McKane v NSW Police and Director of Public Prosecutions (NSW)

[2016] NSWLC 19

Local Court

New South Wales

Medium Neutral Citation:	McKane v NSW Police and Director of Public Prosecutions (NSW) [2016] NSWLC 19
Hearing dates:	In chambers
Date of orders:	09 November 2016
Decision date:	09 November 2016
Jurisdiction:	Civil
Before:	Huntsman LCM
Decision:	Leave to institute the proceedings is refused
Catchwords:	CIVIL PROCEEDINGS – applications - leave to institute civil proceedings - person convicted of serious indictable offence - Felons (Civil Proceedings) Act 1981 - disposal of property in police custody
Legislation Cited:	Felons (Civil Proceedings) Act 1981, s 4 Confiscation and Proceeds of Crime Act 1989, s 41 Law Enforcement (Powers and Responsibilities) Act 2002, ss 216, 218, 219, 220, 229
Cases Cited:	Commissioner of Police v Pecover [2014] NSWSC 1427 Director of Public Prosecutions v Jeffrey (1992) 58 A Crim R 310 Patsalis v State of New South Wales [2012] NSWCA 307 Montiero v State of New South Wales (No 2) [2015] NSWSC 1901 McKane v Commissioner of Corrective Services of New South Wales [2015] NSWSC 737
Category:	Procedural and other rulings
Parties:	Jeffrey Allan McKane (applicant) NSW Police (first respondent) Director of Public Prosecutions (second respondent)
Representation:	No appearances – determined in chambers
File Number(s):	2016/00268871
Publication restriction:	None

Judgment

Description of the application

1. Mr McKane is currently serving a sentence for a serious indictable offence. He has filed civil proceedings, being a Statement of Claim in the Small Claims Division of the Local Court. He has sought the leave of the court to institute such proceedings, given the provisions of the Felons (Civil Proceedings) Act 1981. I now give reasons for decision on his application for leave to institute the civil proceedings.

Background

2. An order was made, pursuant to the Confiscation and Proceeds of Crime Act 1989, by the District Court, upon a Notice of Motion, on 23 October 2015 for forfeiture of various cameras and computer equipment. Mr McKane had been prosecuted by the Director of Public Prosecutions (DPP) for various offences including use child under 14 years to make child abuse material; film person in private act without consent – aggravated; and sexual intercourse person under 10 years, under authority.

3. The material filed indicates that on 6 November 2015 a further order was made in relation to a Toshiba lap top (declining to make a forfeiture order for that item). Mr McKane states that the Crown initiated proceedings in the District Court for a forfeiture order in January 2013, but determination of the proceedings was delayed due to Mr McKane’s appeal to the Court of Criminal Appeal.

4. In his Statement of Claim Mr McKane seeks the return of other items seized by the police as part of their investigation and prosecution of criminal offending. Mr McKane states that this property was not subject of the forfeiture orders made by the District Court, and that the items of property were also not exhibits in the proceedings. In the alternative he seeks compensation, in the amount of $1,535, for the items he asserts were not returned.

Evidence

5. The following documents were in evidence:

• Statement of Claim, dated 11 June 2016, including Annexures 1, 2 and 3 – Annexure 1 is the Notice of Court result, District Court; Annexure 2 is a copy of a letter from Mr McKane to a solicitor of the Director of Public Prosecutions dated 8 February 2016 seeking return of items of property; Annexure 3 is a copy of a letter to Mr McKane from the Police Force, dated 2 May 2016, indicating that no property was held by police, the only property to be returned was a Toshiba lap top and all remaining items were destroyed .

• A letter from the Crowns Solicitor’s Office to the Registrar of Goulburn Local Court attaching a letter to Mr McKane advising Mr McKane that as he was serving a sentence for serious indictable offences he needed to seek leave of the court under the Felons (Civil Proceedings) Act 1981 to commence proceedings.

• Cover letter and Notice of Motion from Mr McKane, dated 14 August 2016, seeking leave of the court to institute proceedings.

• Further material “Outline of Submissions” dated 19 September 2016, received from Mr McKane after directions had been made that any further material in support of the application for leave be filed on or before 30 September 2016. The submissions have been carefully considered and will be discussed below.

6. I do not have before me any transcript in respect of the District Court proceedings, although Mr McKane has submitted the Notice of Court result (Annexure 1 to Statement of Claim).

