Tedesco v Director of Public Prosecutions
[2010] SASC 336
•6 December 2010
SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Civil)
TEDESCO v DIRECTOR OF PUBLIC PROSECUTIONS (SA)
[2010] SASC 336
Judgment of The Honourable Justice White
6 December 2010
CRIMINAL LAW - PROCEDURE - CONFISCATION OF PROCEEDS OF CRIME AND RELATED MATTERS - FORFEITURE OR CONFISCATION - DISCRETION TO MAKE ORDER - HARDSHIP
CRIMINAL LAW - PROCEDURE - CONFISCATION OF PROCEEDS OF CRIME AND RELATED MATTERS - FORFEITURE OR CONFISCATION - PROCEEDS OF CRIME, TAINTED PROPERTY OR CONFISCABLE PROPERTY
Appeal against decision of Magistrate refusing to order exclusion of property from forfeiture under the Criminal Assets Confiscation Act 2005 (SA) - appellant contended that the limited value of his equity in the property was overlooked - whether the forfeiture included the appellant's wife's interest - whether the Magistrate erred in failing to take into account hardship to the appellant's wife and family.
Held: the submission concerning the value of the appellant's equity in the property should not be upheld - the forfeiture did not include the appellant's wife's interest - the Magistrate did not err in his consideration of the hardship to the appellant's family - appeal dismissed.
Criminal Assets Confiscation Act 2005 (SA) s 3, s 24, s 34, s 36, s 44, s 47, ss 74-76, s 93, s 95; Controlled Substances Act 1984 (SA) s 32; Law of Property Act 1936 (SA) s 69, referred to.
Director of Public Prosecutions v George (2008) 102 SASR 246; Director of Public Prosecutions (Cth) v Chan (2001) 183 ALR 575; Direct of Public Prosecutions (Cth) v Chan (2001) 52 NSWLR 56; Albion Insurance Co Ltd v Government Insurance Office (NSW) (1969)121 CLR 342; DPP v Sienczewski [2010] SASC 16; O'Sullivan v Farrer (1989) 168 CLR 210; Visnic v Australian Securities and Investments Commission (2007) 231 CLR 381; McKinnon v Secretary, Department of Treasury (2006) 228 CLR 423; Right to Life Association (NSW) Inc v Secretary, Department of Human Services and Health (1995) 56 FCR 50; Sinclair v Mining Warden at Maryborough (1975) 132 CLR 473; Taylor v Attorney-General (1991) 55 SASR 462, applied.
TEDESCO v DIRECTOR OF PUBLIC PROSECUTIONS (SA)
[2010] SASC 336Magistrates Appeal
WHITE J: This is an appeal against a refusal by a magistrate to order the exclusion of a property from forfeiture under the Criminal Assets Confiscation Act 2005 (SA) (the CAC Act).
On 17 May 2006, the appellant committed the offence of possession for sale of cannabis, contrary to s 32(1)(e) of the Controlled Substances Act 1984 (SA).[1] The offence involved the possession of more than 37 kilograms of cannabis. The appellant pleaded guilty to that offence and subsequently Judge Nicholson in the District Court sentenced him to imprisonment for two years and four months with a non-parole period of 14 months. He declined to suspend that sentence.
[1] As the appellant’s offence was committed on 17 May 2006, it was s 32 in the form which applied before 3 December 2007 which was applicable in his case.
A contravention of s 32(1)(e) is a “serious offence” for the purposes of the CAC Act.[2]
[2] See the definition of “serious offence” in s 3 of the CAC Act.
On 16 August 2006, a magistrate had issued a restraining order under s 24 of the CAC Act. The restraining order prevented any person from disposing of, or otherwise dealing with, the appellant’s interest in two properties: one at Cheltenham and the other at Gillman.
Upon the conviction of the appellant on 12 May 2008, the forfeiture provisions in s 74 of the CAC Act came into operation in relation to both the Cheltenham and Gillman properties. This meant that both properties would, by force of law, be forfeited to the Crown at the end of the “relevant period” if they remained subject to the restraining order and no order had been made excluding them from forfeiture under s 76(1) of the CAC Act. This type of forfeiture was described by Doyle CJ in Director of Public Prosecutions v George as “statutory forfeiture”,[3] and it is convenient to use the same description in these reasons. Section 74 of the CAC Act provides (relevantly):
[3] [2008] SASC 330 at [21]; (2008) 102 SASR 246 at 254.
