particular legal status.  If I could take your Honours to paragraph 4, in my submission, four things flow from that.  My first point seeks to address a concern of Justice Kiefel’s in the Totani Case.  That was an attempt to reason back from the control order made as to how it pursued the objective of the Serious and Organised Crime (Control) Act.  The answer was you could not tell because you needed to know what had been before the Attorney‑General as part of the process of declaring the organisation. 

So, there was a gap, as it were, in being able to translate the order into the objective of the exercise of judicial power.  The gap was filled by the declaration and, therefore, the declaration infected the exercise for Justice Kiefel’s purposes.  In my submission, that does not occur here.  But can I provide your Honours with some references in Totani to contrast it? 

Your Honours will recall, of course, the two‑step process in Totani, the declaration made by the Attorney‑General under section 10, that:

members of the organisation associated for the purpose of organising, planning, facilitating, supporting or engaging in serious criminal activity; and (b) the organisation represented a risk to public safety and order in the State.

Section 8.  Your Honours will recall that under section 14(1), a control order could be obtained on the application of the Commissioner if it was proven that a particular defendant was a member of the organisation.

The question was the extent to which the judicial power to be exercised under section 14(1) was infected, dictated, steered ‑ ‑ ‑

FRENCH CJ:   The only anterior executive decisions here are whether to make application, are they not?

MR HINTON:   Exactly right, if your Honour pleases, in which case I will cut to the chase.  We give your Honour the references there - paragraph 4ii as to where the particular – in each of the judgments of your Honours the degree of infection there present is identified.  By contrast, the force of the submissions of my learned friend, the Solicitor‑General for Northern Territory, become plain.  There is here in the exercise of the power in section 36A nothing in the nature of the compromise of decisional independence as there was in Totani.  It is not harking back to what her Honour Justice Kelly said in paragraph [92] of the judgment functionally equivalent to the case that was before her.  If the Court pleases, those are our submissions.

FRENCH CJ:   Yes, thank you, Mr Solicitor.  Yes, Mr Wyvill.

MR WYVILL:   Thank you, your Honours.  Now, your Honours should have an outline of propositions for us which we intend to advance in support of our position.  Given the time and given the matters which have been of concern to your Honours as discussed with my learned friends and most particularly in relation to section 3 and section 8, I might, if your Honours please, focus directly on that and hopefully cover that before we have to adjourn.

Your Honours will see the structure of the Kable submissions which is on a single page.  There are two propositions put.  The first proposition is a proposition which is focused on the declaration and the second proposition is a broader proposition which focuses on the outcome of the statutory scheme, particularly the relationship between the DPP’s decisions and the decisions of the court.

The points I am wishing to address now are the points at the third bullet point and the fourth bullet point of the second proposition, particularly the court hearing the restraining order under the application of section 44(1)(a), an important point which has not really been examined much by my learned friends but is very important for looking at the impact of the restraining order and that is the objection procedure which follows after service of the order has been made.

If I can take your Honours first to the restraining order application.  Your Honour Justice Bell has asked repeatedly what the role is of section 3 and our submission is this.  It has no role to play whatsoever in relation to the exercise of the discretion in relation to the granting of a restraining order.  That is the best reason.  It is an incomplete and obviously incomplete statement of the objects of the Act.

One can see that clearly by section 8 itself, particularly here in the context of crime‑used property because crime‑used property, one would think, is recovered not on a restitutionary basis because it has been generated from the product of crime, because it has been deployed in crime and we can see that very distinction made in section 10(3) where, with that in mind, one can see that the objects from section 3 are immediately expanded by section 10(3) to include in relation to crime‑used property, deterrence.

So immediately we can see that section 3 is incomplete, so straightaway that tells us that section 10(1), and indeed what follows, is a better guide that a more precise objective is to be achieved by the Act.  We then go to 10(2), which is the critical provision for us because that is the provision that deals with the property of declared drug traffickers.  It is said most critically at the end of the second line and the beginning of the third:

[forfeiture] to the extent provided in this Act [is] to compensate the Territory community –

which I will come back to –

for the costs of deterring, detecting and dealing with the criminal activities.

This is not a statement of the object for which powers set out subsequently are to be exercised.  This is an explanation of what the Territory intends to do with the product that is produced from the powers that are set out subsequently.  What this does is simply restate that if you want to go and see the ambit of the forfeiture that this Act intends you look at the specific provisions which follow. 

In relation to the returns that are generated from the use of those specific provisions the intention is that they will be deployed to compensate the Territory community.  Immediately one can see from looking at that expression, and particularly your Honour Justice Hayne has made this point, how impossible it would be to take that into account in the exercise of the discretion.

There is nothing in the Act to enable a judge to bring this into the balance at all.  Worse, what is the Territory community?  Is that the Northern Territory?  Is the Northern Territory claiming some trusty role on behalf of local government, businesses and private individuals to go and collect the costs?  In our submission, it is purely indicating an explanation for what follows, particularly how the Territory intends to deploy it.

If we can then take your Honours to our further submissions, which are our submissions in reply to the interveners’ submissions, and this particular point is dealt with at length there, because there is some background in this particular litigation about this matter.  If your Honours go particularly to paragraph 3 of our second set of submissions; these are a document of 28 January 2014?  I am looking particularly for paragraph 3 which starts on the first page.

The point we make in paragraph 3.1 is that an application was made in these proceedings to his Honour Justice Southwood to set aside the restraining order on the ground of, if I can use its summary, substantial unfairness, that this was an extreme forfeiture given that the great majority of the property was innocently revived, innocently developed, and that although, yes, there was a very serious incidence of offending which led to the third conviction, the first two were very insignificant.

It is important to note that because of the way the procedure works, practically in this case, it is almost impossible for a respondent to make that application before the restraining order is made.  So in this case the application was made on the basis of setting aside the restraining order, the respondent having had the full opportunity to put before the court all the material as to the unfairness of the remedy being applied against him.

His Honour Justice Southwood concluded – and the passage is set out at 3.3 of our submissions.  It is in italics there and I would just invite your Honours to read what his Honour said.  But having said that on our specific application to set aside a restraining order, his Honour indicated obiter dicta what is set out in paragraph 4.1, and I think your Honour Justice Keane made this precise point, that because of section 10(2) it would be possible for a judge on the restraining order application to confine the ambit of the injunction to, however one assesses it, the cost to the Territory

and its community of deterring, detecting and dealing with the criminal activity. 

His Honour said that particularly at appeal book 1, page 108 and you will see his Honour refers to the decision of Burnett which has been referred to already today.  Then at about point 40 on the page, just below point 40, he says:

the subsection does not prevent the Court making a restraining order over only such property that is of sufficient value to pay for the costs of deterring ‑ ‑ ‑

et cetera.  Then his Honour noted – I just invite your Honours to read on.  Then at paragraph [55] his Honour noted that that application was not made and hence it was unnecessary to decide it.  That was the subject of consideration by the Court of Appeal.

FRENCH CJ:   That might be a convenient time.

MR WYVILL:   Thank you, your Honour.

FRENCH CJ:   We will deal with that tomorrow morning.  The Court will adjourn until 10.15 tomorrow.

AT 4.15 PM THE MATTER WAS ADJOURNED
UNTIL WEDNESDAY, 5 FEBRUARY 2014