Director of Public Prosecutions (SA) v K
[2024] SADC 133
•18 October 2024
DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
DIRECTOR OF PUBLIC PROSECUTIONS (SA) v K
[2024] SADC 133
Judgment of his Honour Judge Burnett
18 October 2024
CRIMINAL LAW - PROCEDURE - CONFISCATION OF PROCEEDS OF CRIME AND RELATED MATTERS - RESTRAINING OR FREEZING ORDER
STATUTES - ACTS OF PARLIAMENT - INTERPRETATION - GENERAL APPROACHES TO INTERPRETATION - SUPPLYING, OMITTING OR SUBSTITUTING WORDS
The applicant, the Director of Public Prosecutions (the DPP), has sought a restraining order pursuant to s 24 of the Criminal Assets Compensation Act 2005 (SA) (the Act) over funds that were seized from the bank account of the respondent. The restraining order was sought pursuant to s 24(1)(a) of the Act in that the respondent had been charged with a serious offence, namely trafficking in a large commercial quantity of a controlled drug.
The respondent contended that a restraining order should not be made over the funds as s 24(1)(a) should be read as subject to an implied limitation that such an order may only specify property if the court is satisfied that there are reasonable grounds to suspect that the property is property of the suspect that is the proceeds of, or an instrument of, a serious offence. The respondent contended that this implied limitation was necessary because the restraining order is made to secure the contingent liability of a person, in the event of a conviction, to forfeit property to the State and therefore the restraint must be proportionate to that contingent liability. The respondent further contended that any forfeiture of property would be made under s 47 of the Act. Section 47(1)(a) requires that the court be satisfied that the property that is to be forfeited is the proceeds of the offence and s 47(3) requires that the court be satisfied that the property is an instrument of the offence. Therefore, it was contended to ensure the proportionality between the restraining order and the property to be forfeited, the restraining order under s 24(1)(a) could only specify property that was the proceeds of, or an instrument of, the offence.
The respondent contended that for the same reasons an exclusion order should be made under s 34 of the Act.
Held:
(1)The DPP is entitled to a restraining order over the funds. The respondent is not entitled to an order excluding the funds from the restraining order.
(2)The circumstances in which a court may insert additional words into a statute are limited. It is ultimately a judgment of matters of degree. Words will not be added that fill "gaps disclosed in legislation" or makes an insertion which is "too big, or too much at variance with the language in fact used by the legislature”: Taylor v Owners-Strata Plan No 11564 (2014) 253 CLR 531, Commissioner of State Revenue (Vic) v Australian Football League (2006) 14 VR 35 applied.
(3)The proposed additional words are inconsistent with the mandatory wording in s 24(1)(a) and the structure of the Act in setting out the circumstances in which a restraining order might be made. The additional words do not satisfy the criteria set out by Lord Diplock in Wentworth Securities v Jones [1980] AC 74, as reformulated in Inco Europe Ltd v First Choice Distribution (a firm) [2001] 1 WLR 586, although those conditions are not always necessary and sufficient.
(4)Forfeiture of property under the Act is not limited to forfeiture under s 47 and may be made under s 56A and s 74. Those latter sections do not require the property to be the proceeds of, or an instrument of, the offence. Forfeiture is therefore not limited to cases where the property is the proceeds of, or instrument of, an offence. Therefore, there is no need to limit the circumstances in which a restraining order might be made to ensure proportionality between the restraining order and the property to be forfeited.
Criminal Assets Confiscation Act 2005 (SA) 3, 6A, 24, 24(1), 24(1)(a), 24(1)(b), 24(1)(c), 24(1)(d), 24(5), 24(5)(a)(ii), 24(5)(a)(ii)(A) and (B)). 24(6), 34, 35, 36, 46A(3), 47, 47(1)(a), 47(3), 47(3)(a), 56A, 56A(1), 56A(2), 56A(3), 56B, 58, 59, 60(1), 74, 74(6), 75, 76, 76(1)(d), 220; Controlled Substances Act 1984 (SA) 32(1), referred to.
