Director of Public Prosecutions v Nguyen & Nguyen

[2009] SADC 49

DISTRICT COURT OF SOUTH AUSTRALIA

(Civil)

DIRECTOR OF PUBLIC PROSECUTIONS v NGUYEN & NGUYEN

[2009] SADC 49

Judgment of His Honour Judge Barrett

24 April 2009

CRIMINAL LAW - JURISDICTION, PRACTICE AND PROCEDURE - JUDGMENT AND PUNISHMENT - ORDERS FOR COMPENSATION, REPARATION, RESTITUTION, FORFEITURE AND OTHER MATTERS RELATING TO DISPOSAL OF PROPERTY

DPP applied for a declaration that the defendant's property, the subject of a Restraint Order, had, in the absence of an application to exempt or extend time, been automatically forfeited six months after conviction pursuant to s 74(1) of the Criminal Assets Confiscation Act 2005. Meaning of "day of conviction".

Held: Defendant convicted upon date of guilty plea and administration of allocutus, not, as the defendant contended, the later date on which the sentencing judge heard submissions on penalty and remanded for sentence.

Criminal Assets Confiscation Act 2005 s 74; Victorian Crimes (Confiscation of Profits) Act  1986; Commonwealth Proceeds of Crime Act 1987; The Charter of Human Rights and Responsibiliites Act 2006, referred to.
DPP v Elliott Masters Decision 11 of 2008 unreported, Master Bampton DCSA (4 July 2008); DPP v Nguyen and DPP v Duncan [2008] VSC 292; DPP v McCoid [1988] VR 982; Della Patrona v DPP (Cth) (No 2) (1995) 132 ALR 307; Griffiths v R (1977) 136 CLR 23; DPP v Helou [2003] NSWCA 301; 58 NSWLR 574; Maxwell v R (1996) 184 CLR 501; Cobiac v Liddy (1969) 119 CLR 257; Burgess v Boetefur 135 ER 193; Wemyss v Hopkins (1985) LR 10 QB 378; Rizzo v DPP [2009] VSC 101; DPP v George [2008] SASC 330; R v O'Loughlin [2008] SADC 76, considered.

DIRECTOR OF PUBLIC PROSECUTIONS v NGUYEN & NGUYEN
[2009] SADC 49

Application

1. The Director of Public Prosecutions seeks a declaration pursuant to s 77 of the Criminal Assets Confiscation Act 2005 (“the Act”) that the defendant’s property has been forfeited. It submits that the property has already been forfeited automatically by virtue of the operation of s 74 of the Act. It argues that the defendant was convicted of the serious offence of possessing heroin for sale on 26 May 2008 and that she did not apply to have her property excluded from forfeiture nor did she apply to have the time extended within which she could make such an application. Having failed to do either of these things within 6 months of her conviction the DPP submits her property has been automatically forfeited.

2. The defendant resists the application on the basis that she was not convicted until 10 September 2008 when she was remanded specifically for sentence. Within six months of that time she did make an application to have her property excluded from forfeiture.

   Background

3. The defendant is a 47 year old woman born in Vietnam.  She was married when she was 18 and had three children.  Her husband was killed in a motor vehicle accident.  She escaped from Vietnam in 1988 and arrived as a refugee in Australia in 1990.  She arranged for her children to be brought to Australia and they arrived in 1993.  They are now aged approximately 27, 25 and 23.  In Australia the defendant gave birth to two more children who are now approximately aged 15 and 9.  The three eldest children became involved in using and selling heroin.  In 1997 the defendant bought a house at Collins Street, Croydon Park.  Because of their involvement in heroin, the defendant first evicted her two eldest children in the late 1990s but then took them back again.  They sold heroin from her house.  In November 2000 the defendant was arrested and charged with taking part in the sale of heroin by reason of allowing her two eldest children to sell heroin from her home.  On 5 August 2004 she was sentenced for that offending.  She successfully appealed against the sentence which was reduced to a head sentence of three years one month and a non-parole period of fifteen months.  She was released from custody in April 2005.

4. She was ordered to pay a pecuniary penalty of $92,000 for that offending.  She re-financed the house to pay the pecuniary penalty and continued living in it.

