Hughes v Director of Public Prosecutions (Ruling)
[2022] VCC 1852
| IN THE COUNTY COURT OF VICTORIA AT Melbourne COMMON LAW DIVISION | Revised Not Restricted Suitable for Publication |
confiscation List
Case No. CI-21-03642
IN THE MATTER of the Confiscation Act 1997
and
IN THE MATTER of property that a person authorised by or under an Act to prosecute the relevant type of offence suspected on reasonable grounds is tainted property in relation to a Schedule 2 offence
BETWEEN
| MICK HARRY HUGHES | Applicant |
| AND | |
| THE DIRECTOR OF PUBLIC PROSECUTIONS FOR VICTORIA | Respondent |
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JUDGE: | HIS HONOUR JUDGE FRAATZ | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 25 July 2022 | |
DATE OF RULING: | 9 November 2022 | |
CASE MAY BE CITED AS: | Hughes v DPP (Ruling) | |
MEDIUM NEUTRAL CITATION: | [2022] VCC 1852 | |
RULING
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Subject:LIMITATION OF ACTIONS
Catchwords: Limitation of actions – Confiscation Act 1997 (Vic) – whether s5(5) Limitation of Actions Act 1958 (Vic), applies to an application for a civil forfeiture restraining order pursuant to s36K of the Confiscation Act 1997 – cause of action – application to set aside or vary civil forfeiture restraining order to release property restrained on basis that proceeding statute-barred
Legislation Cited: Confiscation Act 1997 (Vic); s5(5), Limitation of Actions Act 1958 (Vic)
Cases Cited:Azizi v Director of Public Prosecutions [2022] VSCA 71; Fair Work Ombudsman v Toyota Material Handling (NSW) Pty Ltd [2012] FCAFC 193; Director of Public Prosecutions v Selcuk [2008] VSC 37; Re Application by Commissioner of the Australian Federal Police [2013] VSC 686; Susnjara v Museums Victoria [2020] VCC 1128; State Insurance Regulatory Authority v Abdul-Rahman [2016] NSWCA 210; Block v Powercor Australia Ltd [2019] VSC 15; Paine v Loft [1953] VLR 601; Robinson v Currey (1881) 7 QBD 465; Thomson v Lord Clanmorris [1900] 1 Ch. 718; Deputy Commissioner of Taxation v Moorebank Proprietary Limited (1988) 165 CLR 55; McK v F (Proceeds of Crime) [2005] IESC 6
Ruling: Proceeding not statute-barred; application refused
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr C G Juebner | Ellinghaus & Lindner |
| For the Respondent | Ms R Burton | Solicitor for the Office of Public Prosecutions |
HIS HONOUR:
Introduction
1This proceeding was commenced on 26 August 2021 by the respondent, the Director of Public Prosecutions for Victoria (“Director”), filing an application for a civil forfeiture restraining order pursuant to s36K of the Confiscation Act 1997 (“Confiscation Act”).
2Following a hearing on 7 September 2021 at which the applicant, Mick Harry Hughes, was represented by counsel, Judge Dyer of this Court granted the order sought (“restraining order”)[1] in respect of Mr Hughes’ property at 1980 Mount Baw Tourist Road, Tanjil Bren (“Tanjil Bren property”).
[1] under s36M of the Confiscation Act
3The Director subsequently made a further application in this proceeding on 3 November 2021 under s37 of the Confiscation Act for a civil forfeiture order in respect of the Tanjil Bren property. That application has not yet been determined.
4On 24 June 2022, Mr Hughes filed an application seeking:
(a) an order pursuant to s36W(1) of the Confiscation Act that the restraining order be set aside or varied so as to release the Tanjil Bren property;
(b) declarations under s.49 of the County Court Act 1958:
(i)that this proceeding was commenced by the Director after the limitation period pursuant to s.5(5)(a) of the Limitation of Actions Act 1958 (“Limitation Act”) had expired; and
(ii)that the Director is precluded from further prosecuting this proceeding by reason of the fact that it is statute barred pursuant to s.5(5)(a) of the Limitation Act,
and ancillary relief.
5Mr Hughes brings his application on the basis that the Director commenced this proceeding, and obtained the restraining order, after the “cause of action” to bring the proceeding became statute-barred.[2]
[2] Applicant’s Outline of Submissions dated 6 July 2022
6The Limitation Act, s5(5) provides as follows:
“(a)An action to recover any penalty or forfeiture or sum by way of penalty or forfeiture recoverable by virtue of any enactment shall not be brought after the expiration of two years from the date on which the cause of action accrued.
(b)In this subsection penalty does not include a fine to which any person is liable on conviction of a criminal offence.”
7The Director opposes the relief sought, contending that commencement of this proceeding was not statute barred by virtue of s5(5) of the Limitation Act.
8Neither instrument specifies in terms whether the Limitation Act applies to any of the procedures open to the Director in furtherance of the purposes and objects of the Confiscation Act. Accordingly, the usual principles of statutory interpretation must be employed to determine this application.
9Section 36K of the Confiscation Act relevantly provides that the Director may apply, without notice, to the Supreme Court or the County Court for a civil forfeiture restraining order in respect of property if a police officer or a person authorised by or under an Act to prosecute the relevant type of offence suspects on reasonable grounds that the property is “tainted property”.
10The Confiscation Act also provides that a civil forfeiture restraining order may be made to preserve property or an interest in property in order that the property or interest will be available to satisfy any civil forfeiture order that may be made.[3]
[3] s36I
11In my view this proceeding is not statute barred.
12Firstly, the Director’s application for a civil forfeiture restraining order is not an “action to recover any penalty or forfeiture” within the meaning of the Limitation Act. The Confiscation Act provides a process for the Director to seek a civil forfeiture restraining order under Division 1 of Part 4 in order to preserve property or an interest in property so that the property or interest may be available for any civil forfeiture order under Division 2. A civil forfeiture restraining order does not deprive an individual of property, and expires 90 days after it is made unless an application for a civil forfeiture order is pending before a Court (s36X(1)). The Director or a prescribed person may apply for a civil forfeiture order under s37, and bears the burden of proof in relation to the matters set out in s38. In that sense, a civil forfeiture restraining order is in the nature of a freezing order. In no sense is it an “action to recover forfeiture”, or a “penalty”.
13Secondly, if s5(5) of the Limitation Act does apply, the relevant statutory cause of action in relation to forfeiture does not arise until such time as a civil forfeiture restraining order is made pursuant to s36K of the Confiscation Act. The Confiscation Act itself then limits the time application for a civil forfeiture order. As the restraining order was made in September 2021, the limitation period pursuant to s5(5)(a) of the Limitation Act had not expired at the time the Director made application for forfeiture of the property in November 2021.
14Thirdly, s5(5) of the Limitation Act does not apply to civil forfeiture restraining orders under the Confiscation Act given the purposes of s5(5). It would be an error to construe s5(5) of the Limitation Act outside of its proper context.
15Finally, the provisions of the Confiscation Act appear in effect to provide for a codified scheme, providing various limitations dates and for exclusion of property upon application by persons affected in relation to the exercise of powers under the Confiscation Act. To superimpose an overall limitation period of two years over the exercise of powers under the Confiscation Act would be inconsistent with the intention of Parliament which may be inferred from the instrument.
