Re Grima

[1997] QSC 111

IN THE SUPREME COURT
OF QUEENSLAND

Bundaberg  No. 474 of 1995

Before the Hon. Mr Justice Mackenzie

[Re Grima]

IN THE MATTER  of Part 2 of the
Crimes (Confiscation) Act 1989

and

IN THE MATTER of an application by the
  Director of Public Prosecutions for a Forfeiture
  Order against the property
  of ANTHONY EMMANUEL GRIMA,
  DARELL LESLIE TINDEL and
  KALANDA PASTORAL COMPANY (QLD) PTY LTD
  and of an application by the
  Director of Public Prosecutions for a
  pecuniary penalty order against
  ANTHONY EMMANUEL GRIMA and
  DARELL LESLIE TINDEL   

JUDGMENT - MACKENZIE J.

Judgment Delivered 13 June 1997

CATCHWORDS:           CRIMINAL LAW - pecuniary penalty and forfeiture orders - whether discretion exists whether or not to make pecuniary penalty order - Crimes (Confiscation) Act1989 ss. 13, 17, 24, 34 and 37 - conviction for "serious drug offence" - whether amounts of money subject to Maltese restraining orders may be used to reduce amount of pecuniary penalty order - value of benefit derived - whether joint and several pecuniary penalty orders should be made - Acts Interpretation Act 1954 ss. 14A, 32A, 32C and 32D.

Cases:R v. Fagher (1989) 16 NSWLR 67

R v. Porter (1990) 3 All ER 784
DPP v. Nieves (1992) 1 VR 257
R v. Peterson (1991) 1 VR 297

R v. Smithers ex parte McMillan (1982) 152 CLR 477 Commissioner of AFP v.Curran (1984) 14 A Crim R 434

Razzi v. Commissioner of Australian Federal Police (1990)   50 A Crim  R 142
  Cornwell v. Commissioner of Australian Federal Police   (1990) 49 A Crim  R 122
  State Crime Commission v. Kaddoor and Rossi (Studdert   J., unreported, 20 June 1992 Supreme Court New South   Wales 70549 of 1991)

Counsel:Mr T. Winn and Mr P Kelly for the Crown

Mr P. Feeney for the accused Tindel
  Mr C. Clark for the accused Grima

Solicitors:  Director of Public Prosecutions (Queensland)
  Gilshenan & Luton for the accused Tindel
  Warren Highland as town agents for Carne and Herd for the accused   Grima

Hearing date:          4 June 1997
IN THE SUPREME COURT
OF QUEENSLAND

Bundaberg  No. 474 of 1995

Before the Hon. Mr Justice Mackenzie

[re: Crimes (Confiscation) Act 1989]

IN THE MATTER  of Part 2 of the
Crimes (Confiscation) Act 1989

and

IN THE MATTER of an application by the
  Director of Public Prosecutions for a Forfeiture
  Order against the property
  of ANTHONY EMMANUEL GRIMA,
  DARELL LESLIE TINDEL and
  KALANDA PASTORAL COMPANY (QLD) PTY LTD
  and of an application by the
  Director of Public Prosecutions for a
  pecuniary penalty order against
  ANTHONY EMMANUEL GRIMA and
  DARELL LESLIE TINDEL   

JUDGMENT - MACKENZIE J.

