The Commissioner of the Australian Federal Police v James Henry Kinch

[2016] NSWSC 1424

Supreme Court

New South Wales

Medium Neutral Citation:	The Commissioner of the Australian Federal Police v James Henry Kinch [2016] NSWSC 1424
Hearing dates:	5 October 2016
Date of orders:	06 October 2016
Decision date:	07 October 2016
Before:	Hall J
Decision:	Pursuant to s 95 of the Proceeds of Crime Act 2002 (Cth) (the Act), the items set out in Schedule 1 to 6 in the Notice of Motion filed on 17 August 2016 are forfeited under Part 2-3 of the Act. The question of costs is reserved.
Catchwords:	PROCEEDS OF CRIME – Proceeds of Crime Act 2002 – Forfeiture on conviction of a serious offence – automatic forfeiture provisions (s 92 of the Act) – forfeiture at end of six month period starting on conviction day or the extended period – application for extension order made day prior to expiration of six month period – no extension order made prior to expiration of the six month period – property subject to a forfeiture order was forfeited as expiration of the six month period – s 94(2) of the Act – application for extension order and exclusion order dismissed
Legislation Cited:	Criminal Code 1995 (Cth) Proceeds of Crime Act 2002 (Cth)
Cases Cited:	ASIC v Marlborough Gold Mines Ltd (1993) 177 CLR 485 at 492; HCA 13 Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99; HCA 36 Coco v the Queen (1994) 179 CLR 427; HCA 15 Commissioner for Railways (NSW) v Agalianos (1955) 92 CLR 390; HCA 27 Commissioner of the Australian Federal Police v Hart and Ors [2016] QCA 215 Commissioner of the Australian Federal Police v Nguyen [2016] NSWSC 883 DPP v Alex Chan [2001] NSWCA 249 Gett v Tabet (2009) 254 ALR 504; NSWCA 76 Hall v Director of Public Prosecutions [2015] SASCFC 19 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 The Commissioner of the Australian Federal Police v Halac [2015] NSWSC 520
Category:	Principal judgment
Parties:	Commissioner of the Australian Federal Police (Applicant) James Henry Kinch (Respondent)
Representation:	Counsel: Mr D Tynan (Applicant) Ms S Goodwin (Respondent)   Solicitors: Australian Federal Police, Proceeds of Crime Litigation (Applicant) John B Hajje and Associates (Respondent)
File Number(s):	2008/00284947
Publication restriction:	None

Judgment

1. In these proceedings the Commissioner of the Australian Federal Police (the Commissioner) makes application by way of Notice of Motion filed on 17 August 2016 in which declaratory relief is sought in the following terms:

Pursuant to s 95 of the Proceeds of Crime Act 2002 (Cth) (the Act), the Court declares that the items set out in Schedule One to Six hereto be forfeited under Part 2-3 of the Act.

2. The application is supported by the following affidavits relied upon by the Commissioner:

1. Affidavit of Alexandra Navarrete sworn 16 August 2016;

2. Affidavit of Erica Jayne Last sworn 11 May 2016; and

3. Affidavit of Erica Jayne Last sworn 16 August 2016.

3. The application was heard in the Duty Judge list yesterday, 5 October 2016. Mr Daniel Tynan of counsel appeared on behalf of the Commissioner. Ms Sheridan Goodwin of counsel appeared on behalf of the respondent, James Henry Kinch.

4. The Commissioner’s Notice of Motion relates to proceedings commenced by Mr Kinch on 10 August 2016 (as to which see below) in which proceedings Mr Kinch sought:

1. An extension of the automatic forfeiture date pursuant to s 93 of the Act (the extension application); and

2. An exclusion of the Restrained Property from forfeiture pursuant to s 94 of the Act (the exclusion application).

The Evidence

5. The above affidavits were read without objection on behalf of the Commissioner.

6. The affidavit of John Buddy Hajje, solicitor, sworn 5 October 2016 was read on behalf of the respondent, James Henry Kinch. Objection was taken to the affidavit, firstly, on the ground that the affidavit was late and that Mr Tynan had only received a copy of it that morning; secondly, that the material could only go to an application under s 93(1)(c) of the Act; and thirdly that the reference contained within para [2] to the agreement between Mr Kinch and his former solicitor, Ms Elamrousy, had little weight. Objection was also taken to para [3] of the affidavit on a similar basis.

7. Ms Goodwin accepted, in relation to the last sentence of para [2] that there could be “some admissibility issues with respect to that sentence” (T 8). She submitted that, at its highest, it would go to the state of mind of Mr Hajje in pursuing the proceedings (as to the fact that he had not been able to obtain the full file and was hindered by that) (T 8 [10]-[15]). I determined to admit the evidence of the last sentence of para [2] on that basis as going to an issue as to state of mind. Paragraph [3] was admitted provisionally subject to relevance and, if relevant, its weight.

8. Ms Goodwin sought and was granted leave to call oral evidence from the respondent. This evidence is noted below.

Background

9. On 2 June 2008 this Court made an order pursuant to s 17 of the Act restraining certain property (Restrained Property). The order was made in respect of all of the property owned by Mr Kinch and any property acquired by him after the date of the restraining order.

10. The Restrained Property is identified in Schedules 1 to 6 of the Notice of Motion and in Ms Navarrete’s affidavit at [7]. It includes a property in Portugal, cash, traveller’s cheques and funds held in numerous bank accounts.