SAS Trustee Corporation v Miles (2018) 265 CLR 137; Taylor v Owners-Strata Plan No 11564 (2014) 253 CLR 531; Commissioner of State Revenue (Vic) v EHL Burgess Properties Pty Ltd [2015] VSCA 269; Commissioner of State Revenue (Vic) v Australian Football League (2006) 14 VR 35; Thompson v Gould & Co [1910] AC 409, 420; Wentworth Securities v Jones [1980] AC 74; Director of Public Prosecution v Leys (2012) 296 ALR 96; Mansfield v DPP (WA) (2006) 226 CLR 486; Hall v Director of Public Prosecutions (2015) 122 SASR 12; Public Prosecutions v George (2008) 102 SASR 246; Donnelly v Director of Public Prosecutions [2024] SAC 45, considered.
DIRECTOR OF PUBLIC PROSECUTIONS (SA) v K
[2024] SADC 133Introduction
These proceedings concern the circumstances in which a restraining order may be made pursuant to s 24(1)(a) of the Criminal Assets Confiscation Act 2005 (SA) (the Act) and whether the power to grant a restraining order under that section is subject to an implied limitation that would have the effect that, in the circumstances of this case, a restraining order should not be made over specified property.
The applicant, the Director of Public Prosecutions (the DPP), has by way of an amended originating summons, sought a restraining order over, inter alia, the sum of $66,654.75 (the Funds) that was seized from the bank account of the respondent held with the Commonwealth Bank of Australia and deposited into the Crown Solicitor’s Trust Account. As yet, no restraining order has been made over the Funds.
The DPP contends that it has satisfied all of the statutory criteria for the making of a restraining order over the Funds. The respondent contends that
s 24(1)(a) of the Act (and s 24(1)(b) although that provision is not relevant in these proceedings), should be read as subject to an implied limitation that a restraining order made under subsection (1)(a) or (b) may only specify property if the court is satisfied that there are reasonable grounds to suspect that the property is property of the suspect that is the proceeds of, or an instrument of, a serious offence. The respondent contends that as the Funds were not the proceeds of, or an instrument of, a serious offence, the restraining order over the Funds should not be made or, for the same reasons, an order should be made pursuant to s 34 of the Act, excluding the Funds from any restraining order.
Statutory Framework
The implied limitation advanced by the respondent is based on the construction of the Act as a whole and in particular the interplay between the provisions providing for the granting of a restraining order and those provisions providing for the forfeiture of property.
The long title to the Act assists in the construction of the Act and ascertaining the objectives of the Act.[1] The long title is “An Act to provide for the confiscation of proceeds and instruments of crime; to provide for the confiscation of property of certain drug offenders as an additional punishment for their offending and for other purposes”. That title suggests that the primary purpose of the Act is to provide for the forfeiture of property. It does not assist in determining what property is forfeited.
[1] See D.C. Pearce “Statutory Interpretation in Australia” (LexisNexis Butterworths, 9th ed., 2019), [4.60].
By way of overview, the statutory framework of the Act provides for the making of a restraining order under s 24 preventing the property specified in the order from being disposed of or otherwise dealt with by any person. There are four circumstances in which a restraining order may be made under s 24. They are where:
·a person has been convicted of, or has been charged with, a serious offence or it is proposed that the person be charged with a serious offence (s 24(1)(a));
·A person is suspected on reasonable grounds of having committed a serious offence (s 24(1)(b));
·There are reasonable grounds to suspect that the property is the proceeds of, or is an instrument of, of a serious offence (s 24(1)(c)); or
·There are reasonable grounds to suspect that a person has committed a serious offence and has derived literary proceeds in relation to the offence (s 24(1)(d)).
The court may make an exclusion order excluding property from a restraining order under s 34 of the Act.
The Act subsequently provides for forfeiture of the property after conviction. Forfeiture may occur in three different ways:
1.Pursuant to s 47, the court must, on application by the DPP, make an order for forfeiture where certain criteria are met, including that the property is the proceeds of, or an instrument of, an offence; or
2.Pursuant to s 56A, where immediately upon a person becoming a prescribed drug offender (as defined), a forfeiture order is deemed to have been made; or
3.Pursuant to s 74, property is forfeited at the end of the relevant period (as defined) if a person is convicted of a serious offence and at the end of the relevant period, the property is covered by a restraining order that relates to the offence.
In each of the three instances, the court may make an order excluding property from forfeiture pursuant to ss 58, 59 or 76.