Judgment Delivered 13 June 1997

Following the sentencing of the two respondents upon their pleas of guilty to carrying on the business of trafficking in cannabis sativa counsel on behalf of the Director of Public Prosecutions moved for forfeiture, in the case of Grima, of certain specified real property and money found buried on his property, and specified real property in the case of Tindel.   A pecuniary penalty order representing the difference between the total benefits derived from the commission of the offence and the value of the forfeited property was also sought.
          A preliminary question arises from the fact that the Crimes (Confiscation of Profits) Act 1989 (at it originally was) was amended in 1995. One of the amendments removed the discretion whether to make a pecuniary penalty order or not in the case of a serious drug offence. Prior to the amendment coming into force there was a discretion whether the assessment should be made and whether a pecuniary penalty order should be made. The discretion was not concerned with whether or not the assessment of the value of benefits may depart from the criteria in the Act. In other words the value assessed in accordance with those criteria could not be reduced by relying on the assistance of the discretion. The discretion was concerned with whether the order should be made or not, for the amount assessed according to the criteria (cf. Hunt J. in R v. Fagher (1989) 16 NSWLR 67, 77).
Mr Clark submitted that the provision which now appears in s.34 of the Crimes (Confiscation) Act was not applicable to the offence which occurred prior to its coming into force. He submitted that the former s.13 applied. He submitted that there was a discretion and that it should be exercised in such a way as to prevent lawfully acquired assets of Grima being taken to satisfy a pecuniary penalty order and, more particularly, to make up any shortfall resulting from the inability to recover the moneys from Malta because of the restraining order there. The immediate difficulty with this submission is that it is not the commission of the offence which is the triggering event for the making of the application. It is conviction for the offence which founds the jurisdiction to make the order. The conviction happened after the 1995 amendment came into force. In my view no discretion exists to decline to make a pecuniary penalty order. In any event, having regard to the purpose of the legislation in its present and past forms I do not think that the circumstances in which the respondent Grima finds himself is one which ought to have compelled the exercise of any discretion in his favour. Reference is made later in these reasons to the nature of any redress that he may seek if, as seems likely, the moneys in Malta will not be repatriated to Australia to meet the order.
          At the time when submissions were initially made there was a common assumption on the part of counsel that a joint and several pecuniary penalty order would be made.  Additional submissions in writing as to the proper form of order were invited.  Further reference will be made to this later.  It had been the Crown case that the respondents had carried on business in concert with one another.  There was no submission to the contrary during the sentencing process.  Nor was any differentiation between the extent of involvement of the respondents suggested during the sentencing process.  It was not disputed that an order for forfeiture of the real estate and moneys should be made.
The offence of which the respondents were convicted is a "serious drug offence". Section.17(1) of the Crimes (Confiscation) Act authorises an application for forfeiture and a pecuniary penalty order in such a case.  It was not disputed that a value of $1.9M should be assigned to the drugs produced  in the relevant plantations.  A pecuniary penalty order in that sum was sought. 
A pecuniary penalty order is an order against a person for benefits derived by that person from the commission of a serious offence. In the case of a "serious drug offence" the court is obliged to assess the value of benefits in accordance with s.37. This is not discretionary in the case of a serious drug offence. The court is obliged to order the person to pay to the State a pecuniary penalty equal to the assessed value less, relevantly, the value of property in respect of which a forfeiture order was made following the same conviction. The value of the property at the time of making the forfeiture order is the relevant value to be deducted.
Since it is agreed that the calculable value of the drugs produced in the various plantations was $1.9M it is not necessary to elaborate upon the principles for determining the value of benefits derived from the commission of an offence, except one. Section 37(8) provides that a benefit should not be taken into account for the purpose of s.37 if a pecuniary penalty has been imposed in respect of the benefit under the Crimes (Confiscation) Act, or a law of the Commonwealth a Territory or another State. This is a specific exclusion recognising that, but for s.37(8), a benefit would have been derived of that value and would have been liable to be treated as part of the assessed value of benefits which forms the starting point for assessing the amount of a pecuniary penalty order. This provision is mentioned because Mr Clark raised the question, on behalf of the respondent Grima, of whether a reduction in the amount of the pecuniary penalty order should be made because moneys deposited in the Mid Med Bank in Malta are, according to correspondence in evidence, subject to Maltese restraining orders based on the commission of an offence of money laundering in Malta. The