R v Stark
[2004] VSC 349
•17 September 2004
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
CRIMINAL DIVISION
No. 6544 of 2003
| THE QUEEN | Plaintiff |
| V | |
| JOHN HYMIE STARK & OTHERS | Defendants |
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JUDGE: | SMITH J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 17 and 18 August 2004 | |
DATE OF JUDGMENT: | 17 September 2004 | |
CASE MAY BE CITED AS: | Queen v Stark & Ors | |
MEDIUM NEUTRAL CITATION: | [2004] VSC 349 | |
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Crime: confiscation of property – definition of automatic forfeiture offence – conspiracy to commit multiple offences; forfeiture orders – relevant considerations – exercise of statutory discretion to forfeit “tainted” property – whether obligatory to determine whether property “tainted” property before exercising discretion against forfeiture.
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APPEARANCES: | Counsel | Solicitors |
| For the Crown | Ms P Tate S.C. | Kay Robertson, Solicitor for Public Prosecutions |
| For the First Defendant | Mr I Hayden | R J Lewis Solicitor |
| For the Second and Third Defendants | Dr J Bleechmore | R J Lewis Solicitor |
| N/A for Fourth Defendant |
HIS HONOUR:
Background to application
On 19 December 2002, the defendant pleaded guilty to a presentment containing a number of counts relating principally to a business enterprise in which the first defendant engaged the services of at least four “shop stealers” who stole goods to order. Those goods were then delivered to the defendants to be sold in three retail stores operated by them called “Shopaholic”. It is agreed between the Crown and the defendants that, between 1 July 1997 and 16 July 1999, stolen goods with a retail value of $300,000 were supplied to the defendants for the purposes of resale. Approximately 10% to 12% of the stock turnover of the Shopaholic stores was obtained in this way.
The count which is relevant to the present proceedings is count 2 which alleged a conspiracy in the following terms:
“ … that John Hymie Stark, Marianne Martha Stark, Damien Mark Stark and Peter James Casey at Melbourne in the said State between the first day of July 1997 and the sixteenth day of July 1999 agreed to pursue a course of conduct which would involve the commission of an offence by them namely obtaining property (cash) by deception, namely by falsely representing that the proprietors of Shopaholic stores had good title to all merchandise which they offered for sale at Shopaholic stores and that they were able to pass good title to all such merchandise.”
Subsequent to the pleas of guilty, applications were made by the Director of Public Prosecutions (DPP) under the Confiscation Act 1997. In particular the Director of Public Prosecutions applied for:
(a)a pecuniary penalty order (PPO) under s 58(1) of the Act on the basis that count 2 was an “automatic forfeiture offence” (the AFO application) and
(b)in the alternative, for a PPO under s 58(2) of the Act (the non AFO application).
In addition the Director applied for a forfeiture order under s 33(1) of the Act with respect to two properties:
• a house at 47 Fourth Street Black Rock
•a warehouse at 1C Winston Court Moorabbin (the properties)
on the basis that the properties were “tainted property” (the forfeiture application).
Submissions were made by prosecuting counsel and the defendants on 14 April 2003. On 7 May 2003, his Honour ruled that count 2 was not an “automatic forfeiture offence” as defined by schedule 2 Cl 2(c) of the Confiscation Act 1997. He also dismissed the forfeiture application in the exercise of his discretion.
The application
By originating motion filed 3 July 2003, the plaintiff seeks the following relief:
(a)an order in the nature of certiorari or mandamus bringing up and setting aside the ruling that count 2 was not an automatic forfeiture offence;
(b)an order declaring that his Honour erred in finding that count 2 was not an automatic forfeiture offence;
(c)an order in the nature of certiorari or mandamus bringing up and setting aside the ruling dismissing the forfeiture application;
(d)an order directing that the County Court determine whether the property in question is tainted property.
I note that counsel for the plaintiff, in anticipation, addressed the question whether the proceedings were issued in time. The originating motion was filed on 3 July 2003. There was a potential argument that, his Honour having expressed the view that count 2 was not an automatic forfeiture offence on 14 April, the originating motion was not issued within the prescribed 60 days. His Honour, however, did not hand down his reasons or make orders until 7 May 2003. In my view that was the date when grounds for the grant of relief first arose and, accordingly, the originating motion was filed within the prescribed time.
Grounds
In the originating motion the following grounds are relied upon:
“1.The Fourth Defendant erred in law by holding that a Count of Conspiracy to Obtain Property by Deception relating to property with a total value of $300,000 was not an “automatic forfeiture offence” pursuant to Schedule 2 Clause 2© of the Confiscation Act 1997 because the commission of the offence comprised a number of separate deceptions each of which related to property valued at less than $100,000.
2. The Fourth Defendant erred in law:
(a)by holding that it was unnecessary for the Court to determine pursuant to s 33(1) of the Confiscation Act 1997 whether the property sought to be forfeited was “tainted property” within the meaning of sub-paragraph (a) of the definition of the term “tainted property” contained in s 3 of the Confiscation Act 1997; and
(b)by failing to take into account a relevant consideration, namely the use that was made, or had been intended to be made, in or in connection with, the commission of the offence, of the property sought to be forfeited.
Automatic forfeiture offences – the legislation
The following are the relevant provisions of the Confiscation Act 1997 relating to automatic forfeiture offences (AFO)and pecuniary penalty orders (PPO).
