R v F - [2008] SADC 144

DISTRICT COURT OF SOUTH AUSTRALIA
(Criminal)
R v F, V
[2008] SADC 144
Reasons of His Honour Judge Clayton
4 November 2008
CRIMINAL LAW - JURISDICTION, PRACTICE AND PROCEDURE
CRIMINAL LAW - FORFEITURE
The defendant was convicted of taking part in the sale of methylamphetamine. The transaction involved the sale of 1 ounce of methylamphetamine for $5,000. Police officers seized two cash amounts of $10,000 and $11,755 found in the defendant’s home. A further sum of $261,720.23 was seized from bank accounts of the defendant.
Claim by DPP pursuant to s 47 of the Criminal Assets Confiscation Act 2005 for forfeiture of the sum of $5,000 dismissed. The sums of $10,000 and $11,755 were not proved to be partly derived from the $5,000 received by the defendant from the sale of the methylamphetamine.
Application by the defendant pursuant to Rule 9 of the District Court (Criminal & Misc) Rules is not the appropriate procedure for recovery by the defendant of moneys seized by the police.
Criminal Assets Confiscation Act 1996 s 15; Criminal Assets Confiscation Act 2005 s 2, s 7, s 47, s 47(1), s 47(6), s 221(1), referred to.
District Court (Crim & Misc) Rules 1992 Rule 9, 6 DCR 310; DPP v Burgujobski (1993) 3 NSWLR 53, considered.

R v F, V
[2008] SADC 144

Mr F is to be sentenced for the offences of taking part in the sale of methylamphetamine and possessing methylamphetamine. The sentencing process has been on foot since 26 March 2007 when Mr F was found guilty by a jury of the first of those offences. He pleaded guilty to the second offence on 26 November 2007.
The offence of taking part in the sale of methylamphetamine was a transaction on 21 January 2004 pursuant to which Mr F sold 1 ounce of methylamphetamine to Ms M for the sum of $5,000 cash. The prosecutor has applied for forfeiture of that sum.
The sentencing process has been protracted by a number of matters including the application by the Director of Public Prosecutions for the forfeiture of moneys and an application by Mr F for the return of moneys seized by the police.
Magistrates Court Proceedings for Forfeiture
Civil proceedings for the forfeiture of moneys were initially commenced by the Director on 16 February 2004 in action 1488 of 2004 in the Magistrates Court.
The summons claimed a Restraining Order pursuant to s 15 of the Criminal Assets Confiscation Act 1996 prohibiting dealing with first the sum of $10,570.39 which had been seized from one National Australia Bank account in the name of Mr F, secondly the sum of $251,149.84 seized from another National Australia bank account held by Mr F as a trust account and thirdly the sum of $22,603.10 cash seized from Mr F's residential address. The sum of $22,603.10 included the cash which is the subject of the present application.
Forfeiture Proceedings in Civil Jurisdiction of District Court
By a summons issued in the civil jurisdiction of this court on 21 June 2007 (Action 1024 of 2007) the Director applied for the Magistrates Court proceedings to be transferred to the District Court. As well as procedural orders the Director sought an order that the defendant forfeit the sum of $284,323.33 plus interest pursuant to s 47 of the Criminal Assets Confiscation Act 2005. The Magistrates Court proceedings were transferred to this court by an order made on 6 September 2007. Since then a number of preliminary hearings have been heard before a master in the civil jurisdiction.
I observe that the summons in this court for forfeiture pursuant to the 2005 Act sought different relief from the claim in the Magistrates Court which sought a restraining order pursuant to the 1996 Act, although the money to which the application related was the same.
An application for forfeiture can be heard in the civil jurisdiction of this court; 6 DCR 310 of the District Court Rules sets out the procedure to be adopted. However s 221(1) of the Criminal Assets Confiscation Act 2005 provides:
221(1) If, during the course of criminal proceedings before a court in respect of a serious offence, the DIRECTOR applies for an order under this Act relating to the offence, the court must deal with the application during the course of the criminal proceedings unless satisfied by the defendant that to do so would not be appropriate in the circumstances.