Legislation

7. In respect of the current application for leave to institute proceedings the Felons (Civil Proceedings) Act 1981 (“the Felons Act”) provides that :

4   Leave to sue required for persons convicted of serious indictable offences

A person who is in custody as a result of having been convicted of, or found to have committed, a serious indictable offence may not institute any civil proceedings in any court except by the leave of that court granted on application.

5   Grant of leave

A court shall not, under section 4, grant leave to a person to institute proceedings unless the court is satisfied that the proceedings are not an abuse of process and that there is prima facie ground for the proceedings.

6   Refusal of leave—appeal

(1)  Subject to subsection (2), a person to whom leave referred to in section 4 has been refused may appeal against the refusal as if the decision to refuse the leave were a decision on a point of law.

(2)  An appeal shall not lie to the Court of Appeal (within the meaning of the Supreme Court Act 1970) from an order refusing leave referred to in section 4 except by the leave of the Court of Appeal.

7   Right of appearance

At the hearing or determination of an application or appeal under this Act, except by the leave of the court to which the application or appeal is made:

(a)  the applicant or appellant, as the case may be, is not entitled to appear in person, and

(b)  the person who would, if the proceedings to the institution of which the application or appeal relates were instituted, be the defendant in those proceedings, is not entitled to appear or be represented.

8. Pursuant to the Felons Act, this matter has been determined in Chambers on the written material filed by Mr McKane. In submissions Mr McKane requests that he appear in the leave application, however having considered the material filed, I am not of the view that there should be a departure from the process set out in s 7 - namely, that the plaintiff/applicant is not entitled to appear in person and that the proposed defendants are not entitled to appear in person, or be represented. I am not of the view that any basis to depart from the process set out in the Act is disclosed.

The applicant’s case for leave

9. Mr McKane sets out his case for leave in his Notice of Motion dated 14 August 2016. Those grounds are supplemented by the submissions made in his Outline of Submissions dated 19 September 2016. He submits that the property was seized on 22 October 2010 and 11 May 2011, and because the property that was not subject to a forfeiture order, it was not considered tainted property, and should therefore be returned. He states that the Inspector of Police acted beyond his authority in disposing of property that was not part of the District Court forfeiture order. Mr McKane submits that the proceedings are not an abuse of process because the actions of the police inspector constitute a prima facie case.

Discussion of authorities relied upon by applicant/plaintiff

10. In the Outline of Submissions Mr McKane relies on appellate decisions in support of his application for leave to be granted. Mr McKane submits that the defendant acted outside the scope of his authority when the property was disposed of and cites DPP v Jeffrey (1992) 58 A Cim R 310 as authority. That case involved an appeal to the Court of Appeal from a decision of the Supreme Court on an application by the appellant, who had been convicted of a serious importation offence, to negate a forfeiture of property under the Proceeds of Crime Act 1987. The Supreme Court made a declaration relieving against forfeiture in relation to a motor vehicle but declined to do so in relation to residential properties. The decision of the Supreme Court was largely upheld by the Court of Appeal. The Court of Appeal decision focuses on construction of terms used in the Proceeds of Crime Act 1987, and in particular the terms “serious offence”, “any offence” and “unlawful activity”. The court also considered the meaning of “derived” and whether the property in question was derived from unlawful activity. A close reading of the case reveals that it does not set out any general principal in relation to action outside the scope of authority in disposal of property. Indeed the Court of Appeal observed that appropriate restraining orders had been made in respect of the property in question, and no issue of action beyond scope of authority is raised. The decision is otherwise of no assistance in determining the issues in the present case as it involved a determination of the meaning of particular words used in the Proceeds of Crime Act 1987 and the application of the words to the facts of that particular case. In the present matter I am not required to determine any similar issue.

11. Mr McKane submits that the Act does not apply to applications for judicial review and cites Patsalis v State of New South Wales [2012] NSWCA 307; Montiero v State of New South Wales (No 2) [2015] NSWSC 1901; McKane v Commissioner of Corrective Services of New South Wales [2015] NSWSC 737. The case of Patsalis is a useful authority as it outlines the history of the common law doctrine of attainder, case law history, and legislative reform leading to the enactment of the Felons Act. Patsalis also has a useful discussion of ‘civil proceedings’ and private legal actions, as distinct from issues relating to the exercise of public power (refer [1]-[7], [43]-[50]).

12. All of the authorities cited accept that the Felons Act does not apply to restrict applications for judicial review. The case of Monteiro specifically referred to Patsalis as authority for that position. Both Monteiro and McKane involved applications for judicial review of decisions affecting the applicants as prisoners in NSW gaols. Monteiro involved an application for judicial review of a decision made by Justice Health that Mr Monteiro did not require a special diet; and the applicant in McKane sought judicial review of decisions made by the Commissioner of Corrective Services, in particular decisions relating to distance education, a printer and a laptop computer.