16Mr Hughes’ application is novel in that no other person in the 25 year history of the Confiscation Act has invoked the provisions of the Limitation Act in defence of an application for a civil forfeiture restraining order, or a subsequent application for forfeiture. Nor has there been any like application made under analogue legislation throughout Australia including the Proceeds of Crime Act 2002 (Cth).
17Such guidance as may be obtained from decisions considering the analogue limitation provision in Ireland in the context of applications for confiscation supports the construction contended for by the Director.
18Accordingly, and for the more detailed reasons which follow, Mr Hughes’ application is dismissed.
Evidence relied upon at the hearing
19In support of his application, Mr Hughes relies upon the following materials:
(a) the Director’s application for a civil forfeiture restraining order pursuant to s36K of the Confiscation Act filed 26 August 2021; and
(b) an affidavit in support of the Director’s application sworn by Detective Leading Senior Constable David John Dance on 27 August 2021, including exhibits.
20Mr Hughes filed written submissions dated 6 July 2022 in support of his application, in response to which the Director filed submissions dated 18 July 2022. Mr Hughes also relied upon an outline of reply submissions dated 21 July 2022. The application proceeded by way of submissions only, without cross examination of DLSC Dance.
Background and procedural history
21On 30 August 2018, Victoria Police executed a search warrant pursuant to the Drugs, Poisons and Controlled Substances Act 1981 (“Drugs Act”) at the Tanjil Bren property, during which investigators forced entry into a locked shed and observed a large steel plate on the ground with a bolt on each corner. The police removed the steel plate and uncovered a manhole leading into a series of twenty-five (25) underground, twenty (20) foot-long storage shipping containers. The shipping containers were joined together and fashioned to create eight (8) joined and connected rooms accessible via a main hallway. Inside the rooms, investigators identified four crop houses with sophisticated hydroponic setups including watering, lighting and air extractions systems and a large number of cannabis plants; another room containing drying cannabis seeds and seedling cannabis plants; and other rooms containing commercial size diesel generators used to power the lighting system, extraction fans and ventilation rooms. Cash, cannabis, parts of a firearm and other material were also located in the house on the Tanjil Bren property. Victoria Police seized a total of 453 kilograms of cannabis plants and dried cannabis buds.
22Mr Hughes is registered as the sole proprietor of the Tanjil Bren property.
23Simultaneously, Victoria Police executed a search warrant for a Narre Warren property – Mr Hughes’ residential address – where Mr Hughes was arrested by police.
24On 31 August 2018, investigators seized two generators located on the Tanjil Bren property. Mr Hughes came into ownership of the generators upon purchasing them from a Mr Darren Boucher on 19 March 2017. These generators were seized on the basis that they were being used for cultivating a narcotic plant. On the same day, Mr Hughes was charged with offences under ss72, 72A and 72B of the Drugs Act for cultivating cannabis in a quantity not less than a large commercial quantity; in a quantity not less than a commercial quantity; and cultivating a narcotic plant, namely cannabis. respectively. An offence against s72 is a serious drug offence for the purposes of the Confiscation Act; an offence against s72A is a Schedule 2 offence.
25On 12 February 2019, this Court made a serious drug offence restraining order over the Tanjil Bren property and a Cummins generator pursuant to s18 of the Confiscation Act.
26On 29 March 2021, at a committal hearing in the Magistrates’ Court of Victoria at Latrobe Valley, Mr Hughes pleaded guilty to one charge of cultivating a narcotic plant, namely cannabis (simpliciter)(s72B of the Drugs Act). The balance of charges were withdrawn.
27Pursuant to s27(3A) of the Confiscation Act, the serious drug offence restraining order ceased to be in force on 5 April 2021, 7 days after the charge under s72 of the Drugs Act was withdrawn.
28On 26 August 2021, the Director filed an application for a civil forfeiture restraining order under s36K of Division 1 of Part 4 of the Confiscation Act. As part of the application, the Director relied upon the affidavit of DLSC Dance sworn on 27 August 2021.
29In his affidavit in support of the application, DLSC Dance stated that one of the matters he relied upon as a basis for suspecting that the Tanjil Bren property and the generator is tainted property was as follows:
“26 On 29 March 2021 at a committal hearing in the Magistrates' Court of Victoria at Latrobe Valley, HUGHES pleaded guilty to one charge of cultivating a narcotic plant, namely Cannabis (simpliciter)...”
30The application for a civil forfeiture restraining order was heard by his Honour Judge Dyer, on 7 September 2021. Being satisfied that DLSC Dance suspected that the Tanjil Bren property sought to be restrained was “tainted property”, and that there were reasonable grounds for that suspicion, the Court made the restraining order pursuant to s36M(1) of the Confiscation Act in respect of the Tanjil Bren property for the purpose of preserving the property so that it will be available to satisfy any civil forfeiture order that may be made under Division 2 of Part 4 of the Confiscation Act.
31On 5 October 2021, Mr Hughes made application for an Exclusion Order pursuant to ss36U and 36V of the Confiscation Act; and on 3 November 2021, the Director made application pursuant to s37(1) of the Confiscation Act for a civil forfeiture order with respect to the Tanjil Bren property.
32On 4 November 2021, both the restraining order and the application for civil forfeiture made the previous day were stayed pending the determination of Mr Hughes’ exclusion order application.
33On 24 June 2022, Mr Hughes filed his application seeking an order under s36W(1) of the Confiscation Act that the restraining order be set aside or varied so as to release the Tanjil Bren property.
Legislative framework
Confiscation Act 1958 (Vic)
34The Confiscation Act establishes a scheme by which the Director, or a prescribed person, can confiscate property used in the commission of a crime or derived from the proceeds of a crime.
35Property is defined in s3 as “real or personal property of every description, whether situated within or outside Victoria and whether tangible or intangible, and includes any interest in any such real or personal property.”
36The purposes and objects of the Confiscation Act are set out in ss1 and 3A respectively:
“1 Purposes
The purposes of this Act are—
(a)to provide for the forfeiture of the proceeds of certain offences, whatever the form into which they have been converted;
(b)to provide for the automatic forfeiture of restrained property of persons convicted of certain offences in certain circumstances;
(c)to provide for the civil forfeiture by the Supreme Court or the County Court of property restrained on suspicion that it is tainted property in relation to a Schedule 2 offence;
(d)to provide for the forfeiture of property used in connection with the commission of certain offences;
(da)to provide for the forfeiture of property of a person who is unable to satisfy a court that the property was lawfully acquired;
…
(h) to preserve assets for the purpose of restitution or compensation to victims of crime;
3A Objects
The main objects of this Act are—
(a)to deprive persons of the proceeds of certain offences and of tainted property; and
(b)to deter persons from engaging in criminal activity; and
(c)to disrupt criminal activity by preventing the use of tainted property in further criminal activity; and
(d)to undermine the profitability of serious criminal activity.”