The power to make a restraining order is contained in s 24 of the Act, which provides:
(1)A court must, on application by the DPP, make an order (a restraining order) that specified property must not be disposed of or otherwise dealt with by any person (except in the manner and circumstances, if any, specified in the order) if satisfied that—
(a) a person has been convicted of, or has been charged with, a serious offence, or it is proposed that the person be charged with a serious offence; or
(b) a person is suspected on reasonable grounds of having committed a serious offence; or
(c) there are reasonable grounds to suspect that the property is the proceeds of, or is an instrument of, a serious offence (whether or not the identity of the person who committed the offence is known); or
(d) there are reasonable grounds to suspect that a person has committed a serious offence and has derived literary proceeds in relation to the offence.
(2)An application for an order under this section must specify the property to which the application relates.
(3)...
(4)Subject to subsections (5) and (5a) and Division 3, the court must specify in the restraining order all property specified in the application for the order.
(5)The court may only specify property in a restraining order made under subsection (1)(a),(b) or (d) if satisfied that there are reasonable grounds to suspect that the property is—
(a) in the case of a restraining order made under subsection (1)(a) or (b)—
(i) property of the suspect; or
(ii)property of another person (whether or not that other person's identity is known) that—
(a) is subject to the effective control of the suspect; or
(b) is proceeds of, or is an instrument of, the serious offence;
(5a) …
(6) The court must make a restraining order even if there is no risk of the property being disposed of or otherwise dealt with.
…
A person may apply to exclude property from a restraining order under s 35 and s 36 of the Act. Under s 34, the court may make an order excluding property from the restraining order. Section 34 relevantly provides that the court may exclude specified property from a restraining order where:
(a)an application is made under section 35 or 36; and
(b)the court is satisfied that –
(i)the property is neither proceeds nor an instrument of unlawful activity; and
(ia) –
(A)if the suspect has been convicted of the serious offence to which the restraining order relates-
·the suspect has not become a prescribed drug offender as a result of the conviction; or
·The suspect has become a prescribed drug offender as a result of the conviction, but the property was not owned or subject to the effective control of the suspect on the conviction day of that offence or is property that should not be subject to the restraining order in accordance with section 24(5a);
(B)…
The forfeiture provisions are also relevant to these proceedings. Sections 47(1)(a) and 47(3)(a) are relevant to a restraining order made under section 24(1)(a). s 47 provides:
(1)A court must, on application by the DPP, make an order (a "forfeiture order") that property specified in the order is forfeited to the Crown if—
(a) a person has been convicted of one or more serious offences and the court is satisfied that the property to be specified in the order is proceeds of one or more of those offences;
(2)…
(3)A court may, on application by the DPP, make an order (a "forfeiture order") that property specified in the order is forfeited to the Crown, if—
(a) a person has been convicted of one or more serious offences the court is satisfied that the property is an instrument of one or more of the offences or …
(b) …
Section 56A sets out the circumstances in which a deemed forfeiture order is made and provides:
(1)Immediately on a person becoming a prescribed drug offender, a forfeiture order (a deemed forfeiture order) will be taken to have been made under Subdivision 1 by the convicting court.
(2)A deemed forfeiture order applies to all property owned by, or subject to the effective control of, the prescribed drug offender on the conviction day for the conviction offence other than the following:
(a) …
(b) property that has been excluded from a restraining order under Part 3, Division 3.
Section 56B provides that:
A court may declare that particular property has been forfeited under this Subdivision if-
(a) the DPP applies to the court for the declaration; and
(b) the court is satisfied that the property is forfeited under this Subdivision.
Under ss 59 and 60(1) of the Act, a person may apply for an exclusion order where a forfeiture order specifies the property of that person.
Under s 74:
(1)Property is forfeited to the Crown at the end of the relevant period if-
(a) A person is convicted of a serious offence; and
(b) either –
(i)at the end of the relevant period, the property is covered by a restraining order that relates to the offence; or
(ii)…
The relevant period is defined in s 74(6) as comprising the six-month period starting on the day of conviction or if an application has been made to exclude the property from the restraining order or forfeiture, until that application to exclude property from the restraining order or forfeiture is finally determined.[2]
[2] The Act, s 75.
Section 76 provides only for limited circumstances in which an order excluding property from forfeiture under that Division will be made in the context of a prescribed drug offender. Section 76 will, in such a case, only operate to exclude protected property of the person (provided other criteria are established). Protected property is defined in s 3 as property that is of a class declared by regulation. The Funds are not protected property.
Pursuant to s 220 of the Act, the DPP bears the onus of proving, on the balance of probabilities, the matters necessary to establish the grounds for making the order applied for.