“PART 8 – PECUNIARY PENALTY ORDERS
Division 1 – Automatic forfeiture offence or forfeiture offence
58. Application for pecuniary penalty order
(1)If a defendant is convicted of an automatic forfeiture offence, the DPP may apply to the Supreme Court or the court before which the defendant was convicted of the offence for a pecuniary penalty order.
(2)If a defendant is convicted of a forfeiture offence other than an automatic forfeiture offence-
(a)the DPP may apply to a court; or
(b)an appropriate officer may apply to the Magistrates' Court or the Children's Court-
for a pecuniary penalty order.
(3)Except with the leave of the Supreme Court or the court before which the defendant was convicted, an application may only be made under sub-section (1) or (2) before the end of the relevant period (if any) in relation to the conviction.
(4)A court must not grant leave under sub-section (3) unless it is satisfied that-
(a)the benefit to which the application relates was derived, realised or identified only after the end of the relevant period; or
(b)necessary evidence became available only after the end of the relevant period; or
(c)it is otherwise in the interests of justice to do so.
(5)The applicant must give written notice of the application to the defendant.
(6)The court may waive the requirement under sub-section (5) to give notice if the court is satisfied that it is fair to do so.
(7)The court may, at any time before the final determination of the application and whether or not the period for making the application has expired, amend the application as it thinks fit, either at the request of the applicant or with the approval of the applicant.
(8)If an application under sub-section (1) or (2) has been finally determined, no further application may be made under that sub-section in relation to the same conviction, except with the leave of the Supreme Court or the court which dealt with the earlier application.
(9)A court must not grant leave under sub-section (8) unless it is satisfied that-
(a)the benefit to which the new application relates was derived, realised or identified only after the earlier application was determined; or
(b)necessary evidence became available only after the earlier application was determined; or
(c)it is otherwise in the interests of justice to do so.
59. Determination of application for pecuniary penalty order
(1)On an application under section 58(1) or, (2) the court may-
(a)assess the value of the benefits derived by the defendant in relation to the offence; and (b) order the defendant to pay to the State a pecuniary penalty equal to the value as so assessed less, if the court thinks it desirable to take it into account, any amount paid or payable by way of restitution or compensation in relation to the same conviction- and must do so on an application under section 58(1) if section 68 applies in relation to the automatic forfeiture offence.
(2)The defendant is entitled to appear and to give evidence at the hearing of an application under section 58(1) or (2) but the absence of the defendant does not prevent the court from making a pecuniary penalty order.
(3)If an application is made under section 58(2) to the court before which the defendant was convicted of the offence before that court has passed sentence for the offence, that court may make a pecuniary penalty order at the time of passing sentence and for this purpose the court may, if it thinks it necessary to do so, defer the passing of sentence until it has determined the application for the order.
(4)On an application under section 58(1) or (2) a court may, subject to any rules of court, take into account in determining the application any material that it thinks fit including-
(a)subject to section 99(2), a statement or disclosure made during an examination ordered under Part 12; and
(b)evidence given in any proceeding relating to the offence in reliance on the conviction of which the application is made- and, for this purpose, the whole or any part of the transcript of those proceedings is admissible in evidence as if it were a record of evidence given on the hearing of the application.
(5)A court must give priority to an application made under section 84 (restitution order) or Division 2 of Part 4 (compensation order) of the Sentencing Act 1991 in relation to the same conviction and, accordingly, may defer the determination of an application under section 58(1) or (2) until the application under the Sentencing Act 1991 has been determined.
(6)A court may defer the determination of an application under section 58(1) until the final determination of any application for an exclusion order under section 22(a).
The significance of the distinction between the two types of forfeiture offences is that in the case of automatic forfeiture orders, the DPP can apply to have s 68 of the Act apply with the result that presumptions would apply adverse to the defendant. These are discussed further below. Section 68 provides:
“68. Assessment of benefits in relation to civil forfeiture offences and automatic forfeiture offences
(1)The DPP or a prescribed person or a person belonging to a prescribed class of persons may apply to the Supreme Court for the application of this section in relation to a civil forfeiture offence.
(2)The DPP may apply to the Supreme Court or the County Court for the application of this section in relation to an automatic forfeiture offence.
(3)In assessing the value of the benefits derived by a defendant in relation to an offence, the court must, on application under sub-section (1) or (2), subject to sub-section (4), treat as benefits-
(a)all property in which the defendant had an interest at the time the first application is made under this Act in respect of the offence; and
(b)all expenditure of the defendant within the period of 6 years immediately before the time the first application is made under this Act in respect of the offence- regardless of whether any benefits were actually derived and whether they were derived in relation to an offence, but must not include any property which has been forfeited to the Minister under this Act.
(4)On an application under sub-section (1) or (2), the Supreme Court or the County Court may refuse to treat as benefits specified property or expenditure if the Court is satisfied by the defendant that-
(a)in the case of property-
(i) the property-
(A)was lawfully acquired by the defendant; and
(B)was not used in, or in connection with, any unlawful activity and was not derived or realised, directly or indirectly, by any person from any unlawful activity; or
(ii)an interstate forfeiture order already applies to the property; or
(iii)a forfeiture order, an interstate forfeiture order, a pecuniary penalty order or an interstate pecuniary penalty order under the Crimes (Confiscation of Profits) Act 1986 already applies to the property; or
(b)in the case of expenditure-
(i)the funds which were expended were lawfully acquired and were not derived or realised, directly or indirectly, by any person from any unlawful activity; or
(ii)the expenditure was made to satisfy a pecuniary penalty order or an interstate pecuniary penalty order under this Act or the Crimes (Confiscation of Profits) Act 1986.”
