Cini v The Commissioner of the Australian Federal Police
[2016] VSCA 227
•21 September 2016
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2015 0129
| PATRICK CINI | Applicant |
| v | |
| THE COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE | Respondent |
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| JUDGES | PRIEST, SANTAMARIA and KAYE JJA |
| WHERE HELD | MELBOURNE |
| DATE OF HEARING | 9 September 2016 |
| DATE OF JUDGMENT | 21 September 2016 |
| MEDIUM NEUTRAL CITATION | [2016] VSCA 227 |
| JUDGMENT APPEALED FROM | Cini v Commissioner of the Australian Federal Police [2015] VCC 1565 (County Court of Victoria, Judge Millane, 13 November 2015) |
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PROCEEDS OF CRIME – Applications for forfeiture orders – Applications for exclusion from forfeiture orders – Imported border controlled drugs stored at residential property – Whether trial judge erred in finding that the property was an instrument of an offence – Whether property used in or in connection with the commission of an offence – Proceeds of Crime Act 2002 (Cth) ss 92, 94 and 329(2) – Leave to appeal refused.
| APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr C G Juebner | Paul Horvath, Solicitor |
| For the Respondent | Ms E H Ruddle | Criminal Assets Litigation, Australian Federal Police |
PRIEST JA
SANTAMARIA JA
KAYE JA:
Introduction
This application concerns the forfeiture of property — consisting of a house and land at 14 Ayr Street, Altona Meadows (for convenience, ‘Ayr Street’) — under the Proceeds of Crime Act 2002 (Cth) (‘POCA’).
The applicant claims that the County Court erred in failing to uphold an application for exclusion from forfeiture that he made under s 94 of the POCA with respect to his ‘interest’ in Ayr Street, and in making an order for forfeiture of Ayr Street under s 92.
In our opinion, the application should be refused. Our reasons follow.
Background
On 15 October 2013, pursuant to power granted by s 25 of the POCA, the respondent made an application in the County Court for a restraining order under s 18 with respect to several items of property, including Ayr Street; and, that same day, a judge made a restraining order under s 18 with respect to the property.
The restraining order was made on the basis of a suspicion that the applicant had committed a ‘serious offence’,[1] including, first, the importation of a border controlled drug (methamphetamine) in a commercial quantity contrary to s 307.1(1) of the Criminal Code (Cth); and, secondly, the attempted possession of a border controlled drug (methamphetamine) in a commercial quantity contrary to s 11.1(1) of the Criminal Code (Cth).
[1]The Dictionary to the POCA defines serious offence.
A few months later, on 12 March 2014, the applicant pleaded guilty in the Supreme Court to one charge of importing a commercial quantity of a border controlled drug, in breach of s 307.1(1) of the Criminal Code (Cth). The border controlled drug was 203.2 kilograms — 161.5 kilograms pure — of methamphetamine hidden in the tires of a tractor-truck that the applicant had imported into Australia from China on 27 September 2013.
The applicant was sentenced to be imprisoned for this offence by Croucher J on 29 August 2014.
Since the applicant was convicted[2] of a serious offence, the property which was the subject of the restraining order made on 15 October 2013 (including Ayr Street) was liable to be forfeited automatically unless excluded from forfeiture under s 94 of the POCA.[3]
[2]The meaning of convicted is contained in s 331 of the POCA.
[3]See s 92 of the POCA.
On 13 February 2015, the applicant made an application for an exclusion order under s 94, seeking (among other things) that Ayr Street be excluded from forfeiture. An application was also made for an extension order under s 93, to extend the period before which property is forfeited under s 92(3) of the POCA. As a result, on 17 February 2015, a judge of the County Court ordered that the period before which the restrained property — including Ayr Street — would be forfeited was extended to the date of the hearing of the applicant’s application for an exclusion order.
The application was heard by another judge of the County Court over 13, 14 and 15 October 2015. On 13 October 2015, the judge made an order pursuant to s 93(1) extending the period at the end of which restrained property would be forfeited to midnight on 28 November 2015.
During the hearing of the application, the applicant conceded that the following restrained property should be forfeited:
· a sum of $64,830 cash seized from Ayr Street;
· a further sum of $3,000 cash seized from Ayr Street;
· a silver 2008 Subaru Liberty Sedan, registered to Patrick J Cini (the Subaru’);
· a 2005 Jeep Laredo Wagon, registered to Motek Engineering Pty Ltd (‘the Jeep’); and
· a Sinotruk, imported by Motek Engineering Pty Ltd (which arrived in Melbourne on 2 October 2013) (‘Sinotruk’).
The application for exclusion was, however, vigorously pursued with respect to:
· the sum of $39,000 cash seized from Ayr Street;
· a Sinotruk, imported by Motek Engineering Pty Ltd (which arrived in Melbourne on 16 January 2013); and
· Ayr Street.
On 13 November 2015, the judge made orders refusing the application for an exclusion order with respect to the relevant property, including Ayr Street.