Factual and procedural background
The respondent has been charged with a number of serious drug-related offences including trafficking in large commercial quantity of a controlled drug contrary to s 32(1) of the Controlled Substances Acts 1984 (SA). That is a serious offence under s 3 of the Act and if convicted of this offence, the respondent will become a prescribed drug offender under s 6A of the Act. The trial of the respondent has not yet been heard and therefore the respondent has not been convicted of any offence.
The DPP took out an originating application dated 24 March 2023 in which it sought a restraining order pursuant to s 24 of the Act over specified property and a forfeiture order under either ss 47, 56A or 74 (subject to the relevant statutory criteria being established). On 17 April 2023, the Court granted a restraining order pursuant to s 24(1)(a) of the Act over the property specified in the application. The DPP had filed an amended originating application before those orders were made in which it sought, in addition, a restraining order over the Funds, but did not press for an order at that hearing over the Funds as that application had only just been filed.
The respondent opposes the making of a restraining order which specifies the Funds and has also filed an application pursuant to s 35 of the Act seeking an order under s 34 that the Funds be excluded from the restraining order. The factual basis of the opposition to the restraining order and the seeking of the exclusion order was that there was no evidence that the Funds were the proceeds of, or an instrument of, a serious offence. The respondent went further and said that the evidence in fact demonstrated that the Funds were not the proceeds of, or an instrument of, a serious offence.
I accept for the purposes of this application that there is no evidence that that the Funds were the proceeds of, or an instrument of, a serious offence and will proceed on the basis that they were not.
Basis of the respondent’s opposition to the restraining of the funds
The respondent contended that the purpose of the restraining order was to prohibit conduct which might impede the ability of the court to order, as an additional punishment, forfeiture of the property of certain offenders that was the proceeds of, and instrument of, crime. In this way, it was submitted that the restraining order secured the contingent liability of a person in the event of a conviction to: (a) pay the State by way of compensation; or (b) forfeit property to the State.
It follows, the respondent contended, that the restraining order ought not extend to property which is not required to satisfy the contingent liability
(i.e. forfeiture) once the conditions for forfeiture have been established.
Those conditions will be established on conviction. In these circumstances, the respondent submits that there must be proportionality between the property that is being sought to be restrained and the property that is to be forfeited. In other words, the property that is to be restrained must be property that is liable to be forfeited. In the case of ss 24(1)(c) and 24(1)(d), that proportionality is express.
Sub-section (c) requires the court to be satisfied that there are reasonable grounds to suspect that the property is the proceeds of, or an instrument of a serious offence and subsection (d) requires the court to be satisfied that there are reasonable grounds to suspect that a person has derived literary proceeds in relation to the offence. In the case of ss 24(1)(a) and 24(1)(b), the respondent submits that the requirement for proportionality is implied.
The respondent then contends that where a restraining order is made under
ss 24(1)(a) or 24(1)(b), any forfeiture order will be made under s 47 of the Act. Section 47(1)(a) requires the property that is to be forfeited to be the proceeds of the offence and s 47(3) requires that the court to be satisfied that the property is an instrument of the offence.
The respondent submitted that to ensure that proportionality exists between the restraining order and the forfeiture order where a restraining order is made under ss 24(1)(a) and 24(1)(b), there must be an implied limitation as to the extent to which property ought to be restrained. That limitation is to ensure that the restraint was proportionate to the contingent liability for forfeiture that arose under
s 47 (that liability to forfeiture being confined to the proceeds of, or an instrument of, an offence). The respondent submitted that the only property that should be restrained is that necessary to discharge the contingent liability should a forfeiture order be made. The respondent submitted that the following words should be read into s 24(5) (being the words underlined):
The court may only specify property in a restraining order made under subsection (1)(a), (b) or (d) if satisfied that there are reasonable grounds to suspect that the property is-
(a) in the case of a restraining order made under subsection (1)(a) or (b)-
(i)property of the suspect that is the proceeds of, or an instrument of, the serious offence.
The implied limitation was the only basis upon which the respondent opposed the making of the restraining order. I find that, unless s 24 is construed as containing that implied limitation, the DPP has satisfied the statutory criteria for the making of the restraining order.