Defendant’s “Rule 9” Application to Transfer Forfeiture Claim to Criminal Jurisdiction
By a written application dated 18 December 2007, Mr F applied during the course of the sentencing proceedings in the criminal jurisdiction, for orders that the civil proceedings between the Director and himself in District Court action 1024 of 2007 be heard and determined by myself and that the proceedings be heard expeditiously. The application was filed in matter DCCRM 509 of 2003 and was said to be pursuant to Rule 9 of the District Court Criminal Rules. The grounds relied upon in that application were:
1.It is in the interests of justice.
2.The said proceedings are the confiscation proceedings the subject of dispute as to the relevance of the confiscation proceedings to sentencing by His Honour Judge Clayton.
3.The applicant has the trial pending in the District Court in May 2008. If the defendant is entitled to his moneys the subject of the confiscation proceedings then he wishes to utilise those moneys for the purposes of his trial.
4.The confiscation proceedings have been delayed by the prosecution.
5.The confiscation proceedings should not be further delayed.
6.The confiscation proceedings are not related to the alleged offences the subject of the District Court trial in 2008.
7.Such proceedings can be heard in the manner applied for herein on application by the Director pursuant to s 2 to one of the Criminal Assets Confiscation Act 2005.
Garnishee by the Deputy Commissioner of Taxation
Both the DPP application in the civil jurisdiction and Mr F's application in the criminal proceedings became largely irrelevant on 24 January 2008 when an amount of $261,720.23 was transferred from the Crown Solicitor's trust account to the Deputy Commissioner of Taxation in accordance with a Garnishee Notice. That amount of $261,720.23 was made up of the two separate sums of $10,570.39 and $251,149.84 which had been seized from the accounts which Mr F had with the National Australia Bank.
The Defendant’s “Rule 9” Application for Recovery of Money Seized by the Police
By a further application (which was stated to be pursuant to Rule 9) filed in DCCRM 509 of 2003 in the Criminal Registry of this court on 11 March 2008, Mr F sought orders including:
1.      That SA Police pay to the defendant the sum of $11,755.00 seized by police from the defendant and comprised in item 4 of SA Police property receipt 04/B 66565.
2.      That SA Police pay to the defendant the sum of $10,000 seized by police from the defendant and comprised in item 5 of SA Police property receipt 04/B66565.
3.      That SA Police pay to the defendant the sum of $448.10 seized by police from the defendant and comprised in item 6 of SA Police 04/B66565.
4.      That SA Police pay to the defendant the sum of $400 seized by SA Police from the defendant and comprised in item 6 of SA Police property receipt 04/B 66565.
5.      That SA Police pay to the defendant the sum of $100 seized by SA Police from the defendant and comprised in item 72 of SA Police property receipt 04/B 65565.
6.      That SA Police pay the defendant the sum of about $21,755.00 seized by SA Police from the defendant.
7.      That SA Police pay the defendant the sum of $284,323.33 seized by SA Police from the defendant.
The amounts itemised in paragraphs 1 to 5 inclusive of that application total $22,703.10. That amount and the $261,720.03 paid to the Deputy Commissioner of Taxation total $284,423.13. The discrepancy between the sums of $284,323.33 referred to in paragraph 7 and $284,423.13 can presumably be explained by the fact that item 5 in Mr F's application, the sum of $100, had been overlooked.
The grounds stated in the application of Mr F filed on 11 March 2008 were that the moneys had been seized from the defendant by SA Police, the moneys were the property of Mr F and such property should be delivered to him forthwith.
What is important for present purposes is that the sum of $284,323.33 which was the subject of the claim in the Magistrates Court and was the subject of the claim commenced in the civil jurisdiction of this court on 21 June 2007 included the sums of $10,000 and $11,755 which had been seized by police from the bedrooms in Mr F's home. It is those amounts which are alleged by the prosecution to include the sum of $5,000 which is the subject of the present application.