Later, on 9 December 2015, the judge made an order declaring that the property — including Ayr Street — was forfeited; and made a further order that the applicant pay the respondent’s costs of the application for exclusion from forfeiture made under s 94.
As we have mentioned, the application in this Court is concerned solely with Ayr Street.
Acquisition and use of Ayr Street
Ayr Street was purchased by the applicant and his former wife in 1987, and became the matrimonial home. Since its purchase, the applicant has lived at Ayr Street, either with his former wife and two children or alone.
As part of a divorce settlement, in March 2006 the applicant — using borrowed money — purchased his former wife’s interest in Ayr Street for $100,000. He then became the sole legal and beneficial owner of Ayr Street.
The offending
The applicant was the sole director, secretary and shareholder of Motek Engineering Pty Ltd (‘Motek’).
On 27 September 2013, a ship carrying a Sinotruk which the applicant had caused to be imported from China via Motek, arrived at Brisbane Dock. Concealed in the truck’s tires was 203.2 kilograms of methamphetamine (161.5 kilograms pure) in 205 packages. Each package contained approximately one kilogram of methamphetamine in a clear plastic heat-sealed foil bag. The packages were in the tyres surrounded by assorted coloured rags and material offcuts. Australian Federal Police (‘AFP’) substituted the methamphetamine with an inert substance and returned the truck to the ship, after which it continued its voyage to Melbourne. Police thereafter monitored the movement of the truck.
A few days later, on 3 October 2013, the applicant collected the truck from the docks and, with his son Rhys Cini following in a car, drove it to Motek’s factory in Brooklyn.
The next day, 4 October 2013, the applicant and his son removed the wheels from the truck and began removing the packages — which contained the substituted substance — from the truck tyres. Some of the packages were damaged in the process of removal, and their contents were vacuumed up. During the evening, the applicant and his son placed six large plastic storage containers into the rear of the applicant’s Jeep, secured the factory and departed. Within the six large plastic storage containers was the substance — which the applicant believed to be methamphetamine — substituted by police for the imported drugs. The applicant drove the Jeep to his home, Ayr Street, followed by his son in the Subaru. He parked the Jeep — which held the six large plastic containers of substituted substance — in the garage of Ayr Street, and he unloaded the containers from the Jeep to the garage floor. Shortly afterwards, the applicant’s son drove to his home. In this Court it was not disputed by the applicant’s counsel that the six plastic storage containers contained all of the substituted substance that had been removed from the truck’s tires.
Between Saturday, 5 October 2013, and Wednesday, 9 October 2013, among other things, the applicant sent a text message to his son which read, ‘Leave work till Monday’; the applicant and his son attended the factory on Monday, 7 October 2013; and the applicant ordered twelve truck tyres from a tyre supplier in Altona.
On 9 October 2013, the applicant and his son loaded the same six large plastic containers into the Jeep and returned to the factory. They unloaded the plastic containers and placed them in a shipping container inside the factory.
Later that same day, 9 October 2013, AFP arrested the applicant, his son and another. Police also conducted a search of Ayr Street, and located six packages containing substituted product in an ‘esky’ in the applicant’s garage. Police also located a further 126 packages stored in containers at the factory; 34 packages in a removed tyre; three packages in the roof of the applicant’s son’s house; 15 packages in a ‘National Storage’ unit; and 15 packages in a ‘Storage King’ unit.
Summary of issues
The principal issues raised by the applicant’s grounds of appeal are:
· first, whether the trial judge erred in the approach taken to the exclusion test by failing to consider whether the applicant’s ‘interest’ in Ayr Street — as opposed to the physical property itself — was used in or in connection with the relevant unlawful activity; and
· secondly, whether the judge erred in holding that the applicant was not able to satisfy the Court that his ‘interest’ in Ayr Street was not used in or in connection with any unlawful activity.
The statutory provisions
It is, as we have mentioned, accepted that the applicant was convicted of a serious offence, and that he has an interest in property covered by the restraining order. The applicant submits that the effect of s 94(1) of the POCA is that, in those circumstances, a court may only make an order excluding property covered by a restraining order if:
· the court is satisfied that the applicant’s interest in the property is neither the proceeds of unlawful activity nor an instrument of unlawful activity; and
· the court is satisfied that the applicant’s interest in the property was lawfully acquired.
By virtue of s 317(1), the applicant bears the onus of establishing — on the balance of probabilities[4] — that his interest in the property was lawfully acquired, and that it is neither the proceeds of unlawful activity nor an instrument of unlawful activity.
[4]See s 317(2).
It is not disputed by the respondent that the applicant lawfully acquired Ayr Street. Further, the respondent does not contend that Ayr Street is the proceeds of unlawful activity. The central issue is whether the applicant was capable of establishing that his interest in Ayr Street was not an instrument of unlawful activity.
Section 94(1) of the POCA provides:[5], [6]
[5]Emphasis added.