5. On 2 December 2006 she, and separately, her brother-in-law were arrested for possessing heroin for sale.  On 31 October 2007 a restraining order was made by Judge Rice preventing the disposal of the defendant’s house at Croydon Park and her brother-in-law’s house at Woodville Gardens.  In February 2008 the Director of Public Prosecutions discontinued confiscation proceedings against the brother-in-law’s property.  For his offending he received a suspended sentence.  His property is therefore no longer the subject of these present proceedings.  On 6 February 2008 the restraining order in relation to the defendant’s house was varied to permit the sale of the house.  The house was sold and, after deduction of the outstanding mortgage and costs, the balance of the proceeds consisting of $69,077.53 was paid into the District Court.  That is the property which the DPP submits has been forfeited.

6. Upon her arraignment in this court on 8 October 2007 the defendant pleaded not guilty.  There followed five directions hearings between November 2007 and April 2008.

7. The following dates are critical for the purposes of the application by the Director of Public Prosecutions in this case.  They are as follows:

8               Date	9               Commentary
10             26 May 2008	11             Upon re-arraignment before Judge Millsteed the defendant pleaded guilty to one count of possessing heroin for sale.  The allocutus was administered.  The defendant’s antecedent report was tendered.  The defendant was remanded on continuing bail for submissions.  The court record described the defendant as having been “convicted and remanded”.
12             10 September 2008	13             Submissions on penalty were made by the Director of Public Prosecutions and defence counsel.  A statement of agreed facts was tendered.  Judge Millsteed revoked bail and remanded the defendant in custody for sentence.
14             25 September 2008	15             Judge Millsteed sentenced the defendant.  His Honour imposed a head sentence of two years nine months and ordered that the sentence be served cumulatively upon a balance of outstanding parole of nine months and two days, making a total head sentence of three years six months and two days.  His Honour fixed a non-parole period of eighteen months.  The non-parole period runs from 10 September 2008, the date when the defendant was taken into custody.

Forfeiture of property

1. The property of people convicted of serious offences may be forfeited either by court order or by operation of the Act. The second of these mechanisms is the subject of these proceedings. It may be described as an automatic statutory mechanism.

2. The first step in this process is the making of a restraining order. The DPP made application on 19 October 2007 for a restraining order pursuant to s 24 of the Act. The court must make a restraining order if satisfied, pursuant to s 24(1)(a) that the defendant has been charged with a serious offence and, pursuant to s 24(5)(a)(i) that the property is the property of the defendant. There is no dispute that both these conditions were met. Judge Rice made the restraining order on 19 October 2007. The order was later varied to permit the sale of the house and the payment into court of the net proceeds of sale. Neither the application for the restraining order nor the application for the variation were contested.

3. Property so restrained may be forfeited automatically by operation of s 74 of the Act.

4. Relevantly, s 74(1) reads:

   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;

   (ii)     … , and

   (c)the property is not subject to an order under section 76 excluding the property from forfeiture under this division.

5. The relevant period is defined in subsection (6) as meaning six months “starting on the day of the conviction”.  The Director of Public Prosecutions submits that the six month period began on 26 May 2008 when the defendant pleaded guilty and the allocutus was administered.  It argues that the six month period expired on 26 November 2008.  No application was made during that time to have the property excluded from forfeiture.

6. The defendant submits that the six month period does not begin to run until the sentencing judge remands the defendant for sentence.  Counsel for the defendant submits that the defendant cannot be regarded as having been convicted until the sentencing judge has turned his or her mind to accepting the guilty plea and has indicated that acceptance by hearing submissions and remanding for sentence.  On that argument the six month period ran from 10 September 2008 until 10 March 2009, during which time an application was made to exclude the property from forfeiture.

7. The issue then is what is meant by “the day of the conviction”.

   Discussion

8. The definition section is not helpful.  Section 5(1) says:

   For the purposes of this Act, a person is taken to be convicted of an offence if –

   (a)     the person is convicted, whether summarily or on indictment, of the offence (and in such a case the conviction day for the purposes of this Act is the day on which the person was convicted, whether or not the Court passed a sentence on that day).

9. The subsection then goes on to provide for a conviction day to include different scenarios not relevant to this case.

10. Mr Gupta, for the Director of Public Prosecutions, submitted that the meaning of conviction had been determined by Master Bampton in a case which has direct application to the present case.  In Director of Public Prosecutions v Kenneth Leslie Elliott (decision number 11 of 2008 delivered on 4 July 2008), Her Honour concluded that the defendant’s date of conviction was the date on which the allocatus was administered.  In paragraph [34], Her Honour said that the date of conviction was the date “when the allocatus was administered and [the defendant] was remanded for sentence” (italics added).  As earlier noted in paragraphs [12]-[14] of the judgment, that date was actually the date upon which the defendant first appeared in the District Court, having pleaded guilty in the Magistrates Court.  The allocutus was administered that day.  The defendant was remanded for submissions on sentence.  The purpose of the remand assumes some significance on the defendant’s argument, but it is clear that Her Honour’s decision was that the date of conviction was the date on which the allocatus was administered and there was an adjournment for the purposes of further steps in the sentencing process.