37In Azizi v Director of Public Prosecutions,[4] the objects and operation of the Confiscation Act were considered. Priest, T Forrest and Walker JJA said:
“The purposes of the Act are set out in s1. They relevantly include the purpose of providing ‘for the automatic forfeiture of restrained property of persons convicted of certain offences in certain circumstances’. The main objects of the Act are set out in s3A, as follows:
to deprive persons of the proceeds of certain offences and of tainted property; and
to deter persons from engaging in criminal activity; and
to disrupt criminal activity by preventing the use of tainted property in further criminal activity; and
[4] [2022] VSCA 71 at paragraph [10]
to undermine the profitability of serious criminal activity.”
In furtherance of those objects and purposes, the Act relevantly provides for a court to make restraining orders and for property so restrained to be subject to forfeiture. A ‘restraining order’ is an ‘order that no property or interest in property, that is property or an interest to which the order applies, is to be disposed of, or otherwise dealt with by any person except in the manner and circumstances (if any) specified in the order’ (s14(1)). There are various pathways by which a restraining order may be sought and by which forfeiture may occur.”
38It is helpful to provide a basic outline of the pathways relevant to this proceeding.
(i) “Charge-based” restraining orders – serious drug offences
39Part 2 of the Confiscation Act establishes the pathway for “charge-based” restraining orders. These are restraining orders which are premised on a person being charged with or convicted of relevant offences, including a serious drug offence.[5] Whether the charge or conviction is for a Schedule 1 or 2 offence (as defined) has further distinct consequences for the availability of exclusion orders, and requirements for forfeiture.
[5] “Serious drug offence” is defined in s3 of the Confiscation Act
40A distinct regime applies to a “serious drug offence” (as defined). Division 4 of Part 3 of the Confiscation Act provides for the automatic forfeiture of property the subject of a serious drug offence restraining order.
41A serious drug offence restraining order means a restraining order made under s18 for the purpose referred to in s15(1)(c):
“15 Purposes for which a restraining order may be made
(1) A restraining order may be made to preserve property or an interest in property in order that the property or interest will be available for any one or more of the following purposes—
…
(c) to satisfy automatic forfeiture of property that may occur under Division 4 of Part 3.”
42Application for a serious drug offence restraining order is made under s16(2A):
“(2A) The DPP or a prescribed person, or a person belonging to a prescribed class of persons, may apply, without notice, to the Supreme Court or the County Court for a serious drug offence restraining order in respect of property if—
(a)a member of the police force or a person authorised by or under an Act to prosecute the relevant type of offence believes that—
(i)within the next 48 hours a person will be charged with a serious drug offence; and
(ii) that person has an interest in the property; or
(b)a person has been charged with a serious drug offence and that person has an interest in the property; or
(c)a person has been convicted of a serious drug offence and that person has an interest in the property.”
43No connection between the relevant property to be restrained and the serious drug offence is required under the Confiscation Act.
44Upon conviction for a Schedule 2 offence, which includes a “serious drug offence”, automatic forfeiture occurs (subject to there being a restraining order in force and no pending applications for exclusion orders). The court has no discretion in relation to the operation of forfeiture; it occurs automatically upon the expiration of 60 days from conviction of the offender. An accused is not able to make exclusion applications in respect of property restrained by a serious drug offence restraining order.
45Mr Hughes’ conviction under s72B of the Drugs Act was for a Schedule 1 offence, not a Schedule 2 offence.
(ii) Non-charge-based pathways
46There are also two non-charge-based pathways: the unexplained wealth regime and the civil forfeiture regime. These two pathways provide for restraining orders and forfeiture without the requirement of a criminal conviction.
47This proceeding is concerned with an application for a civil forfeiture restraining order under s 36K. The civil forfeiture regime is contained in Part 4 of the Act and provides for the confiscation of property suspected on reasonable grounds to be tainted.
48Section 36K provides:
“36K Application for civil forfeiture restraining order
(1)The DPP or a prescribed person, or a person belonging to a prescribed class of persons, may apply, without notice, to the Supreme Court or the County Court for a civil forfeiture restraining order in respect of property if a police officer or a person authorised by or under an Act to prosecute the relevant type of offence suspects on reasonable grounds that the property is tainted property.
(2)An application under subsection (1) must be supported by an affidavit of a police officer or a person authorised by or under an Act to prosecute the relevant type of offence (as the case requires)—
(a) setting out any relevant matters; and
(b)stating that the police officer or the person suspects that the property is tainted property; and
(c)setting out the grounds on which the police officer or the person has that suspicion.”
49The Director must satisfy a Court that there are reasonable grounds for a suspicion that property is tainted.
50Section 3(1) defines “tainted property”:
“tainted property means—
(a)in the case of civil forfeiture, a civil forfeiture restraining order, a civil forfeiture order or a civil forfeiture exclusion order, property that—
(i)was used, or was intended to be used in, or in connection with, the commission of one or more Schedule 2 offences; or
(ii)was derived or realised, or substantially derived or realised, directly or indirectly, from property referred to in subparagraph (i); or
(iii)was derived or realised, or substantially derived or realised, directly or indirectly, from the commission of one or more Schedule 2 offences; or
(iiia)is, or has been, subject to a mortgage, lien, charge, security or other encumbrance wholly or partly discharged using property referred to in subparagraph (i), (ii) or (iii); or
(iv)is likely to be used, or intended to be used in, or in connection with, the future commission of one or more Schedule 2 offences; or …”
51The Confiscation Act specifies the purpose of making a civil forfeiture restraining order in s36I:
“(1)A civil forfeiture restraining order may be made to preserve property or an interest in property in order that the property or interest will be available to satisfy any civil forfeiture order that may be made under Division 2.”
52Once a civil forfeiture restraining order is made, forfeiture will only occur if and when a court makes a civil forfeiture order under s 37(1).[6]
[6] See s41, Confiscation Act
53Section 37 relevantly provides:
“(1) If a civil forfeiture restraining order is in force in respect of property, the DPP or a prescribed person, or a person belonging to a prescribed class of persons, may apply to the court which made the civil forfeiture restraining order for a civil forfeiture order in respect of the property.
(2)The applicant must give written notice of the application under subsection (1) to every person who the applicant has reason to believe has an interest in the property.”
54In order to obtain civil forfeiture restraining order, the Court must be satisfied as to the matters in s38:
“38 Determination of application for civil forfeiture order
(1)On an application under section 37(1) for a civil forfeiture order, the court which made the civil forfeiture restraining order must order that the restrained property be forfeited to the Minister if the court is satisfied that—
(a)the requirements of section 37 as to notice of the application have been complied with; and
(b)not less than 30 days have elapsed since the last notice given in accordance with section 37; and
(c)there are no pending applications for section 36V exclusion order in relation to the restrained property.
(2)The court may exclude particular property or any particular interest in property from the operation of a civil forfeiture order if satisfied that otherwise undue hardship may reasonably be likely to be caused to any person by the order.”
55It may be seen that:
(a) grounds for reasonable suspicion that property is ‘tainted’ are not relevant upon the Court’s consideration of an application for forfeiture under s37;
(b) s38 is concerned with notice requirements, and the rights of other persons who may have an interest in the property restrained.
56Once a civil forfeiture restraining order is in force, the Director has only 90 days to apply for a civil forfeiture order. Section 36X(1) provides that if a civil forfeiture application is not made within 90 days of the civil forfeiture restraining order, the restraining order is set aside.