[6]Definitions of asterisked terms are found in the Dictionary contained in s 338.
94 Excluding property from forfeiture under this Part
(1) The court that made a *restraining order referred to in paragraph 92(1)(b) must make an order excluding particular property from forfeiture under this Part if:
(a)a person (the applicant) has applied for an order under this section; and
(b)the court is satisfied that the applicant has an *interest in property covered by the restraining order; and
(d)a person has been convicted of a *serious offence to which the restraining order relates; and
(e)the court is satisfied that the applicant’s interest in the property is neither *proceeds of *unlawful activity nor an *instrument of unlawful activity; and
(f)the court is satisfied that the applicant’s interest in the property was lawfully acquired.
For the purposes of s 94(1), property embraces real property, and includes an interest in any real property; and an interest in relation to property includes legal and equitable interests, and ‘a right, power or privilege in connection with property or thing’. Thus, the Dictionary to the POCA contained in s 338 of the POCA defines property and interest as follows:
property means real or personal property of every description, whether situated in *Australia or elsewhere and whether tangible or intangible, and includes an *interest in any such real or personal property.
interest, in relation to property or a thing, means:
(a)a legal or equitable estate or interest in the property or thing; or
(b)a right, power or privilege in connection with the property or thing;
whether present or future and whether vested or contingent.
Subsections 329(2) and (4) of the POCA relevantly define instrument:[7]
[7]Section 329(1) defines ‘proceeds’:
(1) Property is proceeds of an offence if:
(a)it is wholly derived or realised, whether directly or indirectly, from the commission of the offence; or
(b)it is partly derived or realised, whether directly or indirectly, from the commission of the offence;
whether the property is situated within or outside *Australia.
Further, s 329(3) provides that property ‘can be proceeds of an offence or an instrument of an offence even if no person has been convicted of the offence’.
329 Meaning of proceeds and instrument
…
(2) Property is an instrument of an offence if:
(a)the property is used in, or in connection with, the commission of an offence; or
(b)the property is intended to be used in, or in connection with, the commission of an offence;
whether the property is situated within or outside *Australia.
…
(4) Proceeds or an instrument of an *unlawful activity means proceeds or an instrument of the offence constituted by the act or omission that constitutes the unlawful activity.
It is noteworthy that s 94(1)(d) requires that, in order for the power to make an exclusion order to be engaged, the person with the interest in property covered by the restraining order must have been convicted of a serious offence to which the restraining order relates. Section 338 defines ‘serious offence’. There is no doubt that the definition embraces the offence of importing a commercial quantity of a border controlled drug contrary to s 307.1(1) of the Criminal Code (Cth). By way of contrast, however, s 329(2) provides that property is an instrument of an offence if it is used in, or in connection with, the commission of an offence. In other words, on its face, s 329(2) does not require that property be used in or in connection with a serious offence in order for it to be an instrument of an offence. (The POCA does not define the expression ‘an offence’.) Furthermore, s 329(4) makes plain that the instrument of an unlawful activity is the instrument of the offence constituted by the act that constitutes the unlawful activity. For present purposes, by virtue of s 338, unlawful activity means an act that constitutes an offence against a law of the Commonwealth.
Discussion
There is no dispute that the applicant acquired his present interest in Ayr Street by borrowing $100,000 from the ANZ Bank so as to purchase his former wife’s interest. To that extent, his present interest in the property could not be said to be ‘the proceeds of unlawful activity’. Furthermore, it is plain that when he acquired it, his present interest in property ‘was lawfully acquired’. He had borrowed money from a bank to do so. The evidence disclosed that by 6 August 2010, the applicant had discharged the outstanding loan to the ANZ Bank by making fortnightly payments from his wages. These matters are not in dispute. Thus, as we have indicated, the live question for determination is whether the applicant could satisfy the court that his ‘interest’ in Ayr Street was not ‘an instrument of unlawful activity’.
At relevant times, the applicant was the sole registered proprietor of Ayr Street, which was unencumbered. He was the only person who had a legal or beneficial interest in it. As such, he had the right to use and enjoy the property; the right to exclude others from its use; the right to mortgage the property; the right to lease it; and the right to sell it or give it away.
At the risk of repetition, property is an instrument of an offence if it is used (or is intended to be used) in, or in connection with, the commission of an offence. In the County Court, the trial judge held that Ayr Street was not ‘a passive location vis-à-vis [the applicant’s] unlawful activity’, and found that a ‘combination of factors peculiar to this case were indicative of use or use in connection with the commission of unlawful activity’ in the sense required by the POCA. Her Honour observed that the mere fact that the substituted drugs were stored at Ayr Street ‘would probably not have sufficed to indicate use in connection with unlawful activity’ under the POCA. But she found:
In the present case, the reason for relocating the drugs from the factory to the applicant’s residential address had been to safeguard the imported drugs against what the applicant was persuaded by his son was a threat of robbery. Logically the various features of the property which made the Ayr Street a preferred location and facilitated safeguarding the drugs from a perceived threat of robbery and from detection by the authorities are germane to finding use or use in connection with unlawful activity.