position with respect to these moneys is explained in a letter dated 26 June 1996 which is unsigned but purports to be from the Deputy Attorney-General, Malta. The restraining orders issued by the Maltese courts are independent of the outcome of proceedings in Australia. The only bearing of convictions in Australia would be that convictions in Australia tended to prove the offences underlying the money laundering charges in Malta. The letter further advises that a Bill providing for the possibility for Maltese Courts to enforce foreign confiscation orders is about to become law. The law provides, however, that any assets confiscated as a result of the enforcement of a foreign confiscation order would be vested in the Government of Malta subject to any directives it may give concerning their further disposal. The letter went on to suggest that in view of Government policy as laid down in the Bill the Australian Government may wish to have the matter studied further on a political government to government level.
          The proceedings in Malta had at that time only reached the restraining order stage and had not yet proceeded to forfeiture.  The Director of Public Prosecutions has nevertheless with some justification interpreted this correspondence as meaning that there is no likelihood of the Maltese moneys being returned to Australia.  The Director also accepted during submissions on sentence that each accused had taken all steps within his power to attempt to recover the money from Malta. 
          While the outcome is harsh in operation, Mr Clark's submission as to offsetting the amount restrained in Malta against the pecuniary penalty order must fail.  The Crimes (Confiscation) Act does not allow the fact that property has become irrecoverable because of actions of authorities outside Australia to be taken into account in assessing the value of the benefit derived as a result of the commission of a serious drug offence. It is beyond argument that each respondent derived a benefit in Australia from the commission of the offence of carrying on the business of trafficking in cannabis sativa. They voluntarily placed the moneys so derived in the Mid Med Bank in Malta. The protection against double assessment because of the independent operation of two different laws upon the same sum of money within Australia is achieved by s.37(2). Where a law external to Australia makes assets, voluntarily placed in a situation where they are amenable to that law, irrecoverable because of the operation of that external law, the Crimes (Confiscation) Act makes no allowance for this in assessing the value of benefit derived. While hardship is a relevant factor in deciding whether a forfeiture order should be made under s.24 there is no corresponding provision in relation to pecuniary penalty orders. No submission was made that the forfeiture of the properties named should not be made on the basis of hardship. If it is thought that the form of the legislation achieves a harsh result in a case like the present one, the consequences can only be relieved by executive action in Australia or Malta not by interpreting the legislation in a way that its terms cannot support.
          I return now to the question whether the submission on behalf of the Director that a joint and several pecuniary penalty order can be made is correct.  None of the submissions invited from counsel adverted to the substantial body of Australian authority on this point, albeit in some cases on different legislation.  The only authority referred to in the submissions was the English case R. v. Porter (1990) 3 All ER 784 upon which Mr Feeney relied and which Mr Kelly sought to distinguish. Mr Kelly's argument was based on principles of statutory construction. He submitted that the money or property had come into possession of Grima and Tindel jointly by reason of the commission of the offence. He relied on ss.14A, 32C and 32D of the Acts Interpretation Act 1954 for the propositions that there should be an interpretation best achieving the Act's purpose, that words in the singular include the plural and for, as he put it, an extended definition of "person" respectively. I refer to s.32A which provides that definitions in or applicable to an Act apply except so far as the context or subject matter otherwise indicates or acquires. It was submitted that an interpretation of the Crimes (Confiscation) Act which did not permit a joint and several order to be made was inconsistent with the objects of the Act and inconsistent with the Acts Interpretation Act.  It was submitted that the only order that could be made in the circumstances of the case was a joint and several order. 
Mr Feeney submitted that the appropriate order was not a joint and several order "given the provisions of s.37 and the scheme of the Act generally". In the absence of evidence to the contrary the court could assume, as in R. v. Porter, equal sharing of the proceeds.
Mr Clark submitted that if a pecuniary penalty order was made it should not be on the basis of joint and several liability. It was submitted that there were "abundant passages in the legislation which make it clear that the Act is concerned with benefits derived by the person from the commission of a serious offence", e.g. ss.34(1) and s.37(2).
          The fact that the statutory scheme under which R. v. Porter was decided was different from that operating in Victoria was recognised in the Court of Criminal Appeal decisions in DPP v. Nieves (1992) 1 VR 257 and R. v. Peterson (1991) 1 VR297. Nevertheless in each case a submission that a joint and several pecuniary penalty order was appropriate was rejected. In the latter case Crockett and Murphy JJ. said, at 301:

"... in a disputed case an inquiry should be made designed to ascertain the value of benefit actually derived by the particular person "as the result of committing the offence"."

In New South Wales in R. v. Fagher, Hunt J, at 77, applied the principle that the value of benefits derived by a particular offender must be considered (cf. Allen J, 80).  Hunt J. referred to a like interpretation of the Customs Act in the cases of R. v. Smithers ex parte McMillan (1982) 152 CLR 477 and Commissioner of Australian Federal Police v. Curran (1984) 14 A Crim.R.434. Further there is authority for the proposition that while s.37(8) of the Crimes (Confiscation) Act requires expenses and outgoings in or in connection with the commission of the offence to be disregarded, the division of a benefit derived between partners in the offence is distinguishable from expenses and outgoings.  In such a case the benefit and the pecuniary penalty must be apportioned between the partners (Razzi v. Commissioner Australian Federal Police (1990) 50 A Crim. R.142; Cornwell v. Commissioner Australian Federal Police (1990) 49 A Crim. R.122; State Drug Crime Commission v. Kaddoor and Rossi, Studdert J., unreported, 20 June 1992 Supreme Court New South Wales 70549 of 1991).  The practical difficulties which may be encounted in an individual case are referred to in R. v. Fagher at 77 by Allen J.
          I am satisfied that it is inappropriate to make a pecuniary penalty order on a joint and several basis for the whole of the sum of $1.9M.  The appropriate course is to make two separate orders, one relating to Grima and the other relating to Tindel.  In view of the fact that it is common ground that no differentiation should be made as between the two respondents or as to the benefits derived by them each order will be based on the proposition that each obtained half of the $1.9M (i.e. $950,000).  I am satisfied that, in the case of Grima the land and residence at Burnett Heads and the sum of $6,800 are tainted property.  I am satisfied in the case of Tindel that the property acquired by Kalanda Pastoral Company (Qld) Pty Ltd is tainted property by reason of its having been acquired with the proceeds of the offence committed by Tindel.  It is common ground that the sum of $600,000 of moneys derived from Tindel's criminal activity was used to purchase the property.  That contract was signed on 31 March 1994.  At material times Tindel and his son were directors of the company. 
          It is next necessary to consider the value of the forfeited property.  The Director of Public Prosecutions obtained a valuation of Grima's residence.  The valuation said that the value fell within a range between $230,000 and $270,000, based on sales evidence.  There were however unsatisfactory features about this valuation although they are in no way the fault of the valuer nor the Director.  The valuer did not have access to the property.  The valuation is based on a "drive past inspection".  While the valuer had plans of the residence and a video of the interior taken over 2 years previously he had to assume that it remained in a generally similar condition at the time of preparation of the valuation, 3rd and 4th June 1997.  The contingent nature of the valuation is apparent from its terms.  It expressly states that access would be necessary to produce a specific valuation figure as opposed to a range.
          Mr Kelly on behalf of the Director was prepared to concede that since $300,000 had been expended in acquiring the property and building the residence the value should be taken as $300,000.  In view of that concession and the necessary uncertainty about the accuracy of the recent valuation, I fix the value of the real property forfeited from Grima at $300,000. 
          So far as Tindel is concerned Mr Kelly submitted that a value of $600,000, being the purchase price, should be assessed as the value of the Kalanda Pastoral Company property for the purposes of the pecuniary penalty order.  However there is also a valuation dated 1 April 1997, prepared on behalf of the respondent Tindel by a real estate agent at Mundubbera in which the property is valued at $680,000.  In his submissions on behalf of Tindel, Mr Feeney said that Tindel had, after his arrest, continued to improve and work the property.  Neither the valuation nor Mr Feeney's assertion was challenged on behalf of the Director. 
          The assessment required by the Crimes (Confiscation) Act is of the value of the property at the time of making the pecuniary penalty order.  There is no reason to assume that the purchase price of a property over 3 years prior to the date of the application represents the value of the property at the date of the order.  If there is other valuation evidence and the Director wishes to contest that valuation it is incumbent upon him to challenge it at the appropriate time in the usual way.  In the absence of any inherent improbabilities in the valuation dated 1 April 1997 and in the absence of any challenge to it, I will assign a value of $680,000 to the Kalanda property.  The orders are the following:

1.Pursuant to ss.17 and 23 of the Crimes (Confiscation) Act 1989 the following property of Anthony Emmanuel Grima (being tainted property) is forfeited to the State of Queensland:-

(i)A residential dwelling and land located at Lot 16 on Registered Plan 7212, County of Cook, Parish of Barolin, Title Reference 17210146 situated at The Esplanade, Burnett Heads, Queensland, valued at $300,000.

(ii)The sum of $6,800 found buried on the fence line of Lot 16, The Esplanade, Burnett Heads and found together with Mid Med Bank documents in the name of Anthony Grima.

2.Pursuant to ss.17 and 23 of the said Act, the following property of Kalanda Pastoral Company (Qld) Pty Ltd, being tainted property by reason of the commission of a serious offence by Darell Leslie Tindel be forfeited to the State of Queensland:-

(i)Lot 6, Crown Plan NT22, County of Newcastle, Parish Derra, Title Reference 17106065, valued at $680,000.

3.Pursuant to s.17 and 34 of the said Act, Anthony Emmanuel Grima pay to the State of Queensland by way of pecuniary penalty order the sum of $643,200, being the sum of $950,000 representing the total value of the benefits derived by him less the total value of the forfeited property of $306,800.

4.Pursuant to s.17 and 34 of the said Act Darell Leslie Tindel pay to the State of Queensland by way of pecuniary penalty order the sum of $270,000 being the sum of $950,000 representing the value of the benefits derived by him less the value of the forfeited property of $680,000.