11. On 12 February 2016 the respondent was convicted and sentenced by this Court (Hidden J) in respect of the following:

“(a) two counts of conspiring to import into Australia prohibited imports, being commercial quantities of methamphetamine, an offence contrary to s 233B of the Customs Act 1901 (Cth); and

(b) one count of money laundering by possessing money that was the proceeds of crime, an offence contrary to s 81 of the Proceeds of Crime Act 1987 (Cth) (which has since been replaced by the [Proceeds of Crime Act 2002 (Cth)]).”

12. Following Mr Kinch’s conviction, pursuant to s 92(3)(a) of the Act, the Restrained Property was due to be automatically forfeited to the Commonwealth at midnight on 11 August 2016 (being the end of the six month period which started on “conviction day” as specified in s 92(3)(a) of the Act).

13. On 8 April 2016 Mr Kinch was served with a s 92A Notice which advised him that pursuant to s 92 of the Act, the Restrained Property would be automatically forfeited to the Commonwealth at midnight on 11 August 2016. A copy of the Notice was attached to Ms Last’s May affidavit at [3]. The Notice included the following statement:

“The application for an extension order must be made and determined before midnight on 11 August 2016”.

14. On 8 April 2016 Mr Kinch signed an acknowledgment of receipt of the s 92A Notice.

15. On 13 July 2016 Mr Kinch’s solicitors, John B Hajje and Associates, filed a Notice of Appearance in the Supreme Court in these proceedings. On 13 July 2016 the Commissioner served Mr Kinch’s solicitors with a copy of the s 92A Notice and a notice pursuant to s 183 of the Act for Mr Kinch to attend a compulsory examination before an Approved Examiner: Ms Last’s August affidavit; and Ms Navarrete’s affidavit at [15]-[16].

16. On 19 July 2016 Mr Kinch was examined pursuant to s 180 of the Act. He was represented by counsel at the examination. Mr Hajje also appeared on that occasion.

17. No application was made for an extension of the forfeiture date following service of the s 92A Notice until 10 August 2016, that is to say, a day before the date for automatic forfeiture of the Restrained Property. Mr Kinch, by his Notice of Motion, sought two orders:

(a)   An extension of the automatic forfeiture date pursuant to s 93 of the Act (the extension application); and

(b)   An exclusion of the Restrained Property from forfeiture pursuant to s 94 of the Act (the exclusion application).

18. Mr Kinch’s Notice of Motion was supported by a three-paragraph affidavit of Mr Hajje sworn on 9 August 2016.

19. Mr Hajje’s affidavit did not contain any written notice of the grounds on which Mr Kinch sought an exclusion order as required by s 94(3) of the Act. The affidavit in para [2] merely stated:

“I have been instructed to object on my client’s behalf to the Orders being sought by the Plaintiff herein”.

20. In the submissions in the present matter, the Commissioner submitted that the respondent’s Notice of Motion was liable to be dismissed for want of compliance with the requirement of notice of grounds as stipulated in s 94(3): Commissioner of the Australian Federal Police v Nguyen [2016] NSWSC 883 at [7]-[10].

21. The only matter advanced in Mr Hajje’s affidavit in support of the extension application was in the following terms:

“I have been instructed to, respectfully, seek an extension of time in respect of the statutory forfeiture as the subject assets are located overseas and the defendant is currently resident at Lithgow Correctional Centre.”

The Proceeds of Crimes Act 2002 (Cth)

22. The relevant provisions relating to forfeiture on conviction of a serious offence are set out in Part 2-3 of the Act.

23. The provisions of ss 92, 92A, 93 and 94 are central to the present application. Accordingly, they are reproduced below.

“Section 92

(1)   Property is forfeited to the Commonwealth at the end of the period applying under subsection (3) if:

(a)   a person is convicted of a serious offence; and

(b)   either:

(i)   at the end of that period, the property is covered by a restraining order under section 17 or 18 against the person that relates to the offence; or

(ii)    the property was covered by such a restraining order against the person, but the order was revoked under section 44 or the property was excluded from the order under that section; and

(c)   the property is not subject to an order under section 94 excluding the property from forfeiture under this Part.

(3)   The period at the end of which the property is forfeited is:

(a)   the 6 month period starting on the conviction day; or

(b)   if an extension order is in force at the end of that period -the extended period relating to that extension order.

(4)   This section does not apply if the person is taken to have been convicted of the offence because the person * absconded in connection with the offence.

(5)   A restraining order in relation to a related offence with which the person has been charged, or is proposed to be charged, is taken, for the purposes of this section, to be a restraining order in relation to the offence of which the person was convicted.

(6)   If:

(a)   under section 44, a * restraining order that covered particular property is revoked, or particular property is excluded from a restraining order; and

(b)   the security referred to in paragraph 44(1)(e), or the undertaking referred to in paragraph 44(2)(e), in connection with the revocation or exclusion is still in force;

the property is taken, for the purposes of this section, to be covered by the restraining order.

Section 92A

(1)   The responsible authority for the restraining order referred to in paragraph 92(1)(b) must, before property is forfeited under this Part, take reasonable steps to give any person who has or claims, or whom the authority reasonably believes may have, an interest in the property a written notice stating:

(a)   the date on which the property will be forfeited under this Part unless it is excluded from forfeiture; and

(b)   the effect of section 93 (which deals with extension orders); and

(c)   that the person may be able to apply for an order under one of the following sections in relation to the property:

(i)   section 29 (which deals with the exclusion of property from restraining orders);

(ii)   section 94 (which deals with the exclusion of property from forfeiture);

(iii)   section 94A (which deals with compensation).

