The State of Qld v Deadman
[2015] QSC 241
•21 August 2015
SUPREME COURT OF QUEENSLAND
CITATION:
The State of Qld v Deadman [2015] QSC 241
PARTIES:
THE STATE OF QUEENSLAND
(applicant)
v
PETER JOSEPH DEADMAN(respondent)
FILE NO/S:
No 3530 of 2015
DIVISION:
Trial
PROCEEDING:
Application
ORIGINATING COURT:
Supreme Court at Brisbane
DELIVERED ON:
21 August 2015
DELIVERED AT:
Brisbane
HEARING DATE:
30 July 2015
JUDGE:
Dalton J
ORDER:
1. Dismiss the application
CATCHWORDS:
CRIMINAL LAW – PROCEDURE – CONFISCATION OF PROCEEDS OF CRIME AND RELATED MATTERS –– FORFEITURE OR CONFISCATION – PROCEDURE – GENERALLY – where an application was made by the State of Queensland for a serious drug offender confiscation order under Chapter 2A of the Criminal Proceeds Confiscation Act 2002 – where the property the subject of the application was the respondent’s interest in a piece of real property – where the respondent submitted that the application had not complied with s 93ZZ(8) of that Act because encumbrance not particularised in application – whether the application complied with s 93ZZ(8) – whether non-compliance with s 93ZZ(8) was an irregularity under r 371(1) of the Uniform Civil Procedure Rules 1999
CRIMINAL LAW – PROCEDURE – CONFISCATION OF PROCEEDS OF CRIME AND RELATED MATTERS – FORFEITURE OR CONFISCATION – DISCRETION TO MAKE ORDER – GENERALLY – where s 93ZZB(2) of the Criminal Proceeds Confiscation Act 2002 provides that the Court may refuse to make a serious drug offender confiscation order if satisfied it would not be in the public interest to do so – where the respondent submitted it was not in the public interest to make a confiscation order – where the respondent relies on his personal circumstances – where the applicant submits that the Court cannot have regard to personal circumstances in determining the public interest under s 93ZZB(2) – whether the meaning of public interest under s 93ZZB(2) is so limited – whether it is in the public interest to make the serious drug offender confiscation order sought
Criminal Proceeds Confiscation Act 2002 (Qld) s 4, s 8(6), s 9, s 93ZZ(2), s 93ZZ(8)
Uniform Civil Procedure Rules 1999 (Qld) r 371(1)Attorney-General (NT) & Anor v Emmerson & Anor [2014] HCA 13
Hogan v Hinch (2011) 243 CLR 506
Osland v Secretary, Department of Justice (2008) 234 CLR 275
O’Sullivan v Farrer & Anor (1989) 168 CLR 210
Water Conservation and Irrigation Commission (NSW) v Browning (1947) 74 CLR 492COUNSEL:
M Hinson QC for the applicant
D Lynch with K McMahon for the respondent
SOLICITORS:
Director of Public Prosecutions (Queensland) for the applicant
Walker Pender Group Lawyers for the respondent
This is an application by the State pursuant to the Criminal Proceeds Confiscation Act 2002, the Act. The respondent was convicted in the District Court of producing, and trafficking in, cannabis and a serious drug offender certificate was issued. Those facts give the State the right to apply for a confiscation order pursuant to chapter 2A of the Act.
There were only two points for determination on the application. The first was whether or not the State had complied with s 93ZZ(8) of the Act, which provides that the application for confiscation must include “particulars of any encumbrance over property that an appropriate officer considers is likely to become the subject of the order.”
In this case the State applied to confiscate all the respondent’s interest in a piece of real property at Riverview, his home.[1] The home was mortgaged at all material times and the application did not include particulars of that mortgage. The respondent contended that s 93ZZ(8) required the application to give particulars of the mortgage. I think that is the most natural reading of subsection (8): ie, it requires the consideration of whether or not the property likely to become the subject of a confiscation order is encumbered, and the provision of particulars if it is so encumbered.
[1] The State did not serve the mortgagee of the land. It should have done so. I heard the submissions of applicant and respondent and adjourned the matter so that the mortgage could be served. After receiving an undertaking from the State, the mortgagee did not wish to be heard.
It is possible to read the subsection as meaning that any encumbrance likely to become the subject of a confiscation order must be particularised. However, it is unlikely that an encumbrance would become the subject of an order. It may be technically possible: if a drug offender was, say, a mortgagee, the State could seek to confiscate that property interest – ie, the interest of a mortgagee. It might technically therefore be open to describe such a proceeding as involving an encumbrance becoming the subject of a confiscation order but it involves a most unnatural use of language. Furthermore, if subsection (8) were directed towards a situation where, say, the State wished to confiscate a mortgagee’s interest, it would only need to provide that the application must include particulars of any property likely to become the subject of the order, for the mortgagee’s interest is property.
Because of the definition of “property” in the Act, it is possible that property not actually owned by an offender, but under their effective control, could be confiscated. It is possible that an offender might mortgage or lease property whilst retaining effective control of it and the State might seek to confiscate not just the freehold, but the mortgagee’s interest or the leasehold as well. Again, it might be technically possible to describe that as seeking a confiscation order over an encumbrance, but I think it most unlikely that that is what the legislature meant at subsection (8). Again, if that is what was meant, the subsection would only need to say that particulars be given of any property (as defined) likely to become the subject of the order.