Determination
The argument of the respondent fails for two reasons:
(1) There is no proper basis for reading into s 24, the proposed words;
(2) Sections 56A and 74 provide an independent basis for orders of forfeiture to be made such that s 47 is not the sole basis for the making of that order. Forfeiture made under ss 56A and 74 is not limited to the forfeiting of the proceeds of the offence, or an instrument of the offence. There is therefore no disproportion between a restraining order that includes property beyond merely the proceeds of, or instrument of, the offence and the contingent forfeiture order.
Implying words into a statute
The circumstances in which a court may insert additional words into a statute are limited. This is because the court’s task when engaged in statutory construction is to construe in context the text of the statute.[3] The construction proposed must be consistent with the language used by the legislature.[4] As the Victorian Court of Appeal held in Commissioner of State Revenue (Vic) v Australian Football League,[5] “[i]t is a strong thing to read into an Act of Parliament words which are not there and in the absence of clear necessity it is the wrong thing to do”. However, there is no rigid rule that the court will never construe a provision as if it contained additional words. In Taylor v Owners - Strata Plan No 11564 (Taylor),[6] French CJ, Crennan and Bell JJ held:
Consistently with this Court's rejection of the adoption of rigid rules in statutory construction, it should not be accepted that purposive construction may never allow of reading a provision as if it contained additional words (or omitted words) with the effect of expanding its field of operation. As the review of the authorities in Leys demonstrates, it is possible to point to decisions in which courts have adopted a purposive construction having that effect. And as their Honours observed by reference to the legislation considered in Carr v Western Australia, the question of whether a construction "reads up" a provision, giving it an extended operation, or "reads down" a provision, confining its operation, may be moot.
The question whether the court is justified in reading a statutory provision as if it contained additional words or omitted words involves a judgment of matters of degree. That judgment is readily answered in favour of addition or omission in the case of simple, grammatical, drafting errors which if uncorrected would defeat the object of the provision. It is answered against a construction that fills "gaps disclosed in legislation" or makes an insertion which is "too big, or too much at variance with the language in fact used by the legislature.
Lord Diplock's three conditions (as reformulated in Inco Europe Ltd v First Choice Distribution (a firm))accord with the statements of principle in Cooper Brookes and McColl JA was right to consider that satisfaction of each could be treated as a prerequisite to reading s 12(2) as if it contained additional words before her Honour required satisfaction of a fourth condition of consistency with the wording of the provision. However, it is unnecessary to decide whether Lord Diplock's three conditions are always, or even usually, necessary and sufficient. This is because the task remains the construction of the words the legislature has enacted. In this respect it may not be sufficient that "the modified construction is reasonably open having regard to the statutory scheme’ because any modified meaning must be consistent with the language in fact used by the legislature. Lord Diplock never suggested otherwise. Sometimes, as McHugh J observed in Newcastle City Council v GIO General Ltd,the language of a provision will not admit of a remedial construction. Relevant for present purposes was his Honour's further observation, "[i]f the legislature uses language which covers only one state of affairs, a court cannot legitimately construe the words of the section in a tortured and unrealistic manner to cover another set of circumstances."
(citations omitted)
[3] SAS Trustee Corporation v Miles (2018) 265 CLR 137; [2018] HCA 34.
[4] Taylor v Owners-Strata Plan No 11564 (2014) 253 CLR 531, [39]; [2014] HCA 9; Commissioner of State Revenue (Vic) v EHL Burgess Properties Pty Ltd [2015] VSCA 269, [67].
[5] (2006) 14 VR 35, [17] quoting Thompson v Gould & Co [1910] AC 409, 420. Approved in Commissioner of State Revenue (Vic) v EHL Burgess Properties Pty Ltd [2015] VSCA, 269, [69].
[6] Taylor (above), [37]-[39].
The three conditions referred to by Lord Diplock in Wentworth Securities v Jones are:[7]
(1)It must be possible to determine from a consideration of the provisions of the statute read as a whole precisely what the mischief was that it was the purpose of the statute to remedy;
(2)it must be apparent that the draftsperson and Parliament had by inadvertence overlooked, and so omitted to deal with, an eventuality that was required to be dealt with if the purpose of the statute was to be achieved;
(3)it must be possible to state with certainty what additional words would have been inserted by the draftsperson and approved by Parliament had their attention been drawn to the omission of the intended purpose of the statute or provision in question (although that was reformulated in Inco Europe Ltd v First Choice Distribution (a firm)[8] to read “the court must be abundantly sure of the substance of the provision Parliament would have enacted, although not necessarily the precise words Parliament would have used, had the error been noticed”.[9]
[7] [1980] AC 74, 105.
