Director of Public Prosecutions v Kingswell

[2001] NSWCA 91

Reported Decision: (2001) 160 FLR 366

New South Wales

Court of Appeal

CITATION:	DPP v KINGSWELL [2001] NSWCA 91
FILE NUMBER(S):	CA 40343/98
HEARING DATE(S):	20 November 2000 13 December 2000
JUDGMENT DATE:	10 April 2001
PARTIES :	DIRECTOR OF PUBLIC PROSECUTIONS v RAYMOND JOSEPH KINGSWELL
JUDGMENT OF:	Priestley JA at 1; Meagher JA at 2; Handley JA at 3

LOWER COURT JURISDICTION :	Supreme Court - Common Law Division
LOWER COURT FILE NUMBER(S) :	CLD 11077/94
LOWER COURT JUDICIAL OFFICER :	Donovan AJ

COUNSEL:	D J Bugg QC/C A Webster for the Appellant W Hodgekiss as amicus curiae for the Respondent
SOLICITORS:	Commonwealth DPP Solicitor for the Appellant Peter Ash & Associates for the Respondent
CATCHWORDS:	CRIMINAL LAW - forfeiture of property - Proceeds of Crime Act 1987 (Cth), s 48 - power of Court to exclude existing interest from forfeiture does not authorise the creation of a new interest for that purpose
LEGISLATION CITED:	Proceeds of Crime Act 1987 (Cth) Supreme Court Act 1970 (NSW) The Crimes (Confiscation of Profits) Act 1985 (NSW) Proceeds of Crime Act 1991 (NZ)
CASES CITED:	R v Galek (1993) 70 A Crim R 252 Manfred v Maddrell (1950) 51 SR (NSW) 95 R v Bolger (1989) 16 NSWLR 115 R v Dunsmuir [1996] 2 NZLR 1 CA Lyall v Solicitor-General (1997) 2 NZLR 641 Woodcroft v DPP (2000) 174 ALR 60
DECISION:	Leave to Appeal granted. Appeal allowed - orders made

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

40343/98
CLD 11077/94

PRIESTLEY JA

MEAGHER JA

HANDLEY JA

10 April 2001

DIRECTOR OF PUBLIC PROSECUTIONS v RAYMOND JOSEPH KINGSWELL

CRIMINAL LAW - forfeiture of property - Proceeds of Crime Act 1987 (Cth), s 48 - power of Court to exclude existing interest from forfeiture does not authorise the creation of a new interest for that purpose

The opponent was a prisoner in respect of whose property a restraining order was granted under s 43 of the Proceeds of Crime Act 1987 (Cth). The prisoner sought to have the order varied to exclude two house properties and was partially successful before Donovan AJ who made an order under s 48 that an amount of $70,000 from those properties be excluded from forfeiture. The Director of Public Prosecutions sought leave to appeal.

granting leave to appeal and allowing the appeal: (1) The only orders authorised by s 48(3) are orders under para (c) “to exclude the person’s interest from the [restraining] order”, namely the whole of that interest. The Court has not been given any power to create by order new interests in property in favour of an applicant. (2) The Judge rejected the prisoner’s application to exclude the whole of his interest in the relevant properties from the order and had no power to make an order creating a charge over those properties in his favour. (3) Section 48(1) only authorises orders which are incidental or supplemental to the restraining order. Such a power cannot support a substantive order of the kind made by the primary Judge.

ORDERS

(1) Leave to appeal granted on condition that the notice of appeal is filed within 14 days;

(2) Appeal allowed;

(3) No order as to costs.