Rule 9 of the District Court (Crim and Misc) Rules 1992
I digress to refer to Rule 9 of the District Court (Crim and Misc) Rules 1992. The rule, which is headed "Preliminary Applications", provides for applications to be made by issuing and serving an application in Form No 1 where accused persons seek separate trials, seek to raise questions relating to the admissibility of evidence or other questions of law affecting the conduct of a trial prior to the opening of the case for the prosecution, desire to make an application which if granted would have the effect of postponing or delaying a trial or a judge directs that a written application should be made.
The Claim of the DPP
The Directors initial application for forfeiture in action 1024 of 2007 related to the two amounts seized from the accounts of Mr F with National Australia Bank. On 25 January 2008, by notice in writing, the Director discontinued the confiscation proceedings in the civil jurisdiction except as to the sum of $22,603.10. That is the Director abandoned his claim for forfeiture of the two amounts which had been seized from the two accounts with National Australia Bank and transferred to the Deputy Commissioner of Taxation pursuant to the Garnishee Notice. The remaining figure of $22,603.10 is made up of the sum of $10,000 cash which was found by police officers under a mattress in one bedroom of Mr F's house, the sum of $11,755 which was found by police officers in draws in another bedroom of Mr F's house together with two smaller amounts of $448.10 and $400 which are referred to in paragraphs 3 and 4 of Mr F's application filed 11 March 2008.
The Director limited the forfeiture application during the sentencing proceedings to the sum of $5,000, that being the amount paid by Ms M for the ounce of methylamphetamine which she purchased. The application of the Director with respect to the sum of $5,000 is one I must now consider in the course of these criminal proceedings by reason of subs 221(1) of the Criminal Assets Confiscation Act 2005.
So far as the sum of $17,603.10 (the balance of the sum of $22,603.10 after deducting the sum of $5,000) is concerned there is an application by the Director before a master in the civil jurisdiction of the court. That application should be dealt with on its merits in the ordinary course in the civil jurisdiction. Any order sought with respect to the $17,603.10 does not relate to the offences for which I must sentence Mr F and it would not be appropriate for me to deal with that application in the course of the criminal proceedings pursuant to subs 221(1).
Decision as to Defendant’s Rule 9 Applications
I have made no order on any of the applications to date. I do not regard the civil proceedings as being before me as part of the sentencing process consequential upon the guilty verdict of the jury. In my opinion the two so-called "Rule 9" applications of Mr F do not properly fall within the circumstances specified in Rule 9. They are not matters preliminary to a trial. The subject matter of the applications does not fall within the criminal jurisdiction of the court. I decline to make any order on the two "Rule 9" applications.
In so far as Mr F seeks a return of either $17,603.10 or $22,603.10 that claim should be pursued elsewhere. The order which Mr F seeks is not the proper subject matter of a Rule 9 application. It is not the function of a judge who has presided over a criminal trial and is required to sentence a defendant to resolve disputes over property seized by the police.
The DPP Claim For Forfeiture of $5,000
The claim of the Director for forfeiture of the sum of $5,000 depends upon the legislation. The prosecutor relies upon ss 47 and 221 of the Criminal Assets Confiscation Act 2005. Subsection 47(1) provides that the court must, on application by the Director, make a forfeiture order that specified property is forfeited to the Crown if a person has been convicted of one or more serious offences and the court is satisfied that the property to be specified in the order is proceeds of one or more of those offences.
The question which I must determine is whether the property (either the $10,000 or the $11,755) which was the subject of the Directors application for forfeiture was partly derived from the sum of $5,000 which was the proceeds of the offence.
Subsection 47(6) requires an application for a forfeiture order to be made before the end of the period of six months after the "conviction day". In this case the conviction day is 26 March 2007 when I accepted the jury's verdict of guilty. Counsel for Mr F has argued that the application for forfeiture of the sum of $5,000 does not comply with the requirement of subs 47(6) of the Criminal Assets Confiscation Act 2005 and is therefore out of time.
