Director of Public Prosecutions v George
[2008] SASC 330
•26 November 2008
SUPREME COURT OF SOUTH AUSTRALIA
(Full Court: Civil)
DIRECTOR OF PUBLIC PROSECUTIONS v GEORGE
[2008] SASC 330
Judgment of The Full Court
(The Honourable Chief Justice Doyle, The Honourable Justice Vanstone and The Honourable Justice White)
26 November 2008
STATUTES - ACTS OF PARLIAMENT - INTERPRETATION - PARTICULAR WORDS AND PHRASES - SPECIFIC INTERPRETATIONS
Respondent convicted of producing marijuana – marijuana grown and stored in shed on respondent’s property – appellant sought a Pecuniary Penalty Order (PPO) in relation to the property – respondent’s house on the property – shed occupied only small proportion of total area of property – whether property ‘used in, or in connection with’ the commission of the offence of producing marijuana so that property liable to PPO – appeal against decision of Magistrates Court that property not used in or in connection with commission of offence.
Held: (Doyle CJ, White J agreeing, Vanstone J contra) Property is ‘used in, or in connection with, the commission of an offence’ where it facilitates, assists or contributes to the commission of an offence – use of the land facilitated and contributed to the commission of the offence – land an ‘instrument’ of the offence and liable to a PPO – appeal allowed.
STATUTES - ACTS OF PARLIAMENT - INTERPRETATION - PERMISSIVE, DIRECTORY AND MANDATORY PROVISIONS - GENERAL PRINCIPLES
CRIMINAL LAW - JURISDICTION, PRACTICE AND PROCEDURE - JUDGMENT AND PUNISHMENT - ORDERS FOR COMPENSATION, REPARATION, RESTITUTION, FORFEITURE AND OTHER MATTERS RELATING TO DISPOSAL OF PROPERTY - FORFEITURE OR CONFISCATION - PECUNIARY PENALTY ORDER
Section 95(1) Criminal Assets Confiscation Act 2005 (SA) provided that a Court ‘must’ make a Pecuniary Penalty Order (PPO) upon being satisfied of the existence of certain matters – whether ‘must’ in section 95(1) to be construed as conferring a discretion on the Court to make a PPO – whether implication should be drawn that a PPO cannot be made where there has been a decision to exclude property from statutory forfeiture or a decision not to make a forfeiture order in respect of the property.
Held: section 95(1) to be construed as conferring a discretionary power on the Court – (Doyle CJ, White J agreeing, Vanstone J contra) even if ‘must’ interpreted literally, no implication to be drawn that PPO not to be made after order made excluding property from statutory forfeiture or decision not to make forfeiture order in respect of property.
MAGISTRATES - JURISDICTION AND PROCEDURE GENERALLY - PROCEDURE - THE HEARING - GENERAL MATTERS - RELEVANT PRINCIPLES, JURISDICTION AND POWERS
If s 95(1) Criminal Assets Confiscation Act 2005 (SA) to be interpreted as requiring court to make PPO upon being satisfied of the existence of certain matters, whether an abuse of court's process for DPP to apply for a PPO in respect of property after a court has made an order excluding the same property from statutory forfeiture, or has refused to make a forfeiture order in relation to the same property.
Held: application by DPP for a PPO in such circumstances not an abuse of process - while the result provided for by the legislation may be regarded as harsh or unfair, the application by the DPP does not amount to an unfair or oppressive use of the Court's process.
HIGH COURT AND FEDERAL COURT - THE FEDERAL JUDICATURE - NATURE AND EXTENT OF JUDICIAL POWER - CONFERRAL ON STATE COURTS
If s 95(1) Criminal Assets Confiscation Act 2005 (SA) to be interpreted as requiring court to make PPO upon being satisfied of the existence of certain matters, whether legislation offends principle identified by High Court in Kable v Director of Public Prosecutions (NSW) and invalid.
Held: even if no discretion conferred on Court in relation to making of a PPO, legislation does not require Magistrates Court to act in a manner inconsistent with the independence and impartiality required of a court invested with Federal Jurisdiction – legislation valid.
Controlled Substances Act 1984 (SA) s 32(1)(a); Electricity Act 1996 (SA) s 85(1)(a); Criminal Assets Confiscation Act 2005 (SA) s 3, s 7, s 7(1)(b), s 17, s 24(1), s 24(5), s 34(1), s 35, s 36, s 38, s 44, s 47, s 49, s 52, s 53, s 57, s 74, s 75, s 76, s 77, s 78, s 95, s 97, s 98, s 99, s 107, s 108, s 111, s 204, s 210(1), s 220; Judiciary Act 1903 (Cth) s 78B; Acts Interpretation Act 1915 (SA) s 22, s 34; Legal Practitioners Act 1898-1936 (NSW) s 10; Interpretation Act 1897 (NSW) s 23; Criminal Law Consolidation Act 1935 (SA) s 68; Fisheries Management Act 2007 (SA) s 72; Liquor Licensing Act 1997 (SA) s 99, s 132; Lottery and Gaming Act 1936 (SA) s 8; National Parks and Wildlife Act 1972 (SA) s 47; Summary Offences Act 1953 (SA) s 28; Crimes (Confiscation of Profits) Act 1986 (SA) s 4, s 5; Criminal Assets Confiscation Act 1996 (SA); Proceeds of Crime Act 2002 (Cth) s 17, s 18, s 48, s 92, s 116; Drugs, Poisons and Controlled Substances Act 1981 (Vic) s 70, s 72, s 72A, Sch 11; Confiscation of Proceeds of Crime Act 1989 (NSW) s 13, s 18, s 24, s 25; Criminal Assets Recovery Act 1990 (NSW) s 27, s 28; Criminal Proceeds Confiscation Act 2002 (Qld) s 17, s 102, s 139, s 151, s 162, s 178, s 184, s 193, Sch 6; Drugs Misuse Act 1986 (Qld) s 8; Drugs Misuse Regulations 1987 (Qld) Sch 2; Crime (Confiscation of Profits) Act 1993 (Tas) s 4, s 11, s 16, s 21, s 22; Proceeds of Crime Act 1987 (Cth) s 48; Crimes (Confiscation of Profits) Act 1985 (NSW) s 30, s 48, referred to.
R v Polain (1989) 52 SASR 526; Taylor v Attorney-General (1991) 55 SASR 462; Minister for Immigration and Citizenship v Haneef [2007] FCAFC 203; (2007) 163 FCR 414; Comcare v Mooi (1996) 69 FCR 439; The Queen v Rintel [1990] 3 WAR 527; Walton v Gardiner (1992–1993) 177 CLR 378; Rogers v The Queen (1994) 181 CLR 251; Fardon v Attorney-General for the State of Queensland [2004] HCA 46; (2004) 223 CLR 575; Forge v Australian Securities and Investments Commission [2006] HCA 44; (2006) 228 CLR 45; In Re Davis (1947) 75 CLR 409; Saraswati v The Queen (1990-1991) 172 CLR 1; CIC Insurance Ltd v Bankstown Football Club Ltd (1995–1997) 187 CLR 384; Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation of the Commonwealth of Australia (1980–1981) 147 CLR 297, applied.
Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 226 CLR 256; Gypsy Jokers Motorcycle Club Inc v Commissioner of Police [2008] HCA 4; (2008) 82 ALJR 454; Grunswick Processing Laboratories Ltd v Advisory, Conciliation and Arbitration Service [1978] AC 655; Burch v SA (1998) 71 SASR 12; Kable v The Director of Public Prosecutions (NSW) (1995-1996) 189 CLR 51; Director of Public Prosecutions v Alexander [2003] SASC 340; (2003) 86 SASR 577; Director of Public Prosecutions (New South Wales) v King [2000] NSWSC 394; (2000) 49 NSWLR 727; Director of Public Prosecutions (Cth) v Jeffery (1992) 58 A Crim R 310; Re An Application Pursuant to the Drugs Misuse Act 1986 [1988] 2 Qd R 506; R v Ward, Marles and Graham [1989] 1 Qd R 194; R v Hadad (1989) 16 NSWLR 476, discussed.
Director of Public Prosecutions (Cth) v Chan [2001] NSWSC 151; (2001) 183 ALR 575; Rona v District Court of South Australia (1995) 63 SASR 223; R v Granger [2004] SASC 156; (2004) 88 SASR 453; Varverakis v Police [2003] SASC 20; (2003) 225 LSJS 286; Director of Public Prosecutions (ACT) v Hiep (1998) 86 FCR 33; Posner v Collector for Interstate Destitute Persons (Victoria) (1946) 74 CLR 461; International Union v Massey-Ferguson Industries Ltd (1979) 94 DLR (3d) 743; Ward v Williams (1954-1955) 92 CLR 496; Re Dunsborough Districts Country Club Inc [1982] WAR 321; Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355; R v Di Maria (1996) 67 SASR 466; Murdoch v Simmonds [1971] VR 887, considered.
WORDS AND PHRASES CONSIDERED/DEFINED
"in, or in connection with", "instrument"
DIRECTOR OF PUBLIC PROSECUTIONS v GEORGE
[2008] SASC 330Full Court: Doyle CJ, Vanstone and White JJ
DOYLE CJ: Mr George pleaded guilty to one count of producing a controlled substance, cannabis, contrary to s 32(1)(a) of the Controlled Substances Act 1984 (SA) as it stood at the time of the offence. He also pleaded guilty to a charge of knowingly extracting electricity from a power system without proper authority, contrary to s 85(1)(a) of the Electricity Act 1996 (SA). Police had found 12 mature cannabis plants, and 20 seedlings, being grown hydroponically in a shed at the rear of the property in which Mr George lives. There was also some cannabis drying in the shed. As well, Mr George was unlawfully using electricity to grow the cannabis.
On 1 February 2007 a District Court Judge fined Mr George the sum of $2,500, that being a single sentence in respect of the two offences. They are serious offences. But the penalty imposed reflects the fact that, of their kind, they are at the low end of the scale of seriousness.
On 15 September 2006, on application made by the Director of Public Prosecutions (“the DPP”), a Magistrate made a Restraining Order (“RO”) under the Criminal Assets Confiscation Act 2005 (SA) (“the CAC Act”) restraining any person from dealing with the land comprised and described in an identified Certificate of Title, being the land on which stood Mr George’s home and the shed in which the cannabis was found. I will refer to this property as “the land”.