(2)    However, the responsible authority need not give a notice to a person under subsection (1) if the person has made:

(a)   an application for an extension order in relation to the property; and

(b)   an application under section 30, 31 or 94 in relation to the property.

Section 93

(1)   The court that made the restraining order referred to in paragraph 92(1)(b) may make an order (an extension order) specifying an extended period for the purposes of subsection 92(3) if:

(a)   an application for the order is made within 6 months after the start of the conviction day for the relevant conviction; and

(b)   the applicant has also applied to the court under:

(i)   section 30 or 31 to exclude property from the restraining order; or

(ii)   section 94 to exclude the property that is covered by the restraining order from forfeiture under this Part; and

(c)   the court is satisfied that the applicant made the application under section 30, 31 or 94 without undue delay, and has since diligently followed up that application.

The extended period specified must end no later than 15 months from the start of the conviction day for the relevant conviction.

(2)   The extension order stops being in force if the application under section 30, 31 or 94 is finally determined before the end of the 6 month period starting on the * conviction day for the relevant conviction.

(3)   The extended period ends if the application under section 30, 31 or 94 is finally determined before the end of that period.

(4)    If the court makes the * extension order, the * responsible authority must take reasonable steps to give any person who has or claims, or whom the authority reasonably believes may have, an * interest in the property to which the order relates a written notice stating:

(a)    the date on which the property will be forfeited under this Part, in accordance with the extension order, unless it is excluded from forfeiture; and

(b)   the effect of subsections (2) and (3).

Section 94

(1)   The court that made a restraining order referred to in paragraph 92(1)(b) must make an order excluding particular property from forfeiture under this Part if:

(a)   a person (the applicant) has applied for an order under this section; and

(b)   the court is satisfied that the applicant has an interest in property covered by the restraining order; and

(d)   a person has been convicted of a serious offence to which the restraining order relates; and

(e)   the court is satisfied that the applicant's interest in the property is neither proceeds of unlawful activity nor an instrument of unlawful activity; and

(f)   the court is satisfied that the applicant's interest in the property was lawfully acquired.

(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 Part…

(3)   The person must give written notice to the responsible authority of both the application and the grounds on which the order is sought.

(4)   The responsible authority may appear and adduce evidence at the hearing of the application.

(5)   The responsible authority must give the applicant notice of any grounds on which it proposes to contest the application. However, the authority need not do so until it has had a reasonable opportunity to conduct examinations in relation to the application.

(6)   The application must not be heard until the responsible authority has had a reasonable opportunity to conduct examinations in relation to the application.”

24. It is also noted that s 96 provides the property forfeited under s 92 vests absolutely in the Commonwealth at the time of the forfeiture.

Submissions

25. I have had the benefit of Mr Tynan’s written submissions dated 30 September 2016 and Ms Goodwin’s written submissions dated 4 October 2016. It is appropriate that I express my appreciation to both counsel for the high quality of their written and oral submissions, which have been of great assistance and have facilitated an early determination of the issues arising in the proceedings.

The Commissioner’s Submissions

26. The submissions for the Commissioner regarding the terms of s 92 of the Act was expressed in very clear language. Section 92(1) provides for the automatic forfeiture of property of the Commonwealth at the end of the “period” if the conditions there stated have been met by that time.

27. As observed, the “period” is set out in s 92(3) which states that the period at the end of which the property is forfeited is:

1. The six month period starting on the conviction day; or

2. If an extension order is in force at the end of that period – the extended period relating to that extension order.

28. Section 93, which provides a power in the court to make an extension order specifies the necessary preconditions, namely,

1. That the application for the extension order must be made within six months of the conviction day;

2. That the applicant must also have applied to exclude the property under s 94; and

3. The Court be satisfied that the applicant has made the s 94 application without undue delay and has since diligently followed up that application.

29. By s 94 it is mandatory for the Court to make an exclusion order if it is satisfied of the various matters which include that the applicant’s interest in the property has been lawfully acquired and that it is neither the proceeds of unlawful activity, nor an instrument of unlawful activity.

30. As noted above, s 94(2) of the Act importantly provides:

“To avoid doubt, an order under this section cannot be made in relation to property if the property has already been forfeited under this Part.”

31. The further submissions for the Commissioner were expressed in the following terms:

“The ordinary natural grammatical meaning and consequent effect of ss 92(1), 92(3), 94(2) and 96 is this: unless an extension order is in force at the end of the six month period starting on the conviction day, then at the end of that six month period the restrained property is forfeited to the Commonwealth and vest absolutely in the Commonwealth. Thereafter it is not possible to make an exclusion order under s 94 because of the intractable wording of s 94(2).

The only way an extension order can be ‘in force’ at the end of the six month period is if the application under s 93 has been made by an applicant and the Court has made a s 93 order by the end of that six month period.

The offences for which Mr Kinch was convicted on 12 February 2016 are serious offences within the meaning of the Act: s 338 of the Act.

By reason of the operation of the above provisions, in the absence of an extension order having been made by midnight on 11 August 2016, no extension order under s 93 nor any exclusion order under s 94 can be made by the Court. It is not enough that Mr Kinch made an application for an extension order before the expiration of the six month period since his conviction because no extension order was made (‘in force’) by the end of that period.”

