Director of Public Prosecutions (SA) v Morley
[2023] SADC 125
•12 September 2023
DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Application)
DIRECTOR OF PUBLIC PROSECUTIONS (SA) v MORLEY
[2023] SADC 125
Judgment of his Honour Auxiliary Judge Chivell
12 September 2023
CRIMINAL LAW - PROCEDURE - CONFISCATION OF PROCEEDS OF CRIME AND RELATED MATTERS - RESTRAINING OR FREEZING ORDER
Applications by the DPP for restraining orders, forfeiture orders and/or a pecuniary penalty of money seized by police. Money previously held to respondent’s credit in a bank. Police executed a warrant issued by a Magistrate whereupon the bank electronically transferred the money to the Crown Solicitor’s Trust Account at another bank. Restraining order opposed by respondent.
Whether there was a seizure. Whether the seizure was authorised by the Act. Whether a restraining order should be made.
Criminal Assets Confiscation Act 2005 (SA) s 3, s 6A, s 24, s 171, s 172; Crimes Act 1958 (Vic) s 71, referred to.
Croton v The Queen (1967) 117 CLR 326; Lloyds and Scottish Finance Ltd v Modern Cars and Caravans (Kingston) Ltd [1966] 1 QB 764; O’Neil v Wratten (1986) 65 ALR 451; Parsons v The Queen (1999) 195 CLR 619; Whim Creek Consolidated NL v Colgan (1991) 103 ALR 204, considered.
DIRECTOR OF PUBLIC PROSECUTIONS (SA) v MORLEY
[2023] SADC 125Civil
The Director of Public Prosecutions (“DPP”) has applied for restraining orders, forfeiture orders and/or a pecuniary penalty against Mr Morley. The application relates to several items of property which the DPP asserts are the property of Mr Morley.
Mr Morley opposes the application in relation to one item, the sum of $181,056.02. This sum was seized[1] by the police from an account at Mr Morley’s bank after the presentation by police of a warrant issued by a Magistrate. The bank transferred the money to the Crown Solicitor’s Trust Account, where it remains.
[1] I have used the word “seized” without overlooking Mr Nottle’s later argument that no valid seizure has taken place.
The DPP’s application is brought pursuant to s 24 of the Criminal Assets Confiscation Act2005 (SA). Restraining orders have already been made in relation to the other items of property referred to in the application. Mr Morley opposes the making of orders in relation to the remaining item on the following initial grounds, as set out in the written submissions of his counsel, Mr Nottle:[2]
1.SAPOL had no power to seize the money from Mr Morley’s bank account because it was not tangible property as required by s 172 of the Criminal Assets Confiscation Act;
2.The money is not the property of Mr Morley, nor is it the property of another person that is subject to Mr Morley’s effective control, as required by s 24(5) of the Criminal Assets Confiscation Act.
Was there a seizure?
[2] As stated above, Mr Nottle raised some further grounds for opposing the orders sought which I will discuss later.
The word “seize” is not defined in the Act. The dictionary definitions of the word include, in the Macquarie Dictionary,[3] “to lay hold of suddenly or forcibly”, “to take possession of by force or at will” and, in the Oxford English Dictionary,[4] “to take possession of by legal authority”, “to put in possession, to take possession of, or take hold of” and “to take possession of (goods) in pursuance of judicial order”.
[3] Macquarie Dictionary (7th ed), p 1353.
[4] Oxford English Dictionary (2nd ed, Vol XIV), pp 96-7.
The definition of “seizure” in the law dictionaries is to similar effect. In Butterworths Australian Legal Dictionary[5] it is “the forceable taking possession of [something] by a non-owner”. The definition seems to have been taken from maritime and/or aviation law, but seems to have general application.
[5] Butterworths Australian Legal Dictionary 1997) ‘seizure’ p 1061.
In Black’s Law Dictionary,[6] “seizure” is defined as “the act or an instance of taking possession of a person or property by legal right or process”.
[6] Black’s Law Dictionary (9th ed, 2009) ‘seizure’ p 1480.