(1) Property is forfeited to the Crown at the end of the relevant period if—
(a) a person is convicted of a serious offence; and
(b) either—
(i)at the end of the relevant period, the property is covered by a restraining order that relates to the offence; or
(ii)the property was covered by a restraining order that relates to the offence, but the property was excluded, or the order revoked, under section 38 or section 44; and
(c) the property is not subject to an order under section 76 excluding the property from forfeiture under this Division.
(2) For the purposes of this section, it does not matter whether—
(a) the restraining order was made before or after the person’s conviction of the serious offence; or
(b) immediately before forfeiture, the property is the person’s property or another person’s property.
…
(6) In this section—
relevant period means—
(a) the 6 month period starting on the day of the conviction; or
(b) if an extension order is in force at the end of that period—the extended period relating to the extension order.
The “relevant period” to which s 74(1)(b)(i) refers is the period of six months starting on the day of the person’s conviction or, if an extension order is in force, the period fixed by that extension order (s 74(6)). Section 75 vests the court which made the restraining order with power to make an extension order. However, the period of extension must end not later than 15 months from the start of the day of the person’s conviction (s 75(2)).
In the present case, the six month period starting on the day of conviction expired on 12 November 2008. However, on 7 November 2008, a magistrate, with the consent of the Director, made an order under s 75. This had the effect of extending, subject to the provisions of s 75, to 12 August 2009 the time at which the statutory forfeiture under s 74 would take place.
The CAC Act provides three means by which a person may protect property from statutory forfeiture. First, a person may apply under s 36 for an order excluding the property from a restraining order. A court may make an order to this effect only if the requirements of s 34 are satisfied. Section 34 provides:
(1)The court to which an application for a restraining order under section 24(1)(a) or (b) was made may, when the order is made or at a later time, exclude specified property from the order if—
(a) an application is made under section 35 or 36; and
(b) the court is satisfied that—
(i)the property is neither proceeds nor an instrument of unlawful activity; and
(ii) the owner’s interest in the property was lawfully acquired; and
(iii)it would not be contrary to the public interest for the property to be excluded from the order.
(2) However—
(a) the court must not exclude property from a restraining order unless satisfied that neither a pecuniary penalty order nor a literary proceeds order could be made against—
(i) the person who owns the property; or
(ii)if the property is not owned by the suspect but is under his or her effective control—the suspect; and
(b) the court must not exclude property from a restraining order unless satisfied that the property could not be subject to an instrument substitution declaration if the suspect were convicted of the offence.
It can be seen that the court must be satisfied, amongst other things, that the property in question was neither proceeds nor an instrument of unlawful activity.
The second method of avoiding statutory forfeiture (the giving of alternative security under s 44) is inapplicable in the present case, and need not be addressed.
Thirdly, a person may seek an order under s 76 of the CAC Act excluding the property which is the subject of the restraining order from forfeiture. Section 76 provides:
(1)The court that made the restraining order referred to in section 74(1)(b) may make an order excluding particular property from forfeiture under this Division if—
(a) the person referred to in section 74(1)(a)—
(i) applies for the order; and
(ii) owns the property; and
(iii)has been convicted of a serious offence to which the restraining order relates; and
(b) the property is covered by the restraining order; and
(c) the court is satisfied that—
(i) the property is not proceeds of unlawful activity; and
(ii) the defendant’s interest in the property was lawfully acquired; and
(iii)it would not be contrary to the public interest for the property to be excluded from such forfeiture.
(2)To avoid doubt, an order under this section cannot be made in relation to property if the property has already been forfeited under this Division.
(3)The person must give written notice to the DPP of both the application and the grounds on which the order is sought.
(4) The DPP—
(a) may appear and adduce evidence at the hearing of the application; and
(b) must give the applicant notice of any grounds on which it proposes to contest the application.
The Magistrate’s Decision
On 3 November 2008, the appellant filed an application in the Magistrates Court seeking an order under s 34 excluding both the Cheltenham and Gillman properties from the restraining order, seeking an order under s 75 extending the period before statutory forfeiture would occur and seeking an order under s 76 excluding both properties from forfeiture. As noted earlier, an order was made on this application on 7 November 2008 extending the relevant period for the purposes of s 74 to 12 August 2009.
