S Gillespie-Jones with E McKinnon for the appellant (instructed by Gary Prince)
M D Hinson QC for the respondent (Director of Public Prosecutions (Qld))
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
CATCHWORDS
Henderson v Queensland
Criminal law – Confiscation of property – Exclusion order – Where State sought forfeiture of proceeds of sale of jewellery given to appellant by deceased father – Where appellant sought exclusion from forfeiture under s 68(2) of Criminal Proceeds Confiscation Act 2002 (Q) ("Act") on ground money not "illegally acquired property" – Where "illegally acquired property" defined by s 22(2)(a) of Act to include "proceeds of dealing with illegally acquired property" – Whether sufficient for appellant to prove money was not proceeds of illegal activity on his part – Whether appellant discharged onus placed upon him by s 68(2)(b) to prove jewellery not illegally acquired by father.
Words and phrases – "burden of proof", "civil standard of proof", "exclusion order", "forfeiture order", "illegally acquired property".
On 22 November 2011, the Supreme Court of Queensland made an order under the Criminal Proceeds Confiscation Act2002 (Q) ("the CPCA") forfeiting cash to the value of $598,325 which had been found in the possession of the appellant, who was a person who had engaged in a serious crime related activity within the meaning of the CPCA. An application by the appellant for exclusion of the cash from forfeiture was dismissed[1]. It was dismissed on the basis that although the cash was not itself the proceeds of any illegal activity, it was the proceeds of the sale of jewellery, given to the appellant to hold for himself and three of his siblings by their father, which itself was not shown not to have been illegally acquired property[2]. An appeal to the Court of Appeal of the Supreme Court of Queensland was dismissed on 16 April 2013[3]. The appellant appeals to this Court against that decision by special leave granted on 16 May 2014[4]. The appeal turns critically upon the construction of s 68(2) of the CPCA, which provides:
"The Supreme Court must, and may only, make an exclusion order if it is satisfied—
(a)the applicant has or, apart from the forfeiture, would have, an interest in the property; and
(b)it is more probable than not that the property to which the application relates is not illegally acquired property."
[1]Queensland v Henderson (2011) 218 A Crim R 111 at 122 [66].
[2](2011) 218 A Crim R 111 at 121 [60]–[61].
[3]Henderson v State of Queensland [2014] 1 Qd R 1.
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
Continue reading Henderson v Queensland
Sign in free to access the full text
Details
AGLC
Henderson v Queensland [2014] HCA 52
Case
[2014] HCA 52
Decision Date
CaseChat Overview and Summary
The High Court of Australia considered an appeal by Mr Henderson against a forfeiture order made under the *Criminal Proceeds Confiscation Act 2002* (Qld). The State sought forfeiture of money found in Mr Henderson's possession, which represented the proceeds of the sale of jewellery. Mr Henderson sought an exclusion order under s 68(2)(b) of the Act, arguing the money was not "illegally acquired property". The central dispute concerned the extent of the onus placed upon Mr Henderson to prove the jewellery was not illegally acquired by his deceased father, from whom he received it as a gift.
The legal issues before the Court were whether Mr Henderson, in seeking an exclusion order, was required to prove only that the jewellery was not the proceeds of illegal activity on his part, or whether he also bore the onus of proving that the jewellery was not illegally acquired by his father. This involved interpreting the definition of "illegally acquired property" under s 22(2)(a) of the Act, which includes "proceeds of dealing with illegally acquired property", in conjunction with the requirements of s 68(2)(b) concerning the applicant's burden of proof.
The Court reasoned that the text of s 68(2)(b), read with s 22(2), required Mr Henderson to demonstrate that the property in question was not illegally acquired property. Given that the jewellery was a gift and not acquired for consideration, s 26 of the Act did not apply to sever any taint of illegality. Therefore, if the jewellery had been illegally acquired by Mr Henderson's father, it would retain that character even after being gifted to Mr Henderson. The Court held that Mr Henderson's contention that he only needed to prove the jewellery was not the proceeds of his own illegal activity involved an impermissible interpolation of the statutory text. The Court acknowledged a potential tension between this interpretation and the protective objectives of the Act, particularly where the ultimate origin of property is unknown, but concluded that this tension could not be resolved by expanding the scope of exclusion orders beyond the statutory language.
The appeal was dismissed with costs.
Orders
Orders of the court
Appeal dismissed with costs.