On 8 March 2007 the DPP applied to the Magistrates Court for an order under s 95 of the CAC Act requiring Mr George to pay an amount determined by the Court under s 99 of the CAC Act. The application related to the land, treating it as an instrument (as defined) of a serious offence (as defined), which the first mentioned offence undoubtedly was. An order under s 95 of the CAC Act is described by the CAC Act as a Pecuniary Penalty Order (“PPO”).
If the PPO is made, it will require payment of an amount of $105,269. That is more than 40 times the amount of the fine imposed. The amount of the PPO is not proportionate to the seriousness of the offence. It is pretty well certain that if the PPO is made, Mr George will lose his home. The only way to meet the order will be to sell the land or to surrender it.
This is the context in which a number of issues arise under the CAC Act.
The first issue arises under s 7 of the Act, which defines the expression “proceeds of an offence” and the expression “instrument of an offence”. It also sets out the circumstances in which property ceases to be proceeds of an offence or an instrument of an offence. Section 7(1)(b) provides as follows:
7 Meaning of proceeds and instrument of an offence
(1) For the purposes of this Act, the following rules apply when determining whether property is proceeds or an instrument of an offence:
…
(b) property is an "instrument" of an offence if it is—
(i)used in, or in connection with, the commission of an offence; or
(ii)intended to be used in, or in connection with, the commission of an offence,
The first issue is whether the land falls within this definition.
The second issue that arises raises the relationship between the provision made by s 95(1) of the CAC Act for the making of a PPO in relation to an instrument of an offence, provisions of the CAC Act that enable a court to make a forfeiture order (“FO”) in respect of an instrument of an offence, and provisions that effect a forfeiture of property that is covered by an RO. The Magistrates Court has made an order excluding the land from the RO. That protects the land from statutory forfeiture. I will elaborate on this later. The issue is whether a PPO must be made under s 95 of the CAC Act in relation to an instrument, even though a court has decided not to make an FO in respect of the instrument (on application by the DPP for an FO), or even though (as happened here) a court has decided to exclude the instrument from an RO, or to exclude the instrument from forfeiture under s 76. The effect of such a decision will be to prevent the CAC Act from effecting or giving rise to a forfeiture of the instrument. Does the CAC Act nevertheless require a court (on proof of certain matters) to make a PPO?
The third issue arises if, properly understood, s 95 of the CAC Act provides for the making of a PPO notwithstanding the matters just referred to. The issue is whether the application by the DPP for a PPO is an abuse of the process of the Magistrates Court. The making of a PPO will give rise to a charge on the land to secure the amount of the PPO, or will result in Mr George having to sell the land. In one way or another, he will lose the land. The Magistrates Court appears to be given no power or discretion by s 95 of the CAC Act to decline to make a PPO even though it has decided on an application by Mr George that the land should be excluded from the RO and so be excluded from forfeiture by operation of the Act. In short, is it an abuse of the processes of the Magistrates Court for the DPP in such circumstances to seek a PPO, if the Court has no power to refuse such an order?
The fourth issue arises from a submission by Mr Wells QC, for Mr George, that if the CAC Act requires the making of a PPO despite the circumstances identified under the third issue, then the CAC Act is invalid to the extent that s 95 deprives the Magistrates Court of the ability to prevent an abuse of its process. This submission invokes the principle identified by the High Court in Kable v The Director of Public Prosecutions (NSW) (1995-1996) 189 CLR 51. Notice of this submission was given to Attorneys-General under s 78B of the Judiciary Act 1903 (Cth). No Attorney-General other than the Attorney-General for South Australia intervened in the proceedings.
Before the Magistrates Court Mr George succeeded on the first issue. The DPP has appealed against that decision. The second, third and fourth issues arise on a Notice of Alternative Contention filed by Mr George.
After the Court had reserved its decision, a further aspect of the second issue arose on which this Court invited submissions from the parties. That issue is whether, in s 95(1) of the CAC Act, the word “must” is to be interpreted as meaning “may”. On that approach s 95(1) confers on the Court a discretionary power to make a PPO, and not an obligation to do so. As will appear, I consider that s 95(1) does confer a discretionary power. Nevertheless, I have dealt with the second, third and fourth issues as originally argued (that is, on the basis that s 95(1) imposes a duty to make a PPO), in case my approach to the meaning of s 95(1) is wrong.
It is now necessary for me to summarise the relevant provisions of the CAC Act. This is not done easily. The CAC Act is long (it has 230 sections) and complex. The interrelationship between ROs, FOs, forfeiture by operation of the CAC Act and PPOs is complex.
The CAC Act
The CAC Act replaces earlier legislation that had the same aims. In his Second Reading speech on the Criminal Assets Confiscation Bill (Hansard, House of Assembly, 10 November 2004, p 843) the Attorney-General adopted remarks by the Commonwealth Attorney-General, to the effect that the aim of the legislation is to:
… strike at the heart of major organised crime by depriving persons involved of the profits and instrumentalities of their crimes. By so doing, it will suppress criminal activity by attacking the primary motive – profit – and prevent the reinvestment of that profit in further activity.
He referred to a statement by Professor Freiberg to the effect that the legislation aims to “incapacitate” by depriving persons of the means of offending, and to “prevent offenders from unjustly enriching themselves”, and to deter offenders from crime “by undermining the ultimate profitability of the venture”. In the same speech (p 844) the Attorney-General said that the key elements of the scheme were restraining orders, forfeiture orders, pecuniary penalty orders, literary proceeds orders, and information gathering.
In the summary that follows, I will focus on the provisions relating to ROs, forfeiture and PPOs. I will not refer to the numerous procedural, administrative and ancillary provisions that are necessary to flesh out the statutory scheme. I need not refer to the provisions relating to Literary Proceeds Orders and Information Gathering.
Section 24(1) of the CAC Act provides:
24 Restraining orders
(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.
Under this provision, the Court “must” make an RO if the relevant statutory criteria are made out. Some limits to the reach of this provision are imposed by s 24(5), which provides:
24Restraining orders
…
(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.
But under subs (1)(a) and subs (1)(b) it is not necessary for the DPP to establish any relationship between the offence in question and property to be covered by an RO, if it is property of a person convicted, charged, to be charged or reasonably suspected of having committed a serious offence. A relationship is required only if the DPP relies on subs (1)(c) or subs (1)(d). So it can be seen that s 24 has a wide application.
The CAC Act contains a number of provisions regulating the making of an application for an RO, and giving effect to an RO if made.
A significant feature of an RO is that if one is made, then, by operation of s 74 of the CAC Act, at the end of the “relevant period”, the making of the RO may result in forfeiture of property covered by the RO. The “relevant period” is six months from when the person is convicted of a serious offence, or, if an extension order is made, not more than 15 months from the date of the conviction: see s 74(6) and s 75 of the CAC Act. It is the person affected by an RO who will have an interest in applying for an extension order. An extension order can be made only if the application is made within six months of the relevant conviction (that is, within the initial relevant period), if the applicant has also applied to exclude property from the RO, and if the Court is satisfied that the applicant made the latter application without undue delay and has “diligently followed up that application”: s 75(1). It can be seen that the CAC Act deliberately limits the time within which a person affected by an RO may attempt to avert the effect of an RO.
Section 74 relevantly provides:
74Forfeiting restrained property without a forfeiture order if a person has been convicted of a serious offence
(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 property was covered by a restraining order that relates to the offence, but the property was excluded, or the order revoked, under section 38 or section 44; and
(c)the property is not subject to an order under section 76 excluding the property from forfeiture under this Division.
(2) For the purposes of this section, it does not matter whether—
(a)the restraining order was made before or after the person’s conviction of the serious offence; or
(b)immediately before forfeiture, the property is the person’s property or another person’s property.
The statutory forfeiture (as I will call it) does not require any decision by a court. It is self-executing, although the court that made the RO can, on application by the DPP, declare that particular property has been forfeited: s 77. Section 38 and s 44 deal with the giving of security to replace property that would be, or is, covered by an RO.
Statutory forfeiture occurs if the person is convicted, property is covered by the RO at the end of the relevant period, and s 74(1)(c) does not apply. The statutory forfeiture is not, accordingly, limited to the proceeds of an offence or to an instrument of an offence: see s 24(5)(a)(i) and s 24(5)(b)(i).
It should also be noted that by s 78, a person who is not involved in the commission of the relevant serious offence may recover property in which that person has an interest, although it has been forfeited under s 74, if the person was not involved in the commission of the serious offence and if stated criteria are met. The fact that a person may need to resort to s 78 illustrates the potential reach of s 74.
There are two routes by which a person may protect property from statutory forfeiture.
A person can apply under s 36 for an order excluding property from an RO. Without going into the details, a person must make the application within 14 days after being notified of the application by the DPP for an RO (s 35), or after being notified of the order, but only in limited circumstances if the person appeared on the hearing of the application for the RO or was notified of the application for the RO but did not appear: s 36.
A court may exclude property from an RO only if the requirements of s 34(1) of the CAC Act are satisfied. Section 34(1) provides:
34 Court may exclude property from a restraining order
(1) The court to which an application for a restraining order under section 24(1)(a) or (b) was made may, when the order is made or at a later time, exclude specified property from the order if—
(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
(ii)the owner's interest in the property was lawfully acquired; and
(iii)it would not be contrary to the public interest for the property to be excluded from the order.
The effect of s 34(1)(b)(i) is that in a case like the present one, Mr George would have to satisfy the Court that the land was not an instrument of unlawful activity. Even then the Court must consider the other matters referred to in s 34(1)(b).
The other route by which to protect property covered by an RO from statutory forfeiture is provided by s 76, which relevantly provides:
76 Excluding property from forfeiture under this Division
(1) The court that made the restraining order referred to in section 74(1)(b) may make an order excluding particular property from forfeiture under this Division if—
(a) the person referred to in section 74(1)(a)—
(i) applies for the order; and
(ii) owns the property; and
(iii)has been convicted of a serious offence to which the restraining order relates; and
(b) the property is covered by the restraining order; and
(c) the court is satisfied that—
(i) the property is not proceeds of unlawful activity; and
(ii)the defendant’s interest in the property was lawfully acquired; and
(iii)it would not be contrary to the public interest for the property to be excluded from such forfeiture.