The Ayr Street property had secure fencing (a locked, colour bond gate which the film confirmed was closed other than when the Jeep entered or exited); alarm and CCTV security; and, a garage into which the tubs of drugs were unloaded. The garage was secured by a roller door and setback from the gate. The firearms kept at the property, no doubt, added to the security of this location and to the applicant’s ability to control and monitor access to the drugs at the property.
The judge identified the ‘unlawful activity’ for the purposes of the POCA as being the applicant’s importation offence. Her Honour also went on to find — although he had not been convicted of either offence — that the applicant’s acts constituted the offences of attempting to possess a commercial quantity of a border controlled drug[8] and of attempting to traffic a controlled drug.[9]
[8]See ss 11.1 and 307.5 of the Criminal Code (Cth).
[9]See ss 11.1 and s 302.4 of the Criminal Code (Cth).
Moreover, the judge found that the commission of an offence by the applicant’s son — who was convicted of attempting to possess a commercial quantity of a border controlled drug — meant that the applicant could not establish that Ayr Street was not used in, or in connection with, unlawful activity.
Thus, her Honour’s reasons included the following:
As to attempted possession by the applicant, the facts of this case establish that he had possession of the unlawfully imported substitute drugs and/or control over the disposition of these as contemplated by the definition of possession in the Code. Furthermore, on the facts of this case the co-offender was convicted of an Attempted Possession offence in respect to the drugs. He was similarly involved in transporting and safeguarding the drugs at the Ayr Street property ostensibly for the same reason his father gave.
Both the applicant and his son made use of the property for a purpose associated with an Attempted Possession offence. The use of the Ayr Street property in, or in connection with the co-offender’s commission of and conviction for an Attempted Possession offence was fatal to the Exclusion Application in respect to the Ayr Street property. On this evidence alone, the applicant had not established the Ayr Street property was not used in, or in connection with this unlawful activity.
Alternatively, consistent with the submission made by the [respondent], the facts of this case also indicate that the Ayr Street property was used to guard, conceal and possess the substituted narcotics over a period of some days and, save for the six packages found in the esky, it was the location from which the drugs were distributed to the other locations.
In summary the applicant has failed to establish on the balance of probabilities that the Ayr Street property was not an instrument of his co-offender’s unlawful activity. Alternatively, he has failed to establish, as required, that the same property was not an instrument of acts constituting unlawful activity, either an Attempted Possession offence or an Attempted Trafficking offence.
In this Court, the applicant submitted that, in light of s 94(1)(e) of the POCA, the only matter that the judge had to determine with respect to the exclusion application was whether the applicant’s ‘interest’ was an instrument of unlawful activity. It was submitted that where, as here, the applicant was the sole registered proprietor of unencumbered real estate, by virtue of s 94(1)(e) the question for the County Court was whether such legal and beneficial interest in Ayr Street was an instrument of unlawful activity; that is, whether such legal and beneficial interest in the property was used (or was intended to be used) in, or in connection with, the commission of an offence.
Significantly, the applicant conceded that the substituted drugs had been brought to Ayr Street because his son had told him that the factory could be ‘robbed’; and he agreed that the evidence disclosed that:
· the substituted drugs (or at least some part of them) were stored at Ayr Street for a little over four days;
· the substituted drugs were left in the back of the applicant’s car in the carport at Ayr Street and that he then left it to his son to deal with them;
· plastic storage containers holding the substituted drugs were placed in the garage of Ayr Street for up to four and a half days;
· all of the substituted drugs (other than the six packages in the esky) were removed from Ayr Street prior to the arrest on 9 October 2013; and
· the remaining six packages of the substituted drugs were in an esky within the garage at Ayr Street.
The applicant’s counsel contended, however, that notwithstanding that those facts had been established, it did not follow that the applicant’s interest in the property had been used in, or in connection with, the commission of an offence. Counsel submitted that the applicant holds the legal and beneficial interest in unencumbered Ayr Street. That ‘interest’ constitutes a large bundle of legal rights, such as the right to mortgage, sell, build on, lease and possess the property. The right to possess the property is only one of a number of rights enjoyed by the applicant. It was submitted that the applicant’s right to possess his property ‘is not sufficiently connected’ with the alleged offence. A strict test, so it was argued, requiring a ‘substantial connection’, is necessary ‘where the consequence of failing to satisfy the exclusion test is the automatic forfeiture of valuable, unencumbered real estate’. Ayr Street, it was submitted, ‘is merely incidental to the offending’.