Background
Background to the litigation
The appellant challenges the decision of the Court of Appeal primarily by reference to what he had to prove in order to satisfy the criterion in s 68(2)(b). For the reasons that follow, the appeal should be dismissed.Factual background The factual circumstances are set out in detail in the reasons for judgment of Gageler and Keane JJ respectively. The essential facts as found by the primary judge were:•The appellant had engaged in a serious crime related activity within the meaning of the CPCA within a period of six years before the application for a forfeiture order[5]. •The money the subject of the order was found in the appellant's possession[6].•The money was the proceeds of the sale of jewellery given to the appellant for the benefit of the appellant and his siblings by their now deceased father[7].•The jewellery had been said by the appellant's father to have been a gift to the appellant's great grandfather from Russian royalty in the late 19th or early 20th century[8].•The account given to the appellant and his siblings of the provenance of the jewellery was untrue. The jewellery had in fact been made some time after 1950[9].•It was not known how the appellant's father had come into possession of the jewellery[10].[5](2011) 218 A Crim R 111 at 118 [42].[6](2011) 218 A Crim R 111 at 111 [1].[7](2011) 218 A Crim R 111 at 118 [45], 120–121 [57]–[58].[8](2011) 218 A Crim R 111 at 118 [45]–[46].[9](2011) 218 A Crim R 111 at 119 [50]–[51].[10](2011) 218 A Crim R 111 at 121 [59]. On the basis of the preceding findings, the primary judge held that the Court could not be satisfied, on the balance of probabilities, that the jewellery itself was not illegally acquired property[11]. The term "illegally acquired property" includes all or part of the proceeds of dealing with illegally acquired property[12]. It followed that the money the subject of the exclusion application had not been shown on the balance of probabilities not to be illegally acquired property[13]. The exclusion order sought by the appellant was therefore refused. The Court of Appeal came to the same conclusion. It found no error in the primary judge's approach to the standard of proof[14]. It found that on the evidence the primary judge was entitled to conclude that the appellant had not discharged the onus on him[15].[11](2011) 218 A Crim R 111 at 121 [60]–[61].[12]CPCA, s 22(2)(a).[13](2011) 218 A Crim R 111 at 121 [60]–[61].[14][2014] 1 Qd R 1 at 18 [86] per White JA, Holmes JA agreeing at 3 [1], Daubney JA agreeing at 20 [100].[15][2014] 1 Qd R 1 at 19 [92].Legislative framework A comprehensive overview of the CPCA and the text of relevant provisions are set out in the judgment of Keane J. What follows is an outline of salient features relevant to this appeal. The "main object" of the CPCA is to remove the financial gain and increase the financial loss connected with illegal activity, whether or not a particular person is convicted of an offence because of the activity[16]. Other "important" objects are protective of property rights. One of those is to protect property honestly acquired by persons innocent of illegal activity from forfeiture and other orders affecting property[17]. Nevertheless, the text of s 68(2)(b) of the Act, as construed by the primary judge and the Court of Appeal, does not, as in the circumstances of this case, protect from characterisation as "illegally acquired" property received as a gift from another unless it is also shown not to have been illegally acquired by that other. [16]CPCA, s 4(1).[17]CPCA, s 4(2)(b).
Evidence
Evidence Before The Court
The substantial contest between Mr Henderson and the State concerned the condition in s 68(2)(b) of the Act: whether or not the Supreme Court ought to be satisfied that it was more probable than not that the money was not illegally acquired property. Evidence Mr Henderson gave evidence in support of his application in which he gave the following account of how he came into possession of the money. In or about December 1996, Mr Henderson was visiting his father in his father's house in Picola in Victoria. His father then gave him some jewellery, comprising a pair of earrings, a bracelet, a necklace and a brooch, which his father had kept in a box under a bed, saying to him "[l]ook after your family". Mr Henderson understood his father to be referring to his brothers, Joseph and Frank Marijancevic, and to his sister Dianne Murphy. Mr Henderson regarded himself from then on as holding the jewellery on behalf of those siblings and himself in equal shares. Mr Henderson took the jewellery home to Melbourne where it was initially kept in a safety deposit box in a bank. The account continued that, after the death of their father in April 2001, Mr Henderson and his siblings together decided to have the jewellery valued and sold, and to invest the proceeds. In or about December 2001, Mr Henderson took the jewellery to a jeweller in Melbourne, Mr Theodosis Komianos, who sketched the jewellery and told Mr Henderson that it had a wholesale value of between $600,000 and $700,000 and a retail value of $1,000,000. Sometime later, a person whose first name was Daniel contacted Mr Henderson and ultimately purchased the jewellery for $620,000, which he paid Mr Henderson in $50 notes. Mr Henderson and his wife went to different banks and a casino, where they exchanged the $50 notes for $100 notes. Mr Henderson then kept that cash in a safety deposit box in a bank. Mr Henderson and his siblings held a family meeting in which they decided that the cash should be invested in the Queensland property market. In or about January and February 2002, Mr Henderson travelled to Cairns several times, where he met with a Mr John Dredge to negotiate the possible purchase of an investment property. Mr Henderson then reached a verbal agreement with Mr Dredge to purchase a property in Kuranda, but he and Mr Dredge were continuing to negotiate on the price. They agreed to meet in a coffee shop in a shopping plaza in April 2002. Mr Henderson travelled to Cairns for that meeting, bringing with him the cash which was the proceeds of the sale of the jewellery. He thought he could use the cash as a bargaining tool to encourage Mr Dredge to accept the lowest possible price. That cash (which he maintained should have been $620,000 and from which an amount was therefore missing) was the cash which on 20 April 2002 police found in his bag in the boot of a car which Mr Henderson had hired. Joseph and Frank Marijancevic and Dianne Murphy each gave evidence generally supportive of Mr Henderson. None had seen the jewellery during their father's lifetime. Each first saw it when Mr Henderson showed it to them after their father's death. They explained that they associated the jewellery with their mother and father having told them that jewellery had been given to their great grandfather as a reward for providing transportation services for Russian royalty. No objection was taken to the hearsay nature of that evidence.
Decision
Reasons for decision
FRENCH CJ
KIEFEL J
BELL J
GAGELER J
KEANE J
By virtue of s 25, illegally acquired property retains its character as such even if it is disposed of, including by using it to acquire other property, until it stops being property of that character by virtue of one or more of the circumstances set out in s 26. They include acquisition of the property by a person for sufficient consideration, without knowing, and in circumstances not likely to arouse a reasonable suspicion, that the property was illegally acquired property[32]. The jewellery was a gift to the appellant for the benefit of the appellant and his siblings and was not acquired for any consideration. None of the circumstances set out in s 26 was applicable to it or the money the subject of these proceedings.[32]CPCA, s 26(a).Contentions and conclusions On the facts as found by the primary judge and not in dispute before the Court of Appeal, the money the subject of the exclusion application was not "all or part of the proceeds of an illegal activity" within the meaning of s 22(1) of the CPCA. The question is whether it was nevertheless "illegally acquired property" within the meaning of s 22(2)(a) as "all or part of the proceeds of dealing with illegally acquired property". The appellant's principal contention was that in order to satisfy the requirements of s 68(2)(b), he needed to prove no more than that the jewellery, sold for the money the subject of his application, was not the proceeds of any illegal activity on his part. That submission could find no footing in the text of s 68(2)(b) read with that of s 22(2). Pursuant to s 22(2), property is characterised as illegally acquired if it is all or part of the proceeds of dealing with illegally acquired property or was acquired using such property. Given that none of the circumstances set out in s 26 was applicable to the jewellery, if it had been illegally acquired by the appellant's father it would still have been illegally acquired property after being given to the appellant. On its face, s 68(2)(b) read with s 22(2) required the appellant to negative that proposition. The appellant would read s 68(2)(b) as requiring an applicant for an exclusion order to satisfy the Supreme Court that it was "more probable than not that the property to which the application relates was not acquired by illegal activity on the part of the applicant". That construction involves a judicial interpolation in the text of the statute. It is not a construction which the text permits. It may be argued that the construction adopted by the primary judge and the Court of Appeal is in tension with the protective objectives of the Act because the applicant for an exclusion order may have to prove not only that the property was honestly acquired by him or her, when s 26 is not applicable, but also that it is not tainted by its ancestry. The primary judge observed[33]:"it would appear to be anomalous that property may be confiscated, because the ultimate origin of the property is beyond the knowledge of, and means of proof available to, a prescribed respondent. Such a case would appear to be well outside the intended scope of the legislation, as identified in s 13(1) and (4) of the Confiscation Act." The tension thus indicated cannot be resolved by widening the scope of the protection effected by exclusion orders beyond the limits imposed by the text of the Act. [33](2011) 218 A Crim R 111 at 121 [65].
Ratio Decidendi
Legal Principle Established
Established by:
FRENCH CJ,
KIEFEL J,
BELL J,
GAGELER J,
KEANE J