Automatic forfeiture offences are defined in Schedule 2 of the Act.
“SCHEDULE 2
AUTOMATIC FORFEITURE OFFENCES
1. . . .
2.An offence against any of the following provisions of the Crime Act 1958:
(a)section 81(1) (obtaining property by deception) where the value of the property in respect of which the offence is committed is $100 000 or more;
(b)section 82(1) (obtaining financial advantage by deception) where the value of the financial advantage obtained is $100 000 or more;
(c)section 321 (1) where the conspiracy is to commit an offence referred to in paragraph (a) or (b)
3.. . .
4.. . .
5.. . .
6.A continuing criminal enterprise offence within the meaning of Part 2B of the Sentencing Act 1991 for which the offender is liable to be sentenced under that Part as a continuing criminal enterprise offender.
7.The common law offence of conspiracy to defraud where the property, financial advantage or economic loss in respect of which the offence is committed is $100 000 or more.”
The automatic forfeiture issue - His Honour’s reasons
After referring to the relevant sections and the concession of counsel for the Director that the provisions relating to forfeiture were draconian, his Honour then recorded that counsel had submitted that:
“Clause 2(c) applies where the property or financial advantage obtained in furtherance of the conspiracy has a value of $100,000 or more. He eschewed, correctly in my view, the suggestion that para (c) applies to every conspiracy to commit an offence against s 82(1) regardless of the value of the goods or financial advantage obtained or to be obtained.”
It should be noted that in the course of the submissions, prosecuting counsel stated his position as follows:
“And what I am putting to your Honour, once it is pleaded this way and once it is pleaded to, it is clearly one offence, and it is one offence that is a conspiracy which involves an ongoing business of dishonesty in obtaining property by deception, mainly, money, and it is over $100,000. It is too artificial, in my submission, to say, well, for this purpose, it really doesn’t mean that they have pleaded to one count, what it means is that they have pleaded to numerous counts. . . . But, in essence, that is what it is, one count alleging a conspiracy to obtain property by deception over a period of time, and that clearly was an offence of conspiracy to obtain over $100,000 in money, it was an ongoing business of which the three had varying roles.”
His Honour referred to the submissions put forward by counsel for the defendants in the following terms:
“[Counsel] drew attention to the fact that count 2 is a rolled up count alleging a large number of offences. Such counts are commonly used, with the concurrence of accused persons, for the purpose of plea hearings. [Counsel] submitted that cl 2(a) does not permit offences against s 82(1) to be aggregated for the purpose of determining whether the financial advantage obtained is $100,000 or more. Therefore, if a person is presented on 25 counts each of obtaining $4,000 by deception, those offences cannot be aggregated to create an automatic forfeiture offence. Counsel drew attention to s 321(1) of the Crimes Act which provides: “Subject to this Act if a person agrees with any other person or persons that a course of conduct shall be pursued which will involve the commission of an offence by one or more the parties to the agreement, he is guilty of indictable offence of conspiracy to commit that offence.”
His Honour then noted:
“Counsel submitted that the offence created by s 321(1) is conspiracy to commit an offence, not conspiracy to commit a series of offences. If the prisoners had been charged with the completed offences, no single offence would have involved a financial advantage of $100,000 or anything like it. Just as a number of substantive offences cannot be aggregated to produce an automatic forfeiture offence, a count alleging a conspiracy to commit a number of offences cannot be used in that way either.”
His Honour then stated:
“I uphold this submission. Clause 2(c) refers to “a conspiracy to commit an offence”. Clause 2 could have provided for aggregation where, for example, the offences constituted a series of transactions or arose out of a single course of conduct, likewise cl 2(c).”
His Honour then noted his view that count 2 was not “necessarily duplicitous” and referred to a line of authority that a number of offences may be combined in a single count to constitute a single course of conduct (citing by way of example the case of Moussad)[1]. He commented, however,
“The fact that they can be combined in a single count does not mean that they cannot also be treated or regarded as separate offences.”
[1](1999) 152 FLR 373.
He also invoked the principle that the pecuniary penalties, particularly those involving automatic forfeiture, being penal in nature, the legislation creating them must be strictly construed citing Murphy v Farmer[2], DPP v Logan Park Investments Pty Ltd[3] and R v Parks[4].
The consequence of his Honour’s ruling was that the Director was not able to proceed under s 58(1) of the Act. He could still proceed, however, under s 58(2) of the Act and his Honour then went on to consider that alternative application. The Director achieved some success under this alternative claim in that his Honour ordered a pecuniary penalty of $31,540 in respect of count 2, $33,948 in respect of count 3 and $3,015 in respect of count 5. His Honour then turned to the forfeiture application relating to the above two properties. That aspect is discussed below.
[2](1988) 165 CLR 19.
[3](1995) 37 NSWLR 118.
[4](1996) 88A Crim R 166.