It was submitted by the applicant’s counsel that the six storage containers which had been placed in the back of the applicant’s vehicle and, thereafter, in the garage for a short period, were used in or in connection with the possession of the substituted product. Likewise, the esky was used in connection with a small portion of the possession of the substituted product. As a matter of fact and degree, it was also arguable that the vehicle was used in that manner. Moreover, applying the exclusion test under s 94(1), it may be arguable that — provided that the applicant had a relevant interest in the six packages, the esky and the vehicle — such interest was used in or in connection with the relevant unlawful conduct. But, so it was contended, in the context of automatic forfeiture, it is going too far to assert that the land — upon only part of which the carport and garage were situated — was used in connection with the relevant unlawful activity, or, relevantly, that the applicant’s ‘interest’ in such land was so used. That is so because for approximately 27 years — or ‘ten thousand days’, as counsel colourfully put it — Ayr Street served as the applicant’s residential premises (by reason of which its ordinary use was that of a family home), and there was an absence of any evidence that the land was in any way modified for the purpose of committing an offence. Moreover, it was submitted that only a very small part of the total area of Ayr Street was actually used for storing the substituted drugs, since, although all of the substance was put within six plastic storage containers, those six containers fitted within the relatively confined space of the Jeep. The six containers thus occupied a very confined proportion of the overall dimensions of Ayr Street.
In our view, the applicant’s submissions must be rejected.
To a significant extent, the applicant’s arguments revolved around the definitions of ‘property’ and ‘interest’ found in the POCA. In Minister of State for the Army v Dalziel,[10] Rich J observed:[11] ‘Property, in relation to land, is a bundle of rights exercisable with respect to the land. The tenant of an unencumbered estate in fee simple in possession has the largest possible bundle.’ The applicant is, of course, the sole tenant in possession of an unencumbered estate in fee simple and as such is the only person entitled at law or in equity to the rights that inhere in the fee simple to the property.
[10](1944) 68 CLR 261.
[11]Ibid 285.
Conceptually, ‘property’ generally connotes not only a thing but rights inuring in relation to a thing. So much was made clear by the plurality of the High Court (Gleeson CJ, Gaudron, Kirby and Hayne JJ) in Yanner v Eaton[12] (a case concerned generally with the ambit of State legislation limiting the right to take fauna). It was said:[13]
The word ‘property’ is often used to refer to something that belongs to another. But in the Fauna Act, as elsewhere in the law, ‘property’ does not refer to a thing; it is a description of a legal relationship with a thing.[14] It refers to a degree of power that is recognised in law as power permissibly exercised over the thing. The concept of ‘property’ may be elusive. Usually it is treated as a ‘bundle of rights’.[15] But even this may have its limits as an analytical tool or accurate description, and it may be, as Professor Gray has said,[16] that ‘the ultimate fact about property is that it does not really exist: it is mere illusion’. Considering whether, or to what extent, there can be property in knowledge or information or property in human tissue may illustrate some of the difficulties in deciding what is meant by ‘property’ in a subject matter.[17] So too, identifying the apparent circularity of reasoning from the availability of specific performance in protection of property rights in a chattel to the conclusion that the rights protected are proprietary may illustrate some of the limits to the use of ‘property’ as an analytical tool.[18] No doubt the examples could be multiplied.
Nevertheless, as Professor Gray also says,[19] ‘An extensive frame of reference is created by the notion that ‘property’ consists primarily in control over access. Much of our false thinking about property stems from the residual perception that ‘property’ is itself a thing or resource rather than a legally endorsed concentration of power over things and resources’.[20]
‘Property’ is a term that can be, and is, applied to many different kinds of relationship with a subject matter. It is not ‘a monolithic notion of standard content and invariable intensity.[21] That is why, in the context of a testator’s will, ‘property’ has been said to be ‘the most comprehensive of all the terms which can be used, inasmuch as it is indicative and descriptive of every possible interest which the party can have’.[22]
Because ‘property’ is a comprehensive term it can be used to describe all or any of very many different kinds of relationship between a person and a subject matter. To say that person A has property in item B invites the question what is the interest that A has in B? The statement that A has property in B will usually provoke further questions of classification. Is the interest real or personal? Is the item tangible or intangible? Is the interest legal or equitable? …
[12](1999) 201 CLR 351.
[13]Ibid 365–7 [17]–[20] (emphasis added). See also 388–9 [85] (Gummow J).
[14]Bentham, An Introduction to the Principles of Morals and Legislation, ed by W Harrison (1948), p 337, n 1; K Gray and S F Gray, ‘The Idea of Property in Land’, in Bright and Dewar (eds), Land Law: Themes and Perspectives (1998) 15, at p 15 .
[15]See, eg, Minister for the Army v Dalziel (1944) 68 CLR 261 at 285, per Rich J.
[16]Gray, ‘Property in Thin Air’, Cambridge Law Journal, vol 50 (1991) 252, at p 252 .
[17]See, eg, Kohler and Palmer, ‘Information as Property’ and Magnusson, ‘Proprietary Rights in Human Tissue’, in Palmer and McKendrick (eds), Interests in Goods, 2nd ed (1998), pp 3 and 25 respectively
[18]See, eg, Colbeam Palmer Ltd v Stock Affiliates Pty Ltd (1968) 122 CLR 25 at 34, per Windeyer J.