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

40343/98
CLD 11077/94

PRIESTLEY JA

MEAGHER JA

HANDLEY JA

10 April 2001

DIRECTOR OF PUBLIC PROSECUTIONS v RAYMOND JOSEPH KINGSWELL

JUDGMENT

1    PRIESTLEY JA: I agree with Handley JA.

2    MEAGHER JA: I have read the judgment of Handley JA. I agree with his Honour’s reasons and orders.

3    HANDLEY JA: On 2 May 1994 the opponent (the prisoner) was charged with two indictable offences under the Customs Act relating to the importation of 4.5 kgs of heroin. On 6 May a restraining order based on those charges was granted under s 43 of the Proceeds of Crime Act 1987 (Cth) (the Act) in respect of the whole of his property. On 31 January 1997 he was convicted by a jury of the offences and on 18 February he was sentenced to life imprisonment with a minimum term of 15 years 4 months. His appeal to the Court of Criminal Appeal, and his application for special leave to appeal to the High Court, were dismissed.

4 On 26 March 1997 the prisoner filed a notice of motion seeking to have the restraining order varied under s 48(3) or (4) to allow him to recover his house properties at 21 England Avenue, Marrickville and 102 Tweedmouth Avenue, Eastlakes. Under s 30(1) property still bound by a restraining order is automatically forfeited to the Commonwealth six months after conviction on the charges which grounded the order, or at the end of that period as extended pursuant to s 30A. In this case the extended period expired on 30 April 1998. On 27 April the prisoner’s notice of motion came on for hearing before Donovan AJ who gave an extempore judgment on the 30th.

5 The Judge dismissed the prisoner’s application under s 48(4) but granted his application under s 48(3) in a limited form. Section 48(3) provides, so far as relevant:

“(3) Where:
(a) a person (in this subsection called the defendant) has been convicted of … an offence;
(b) a court, in reliance on the … charging … makes a restraining order against property; and;
(c) a person having an interest in the property applies to the court for a variation of the order to exclude the person’s interest from the order;
the court shall grant the application if:
…
(g) in any case - the court is satisfied that it is in the public interest to do so having regard to all the circumstances, including:
(i) any financial hardship or consequence of the interest remaining subject to the order;
(ii) the seriousness of the offence; and
(iii) the likelihood that the interest will be:
(A) …

(B) subject to s 30; or

(C) …”.

6    The Judge held that the circumstances which were relevant in considering whether the public interest required the granting of the application, were not limited to the matters specified in sub paras (i) to (iii). This was clearly correct because the paragraph refers to “all the circumstances” which include, but are not limited to, the matters referred to in the sub paragraphs and this has been recognised in the cases. The Judge said:

“… there is a significant public interest in the appropriate rehabilitation of prisoners upon their release, particularly in the circumstances of this prisoner who will be in his late 50’s or 60’s when he is finally released from jail … I think it is appropriate in the public interest that there be a fund to which the applicant can have access in order to get him started and perhaps to enable him to have, in his senior years, some financial security”.

7 He ordered: “that a proportion of the properties, being the Marrickville property and the Rosebery [Eastlakes] property representing an amount of $70,000 be released from the orders under s 48(1). I make that order bearing in mind the likely change in the value of money between now and the 15 or 20 years when the applicant may be released from prison”.

8 The order did not involve a matter at issue amounting to the value of $100,000 within s 101(2)(r) of the Supreme Court Act and the Director sought leave to appeal. He submitted that the Judge’s decision that the public interest required the making of such an order was contrary to the Act, and in particular its principal objects in s 3(1).

9    During argument one of the Judges asked the Director whether the Judge had power to create a new interest in property to be excluded from the forfeiture. The Director took up the point in further written submissions filed by leave. Since I am satisfied that there was no power to make such an order there is no need to deal with the public interest point.

10 Section 43(1) authorises the making of a restraining order against specified property of the defendant, all his property, or all his property other than specified property. It also authorises a restraining order against specified property of a person other than the defendant. Property is defined in s 4(1) as meaning: “real or personal property of every description .. whether tangible or intangible and includes an interest in any such real or personal property”. Interest is defined in relation to property as meaning: “(a) a legal or equitable estate or interest in the property; or (b) a right, power or privilege in connection with the property; whether present or future and whether vested or contingent”.