13. The current application does not involve an application for judicial review, and therefore the cases cited above, indicating that no leave is required for an application for judicial review, do not apply. In the current application leave is sought to commence civil proceedings in the Small Claims Division of the Local Court. As a civil proceeding is a proceeding to which the Felons Act applies, a grant of leave under that Act is required.

Discussion of evidence

14. The forfeiture order made by the District Court pursuant to s 18 of the Confiscation of Proceeds of Crime Act 1989 on 23 October 2015, was in relation to specified property: Black Seagate 1 TB External HDD S/N 2GHJ7WJ1; Black Nikon Digital camera S/N 8144357; Black Western Digital WD External HDD S/N WCAV599532934; Black Sony Digital Camera S/N 283073; 8GB Micro Scandisk; Seagate External Hard Drive S/N 9T7003-304; 16 GB Scandisk CD card; Seagate External Hard Drive S/N 5MA9NTNN3 1.2. Mr McKane does not challenge the forfeiture order or the disposal of any of the property pursuant to that order

15. In the order of 23 October 2015 the property was held to be of a value of $200 and the property was to be forfeited or disposed of. On 6 November 2015 the District Court declined to make an order on the “remaining item contested in this application” being the Toshiba laptop and directed if the item could have data removed it could be delivered to Mr McKane’s mother. Indeed the correspondence from NSW Police Force annexed to the Statement of Claim refers to that item as “the only item to be returned was the Toshiba lap top. As you state this has been returned to your mother”.

16. It appears from the documents available that the property items now subject of the Statement of Claim by the defendant were not the subject of a forfeiture order. The defendant seeks return of certain property items which were seized and retained by the police, but which he states were not ultimately found to be used in the crimes and were not subject to forfeiture order.

17. In the Statement of Claim, Mr McKane sets out other computer property and cameras that he states not subject of use in the commission of any offence. He states that during the forfeiture proceedings the DPP solicitor conceded this, and that the items could be returned. Mr McKane attached, in Annexure 3 to the Statement of Claim, a list of 29 items, the list indicated that child abuse material was found on certain items, that some property is recorded as “nil find” and other property was “not examined”.

18. The list of property reveals that several items, including computer/camera equipment, were used in the commission of the offences and contained child abuse material (items 2, 3, 6, 7, 9, 11, 15, 24, 26, 27, 28). Other items - which included USB drives, external DVD drive, Finepix camera, an iPhone, a Canon digital camera, one of the Samsung internal hard drives, and a Mainboard Brand CPU - were found not to contain child abuse material and were recorded as “nil find” (these were Items 1,4,5,8,10,12,13,16, 25 on the list). Item 13 consisted of 14 pornographic DVDs but this item was “nil find” because it did not contain child abuse material.

19. A number of Samsung Internal hard drives (items 17 to 23 on the list) were recorded as “not examined “ indicating that these items were not examined forensically – it has therefore not been established that these did not contain child abuse material.

20. A perusal of the list set out in the Statement of Claim, of the items which Mr McKane seeks to be returned or to be compensated for, indicates that those items are not subject of the forfeiture order. It is clear that he seeks return of all the items in the list in Annexure 3 which are recorded as “nil find” or “not examined”.

21. A copy of a letter from the Police Force to Mr McKane of 2 May 2016 (Annexure 3 to Statement of Claim) indicates that the Toshiba laptop was returned to his mother by the police, but all other items were destroyed and that the police no longer retain any exhibits in the matter.

22. There is no evidence before this court to indicate that Mr McKane has made any application to a court under any applicable legislation, for a court order for return of the property. However, as indicated above I have not been supplied with a transcript of the District Court proceedings. Mr McKane states in his written material that he discussed return of the property with the solicitor for the Director of Public Prosecutions (DPP) at court.

The forfeiture order

23. Mr McKane submits that the property was disposed of by police without authority because it was not found to be “tainted property” because the subject property was not subject of the forfeiture order.

24. The term “tainted property” is defined in s 4 of the Confiscation of Proceeds of Crime Act 1989 (“Proceeds of Crime Act”):

tainted property means property that:

(a)  was used in, or in connection with, the commission of a serious offence, or

(b)  was substantially derived or realised, directly or indirectly, by any person, from property used in, or in connection with, the commission of a serious offence, or

(c)  was substantially derived or realised, directly or indirectly, by any person, as a result of the commission of a serious offence, or

(d)  was substantially derived or realised, directly or indirectly, by any person for the depiction of a serious offence, or the expression of the offender’s thoughts, opinions or emotions regarding the offence, in any public promotion.