[19]Gray, ‘Property in Thin Air’, Cambridge Law Journal, vol 50 (1991) 252, at p 299 .
[20]Jeremy Bentham recognised this long ago. Bentham pointed out that ‘in common speech in the phrase “the object of a man's property”, the words “the object of” are commonly left out; and by an ellipsis, which, violent as it is, is now become more familiar than the phrase at length, they have made that part of it which consists of the words “a man's property” perform the office of the whole’. See An Introduction to the Principles of Morals and Legislation, ed by W Harrison (1948), p 337, n 1.
[21]K Gray and S F Gray, ‘The Idea of Property in Land’, in Bright and Dewar (eds), Land Law: Themes and Perspectives (1998) 15, at p 16.
[22]Jones v Skinner (1835) 5 LJ Ch (NS) 87 at 90, per Lord Langdale MR. See also Commissioner of Stamp Duties (Q) v Donaldson (1927) 39 CLR 539 at 550, per Isaacs A-CJ; In re Prater; Desinge v Beare (1888) 37 Ch D 481 at 483, per Lord Halsbury LC; at 486, per Cotton LJ.
In our view, the POCA defines ‘property’ and ‘interest’ in relation to property in the manner that it does to make plain that the POCA seeks to catch not only a thing, but the legal relationship with the thing. So far as real property is concerned, the statutory definitions are intended to embrace ‘a bundle of rights exercisable with respect to the land’. That is why ‘property’ as defined in s 338 includes ‘an interest in any … real or personal property’; and why ‘interest’ is defined to include ‘a legal or equitable estate or interest in the property’, or ‘a right, power or privilege in connection with the property’.
It is beyond argument, in our view, that the applicant’s interest in property was used in, or in connection with, unlawful activity. He used his rights to possess Ayr Street, and to control access to the property, so as to there store what he thought was a large quantity of a border controlled drug. The applicant argued, however, that his right to possess his property was not sufficiently connected with an offence, since a ‘substantial connection’ (or, at least, a ‘sufficiently significant connection’) is required where the consequence is forfeiture of valuable real estate. Only a very small area of the physical property was used to store the substituted drugs, for only a very small period of the overall length of time that the applicant had possessed the property.
Despite the applicant’s submissions — which seek to add a gloss to the statutory language — it must be understood that the resolution of the present application begins and ends with the words of the statute.[23] In order for the applicant to avoid automatic forfeiture of Ayr Street, the POCA required him to satisfy the court that his interest in the property was not an instrument of unlawful activity, in the sense that it was not used in, or in connection with, an offence against a law of the Commonwealth.[24] The words of the POCA, it will be seen, do not require a ‘substantial connection’ (or a ‘sufficiently significant connection’).
[23]Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503, 519 [39] (French CJ, Hayne, Crennan, Bell and Gageler JJ); Thiess v Collector of Customs (2014) 250 CLR 664, 671 [22] (French CJ, Hayne, Kiefel, Gageler and Keane JJ); DPP v Walters (a pseudonym) [2015] VSCA 303, [2] (Maxwell P, Redlich, Tate and Priest JJA).
[24]Or against the law of a State or Territory, an offence against a law of a foreign country.
In George,[25] the central issue was whether land was ‘used in, or in connection with, the commission of an offence’, and thus was an ‘instrument’ of an offence under s 7 of the Criminal Assets Confiscation Act 2005 (SA). Doyle CJ (with whom White J agreed), rejected the notion that there must be a ‘substantial connection’ before property may be considered to have been used in, or in connection with, the commission of an offence. His Honour said:[26]
There is one thing which I consider to be clear. It is that there is no basis for qualifying the statutory definition by requiring that any connection be a ‘substantial connection’. To take that approach is to introduce an expression which the draftsman has not used. In that respect I agree with Millhouse J and with Debelle J in Taylor v Attorney-General (SA) [(1991) 55 SASR 462] at 466 and at 472 respectively, and with the majority of the Court of Criminal Appeal of Western Australia in R v Rintel (1991) 3 WAR 527 at 530–531, Malcolm CJ, and at 542, Pidgeon J.
I also approach the issue of interpretation on the basis that the statutory definition should not be read as referring to or requiring a causal link between the property and the offence. Something less than that may suffice. Nor is it necessary that the property be something that is essential or necessary for the commission of the offence, or something that makes a unique contribution to the commission of the offence. Nor is it appropriate, when the instrument is land, to assign to the land a single or dominant use. There is no reason why land cannot be used in, or in connection with, the commission of an offence when it is also used for other purposes, and when on the objective circumstances it would be described as being used in another manner. …
[25]Director of Public Prosecutions (SA) v George (2008) 102 SASR 246 (‘George’).
[26]Ibid 262 [62]–[63] (emphasis added).