The alleged error in ruling that count 2 was not an automatic forfeiture offence
The plaintiff submits that his Honour erred in his application of para 2(c) of Schedule 2 of the Act. The legal issues raised concern the proper construction of that provision. I am satisfied that the alleged error, if substantiated, constituted a jurisdictional error.[5] The ruling determined the procedure to be followed by the court and the powers the Court could exercise. If the correct ruling was that the offence was an automatic forfeiture offence, the application for a pecuniary penalty order would have been made under s 58(1) and not s 58(2). The consequence of that would have been that the Director of Public Prosecutions could have applied to have s 68 of the Act operate. A result of such an application would have been that a presumption would have been applied by the Court that all the property of the defendants and all expenditure over the preceding six years were a benefit derived by the defendants in relation to the offence. The onus would have been placed upon the defendant to show that such property should not be included in the assessment of the benefits for the reasons prescribed in s 68(4). The ground of particular significance was that the property was lawfully acquired by the defendant and not used in or in connection with any unlawful activity and was not derived or realised directly or indirectly by any person from any unlawful activity. A similar provision applied in the case of expenditure. A further difference was that where the offence was an automatic forfeiture offence and s 68 was made to apply, the Court was required to make a PPO equal to its assessment of the value of the benefits derived in relation to the offence. If s 58(2) applied the Court had a discretion whether to grant a PPO.[6]
[5]Craig v South Australia (1994-5) 184 CLR 163; 177-8.
[6]S 59 of the Act.
In determining whether an error of law was made, it is necessary to consider first the categorisation of the offence alleged in count 2. This is a question of fact and degree.[7] As the plaintiff has submitted, there were three constructions available:
•a single conspiracy to engage in a single continuous offence of engaging in obtaining property by deception;
•a single conspiracy to engage in numerous offences of engaging in obtaining property by deception;
•a “rolled up” count alleging several offences within the one count.
Submissions were made to his Honour about the categorisation of the count. On occasions, submissions made to, and comments from, his Honour used the term “rolled up count” [8] suggesting the third category. Submissions and comments also related to the second. One thing is clear, however, and that is that the first categorisation mentioned above was not discussed. A single continuous offence is one where acts of a similar nature are committed which are connected in time, place and purpose such that they can be regarded as forming part of the same criminal enterprise.[9] A fair reading of his Honour’s decision points to him concluding that the count was a single conspiracy to engage in numerous offences. I do not accept the plaintiff’s submission that His Honour was saying that it was the first category.[10] What is critical for this application, however, is that the categorisation adopted by his Honour was that the offence charged was a single conspiracy to engage in numerous offences of engaging in obtaining property by deception. This conclusion was plainly open to him.
[7]R v Giretti (1986) 24 A Crim R 112, 118 referring inter alia to Smythe (1981) 72 Cr App R 8, 13.
[8]The term is generally used to refer to a count which is a collection of counts bundled together in a single count which would be bad for duplicity but for the agreement of the accused and is used solely for the purpose of a plea of guilty and sentencing. R v Jones [2004] VSCA 68, para [13].
[9]His Honour was not invited by counsel for the prosecution to consider that alternative. Rather, prosecuting counsel put submissions that count 2 was a single offence and sought to have his Honour regard the count as in substance being one raising only the one offence. He appeared to ignore the reality that the conspiracy alleged was one to commit multiple offences. Thus His Honour was left to choose between the second and third categories. R v Merriman [1973] AC 584, 607; R v Giretti (1986) 24 A Crim R 112; R v Moussad (1999) 152 FLR 373; Walsh v Tattersall (1996) 188 CLR 77.
[10]42/3.
Taking the above categorisation as the starting point, the question that must be resolved on this application is whether on its proper construction, para 2(c) of Schedule 2 of the Act applied to a count alleging a single conspiracy to engage in numerous offences of obtaining property by deception.
In support of the plaintiff’s argument, reference was made to the Minister’s Second Reading Speech relating to these provisions. Counsel submitted that the automatic forfeiture provisions were included in the Act to address a concern that:
“Existing legislation [was] directed to the fruits and instruments of individual crime rather than to accumulations of wealth derived from long-term criminal activity.”[11]
Counsel submitted that the conduct in question here was “long-term criminal activity” which the Act was plainly intended to bring within its ambit. Counsel further submitted that it would have been Parliament’s intention that a single conspiracy to obtain over $100,000 from long-term criminal activity would be caught by the automatic forfeiture offences provisions. Counsel also submitted that while the crime of conspiracy is complete when an agreement is made, that agreement will continue to exist as long as there are two or more parties intending to carry it out and, if carried out, will involve performance or implementation and ultimately discharge or termination. So long as the performance continues the conspiracy is operating.[12] Counsel also emphasised that a conspiracy may be an agreement to commit a single offence or it may be an agreement to commit numerous criminal offences.
[11]The Honourable Louise Asher, Confiscation Bill, Second Reading Speech, Hansard, Legislative Council, 4 December 1997, p 908, 909.
[12]Woss v Jacobsen (1985) LFCR 243 at 250 and Director of Public Prosecutions v Dout [1973] AC 807 at 827, Troulong v R (2004) 205 ALR 72 at 82.
Turning to para 2(c) of Schedule 2, counsel drew attention to the fact that it refers to an offence against s 321(1) Crimes Act 1958. That sub-section provides:
“321. Conspiracy to commit an offence
(1)Subject to this Act, if a person agrees with any other person or persons that a course of conduct shall be pursued which will involve the commission of an offence by one or more of the parties to the agreement, he is guilty of the indictable offence of conspiracy to commit that offence.