(2) To avoid doubt, an order under this section cannot be made in relation to property if the property has already been forfeited under this Division.
The Court may make an order excluding property from forfeiture by the operation of s 74 even though the property is an instrument of a serious offence, but not if the property is “proceeds of unlawful activity”: s 76(1)(c)(i). But property that is an instrument of an offence can be excluded from an RO only if the Court is satisfied of each of the matters set out in s 76(1)(c).
The effect of s 76(2) is not entirely clear. What happens if an application is made under s 76(1), but the application has not been decided when the relevant period expires? Is it then too late to make an order under s 76(1), because the property has already been forfeited under s 74(1)? It may be that this situation is covered by s 74(1)(c) (set out above), and that that provision refers to property in respect of which an order may be made in a pending application under s 76. I will return to that point, because it is relevant to the present case.
Significant features of the legislative scheme so far are the wide range of property that can be covered by an RO; the fairly strict time limits within which an application may be made to exclude particular property from statutory forfeiture; the provision for statutory forfeiture at the expiration of the relevant period; the limited scope of the excluding power conferred by s 34, and the fact that under s 34(1) and s 76(1)(c) the court considers the public interest.
The CAC Act provides another means by which forfeiture can occur. Section 47(1) provides:
47 Forfeiture orders
(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; or
(b)the property to be specified in the order is covered by a restraining order made under section 24(1)(b) that has been in force for at least 6 months and the court is satisfied that the property is proceeds of one or more serious offences committed by the person whose conduct (or suspected conduct) formed the basis of the restraining order; or
(c)the property to be specified in the order is covered by a restraining order made under section 24(1)(c) that has been in force for at least 6 months and the court is satisfied that—
(i)the application for the order alleges that the property is proceeds of one or more serious offences; and
(ii)no application has been made under Part 3 Division 3 for the property to be excluded from the restraining order, or that any such application has been withdrawn; and
(iii)the DPP has taken reasonable steps to identify and notify persons with an interest in the property.
This provision does not apply to the present case. It is directed at the proceeds of an offence.
Section 47(3) deals with an instrument of an offence, and provides as follows:
47Forfeiture orders
…
(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 is subject to an instrument substitution declaration under section 48; or
(b) the property to be specified in the order is covered by a restraining order made under section 24(1)(b) that has been in force for at least 6 months and the court is satisfied that the property is an instrument of one or more serious offences committed by the person whose conduct (or suspected conduct) formed the basis of the restraining order; or
(c) the property to be specified in the order is covered by a restraining order made under section 24(1)(c) that has been in force for at least 6 months and the court is satisfied that—
(i)the application for the order alleges that the property is an instrument of one or more serious offences; and
(ii)no application has been made under Part 3 Division 3 for the property to be excluded from the restraining order, or that any such application has been withdrawn; and
(iii)the DPP has taken reasonable steps to identify and notify persons with an interest in the property.
An application for an FO that relates to a person’s conviction must be made within six months of the conviction: s 47(6). That is, it must be made within the initial relevant period. An application can be made under s 47(3)(a) even though an RO has not been made. If an RO has been made, there seems to be nothing to gain by making an application under s 47(3), rather than relying on statutory forfeiture.
Although the criteria for the making of an FO are set out in s 47(3), in deciding whether to make an FO the Court must have regard to the matters set out in s 47(4), which provides as follows:
47 Forfeiture orders
…
(4) In considering whether it is appropriate to make a forfeiture order under subsection (3) in respect of particular property, the court may have regard to—
(a)any hardship that may reasonably be expected to be caused to any person (other than the suspect) by the operation of the order; and
(b)the use that is ordinarily made, or was intended to be made, of the property; and
(c) the gravity of the offence or offences concerned; and
(d) any other matter the court thinks fit.
These provisions require the Court to consider the circumstances of the owner of the property.
It is to be noted that the Court is required to make a judgment (the criteria vary) if an application is made under s 34(1) to exclude property from an RO, if an application is made under s 76 to exclude property from forfeiture, or if an application for an FO is made under s 47. Only in the case of an application under s 34(1) to exclude property from an RO does the fact that the property is an instrument of an offence preclude the making of an order.
A PPO requires a person to pay an amount determined under subdivision 2 of Division 1 of Part 5 of the CAC Act: s 95(1). In the case of an instrument of an offence, the amount is “the value of the instrument” at the time of assessment: s 99(b). Having regard to the terms of the legislation, it may be that no reduction is to be made on account of a mortgage or charge over land that is an instrument of an offence. In the present case the amount of the PPO has been agreed by the parties, and it is not necessary for the Court to decide the matter. If the value is the value of the instrument, or of an unencumbered interest in the instrument, the owner of an instrument subject to a PPO faces the prospect of paying the full value of the instrument and remaining indebted to a mortgagee or holder of a charge for any amount secured by that mortgage or charge.
At first sight, the Court is not required or permitted to make a judgment, or exercise any discretion, if the criteria for making a PPO are established. Section 95(1) provides:
95 Making pecuniary penalty orders
(1) A court must, on application by the DPP, make an order (a pecuniary penalty order) requiring a specified person to pay an amount determined under Subdivision 2 to the Crown if satisfied that the person has been convicted of, or has committed, a serious offence and—
(a)the person has derived benefits from the commission of the offence; or
(b)an instrument of the offence is owned by the person or is under his or her effective control.
In this respect the provision for the making of a PPO is in striking contrast to the provisions relating to forfeiture.
Parliament has evidently contemplated that the possibility of statutory forfeiture (consequent on the making of an RO) will usually be resolved before an application is made for a PPO. Section 97 provides that a court must not make a PPO in relation to a conviction for a serious offence until the end of six months commencing on the day of conviction: s 97(1). That is, until the end of the initial relevant period. As well, s 95(5) provides:
95 Making pecuniary penalty orders
…
(5) An application for a pecuniary penalty order must be made—
(a)before the end of the period of 9 months commencing on the conviction day; or
(b)if an extension order is in force at the end of that period—before the end of the period of 3 months commencing on the day the extended period relating to the extension order ends.
That provision allows an application for a PPO to be made up to three months after the expiry of the initial relevant period, or of an extended period. While the matter of statutory forfeiture might remain unresolved when an application for a PPO is made, in most cases it is likely to have been decided by then, especially having regard to the doubt (already referred to) about the outcome if an application under s 76 is pending when the relevant period expires.
Section 95(3) provides:
95 Making pecuniary penalty orders
…
(3) The court cannot make a pecuniary penalty order in relation to an instrument of a serious offence if—
(a)a pecuniary penalty has been imposed in respect of the instrument under this Act or any other law; or
(b)the instrument has been forfeited, or an application has been made for a forfeiture order that would cover the instrument, under this Act or any other law in relation to the offence.
This means relevantly that no PPO can be made (an application can be made but not an order) if the instrument has been forfeited by virtue of the making of an FO or by statutory forfeiture. Nor can a PPO be made if an application for an FO is pending. That indicates an intention on the part of Parliament that an application for an FO is to be resolved before a court makes a PPO.
In that context, s 95(7) is relevant. It provides:
95 Making pecuniary penalty orders
…
(7) An application may be made for a pecuniary penalty order in relation to a serious offence even if—
(a)a forfeiture order in relation to the offence, or an application for such a forfeiture order, has been made; or
(b) Part 4 Division 2 applies to the offence.
The reference to an FO must be a reference to an FO in relation to other property, because there cannot be a PPO if the instrument has already been forfeited: s 95(3). There would no point in applying for a PPO if forfeiture had already occurred. The reference to an application for an FO appears to cover an application under s 47, in relation to the same property, that is still pending. The effect of the language used in subpara (b) is not completely clear. Part 4 Division 2 regulates statutory forfeiture. It begins with s 74. Section 95 (7)(b) appears to mean that an application for a PPO can be made even though there is an RO covering the relevant property, the relevant period is “running” because the person has been convicted, but the question of statutory forfeiture under s 74 has not been resolved. In that situation Part 4 Division 2 “applies to the offence” in question. Although s 95(3) does not prohibit the making of a PPO in this situation, Parliament must have intended that a PPO not be made until the question of statutory forfeiture is resolved. Section 95(7) must be intended to make it clear that an application can be made for a PPO although statutory forfeiture might occur.
The CAC Act contains numerous enforcement provisions designed to ensure that the Crown recovers forfeited property or the amount of a PPO. If a PPO is made, and the relevant property is or was previously subject to an RO, then upon the making of the PPO a charge in favour of the Crown over the property comes into being: s 210(1).
The following aspects of s 95 are to be noted. First, the provisions that seem intended to allow time for statutory forfeiture to be worked out before the Court makes a PPO. Second, the fact that if an application is made for a PPO under s 95, the Court apparently has no discretion if the criteria in s 95(1) are satisfied. This is in striking contrast with the forfeiture procedures. Third, no PPO can be made if an application for an FO is pending: s 95(3)(b). It seems that no PPO can be made if the question of statutory forfeiture is unresolved, but the relevant period is running. Part 4 Division 2 only “applies” if “a person is convicted” and so the relevant period is running.
I mention here that this raises what I called the second issue. That issue is whether, as a matter of construction, s 95 authorises the making of a PPO if the Court has declined to make an FO under s 47 or has excluded property from forfeiture under s 76. If the Court has excluded the property from an RO, it will already have decided that the property is not an instrument of an offence.
The proceedings
On 23 August 2006 the DPP applied for an RO covering the land. The RO was made on 15 September 2006.
Mr George entered a plea of guilty in the Magistrates Court on 20 October 2006. On 18 December 2006 he appeared before the District Court and was convicted and remanded for sentence. The relevant period began to run that day. Thereafter, Part 4 Division 2 “applies”, because an RO was in force, Mr George had been convicted and the relevant period was running.
On 1 February 2007 Mr George was sentenced by the District Court.
On 8 March 2007 the DPP applied to the Magistrates Court for a PPO under s 95. The DPP at no stage applied for an FO under s 47.