11. Her Honour relied on Full Court authority in New South Wales and Victoria in arriving at her decision.  The arguments put by the defendant in this case were not those put before Her Honour.  The defendant relies on two cases heard jointly and in respect of which judgment was delivered on 7 August 2008, a month after Her Honour’s decision.  The joint cases are Director of Public Prosecutions v Nguyen and Director of Public Prosecutions v Duncan [2008] VSC 292. In Elliott, the defendants had argued that the date of conviction was the date of sentence.

12. I recapitulate and elaborate on the Full Court cases to which Her Honour referred.

13. In Director of Public Prosecutions v McCoid [1988] VR 982, the defendant pleaded guilty upon arraignment in the County Court to an offence. He was remanded for “plea and sentence”. No mention was made of an allocatus being administered. He was sentenced on a later date. The Full Court in Victoria was hearing an appeal by the Director of Public Prosecutions from the County Court’s ruling that the Director of Public Prosecutions had applied out of time for a confiscation order under the Victorian Crimes (Confiscation of Profits) Act 1986.  The time within which the application had to be made was 6 months after conviction.  Young CJ, with whom the other members of the Court agreed, rejected the proposition that the date of conviction was the date of sentence.  The Court held that it was the arraignment day when the Court, by its remand for plea and sentence, had accepted the guilty plea.

14. The New South Wales Court of Appeal followed McCoid in Della Patrona v Director of Public Prosecutions (Cth) (No. 2) (1995) 132 ALR 307. Again the argument before the Court was whether the day of conviction was the date of the jury’s guilty verdict (the Director of Public Prosecution’s argument) or the date of sentence (the defence’s argument). On the former date, no allocatus was administered. In fact, the trial judge did no more than remand the defendant in custody until a later date. Kirby P, with whom the other members of the Court agreed, relied upon the interpretation of “convicted” adopted by Barwick CJ in Griffiths v R (1977) 137 CLR 293, which is that it is the occasion on which the trial judge either expressly or by necessary implication accepts the jury’s verdict of guilty. Kirby P followed McCoid which itself had applied the reasoning in Griffiths.  His Honour noted that the Commonwealth Act he considered and the Victorian Act considered in McCoid had similar provisions deriving from the draft model Bill agreed to by the Standing Committee of Attorneys General of the Commonwealth and the States.  His Honour referred to similar legislation in other states and territories although not to South Australia.  Nevertheless, the South Australian legislation is now in similar terms to at least the Commonwealth and the Victorian Act.  His Honour emphasised the desirability of uniform decisions in comparable legislation (page 315).  He concluded that for a conviction “all that is necessary is that the judge should accept and proceed upon the jury’s verdict”.  The trial judge had done that when he remanded the defendant “in custody for sentence”.  I add that Kirby P placed no reliance on the remand in custody, and, although he referred to the remand being “for sentence”, it was in fact no more than a remand for the next stage in the sentencing process.  No submissions on sentence had been made.  All that had happened was that the jury had returned its guilty verdict.  His Honour expressly recognised this reality:

    “ … that conviction of the defendant occurred when the learned judge accepted the jury verdict and entered upon that stage of the proceedings which follows conviction, namely, a consideration of what should be done in relation to sentence”.

15. That consideration included the prosecutor’s presentation of the defendant’s criminal antecedents.

16. Another NSW Court of Appeal in Director of Public Prosecutions v Helou [2003] NSWCA 301, 58 NSWLR 574 unanimously followed McCoid and Della Patrona.  The Court was considering the Commonwealth Proceeds of Crime Act 1987 whose provisions are materially the same as the South Australian Act.  The defendant submitted in Helou that the intervening decision by the High Court in Maxwell v R (1996) 184 CLR 501 called for a reconsideration of McCoid (1988) and Della Patrona (1995).  What I describe as the Maxwell argument was put to Master Bampton and rejected by her.  The Maxwell argument was not put before me.  It may be that it was not put to me because there is a significant distinction observed in Helou between the context in which “conviction” was being considered in McCoid and Della Patrona on the one hand and Maxwell on the other.  In Maxwell the High Court was concerned with the principle of autrefois convict.  The Court was at pains to emphasise that particular context.  Davies A-JA, with whom the other members of the Court of Appeal agreed, cited a passage in the judgment of Dawson and McHugh JJ to illustrate that specific context and to distinguish Maxwell.  Dawson and McHugh JJ said:

    “The question of what amounts to a conviction admits of no single, comprehensive answer.  Indeed, the answer to the question rather depends upon the context in which it is asked (see Cobiac v Liddy (1969) 119 CLR 257 at 271). On the one hand, a verdict of guilty by a jury or a plea of guilty upon arraignment has been said to amount to a conviction. On the other hand, it has been said that there can be no conviction until there is a judgment of the court, ordinarily in the form of a sentence, following upon the verdict or plea. Thus Tindal CJ said in Burgess v Boetefur … [135 ER 193 at 202]:

    ‘The word “conviction” is undoubtedly verbum aequivocum.  It is sometimes used as meaning the verdict of a jury, and at other times, in its more strictly legal sense, for the sentence of the court.’ (Emphasis added.)

    The context in which the question arises for present purposes is that of autrefois convict and in that context it would seem clear that a verdict or plea of guilty is insufficient of itself to constitute a conviction.  That accords with the principle lying behind the plea of autrefois convict which is that a person should not be punished more than once for the same matter (Se Wemyss v Hopkins (1875) LR 10 QB 378 at 381).”

17. Davies A-JA distinguished Maxwell saying that the case provided no ground for not applying the law enunciated in McCoid and Della Patrona.

18. Thus in July 2008, Master Bampton followed the authority of three interstate Courts of Appeal in finding that, for the purposes of the South Australian Criminal Assets Confiscation Act 2005, the day of conviction meant the day on which the allocatus was administered and there was a remand for further steps leading towards sentence.

19. On 7 August 2008, a single judge of the Victorian Supreme Court delivered a judgment to a different effect.  In Director of Public Prosecutions v Nguyen and Director of Public Prosecutions v Duncan [2008] VSC 292, Smith J was conducting a judicial review of a County Court decision which held that the date of conviction was not the date on which the defendants pleaded guilty before a listing judge, on which the allocatus was administered and there was an adjournment on continuing bail for further steps in the sentencing process. The Director of Public Prosecutions argued that that was the date of conviction. The defendants did not argue that the date of conviction was the date of sentence, but rather than it was the date upon which the sentencing judge remanded the defendants literally for sentence, having heard full submissions on penalty. That is the argument that the defendant puts in this present case. In Nguyen and Duncan, the judge at first instance noted several differences between the situation obtaining when McCoid was decided and the present.  In 1988 there was no concept of automatic forfeiture in the relevant legislation.  In the current Victorian legislation an application has to be made by a defendant within a mere 60 days of conviction to avoid automatic forfeiture.  The Charter of Human Rights and Responsibilities Act 2006 provides that a person must not be deprived of his property other than in accordance with law [37]. While declining to embark upon a consideration of these matters, Smith J did suggest that they had a potential bearing on the construction of the word “conviction” [40].

20. It seems that the basis for Smith J departing from the decisions in McCoid, Della Patrona and Helou was that, on the facts of the case, the Court had not unequivocally accepted that the defendant had been found guilty [25]-[34].  Several facts appear to be relied on.  The first is that the guilty plea was entered before a listing judge whose function was not ultimately to sentence the defendant but was “concerned with sorting out the future handling of matters in the list” [30]-[31].  The sentencing process would be carried out by another judge.  The listing judge was not really in a position to accept the substance of the plea and thus make a finding of guilt.

1. Second, although the allocatus was administered, that act no longer serves the function of indicating the Court’s acknowledgement and acceptance of the guilty plea but is instead “a formal way of ascertaining the defendant’s intentions for programming purposes” [30]. (In my view the allocutus means more than that, at least in South Australia. I concluded in R v O’Loughlin [2008] SADC 76 that the allocutus was both a formal adherence by a defendant to his guilty plea and an acceptance of that plea by the court [45]). Smith J in Nguyen and Duncan said without elaboration that the allocutus might in some cases indicate more than a defendant indicating his intentions for programming purposes, but in that case it did not.

