Director of Public Prosecutions v Stephens - [2013] SADC 154

District Court of South Australia
(Civil)
DIRECTOR OF PUBLIC PROSECUTIONS v STEPHENS
[2013] SADC 154
Judgment of His Honour Judge Slattery (ex tempore)
5 November 2013
CRIMINAL LAW - PROCEDURE - CONFISCATION OF PROCEEDS OF CRIME AND RELATED MATTERS
The defendant in this application seeks to have various properties excluded from a prior Order made by a Judge of this Court under the Criminal Assets Confiscation Act - the defendant sought an extension of time for the automatic forfeiture provision of restrained property under the Act.
Held: Order extending relevant time period granted to 17 August 2014 pursuant to ss75(1) and (2) of the Act.
Criminal Assets Confiscation Act 2005 s36, s44, s74, s75, s76, Part 4 Division 1, referred to.
Director of Public Prosecutions v George (2008) 102 SASR 246 ; Tedesco v Director of Public Prosecutions [2010] SASC 336, discussed.

DIRECTOR OF PUBLIC PROSECUTIONS v STEPHENS
[2013] SADC 154
JUDGE SLATTERY

On 22 February 2012, Judge Smith in this Court made an order pursuant to the Criminal Assets Confiscation Act 2005 (“the Act”) restraining the defendant, Shane Ashley Stephens, from dealing with his interests in properties set out in the terms of the order. It is not necessary for me to set out here his Honour’s orders; they are plain on the face of the order made on 22 February 2012 which has been sealed by the Court.
The order of Judge Smith was, in para.2, made subject to the rights of various mortgagees, as well as to a caveatee on some or all of those properties (viz para.2 of the Order). The order was made upon the undertaking given by the Director of Public Prosecutions pursuant to s.26 of the Act to abide by any order the Court may make as to damages and/or costs arising from the making and operation of the restraining order. In my opinion, the nature of the Order made on 22 February 2012 was plainly interlocutory.
I have been informed today that Mr Stephens was convicted by the Court on 17 May 2013 on a charge of trafficking. Under s.74 of the Act, property is forfeited to the Crown at the end of what is described as the “relevant period” if a person is convicted of a serious offence and at the end of the relevant period the property is covered by a restraining order that relates to the offence. Mr Stephens has been convicted of a serious offence. The property referred to in the Order of Judge Smith made on 22 February 2012 is property covered by a restraining order relating to that offence.
Before me today is an interlocutory application brought by solicitors on behalf of Mr Stephens for various orders. The interlocutory application seeks the following orders:-
“The defendant, Shane Stephens applies for the making of the following Orders or Directions:
1.   Permission from this Honourable Court to make an application to exclude property from the restraining order made in this matter on 22 February 2012 by his Honour Judge Smith in the District Court.
2.   If permission is granted, an order excluding the following property from the abovementioned restraining order.
2.1 The property situated at _________, Wynn Vale, in the State of South Australia, being the whole of the land comprised and described in Certificate of Title Volume ___ Folio ___;
2.2 The property situated at _________, Davoren Park in the State of South Australia, being the whole of the land comprised and described in Certificate of Title Volume ___ Folio ___;
2.3 The property situated at _________, Milang, in the State of South Australia, being the whole of the land comprised and described in Certificate of Title Volume ___ Folio ___;
2.4 The property situated at _________, Davoren Park in the State of South Australia, being the whole of the land comprised and described in Certificate of Title Volume ___ Folio ___;
2.5 The property situated at _________, Salisbury North, in the State of South Australia, being the whole of the land comprised and described in Certificate of Title Volume ___ Folio ___.
3    An extension of time before the automatic forfeiture of the restrained property occurs on or about 16 November 2013.
Application made pursuant to section 36, 75 and 76 of the Criminal Assets Confiscation Act, 2005.”
I refer only to para.3 for relevant purposes of this proceeding. That paragraph seeks an extension of time before the automatic forfeiture of the restrained property occurs on or about 16 November 2013. It is not necessary to resolve the matter finally but, in my view, the question of the automatic forfeiture on 16 November is a matter to be resolved: the relevant date may well be 18 November 2013.