32. Attention was drawn to a number of decisions including in particular the decision in The Commissioner of the Australian Federal Police v Halac [2015] NSWSC 520 (Hidden J); Hall v Director of Public Prosecutions [2015] SASCFC 19; and DPP v Alex Chan [2001] NSWCA 249.

33. The Commissioner’s position was succinctly stated in the submissions, namely, that in the absence of an extension order having been made by the Court by 11 August 2016, no extension order under s 93 nor any exclusion order under s 94 can be made by this Court: Written Submissions at [48].

34. It was accordingly submitted for the Commissioner that at midnight on 11 August 2016, the Restrained Property vested in the Commonwealth, accordingly the Commissioner sought the declaration sought in the Notice of Motion.

Respondent’s Submissions and Evidence

35. In Ms Goodwin’s oral outline of submissions, it was foreshadowed that the respondent intended to submit that to the extent that the judgment of Hidden J in Halac, supra, establishes that there is an automatic forfeiture of the process six months after conviction in circumstances in which an application for exclusion and extension has been filed but not yet determined was erroneous (T3).

35. Ms Goodwin indicated that reliance would be placed upon the authority of the Court of Criminal Appeal in Chan, supra, and that Hidden J was in error in seeking to distinguish or differentiate the decision in Chan from that determined by his Honour in Halac. In that respect it was submitted that provisions of s 94 in the 2002 Act did not justify the departure from the authority of the Court of Criminal Appeal in Chan.

36. Ms Goodwin in her oral outline of submissions, stated that

“…Section 92 is plainly in conflict with section 93 of the new legislation, the relevant legislation relating to the instant matter. Insofar as section 93 which grants the power of the Court to extend an application requires only that the extension application be made within the six month relevant time limit and then laid out relevant criteria for assessing, on the balance, as to whether the application would be warranted.

In our submission, insofar as what is expressed is plain, had the legislature meant to prohibit an extension application being made in circumstances where the application is filed, but not yet determined inside the six month time limit and that is what would have been expressed. Although that is one interpretation, given section 92, and given the inclusion of words “in force”, in our submission, that interpretation is not to be preferred against any interpretation which would favour the strict application of the wording in s 93. Particularly, that is the case given that it is referring to an abrogation of otherwise a common law right, for example, to own property.” (T 3-4).

38. In Ms Goodwin’s written submissions, it was stated that the issue was whether s 92 of the Act applies so as to result in automatic forfeiture of proceeds six months after conviction when an application for an extension order has been filed but not yet determined.

39. Ms Goodwin’s written submissions helpfully reviewed in detail many of the relevant authorities concerned with statutory construction including those which emphasise that the legal meaning will correspond with the grammatical meaning of a provision, but that sometimes the context of the words, the purposes of the legislation, or the consequences of such an interpretation necessitate another interpretation: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 384.

40. It was submitted that if the law permits two or more constructions then a construction which avoids a capricious, unreasonable, inconvenient or unjust interpretation is to be inferred, even if it is not the most obvious or grammatically accurate approach. The submissions set out an extract to support that proposition from the judgment of Gibbs J in Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99; HCA 36.

41. It was submitted that the considerations of fairness are also relevant as noted in Commissioner for Railways (NSW) v Agalianos (1955) 92 CLR 390; HCA 27 as cited in the Project Blue Sky case.

42. Authority was cited for the proposition that an interpretation which renders legislation inoperative or nonsensical is to be avoided: Coco v the Queen (1994) 179 CLR 427 at 446; HCA 15 and it was submitted equally the interpretation that would be “unreasonable” is also to be avoided: Submissions p 3.

43. Emphasis was also given to the importance of the right to own property as one of the rights usually protected by the common law. Legislative abrogation of such a right, it was submitted (permitting confiscation of property) must be clear and unambiguous: Submissions p 4.

44. In addition, it was submitted that legislations should be read such that it is construed consistently with the language and purpose of all of its provisions and the meaning of the provision must be determined by reference to the language of the instrument viewed as a whole. The relevant authorities in support of those submissions are set out on pp 4 and 5 of the respondent’s submissions. In the present case it was submitted that whilst the general purpose of the Act might be stated to be “to deprive persons of property which is the result of criminal activity” that does not necessarily mean that that intention was to be pursued at all costs throughout every provision, especially when such a provision might be seen as “remedial or a beneficial provision” citing the observations in Commissioner of the Australian Federal Police v Hart and Ors [2016] QCA 215 at 882 ff.

45. In the present case it was submitted that the safeguards that exist within the Act (including ss 92 and 93) would not be interpreted to promote to the fullest extent possible, the power of the Government to confiscate property. Their reason for existence, it was said, is to provide protections against the regime. Any ambiguity ought to be resolved in favour of upholding them.

46. In the context of the legislative provisions that apply in this case, it was said that interpretation of the relevant provisions must be undertaken having regard to all of the provisions. This included s 93, the provision intended to govern extensions. The absence of a phrase stipulating as a precondition that there must have been a (successful) determination of an extension order within six months indicates that no such condition was intended to be placed upon the operation of s 93: submissions at p 8.