25. The Proceeds of Crime Act provides for forfeiture orders to be made in several situations, including in respect of “tainted property”:

Division 2 Forfeiture orders

18 Forfeiture orders

(1)  If a person has been convicted of a serious offence and an application is made to a court under section 13 (1) (a) or (2) (a) in relation to specified property and:

(a)  the court is satisfied that the property is tainted property in relation to the offence, and

(a1)  if the application relates to property of the kind referred to in paragraph (d) of the definition of tainted property in section 4 (1)—the court is satisfied that, having regard to subsection (1A), it is appropriate to treat the property as having been derived or realised by the defendant (or by a person at the request or by the direction of the defendant) because of the commission of a serious offence, and

(b)  the court has taken into consideration (having regard to information before the court):

(i)  the use that is ordinarily or had been intended to be made of the property, and

(ii)  any hardship that may reasonably be likely to arise (whether on the part of that or any other person) following the making of the order,

the court may order that the property is forfeited to the State.

(1A)  In considering whether to treat property of the kind referred to in paragraph (d) of the definition of tainted property in section 4 (1) as property derived or realised by the defendant (or by a person at the request or by the direction of the defendant) because of the commission of a serious offence, a court may have regard to any matter that it thinks fit, including:

(a)  whether or not it is in the public interest to treat it as such property, and

(b)  whether or not the depiction of the offence, or the expression of the defendant’s thoughts, opinions or emotions regarding the offence, in the public promotion for which the property was derived or realised has any general social or educational value, and

(c)  the nature and purposes of the public promotion for which the property was derived or realised, including its use for research, educational or rehabilitative purposes.

(2)  In considering any hardship that may be likely to arise on the part of a person convicted of a serious offence, the court shall not take into account the sentence imposed in respect of the offence.

(2A)  In considering any hardship reasonably likely to arise on the part of an Aboriginal person or a Torres Strait Islander convicted of a serious offence, the court must take into account responsibilities arising from the person’s ties to extended family and kinship.

(3)  If the court orders that property (other than money) is forfeited to the State, the court shall specify in the order the amount that it considers to be the value of the property at the time when the order is made.

(4)  If, at the hearing of an application made under section 13 (1) (a) or (2) (a) in reliance on the conviction of a person for a serious offence, evidence is given that property to which the application relates was in the possession of the person at or immediately after the commission of the offence, then:

(a)  if there is no evidence given tending to show that the property was not used in, or in connection with, the commission of the offence—the court shall presume that the property was used in, or in connection with, the commission of the offence, or

(b)  in any other case—the court shall not make an order under this section in relation to the property unless it is satisfied, on the balance of probabilities, that the property was used in, or in connection with, the commission of the offence.

(5)  A court making a forfeiture order in respect of property may specify in the order the extent of the estate, interest or rights in the property that are affected by the order and, where the order is to apply to land, the court shall do so.

26. The definition of tainted property indicates use of the property in the offence, or use in connection with the offence. Section 18 also provides for a number of different considerations by a court before a forfeiture order is made, that is, s18 does not provide that a forfeiture order is automatically made where it is established that the property is tainted property. A court may decline to make a forfeiture order even when satisfied the property is tainted property – this occurred in the present case where the District Court declined to make a forfeiture order in respect of the Toshiba laptop even though that item was tainted property having been found to contain child abuse material. The fact that no order for forfeiture is made does not therefore indicate that a court is satisfied that property is not tainted property.

Obligations in relation to seized property

27. Mr McKane’s case is that police did not return property to him, which was seized by warrant, after completion of proceedings, and that the property should therefore be returned or he should be compensated for its value. In determining his application for leave to institute civil proceedings I must determine whether he has a prima facie case in regard to the case he submits, or whether the proposed proceedings are an abuse of process. This necessitates an examination of legislation governing police powers for seizure and obligations in relation to seized property.