On 7 May 2007 Mr George applied to the Magistrates Court for an order that the RO be revoked; alternatively, for an order under s 34 excluding the land from the RO; in the further alternative, for an order under s 76 that the land be excluded from forfeiture. He also opposed the making of a PPO.
On 11 May 2007 the relevant period was extended to 18 December 2007.
The factual material before the Magistrate who heard these applications on 28 September 2007 and 31 October 2007 was sketchy.
The Magistrate gave his decision on 17 December 2007, the day before the relevant period expired. The Magistrate dealt first with Mr George’s application to exclude the land from the RO. He said that the only evidence before him was that the cannabis plants were located in a large shed at the rear of the property; that there were 12 mature cannabis plants growing hydroponically, 20 cannabis seedlings and a small quantity of cannabis head drying in the shed; that he inferred that there was a house on the land; that the shed occupied only part of the land; that he had no evidence as to the dimensions of the shed, or whether it was affixed to the land, and that although he had no evidence as to what was involved in hydroponic growing of cannabis, he assumed that it required significant amounts of water and electricity.
He noted that only part of the property was used in connection with the offending; that the connection between the land and the offending was “tenuous”, and that the only connection with the land was that the cannabis was in the shed when the police came to the premises.
The Magistrate said that the onus of establishing that the property was an instrument of the relevant offence was on the DPP. In that respect he erred. Section 220 of the CAC Act provides that the applicant in any proceedings under the Act bears the onus of proving the matters necessary to establish the grounds for making the order applied for. The onus was on Mr George to establish that the land was not an instrument of the offence: s 34(1)(b)(i).
However, in the circumstances I doubt whether the onus of proof mattered much. The Magistrate was satisfied that the limited use made of the shed did not establish that the land was used in connection with the offence of producing the cannabis. The Magistrate was satisfied as to the other matters under s 34(1). He made an order excluding the land from the RO.
The Magistrate declined to make a PPO. His conclusion that the land was not an instrument of the offence led to that result.
The Magistrate made no order on the application under s 76, because there was no property the subject of the RO, having regard to his decision to exclude the land from the RO.
The DPP has appealed against the Magistrate’s decision. As previously mentioned, Mr George has filed a Notice of Alternative Contention.
Was the land an instrument of the offence?
The definition of “instrument” (set out above) is a wide one, or at least uses words that are capable of having a wide reach. The expression “… used … in connection with, the commission of an offence …” has a widening effect that must be allowed for: R v Polain (1989) 52 SASR 526, Cox J at 531-532. The composite expression involves practical considerations and matters of degree. There is no point trying to define the statutory expression, as each case will turn on its own facts: Taylor v Attorney-General for the State of South Australia (1991) 55 SASR 462, Debelle J at 471.
However, in considering the meaning of the statutory expression, it is relevant to bear in mind that the composite expression that has been used is one that has often been said to have a wide reach.
Moreover, the purpose of the CAC Act and the nature of its provisions suggest that the definition of “instrument” was intended to have a wide rather than a narrow reach. On the other hand, as Mr Wells submits, a conclusion that property is an instrument of an offence has serious adverse consequences for the owner. That is a matter to be borne in mind in determining the application of the statutory expression in the present context: see Minister for Immigration and Citizenship v Haneef [2007] FCAFC 203; (2007) 163 FCR 414 at [105]-[113].
It is also relevant that a finding that property is an instrument of an offence may mean that a PPO can be made in respect of the property without the Court exercising any judgment or discretion, without having regard to considerations of proportionality, or without any reference to matters such as the public interest. It may be appropriate to give the words used in s 7(1)(b) a wide meaning when that meaning catches property that will be forfeited only if the Court considers it appropriate to do so, applying statutory criteria that give the Court power to refrain from making an FO. That was the case in Taylor v The Attorney-General (above). However, it remains necessary to consider the words actually used, and to bear in mind that, at least on their face, they are capable of having a wide application.
Notwithstanding the statutory definition, it is also relevant to consider the meaning of the word “instrument”. The meaning of the term that is defined can influence the meaning to be given by a definition section: Comcare v Mooi (1996) 69 FCR 439 at 444 Drummond J. Relevantly, an instrument is something with or through which something is done or effected, a means of doing things. It can also refer to a tool, an implement or a weapon. The Macquarie Dictionary (4th ed, 2005) refers to “a thing with or by which something is effected; a means; an agency …”.
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 The Attorney-General at 466 and at 472 respectively, and with the majority of the Court of Criminal Appeal of Western Australia in The Queen v Rintel (1990) 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. Thus, the use of Mr George’s land might be described as residential, but it could nevertheless fall within the statutory definition of “instrument”.
It should also be noted that the definition of “instrument” applies to real and personal property, to tangibles and to intangibles. The property in question might be a place where an offence is committed, a thing in which an offence is committed (a motor vehicle), or a thing used in the course of committing an offence.
Bearing these matters in mind, what is the link, or kind of link, between property and the commission of an offence that Parliament has identified by its definition of “instrument”? As a matter of ordinary language, and bearing in mind that the word defined is “instrument”, 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.
I turn now to the facts.
The land is a little less than one quarter of an acre in area, an allotment size that is often regarded as a standard residential allotment. There is no evidence as to the topography of the land, but it is not easy to see that that would be relevant anyhow. It is appropriate to infer that the land used is suburban land, is used for residential purposes, and that Mr George lived there. There is a large shed on the property. There is no suggestion that the shed was erected with a view to growing cannabis in it. There is no information about the shed other than the fact that it is large. It is appropriate to infer that the shed occupies one quarter of the land or less.
It is also appropriate to infer that the shed concealed the cannabis plants, and protected them from the elements, and that to grow the plants hydroponically Mr George used electricity and water that were supplied to the land.
The plants and seedlings were not growing in the ground. It is appropriate to infer that they were growing in some kind of container standing on the ground.
The shed was a suitable and convenient place to grow the cannabis plants.
There was no evidence about how long the plants had been growing there, or how long they would have remained had the police not found them. It is reasonable to infer that they were growing there for more than a matter of hours, and for more than a day or so. There is no reason to think that the plants had been brought to the land only shortly before they were found by the police, or that they were about to be moved to another location.
Another relevant factor is that growing the cannabis plants involved the use of part only of the land, probably a quarter of the land or less. Other than that, the land was used for residential and related purposes.
The land was in no sense a consumable, being used up in production of the cannabis plants. There was no need to modify or change the land (for example, by clearing it or ploughing it) for the purpose of growing the cannabis plants. The use of the land was temporary, meaning that while that the use was of uncertain duration, there was no suggestion that this was one of a series of crops that had been grown or were to be grown on the land.
Having said all that, one comes back to the question of whether the land was used in or in connection with the commission of the offence of producing cannabis.
There are a number of circumstances that lead me to the conclusion that the land was used in connection with the commission of the offence of producing cannabis.
The offence was not merely committed on the land. It is in no sense an accident or coincidence that the offence was committed there, as it might be if a visitor called in and sold some cannabis while on the land. The shed provided a convenient and secure place to grow the cannabis, in particular because the use of the shed and of the land enabled access to electricity and water supplied to the land. Although only part of the land was used to grow cannabis, the part used (the area of the shed) cannot be regarded as trifling or insignificant. The use of the shed and of the land was temporary, but not momentary. The use of the shed and the land was not unplanned. I infer that the shed was chosen by Mr George as a suitable place to grow the cannabis.
The use of the land facilitated and contributed to the commission of the offence. It was not just the place where the offence was committed. I have identified features that made the use of the land attractive to Mr George. It accords with ordinary language to refer to the land as a means of growing cannabis, as a thing by which the growing of the crop was effected. In terms of the significance of the use, although it was temporary it was not momentary. The portion of the land that was used was not trifling or insignificant.
Although on those scant facts, the case lies close to the limits of the reach of the definition, I consider that it falls within it. Standing back, and bearing in mind the purpose of the CAC Act, it is not surprising that a person who grows cannabis hydroponically on land, or in a building on land, is found to be using the land in connection with the commission of the offence of growing the cannabis.
I consider that the Magistrate erred. He should have found that Mr George had not established for the purposes of s 34(1) of the CAC Act that the land was not an instrument of unlawful activity. The Magistrate should have found that the requirements of s 95(1) for the making of a PPO were made out.
Does s 95 provide for the making of a PPO in relation to an instrument even though a court has decided not to make an FO or has excluded property from statutory forfeiture?
I agree with White J, for the reasons he gives, that s 95(1) confers on a court a discretionary power to make a PPO, and not an obligation to do so.
However, the relevant aspects of the CAC Act were thoroughly canvassed in submissions. In case I am wrong on the construction of s 95(1), it is appropriate to decide the second issue as originally argued. Moreover, the decision on this issue is relevant to the third issue. I therefore assume for the purpose of the discussion that follows that, properly construed, s 95(1) does not confer on a court a discretion with regard to the making of a PPO.
I have referred to indications in s 95 and elsewhere that Parliament envisaged that usually, or at least often, the question of forfeiture of an instrument will be resolved before the Court decides whether or not to make a PPO. It is clear from s 95(3) of the CAC Act that a court cannot make a PPO in relation to an instrument which has either been forfeited, or which is subject to a pending application for an FO. The consequence of the fact that statutory forfeiture under s 74 has not been resolved when an application is made for a PPO is not so clear: see s 95(7)(b), s 74(1)(c) and the discussion above.
Having regard to the terms of s 95, and to the provisions bearing on the relationship between the making of a PPO and forfeiture, is there an unstated implication that if a court has refused to make an FO in relation to an instrument, or has excluded the instrument from an RO, or has ordered under s 76 that the instrument be excluded from statutory forfeiture, a PPO may not be made? That is, does a decision to exclude an instrument from forfeiture mean that a PPO cannot be made?
I put to one side a situation in which the Court has found in contested proceedings between the owner and the DPP that property is not an instrument of unlawful activity. Such a finding will be necessary before an instrument can be excluded from an RO under s 34(1) of the CAC Act. An FO can be refused, and property can be excluded from forfeiture, even though it is an instrument of an offence. But an FO cannot be made under s 47(3) if property is not an instrument of an offence. Whether the DPP could relitigate under s 95 the issue of whether property is an instrument of an offence is a separate question, and need not be decided now.