47. It was further submitted that the effect attributed to s 92 by the Court in Halac, supra, would frustrate the effect intended and expressed by s 93. Accordingly, it was submitted that the interpretation in Halac would exclude the operation of s 93 in circumstances not contemplated by s 93, and that this interpretation was incorrect. It could also result in an outcome that was unjust, unfair and unreasonable.

48. It was submitted that the alternative interpretation is one to be preferred, that is so long as the application has been filed within six months of the conviction date, then a s 93 order can be made. Issues of timeliness and delay are taken into account within that section. Reference was made and passages cited from the Court of Appeal’s judgment in Chan were set out in the written submissions at pp 8-9 with particular emphasis to the dicta at [13].

49. It was submitted that the provisions of the 1987 legislation, the subject of consideration in Chan, do not differ in any relevantly significant way from the Act. The absence of s 94 in the earlier legislation it was said was not significant to the argument at hand, it simply confirms that once forfeited, the property cannot be the subject of an exclusionary order.

50. It was submitted that Chan ought to be followed and that the Court would find that there is jurisdiction to entertain the defendant’s motion for exclusion and would not make the declaration sought by the plaintiff.

51. Mr Kinch gave oral evidence by AVL. He gave evidence that he had instructed a solicitor, Ms Elamrousy to act for him in relation to the criminal proceedings. He said that he also had instructed her to act for him in the confiscation proceedings. He said that after he had received the s 92A Notice, he became concerned and tried to contact Ms Elamrousy on the same date.

52. At some unspecified date, he said that he sent a fax to Mr Hajje’s office explaining the position to him.

53. He said that he had earlier given instructions to Ms Elamrousy in relation to the confiscation proceedings and at a later stage instructed her to provide all documents to Mr Hajje who, he said, was having difficulties obtaining documents from her. He said that Mr Hajje managed to collect some documents. He again spoke to Ms Elamrousy as to why she had not given “the proceeds of crime documents” to Mr Hajje (T 12). He said that she said that so far as she was aware, she was still representing him in the confiscation matter.

54. He said that he was moved from Long Bay Prison to Lithgow Gaol and gave evidence of the difficulties he had in accessing use of the telephone.

55. His evidence was that he had applied unsuccessfully for Legal Aid and set about raising funds from friends and relatives overseas in respect of the confiscation proceedings.

56. He was asked as to how often he spoke by telephone with Mr Hajje between 13 July 2016 and 10 August 2016. He said that it would have been less than ten times.

57. Ms Goodwin asked him whether he had any legal training. He said he had not, that he did not even finish high school. He said he was although “not a dummy” he did not understand some of the legal jargon and did not understand everything said in legal papers (T 14).

Consideration

58. It is to be observed that the provisions of ss 92 and 94 concern substantive rights, that is, s 92 relates to the forfeiture of property; whilst s 94 provides for a power in the Court to exclude property from forfeiture under Part 2-3 of the 2002 Act.

59. On the other hand, ss 92A and 93 are provisions respectively concerned with specified procedures as to notice in relation to the former and as to a power in the Court to extend the time or period in terms of s 92(3) (an extension order). Section 92A imposes an obligation on the “responsible authority” to give a written notice in accordance with the terms of s 92A. Section 93 specifies the preconditions of the making of an extension order.

60. It is noteworthy that ss 92 and 93 do not stand independently of one another. The two sections form part of the statutory scheme established under divisions of Part 2-3. Section 92(3) makes reference to an “extension order”, a reference to an order that may be made under s 93. Section 93 in turn expressly is linked to s 92. Section 93(1) expressly refers to subs 92(3) in the chapeau to that section.

61. Accordingly, ss 92 and 93 are interlocking or interconnected provisions that operate together as part of the scheme established under Division 1 of Part 2‑3.

62. The issue for determination in the present proceedings requires, inter alia, consideration of the submission made that the decision of Hidden J in Halac, supra, is incorrect or erroneous insofar as the construction of the relevant provisions under Part 1 of the Act, in particular, those contained within ss 92 and 93 of the Act. Additionally, I am required, of course, to undertake the task of statutory interpretation as an independent exercise in order to determine whether there is any basis upon which there exists a construction of the provisions that differs from that determined in Halac.

63. In Halac, the defendant was sentenced for an offence of drug trafficking, having pleaded guilty to an offence under s 302.1 of the Criminal Code 1995 (Cth). On 4 October 2011 a Restraining Order was made under s 18 of the Act in respect of certain property.

64. Following his conviction on 10 April 2014, the defendant was served with a notice under s 92A of the Act notifying him that on 20 August 2014 six months after his conviction, the Restrained Property would automatically would be forfeited to the Commonwealth pursuant to s 92.

65. On 20 August 2014 the defendant filed a Notice of Motion seeking exclusion of property the subject of the Restraining Order, pursuant to s 94 and an extension of time in which to do so, pursuant to s 93.

66. His Honour, Hidden J, heard the proceedings on a question as to whether the Court had jurisdiction to entertain the defendant’s application.

67. His Honour, inter alia, set out in his judgment the full provisions of ss 92, 93 and 94 of the Act and noted the provisions of s 96 to which reference has been made above.

68. In Halac, detailed written submissions were made by Mr A Sullivan QC, who appeared for the Commissioner and his Honour extracted a summary of some of the relevant principles of statutory construction set out in Mr Sullivan’s written submissions: at [9] of the Judgment.

69. I have, of course, paid close attention to the principles reproduced in Hidden J’s judgment and the written submissions by Mr Sullivan in that case.