The appellant filed a second application on 15 July 2009. This application was in terms which were identical with that filed on 3 November 2008. The intended purpose of the application is unclear. So far as I can tell, it remains undetermined.
In addition, on 5 November 2008, the Director filed an application seeking a pecuniary penalty order (a PPO) under s 95 of the CAC Act. No order has been made on that application.
The appellant’s application of 3 November 2008 was not heard until 9 July 2010. The reason for this lengthy lapse of time is not clear.
On one view of the CAC Act, it could be said that the statutory forfeiture of the Cheltenham property had already occurred by the time the Magistrate heard the application. As noted earlier, statutory forfeiture under s 74 occurs at the end of the relevant period. In this case, as a result of the extension order made on 7 November 2008, the end of the relevant period was 12 August 2009. Thus, it could be said that forfeiture of the appellant’s interest in the Cheltenham property occurred by force of the statute on that day. Further s 76(2) provides expressly that an order excluding property from statutory forfeiture cannot be made if the property has already been forfeited under Div 2 of Pt 4 (which includes ss 74 and 76).
However, in DPP v George,[4] I expressed the view that a construction of the CAC Act which would mean that statutory forfeiture occurs at the end of the relevant period, even though an application under s 76 had been made but not yet determined, seemed inappropriate. The Director of Public Prosecutions also considers such a construction to be inappropriate. On the hearing of the appeal, counsel for the Director accepted that the CAC Act should be construed so that, despite the apparent effect of s 74, statutory forfeiture does not occur if an application has been made under s 76 within time and remains undetermined at the time of expiry of the relevant period.[5]
[4] Ibid at [251]; 297.
[5] See also Director of Public Prosecutions(Cth) v Chan [2001] NSWSC 151; (2001) 183 ALR 575, in particular at [66]-[69], 589-90, affirmed on appeal in Director of Public Prosecutions(Cth) v Chan [2001] NSWCA 249; (2001) 52 NSWLR 56.
On this construction of the CAC Act, statutory forfeiture did not occur in this case on 12 August 2009.
At the hearing before the Magistrate, the parties agreed that the Gillman property should be excluded from forfeiture and I was informed that an order to that effect has since been made. In relation to the Cheltenham property, the Magistrate ruled that the circumstances required by s 34 for its exclusion from the restraining order did not exist, and that it was not appropriate to make an order under s 76 excluding it from statutory forfeiture.
First, the Magistrate noted that in the course of the sentencing submissions in the District Court for the offence committed on 17 May 2006, the appellant’s then counsel had relied on the probability of statutory forfeiture of the appellant’s home as a matter which should mitigate his sentence. Judge Nicholson accepted this submission saying:
The Crown has obtained a restraining order over your interest in the family home, together with other property. On the information presently available, it is highly likely that an automatic forfeiture of at least your interest in the family home will occur on or about 12 November 2008 or some later date. If so, this forfeiture is likely to be of significant value. For this reason, at the moment you are at serious risk of losing the house that you own and in which your family resides. For the reasons I set out in some detail in the appendix to these sentencing remarks, I have had regard to this likely forfeiture as one of the factors bearing on the extent to which leniency can be exercised in your case.
It can be seen that the appellant obtained some leniency in sentencing by reason of the probability of statutory forfeiture of the Cheltenham property.
Although the Magistrate accepted that the hardship relied upon in the submissions in the District Court was to the appellant personally, whereas in the application before him it was the hardship to the appellant’s family which was relied upon, he considered that it was not in the public interest to allow an applicant to advance in different courts positions with respect to forfeiture which were inconsistent. The Magistrate said:
Would the sentencing court have taken the automatic forfeiture into account in the manner that it did, had it been aware that at sometime in the future the defendant would seek to have that property excluded from such forfeiture? The defendant cannot have it both ways.
It cannot be in the public interest to allow a litigant to benefit from what effectively amounts to a duplicitous approach to two different courts.
Secondly, the Magistrate considered that the matters relating to the public interest contemplated by s 76(1)(c)(iii) did not include the prospect of hardship to the appellant’s family.