Seizure

28. Police have power to seize property which they suspect, on reasonable grounds, has been or is intended to be used in connection with a crime. Those powers are contained in the Law Enforcement (Powers and Responsibilities) Act 2002 (“LEPRA”) which provides:

21   Power to search persons and seize and detain things without warrant

(1)  A police officer may, without a warrant, stop, search and detain a person, and anything in the possession of or under the control of the person, if the police officer suspects on reasonable grounds that any of the following circumstances exists:

(a)  the person has in his or her possession or under his or her control anything stolen or otherwise unlawfully obtained,

(b)  the person has in his or her possession or under his or her control anything used or intended to be used in or in connection with the commission of a relevant offence,

(c)  the person has in his or her possession or under his or her control in a public place a dangerous article that is being or was used in or in connection with the commission of a relevant offence,

(d)  the person has in his or her possession or under his or her control, in contravention of the Drug Misuse and Trafficking Act 1985, a prohibited plant or a prohibited drug.

(2)  A police officer may seize and detain:

(a)  all or part of a thing that the police officer suspects on reasonable grounds is stolen or otherwise unlawfully obtained, and

(b)  all or part of a thing that the police officer suspects on reasonable grounds may provide evidence of the commission of a relevant offence, and

(c)  any dangerous article, and

(d)  any prohibited plant or prohibited drug in the possession or under the control of a person in contravention of the Drug Misuse and Trafficking Act 1985,

found as a result of a search under this section.

29. LEPRA also provides for seizure of property on execution of a search warrant, and provides that when executing a warrant other items may also be seized if the person executing the warrant has reasonable grounds to believe the item is connected with an offence:

49   Seizure of things pursuant to search warrant

(1)  A person executing a search warrant issued under this Division:

(a)  may seize and detain a thing (or thing of a kind) mentioned in the warrant, and

(b)  may, in addition, seize and detain any other thing that the person finds in the course of executing the warrant and that the person has reasonable grounds to believe is connected with any offence.

(2)  Without limiting subsection (1), the power to seize and detain a thing includes:

(a)  a power to remove the thing from the premises where it is found, and

(b)  a power to guard the thing in or on those premises, and

(c)  if it is a covert search warrant that authorises the placing of a kind of thing in substitution for a seized thing—a power to place a thing of that kind on the subject premises in substitution for a thing seized.

Note. For the disposal of things seized pursuant to a search warrant, see Division 2 of Part 17.

30. In particular LEPRA provides for searchable offences in relation to search warrants, and a child abuse material offence is a searchable offence:

46A   Searchable offences

(1)  For the purposes of this Part, searchable offence in relation to a warrant:

(a)  means any of the following:

(i)  an indictable offence,

(ii)  a firearms or prohibited weapons offence,

(iii)  a narcotics offence,

(iv)  a child abuse material offence,

(v)  an offence involving a thing being stolen or otherwise unlawfully obtained, and

(b)  if the warrant is a covert search warrant—means a serious offence, and

(c)  if the warrant is a criminal organisation search warrant—means an organised crime offence.

(2)  In subsection (1):

child abuse material offence means an offence under section 91H or 578C of the Crimes Act 1900.

31. Mr McKane’s material indicates the property was seized by warrant, and the applicable search warrant for police investigating an offence of possession/use of child abuse material would be a warrant under the LEPRA provisions set out above.

32. I note a warrant may be issued under the Proceeds of Crime Act – warrants can be issued under that Act to search for and seize tainted property (see Part 3, ss 36-41). The material filed by Mr McKane does not indicate that a warrant was issued under the Proceeds of Crime Act. There no evidence that Mr McKane was investigated as someone possessing tainted property or property that could be considered to have been derived from crime, or profits of crime. Rather the evidence is that Mr McKane was investigated and prosecuted for child abuse material offences, warrants were issued for the investigation of those offences, property was seized which contained child abuse material, various items were seized also which were not examined or did not contain child abuse material, property items seized containing child abuse material were exhibits in the proceedings, and at the completion of the proceedings, upon conviction, orders for forfeiture of those exhibits were made in the ordinary way. The evidence supports the conclusion that the warrants were issued under LEPRA in the course of the police investigation of offences for child abuse material.

Disposal

33. The warrants have relevance because the disposal obligations differ under the Proceeds of Crime Act and LEPRA. Under the Proceeds of Crime Act, s 41 provides for the obligation to return items seized pursuant to a warrant executed under Part 3 (that is a search warrant issued in respect of tainted property). However, on the material before me, as explained above, I do not find that the property was seized by police under the Proceeds of Crime Act.

34. Rather as detailed above the evidence indicates that the warrant was issued under LEPRA (being a search warrant issued to search for child abuse material as part of the police investigation of child abuse material offences). If the seizure was affected without warrant then the provisions of LEPRA would also apply (s 21).