Subsection 74(1)[1] of the Act contains a reference to a relevant period. Subsection 74(6)[2] defines a relevant period to mean the six-month period starting on the day of the conviction, which in this instance is 17 May 2013, or, if an extension order is in force at the end of that period, the extended period relating to the extension order. The question of making an extension order extending the period before property is forfeited is covered under ss.75(1)[3] of the Act.
[1] Section 74—Forfeiting restrained property without a forfeiture order if a person has been convicted of a serious offence
[2] Section 74(6) In this section—
relevant period means—
(a)     the 6 month period starting on the day of the conviction; or
(b)if an extension order is in force at the end of that period—the extended period relating to the extension order.
[3] Section75—Making an extension order extending the period before property is forfeited
(1) The court that made the restraining order referred to in section 74(1)(b) may make an order (an extension order) specifying an extended period for the purposes of that section if—
(a)     an application for the order is made within 6 months after the start of the day of the relevant conviction; and
(b)     the applicant has also applied to the court under this Act to exclude property from the restraining order; and
(c)     the court is satisfied that the applicant made the application to exclude property from the restraining order without undue delay, and has since diligently followed up that application.
Under s.75 of the Act, the Court that made the restraining order may make an order, called an extension order, specifying an extended period for the purposes of that section. That application must be made within six months after the start of the day of the relevant conviction.[4] The relevant conviction day appears to be the day of the conviction for ss.74(6) of the Act; however, the issue as to the relevant day may well be affected by the Acts Interpretation Act but that is not a matter that I need to resolve now.
[4] Viz the reference in s75(1) to the six month period which is the “relevant period”.
I am satisfied that this application has been made before the expiration of six months after the day of the relevant conviction. Subsection 75(2) of the Act provides that the extended period must end no later than 15 months from the start of the day of the relevant conviction. Fifteen months from 17 May 2013 is 17 or 18 August 2014.
At the hearing today, Mr Gupta informed me that the policy of the Director concerning applications under s.74 and s.75 of the Act was that, administratively, the Director treats the extension as being on-foot if, without more, the application for the extension order being extended before the property is forfeited is made within the six-month period referred to in ss.74(6) of the Act. Under this policy the extension of time operates even after the expiration of the15 month period prescribed under ss.75(2) of the Act.
Mr Gupta informed me that this was a policy decision made by the Director and actually favoured persons in the position of the respondent, Mr Stephens, the applicant on this interlocutory application. This is because, on the Director’s stated view, it is not necessary to make anything more than an application for an Order for extension of time without the necessity of obtaining formal Orders of the Court pursuant to such an application. The Director takes the view that the making of the application may be treated in the same way as if an Order extending the relevant period had been made but without the stricture of the 15 month period prescribed in ss.75(2) of the Act.
In further submissions, Mr Vadasz identified the ‘guillotine’ nature of the content and operation of ss.76(2)[5] of the Act, that, in the event that property has been forfeited then the Court is prevented from making an order excluding property from forfeiture under the division.
[5] Section 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.
Para.2 of the interlocutory application seeks such orders. Mr Vadasz pointed to the fact that property the subject of the Order of Judge Smith would be forfeited at the end of the 6 month period if no Order for extension of that time was made by the Court under ss75(1) of the Act. Put another way, Mr Vadasz was not prepared to rely upon the administrative decision of the Director in light of the other provisions of the Act. I have received the affidavit material filed in support of the defendant’s application. It is pithy but that position appears to reflect the operation of ss75(1) of the Act. That subsection appears to operate in a largely mechanical way and does not require the application for an extension to descend to details on the merits in support of an application.
I am satisfied that the Order made by Judge Smith on 22 February 2012 is interlocutory in nature. I am here dealing with an interlocutory application and I am here permitted on such an application to similarly make an Order for the extension of the effect of the Orders made by Judge Smith pursuant to s.74 and s.75 of the Act.