Doyle CJ also observed:[27]
… As a matter of ordinary language … I consider that the definition refers to a use of property that facilitates, assists or contributes to the commission of an offence. That is a starting point, not a conclusion. The use of the property must be sufficiently significant (I realise that this is question begging) to warrant a conclusion (especially when the property is the place where the offence is committed) that the property is used in connection with the commission of the offence. This invites attention to the role that the property plays in the commission of the offence, to the extent to which the property is so used, and to how much of the property, or what part of it, is used. I doubt whether one can usefully go any further than that.
[27]Ibid 262 [65].
When dealing with cognate legislation, in Chalmers[28] this Court — after a detailed review of authority — also rejected the view that it was necessary for it to be established that there was a ‘substantial’ connection, or that the crime could not have been committed without using the property, before property could be considered to have been used in, or in connection with, an offence. Chalmers was a case in which the applicant had murdered his de facto wife in an apartment in which they resided. Upon his conviction for murder, the judge made a forfeiture order with respect to the applicant’s interest in the apartment in which he murdered his wife, on the basis that the apartment was ‘tainted property’ within the meaning of the Confiscation Act 1997 (Vic). By s 3(1) of the Confiscation Act, ‘tainted property’ included property that ‘was used … in, or in connection with, the commission of the offence’. The Court (Maxwell P, Redlich JA and Kyrou AJA) concluded that the mere fact that an act was done in or on a particular property would ordinarily not suffice to bring that property within the definition of ‘tainted property’, since, as a matter of ordinary language, that could not be characterised as a ‘use’ of the property. It would only be possible to say that property had been ‘used’ when the property, or some feature or attribute of it, had been turned to advantage by an offender, or enlisted to the offender’s purpose. The Court observed:[29]
[28]Chalmers v The Queen (2011) 37 VR 464 (‘Chalmers’).
[29]Ibid 479–80 [76]–[78].
This court has not previously had occasion to consider the correct interpretation of the phrase ‘used in connection with the commission of the offence’, as used in the definition of ‘tainted property’. Over the past two decades, however, the intermediate appellate courts of several other States have given detailed consideration to the same phrase, or close equivalents of it, in cognate statutory contexts.[30] The High Court, too, has recently expressed relevant views, although the court did not need to decide this particular question of construction.[31]
[30]NSW: R v Hadad (1989) 16 NSWLR 476, re Crimes (Confiscation of Profits) Act 1985 (NSW) (‘Hadad’); SA: Taylor v Attorney-General (SA) (1991) 55 SASR 462, re Crimes (Confiscation of Profits) Act 1986 (SA) (‘Taylor’); Director of Public Prosecutions (SA) v George (2008) 102 SASR 246 re Criminal Assets Confiscation Act 2005 (SA) (‘George’); WA: Rintel v R (1991) 3 WAR 527, re Crimes (Confiscation of Profits) Act 1988 (WA) (‘Rintel’); Director of Public Prosecutions (WA) v White (2010) 41 WAR 249, re Criminal Property Confiscation Act 2000 (WA) (‘White’) and see White v Director of Public Prosecutions (WA) (2011) 243 CLR 478 (‘White (HCA)’).
[31]White (HCA) (2011) 243 CLR 478.
We have found the analyses by the respective courts illuminating, and they disclose a high degree of unanimity of approach. We would respectfully adopt the following propositions which emerge from those authorities:
1.The word ‘used’ should be given its ordinary meaning of ‘employed, or made use of, for a particular end or purpose’.[32]
2.The statutory phrase is of wide scope. The inclusion of the words ‘in connection with’ was plainly intended to extend the scope of the definition of ‘tainted property’ beyond circumstances where the property could be said to have been ‘used in the commission of’ the offence.[33]
3.Whether there is a connection between the use of the property and the commission of the crime is a question of fact and degree.[34] It is not necessary for it to be established that there was a ‘substantial’ connection, or that the crime could not have been committed without using the property.[35]
4.The nature, extent and significance of the use of the property in connection with the commission of the crime will be matters which go to the court’s discretion whether or not to order forfeiture of the property.[36]
Very often, the decisive issue will be whether the relevant property can be said to have been ‘used’,[37] since ‘use’ is (by definition) employment for a purpose. Once it is concluded that the offender ‘used’ the property at or around the time of the commission of the offence, it will usually follow that there was the requisite connection between the use of the property and the commission of the offence. Put differently, if the offender (or some other person) ‘employed or made use of’ the property for a purpose associated with the offending, then it would follow that the property was ‘used in connection with the commission’ of the offence.
[32]Rintel (1991) 3 WAR 527 at 529 and 542; White (2010) 41 WAR 249 at 257, [27]; White (HCA) (2011) 243 CLR 478 at 487–8, [21].
[33]Taylor (1991) 55 SASR 462 at 471; Hadad (1989) 16 NSWLR 476 at 481D; George (2008) 102 SASR 246 at 261, [57].