70. His Honour noted at [10] the defendant’s conviction on 21 February 2004 was for “a serious offence” for the purpose of s 92(1)(a), that the six month period had expired at midnight on 20 August 2014. As at that date the relevant property was still covered by the restraining order. Accordingly, his Honour noted that the property would be automatically forfeited at that time unless the defendant could obtain an extension of the forfeiture period pursuant to an exclusion application.

71. His Honour further noted that the defendant’s application for exclusion and extension of the period for automatic forfeiture was not made until 20 August, the day on which that period expired. The Commissioner argued in that case that an application for an extension could not be entertained because of the terms of s 92(3).

72. In the course of his judgment, Hidden J observed at [12]-[17]:

“True it is that s 93(1)(a) provides for a period of six months after conviction during which an application for extension of the period for automatic forfeiture might be made. Nevertheless, Mr Sullivan argued, the effect of the s 92(3)(b) is that, to avoid automatic forfeiture after six months by virtue of par (a), an application must have been made and favourably determined within that six month period. He also noted that by s 93(1)(c), a prerequisite for an extension order is the court’s satisfaction that the application for exclusion, in this case under s 94, had been made without undue delay and had since been diligently followed up. Those requirements, Mr Sullivan said, had not been met in this case.

In support of this construction, Mr Sullivan noted s 94(2), providing that ‘to avoid doubt’, an order for exclusion under the section could not be made ‘if the property has already been forfeited under this Part’. He also referred to the judgment of Button J in The Commissioner of the Australian Federal Police v Klein and Hubble [2014] NSWSC 1638. In that case an application for extension under s 93 had been made before the expiration of the period of six months after conviction, and his Honour was giving judgment on the day before that period expired. Accordingly, his Honour was not called upon to decide the question raised in the present case, but expressed a view consistent with that propounded by Mr Sullivan at [2] of the judgment, as follows:

‘To state the procedural background succinctly, on 16 May 2014 Mr Klein was convicted of a serious offence of drug importation and sentenced to imprisonment. Prior to that time various pieces of real and personal property had been restrained. The result would be that, if no extension were granted, the restrained property would be forfeited, by way of the strict time limit of six months from the date of conviction contained in s 92(3) of the Act. The solicitor for the plaintiff (the AFP) submitted, correctly in my opinion, that it is not the filing of an application for an extension order that overrides the effluxion of time that underpins s 92(3); rather, it is the making of an extension order by the Court before that time.’ (His Honour’s emphasis)

Mr Sullivan acknowledged authority to a different effect in Director of Public Prosecutions (Cth) v Chan [2001] NSWCA 249, 52 NSWLR 56. That case was concerned with provisions of the predecessor of the current Act, the Proceeds of Crime Act 1987 (Cth), broadly to the same effect as the present provisions. In particular, s 30 of that Act provided for automatic forfeiture of property subject to a restraining order six months after the day of conviction or at the end of an extended period, provision for an application for extension of the period being made by s 30A. An application for extension had been made, but not decided, before the expiration of this six month period. The application did not come on for hearing until after that period, but a judge of this court made an extension order.

The Court of Appeal dismissed an appeal by the Director against that order. Meagher JA, with whom Powell and Heydon JJA agreed, noted at [11] a submission by counsel for the respondent that, when an application under s 30A was made within the six months without undue delay and then diligently prosecuted (as required by s 30A(5)), but the court has not determined the application, “the property should not be forfeited automatically by operation of the statute and the power to extend the period must still subsist.” His Honour accepted that submission, saying at [13] :

‘The question is really one of reasonableness. If the view contended for by the DPP is correct, one would have most unreasonable and unjust results flowing from it. … Parliament cannot, in my view, reasonably have meant to sanction the tree but not the fruit.’

Mr Radojev’s argument on behalf of the defendant was to the same effect. He relied upon the fact that s 93(1)(a) of the Act permits an application for an extension order to be made within six months after a conviction. He referred to the notice under s 92A sent to the defendant, which informed him, among other things, that any application for an extension order must be made “before 20 August 2014”, but did not expressly inform him that such an application would have to be determined no later than that date. Put shortly, his argument was that s 92(3)(b) is applicable if an extension order has been made during the six month period, but it does not require such an order to have been made within that period. The statutory scheme encompasses an extension order after that period has expired, provided it had been applied for within six months after conviction.

Mr Sullivan submitted that I was not bound by the decision in Chan, because it was concerned with different legislation. Moreover, he pointed out that in the 1987 Act there was no equivalent to s 94(2) of the present Act, which emphasises that an exclusion order cannot be made in relation to property which has already been forfeited under the Part. Alternatively, he submitted that Chan was wrongly decided and is inconsistent with the contemporary principles of statutory interpretation set out above.”