(2)For a person to be guilty under sub-section (1) of conspiracy to commit a particular offence both he and at least one other party to the agreement-
(a)must intend that the offence the subject of the agreement be committed; and
(b)must intend or believe that any fact or circumstance the existence of which is an element of the offence will exist at the time when the conduct constituting the offence is to take place.
(3)A person may be guilty under sub-section (1) of conspiracy to commit an offence notwithstanding the existence of facts of which he is unaware which make commission of the offence by the agreed course of conduct impossible.
(4)A presentment at the Supreme Court or the County Court of a person for an offence against this section shall not be made without the approval of the Director of Public Prosecutions or of a person authorized by the Director of Public Prosecutions to give approval for the purposes of this sub-section.”
Counsel submitted that the reference to “an offence” in s 321 Crimes Act 1958 must be read as encompassing more than one offence – in other words, “one or more offences”. Counsel referred to s 321C of the Crimes Act1958
“321C. Penalties for conspiracy
(1)Where a person is convicted under section 321 of conspiracy to commit an offence or offences against a law or laws in force in Victoria-
(a)if the penalty for the relevant offence is fixed by law, the person shall be liable to a penalty not exceeding the penalty for the relevant offence;
(b)if the relevant offence, or any of the relevant offences, is an offence for which the penalty is imprisonment for a term the maximum length of which is not prescribed by law, the person shall be liable to level 4 imprisonment (15 years maximum);
(ba)despite paragraph (b), if the relevant offence, or any of the relevant offences, is murder or treason, the person is liable to-
(i)level 1 imprisonment (life); or
(ii)imprisonment for such other term as is fixed by the court-
as the court determines;
(c)subject to paragraphs (a), (b), (ba) and (d), if the relevant offence, or any of the relevant offences, is an offence for which a maximum penalty is prescribed by law, the person shall be liable to a penalty not exceeding that maximum penalty or the accumulated maximum penalties, as the case may be; or
(d)if the relevant offence, or each of the relevant offences, is triable only in the Magistrates' Court, the person shall be liable to-
(i) level 6 imprisonment (5 years maximum); or
(ii)imprisonment for a term not exceeding the maximum term of imprisonment (if any) prescribed in respect of the relevant offence or the greatest of the maximum terms prescribed in respect of any of the relevant offences, as the case requires- whichever is the greater.
(2)Where a person is convicted under section 321 of conspiracy to commit an offence or offences against a law or laws in force only in a place outside Victoria-
(a)the person shall, if the relevant offence, or any of the relevant offences, is punishable by a term of imprisonment, be liable to a term of imprisonment not exceeding the maximum term of imprisonment prescribed in respect of the relevant offence; and
(b)the person shall, in any other case, be liable to a level 6 fine (600 penalty units maximum).”
Counsel submitted that the reference to “offences” in s 32 1C revealed an intention on the part of Parliament that s 321(1) extend to a conspiracy to commit more than one offence. As a result, counsel submitted that Schedule 2 para 2(c) of the Confiscation Act should be construed as applying where there was a conspiracy to commit one or more offences of the kind referred to in para 2 (a).
Counsel also called in aid s 37 (c) Interpretation ofLegislation Act 1984 interpreting “an offence” in Schedule 2 para 2(c), so that the singular will include the plural unless “a contrary intention appears”. I consider that a contrary intention does appear. As the plaintiff accepted, the provision is not to be applied to the interpretation of “the conspiracy” - counsel accepted that Schedule 2 para 2(c) in referring to “the conspiracy” was referring to one conspiracy only. That is understandable when one considers the aims of the legislation, the consequences of the categorisation of the offence as an automatic forfeiture offence and the fact that Parliament was obviously intending to define the categories and so fix boundaries. In any event, the task is not to interpret “an offence” but to interpret “an offence referred to in para (a) or (b)”. The drafter could have simply referred to a conspiracy to obtain property by deception contrary to s 81(1) of the Act if that was what was intended to be meant by the quoted expression. The use of the phrase rather suggests that it was intended to incorporate the other paragraphs by reference so that para (c), applied to para (a) would be read as follows:
“(c)Section 321(1) where the conspiracy is to commit a breach of s 81(1) (obtaining property by deception) where the value of the property in respect of which the offence is committed is $100,000 or more.”
The question that must then be asked is whether that description was intended to apply to a conspiracy to commit one offence or embraces a conspiracy to commit one or more offences. The obvious difficulty with the latter possibility is that the language of para 2(a) suggests a single offence. This does not run counter to the Parliamentary intention as foreshadowed by the Minister because a single offence of obtaining property by deception may be constituted by numerous acts of obtaining property by deception where those acts may be properly viewed as part of a single continuous offence.[13] Thus, accepting that gloss, para 2 of Schedule 2 does have the effect of enabling the automatic forfeiture provisions to apply to accumulations of wealth derived from long-term criminal activity. At the same time, such a construction appropriately resolves the ambiguity of the provisions and meets the need for strict construction of these provisions which are penal in nature.[14]
[13]R v Merriman (above); R v Giretti (above); R v Moussad (above).
[14]Beckwith v R 1976) 12 ALR 333, 339.