2. Third, the defendant’s matters were adjourned for sentence rather than remanded for sentence [27] and [30].

3. Smith J adopted the same approach to the interpretation of the word “conviction” in the very recent case of Rizzo v Director of Public Prosecutions [2009] VSC 101 delivered on 25 March 2009. In that case, the facts are similar to, but no identical to, Nguyen and Duncan.  His Honour noted that his decision in Nguyen and Duncan was on appeal to the Court of Appeal [31].  My enquiries suggest argument may be presented in that matter in May this year.

4. In my view, I ought to follow the decisions of the Courts of Appeal in McCoid, Della Patrona and Helou, unless I can distinguish them.  I see no basis on which to distinguish them.  In fact, there are points of distinction between this case and Nguyen and Duncan.  Judge Millsteed in the present case received the guilty plea from the defendant and ultimately sentenced her.  The allocatus was administered and the defendant’s antecedent report was tendered on the day of the plea.  The Court record for the day referred to the defendant being “convicted and remanded”.  All these features have the hallmarks of the Court’s acceptance of the guilty plea.  If, as Smith J suggests, the Court’s acceptance of a guilty plea is a matter of fact, then the facts of this present case would suggest that the plea was accepted by the Court on the day that the guilty plea was taken.

5. In those circumstances, I find that the day of conviction of the defendant was 26 May 2008, the date of the guilty plea. In those circumstances, section 74(1) and (6) operate to effect an automatic forfeiture to the Crown of the defendant’s property on 25 November 2008 unless an application is made by the defendant either to extend the six month time limit or to have her property exempted from forfeiture. No such application was made within six months. Accordingly I declare, pursuant to section 77 of the Criminal Assets Confiscation Act 2005, that the defendant’s property has been forfeited.

   Pecuniary penalty orders

6. There is another mechanism by which property may be seized from a defendant.  It is by way of a pecuniary penalty order.  For reasons that will become clear, this mechanism is not pursued in this case.

7. Pursuant to s 95 of the Act the DPP made application on 10 July 2008 for a pecuniary penalty order. The application was made within the time limit of nine months from the conviction date prescribed in s 95(5)(a).

8. Pursuant to s 95(1) a court must make a pecuniary penalty order if, inter alia, it is satisfied that a person has been convicted of a serious offence and in addition, one of two further pre-conditions is met. Either a) the person had derived benefits from the commission of the offence or b) the property is an instrument of the offence and is owned by the defendant.

9. The defendant submits that the court could not be satisfied of either pre-condition in this matter.  The DPP does not suggest that it could.  Out of deference to the submissions of counsel for the defendant I briefly state why I accept the correctness of the submissions by him.  The facts agreed between the DPP and the defendant, and upon which Judge Millsteed sentenced, were that the defendant derived no benefit from committing the offence of possessing heroin for sale.  She had merely agreed to package the heroin for an anticipated payment of $100-200.  Hence the court could not be satisfied of pre-condition a) above.

10. The packaging occurred in the defendant’s house at Croydon Park.  There is authority for the proposition that a house does not become an instrument of an offence simply because the defendant commits the offence inside it. There must be a greater connection between the property and the commission of the offence.  There are several authorities but 0I content myself by referring to the authority of DPP v George [2008] SASC 330 (delivered on 26 November 2008) per Doyle CJ at [65], [76] and [77] and per Vanstone J at[167] to [169]. In this case there was no greater connection.

11. Where a forfeiture has occurred the court may not make a pecuniary penalty order (s 95(3)).  The DPP does not pursue the application for a pecuniary penalty order. 

    Conclusion

12. The results of this case are quite drastic for the defendant. She was sentenced on the basis that she was packaging a small quantity of heroin anticipating receiving a payment of $100-200. Her house thereafter became the subject of a restraining order. That was so by virtue of her being charged with a serious offence and being the owner of the house. They were the only matters that had to be established. In due course she was convicted of the offence of possessing heroin for sale. She was sentenced within four months of her conviction but she did not apply within six months of her conviction to have the proceeds of sale of her house excluded from forfeiture. In those circumstances s 74(1) of the Criminal Assets Confiscation Act operates automatically to forfeit her property. That is so despite the fact that the court would not have imposed a pecuniary penalty order given that her house was not the instrument of her offending. Nevertheless I conclude that that is the mechanism provided for in the Act. Those who do not make a timely application to either extend time or to exempt their property from forfeiture will see it forfeited.