73. His Honour then noted that, after the matter had been argued, his attention was drawn to the then recent decision of the South Australian Full Court in Hall, supra. His Honour observed that in his opinion the Full Court’s decision supported Mr Sullivan’s argument and was decisive of the issue in the proceedings before him. His Honour noted at [19]-[20]:

“The court was concerned with provisions of Pt 4, Division 2 of the Criminal Assets Confiscation Act 2005 (SA), which are identical to, or relevantly similar to, the provisions of the Commonwealth Act with which I am concerned. Section 74 of the South Australian Act is the counterpart of s 92 of the Commonwealth Act, providing for the automatic forfeiture of restrained property following the expiration of a period after a conviction for a serious offence. Section 74(6), like s 92(3) of the Commonwealth Act, defines that period as the six month period from the day of conviction or, if an extension order is in force at the end of that period, that extended period. Section 75(1)(a) and (c), like s 93(1)(a) and (c) of the Commonwealth Act, require an application for an extension order to be made within six months of the conviction, and to be made without undue delay and to be diligently followed up. Section 76 empowers the court to make an exclusion order; and subsection (2) of that section, in virtually identical terms to s 94(2) of the Commonwealth Act, provides that such an order cannot be made in respect of property which has already been forfeited under the Division.

The case was concerned with an application for extension of time in which to apply for exclusion of property which had been made outside the six month period prescribed by s 75(1)(a). The primary judge had refused to order an extension, and the Full Court upheld that decision. Gray J, with whom Stanley and Parker JJ agreed, summarised the effect of the relevant sections of the South Australian Act upon the case at hand at [29]-[31], as follows:

‘[29] Earlier, the terms of section 74 of the Criminal Assets Confiscation Act have been set out. Mr Hall was convicted of a serious offence on 9 April 2013. The subject property, namely the money in the Suitors’ Fund, was covered by a restraining order that related to that offence. That restraining order continued until the end of the relevant period. The property was not, as at 9 October 2013, or at any prior time, the subject of an order under section 76 excluding the property from forfeiture. In these circumstances, it would appear that the property was forfeited to the Crown at the end of the relevant period.

[30] It is to be recalled that the relevant period is defined to mean either the six month period starting on the day of conviction, or, alternatively, if an extension order is in force at the end of that period, the extended period related to the extension order. In the present proceeding, as earlier noted, the six month period commenced on 9 April 2013 and concluded on 9 October 2013. If this definition of relevant period applied then the property was forfeited to the Crown on 9 October 2013.

[31] The alternative definition of relevant period requires an extension order to be in force at the end of the six month period; in the present case, by 9 October 2013. It was common ground that no such extension order was in force by that date.’” (My emphasis)

74. His Honour later in his judgment noted at [23] observations made by Gray J in Hall as follows:

“After considering the statutory scheme for forfeiture, his Honour said at [46]-[47]:

‘[46] It is apparent that Parliament, in enacting the Criminal Assets Confiscation Act was intending to enact a comprehensive and extensive set of new powers targeting the assets and profits of criminals. The proposed legislation was said to be comparable to the Proceeds of Crime Act 2002 (Cth). This was with a view to promoting consistency between State and Commonwealth provisions. This comparable legislation throughout Australia seeks to strike at the heart of major organised crime by depriving persons involved of the profits and instrumentalities of their crimes. The legislative intent is to suppress criminal activity by attacking the primary motive — profit — and to prevent the reinvestment of that profit in further activity. The legislation enacted by the States and Commonwealth parliaments is not identical, but the broad comparability of these provisions is plainly evident.

[47] In my view, there is force in the submission of the Solicitor-General that, having regard to the comprehensive nature of the integrated scheme for the forfeiture of property set out in the Criminal Assets Confiscation Act, the time limits operating are essential to the effective operation of the scheme.”

75. His Honour then stated at [24]-[26]:

“Of course, the circumstances of the South Australian case are different from the present case, in that the application for extension of time was made after the expiration of the prescribed six month period and by the time the proceedings before the primary judge were concluded the permissible period of extension, fifteen months, had also expired. Nevertheless, what emerges from the decision is that the relevant provisions of the Criminal Assets Confiscation Act were to be applied strictly according to their terms. That necessarily included s 74(6), by which automatic forfeiture occurred six months after the day of conviction unless an extension order was in force by the end of that period. On that issue, Gray J at [11] referred, apparently with approval, to a statement to that effect by the primary judge:

‘[11] The Judge conducted a survey of the provisions of the Criminal Assets Confiscation Act and concluded that it followed

‘… that Parliament intended applications for exclusions of property from restraining orders under s 74, had to be brought without exception within the six month period immediately following conviction and correspondingly, that all orders extending that period made under s 75, had also to be brought within the same timeframe’.”

At [13], his Honour quoted another passage from the judgment of the primary judge, directed to the appellant’s reliance upon s 47 of the Limitation of Actions Act, as follows:

[13] …

‘The strict nature of the six month time limit prescribed by ss 74(1) and (6), the express and intractable words of s 76(2) ‘to avoid doubt, an order … cannot be made’, reinforcing as it does the absolute nature of the limitation, together with the outer limit of 15 months which pertained at relevant times for extension orders erected by s 75(2), serve to demonstrate Parliament’s intention that the six month period was essential to the nature and purpose of the forfeiture mechanisms contained in Part 4 of the Criminal Assets Confiscation Act.’

There is little room for doubt that the six months period was designed to provide for expeditious determinations of forfeiture proceedings, following conviction.”