In relation to the application under s 36, the Magistrate refused to order the exclusion of the Cheltenham property because he was not satisfied that it was not an instrument of unlawful activity.[6]
[6] CAC Act, s 34(1)(b)(i).
The Appeal
The appellant now appeals against the ruling in respect of the Cheltenham property. The appellant does not complain of the Magistrate’s refusal to make an order under s 34 excluding the Cheltenham property from the restraining order. His complaint relates only to the Magistrate’s ruling on the s 76 application.
The grounds of appeal contained in the notice of appeal are uninformative, asserting only that the Magistrate erred in refusing to make an exclusion order under s 76, and that he took (unspecified) irrelevant matters into account in reaching that ruling.
On the hearing of the appeal, the appellant imputed several errors to the Magistrate. These were first that the Magistrate failed to have regard to the fact that the appellant was a co-owner of the property, and to the fact (asserted by the appellant) that his present equity in the Cheltenham property was only $7,500. Secondly, the appellant contended that the interest of his wife in the Cheltenham property had been inappropriately incorporated in the restraining order, with the effect that her interest too was being forfeited, even though she had not committed any crime. Thirdly, the appellant submitted that the Magistrate had failed to take account appropriately of the hardship to his wife and family which forfeiture would cause.
Background
The material before the Magistrate indicated that the Cheltenham property was bought by the appellant and his wife in 1977 for the sum of $188,000. They hold it as tenants in common. The evidence suggested that the property had been acquired lawfully and, in particular, without use of the proceeds of any unlawful activity.
The Cheltenham property has been the home of the appellant, his wife and their three children (who are now 23, 18 and 16) since it was bought. Both the appellant and his wife deposed that if they were evicted from the Cheltenham property, they will have nowhere else to live.
The Gillman property is owned by a trust controlled by the appellant and his wife. It was purchased in March 2006 for $418,000 and presently secures borrowings of $229,000.
The appellant and his wife own and operate a trucking business.
The Interest of the Appellant’s Wife in the Cheltenham Property
The appellant and his wife, as tenants in common, each own one undivided part of the Cheltenham property. The appellant submitted that the restraining order applied both to his wife’s interest as well as his own, with the effect that his wife’s interest was also the subject of statutory forfeiture. His contention was that the Magistrate had erred by failing to exclude his wife’s interest from the restraining order and from forfeiture. This submission seems more relevant to the Magistrate’s decision in relation to s 34, but this point can be put to one side.
In my opinion the submission cannot be sustained.
By s 24 of the CAC Act, a court is required to make a restraining order if satisfied of one or more of four specified matters. Section 24(1) provides:
A court must, on application by the DPP, make an order (a restraining order) that specified property must not be disposed of or otherwise dealt with by any person (except in the manner and circumstances, if any, specified in the order) if satisfied that—
(a)a person has been convicted of, or has been charged with, a serious offence, or it is proposed that the person be charged with a serious offence; or
(b)a person is suspected on reasonable grounds of having committed a serious offence; or
(c)there are reasonable grounds to suspect that the property is the proceeds of, or is an instrument of, a serious offence (whether or not the identity of the person who committed the offence is known); or
(d)there are reasonable grounds to suspect that a person has committed a serious offence and has derived literary proceeds in relation to the offence.
Although the application for the restraining order filed by the Director on 6 June 2006 in relation to the appellant did not specify the paragraph in s 24(1) upon which the Director relied, it seems that the Director was invoking s 24(1)(a). That is because the particulars to the application included the statement “It is proposed that the defendant be charged with one count of possessing a controlled substance for sale, contrary to s 32(1)(e) of the Controlled Substances Act 1984”, using the language of paragraph (a).
The Director sought a restraining order in respect of property “in which the appellant has an interest” and particularised, relevantly, the Cheltenham property. Thus the application was framed in terms of the property in which the appellant had an interest rather than in terms of his interest in specified property.
On 23 June 2006, a magistrate made an order in the terms sought by the Director, that is, restraining dealings in the specified properties, and not just dealings in the appellant’s interest in those properties. However, the magistrate stayed the operation of that order for seven days, apparently to allow the appellant to make further submissions.