The correctness of this construction is supported by the subsequent legislative history.[15] By Act no 108 of 1999 a new definition was supplied which assumed the above construction and sought to widen it to cover occasions where multiple criminal offences were alleged. For example, para 2(f) of Schedule 2 now deals with offences under s 81(1) in the definition of automatic forfeiture offences. It reads as follows:
“(f) Section 81(1) (obtaining property by deception) where –
(i)only one offence is charged and the value of the property in respect of which the offence is committed is $50,000 or more; or
(ii)more than one offence is charged and the offences are founded on the same factual form or are part of a series of offences of the same or similar character and the value of the property in respect of which the offences are committed is $75,000 or more;”
[15]Grain Elevators Board (Vic) v Dunmunkle Corporation (1946) 73 CLR 70; Pearce, Statutory Interpretation in Australia [3.30].
It follows from the above that the plaintiff is unable to show that his Honour erred in his conclusion that the offence charged in count 2 did not come within the definition of an automatic forfeiture offence; for the categorisation made by him did not bring the offence within the definition. Accordingly, that part of the application must fail.
The forfeiture application
The application for forfeiture was made under ss 32(1) and 33 of the Act. It related to two properties – a house at 47 Fourth Street, Black Rock,[16] and a warehouse. The registered proprietor of the house was the second defendant and the registered proprietor of the warehouse was the third defendant. The plaintiff alleges error of law on the face of the record in the decision to refuse a forfeiture order.
[16]Value approximately $710,000.
The forfeiture application – the legislation:
The following are the key provisions:
“Division 1 – Forfeiture on Court Order
32. Application for forfeiture order
(1)If a defendant is convicted of a forfeiture offence, the DPP or an appropriate officer may apply to the Supreme Court or the court before which the defendant was convicted of the offence for a forfeiture order in respect of tainted property.
(2)Except with the leave of the court, an application may only be made under sub-section (1) before the end of the relevant period (if any) in relation to the conviction.
(3)A court must not grant leave under sub-section (2) unless it is satisfied that-
(a)the property to which the application relates was derived, realised or identified only after the end of the relevant period; or
(b)necessary evidence became available only after the end of the relevant period; or
(c)it is otherwise in the interests of justice to do so.
(4)The applicant must give written notice of the application-
(a)to the defendant, unless the defendant has absconded; and
(b)to any other person whom the applicant has reason to believe has an interest in the property.
(5)The court may waive the requirement under sub-section (4) to give notice if-
(a)the defendant is present before the court; and
(b)the court is satisfied either that any other person who has an interest in the property is present before the court or that it is fair to waive the requirement despite any such person not being present.
(6)The court may, at any time before the final determination of the application, require the applicant to give notice of the application to any person, in any manner and within any time that the court thinks fit.
(7)Any person notified under sub-section (4) or (6) and any other person who claims an interest in the property are entitled to appear and to give evidence at the hearing of the application but the absence of a person does not prevent the court from making a forfeiture order.
(8)The court may, at any time before the final determination of the application and whether or not the period for making the application has expired, amend the application as it thinks fit, either at the request of the applicant or with the approval of the applicant.
(9)If an application under sub-section (1) has been finally determined, no further application may be made under that sub-section in relation to the same conviction, except with the leave of the Supreme Court or the court which dealt with the earlier application.
(10)A court must not grant leave under sub-section (9) unless it is satisfied that-
(a)the property to which the new application relates was derived, realised or identified only after the earlier application was determined; or
(b)necessary evidence became available only after the earlier application was determined; or
(c)it is otherwise in the interests of justice to do so.
33. Determination of application for forfeiture order
(1)On an application under section 32(1), if the court is satisfied that the property is tainted property in relation to the offence, the court may order that the property, or such of the property as is specified by the court in the order, be forfeited to the Minister.
(2)A forfeiture order must specify the interests in property to which it applies.
(3)If an application is made under section 32(1) to the court before which the person was convicted of the offence before that court has passed sentence for the offence, that court may make a forfeiture order at the time of passing sentence and for this purpose the court may, if it thinks it necessary to do so, defer the passing of sentence until it has determined the application for the order.
(4)On an application under section 32(1) a court may, subject to any rules of court, take into account in determining the application any material that it thinks fit, including evidence given in any proceeding relating to the offence in reliance on the conviction of which the application is made and, for this purpose, the whole or any part of the transcript of those proceedings is admissible in evidence as if it were a record of evidence given on the hearing of the application.
(5)In considering whether to make an order under sub-section (1) in respect of particular property, the court may have regard to-
(a)the use that is ordinarily made, or had been intended to be made, of the property; and
(b)any hardship that may reasonably be likely to be caused to any person by the order; and
(c)the claim of any person to an interest in the property having regard to the matters specified in section 50(1).
(6)A court must give priority to an application made under section 84 (restitution order) or Division 2 of Part 4 (compensation order) of the Sentencing Act 1991 in relation to the same conviction and, accordingly, may defer the determination of an application under section 32(1) until the application under the Sentencing Act 1991 has been determined.
(7)The making of a forfeiture order does not prevent the making of a pecuniary penalty order.”