11 By s 43(2)(a) the Court may direct: “that the property, or such part of the property as is specified in the order” is not to be disposed of or otherwise dealt with by any person otherwise than as specified in the order and by sub para (b) it may direct the Official Trustee to take custody and control of the property, or of such part of the property as is specified in the order. Sub section (3) allows the Court to make orders for the payment out of the property, or a specified part of the property, of the person’s reasonable living expenses, the reasonable expenses of defending a criminal charge, and a specified debt incurred by that person in good faith.

12 Under s 30(1) it is the property that is subject to the restraining order that is forfeited to the Commonwealth if the conditions in that section are satisfied. Section 48(1) empowers the Court to make ancillary orders including: (a) an order varying the property to which the restraining order relates and (da) an order directing the owner, the defendant, or a director of a body corporate which is the owner, to provide a statement on oath setting out particulars of the property or dealings with the property of the owner or the defendant as the case may be. Where the restraining order directed the Official Trustee to take custody and control of property, orders may be made under para (e) regulating the manner in which the Official Trustee may exercise its powers or perform its duties, the Court may determine any question relating to the property to which the restraining order relates, or may direct the owner or any other person to do any act or thing necessary or convenient to enable the Official Trustee to take custody and control of the property.

13    The Court is given power to make orders excluding the interests of third parties from the scope of the restraining order.

14 Section 48(3) refers in para (b) to the existence of a restraining order “against property”. Paragraph (c) allows a person having “an interest in the property” to apply for a variation of the order “to exclude the person’s interest from the order”. The Court is to grant that application if, inter alia, the conditions in para (g) are satisfied.

15 The prisoner as the unencumbered owner of the properties had “an interest” in them and was a competent applicant. However the only orders authorised by s 48(3) are orders under para (c) “to exclude the person’s interest from the [restraining] order”, namely the whole of that interest. The Court has not been given any power to create by order new interests in property in favour of an applicant. As Allen J said of comparable legislation in R v Galek (1993) 70 A Crim R 252, 256: “[it] is an all or nothing jurisdiction”.

16    An applicant may have a limited interest in land, for example, as a tenant in common, lessee, mortgagee, or remainderman, and a restraining order in appropriate terms will bind that limited interest. Where personal property is in question and is naturally divisible (fungible) for example, cash, shares in companies, or credit balances in bank accounts (compare Manfred v Maddrell (1950) 51 SR (NSW) 95, 97), the court may well have power under s 48(3)(c) to exclude a divisible part of such property from the restraining order. No such question arises in this case and it can be left for decision if and when it does.

17    The Judge rejected the prisoner’s application to exclude the whole of his interest in these properties from the order, and had no power to make an order creating a charge over those properties in his favour. Similar legislation in The Crimes (Confiscation of Profits) Act 1985 (NSW) and the Proceeds of Crime Act 1991 (NZ) has received the same construction. See R v Bolger (1989) 16 NSWLR 115, 117, 124, 128, 129; R v Galek (1993) 70 A Crim R 252, 253-4, 256, 258; R v Dunsmuir [1996] 2 NZLR 1 CA and Lyall v Solicitor-General (1997) 2 NZLR 641, 647, 649 CA. There is a further difficulty. These properties were not forfeited to the Commonwealth until midnight on 30 April. When the order was made the prisoner was the owner and could have no separate charge over his own properties.

18 Counsel for the prisoner sought to rely on the general power in s 48(1) to make ancillary orders but this only authorises orders which are incidental or supplemental to the restraining order. See Woodcroft v DPP (2000) 174 ALR 60, 73 per Giles JA. Such a power cannot support a substantive order such as that in question here.

19    In my opinion therefore leave to appeal should be granted and the appeal allowed. The point was one of general importance in the administration of the Act and in all the circumstances there should be no order as to costs.

20    The following formal orders should be made:

(1) Leave to appeal granted on condition that the notice of appeal is filed within 14 days;

(2) Appeal allowed;

(3) No order as to costs.
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