In Words and Phrases Legally Defined,[7] the authors quote Halsbury’s Laws[8] as follows:
For an act of the sheriff or his bailiff to constitute a seizure of goods it is not necessary that there should be any physical contact with the goods seized, nor does such contact necessarily amount to seizure. An entry upon the premises on which the goods are situate, together with an intimation of an intention to seize the goods, will amount to a valid seizure, even where the premises are extensive and the property seized widely scattered, but some act must be done sufficient to intimate to the judgment debtor or his employees that a seizure has been made, and it is not sufficient to enter upon the premises and demand the debt. Any act which, if not done with the court’s authority, would amount to a trespass to goods will constitute a seizure of them when done under the writ. Whether or not there has been a seizure is a question of fact.
It is noted that this definition has been quoted with approval in the United Kingdom in Lloyds and Scottish Finance Ltd v Modern Cars and Caravans (Kingston) Ltd[9] and in Australia in O’Neil v Wratten.[10] There is also a reference to Whim Creek Consolidated NL v Colgan per O’Loughlin J:[11]
The authorities seem to make it clear that a mere oral announcement of seizure is not enough … There must be some act of dominion which, of its nature, is such that there would be no doubt in the mind of a reasonable observer that seizure has taken place.
[7] Words and Phrases Legally Defined (5th ed, 2018) ‘seizure’ p 2860.
[8] Halsbury’s Laws (4th ed) p 296, para 489.
[9] [1966] 1 QB 764 at 776.
[10] (1986) 65 ALR 451 AT 457.
[11] (1991) 103 ALR 204 at 216.
I conclude that the presentation of the warrant issued by the Magistrate to the bank, and the giving by the police of a direction to the bank to forward the money standing to the credit of Mr Morley in the account to the Crown Solicitor’s Trust Account by electronic funds transfer, constitute a seizure of the money. The direction given by the police, supported by the authority of the warrant, constituted taking possession of the money by legal authority, once it was forwarded to the Crown Solicitor’s Trust Account. This also satisfies the test in Whim Creek that there must be some “act of dominion” over the property.
Was there power to seize the money?
The power to seize property is contained in Part 6 Division 5 of the Criminal Assets Confiscation Act. Section 172 gives power to a Magistrate to issue a warrant authorising the seizure of “material liable to seizure under this Act”. Section 171 defines such material as “tainted property”, which in turn is defined in s 3 as “property owned by, or subject to the effective control of, a person who has been charged with … an offence where the person would, if convicted of the offence, become a prescribed drug offender”.
If he is convicted of the offence with which he is charged, Mr Morley would be a prescribed drug offender, since he is charged with a serious drug offence.[12]
[12] See s 6A of the Criminal Assets Confiscation Act.
Section 3 of the Criminal Assets Confiscation Act defines “property” for the purposes of the Act as:
real or personal property (tangible or intangible) including—
(a) a chose in action; and
(b) an interest in property
I agree with Mr Nottle’s submission that a person does not own money held to their credit in a bank account. He referred to Parsons v The Queen,[13] in which the High Court considered the judgment of Barwick CJ in Croton v The Queen:[14] In Croton, Barwick CJ said:
But, though in a popular sense it may be said that a depositor with a bank has “money in the bank”, in law he has but a chose in action, a right to recover from the bank the balance standing to his credit in account with the bank at the date of his demand, or the commencement of action. That recovery will be effected by an action for debt. But the money deposited becomes an asset of the bank which may use it as it pleases ... Neither the balance standing to the credit of the joint account in this case, nor any part of it, as it constituted no more than a chose in action in contradistinction to a chose in possession, was susceptible of larceny …
[13] (1999) 195 CLR 619; [1999] HCA 1 at [17].
[14] (1967) 117 CLR 326 at 330.
The distinction drawn by Barwick CJ was more significant in former times when a chose in action was regarded as having no intrinsic value. As the High Court noted in Parsons,[15] this led to legislative reform such as the provisions in ss 71(1) and (2) of the Crimes Act 1958 (Vic), the legislation under consideration in that case. These provisions deal with the crime of theft, and they extend the meaning of the word “property” to intangible property and choses in action. Section 71(1) provides:
property includes money and all other property real or personal including things in action and other intangible property.
[15] At [22].