On 11 July 2006 the appellant and his wife applied to the Magistrates Court for the entire discharge of the restraining order or, in the alternative, a “discharge” of the restraining order in relation to the interest of the appellant’s wife. Subsequently, on 16 August 2006, a magistrate made a new restraining order which, relevantly, restrained dealings in “the defendant’s interest” in the Cheltenham property, instead of dealings in the property itself. This is the restraining order to which I referred at the commencement of these reasons. The Magistrate also rejected a submission that the appellant’s wife had not been properly notified of the Director’s application, as required by s 25 of the CAC Act.
Although the Magistrate did not say so explicitly, it is evident that he intended the order made on 16 August 2006 to be a substitution for the order made on 6 June 2006, so that the latter ceased to have any effect.
There was no appeal against the Magistrate’s order.
The effect of the order made on 16 August 2006 was to exclude the appellant’s wife’s interest from the restraining order. Ever since that date, the restraining order has not prevented her from dealing with her interest in the Cheltenham property as she sees fit.
As seen above, s 24(1) of the CAC Act requires a restraining order to be made with respect to specified property. The word “property” is defined in s 3 of the CAC Act as follows:
property means real or personal property (tangible or intangible) including—
(a) a chose in action; and
(b) an interest in property;
Accordingly, it was open to the Magistrate to make a restraining order with respect to the appellant’s interest in the Cheltenham property.
It was not suggested that a restraining order must itself specify the nature of the interest in the property held by a defendant. Further, because the application for the restraining order in the present case was made under s 24(1)(a), it was not necessary for the Director to establish that it was the appellant’s interest as a tenant in common in the property (as opposed to the property itself) which was the instrument of the offence (as may have been required under s 24(1)(c)).
The appellant’s submissions did not explain how, despite the order made on 16 August 2006, the interest of the appellant’s wife was still subject to the restraining order and, accordingly, to statutory forfeiture. This ground of appeal fails.
The Appellant’s Equity in the Cheltenham Property
The appellant submitted that the Magistrate had erred by not appreciating that the appellant’s interest in the Cheltenham property was that of tenant in common, and not joint tenant, and by not appreciating that the appellant’s net equity in the property was only $7,500.
The appellant accepted, in fairness to the Magistrate, that the material relied upon for this submission had not been put before the Magistrate, and that a submission to this effect had not been made to him. I permitted the appellant to adduce the evidence upon which he relied as fresh evidence on the appeal. Although the material had been available at the time of the hearing in the Magistrates Court, the significance which the appellant now attaches to it had not been appreciated. Given the limited experience in the application of the CAC Act to date, and the importance of the matters involved for the appellant, I considered it to be in the interests of justice for the fresh evidence to be received.
On the basis of the new material, counsel put an argument along the following lines:
1.The appellant owned the Cheltenham property with his wife as tenants in common.
2.The capital value of the Cheltenham property as at 1 January 2008 (the most recent valuation in the materials put forward by the appellant) is $495,000.
3.As at 18 July 2008, the sum of $240,000 remained owing by the appellant and his wife on a loan secured by mortgage on the Cheltenham property.
4.The appellant and his wife are jointly and severally liable to the mortgagee for that $240,000.
5.The appellant’s equity in the Cheltenham property is $7,500 derived as follows:
Capital value $495,000
Appellant’s half share $247,500
Less amount secured by mortgage $240,000
Appellant’s equity $7,500
It can be seen that the appellant derived the figure of $7,500 by first taking the assumed capital value and then deducting from the appellant’s half the whole of the outstanding liability to the mortgagee.
As I understood the argument, it was to the effect that if the Magistrate had appreciated that the appellant’s equity was only $7,500, he was likely to have taken a different view about the “inconsistency” between the appellant’s position in the District Court and his position in the Magistrates Court; that he may have regarded the advantage to the State resulting from the forfeiture as being, in relative terms, so slight as not to be worthwhile; he was likely to have taken a different view of the hardship resulting from forfeiture to the appellant’s wife; and he was likely to have made a different assessment of the public interest.
There are a number of difficulties in the way of accepting this submission. In the first place, the submission relies upon historic figures of value and indebtedness. The valuation of the property at January 2008 was already two and a half years out of date at the time of the hearing before the Magistrate. That is quite significant given the general appreciation in property values in metropolitan Adelaide since January 2008. The appellant could have adduced, as part of the fresh evidence, the Valuer-General’s current valuation for the property and could also have adduced evidence of the current level of indebtedness secured by the property. I surmise that up-to-date figures would have indicated that, even on his own rationale, the appellant’s equity was much more than $7,500.