57The effect of s36X(1) is that property cannot be restrained for an indefinite period of time.[7] However, there is no specified time limit within the Confiscation Act for obtaining a civil forfeiture restraining order. This is perhaps unsurprising, as civil forfeiture restraining orders require that a “police officer or a person authorised by or under an Act to prosecute the relevant type of offence suspects on reasonable grounds that the property is tainted property.” The Act also permits more than one application for such a restraining order.
[7] Respondent’s Outline of Submissions dated 18 July 2022, at paragraph [26]
58This may be contrasted with the charge-based restraining order regime, for which the Confiscation Act provides absolute time limits for obtaining restraining orders for the purposes of automatic forfeiture. These time limits are tied to the date on which conviction occurs.[8] I return to consider various time limits in the Confiscation Act, and their significance in the disposition of the issues in this proceeding, below.
[8] Applicant’s Outline of Submissions dated 6 July 2022, at paragraph [20]
59The other important safeguard is the ability of a person with an interest in property the subject of a civil forfeiture restraining order to obtain a s36V exclusion order. The Confiscation Act provides as follows:
“(1) If the Supreme Court or the County Court makes a civil forfeiture restraining order against property, any person claiming an interest in the property may apply to the Court that made that order for a section 36V exclusion order.
(2) An application under subsection (1) must be made—
(a) if notice is required to be given under section 36N, within 30 days after service of notice of the making of the civil forfeiture restraining order; or
(b)in any other case, within 30 days after the making of the civil forfeiture restraining order.
(3)Subject to subsection (3A), the court may extend the period within which an application may be made, whether or not that period has expired, if it is in the interests of justice to do so.
(3A) The court may not extend the period within which an application may be made in respect of property that has been forfeited by or under this Act.”
“36V Determination of application for exclusion from civil forfeiture restraining order
(1)On an application under section 36U, the Supreme Court or the County Court, as the case requires, may make an order—
(a)excluding the applicant’s interest in the property from the operation of the civil forfeiture restraining order if the court is satisfied that—
(i) the property is not derived property; and
(ii) the property is not tainted property; or
(b)excluding the applicant’s interest in the property from the operation of the civil forfeiture restraining order if the court is not satisfied that the property in which the applicant claims an interest is not tainted property or derived property but is satisfied that—
(i)the applicant was not, in any way, involved in the commission of any relevant Schedule 2 offence; and
(ii)where the applicant acquired the interest before the commission, or alleged commission, of the relevant Schedule 2 offences, the applicant did not know that the property—
(A) would be, or was intended to be, used in, or in connection with, the commission of any of those offences; or
(B) was likely to be, or intended to be, used in, or in connection with, the future commission of any of those offences; and
(iii)where the applicant acquired the interest at the time of or after the commission, or alleged commission, of the relevant Schedule 2 offences, the applicant acquired the interest without knowing, and in circumstances such as not to arouse a reasonable suspicion, that the property was tainted property or derived property and
(iv) the applicant’s interest in the property—
(A) was not subject to the effective control of another person on the date that the civil forfeiture restraining order was made in relation to the property; or
(B) was subject to the effective control of another person on the date that the civil forfeiture restraining order was made in relation to the property but the person in effective control satisfies subparagraphs (i) to (iii) as if a reference in those subparagraphs to the applicant were a reference to the person in effective control; and
(v)where the applicant acquired the interest, directly or indirectly, from another person that—
(A) it was acquired for sufficient consideration; or
(B) if it was not acquired for sufficient consideration, the person from whom the interest was acquired satisfies subparagraphs (i) to (iii) as if a reference in those subparagraphs to the applicant were a reference to the person from whom the interest was acquired.
(2)If the court makes an order under subsection (1) the court may also make an order declaring the nature, extent and value of the applicant’s interest in the property.
(3)In this section—
relevant Schedule 2 offence means a Schedule 2 offence in relation to which the civil forfeiture restraining order was made.
Limitation of Actions Act 1958 (Vic)
60Whilst an expired limitation period does not preclude the commencement of a proceeding, it affords a complete defence. In other words, the remedy is barred, not the right to bring the cause of action. In Price v Spoor [2021] HCA 20; 270 CLR 450, Gageler and Gordon JJ (in considering Queensland limitations legislation) stated at [40] – [41]:
“Section 13 [of the Queensland Act], in its terms, provides that ‘[a]n action shall not be brought by a person to recover land after the expiration of 12 years from the date on which the right of action accrued to the person ...’. It is in a form which, as has long been settled by judicial decision, is not to be taken literally but merely provides a defence to an action that must be pleaded by a defendant if the expiration of the limitation period is to be given effect. It is a provision by which the remedy is barred, but not the right of the plaintiff to bring the cause of action. Section 10 is to a similar effect. Concluding that it is for the defendant to raise a limitation defence does not cut across the public policy at which limitations of actions statutes are directed, namely ‘finality in civil litigation’.
The way that ss 10 and 13 of the Limitation Act give effect to the Act’s legislative purpose of ensuring finality in litigation – a legitimate public policy objective – is by conferring a right on an individual defendant in a particular case to elect to plead a limitation period.”[9]
[9] Confiscation Act 1997
61The Limitation Act expressly provides that it applies to proceedings by the Crown in like manner as it applies between subjects: s32(1), noting that the Office of the Director is established under Part 4 of the Public Prosecutions Act 1994 (Vic) and in that role, the Director acts for the Crown. This is not in dispute.
62Section 5(5) is within Part I of the Act, which refers to “Periods of Limitation”. Division 2 of Part I is headed “Actions of contract, tort etc”.[10]
[10] Section 5 itself is also titled “Contracts and torts.”
63Section 36 of the Interpretation ofLegislation Act 1984 (Vic) provides:
“Headings, Schedules, marginal notes and footnotes
(1) Headings to—
(a)Chapters, Parts, Divisions or Subdivisions into which an Act or subordinate instrument is divided; or
(b) Schedules to an Act or subordinate instrument—
form part of the Act or subordinate instrument.”
64The contract or tort actions include “actions to recover any sum recoverable by virtue of enactment”: s5(d), of which the actions in sub-section 5(5) are a type (but having a two year limitation period). The Limitation Act, s5(5) provides as follows:
“(a)An action to recover any penalty or forfeiture or sum by way of penalty or forfeiture recoverable by virtue of any enactment shall not be brought after the expiration of two years from the date on which the cause of action accrued.
(b)In this subsection ‘penalty’ does not include a fine to which any person is liable on conviction of a criminal offence.”
65“Action” is defined in s3 of the Limitation Act as follows:
“(1) In this Act unless inconsistent with the context or subject-matter—
‘action’ includes any proceeding in a court of law;”
66The expression “enactment” is defined in s38 of the Interpretation of Legislation Act to mean:
“an Act or subordinate instrument or a provision of an Act or subordinate instrument”.