[8] [2000] 1 WLR 586, 592; [2000] UKHL 15.
[9] See Commissioner of State Revenue (Vic) v EHL Burgess Properties Pty Ltd [2015] VSCA 269, [65].
The High Court in Taylor held that in the circumstances of that case, it was correct to consider these three conditions as prerequisites to reading the provision with the additional words (as well as a fourth condition that the construction must be reasonably open having regard to the statutory scheme which condition requires that the provision must be consistent with the statutory scheme).[10] However, the Court went on to hold that it was not necessary to decide whether Lord Diplock’s conditions are always, or even usually, necessary and sufficient.
[10] Ibid, [66]; Taylor (n 4), [39].
In the present case, the proposed words are not a simple drafting error. The proposed words are at variance with the language used in s 24 of the Act. Section 24(1) requires that the Court must make an order if inter alia the conditions of s 24(1) or s 24(1)(b) are satisfied. The proposed wording no longer makes that requirement mandatory. Further, s 24(1)(a)-(d) creates four separate different circumstances in which a restraining order be made. The proposed wording imports requirements from sub-section (c) into sub-sections (a) and (b). Still further, it is evident in s 24(5)(a)(ii) that the restraining order, when it applies to property of another person, extends beyond property that is the proceeds of, or an instrument of, the serious offence but extends also to property of the other party that is under the effective control of the suspect (see ss 24(5)(a)(ii)(A) and (B)). There is no logical reason why the circumstances in which a restraining order might be made, would be wider against persons who are not the suspect, than it would be (if the proposed wording of the respondent is accepted) in relation to the suspect.
The three conditions set out by Lord Diplock (together with the fourth condition added to in Director of Public Prosecution v Leys[11] and endorsed by the High Court in Taylor)[12] are not satisfied (although that is not a definitive answer to the implication of the words). It is not apparent that Parliament had overlooked an eventuality that was required to be dealt with if the purpose of the statute was to be achieved. In fact, the purpose of the statute (that is granting a restraining order so that there would be utility in making a forfeiture order), is achieved by the statutory scheme in its current form (i.e. without the proposed additional words). Further, it cannot be said with certainty that Parliament would have inserted the proposed additional words. The proposed additional words are inconsistent with the structure of s 24(1) and the mandatory requirement imposed by s 24(1). The proposed words are not consistent with the statutory scheme.
[11] (2012) 296 ALR 96, [97]; [2012] VSCA 304.
[12] Taylor (n4), [39].
The respondent in his written submissions relied upon the decision in Mansfield v DPP (WA) (Mansfield)[13] for support for the proposition that the purpose of the restraining order was to prohibit conduct that impeded the ability of the court to secure forfeiture under the Act. That is, the restraining order secured the contingent or prospective liability of the respondent to forfeit property.
In Mansfield, the Court was considering different legislation in which the DPP could apply for a freezing order under the general civil law. The granting of a freezing order in that case was discretionary. The wording of s 24 of the Act is very different in that it is mandatory and is not made under the general civil law. This suggests that the reason for the making of a restraining order is not limited to ensuring a forfeiture order can have effect. The wording of s 24(6) supports this conclusion. Section 24(6) provides that the court must make a restraining order even if there is no risk of the property being disposed of or otherwise deal with. Section 24(6) therefore suggests that the restraining order may have a purpose beyond simply securing the contingent liability for forfeiture.
[13] (2006) 226 CLR 486, [43], [46]; [2006] HCA 38.
Power of forfeiture under the Act
The contention of the respondent is also based on the argument that forfeiture under the Act is limited to the forfeiture of property that is the proceeds of, or instrument of, an offence. That is not the correct construction of the Act and in particular of ss 56A and 74.
While forfeiture under s 47 only applies to property that is the proceeds of, or an instrument of, the offence, there is no such limitation under ss 56A and 74.
Pursuant to s 56A(1) of the Act, a forfeiture order is deemed to be made by the convicting court immediately on a person becoming a prescribed drug offender. The court in Hall v Director of PublicProsecutions,[14] confirmed that approach and held property is automatically forfeited on that day.[15]
[14] (2015) 122 SASR 12; [2015] SASCFC 19.