35. The provisions of LEPRA relating to disposal of property are thereby relevant to a consideration of Mr McKane’s claim:

Part 17, Division 2 Other property in police custody

216   Application to property

(1)  This Division applies to the following property:

(a)  property that is in the custody of a police officer or member of the NSW Police Force in connection with an offence, whether or not proceedings for the offence have been commenced,

(b)  property that is lawfully in the custody of a police officer or member of the NSW Police Force other than in connection with an offence.

(2)  However, this Division does not apply to the following property:

(a)  a dangerous article or dangerous implement to which Division 1 applies,

(b) livestock to which section 19 of the Stock Diseases Act 1923 applies.

…

218   Return of seized things

(1)  A police officer who, in exercising a function conferred by or under this Act, seizes a thing or has custody of other property to which this Division applies must return the thing to the owner or person who had lawful possession of the thing before it was seized or came into custody if the officer is satisfied that:

(a)  its retention as evidence is not required, and

(b)  it is lawful for the person to have possession of the thing.

(2) This section is subject to any order made under section 219.

219   Disposal of property on application to court

(1)  A court may, on application by any person, make an order that property to which this Division applies:

(a)  be delivered to the person who appears to be lawfully entitled to the property, or

(b)  if that person cannot be ascertained, be dealt with as the court thinks fit.

(2)  In determining an application the court may do any one or more of the following things:

(a)  adjust rights to property as between people who appear to be lawfully entitled to the same property or the same or different parts of property (including adjusting rights by extinguishing, whether in whole or in part, any interests in the property of such persons),

(b)  make a finding or order as to the ownership and delivery of property,

(c)  make a finding or order as to the liability for and payment of expenses incurred in keeping property in police custody,

(d)  order, if the person who is lawfully entitled to the property cannot be ascertained, that the property be forfeited to the Crown,

(e)  make any necessary incidental or ancillary orders.

(3)  Property ordered to be forfeited to the Crown:

(a)  in the case of money, is to be paid to the Treasurer for payment into the Consolidated Fund, or

(b)  in any other case, may be sold by or on behalf of the Commissioner at public auction and the proceeds of sale are to be paid to the Treasurer for payment into the Consolidated Fund.

(4)  If the property is not money or is not fit or suitable for sale, or fails to sell at public auction, it is to be disposed of in accordance with the directions of the Commissioner.

(5)  An order under subsection (2) (a) that provides for the extinguishment, whether in whole or in part, of any interest in property operates to extinguish the interest according to its tenor.

220   Disposal of property connected with an offence after determination of proceedings

(1) Property that is in the custody of a police officer or member of the NSW Police Force in connection with an offence and that is not delivered to the person lawfully entitled to it (by virtue of section 218, an order of a court under this Division or otherwise) within 1 month after determination of proceedings against a person for an offence connected with the property, or within 1 month after the police officer determines that it is no longer required for use as evidence, is to be dealt with in accordance with subsection (2).

(2)  The property:

(a)  in the case of money, is to be paid to the Treasurer for payment into the Consolidated Fund, or

(b)  in any other case, may be sold by or on behalf of the Commissioner at public auction and the proceeds of sale are to be paid to the Treasurer for payment into the Consolidated Fund.

(3)  If the property is not money or is not fit or suitable for sale, or fails to sell at public auction, it is to be disposed of in accordance with the directions of the Commissioner.

…

229   Courts having jurisdiction under this Division

(1)  The court to which an application under this Division may be made is:

(a)  the Local Court, if the estimated value of the property (or the amount of the money) does not exceed $100,000, or

(b)  the District Court, if the estimated value of the property (or the amount of the money) exceeds $100,000 but does not exceed $250,000, or

(c)  the Supreme Court, if the estimated value of the property (or the amount of the money) exceeds $250,000.

(2)  Despite subsection (1), a court that is dealing with an offence may deal with an application relating to property connected with that offence even though the value of the property exceeds or is less than the amount specified by subsection (1) in relation to that court.

36. Section 218 of LEPRA provides that a police officer who seizes a thing of has custody of other property must return the thing or property to the person who previously had lawful possession, if the officer is satisfied that its retention as evidence is not required, or that it is lawful for the person to have possession of the thing. I note that in the present case, while child abuse material was found on a number of items seized, there were other items that were not examined, and therefore it was not established that those items did not also contain child abuse material. This issue would apply in the present matter to the Samsung drives which were not examined. I have considered the case Commissioner of Police v Pecover [2014] NSWSC 1427 on this point. That was a decision by the Supreme Court on appeal from a decision of a Magistrate – the Magistrate was held to have been in error in applying the wrong test in relation to an application by Police for a forfeiture order under s 219 of LEPRA. The case involved an examination of the test in s 219 of the Act and so is not directly applicable to the issues to be decided in the present case, however it provides useful guidance as the case involved a factual issue of lawful entitlement to property, when the property in question is computer equipment upon which child abuse material may be contained. In particular, while the court was dealing with an application for an order under s 219 of LEPRA, the court made some useful observations about the obligation at s 218 of the Act. At [33] – [37] it is stated:

Grounds (e) and (f): the construction of s 219 of LEPRA and the onus of proof

33 The effect of s 218 is that the obligation of a police officer to return property that has been seized arises only if the police officer is satisfied that it is lawful for the person from whom it was seized to have possession of it. If the police officer is not so satisfied, then there is no obligation to return it unless an order for its return is made under s 219. An application under s 219 can be made by "any person". It follows that either the putative owner or the relevant police officer can apply for orders in relation to the property. Where there is no application by the putative owner, the police officer may apply for an order under s 219 so that the status of the property can be determined and either it can be returned, or forfeited to the Crown and thereafter destroyed or sold.

34 Section 219 must be construed by reference to its purpose. As Johnson J said in Carolan v State of New South Wales [2013] NSWSC 1593 at [6]:

It has been said that an application under s 219 LEPRA does not involve ordinary litigation, but has, as one of its objects, the protection of police who have in their possession property, with the provision designed to resolve a situation where the police entertain a doubt as to whether the person applying for the delivery of the property does in fact have lawful title to the property: Commissioner of Police v Bennett (McInerney J, Supreme Court of New South Wales, 17 October (1991) 9 Petty Sessions Review 4311 at 4314; Fantakis v Commissioner of Police [2013] NSWSC 685 at [44].

35 An order may be made to deliver the property to a person who appears to be lawfully entitled to it. If such a person is not ascertained then the Court determines what happens to the property. If there is someone who claims to be lawfully entitled to it, that person (or someone claiming through that person) has the onus of establishing lawful entitlement: Carolan at [7]. To determine who bears the onus by reference to the identity of who happens to be the applicant (the plaintiff in the Local Court), whether a police officer or the person claiming to be entitled to possession, would be irrational. Legislation ought be construed rationally and in accordance with its purpose.

36 The approach taken by the Magistrate was revealed by the exchanges in the course of the hearing, including most obviously: "It's his property and they've got to give it back to him." The Magistrate asked why the police ought to be entitled to retain items 4 and 5 when the correct question was whether Dr Pecover had established to the civil standard that he was lawfully entitled to possession of these items. The Magistrate failed to apply s 219 and failed to address the correct question. The Magistrate has misdirected himself by defining the question of fact other than by reference to the correct law: Azzopardi, at 156 per Glass JA.

37 The circumstance that the Magistrate applied the incorrect test might explain why the uncontroverted evidence of Senior Sergeant McCulloch that it was impossible to ensure that no illegal material was on the discs or to remove all illegal material did not lead to forfeiture orders being made in respect of items 4 and 5. However, it is not necessary to speculate about this matter since it is, for present purposes, sufficient to say that grounds (e) and (f) have been made out.

37. It is also clear from the court’s observations that while the court did not need to decide the question for the purposes of the appeal, the court entertained the distinct possibility that police evidence in the proceedings that it was impossible to ensure no illegal material remained on the discs, may well have led to forfeiture orders being made upon the police application under s 219 (because the owner would not be able to establish lawful entitlement to the property).

Discussion of evidence and findings

38. Mr McKane does not dispute that he is a person to whom the Felons Act applies, that is, he does not dispute that has been convicted of a serious indictable offence. He must therefore be granted leave by this court before he can institute civil proceedings. The question of leave is to be determined by the Local Court because the proceedings sought to be instituted are proceedings in the Small Claims Division of the Local Court.

39. In any civil proceeding, as plaintiff, Mr McKane would have the onus of proof on the balance of probabilities, in respect of the matters in the Statement of Claim. He would be required to establish a basis for legal liability on the part of the named defendants, and to prove his claim on the balance of probabilities. In relation to his claim for compensation he would also need to prove the quantum of the claim on the balance of probabilities.

40. The property subject of the Statement of Claim were some of the items seized by police in relation to the investigation and prosecution of serious offences; all items seized were similar in nature, some upon examination were found to contain child abuse material and became exhibits in the proceedings, others were "nil find" and others were "not examined". Relevantly, all the items of similar nature, at the time of seizure, were potentially exhibits pending further forensic examination.