67“Recover” is defined in the Collins Australian Dictionary in a legal context as to gain (something) by the judgment of a court of law.[11]
[11]See also discussion in Fair Work Ombudsman v Toyota Material Handling (NSW) Pty Ltd [2012] FCAFC 193, [22]-[24], [75]
68The words “penalty” and “forfeiture” are not defined in the Limitation Act.[12]
[12]although “penalty” does not include a fine to which any person is liable on conviction of a criminal offence: s5(5)(b)
69“Penalty” is defined in the LexisNexis Concise Australian Legal Dictionary, 5th edition, as a punishment or sanction imposed for unlawful conduct, for example, imprisonment or a pecuniary penalty.
70“Forfeiture” is also defined in the LexisNexis Concise Australian Legal Dictionary, as the immediate loss of all interest in property, including loss of the right to possession. Further, in a criminal law context, the surrender of a right or privilege as a penalty, citing the example of forfeiture in consequence of the commission of a criminal offence under statutory provisions such as the Proceeds of Crime Act 1987 (Cth). In the context of the Confiscation Act, in Director of Public Prosecutions v Selcuk,[13] Hollingworth J stated (at [39]):
“Like the cancellation or suspension of a licence, the forfeiture of property is of a penal nature, and has the effect of imposing an additional punishment above and beyond that otherwise provided for in respect of the offence.”
[13] [2008] VSC 37
71Re Application by Commissioner of the Australian Federal Police[14] relevantly concerned the application of the privilege against exposure to penalty for forfeiture in the context of an application for forfeiture following the grant of a restraining order under s19 of the Proceeds of Crime Act 2002 (Cth). The Commissioner had sought discovery of certain documents referred to in affidavits filed on behalf of the respondent. The Court held that when a proceeding is brought to obtain a forfeiture or enforce a penalty, neither discovery nor interrogatories will be allowed; and that the respondent was not obliged to claim the privilege. In the course of his judgment, Ginnane J stated:[15]
“I consider that when the Commissioner has obtained a restraining order and in the same proceeding seeks a forfeiture order of the property the subject of the restraining order, he is seeking a penalty or forfeiture that attracts the privilege….
a forfeiture order made under the Act in respect of a person’s property is a forfeiture for the purposes of the privilege against exposure to forfeiture.”
[14] [2013] VSC 686
[15] Ibid, 249 [39]
72This decision did not concern the application of an analogue to s5(5) of the Limitation Act. His Honour was considering the application of a privilege against exposure to a penalty or forfeiture in the context of a forfeiture order under the Commonwealth confiscation legislation.[16] It may be inferred that Ginnane J considered, in the context of the statutory scheme in the Proceeds of Crime Act 2002 (Cth), that it is not until the Commissioner seeks a forfeiture order that the question of “recovery of any forfeiture” could arise.
[16]See discussion in State Insurance Regulatory Authority v Abdul-Rahman [2016] NSWCA 210, [27] to 33] as to the concept of “penalty and forfeiture”
73Mr Hughes’ application seeks to impugn the granting of a civil forfeiture restraining order. Such an order is to preserve the relevant property in the State so that the property or interest may be available for any civil forfeiture order under Division 2 of Part 4, that may or may not be made at a later stage. For forfeiture to arise another application must be made. It must follow that the relief granted by way of an application for a civil forfeiture restraining order under s36K on 7 September 2021 is different and separate from forfeiture. It does not amount to the forfeiting of property.
74The expression “cause of action”, although not defined, was understood by the parties to constitute the meaning attributed to that phrase by his Honour Judge Bowman in Susnjara v Museums Victoria [2020] VCC 1128 (at [72]).
“For example, in Sugden v Sugden [1957] 1 AER 300, Denning LJ defined ‘causes of action’ as ‘rights which can be enforced, or liabilities which can be redressed, by legal proceedings in the Queen’s courts’. Another definition, to much the same effect, is ‘the act on the part of the defendant which gives the plaintiff his cause of complaint’ – see, for example, Bass v R [1948] NZLR 777. Older, but useful, definitions can be found in Read v Brown (1888) 22 QBD 128 – ‘The facts which are relied upon for judicial redress’ – and in Bennett v White [1910] 2 KB 643 – ‘The whole set of facts which give rise to an enforceable claim’. Without going through them in detail, other definitions to be found in legal dictionaries and the like include ‘the set of facts which give rise to a claim enforceable in court’ and ‘a legally recognised wrong which creates the right to sue’.”
75Applying this meaning, the existence of a civil forfeiture restraining order under s36K is an element of the cause of action to recover or obtain forfeiture under s37(1) of the Confiscation Act.
76Ultimately the question of whether this proceeding constitutes an action to recover forfeiture falls for determination upon application of the principles of statutory interpretation.
Relevant principles
77Whether or not s5(5) of the Limitation Act applies to an application under s36K of the Confiscation Act is a question of statutory construction. No relevant factual disputes infect the consideration of the issues in this case.
78The starting point, as with any question of statutory construction, must be with the structure, text and language of the Act.
79The Honourable Justice J Dixon in Block v Powercor Australia Ltd [2019] VSC 15 reviewed the relevant principles:
“99As the Court of Appeal recently observed in Greater Shepparton City Council v Clarke, the starting point is the text of the particular statutory provisions, particularly the language used by Parliament to express its intention, but such statutory provisions are not to be construed in isolation. The legislative intention expressed in particular provisions is to be interpreted in context, understood by reference to its function in the statutory scheme of which it is part.
100 The Court noted:
The statutory context of a provision includes the legislative purpose intended to be served by it, and by the legislation of which it forms a part. Section 35(a) of the Interpretation of Legislation Act 1984 provides that a construction that would promote the purpose or object underlying the Act (whether or not that purpose or object is expressly stated in the Act) is to be preferred to a construction that would not promote that particular purpose or object. In that way, the court is directed, specifically, to identify, and give effect to, the intended statutory purpose, objectively ascertained. However, such an approach does not provide a warrant to ignore the plain language of the statutory provision, or to redraft it so that it conforms with the presumed statutory intention.
101The Court of Appeal noted that these principles have been stated by members of the High Court on a number of occasions and counsel took me to these cases in submissions. In Project Blue Sky Inc v Australian Broadcasting Authority (‘Project Blue Sky’), the majority stated:
The duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning.
102In Federal Commissioner of Taxation v Consolidated Media Holdings Ltd, the Court said:
‘This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the [statutory] text’. So must the task of statutory construction end. The statutory text must be considered in its context. That context includes legislative history and extrinsic materials. Understanding context has utility if, and in so far as, it assists in fixing the meaning of the statutory text. Legislative history and extrinsic materials cannot displace the meaning of the statutory text. Nor is their examination an end in itself.”
(citations omitted).
Discussion
80In summary, Mr Hughes submitted that:
(a) the restraining order was made more than three years after police first executed a search warrant at the Tanjil Bren property on 30 August 2018;
(b) from at least the time police executed the search warrant it was open to the Director to obtain a civil forfeiture restraining order under the Confiscation Act;
(c) the matters in section 36K define the elements of a statutory cause of action pursuant to which the Director may obtain a civil forfeiture restraining order;
(d) this proceeding by virtue of the provisions of the Confiscation Act is an “action to recover… penalty or forfeiture” within the meaning of s5(5) of the Limitation Act. The Director’s application under s36K constitutes an action “in relation to” forfeiture in the sense that, following the restraining order made on 7 September 2021, the Director made a civil forfeiture application on 3 November 2021 in accordance with the time limits set out in the Confiscation Act;
(e) at the latest, the “cause of action” had accrued by 12 February 2019, because on that date the Director applied for a serious drug offence restraining order in respect of the Tanjil Bren property under the Confiscation Act. At that time, the police must have had knowledge of grounds sufficient to form a reasonable suspicion that the Tanjil Bren property was tainted in order to obtain a civil forfeiture restraining order;
(f) the cause of action is barred, having accrued more than two years before application under s36K was made in August 2021.