More fundamentally, there are difficulties in the reasoning by which the appellant derived the figure of $7,500 as the amount of his equity. The appellant and his wife are jointly and severally liable to the mortgagee for the loan secured by the Cheltenham property. Their liability is secured by the whole property, and not just by the appellant’s interest in it. There is no basis upon which the whole of the outstanding liability should, on an application of the present kind, be attributed solely to the appellant. Even if it was possible for the mortgagee to enforce the liability against the interest of one co-owner only, it is improbable that it would do so. Further, any prospect of that occurring appears to apply as much to the wife’s interest as it does to the appellant’s. On that basis, using the appellant’s reasoning, it could be the equity of the appellant’s wife which would be only $7,500 whereas his would be $247,500.
If the statutory forfeiture proceeds, it is only the appellant’s half interest as tenant in common which will be forfeited. In that event, the Administrator under the CAC Act will be obliged to dispose of the property as soon as practicable.[7] Absent the agreement of the appellant’s wife, that will require an order for partition and sale, or sale only, under s 69 of the Law of Property Act 1936 (SA). On such a sale, the indebtedness to the mortgagee would have to be discharged from the proceeds. The net proceeds, after deduction of the costs of sale, any other proper deductions, and allowance for any competing equities between the appellant and his wife, would then be divided equally. This would result in the appellant’s equity realising much more than $7,500.
[7] CAC Act, s 93.
The position can be illustrated in another way. If, hypothetically, the whole of the outstanding liability to the mortgagee is attributed to the appellant’s half share and statutory forfeiture occurs, it seems that the State, on discharging the liability to the mortgagee, would be entitled to equitable contribution from the appellant’s wife.[8] The State in that circumstance would not recover only $7,500, but that figure in addition to the contribution from the appellant’s wife. In other words, the appellant’s interest forfeited to the State would comprise the equity as calculated by the appellant and, in addition, an equity entitling him to contribution.
[8] Albion Insurance Co Ltd v Government Insurance Office (NSW) (1969) 121 CLR 342 at 349-50.
Accordingly, even if the material now relied upon had been put before the Magistrate, and the present submission made to him, it could not have produced any different result.
For these reasons alone, this ground of appeal should fail. This makes it unnecessary to consider the submissions concerning the different view which the Magistrate may have taken if the appellant’s net equity in the Cheltenham property was only $7,500.
Hardship
The appellant submitted that the Magistrate had failed to take account of the hardship, particularly to his wife and children, which statutory forfeiture would produce.
The submission was put in a number of ways. First, it was said that the Magistrate had failed fully to appreciate that it was the hardship to the appellant’s family, rather than the hardship to him personally, which was the significant matter. If the Magistrate had appreciated this, it was contended that he would not have regarded the apparent inconsistency between the appellant’s submission to the District Court, and his application in the Magistrates Court, as being a significant matter.
Secondly, the appellant compared the hardship to himself and his family with the limited benefit to the State. This argument assumed that the appellant’s equity was only $7,500. For the reasons already mentioned, this submission fails.
Thirdly, the appellant contended that his wife would suffer the hardship of having her interest in the property forfeited, even though she herself had not committed any offence. This argument proceeded on the misconception which I addressed earlier, and so also fails.
At the outset, there is a question of whether either personal hardship to defendants, or to members of their families, is something which can be taken into account on an application under s 76. As noted earlier, s 76(1) requires, relevantly, that the court be satisfied that it not be contrary to the “public interest” for the property to be excluded from forfeiture. In this respect, s 76(1) differs from s 47 of the CAC Act which provides for court ordered forfeiture. Section 47(4) provides that the court may have regard, when considering whether it is appropriate to make a forfeiture order under that section, to “any hardship that may reasonably be expected to be caused to any person (other than the suspect) by the operation of the order”. That is to say, hardship to persons such as members of a defendant’s family is expressly made a relevant discretionary consideration in relation to Court ordered forfeiture under s 47, but is not mentioned in s 76(1).