[34]Taylor (1991) 55 SASR 462 at 472; Director of Public Prosecutions (NSW) v King (2000) 49 NSWLR 727 at 731, [15] per O’Keefe J (‘King’); George (2008) 102 SASR 246 at 261, [57].
[35]Taylor (1991) 55 SASR 462 at 466 and 471–2; George (2008) 102 SASR 246 at 262, [62]; Hadad (1989) 16 NSWLR 476 at 482E; Rintel (1991) 3 WAR 527 at 531.
[36]Hadad (1989) 16 NSWLR 476 at 481–2; Rintel (1991) 3 WAR 527 at 530.
[37]White (2010) 41 WAR 249 at 258–9, [37]–[39].
More recently, in Hart,[38] the Queensland Court of Appeal (Morrison JA, Douglas and Peter Lyons JJ) has had cause to consider various provisions of the POCA, including s 102(3)(a), which, in its then form, permitted an order to be made under the section if ‘property was not used in, or in connection with, any unlawful activity and was not derived or realised, directly or indirectly, by any person from any unlawful activity ’. In light of the fact that the POCA was a ‘penal statute’, the trial judge had concluded that the word ‘substantially’ had to be read into s 102(3)(a), so that it read ‘the property was not substantially used in, or in connection with, any unlawful activity and was not substantially derived or realised, directly or indirectly, by any person from any unlawful activity’. On appeal, however, Morrison JA — dissenting as to result — endorsed the approach of this Court in Chalmers, and held that the authorities support giving ‘use’ and ‘used in, or in connection with’ a wide scope of operation, and not requiring that there be a substantial connection between the property used and the offence.[39] Peter Lyons J (with whom Douglas J agreed) expressed the view that it was correct in principle to say that the relevant provision should not be read as if it included the word ‘substantial’ as a qualification on the connection referred to.[40]
[38]Commissioner of Australian Federal Police v Hart; Flying Fighters Pty Ltd [2016] QCA 215.
[39]Ibid [106].
[40]Ibid [901].
Whether in a given case there is a connection between the use of the property and the commission of an offence will be a question of fact and degree. Based on the authorities which deal with cognate legislation, however, it is clear that it is not necessary that there be a ‘substantial’ connection, or that it be established that the crime could not have been committed without using the property. The applicant suggested that a number of the authorities might be distinguished on the basis that the particular legislation under consideration gave a court a discretion to give relief against forfeiture, whereas ss 92 and 94 of the POCA were not attended by any discretion. In our opinion, however, the absence of any discretion to give relief from forfeiture cannot affect the plain meaning of the words. We are mindful of the fact that the principle of legality favours a construction of the POCA — if one is available — which avoids or minimises its encroachment upon fundamental property rights. In our opinion, however, there simply is no justification for notionally reading s 329(2)(a) as if the word ‘substantially’ occurred before the word ‘used’ in the phrase ‘the property is used in, or in connection with, the commission of an offence’.[41]
[41]The limited circumstances in which a court may read words into a statute were discussed recently in Lowe v The Queen [2015] VSCA 327, [19]–[29], [67]–[69] (Warren CJ).
In the present case, the judge was correct to conclude that the applicant had not satisfied the burden of showing that Ayr Street (or his interest in it) had not been used in, or in connection with, unlawful activity. On the available evidence, the very reason for relocating the ‘drugs’ to the applicant’s residential property at Ayr Street was to safeguard them against possible theft. Rhys Cini, the applicant’s son and co-offender, persuaded his father that what they both believed to be a substantial quantity of methamphetamine should be moved from the factory to Ayr Street to avoid the threat of ‘robbery’. Moreover, it was thought that the move would also help thwart detection by law enforcement authorities.
Further, and in that respect, there were features of Ayr Street which made it a preferred location for the storage of illicit drugs. The judge identified those features as including secure fencing (a locked, Colorbond gate which was closed other than when the Jeep entered or exited); an alarm and CCTV security; and a garage — secured by a roller door — into which the plastic storage containers of ‘drugs’ were unloaded. Thus, by putting the ‘drugs’ at Ayr Street, the applicant was able to store them at a secure location, and control access to them. Thus, as was said in Chalmers, ‘the property, or some feature or attribute of it, had been turned to advantage by [the applicant], or enlisted to the [applicant’s] purpose’.
As we have said, the judge identified the ‘unlawful activity’ for the purposes of the POCA as being the applicant’s importation offence, and also found that his acts constituted the offences of attempting to possess a commercial quantity of a border controlled drug and of attempting to traffic a controlled drug. Her Honour also held that the commission of an offence by the applicant’s son (that is, attempting to possess a commercial quantity of a border controlled drug) meant that the applicant was incapable of showing that Ayr Street was not used in, or in connection with, unlawful activity. With respect, these findings are unassailable.
The applicant has failed to demonstrate that the judgment of the County Court is attended by error.
Conclusion
For the foregoing reasons, leave to appeal must be refused.[42]
[42]See Supreme Court Act 1986, s 14C.
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