I consider that the implication referred to should not be drawn, as a matter of construction of the CAC Act. Parliament could easily have provided, if it so intended, that a PPO could not be made if a court had declined to make an FO in relation to the instrument, or had excluded the instrument from forfeiture. In my opinion, s 95(3)(b) and s 95(7) reflect a “wait and see” approach in relation to forfeiture, not an intention to prohibit the making of a PPO if a court has declined to make an FO under s 47 or has decided under s 76 to exclude an instrument from forfeiture. If the suggested implication was to be drawn, s 95 would not be available if forfeiture had been ordered, or if forfeiture had been averted by an order made under s 76 or by the refusal to make an order under s 47. It would operate only when the question of forfeiture had not previously been decided by a court. That is a very limited field of operation. It would require more than I find in s 95 to draw the relevant implication.
This conclusion highlights the potential for a harsh outcome if the making of the PPO is not subject to the court considering matters of the kind that led it to refuse to make an FO or led it to exclude the instrument from forfeiture.
Is the application by the DPP, in the circumstances, an abuse of the processes of the Magistrates Court?
In view of my conclusion on the first issue and on the construction of s 95(1), this issue does not arise. It will arise if I am wrong on the those issues. The issue was fully argued, and it is appropriate to decide it.
The submission by Mr Wells that the application by the DPP is an abuse of process rests on the hypothesis that the conditions for making a PPO are the commission of a serious offence and that the property is an instrument of the offence, and on the hypothesis that there is no scope for the court to exercise a discretion, and no ability to consider matters such as those which arise under s 34(1)(b), s 47(4) or s 76(1). The provisions as to the amount of a PPO mean that the making of a PPO is akin to forfeiture. The amount is the value of the property, and the court cannot reduce that amount other than in very limited and irrelevant circumstances. Accordingly, s 95 enables the DPP to achieve what, on Mr Wells’ hypothesis, the court has decided should not happen. I accept that this is a harsh result. I cannot identify any good reason why Parliament would have taken such a different approach to the making of a PPO.
I am prepared to assume that the Magistrates Court has an implied power to prevent an abuse of its process, or that this Court has an inherent power to prevent an abuse of the process of the Magistrates Court: cf Rona v District Court (SA) (1995) 63 SASR 223 at 226 King CJ. As to the scope of the power, it suffices to refer to the general description given by Mason CJ, Deane and Dawson JJ in Walton v Gardiner (1992-1993) 177 CLR 378 at 392-393:
The inherent jurisdiction of a superior court to stay its proceedings on grounds of abuse of process extends to all those categories of cases in which the processes and procedures of the court, which exist to administer justice with fairness and impartiality, may be converted into instruments of injustice or unfairness. …
A convenient summary of the position can be found in the reasons of McHugh J in Rogers v The Queen (1994) 181 CLR 251. Although he was in dissent, there is no reason to doubt the accuracy of his summary. He said at 286:
Inherent in every court of justice is the power to prevent its procedures being abused. Although the categories of abuse of procedure remain open, abuses of procedure usually fall into one of three categories: (1) the court's procedures are invoked for an illegitimate purpose; (2) the use of the court's procedures is unjustifiably oppressive to one of the parties; or (3) the use of the court's procedures would bring the administration of justice into disrepute. Many, perhaps the majority of, cases of abuse of procedure arise from the institution of proceedings. But any procedural step in the course of proceedings that have been properly instituted is capable of being an abuse of the court's process. …
(footnote omitted)
Mr Wells submits that, in the circumstances, the application under s 95 for a PPO is for an illegitimate purpose. It aims to secure what the DPP has been denied (on his hypothesis) by an earlier decision that protects the property from forfeiture. He does not suggest that s 95 is being used for a collateral purpose, or for a purpose extraneous to that to which s 95 is directed. His submission rests on the injustice of the DPP being able to achieve what the DPP previously failed to achieve, the court being denied the power to protect the instrument from the making of a PPO in respect of it. He submits that the application is oppressive for the same reason, and having regard to the fact that the PPO will have the same effect as a forfeiture. He submits that to make the PPO in such circumstances brings the administration of justice into disrepute.
I do not accept this submission. I have concluded that Parliament intended that a court can make a PPO under s 95 even though, on other applications made to it or to another court, the Court has decided that an FO will not be made in relation to the instrument, or that the instrument is to be excluded from statutory forfeiture. Accordingly, Parliament must be taken to have intended that a PPO can be made in the circumstances postulated by Mr Wells. To accept his submission would be to impose a fetter on the application or use of s 95 that Parliament must be taken to have rejected. It is evident that Parliament has considered the interaction between the provision for the making of a PPO and the forfeiture provisions, and has decided that s 95 may be invoked even though the forfeiture provisions have been invoked and have resulted in a decision adverse to the DPP.
I consider that a court cannot restrain, as an abuse of process, the making of an application that Parliament has provided may be made, when the basis for restraining the making of the application is a circumstance that Parliament has said, in effect, is not of itself an obstacle to the making of a PPO.
Mr Kourakis SC SG made the same point in another way. He submits that Mr Wells’ submission fails to distinguish between a result contemplated and permitted by the CAC Act (harsh as it may be) and the unfair or oppressive use of a court’s processes. I agree with that submission.
In short, Parliament may enact a law that permits or even requires the making of an order that may be regarded as unjust or inappropriate. But the Court must apply such a law, assuming it is valid. It cannot be an abuse of process for an applicant to apply to the Court for an order in the circumstances in which it was intended by Parliament that the Court should be able to or should make an order. The Court cannot use the remedy of restraining an abuse of process to prevent an outcome of which the Court disapproves.
Is s 95 invalid?
The invalidity of s 95 will not arise on my approach to the construction of s 95(1). It is appropriate to deal with this issue because it will arise if I am wrong on the construction of s 95(1), it was fully argued, and because it arises if the land is an instrument of the relevant offence. The discussion that follows is premised on s 95 having the meaning contended for by the Director.
The submission that s 95 is invalid (there is no need to consider which other provisions are invalid if s 95 is invalid) is put in two different ways. Each form of the submission is said to be an application of the principle identified by the High Court in Kable v Director of Public Prosecutions (NSW) (1995-1996) 189 CLR 51. Whether that principle applies to the Magistrates Court (as distinct from the Supreme Court) is yet to be determined authoritatively: see R v Granger [2004] SASC 156; (2004) 88 SASR 453 at [20] Doyle CJ. However, for present purposes I am content to assume that the principle does apply to the Magistrates Court, it being a court in which federal jurisdiction is invested.
The first way in which Mr Wells puts the submission begins with the proposition that the Magistrates Court, a court of record, has an implied or inherent power to prevent an abuse of its process. The next step is that if the CAC Act excludes the power of the Magistrates Court (or this Court) to prevent an abuse of the process of the Magistrates Court, then s 95 is invalid for that reason. It is invalid because it would require the Magistrates Court to act in a manner that substantially impairs the Magistrates Court’s institutional integrity as a court, and in a manner that is incompatible with that court’s role as a repository of federal jurisdiction. Mr Wells also submits that if the CAC Act prevents the Magistrates Court from controlling an abuse of its process by the DPP as an agent of the Executive Government, a reasonable observer might think that the capacity of the Court to be impartial is compromised.
The second way in which Mr Wells puts the submission is that s 95 enables an agent of the Executive Government (the DPP) to secure a forfeiture of the instrument in question, which forfeiture was not able to be obtained by judicial determination (under s 47 or under s 76) in the exercise of a judicial discretion, creating the appearance that the forfeiture is the outcome of a judicial determination. It is a situation, he submits, in which a forfeiture in effect is brought about by a process that has only the appearance of a judicial process whereas, “a real judicial process, involving the exercise of a real judicial discretion” resulted in forfeiture being refused.
The submission assumes that an FO under s 47 has been refused, or that an order under s 76 has been made. Neither of these things happened. But Mr George’s application under s 76 has not been determined. It might be decided in his favour, if this Court directed that it be considered. It is therefore appropriate to deal with the submission.
The decision in Kable has been considered by the High Court on a number of occasions. The relevant principle has been stated in different ways, and in any event, the statement has necessarily varied according to the situation before the Court. For present purposes it suffices to refer to some of the recent statements of the principle.
In Fardon v Attorney-General for the State of Queensland [2004] HCA 46; (2004) 223 CLR 575, a case turning on the nature of the function conferred on the Supreme Court, Gleeson CJ described the relevant principle as follows at [15]:
[15]The decision in Kable established the principle that, since the Constitution established an integrated Australian court system, and contemplates the exercise of federal jurisdiction by State Supreme Courts, State legislation which purports to confer upon such a court a function which substantially impairs its institutional integrity, and which is therefore incompatible with its role as a repository of federal jurisdiction, is invalid.
McHugh J referred to the circumstances in which State legislation investing powers in a State court may be invalid. He said at [37]:
[37]Another is the circumstance dealt with in Kable: legislation that purports to confer jurisdiction on State courts but compromises the institutional integrity of State courts and affects their capacity to exercise federal jurisdiction invested under Ch III impartially and competently. Subject to that proviso, when the federal Parliament invests State courts with federal jurisdiction, it must take them as it finds them.
Gummow J identified the principle as follows at [101]-[102]:
[101]Secondly, the essential notion is that of repugnancy to or incompatibility with that institutional integrity of the State courts which bespeaks their constitutionally mandated position in the Australian legal system. …
[102]Thirdly, one important indication that a particular law has the character just stated is that the exercise of the power or function in question is calculated, in the sense of apt or likely, to undermine public confidence in the courts exercising that power or function. ... However, although in some of the cases considering the application ff Kable, institutional integrity and public confidence perhaps may have appeared as distinct and separately sufficient considerations, that is not so. Perception as to the undermining of public confidence is an indicator, but not the touchstone, of invalidity; the touchstone concerns institutional integrity.