In my view, the Full Court’s analysis of the South Australian provisions should be accepted and applied to the virtually identical Commonwealth provisions. In particular, I would adopt the statements in the judgment of Gray J of the effect of s 74(6), the equivalent of s 92(3) of the Commonwealth Act, which is consistent with the view expressed by Button J in Klein and Hubble quoted above. The subsection cannot be read any other way, and Mr Radojev’s attempt to do so is inconsistent with the canons of statutory construction earlier referred to. In my respectful opinion, Chan should not be followed in approaching the current legislation.” (My emphasis)

76. Hidden J observed that as the case before him exemplified, the effect of the provision can be draconian. However, his Honour stated at [27]:

“…Like it or not, that is a feature of legislation of this kind. Adapting one of the observations of the primary judge in Hall, the provision is ‘designed to provide for expeditious determinations of forfeiture proceedings, following conviction’. So much is spelled out in s 93(1)(c) of the Commonwealth Act requiring an application for extension to be made without due delay and to be followed up diligently.”

77. His Honour in conclusion noted that the defendant’s motion was filed on the last day of the six month period prescribed by s 92(3) (there had not then been any order in force extending that period) and that accordingly at midnight on that day, the property was forfeited to the Commonwealth. By virtue of s 94(2), an order excluding any of the property from forfeiture, his Honour observed, could not be made: at [29].

78. Upon examination of the relevant provisions, I note the following matters:

1. Section 92 makes provision for automatic forfeiture of property of the Commonwealth at the end of the period applying under subs (3) (in the event that the conditions stipulated in s 92(1), (a), (b) and (c) apply).

2. “The period” at the end of which the property is forfeited, as stated in s 92(3) is either:

1. The six month period starting on the conviction day; or

2. If an extension order is in force at the end of that period.

3. The expression “extension order is in force at the end of the period” in s 92(3)(b) is unambiguous. No “extended period” can arise unless the Court is satisfied of matters in accordance with that section and an order is made.

4. It cannot be said that the provisions of s 93 conflict with the provisions of s 92. The two sections are expressed in terms that indicate that they are to operate together as part of the statutory scheme under Div 1 of Part 2-3 – Forfeiture on Conviction of a Serious Offence.

5. The provisions of s 92(3) are fundamental to the operation of the automatic forfeiture scheme as at the specified point in time, namely, at the end of the period referred to in s 92(3)(a) (that is, the six month period) or at the end of the extended period as referred to in s 92(3)(b).

6. Section 94(2) reinforces the provisions of ss 92 and 93 in stating “(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 Part”.

7. At the end of the six month period, there being in this case no extension order then in place or “in force”, the Restrained Property was forfeited to the Commonwealth.

79. An analysis of the provisions of ss 92, 93 and 94 as referred to above, in my opinion, supports the interpretation of the provisions by Hidden J in Halac. The analysis and judgment of the South Australian Full Court in Hall, supra, and the obiter observations of Button J in The Commissioner of the Australian Federal Police v Klein and Hubble, supra, reinforce and confirm the correctness of the statutory construction made as to those provisions in Halac.

80. The judgment of the Court of Appeal in Chan does not, in my opinion, represent an authoritative decision as to the provisions in Part 2-3 of the Act and should not be followed, for reasons discussed in Halac, in approaching the current legislation.

Conclusion

81. I have concluded, notwithstanding Ms Goodwin’s very persuasive submissions, that the judgment of Hidden J in Halac was not erroneous or incorrect. Having closely examined the relevant provisions in Division 1 of Part 2-3 of the Act and the authorities to which my attention has been drawn his Honour’s construction in that case in relation to the provisions of s 92 and 93 accords with my own interpretation of those provisions, having due regard to the important principles of statutory construction to which both Hidden J had referred and as detailed by Ms Goodwin in her written submissions.

82. I need only add that there is, of course, a well-accepted principle that a single judge should not depart from the considered judgment of another single judge as to the proper interpretation to be placed on uniform national legislation unless he or she forms the view that the previous decision is “plainly wrong”: ASIC v Marlborough Gold Mines Ltd (1993) 177 CLR 485 at 492; HCA 13.

83. The Court of Appeal in Gett v Tabet (2009) 254 ALR 504; NSWCA 76 observed at [283] that the term

“’was plainly wrong’ does not limit departure from earlier decisions in cases in which error is patent or obvious or easily perceived. Rather they bespeak the quality of the error or the level of conviction of error that must be perceived.”

84. As I have stated, not only, in my opinion, has no error been established in the reasoning of Hidden J in Halac, but that I am satisfied that his Honour’s reasoning is plainly correct.

85. I am satisfied that the Commissioner is entitled to the declaratory relief.

86. On 6 October 2016 I made orders in the following terms (with reasons to follow):

1. Pursuant to s 95 of the Proceeds of Crime Act 2002 (Cth), the items set out in Schedules 1 to 6 in the Notice of Motion filed on 17 August 2016 are forfeited under Part 2-3 of the Proceeds of Crime Act 2002 (Cth).

2. Grant leave to the Commissioner to lodge with my Associate a note dealing with the application for costs of the proceedings. Note is to be served on the defendant’s legal representatives on or before 14 October 2016 at 4.00pm. Any reply note is to be lodged with my Associate by 4.00pm on 21 October 2016.

List proceedings for ancillary orders on Friday 28 October 2016 at 9.30am.

87. On 6 October 2016 Mr Tynan sought an order dismissing Mr Kinch’s Motion filed on 10 August 2016, being the Notice of Motion seeking an extension order and the exclusion order on the basis that that order follows from my Judgment.

88. I propose to make the order as sought by Mr Tynan but defer doing so until Ms Goodwin has instructions as to her position in respect of making such an order. If necessary, I will deal with the matter when the proceedings come back into the list on 28 October 2016.

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Decision last updated: 07 October 2016