[15] Ibid, [25], [28].See also Director of Public Prosecutions v George (2008) 102 SASR 246, [44]; [2008] SASC 330.
Section 56A(2) provides that the deemed forfeiture applies to all property owned by or subject to the effective control of the prescribed drug offender on the conviction day except property that had been excluded from a restraining order.[16] Therefore, deemed forfeiture under s 56A operates over property that is owned by or subject to the effective control of the prescribed drug offender on the conviction day.
[16] The Act, s 56A(2)(b).
The express words of s 56A are not limited to property that is the proceeds of, or instrument of, the offence. Section 56A(2) applies to all property that is owned by or subject to the effective control of the offender. Kourakis CJ (with whom Doyle JA agreed) reached the same conclusion in Donnelly v Director of Public Prosecutions (SA)[17] where his Honour held that the manifest purpose of s 56A is to punish prescribed drug offenders severely by forfeiture of all of their property, however acquired and thereby to deter serious drug offending generally.
[17] [2024] SAC 45, [13].
There are further textual indications that the construction proposed by the respondent is not tenable. Sections 58 and 59 set out the circumstances in which an order might be made excluding property from forfeiture. Those sections provide for the exclusion from forfeiture of property provided, inter alia, it is not the proceeds of, or an instrument of, the offence. Sections 58 and 59 implicitly recognise that the property that is forfeited may be property that is not the proceeds of, or an instrument of, the offence. If the respondent’s construction was correct, ss 58 and 59 would not need to specify, as a requirement for exclusion, that the property not be proceeds of, or an instrument of, an offence as such property would not be liable for forfeiture in the first place.
The respondent relied upon s 56A(3) which provides that the Act applies to a deemed forfeiture order as if it were a forfeiture order made under s 47(3)(a). That section does not incorporate the requirements of s 47 into s 56A but rather provides for the consequences of the order. I have come to this conclusion for the following reasons. First, that is the natural meaning of the words in s 46A(3). It is expressing how the Act applies to the deemed forfeiture. For example, the court may make an exclusion order under s 59. If s 56A(3) was not included, it may be that s 59 would not apply to a deemed forfeiture as no court made the forfeiture order for the purposes of s 59. Secondly, s 56A provides for the deemed forfeiture order to be made on the conviction day. How that order is treated comes after the making of the deemed order. Section 56A(3) cannot therefore dictate the requirements for the making of the order. Thirdly, as discussed above, such a construction would be inconsistent with the express words contained in s 56A(2) that the deemed forfeiture order applies to all property owned by or under the effective control of the respondent on conviction day. Fourthly, the construction advanced by the respondent would have the incongruous result that a deemed forfeiture order might be made if the requirements in s 47(3)(a) were satisfied
(i.e. the property was an instrument of the offence) but could not be made if the property was only the proceeds of the offence.
It follows that the forfeiture under s 56A applies to all property of the respondent and not just property that is the proceeds of, or an instrument of, the offence. Therefore, there is no reason to limit the operation of the restraining order. It follows there is no disproportion between the restraining order operating over all of the property of the respondent and the forfeiture order that might be made.
Further, the property may also be forfeited under s 74 of the Act. Section 74 applies where the respondent is convicted of a serious offence (as defined) and at the end of the relevant period, the property was covered by a restraining order that relates to the offence. The relevant period is defined as either six months starting on the day of conviction or the period ending when the application to exclude property from the restraining order or the application to exclude property from forfeiture is finally determined.
Both the application pursuant to s 34 of the Act to exclude the property from the restraining order, and the application pursuant to s 76 to exclude property from forfeiture, by their terms recognise that the property, beyond property that is the proceeds of the offence or the instrument of the offence, may be restrained and forfeited. Section 34(1) imposes four requirements that must be satisfied before the court will granting an exclusion order. One of those requirements is that the property is neither the proceeds nor an instrument of unlawful activity. That requirement would be unnecessary if the criteria for the making of an exclusion order in respect of the accused is that the property not be the proceeds or instrument of the offence. The same reasoning applies in relation to an exclusion from forfeiture under s 76. Subsection 76(1)(d) imposes the same four criteria.
Conclusion
For the reasons that I have expressed, the DPP is entitled to a restraining order over the Funds. The respondent is not entitled to an order excluding the Funds from the restraining order.
I will hear the parties as to the formal orders to be made and the question of costs.
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