There was no distinction drawn by the High Court between “things in action” and a “chose in action”, so I will regard the two phrases as synonymous.
Section 71(2) of the Crimes Act 1958 (Vic) provides:
In this Division property shall be regarded as belonging to any person having possession or control of it, or having in it any proprietary right or interest (not being an equitable interest arising only from an agreement to transfer or grant an interest).
When ss 71(1) and (2) are considered together, the definition of “property” in the Crimes Act1958 (Vic) is co-extensive with the definition of “property” in s 3 of the Criminal Assets Confiscation Act quoted above.
On the evidence, it is clear that Mr Morley had a chose in action against his bank in relation to the subject money at the time it was seized by the police.
It follows that Mr Morley’s chose in action against the bank in which he deposited the money was property within the meaning of s 3 of the Criminal Assets Confiscation Act despite its intangibility. It also follows that the property was under the effective control of Mr Morley at the time immediately before it was seized by the police. His chose in action against the bank entitled him to an immediate refund of the money upon demand. It therefore satisfied the test for tainted property in s 3 of the Criminal Assets Confiscation Act and was therefore liable to seizure under s 172 of the Act.
Mr Nottle also submitted that there has been no effective seizure of the money in question because the money was an asset of the bank at the time the funds were disbursed by the bank. I do not accept that argument. I have already held that immediately before the money was disbursed it was the property of Mr Morley within the meaning of the Act. The fact that it may also have been the property of the bank does not change the situation.
Should a restraining order be made?
The power to make a restraining order comes from s 24 of the Criminal Assets Confiscation Act:
(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) The DPP may submit evidence in support of the application in the form of an affidavit.
(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; or
(b) in the case of a restraining order made under subsection (1)(d)—
(i) property of the suspect; or
(ii) property of another person (whether or not that other person’s identity is known) that is subject to the effective control of the suspect.
(5a) The court may not specify property in a restraining order that is protected property of a person unless subsection (1)(c) applies to the property.
(6) The court must make a restraining order even if there is no risk of the property being disposed of or otherwise dealt with.
(7) The court may specify that a restraining order covers property that is acquired by the suspect after the court makes the order.
(8) A restraining order may be made subject to conditions.
There is no dispute that the requirements of s 24(1)(a) have been satisfied.
Mr Nottle submitted that, since the funds are deposited in the Crown Solicitor’s Trust Account, Mr Morley no longer owns the property, rather it is an asset of the Crown Solicitor’s bank. He submitted that it is no longer the “property of the suspect” within the meaning of s 24(5)(a)(i) of the Criminal Assets Confiscation Act.
Mr Schapel, counsel for the DPP, submitted that Mr Morley retained an interest in the funds, which is sufficient to satisfy the definition of “property” in s 3 quoted above. He referred to the definition of “interest” in s 3:
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
Mr Schapel accepted that only the Crown Solicitor held a chose in action in relation to the funds in the Trust Account. He submitted, however, that Mr Morley still retained an interest, in the sense of a right, power or privilege, over the funds. He argued that the Crown Solicitor’s power to retain control of the property would cease if a forfeiture order under the Act is not made. In that event, Mr Morley would have an enforceable right to the return of the money. I accept that submission.
I reject Mr Nottle’s submission that, in the event of an order not being made, the funds must be returned to the Commonwealth Bank because it was the bank’s asset when it was seized. It was only while the money was held in one of the bank’s accounts that it was the bank’s asset. Once the bank sent the money to the Crown Solicitor’s Trust Account, it no longer held any interest in the money.
I also reject Mr Nottle’s submission that if a restraining order was made, it would need to be directed at the entire Crown Solicitor’s Trust Account and could not be limited to the $181,056.02 at issue here.
In my view, an order can be fashioned which acknowledges the extent of the Crown Solicitor’s chose in action against the bank, in the same way as restraining orders have already been made in relation to cash seized by the police and subsequently banked.
I find that on the evidence presented, the sum of $181,056.02 presently held in the Crown Solicitor’s Trust Account was validly seized by the police on 18 April 2023, and can be made the subject of a restraining order pursuant to s 24 of the Criminal Assets Confiscation Act.
I will hear the parties as to the form of orders to be made.
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