(footnotes omitted)
Kirby J agreed in substance with the approach of Gummow J at [198]. Callinan and Heydon JJ said at [213]:
[213]In Kable, the Justices in the majority used differing formulations when stating the principles, but all of them referred to constitutional integrity, or public confidence, or both. …
The High Court gave further consideration to the principle in Forge v Australian Securities and Investments Commission [2006] HCA 44; (2006) 228 CLR 45. In this case the attack on validity was based on the use of acting judges. Gleeson CJ identified the principle as follows at [41]:
[41]It follows from the terms of Ch III that State Supreme Courts must continue to answer the description of "courts". For a body to answer the description of a court it must satisfy minimum requirements of independence and impartiality. That is a stable principle, founded on the text of the Constitution. …
Gummow, Hayne and Crennan JJ said at [63]-[64]:
[63]Because Ch III requires that there be a body fitting the description "the Supreme Court of a State", it is beyond the legislative power of a State so to alter the constitution or character of its Supreme Court that it ceases to meet the constitutional description. One operation of that limitation on State legislative power was identified in Kable. The legislation under consideration in Kable was found to be repugnant to, or incompatible with, "that institutional integrity of the State courts which bespeaks their constitutionally mandated position in the Australian legal system". … [T]he relevant principle is one which hinges upon maintenance of the defining characteristics of a "court", or in cases concerning a Supreme Court, the defining characteristics of a State Supreme Court. It is to those characteristics that the reference to "institutional integrity" alludes. That is, if the institutional integrity of a court is distorted, it is because the body no longer exhibits in some relevant respect those defining characteristics which mark a court apart from other decision-making bodies.
[64]It is neither possible nor profitable to attempt to make some single all-embracing statement of the defining characteristics of a court. The cases concerning identification of judicial power reveal why that is so. An important element, however, in the institutional characteristics of courts in Australia is their capacity to administer the common law system of adversarial trial. Essential to that system is the conduct of trial by an independent and impartial tribunal.
(footnotes omitted)
Kirby J also referred to the relevant principle as involving alterations to the “institutional arrangements” of a court that threatened “the real and apparent independence and impartiality of the court and of the State judicial officers” of the Court: at [195]. Heydon J appears to have taken much the same approach: at [245] and [277].
The relevant principle is not one which can be expressed adequately in a few words. However, it is apparent that a significant issue is whether the impugned legislation interferes with the minimum requirements of independence and impartiality that must exist if a body is to be regarded as a court. Legislation that permits a litigant to dictate to the court the outcome of the proceedings would seem to be inconsistent with that principle. So would legislation that requires a court to act in a manner inconsistent with judicial process, although as to that proposition a good deal of care is called for, having regard to the difficulty of identifying the essentials of the judicial process.
Mr Wells’ submission rests in part on an assumption that a power to control an abuse of process is an essential attribute of the exercise of judicial power, that its absence means that a court lacks a capacity that is an essential attribute of a court, and on the proposition that an attribute of judicial power under Chapter 3 of the Constitution is the ability to control an abuse of process. None of these propositions have been authoritatively established, as far as I am aware. In particular, as he acknowledged, in Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 226 CLR 256 Gleeson CJ, Gummow, Hayne and Crennan JJ said, referring to an inherent power to prevent an abuse of process:
[13]It should be added that, in this Court, it has yet to be determined whether the inherent power identified by Lord Blackburn is, like the power to punish contempt, an attribute of the judicial power of the Commonwealth provided in Ch III of the Constitution. However, in this Court much attention has been given to the nature and extent of the inherent power to deal with abuse of process.
(footnote omitted)
Nevertheless, I am content to assume that if the CAC Act deprives the Magistrates Court of a power to control the abuse of its process, that would raise a serious question as to its validity.
I turn to the first manner in which Mr Wells put his submission on invalidity.
The CAC Act does not deprive the Magistrates Court of the power to control an abuse of its processes, assuming such a power otherwise exists. At most, the CAC Act affects the exercise of that power in relation to an application under s 95. I have already decided that the application by the DPP for a PPO is not an abuse of the process of the Magistrates Court, and could not properly be so categorised, having regard to the provisions of the CAC Act.
Even if attention is confined to the power of the Magistrates Court to control the ability to make an application under s 95, it is wrong to say that the CAC Act deprives the Magistrates Court of the power to control an abuse of its process. It is wrong for the reasons that I have given in dealing with the third issue that I identified. Making an application for a PPO in the circumstances postulated by Mr Wells (that is, assuming that the instrument has, by judicial decision, been protected from forfeiture) cannot be treated as an abuse of the process of the Magistrates Court. Such an application is a proper use of a procedure made available by the CAC Act.
This conclusion is not reached because the Magistrates Court is unable to protect itself against an abuse of its process. It is reached because, having regard to the legislative provisions, there is no abuse of process that calls for a judicial response. Nor is the conclusion the product of a legislative device or trick. In my opinion, this aspect of Mr Wells’ submission rests on the misconception that caused me to reject his submissions in relation to the third issue. Mr Wells’ submission equates the harsh outcome that results from the application of s 95 with a quite different matter, the misuse of the processes of the Magistrates Court.
One could not say that the operation of s 95 might cause a reasonable observer to doubt the impartiality of the Magistrates Court. There is nothing in s 95, or in related provisions of the CAC Act, to support that conclusion.
The second way in which Mr Wells puts the submission on invalidity draws on some other strands that may be found in judicial references to the principle in Kable.
There is a suggestion in Mr Wells’ submissions that the legislation impermissibly directs the Magistrates Court to exercise its power under s 95, or impermissibly directs the Magistrates Court as to the manner in which the power is exercised, or that the legislation enables the DPP to do one of these things. This submission appears to build on the statement made by Gummow, Hayne, Heydon and Kiefel JJ in Gypsy Jokers Motorcycle Club Inc v Commissioner of Police [2008] HCA 4; (2008) 82 ALJR 454 at [39] that:
[39]As a general proposition, it may be accepted that legislation which purported to direct the courts as to the manner and outcome of the exercise of their jurisdiction would be apt impermissibly to impair the character of the courts as independent and impartial tribunals. …
(footnote omitted)
None of these suggestions by Mr Wells can be accepted. It is not uncommon for legislation to provide that, if in proceedings before a court specified matters are established, a particular consequence will follow or a particular order must be made. This feature of s 95 is of no particular significance. The failure to interpose a judicial discretion, or a judicial decision, between the establishment of the criteria and the making of the order is not problematic.
Nor has Parliament “clothed” a forfeiture with the appearance of a judicial process. The judicial process is a reality. The Court does not act at the dictation of the DPP. The DPP must satisfy the requirements of s 95(1). It is the decision of the Court on those matters that determines whether or not a PPO is to be made. There is no merit in the suggestion that the process under s 95 is not a “real judicial process”, involving the exercise of a “real judicial discretion”. That submission merely treats the absence of a judicial decision or discretion as inconsistent with the exercise of a judicial power. There is no basis for doing so.
It needs to be borne in mind that the argument for invalidity rests very much on the fact that the process of protecting an instrument from forfeiture involves the Court in making a judgment or exercising a discretion (under s 47 or under s 76) of a kind that is not called for or permitted under s 95(1). If s 95(1) stood alone, as the only remedy available to the DPP under the CAC Act, I cannot identify a basis upon which its validity could be attacked. The fact that the CAC Act provides other remedies (forfeiture) that require the Court to make a judgment or to exercise a discretion does not, in my opinion, change the approach that should be taken to s 95(1).
I can find nothing in s 95(1), even on the Director’s construction of it, that leads to a conclusion that it requires the Magistrates Court to act in a manner inconsistent with the minimum requirements of independence and impartiality that are recognised as the defining characteristics of a court. There is nothing about s 95(1) that is inconsistent with commonly accepted judicial standards and processes. The institutional integrity of the Magistrates Court as a court is not compromised or distorted by the requirement to make a PPO if the requirements of s 95(1) are met in the circumstances postulated by Mr Wells. Nor is the function conferred by s 95(1) a function of a kind that is incompatible with the institutional integrity of the Magistrates Court as a court.
For those reasons, I would reject the submission that s 95 is invalid.
Orders
I would order that the appeal by the DPP be allowed.
I would order that the decision pursuant to s 34 of the CAC Act to exclude from the restraining order made on 15 September 2006, the land comprised in Certificate of Title Register Book Volume 5268 Folio 486, be set aside.
That order is appropriate in view of my conclusion that the Magistrate erred, and should not have been satisfied that the land was not an instrument of unlawful activity. That has the consequence that the order sought under s 34 cannot be made.
I would order that the application made by Mr George on 7 May 2007 to exclude the land from the restraining order be dismissed.
I would order that the application made by Mr George on 7 May 2007 for an order under s 76 of the CAC Act, excluding the land from forfeiture under Division 2 of Part 4 of the CAC Act, be remitted to the Magistrates Court for further consideration.
That order is appropriate because the application has not been determined by the Magistrate. The application can be decided in favour of Mr George even though the land is an instrument of the relevant offence. Whether the expiry of the relevant period (on 18 December 2007) means that forfeiture has occurred remains to be decided. I have referred to this point in my reasons. It may be that s 74(1)(c) refers to a situation in which there is a pending application under s 76. There are powerful reasons for so deciding, because to do so would avoid the risk of forfeiture occurring simply because a court ran out of time to deal with an application. Whether Mr George wishes to pursue the application under s 76 is for him to decide. The DPP does not oppose the making of an order under s 76, if a pecuniary penalty order is to be made.
I would order that the order dismissing the application by the DPP for a PPO be set aside. I would further order that the application made by the DPP on 8 March 2007 for a PPO in relation to the land be remitted to the Magistrates Court for further consideration, in the light of the reasons of this Court.
I would hear the parties on the question of costs.
VANSTONE J: If this Court holds that the house property of Mr George was “an instrument” of the cannabis offence committed by him, under s 7 CAC Act, and holds that the PPO regime is not subordinate to the forfeiture and statutory forfeiture provisions of the CAC Act and that there is no discretion to decline to make a PPO, then in all probability he will lose, by means of a PPO, the value of that property and, as well, he will remain indebted to the mortgagee of the property.