The forfeiture application – Judge’s reasons
After referring to s 32(1) which permits the DPP to apply for a forfeiture order, his Honour noted that s 33(1) gives the Court a discretion to order forfeiture of a property if it is satisfied that the property is “tainted property”. “Tainted property” is defined in s 3 of the Act as property that
“(a)was used or was intended by the defendant to be used in, or in connection with, the commission of the offence; or
(b)was derived or realised, or substantially derived or realised, directly or indirectly, from property referred to in paragraph (a); or
(c)was derived or realised, or substantially derived or realised, directly or indirectly, by any person from the commission of the offence.”
(1) Alternative (c)
His Honour then considered the last alternative - whether the house or warehouse were derived or substantially derived directly or indirectly from the commission of the offence. The juxtaposition of the phrases lead him to the view that the words “derived or realised” must mean “wholly derived or realised”. His Honour then stated that there was, in his view, no basis for concluding that the 47 Fourth Street property was derived, or realised, or substantially so from the commission of any of the offences. His view was that most of the equity in the house was derived from capital gains made by John and Mary Anne Stark from the purchase and resale of various houses prior to the acquisition of the land on which it was built. As to the warehouse, he noted that settlement of that purchase occurred on 9 July, nine days before the raids which terminated the conspiracy. After considering some possible permutations and combinations, his Honour indicated that he was not persuaded that the cash monies provided by the defendants for the purchase totalling $74,000 were substantially derived from the commission of any of the offences. He held that the sale of stolen property accounted for only 10% to 12% of the total turnover of the business. While he acknowledged that that 10% to 12% might on one view be the “cream” and so available for use for a capital purchase of this kind, he thought it a far too tenuous proposition that the warehouse was substantially derived from the commission of the offences or a combination of them. While he considered it likely that some of the deposit was derived from the commission of one or more of the offences, bearing in mind that 88% to 90% of the business was legitimate, he was not satisfied that the warehouse was substantially derived from the commission of any of the offences charged.
2. Alternative (a)
His Honour then considered the first alternative - whether the properties were used or intended to be used in connection with the commission of the offence. He noted that this did not turn on registered ownership. His Honour referred to the matter of King[17]. In that case, O’Keefe J analysed a number of cases where courts have considered whether property was used in the commission of an alleged offence or in connection with such offence. His Honour quoted a passage from the judgment in that case[18] which include the following:
[17](2000) 114 A Crim R 14.
[18]At p 21.
“However, the over arching principle that in my opinion can be extracted from the cases in relation to that part of the statutory definition of tainted property presently under consideration is that some activity connected with the relevant crime must have involved the utilisation or employment of the property with the aim or purpose of committing or furthering the commission of the crime in question. In none of the cases referred to has the mere fact that the property in question being the place of commission of the crime and nothing more been held to result in the property being tainted property within the meaning of the forfeiture statutes. What is more, a number of the decisions are expressly to the contrary.”
His Honour then turned to the Fourth Street house stating that there was evidence that acts in furtherance of each of the alleged conspiracies, with the possible exception of the count 2 conspiracy, occurred at that house. He stated, however, that having regard to the conclusion he had reached on the proper exercise of his discretion it was not necessary for him to decide whether the house was in fact tainted property in that relevant sense. He described that issue as “no simple issue”. His Honour then went on to explain why he saw the proper exercise of his discretion requiring rejection of the application. He said there were cogent reasons why the exercise of discretion should be refused.
(a)He stated that the presence of the word “may” in s 33 conferred a discretion which should not be exercised unless in all the circumstances it was just and fair to do so having regard to the purposes of the legislation.
(b)He referred to s 33(5) (see above) and the need to consider the use ordinarily made or intended to be made and any hardship that might be caused to any person by the order. His view was that sub-s (5) did not limit the matters to be considered but said that even if that was its effect, the considerations mentioned in sub-s(5) were sufficient to lead to rejection of the application for forfeiture.
He went on to elaborate on some of these issues, in particular, the question of hardship. Applying the principles he had identified to the Fourth Street property, he said that practically the entire equity in the property was derived from activity not the subject of the counts particularly bearing in mind that they constituted 10% to 12% of the “Shopaholic” business. The gain in equity had occurred as a result of the sale and resale of a number of houses over the years. Further, the value of the property was far in excess of the benefits derived by or from the offences. Next the property was acquired long before the offences were committed and was the family home of a middle aged couple. He noted further that forfeiture was an all or nothing exercise. He was not permitted to order the sale of the property and forfeiture of some of the proceeds. He stated that he had no hesitation in concluding that the application for forfeiture of the house should be refused in the exercise of the statutory discretion.
His Honour then turned to the issue of the warehouse and whether it was tainted property on the first alternative basis. After noting that the settlement of the purchase price occurred nine days before the raid, and the way in which the purchase price was made up, he stated that applying the definition of tainted property he was not persuaded that the warehouse was used or intended to be used in the relevant sense in connection with the commission of any of the offences set out in the presentment. While noting that the police recovered stolen property from the warehouse, it was only a fraction of the considerable amount of property recovered by the police. He said that the mere fact that stolen property was stored at the warehouse should not necessarily lead to the conclusion that it was intended to be used in connection with any of the offences. At the same time he accepted that when the warehouse was acquired and while the conspiracy was still on foot it was intended that various goods to be sold by the business including a small percentage of stolen goods would be stored at the warehouse and in that sense it might be said that it was intended for use in connection with the commission of the offences. He regarded that connection with the offending, however, as slight in view of the fact that the warehouse had been acquired only nine days before the end of the conspiracy.