81The principal submission of Ms Burton on behalf of the Director was that the cause of action for recovery of a “penalty or forfeiture” contemplated by s5(5) of the Limitation Act must be understood in its historical context, and does not apply to an application for a civil forfeiture restraining order under the Confiscation Act.
82This was so, in part, in the circumstance where no forfeiture order in relation to the relevant property has yet been made. On this (alternative) analysis, a plain reading of s5(5) of the Limitation Act does not accommodate a finding that a civil forfeiture restraining order is an “action to recover… penalty or forfeiture”. An application for a civil forfeiture restraining order is neither the bringing of a suit for relief in respect of a cause of action, nor “to recover any penalty or forfeiture” – it is an application to restrain all dealings in relation to the relevant property.
83At this point I make two findings:
(a) on its face, the proceeding issued on 26 August 2021 was not an action for recovery of forfeiture. There is no remedy available under s37(1) of the Confiscation Act until a civil forfeiture restraining order has been granted;
(b) if Mr Hughes’ application is viewed on the basis that since 3 November 2021 – when the application for forfeiture was made – this proceeding relates to recovery of a penalty or forfeiture under s37(1), then a different analysis attends. The elements of the cause of action in relation to forfeiture in order to enforce that right would necessarily include:
(i)that a police officer or other authorised person suspects on reasonable ground that the property is tainted property: ss36K(1) and (2); and
(ii)the existence of a civil forfeiture restraining order under s36M.
84Understood in that way, any cause of action seeking to recover forfeiture is not complete at the earliest until such time as the restraining order was made on 7 September 2021. On the assumption that s5(5) of the Limitation Act applies, then the proceeding was not commenced out of time. The application of s5(5) will never arise, because under s36X of the Confiscation Act, the Director only has 90 days from the date of the civil forfeiture restraining order to apply for forfeiture.
85I prefer this construction, which results in harmonious operation of the two Acts.
86It is difficult to accept that the purposes and objects of the Confiscation Act, which seek to, inter alia, deter crime by confiscating tainted property without limit as to when such property might be discovered or traced, can be defeated by private civil litigation periods suitable to the governing of private causes of action arising from contracts or torts. This observation invites consideration of the historical context of this provision of the Limitation Act.
Historical context
87The Director submitted that to understand the intended scope of s5(5) of the Limitation Act, it is useful to consider its place in the Act and its history.
88The time limit appearing in s5(5)(a) of the Limitation Act in respect of “an action to recover any penalty or forfeiture or sum by way of penalty or forfeiture recoverable by virtue of any enactment” is descended from s2(5) of the Limitation Act 1939 (UK):
“(5) An action to recover any penalty or forfeiture, or sum by way of penalty or forfeiture, recoverable by virtue of any enactment shall not be brought after the expiration of two years from the date on which the cause of action accrued:
Provided that for the purposes of this subsection the expression ‘penalty’ shall not include a fine to which any person is liable on conviction of a criminal offence.”
89Section 5(5) of the Limitation Act and its equivalents in all Australian States and territories, with the exception of Western Australia that has amended its equivalent most recently, were effectively lifted from the 1939 UK equivalent section.
90Historically, the predecessor to s5(5) described actions whereby the Crown sued for monies arising out of penal statutes and forfeitures of goods and chattels or where “common informers” (private parties) brought the suit (by writs known as qui tam)[17] to enforce the penalty and kept all or part of the monies the subject of the suit.
[17]See Paine v Loft [1953] VLR 601, 611 - 617 for the history of the original statutes; NSW Law Reform Commission, Limitation of Actions, 1967 for NSW equivalent (s 18) at pp109 - 110
91I accept that limitations on these sorts of actions were deliberately not omitted from the NSW equivalent to s5(5) of the Limitation Act. In its recommendations, the NSW Law Reform Commission, Limitation of Actions, 1967 report stated, in relation to section 18 of the NSW Act:
“This is the combined effect of section 5 of the Imperial Common Informers Act, 1588, and section 39 of the Supreme Court Act, 1841. Provisions for actions by informers were occasionally inserted in statutes many years ago. Such provisions are now obsolete and, indeed, the procedure has been abolished in England. However, there may be cases which, in the absence of something like section 18 of the Bill, would be without any limitation period. The safer course is to provide for some limitation period and the Bill follows section 2(5) of the Imperial Act of 1939 in fixing the period at two years.”
92I also accept the submission of the Director that, in context, the cause of action contemplated in s5(5) of the Limitation Act would include the ancient “action on the case” or other relevant debts or actions that lie in persons, or public authorities in their capacity as private parties.
93I was taken to a number of cases by the Director to demonstrate that the applicant’s submissions incorrectly construe s5(5)(a) of the Limitation Act by seizing upon the words “forfeiture” and “cause of action” out of context and misapplying these to the Director’s application for a civil forfeiture restraining order pursuant to the Confiscation Act.
94Robinson v Currey[18] was an action by the deputy warder of the Company of Goldsmiths in London for penalties from the defendant who was accused of selling counterfeit silverwares in breach of the statute.[19] The plaintiff was suing not as the grieved party, but as a public entity responsible for administering the statute.
[18] (1881) 7 QBD 465
[19] 7 & 8 Vict. c. 22, s. 3
95The relevant limitation provision considered in Robinson v Currey provided that:
“all actions for penalties, damages, or sums of money given to the party grieved, by any statute now or hereafter to be in force… that shall be sued or brought at any time after the end of the present session of Parliament, shall be commenced and sued within the time and limitation hereinafter expressed, and not after; the said actions by the party grieved, one year after the end of this present session, or within two years after the cause of such actions or suits, but not after… provided that nothing herein contained shall extend to any action given by any statute where the time for bringing such action is or shall be by any statute specially limited.”
96Bramwell LJ held that the relevant limitation period did not apply to public prosecutors suing for the public benefit:
“To my mind this case was not within the contemplation of the legislature, and it was not a casus omissus, because the legislature was not dealing with or thinking of cases of a public prosecutor, or of prosecution at all.”[20]
[20] At 472, CB 477.
97As the action was not an action by the party grieved, nor an action by a common informer, the relevant limitation period did not apply.
98In relation to this finding the Director submitted the following:
“If I have to give up all of the court book, Your Honour, I wish to keep only court book p477, because that is the authority that puts in context why the use of the word ‘causes of action’ on penalties arising out of an enactment are in the Act at all. They’re the direct descendant of these arcane sections we’ve been looking at.