Such a decision could also have far reaching consequences for others convicted under any of the provisions which are encompassed by the definition of “serious offence” in s 3 of the CAC Act. That definition is:
Serious offence means –
(a) an indictable offence; or
(b)an offence of a kind that is required to be prosecuted, and dealt with by the Magistrates Court, as a summary offence under a provision of Part 5 Division 2 of the Controlled Substances Act 1984; or
(c)an offence against –
(i)section 68(3) of the Criminal Law Consolidation Act 1935; or
(ii)an offence against section 52, 53, 72 or 74 of the Fisheries Management Act 2007; or
(iii)section 99 of the Liquor Licensing Act 1997; or
(iv)a provision of the Lottery and Gaming Act 1936; or
(v)section 47, 48, 48A, 51 or 60 of the National Parks and Wildlife Act 1972; or
(vi)section 28(1)(a) or 41 of the Summary Offences Act 1953; or
(d)a foreign offence declared by the regulations to be within the ambit of this definition;
I shall mention some of these offences. To illustrate my point I shall instance less serious examples.
One of the specified offences under the definition of “serious offence” in s 3 of the CAC Act is an offence against s 68(3) of the Criminal Law Consolidation Act 1935. Section 68 deals with use of children in commercial sexual services. Under s 68(3)(b) a person must not “exploit a child by obtaining money knowing it to be the proceeds of commercial sexual services provided by the child”. If the child is 14 to 17 years of age, the maximum penalty is imprisonment for two years. It is not necessary for the prosecution to prove that the defendant knew that the victim was a child, although there is a defence available if the defendant believed on reasonable grounds that the victim was 18 years of age: s 68(4), s 68(5). If the proved exploitation occurs on premises owned by, or effectively controlled by, the defendant and if those premises were seen to be an instrument of the offence, then conceivably, upon application for a PPO, a court would be obliged to make the order notwithstanding that the offence might have been committed recklessly rather than knowingly and might be at the lower end of the scale of seriousness of such offences and might have resulted in the imposition of a fine, only, upon the defendant. On the appellant’s argument, this would be so, even though the defendant had succeeded in obtaining an exercise of the court’s discretion under s 76 excluding the property from statutory forfeiture.
PPOs are a form of monetary sanction. In his Second Reading Speech, the Attorney‑General described them as “a kind of combination of forfeiture and fine”.[20] They amount, in effect, to a confiscation of the benefits derived from the commission of serious offences or of an amount equivalent to the value of instruments used in the commission of such offences.
[20] Hansard, House of Assembly, 10 November 2004 p 844.
Section 95 of the CAC Act, which is the principal provision concerning PPOs, has been set out above. A number of the relevant features of the regime for PPOs are set out in the reasons of the Chief Justice and it is not necessary to repeat them all. However, some features should be mentioned for present purposes.
The amount of the penalty in a PPO is determined by reference to the value of the benefits which the offender derived from the commission of the serious offence (s 99(a)) or, in the case of an instrument of an offence, by reference to the value of the instrument (s 99(b)). That is to say, the amount of the penalty is determined by reference to the same property which can be the subject of forfeiture under other sections of the CAC Act. Certain limited deductions may be made in each case from these assessed values (ss107 and 108).
The CAC Act does not contain any provision enabling a court to make orders to ameliorate the harshness which a PPO may cause, or to take account of the interests of others in the property to which the PPO relates, or to compensate the owners of such other interests, or to compensate dependants of the offender in the way which is open to a court acting under s 47.
The CAC Act provides for the enforcement of PPOs. Upon the making of a PPO in respect of property to which a Restraining Order applies, a charge securing payment to the Crown of the amount of the PPO is created (s 210(1)). In addition, an administrator appointed under the CAC Act may, subject to court direction, sell the property and use the proceeds of the sale to satisfy the PPO (s 204). In the circumstances of this case, these provisions mean that if a PPO is made, it is probable that Mr George will lose his home. This consequence could be avoided only if Mr George, and any other offender in a similar position, had sufficient resources to enable the PPO to be satisfied without the sale of the home.
Implications from the Language of Section 95
On its face, the language used in s 95(1) appears to be mandatory in nature. It appears to oblige the court to make a PPO once satisfied of the specified matters.
However, an indication that the word “must” in s 95(1) may be used in the sense of a power, rather than of an obligation, appears in sub s (2). It provides that the court’s “power” to make a PPO in relation to the proceeds of a serious offence is not affected by the existence of another confiscation order in relation to that offence. The use of the word “power” seems to indicate an understanding by Parliament that sub s (1) invests a power in the courts, rather than imposes an obligation. If Parliament had intended that the making of a PPO was obligatory (upon the court’s satisfaction of the specified matters) it would have been more natural for the word “obligation” to have been used in sub s (2).
The same point can be made (admittedly not so strongly) in respect of sub s (3). The provision that the court “cannot” make a PPO in relation to an instrument of a serious offence if satisfied of the specified matters seems more naturally to be a fetter on the exercise of a power, rather than an exemption from an obligation. This is not a strong indication because elsewhere (s 97(1), s 98) the CAC Act uses the expression “must not” when limiting the court in relation to considering an application for a PPO so that it may be that Parliament intended the two expressions to be synonymous in effect.
PPOs: A Subordinate Alternative to Forfeiture
A PPO can be made in relation to an instrument of an offence only as an alternative to forfeiture of the same instrument. If the instrument is forfeited, no PPO can be made in relation to it (s 95(3)). The position is less clear with respect to property which is the proceeds of a serious offence, but it does not seem that the CAC Act intends the position to be different.
There are also indications that the PPO alternative is not available equally with the alternatives of court ordered forfeiture and statutory forfeiture. That is to say, there are indications that PPOs are available only in a way which is subordinate to court ordered forfeiture and statutory forfeiture.
One such indication is seen in the time limitation provisions relating to each. As noted earlier, an application for a forfeiture order under s 47 which relates to a previous conviction for a serious offence must be made within six months of the person’s conviction (s 47(6)). An application to have property excluded from statutory forfeiture also must be made within six months of the person’s conviction (I understand this to be the effect of ss 74 and 76).
By contrast, unless the PPO is made at the time of sentencing, it cannot be made until at least six months have elapsed since the person’s conviction for the serious offence (s 97). Further, an application for a PPO may be made up to nine months after the conviction date (s 95(5)(a)) and, if an extension order under s 75 has been made, at any time up to three months after the expiry of the period fixed by the extension order (s 95(5)(b)). This means that, depending upon the circumstances of a given case, an application for a PPO may be made up to 18 months after the date upon which the offender was convicted of a serious offence. (The contrast to which I have referred may not always exist. So far as I can ascertain, the CAC Act does not contain any time limitation for applications for court ordered forfeiture when there has been no conviction of an offender).
The difference in the time limitation prescriptions indicates strongly, in my opinion, that the CAC Act contemplates that, in the ordinary case, the question of forfeiture (whether court ordered or statutory) should be resolved before a court considers an application for a PPO. It does so by requiring a minimum period to elapse before a PPO can be made and by allowing an application for a PPO to be made after the time at which applications concerning forfeiture should have been resolved. This suggests a legislative intention that the fate of an application for court ordered forfeiture, and the fate of any application under s 76 to have property excluded from statutory forfeiture, should be known by the court hearing an application for a PPO. It is but a short step to draw the further inference in those circumstances that there is a legislative intention that courts hearing an application for a PPO should take account of the outcome of the s 47 or s 76 application. Drawing this inference does not, of course, of itself, warrant the further inference that courts have a discretion as to the use to be made of a decision concerning a forfeiture order or of a decision concerning statutory forfeiture.
The differing time limitation provisions also suggest that a PPO is not intended to be a free-standing independent alternative to forfeiture but, rather, subordinate to the two kinds of forfeiture which may occur under the CAC Act.
The conclusion that a PPO is a subordinate alternative to forfeiture is indicated more clearly by the express prohibitions on the making of a PPO if the instrument to which it relates has been forfeited, or if an application for a forfeiture order which would cover the instrument has been made (s 95(3)(b)). The first of the prohibitions may, of course, be directed principally to avoiding the imposition of a double sanction in relation to the same instrument. Nevertheless, it indicates the primacy of forfeiture orders over PPOs. In this respect it is also significant that there is no counterpart prohibition in either s 47 or s 74 to indicate that a forfeiture order cannot be made, or that statutory forfeiture of an instrument cannot occur, if a PPO has been made in respect of the same instrument.
The prohibition in s 95(3)(b) on the making of a PPO in relation to an instrument if an application has been made for a forfeiture order in relation to the same instrument also indicates, at the very least, a legislative intention that applications for forfeiture should be finalised before the court determines an application for a PPO in respect of the same instrument.
There is no provision in s 95 to the effect that a PPO cannot be made while an application under s 76 to have property excluded from statutory forfeiture remains unresolved. However, I do not regard this as significant. It is difficult to see any reason why Parliament would have intended PPOs to be subordinate to one kind of forfeiture, and not to another. Further, the time limitation provisions in s 95 indicate a legislative intention that a PPO should not be made while issues concerning statutory forfeiture remain unresolved.
In summary, I conclude that PPOs in respect of instruments are subordinate to forfeiture of instruments as a sanction in at least two respects: first, as to the timing of their making and, secondly, as to their availability. A PPO in relation to an instrument cannot be made until the fate of an application for the forfeiture of the instrument is known, and should not be made until the fate of an application for exclusion of the instrument from statutory forfeiture is known. A PPO is not available at all once the instrument has been forfeited.
The conclusion that PPOs are subordinate to forfeiture does not mean that the court’s powers with respect to PPOs are subordinate to its powers concerning forfeiture, or that the regime concerning PPOs is subordinate to the forfeiture regimes in the CAC Act for all purposes. The conclusion does however provide one means by which the nature of the court’s function under s 95(1) with respect to PPOs can be assessed. In particular, the conclusion provides one means by which the significance of a previous court determination that a forfeiture order is inappropriate, or that specified property should be excluded from statutory forfeiture, may be assessed.
Implications from the Scheme of the CAC Act
As previously noted, applications under ss 47 and 76 may involve a substantial hearing. If the court determines under s 47 that a forfeiture order should be made or, under s 76 that specified property should not be excluded from statutory forfeiture, that will be the end of the matter. The property will then be forfeited and a PPO cannot be made (s 95(3)(b)).