I am also satisfied that it is both necessary and that I am in a position to make an order because as contemplated in the wording of subparagraph 74(6)(b). Thus it is necessary for an extension order to be made in relation to the forfeiture provision in ss.74(1) prior to the end of the period prescribed in ss.74(1) and (6) of the Act, pursuant to s75 of the Act.
The intention of Parliament appears to be that the 15-month period for the purposes of ss.75(2) is to be understood in light of subparagraph 74(6)(a)(the six-month period) as well as subparagraph 74(6)(b), (the extension of the six-month period) i.e. an extension for a further 9 months after the current relevant period of 6 months.
Mr Vadasz submitted and I accept that having regard to the nature of provisions in the Act such as ss.76(2) it is necessary to formally make an order for the extension albeit that such order must end (ss.75(2) of the Act) not later than 15 months from the start of the day of the relevant conviction (i.e. an end date of 17 or 18 August 2014).
For the sake of completeness I mention that the operation of s74 and s75 of the Act have been given some consideration by the Supreme Court. There are two relevant decisions: Director of Public Prosecutions v George (2008) 102 SASR 246 (George) and Tedesco v Director of Public Prosecutions [2010] SASC 336 (Tedesco). In George at para [251] White J said the following on this topic:-
“[251] 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.”
Those sentiments, that are obiter dicta, were repeated by White J in Tedesco at paragraphs [1] – [15] especially at [15].
I respectfully agree with White J’s sentiments there expressed. In my opinion there is a further consideration in addition to the matters raised by White J. Section 75 of the Act sets out the time within which an application must be heard and determined, for example, and ss.36, 44 and 76 set out the relevant bases upon which an Order for forfeiture may be avoided. Confining my considerations to s36 and s76 of the Act, these require an inter partes proceeding to be commenced in and to be resolved by the Court on the merits. The current application may be treated as a forerunner to such a proceeding.
Accepting that Parliament may legislate in any way that it sees fit, in my opinion, it would be a very strange result for Parliament to pass and enact legislation that permits (and requires) the commencement of a proceeding to preserve an interest and then surreptitiously to terminate the effect of that proceeding because of an arbitrarily imposed time limit. Such an approach arguably circumscribes the Judicial function when it is understood that a Court has a fundamental duty to hear and dispose of any matter properly brought before it, including any appeals. A statutory provision that terminates an interest of the party in forms of property merely because of the effluxion of time (for disposition and not commencement) when the party has invoked a right under the same statute to determine that interest appears anathema to the status and operation of the Courts’ Judicial function.
I accept the submissions made to me by Mr Gupta today on behalf of the Director that the substantive proceeding concerns the question of forfeiture. This application is ancillary to those principal proceedings. Those principal proceedings are concerned with questions arising within Part 4 Division 1 and following of the Act concerning the connection between the relevant properties and the offence in respect of which conviction has been obtained. It is not necessary for me here to give consideration to the issues arising in the principal proceedings. These are matters for another day.
In those circumstances, I am prepared to make an Order extending the relevant period (for ss74 (1) and (2) of the Act and as defined in ss.74(6) of the Act) to a period ending on 17 August 2014, pursuant to ss.75(1) and (2) of the Act. That order for extension is made in circumstances where the Director has already given the undertaking as to damages and/or costs that has been recorded by Judge Smith in his order of 22 February 2012 and that undertaking continues.
The issue now is the determination of the question between the parties arising under the Act. That is a matter that requires interlocutory orders concerning procedural issues that are best made by a Master who should have the conduct of this matter before trial.
I therefore refer this matter to the Master’s list for interlocutory orders to be made about the application to be resolved by the Court under the terms of the Act.
All that need be said is that currently, on the literal meaning of the provisions of the Act,[6] this matter must be heard and determined by judgment of a Judge of this Court before 17 August 2014. In the absence of such determination and consistent with what fell from White J in George and Tedesco then on that day the property is forfeited to the Crown under the operation of the Act.
[6] As this was identified by White J in George and Tedesco.

(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.