And to show Your Honour that even at the time of 1881, it was not considered that this was that kind of action. Because rather than being for the Crown's own profit or for the state's own profit here, here we have expressly the Director of Public Prosecutions who is not suing for his own benefit - for her own benefit in the current case - but who is in pursuance of a public duty as a kind of public prosecutor upon the same principle in which she might prosecute an indictment at law if an indictment would lie where a thing is prohibited and no penalty is fixed.”
99Thomson v Lord Clanmorris[21] was an action brought by a shareholder, Joseph Thomson, under s 3 of the Directors Liability Act 1890 against directors of a company in which he had invested, the British Goldfields of Africa. This provision allowed shareholders to claim compensation from a company director for damage sustained as a result of untrue statements contained in the prospectus of a company, on the faith of which the shareholder subscribed to the shares. In issue was whether the limitation period of two years which applied to “all actions for penalties, damages or sums of money given to the party grieved by any statute” contained in s3 of the Civil Procedure Act 1833 (UK) applied to defeat the claim.
[21] [1900] 1 Ch. 718
100In finding that the action was compensatory rather than penal in nature, and therefore not an action “for penalty, damages or sums of money”, Lindley MR observed:
“In construing s.3 of the Act of 1833, as indeed in construing any other statutory enactment, regard must be had not only to the words used, but to the history of the Act, and the reasons which led to its being passed. You must look at the mischief which had to be cured as well as at the cure provided.”[22]
[22] Ibid, 725
101The cases referred to by Mr Hughes in his written submissions applying the equivalent to s5(5) of the Limitation Act to state recovery of amounts in the nature of penalties or tax, or pecuniary sanction, as a civil debt, for failure to do something prescribed by a statute[23] illustrate its application in that context, but ultimately are not determinative.
[23]DTR Securities Pty Ltd v Deputy Commissioner of Taxation (Cth) (1987) 8 NSWLR 204; State Insurance Regulatory Authority v Abdul-Rahman [2016] NSWCA 210; Fair Work Ombudsman v Toyota Material Handling (NSW) Pty Ltd [2012]
102The words of s5(5) result in a finding that – without reference to context - this proceeding at the time it was commenced was not an action to recover forfeiture within the meaning of the Limitation Act.
103With reference to context, it seems that the Limitation Act has no role to play in proceedings to obtain restraining orders under the Confiscation Act which relate to criminal offending and penalties under separate legislation, sought by the Director not for the benefit of the Crown, but for the benefit of the public.
104The clear intention of Parliament expressed in ss1 and 3A of the Confiscation Act is to provide for forfeiture of property in connection with serious offending with the object of depriving persons of tainted property, and to deter, disrupt and undermine the profitability of criminal activity. That purpose is achieved under the Act – whether in the context of either charge-based or non-charge-based pathways – firstly by obtaining a restraining order over property. The Confiscation Act then turns its focus to interests to be excluded from the restrained property: see for example s38(1)(c) in relation to civil forfeiture orders. Any applications for exclusion orders must be determined prior to forfeiture. This context of the civil forfeiture scheme in the Confiscation Act is completely removed from the notion of a “cause of action” to recover penalty or forfeiture.
105Finally, unlike the authorities referred to me, the Confiscation Act relates to penalties imposed by extraneous criminal proceedings under separate enactments; put another way, the essential character of penalty does not derive from the Confiscation Act itself, but from other enactments. If so, the forfeiture is not “by virtue of” the Confiscation Act at all, and the Limitation Act has no role to play in fixing a time limit to commence civil forfeiture proceedings under the Confiscation Act.
Inconsistent to apply s5(5) of the Limitation Act to the Confiscation Act
106Time limits exist in relation to various regimes under the Confiscation Act discussed above.
107Relevant time limits for taking steps under the Confiscation Act’s civil forfeiture regime are governed by provisions in that Act. For example, section 36X in respect of applications for civil forfeiture orders, which provides:
“36X Duration and setting aside of civil forfeiture restraining order
(1) A civil forfeiture restraining order ceases to be in force on the expiry of 90 days after it is made unless an application for a civil forfeiture order in respect of the restrained property is then pending before the Supreme Court or the County Court.”
108The Confiscation Act thus regulates the time in which a civil forfeiture order may be made, by reference to obtaining a restraining order on the statutory grounds there set out.
109The period of time within which exclusion applications must be made is limited under s40A.
110Section 16 is the section by which charge-based restraining are obtained. This section makes plain that any application for such a restraining order – whether it be for automatic forfeiture including serious drug offence forfeiture - may only be made before the end of the relevant period in relation to the conviction. Section 16(3) provides that–
“An application under subsection (2) or (2A) for the purposes of automatic forfeiture may only be made before the end of the relevant period in relation to the conviction.”
111“Relevant period” is defined in s3 as a six month period, subject to certain extensions that may be granted.
112The same limitation applies in s32(2), which permits the Director to seek forfeiture on a discretionary basis when an accused is convicted of a Schedule 1 offence.
113Thus the Parliament has specified in the Confiscation Act that all charge-based forfeiture has an end date six months after conviction.
114Section 58 is the section pursuant to which a pecuniary penalty order can be applied for, and again, under s58(3), there is a limitation period of six months after conviction.
115Finally, s77 deals with disposal orders, which is another type of forfeiture often made with respect to items used in connection with the commission of a crime. Such an order must be made under s77(2) within the six months from the commission. So, there are a large number of provisions in the Confiscation Act that expressly provide a limitation period.
116It is significant that there is no end date for the civil forfeiture regimes under Part 4 or Part 4A. I regard this as consistent with the purposes and objects of the Confiscation Act. I do not accept that an endpoint is required in relation to the non-charge-based pathways to forfeiture, at which point in time a person knows that whatever assets are being dealt with are not being dealt with as “tainted property” under the Act.
117Mr Hughes submitted that this construction produces absurd results, including that the Director could wait 20 years, having formed the relevant suspicion that property was tainted property, to bring an action for a restraining order, during which time the property may have been sold or improved. Such a result, it was said, was not contemplated by the Act, unjust and militated against the interpretation of the scope of s5(5) contended for by the Director.
118There are at least two answers to this submission. Firstly, should the relevant interests in the property be able to be traced, it is entirely within the purposes and objects of the Confiscation Act that property derived from the proceeds of crime or used in its connection or being required to satisfy a forfeiture order be available for forfeiture. The definition of “tainted property” in s3 of the Act includes property that was derived or realised, or substantially derived or realised, directly or indirectly from property used in connection with the offending.
119Secondly, the exclusion order provisions protect unrelated interests in such property.
120The Confiscation Act has specific time limits for different purposes in the Act. To attach an overall limitation as to when the Act can be invoked is inconsistent with these time limits. The approach to time limits in the Confiscation Act, in the sense considered in the High Court in Deputy Commissioner of Taxation v Moorebank Proprietary Limited,[24] has covered the ground and in effect is a codified or comprehensive scheme relating to the limitation of the relief and other very significant exercise of powers under the Confiscation Act.
[24] (1988) 165 CLR 55
121This is consistent with my finding above that an element of any statutory cause of action to recover forfeiture under the Confiscation Act is the granting of a civil forfeiture restraining order.