But if, on an application under s 47, the court determines that a forfeiture order is inappropriate, it would be curious if the effect of that determination must be negated (once the relatively undemanding requirements for a PPO are established) by the imposition of the alternative but subordinate sanction of a PPO in relation to the very same instrument. It would be similarly curious that the effect of a determination of a court, after considering the public interest, that property should be excluded from statutory forfeiture must be negated by the imposition of the alternative sanction of a PPO in respect of the same instrument. Far from being a subordinate alternative, PPOs would then assume a much more significant role in the confiscation regime established by the CAC Act.
If a court is obliged by s 95(1) to make a PPO once satisfied of the specified matters, it would mean that the PPO would operate, in effect, as the equivalent of a trump card. Even if a person is successful under s 47 or s 76 in avoiding forfeiture, the effect of that success could be “trumped” by a PPO application. The whole of the forensic endeavour under s 47 or s 76 would then have been for no good purpose.
It is implicit in sub s 95(3)(b) that an application for a PPO may be pending simultaneously with an application for forfeiture under s 47. In many cases the parties, and perhaps the court itself, will know, at the time of the hearing of the application under s 74 or s 76, of the pending application for a PPO. They may then know that the proceedings are pointless. But the different time limitation provisions will mean that in many cases the persons resisting forfeiture, or seeking the exclusion of property from statutory forfeiture, will not know whether or not an application for a PPO will be brought. There is something unfair, if not cruel, in the prospect of a person being allowed to invoke the detailed regime provided by the CAC Act to avoid forfeiture, only to have the effect of a successful result later negated by a PPO.
It is difficult to contemplate that outcomes of these kinds are the legislative intention. It is quite improbable that Parliament established the detailed regimes in ss 47 and 76 for judicial determination of disputes about forfeiture while intending, at the same time, that the result of such determinations could be “trumped” by a later PPO. It is improbable that Parliament intended ss 47 and 76 hearings to be pointless. It is improbable that the Parliament intended that courts should commit their limited resources to the resolution of disputes about forfeiture, when the effect of a decision which is adverse to forfeiture may so easily be avoided.
Similarly, the resources of the DPP are finite. The same can be expected, in most cases, of those who may be subject to forfeiture orders and statutory forfeiture. It is improbable that Parliament intended that the DPP or the offender should commit resources to pointless court hearings.
Moreover, the construction for which the DPP and the Attorney‑General contend has the potential to bring the administration of justice into disrepute. If it is seen that the effect of a decision under ss 47 or 76, can be “trumped” by a later application or order under s 95, the earlier proceedings will lose their significance. This is likely to engender a lack of respect for such proceedings and the authority of the courts conducting them is likely to be undermined. The DPP could, for example, take the attitude before a court hearing an application under ss 47 or 76 that its decision will be immaterial, and conduct the proceedings accordingly. It is inimical to proper respect of judicial authority for one party to an application before the court to be able to take such an attitude.
I referred earlier to the absence of any provision in the CAC Act which would enable a court to take account of, or to ameliorate, the harsh consequences of a PPO or the interests of others in the subject property. Nor is there any provision enabling the court to take account of the public interest in the way in which s 76(1)(c) requires in relation to statutory forfeiture. The absence of such provisions is stark if s 95(1) is construed as obliging a court, upon satisfaction of the specified matters, to make a PPO. It is difficult to identify any reason why Parliament should have considered provisions to that effect to be appropriate in relation to forfeiture orders, but not in relation to PPOs. Similarly, it is difficult to identify any reason why Parliament should have intended consideration of the public interest to be relevant in relation to applications for exemption from statutory forfeiture, but not in relation to PPOs. The absence of provisions permitting a court to ameliorate the harsh consequences of a PPO, or to consider the public interest, loses much of its significance however if s 95(1) is construed as vesting a discretionary power, rather than imposing an obligation. The considerations relevant under s 47(4) or under s 76 may then be taken into account by the court in the exercise of its discretionary power.
Finally, I refer again to the inference that Parliament must have contemplated that the fate of applications under ss 47 and 76 would be known by the time a court considers an application for a PPO. If this be correct, it is but a short step to infer that Parliament also contemplated that a court could (and, in appropriate circumstances, should) take account of the earlier decision in its determination of an application for a PPO. This can be done if s 95(1) is regarded as vesting a discretionary power, and not imposing a mandatory obligation.
The various matters to which I have referred indicate, in my opinion, real doubts that s 95(1) should be construed as being mandatory in nature. These same matters incline me to the view that s 95(1) can, and should, be construed as vesting in courts a discretionary power to make PPOs.
Before expressing a final view about the matter, it is appropriate to mention some other matters which may, despite the matters to which I have referred, indicate that the literal interpretation of s 95(1) should be applied.
The CAC Act provides for both PPOs and Literary Proceeds Orders in Part Five: PPOs in Division One and Literary Proceeds Orders in Division Two. Section 111, concerning Literary Proceeds Orders, is expressed in terms of a discretionary power, (“A court may, on application by the DPP, make an order (a “Literary Proceeds Order”)” if satisfied of specified matters). The language of s 111(1) in this respect contrasts with the language of s 95(1). That contrast may suggest a legislative intention that the court’s function in relation to the two kinds of pecuniary orders provided for in Part Five is to be different.
Further, the CAC Act reveals a clear intention that courts should not have discretionary powers in relation to property which is the proceeds of serious offences. I referred earlier to s 47(1) which obliges a court to make a forfeiture order in relation to proceeds of a serious offence. The court’s discretionary power under s 47 relates only to instruments of offences. Similarly, s 76(1)(c) expressly precludes the court from excluding property from statutory forfeiture if it is the proceeds of unlawful activity. If s 95(1) is construed as vesting a discretionary power, that discretionary power would be available in relation to both proceeds of, and instruments used in, offences. Arguably, this is inconsistent with the policy of the CAC Act.
It could be said that the occasions for the making of a PPO in relation to proceeds of offences are likely to be rare. That is because the making of a forfeiture order in relation to such proceeds is mandatory and the court has no power to exclude proceeds of offences from statutory forfeiture. That is so, but there may be occasions when the DPP will seek a PPO in relation to proceeds of offences, e.g., if the particular proceeds in question cannot be identified or located or, perhaps, have been intermingled with other property so as to be no longer separately ascertainable. It could also be said that on the occasions on which a PPO may be sought in relation to proceeds of an offence, the legislative intention evidenced in s 47(1) and s 76(1)(c) would be a significant, perhaps decisive, factor informing the exercise of the court’s discretion. One may accept that this is so, but it is not a complete answer to the implication arising from the legislative intention concerning proceeds of offences. The present issue is one about the identification of a power or a duty of the court, and not about the occasion or manner of exercise of such a power or duty.
Both the matters which I have mentioned are relevant to the proper construction of s 95(1). They do provide some support for the contention that effect should be given to the literal meaning of s 95(1). They serve to emphasise the difficulty of the question of construction which arises on this appeal. However, even when regard is had to these matters, I regard the contrary inferences to which I have referred as being so strong that they are outweighed. Further, I consider that it can be said that Literary Proceeds Orders are of such a distinctive kind that no inferences should be drawn from the different language used in the CAC Act concerning them.
Accordingly, I conclude that a construction of s 95(1) as vesting a discretionary power in courts is open and, further, that it is the appropriate construction.
Third and Fourth Issues: Abuse of Process and Invalidity
The third and fourth issues arise from the notice of alternative contention of the respondent. The third issue is whether the application by the DPP for a PPO is an abuse of the process of the Magistrates Court. The fourth issue is whether the CAC Act is invalid to the extent that s 95 deprives the Magistrates Court of the ability to prevent an abuse of its own process.
Given my decision concerning the second issue, neither of these issues arises, strictly speaking, for determination. However, in case I am wrong about the second issue, it is appropriate that I express my agreement with both the reasons and conclusions of the Chief Justice concerning these issues.
Statutory Forfeiture in the Present Circumstances
As noted earlier, s 74 provides that statutory forfeiture of an instrument of an offence occurs on the date six months after the person’s conviction, or at the end of the period fixed by an extension order. By reason of a restraining order on Mr George’s home, his conviction of a serious offence and an extension order made by the Magistrate on 11 May 2007, the date at which statutory forfeiture of his home would occur was extended to 18 December 2007.
Mr George’s application under s 76 to have his property excluded from statutory forfeiture which was filed on 7 May 2007 remains undetermined. The Magistrate’s decision that the house was not an instrument of Mr George’s offence made it unnecessary for him to determine the application.
The Magistrate delivered his decision on 17 December 2007. The appeal to this Court was commenced on 21 February 2008 (an extension of time for its commencement was granted). In these circumstances, some nice questions about the operation of the statutory forfeiture provisions arise. Although the effect of the Magistrate’s order excluding the home from the Restraining Order was that statutory forfeiture did not occur on 18 December 2007, does the setting aside of that order on appeal mean that statutory forfeiture is now to be taken to have occurred on that date?[21] If not, what now is the relevant date for the operation of the statutory forfeiture provisions? When will the statutory forfeiture take effect if the Magistrate now declines to exclude the home from statutory forfeiture? In the events which have happened in this case, is it still possible for the statutory forfeiture regime to have any continued operation at all?[22] More generally, if an order excluding property from statutory forfeiture is overturned on appeal, what is the date on which the statutory forfeiture occurs, or is taken to have occurred? No doubt other questions of this general kind may arise.
[21] Cf Director of Public Prosecutions (Cth) v Chan [2001] NSWSC 151; (2001) 183 ALR 575.
[22] Cf Director of Public Prosecutions (ACT) v Hiep (1998) 86 FCR 33.
Although some of these issues were touched on in the parties’ submissions, they were not addressed in detail. To the extent to which they are relevant, they will have to be addressed in the Magistrates Court. I do however think it appropriate to say that a construction of the CAC Act which would mean that statutory forfeiture occurs at the end of the relevant period, even though an application under s 76 has been lodged, but not yet determined, or while an appeal from a decision on a s 76 application remains unresolved, seems inappropriate. This general topic warrants the further consideration of the Parliament.
Conclusions and Orders
For the reasons given above, I would allow the appeal. I agree with the orders proposed by the Chief Justice.
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