The structure of s 76(1) indicates that the exercise of the discretion to exclude property from forfeiture is subject to the conditions precedent listed in subparagraphs (a), (b) and (c). These conditions include the requirement that the court must be positively satisfied that the exclusion from forfeiture would not be contrary to the public interest. That suggests that even if a court thought that considerations of hardship may warrant an exclusion order being made, it should not make the order unless satisfied that it would not be contrary to the public interest to do so.
Duggan J referred to the inter‑relationship between hardship, on the one hand, and the public interest criterion in s 76(1), on the other, in DPP v Sienczewski:[9]
Apart from being a condition precedent and not a discretionary consideration, I do not consider that considerations of public interest in this context can be turned into an argument based on hardship. In my view, the public interest considerations referred to in s 76 are those which are closely connected with the purpose of the legislation. The order for exclusion of property is not to be made if it would be contrary to those interests.[10]
[9] [2010] SASC 16.
[10] Ibid at [32].
It is not possible to identify all the various matters which may bear upon the public interest for the purposes of s 76(1)(c). The concept of “the public interest” is a wide one, and generally involves a discretionary value judgment following consideration of a range of matters. Mason CJ, Brennan, Dawson and Gaudron JJ spoke in O’Sullivan v Farrer of the undefined nature of the public interest:[11]
[T]he expression “in the public interest”, when used in a statute, classically imports a discretionary value judgment to be made by reference to undefined factual matters, confined only “in so far as the subject matter and the scope and purpose of the statutory enactments may enable … given reasons to be [pronounced] definitely extraneous to any objects the legislature could have had in view”.[12]
(Citation omitted)
Kirby J gave a paraphrase of this passage in Visnic v Australian Securities and Investments Commission[13] when he said:
The use of such expressions [“in the public interest”] in legislation may direct the attention of the court to a “discretionary value judgment to be made by reference to undefined factual matters” but with boundaries that can be fixed by reference to the objects that the legislature is taken to have had in view.[14]
Thus the matters to which a court may have regard will usually be confined only by the scope and purpose of the relevant legislation.
[11] (1989) 168 CLR 210.
[12] Ibid at 216.
[13] [2007] HCA 24; (2007) 231 CLR 381.
[14] Ibid at [36]; 391.
The identification of where the public interest lies in any particular circumstance may well be a matter upon which reasonable minds may differ.[15]
[15] McKinnon v Secretary, Department of Treasury [2006] HCA 45 at [55]; (2006) 228 CLR 423 at 444; Right to Life Association (NSW) Inc v Secretary, Department of Human Services and Health (1995) 56 FCR 50 at 59.
An assessment of the public interest in some circumstances may involve a consideration of the effect of the proposed action (or absence of action) upon the particular interests of an individual. It may, for example, promote the public interest, or at least be consistent with the public interest, for the particular interests of an individual to be recognised. Jacobs J spoke of the relationship between the public interest and private interests in Sinclair v Mining Warden at Maryborough[16] in the following passage:
The public interest is an indivisible concept. The interest of a section of the public is a public interest but the smallness of the section may affect the quantity or weight of the public interest so that it is outweighed by the public interest in having the mining operation proceed. It does not however affect the quality of that interest … The words “public interest” are so wide that they comprehend the whole field of objection other than objection founded on deficiencies in the application and in the required marking out of the land applied for. For instance the public interest may tell against the grant of a mining lease even though the particular interests of an individual are the only interests primarily affected. It may thus be in the public interest that the interests of that individual be not overborne. However, all the objections can be and should be related to the public interest. But private interests as such are not a relevant consideration.[17]
(Emphasis added)
[16] (1975) 132 CLR 473.
[17] Ibid at 487.
The consideration of the public interest for the purposes of s 76(1)(c) must take account of the scope and purpose of the CAC Act. In that respect it is significant that it is both an intended, and inevitable, effect of the regime of forfeiture contemplated by the CAC Act that there will be some resultant hardship. Debelle J referred to this consideration in Taylor v Attorney-General[18] when he said:
The fact that hardship will occur is not a factor which, standing alone, will militate against an order for forfeiture. It is necessary to bear in mind that it is the intention of the Act that the forfeiture of property will cause a measure of hardship.[19]
In the Second Reading Speech on the introduction of the Criminal Assets Confiscation Bill on 10 November 2004, the Attorney-General adopted the following statement of Professor Frieberg as the purpose of the Act which also indicates that some hardship is an intended consequence:
[T]o incapacitate, by depriving a person of the physical or financial ability, power or opportunity to continue to engage in proscribed conduct, to prevent offenders from unjustly enriching themselves, by eliminating the advantages and benefits which the offender has gained through his or her illegality, to deter the offender and others from crime by undermining the ultimate profitability of the venture and to protect the community by curbing the circulation of prohibited items.[20]
Of course, these purposes are directed to the offender and not the family or dependants of the offender. However, the legislature must have contemplated that the achievement of the purposes of forfeiture would be likely to result in many cases in hardships to the family and dependants of the offenders.