Findings
122Despite the carefully constructed arguments of Mr Juebner on behalf of Mr Hughes, upon consideration of the principles and the other circumstances set out above, I find that:
(a) an application for a civil forfeiture restraining order under s36K of the Limitation Act is not an action for recovery of a penalty or forfeiture in the sense contemplated by s5(5);
(b) any cause of action for forfeiture of property under s37(1) in Division 2 of Part 4 of the Confiscation Act includes the element that a civil forfeiture restraining order is in force in respect of the property;
(c) the proceeding was not commenced out of time.
123To apply s5(5) to the civil forfeiture restraining order regime in Division 1 of Part 3 of the Confiscation Act in the manner contended for by Mr Hughes courts great difficulties in identifying with some precision when the police officer or person authorised by or under an Act to prosecute the relevant type of offence suspects on reasonable grounds that the property is tainted property. Detective DLSC Dance was not cross examined about when he formed the formed belief. The only evidence as to the grounds of suspicion is his affidavit, sworn in August 2021; and the grounds include the plea of guilty to the simpliciter charge in March 2021.
124If it could sensibly be said that the relevant cause of action relates to the application for a civil forfeiture restraining order under s36K (as opposed to the application for forfeiture under s37):
(a) March 2021 is inside a limitation period of two years s5(5) of the Limitation Act applies to the process of obtaining a civil forfeiture restraining order;
(b) I reject the submission that the “cause of action” had accrued by 12 February 2019 because by that date the police must have suspected on reasonable grounds that the Tanjil Bren property was “tainted”;
(c) the relevant date of the suspicion held by the police for the purposes of applications under s36K is the hearing of the application for the civil forfeiture restraining order, and of the Court being satisfied that:
(i)the deponent of the affidavit supporting the application does suspect that the property is tainted property; and
(ii)there are reasonable grounds for that suspicion.[25]
[25] s36M of the Confiscation Act
Alternatively, the reasonable suspicion must be held as at the date of forfeiture itself. A past suspicion is irrelevant to the exercise of the powers of restraint and forfeiture under the Act. This interpretation permits of changing circumstances, is consistent with the purposes and objects of the Confiscation Act and accords with the proper exercise of powers exercised by the Court under the Act.
125Consideration of the issues in this proceeding is necessarily undertaken in the context of balancing the competing interests of public policy underlying the Confiscation Act as against the personal rights of persons subject to the exercise of these powers.
126The exercise of such powers is subject to the supervision of Court, and rights enshrined in the Confiscation Act to exclude a person’s interest in property from the operation of the civil forfeiture restraining order upon application under s36U. In my view these control mechanisms are sufficient to protect against the precise scenario relied upon by Mr Hughes – not relevant in this case – of delay in exercise of the powers.
127The exercise of statutory interpretation cannot be resolved narrowly in the specific circumstances of Mr Hughes. I must consider the words in the Acts and their operation in general in order to import a limitation on the exercise of powers under s36K which is not contained within the Confiscation Act.
128It seems to me the Parliament has made a deliberate decision to invest powers in the State in respect of confiscation of property being the proceeds of crime in circumstances where charge-based seizure is not apposite. There is nothing in the Confiscation Act to prohibit the Director awaiting the outcome of investigations, or a plea of guilty to related charges, before exercising powers under it to obtain a civil forfeiture restraining order.
129Accordingly, I find that s5(5) of the Limitation Act does not operate as a defence to the Director’s application under s36K of the Confiscation Act which resulted in the granting of the restraining order, or the later application for forfeiture under s37(1).
Irish cases
130Whilst not binding, the Supreme Court of Ireland has considered the questions extant in this proceeding.
131Section 3 of the Proceeds of Crime Act 1996 (Ireland) provides a Court with the power to make an order “prohibiting the respondent or any other specified person or any other person having notice of the order from disposing of or otherwise dealing with the … property or diminishing its value”. While not limited to the same circumstances, such “interlocutory orders” are comparable to civil forfeiture restraining orders under the Confiscation Act.
132In the Irish regime, s4 provides the power to, upon application, make a disposal order “where an interlocutory order has been in force for not less than 7 years in relation to the specified property”. Under s4(4) a disposal order operates to deprive the respondent of his or her rights in the property and the property stands transferred to the Minister.
133Section 11(7) of the Statute of Limitations 1957 (Ireland) is identical in wording to LAA s 5(5), providing that:
“(a)In this subsection ‘penalty’ does not include a fine to which any person is liable on conviction of a criminal offence.
(b)An action to recover any penalty or forfeiture, or sum by way of penalty or forfeiture, or sum by way of penalty or forfeiture recoverable by virtue of any enactment shall not be brought after the expiration of two years from the date on which the cause of action accrued.”
134McK v F (Proceeds of Crime)[26] considered the application of s11(7) of the Statute of Limitations 1957 (Ireland) in the context of restraining orders granted over property prior to application for forfeiture.
[26] [2005] IESC 6
135The Honourable Justice Geoghegan in McK v F ultimately held that the limitation provision did not apply to an application under s3 of the Proceeds of Crime Act 1996 (Ireland). The judge below had found that the provision did not apply having regard to the historical antecedents of the subsection, primarily on the basis that it was enacted to apply to common informers and actions brought for the moving party’s benefit – the arguments advanced on behalf of the Director in this application. In relation to those issues, Geoghehan J stated (emphasis added):[27]
“If it was necessary to interpret the subsection because of some ambiguity this would have been a perfectly legitimate exercise. It would, however, appear to be unnecessary in this case because, for the reasons already given, the current proceeding is one merely seeking a freezing order. By no stretch of the imagination could that be anything to do with a ‘penalty or forfeiture’. Accordingly, the historic origins of the subsection are not relevant. I am expressing no view, therefore, as to whether the learned President’s analysis is correct or not. I am simply taking the view that it does not arise. At any rate, this view has already been taken by the court in McK v F cited above. At p.432 of the report Fennelly J. is quoted as follows:
‘It is clear that the court did not say in Murphy, that a section 3 Order effected a forfeiture. The respondent has sought to trace the provenance of the section through the Common Law Procedure Acts and to explain their former relevance to claims by common informers. It is unnecessary to enter into that subject matter. It is sufficient to say that the effect of section 3 is, as stated in Murphy, to freeze the interest of the property owner but not to deprive him of it. It allows the court to make an order restraining the owner from disposing of or otherwise dealing with the whole or, if appropriate, a specified part of the property or diminishing its value … Such an order is not, in any normal sense, an order of forfeiture. It would do violence to the language of section 3 to hold that it effects a forfeiture. I would reject this ground of appeal’.”
[27] Ibid, [18]
136Ultimately, in relation to s3, Geoghahan J took the position that:[28]
“The position as to statute bar in relation to section 3 applications is quite simple. There is no statute bar provision in the 1996 Act itself. There is no section in the Statute of Limitations, 1957 that could conceivably cover them. Accordingly, section 3 applications are not subject to any statute bar provisions.”
[28] Ibid, [20]
Conclusion
137The application by Mr Hughes is refused.
138In the circumstances there is no utility in determining arguments in relation to the purport and scope of relief obtainable under s36W of the Confiscation Act.
139I shall hear the parties on the form of final orders, including as to costs.
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