41. In the present case there was no application for an order for return/disposal of the property under s 219 of LEPRA, nor was there any return under s 218. Section 218 needs to be read in the context of the Division as a whole, including the provisions of s 219, s 220, s 221 and s 229. Section 219 provides for an application to the court in respect of property in police custody, and s 229 provides for orders to be made by the court dealing with the offence. Subsection 229(2) provides that a court that is dealing with an offence may deal with an application relating to property connected with that offence. This indicates that an application by Mr McKane for return of the property could have been made to the District Court at the time that it was dealing with the offence.

38. Section 220 provides for the position where no return of property is effected by police pursuant to s 218, or following a court order under s 219. Section 220 states that the position then is, alternatively, that within one month after the police officer determines the property is not required as an exhibit OR within one month after determination of the proceedings for the offence, the property may be disposed of by police.

39. Relevantly s 220 refers to property connected with an offence and Mr McKane indicates his belief that the property was not connected given that the property items were not exhibits in the proceedings or subject of forfeiture order. I consider that where computers/discs/drives and cameras are seized from a person who is investigated for and charged with offences of possession/use of child abuse material, and some of the property which is seized contains child abuse material, then the similar property that was seized as part of the police investigation is also property in connection with the offence. Indeed, in relation to the Samsung drives which were not tested, it is not established that those items did not contain child abuse material. In relation to the items which were tested and the result was “nil find” I consider, on the same basis, that those items were property in connection with an offence.

40. In so finding I have carefully considered the use of similar words in the definition of tainted property in the Proceeds of Crime Act. However LEPRA refers to property in police custody in connection with an offence; and the Proceeds of Crime Act refers to tainted property USED in an offence or USED in connection with an offence. LEPRA definitions do not refer to the direct use of the property in connection with the offence, and only make reference to property being in police custody in connection with the offence. Therefore the narrower definition in respect of tainted property, does not apply to property under LEPRA.

41. For reasons given above I consider the subject property was “in connection with an offence”. I note this finding would be consistent with the other provisions of LEPRA which provide for property to be seized on reasonable grounds that the property may provide evidence of commission of an offence/ or that the property was used or intended to be used in the commission of an offence. The subject items were clearly seized on reasonable grounds that the items may provide evidence of the commission of an offence (and indeed some of the items so seized did provide such evidence) and also due to the items connection with the offences being investigated. All the items seized were therefore in police custody in connection with an offence.

42. It is not disputed that the property was, prior to its disposal, in the lawful custody of the police. There is no challenge made as to the lawfulness of the seizure of the items in the current proceedings. If they were seized during execution of a search warrant it is not contended that there was any issue with lawful seizure.

43. As I am satisfied, as detailed above, that the property was connected with an offence then s 220 of LEPRA applied to provide for its disposal after determination of the proceedings.

44. On the available evidence Mr McKane has not made any application for return of property under LEPRA. Forfeiture orders were made under s 18 of the Proceeds of Crime Act in relation to part of the property seized as set out above. LEPRA provides for applications to the court, and for the court to make orders for return of property in police custody. Such applications can also be made to the Court dealing with the offence (s 229 set out above). LEPRA also authorises that within a month of the completion of criminal proceedings the property held by police may be disposed of.

45. Mr McKane’s material indicates that police have advised that the property has been disposed of. Given the provisions of LEPRA set out above, such disposition would be lawful. In practical terms no order can be made for return of the property as it no longer exists, having been disposed of.

46. Mr McKane relies on alternative grounds if the property cannot be returned, namely that he be compensated for the value of the property. For Mr McKane to succeed he would need to prove on the balance of probabilities, in the proposed civil proceedings in the Statement Of Claim, legal liability of the named defendants in relation to the property disposed of by the police. Given the provisions of LEPRA set out above, and my conclusion that the property was lawfully disposed of pursuant to those provisions as previously detailed, I consider that he has not demonstrated such liability on the balance of probabilities. Further there would be an issue with his lawful right to possession of the various items that have not been examined and found not to contain child abuse material, as set out above. He would also need to prove the value of the property on the balance of probabilities an issue that might present some difficulties. I therefore find, for reasons detailed, that he has not established a prima facie case in relation to the proceedings.

47. Accordingly given the lack of a Prima facie case I find that Mr McKane has not met the test in the Felons Act for the granting of leave to institute civil proceedings, and pursuant to s 4 of the Act, leave is refused. Given this finding, I have not gone on to determine whether the proceedings are an abuse of process.

Magistrate C Huntsman

Goulburn Local Court

9 November 2016

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Decision last updated: 15 December 2016