The prosecutor referred to the written application of the Director filed in the District Court on 29 June 2007. In my opinion that written application in the civil jurisdiction satisfies the requirements of subs 47(6). It was made within the six-month time limit. While the Director's application was not on its face an application for the sum of $5,000 being the proceeds of the sale of the methylamphetamine to Ms M, the application did, at the time it was made, extend to moneys alleged to include the $5,000, although the sum of $5,000 was not specifically identified.
Subsection 47(1) requires that the court be satisfied that the $5,000 which the Director asks to be specified in the forfeiture order is the proceeds of the offence. The police did not locate a discrete sum of $5,000 when they searched Mr F's home. As I have mentioned they found an amount of $10,000 in one room and an amount of $11,755 in another room.
There is no evidence as to what Mr F did with the $5,000 which he received from Ms M. If, shortly after he made the sale to Ms M, a discrete sum of $5,000 had been found in the possession of Mr F, I might have been able to draw the inference that sum was the proceeds of the offence. However that was not the case.
Section 7 of the Criminal Assets Confiscation Act 2005 sets out rules for determining what property is the proceeds of an offence. For the purposes of the Act property is proceeds of an offence if it is wholly or partly derived or realised, whether directly or indirectly, from the commission of the offence.
Does the $5,000 which the Director seeks to have forfeited form part of the $10,000 or part of the $11,755? I must be satisfied that those amounts include the sum of $5,000. There is no direct evidence. In my opinion there is no evidence upon which I can draw an inference that one or other of the $10,000 or $11,755 was partly derived from the $5,000.
I accept the prosecutor's submission that the $5,000 received from Ms M is "proceeds" of the criminal offence Mr F was convicted of. I also accept that the "proceeds" of the offence does not have to be the amount of cash received "in specie", but rather money to the value of $5,000. I accept the prosecutor's submission that in order to make the forfeiture order the court does not have to be satisfied that the exact cash the defendant received from Ms M forms part of the $21,755 held by police. However as I have said the Crown must prove that the $5,000 received from Ms M was included in the $21,755 seized by the police or to put it the other way the $21,755 was partly derived from the $5,000.
I reject the submission of the prosecutor in paragraph 18 of his written outline that it would be sufficient that the defendant received $5,000 as proceeds of the offence and that the $21,755 seized by the police was cash belonging to the defendant. In my opinion more is required. Subsection 47(1) requires the court to be satisfied "that the property to be specified in the order is proceeds of one or more of (the) offences." The Crown must prove that the sum of $5,000 received from Ms M was included in the two amounts.
It is to be noted that the Crown did not seek a pecuniary penalty order under s 95 but seeks forfeiture of specified property pursuant to s 47 of the Criminal Assets Confiscation Act 2005.
In my opinion it is not sufficient that after he had received $5,000 from Ms M, Mr F had an amount in excess of $5,000 in his possession. The fact that Mr F had the two amounts of $10,000 and $11,755 does not establish either directly or by inference that the sum of 5,000 which was the proceeds of the offence formed part of those moneys. The evidence just does not establish what happened to the sum of $5,000. There is no evidence to suggest that Mr F did not have the whole sum of $21,755 prior to the offence being committed.
I cannot be satisfied on the balance of probabilities that either the sum of $10,000 or the sum of $11,755 was partly derived from the $5,000 which Mr F received from Ms M.
Proceeds of crime which are mixed with other moneys may be traced. DPP v Burgujobski (1993) 3 NSWLR 53: Lunn, Criminal Law South Australia 45,000F.5. But for that to happen it is necessary to follow the course of the money into a fund.
There is no evidence which traces the $5,000 into either the fund of $10,000 or the fund of $11,755.
Accordingly application of the Crown for forfeiture of the sum of $5,000 is dismissed.
I make no order on the applications by Mr F pursuant to Rule 9.