His Honour then sated:
“Even if the warehouse is strictly speaking to be regarded as tainted property I would not, in the exercise of discretion, order forfeiture particularly as the warehouse continues to be used in the operation of the business now being substantially run by Damian Stark (the third defendant).”
Forfeiture applications – submissions of plaintiff
For the plaintiff, it was submitted that the power to order forfeiture under s 32 is defined in s 33 of the Act. Counsel submitted that there is a specific staged and logical sequence described. The first step is that the Court must consider as a preliminary to any exercise of the discretion whether it is satisfied that the property is tainted property. If it is so satisfied the Court may, in the exercise of its discretion, order that the property be forfeited. If not, no question of the exercise of discretion arises. Counsel submitted that, therefore, before the Court could consider a favourable or unfavourable exercise of discretion it must have arrived at a finding as to whether or not the property is tainted property. Counsel further noted that matters to be considered in determining whether the discretion should be exercised as set out in s 33 included consideration of:
“The use that is ordinarily made, or had been intended to be made, of the property.”
Counsel argued that this issue involved consideration of questions similar to those to be considered in determining whether the property was tainted property notably that the property :
“(a)was used, or was intended by the defendant to be used in, or in connection with, the commission of the offence; or
(b)was derived or realised or substantially derived or realised, directly or indirectly from property referred to.
(c). . . “
Counsel submitted, relying inter alia on R v Winand[19], that the discretion could only be exercised where regard was had to a number of factors including:
• the nature of the offender’s interest in the property;
• the use or intended use of the property;
• the length of ownership of the property;
• the extent to which the property was connected with the commission of the
offence.
Counsel submitted that these were factors which the Court would consider in determining whether the property was tainted. Thus the analysis of the “tainted property” question would inform the exercise of discretion.
[19](1994) 74 A Crim R 496, 500-1.
Counsel for the plaintiff submitted that the learned judge chose not to make this preliminary determination and so fell into error; for it was only once the trial judge has determined that he is satisfied that the property was tainted property that the occasion can arise for the exercise of his discretion. Counsel submitted that the proper exercise of the discretion needed to be informed by findings about the use or intended use of the properties including a finding about whether the properties were used or intended to be used in or in connection with the commission of the offence.
Thus, counsel was suggesting two errors, namely, a failure to recognise that:
•determining that the properties were tainted properties was an essential preliminary step in the exercise of the discretion, and
•it was only by first determining whether the properties were tainted properties that he would be in a position properly to exercise his discretion – because the exercise of the discretion would call on the relevant findings made in that inquiry.
In my view the issues raised do not affect the determination of the forfeiture application in relation to the warehouse property. I am satisfied that on a fair reading his Honour reached a decision that the property was not tainted property. It is true that his Honour went on to say that:
“Even if the warehouse is, strictly speaking, to be regarded as tainted property I would not, in the exercise of discretion order forfeiture . . .”
I attach no significance to that statement. It was the proper approach to take and indicated to the parties that should his Honour’s view that the property was not tainted property be not correct, and the property should be regarded as tainted property, he would not in the exercise of his discretion order forfeiture.
If my reading of his Honour’s decision is incorrect, and he did not reach a conclusion as to whether the warehouse was a “tainted property”, then the issues raised by the plaintiff need to be considered in relation to it. They must be considered in any event in relation to the house.
The first point to consider is whether it is a condition precedent to the refusal of an application for forfeiture on discretionary grounds that the Court be satisfied that the property was tainted property. A consideration of s 33(1) makes it clear that before the discretion can be exercised to order forfeiture, a finding must be made that the property is tainted. The section, however, does not require that the Court reach a final view on that question before it can dismiss the application. The argument advanced for the plaintiff would require judges to reach a decision about whether a property is a tainted property before they consider the exercise of the discretion, even though, in the particular case, it may be as clear as day that the discretion should not be exercised to forfeit the property. This is unnecessary and would place an unreasonable burden on judges. The way s 33(1) is drafted and structured, a decision as to whether the property is tainted or not is only a condition precedent to an order for forfeiture. It is not a condition precedent to a refusal of the application on discretionary grounds.
As to the question whether it was necessary to form a view as to whether the properties were tainted or not because of the need to consider common issues in the exercise of the discretion, I accept that a consideration of the tainted property issue would focus the mind on questions of use and intended use. But it does not follow that, because that would be beneficial, it is necessary before the discretionary matters can be considered. There will be cases, as here, where consideration of the common matters will result in a clear picture emerging that whatever may be the status of the property a forfeiture order should not be made. As long as it appears that the Court has directed its attention to matters relevant to the exercise of discretion, the plaintiff cannot complain if the Court refuses the application on discretionary grounds. I note that in this instance the plaintiff, properly, did not suggest that there was a failure to consider relevant matters or the giving of inappropriate weight or significance to relevant matters. In my view, his Honour, in considering the facts relevant to the “tainted property” issue directed his mind sufficiently to the relevant common matters and properly considered them when considering the discretion issue.
For these reasons I am not persuaded that any error of law appears on the face of the record in connection with the Court’s consideration of the forfeiture applications and accordingly that aspect of the application should fail.
Conclusion
For the foregoing reasons the proceedings should be dismissed.
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