[18] (1991) 55 SASR 462.
[19] Ibid at 473.
[20] See Director of Public Prosecutions v George [2008] SASC 330 at [16]; (2008) 102 SASR 246 at 253.
On the other hand, it has to be kept in mind that the public interest criterion in s 76(1)(c)(iii) is in the nature of a negative condition about which a court must be satisfied before the discretion vested in it by the opening words of s 76(1) may be exercised. The court does not have to be satisfied that it would be in the public interest to make the exclusion order; only that it would not be contrary to the public interest to do so. Put the other way round, the court may be satisfied that it is not contrary to the public interest to exclude specified property from forfeiture, even though it would not have been satisfied positively that that exclusion was required in the public interest. There may be cases, for example, in which the public interest is neutral about whether or not forfeiture should occur.
Once the court is satisfied of the other conditions precedent in s 76(1) and that it would not be contrary to the public interest to make an exclusion order, the court’s discretion under s 76(1) may be exercised. That discretion must of course be exercised judicially, having regard in particular to the scope and purpose of the CAC Act. However, I see no reason why hardship to an offender’s family may not, in some cases, be relevant to the exercise of that discretion, subject of course to satisfaction of the conditions precedent in subparagraphs (a), (b) and (c). The CAC Act recognises in other provisions that account may be taken of the hardship to an offender’s family or dependants, for example, ss 47 and 57. This suggests that exclusion from forfeiture under s 76 on the grounds of hardship will not always be contrary to the public interest.
I doubt that considerations of hardship could support the routine making of exclusion orders under s 76(1). Such routine exclusions could have the effect of undermining the primary purposes sought to be achieved by the CAC Act. It would be contrary to the public interest as manifested in the structure and content of the CAC Act for that to occur. However, that leaves open the possibility that there may be cases in which, because of the particular hardship which forfeiture may cause, it would not be contrary to the public interest for the property in question to be excluded, and therefore for the discretion to exclude the property from forfeiture to be exercised.
I do not regard the present case as one in which it can be said that the particular effect upon the appellant’s family indicates that it would not be contrary to the public interest for the statutory forfeiture to occur. Apart from anything else, it is not inevitable on the evidence that the Cheltenham property will have to be sold. It is by no means clear that an order for the sale of the property will inevitably lead to the appellant and his family losing possession of the property, as there remains the prospect of the appellant and his wife negotiating some alternative arrangement with the Administrator. Even if it did, it is by no means clear that they will not be able to secure other suitable accommodation. Apart from bald assertions in their respective affidavits to that effect, the appellant and his wife did not indicate why that conclusion should be accepted. I agree that the financial effect of the statutory forfeiture is likely to be severe, but, as noted earlier, it is consistent with the scope and purpose of the CAC Act that statutory forfeiture should have that effect. Put slightly differently, the hardships identified by the appellant and his wife are not such as to outweigh the public interest in the scheme for forfeiture contemplated by the CAC Act having its full effect.
Further, as the appellant obtained an advantage for himself in the District Court sentencing by reference to the hardships which the probable statutory forfeiture of the Cheltenham property would cause, it would be contrary to the public interest, and in particular to the public interest in the proper administration of justice, for the appellant to rely now (in substance) on the same foreshadowed hardships in order to avoid forfeiture.
In my opinion, the appellant has not shown that the Magistrate erred in his consideration of the conditions specified in s 76(1) of the CAC Act for the exercise of the discretion to exclude the Cheltenham property from forfeiture, nor in the exercise of his discretion.
Conclusion
For the reasons given above, I consider that the appellant has not established any error by the Magistrate. I dismiss the appeal.
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