I construe s 93ZZ(8) as meaning that the officer must consider whether the property which is likely to become the subject of a confiscation order is encumbered and, if so, must give particulars of any such encumbrance. It follows that the application in this case was deficient because it did not comply with subsection (8). In the circumstances of this case, I am content to regard this as an irregularity within the meaning of r 371(1) of the UCPR. The UCPR applies to applications under the Act, unless there is an inconsistency – s 8(6). There is no inconsistency here. I would excuse the failure to provide particulars of the mortgage in the application because: (1) it was in any event well known to the respondent; (2) it was disclosed in the affidavit material of the applicant, and (3) it was the subject of the affidavit material filed on behalf of the respondent. There was not said to be any prejudice to the respondent because of the failure to comply with s 93ZZ(8).
The real point of the application before me was as to the meaning of “public interest” at s 93ZZB(2) of the Act. That subsection provides that the Court may refuse to make a confiscation order “if the Court is satisfied it is not in the public interest to make the order”.
The respondent submitted it was not in the public interest to make the order and relied upon his personal circumstances as supporting that submission. His affidavit reveals that he is 65 years of age. He was married in 1972 and divorced from his wife in 2005. The respondent and his wife purchased their Riverview home in 1977 for $27,000. They had a deposit of $1,000, and a Housing Commission loan for the remainder of the purchase price. The respondent worked as a plant operator for the same employer from June 1972 until June 2013. He and his then wife paid off their home, and the original mortgage was discharged in 1994. Consequent on the divorce, the respondent re-mortgaged the home in order to buy out his wife’s interest in it. As part of the property settlement on divorce, they also sold an investment unit, which they had bought for $150,000, and in which they had $90,000 equity. In 2011 the respondent was able to access his superannuation and did so in order to pay out the new mortgage, which had increased because of his gambling debts. By May 2011 the home was again unencumbered. Having been charged with the offences which found this application, the respondent borrowed, and re-mortgaged his house, to pay his legal fees and also pay off a credit card.
The respondent receives the aged pension in an amount of $830 per fortnight and has no other income. He details his living expenses in his affidavit. They are modest. If the State confiscated his home, and his expenses otherwise remained constant, he would have $384 a fortnight to spend on rent and social expenses. As described, the respondent has lived in Riverview all his life and he would prefer to stay there. His searches reveal only one unit currently listed for rent in that area. It is a one bedroom unit and is listed for $390 per fortnight, with a $980 bond.
The respondent deposes that he suffers from diabetes, arthritis, high blood pressure and depression, and he takes medication for all those conditions. He deposes to having a problem with gambling, which he says contributed in part to his criminal offending and the breakdown of his marriage. He deposes to having had counselling to assist him with his gambling problem. The respondent has no assets of any value, other than his home, his car which he puts at $3,000, and his personal effects. He has no further superannuation and no further investments. His home is valued at approximately $255,000. He estimates he made $9,000 from selling cannabis. That conviction was his only criminal conviction apart from a conviction for driving under the influence of liquor in 2010.
The respondent says on the application before me that he is remorseful for his criminal offending. The remarks of the sentencing judge in the District Court show that he made admissions to police and that the trafficking charge could not have been brought against him without those admissions. The District Court judge accepted that the offending was small-scale commercial offending at a time when the respondent had a serious gambling addiction and noted that, to his credit, he had received specialist counselling for that addiction. He pled guilty at an early stage. In other words, the sentencing remarks are consistent with the respondent being remorseful and exhibiting that remorse from the time he was charged.
The State of Queensland submits that the respondent’s personal circumstances cannot be relevant to my consideration of what is in the public interest. Reliance was placed on Hogan v Hinch,[2] where Chief Justice French made reference to the wide range of contexts in which the phrase “public interest” appears and said:
“When used in a statute, the term derives its content from ‘the subject matter and the scope and purpose’ of the enactment in which it appears. The court is not free to apply idiosyncratic notions of public interest.”
[2] (2011) 243 CLR 506, [31].
The majority of the Court in that case dealt with the matter at [80] to similar effect, “That expression derives content from the main purpose of the Act …”. I accept that authority.
The objects of the Act are set out at s 4:
“(1) The main object of this Act is to remove the financial gain and increase the financial loss associated with illegal activity, whether or not a particular person is convicted of an offence because of the activity.
(2) It is also an important object of this Act—
(a) to deprive persons of the following—
(i)illegally acquired property, tainted property and benefits derived from the commission of offences;
(ii)the benefits derived from contracts about confiscation offences;
(iii)wealth that persons can not satisfy a court was lawfully acquired; and
(b)to deter persons from committing serious criminal offences, including by increasing the financial risk associated with committing serious criminal offences; and
(c)to prevent the reinvestment of financial gain from illegal activity in further illegal activity; and
(d)to assist law enforcement agencies to effectively trace—
(i)property acquired by persons who engage in illegal activity; and
(ii)tainted property; and
(iii)benefits derived from the commission of offences; and
(iv)amounts of unexplained wealth; and
(e)to forfeit to the State property of, or associated with, persons who commit qualifying offences, and against whom serious drug offender confiscation orders are made, in recognition of the impact of qualifying offences on the community and the justice system; and
(f)to ensure orders of other States restraining or forfeiting property under corresponding laws may be enforced in Queensland; and
(g)to protect property honestly acquired for sufficient consideration by persons innocent of illegal activity from forfeiture and other orders affecting property.
(3) This Act provides for 3 separate schemes to achieve its objects.
(4) The scheme in chapter 2 does not depend on a charge or conviction and is administered by the commission.
(5) The scheme in chapter 2A relates to the charge or conviction of particular serious offences involving drugs and is administered by the commission.
(6) The scheme in chapter 3 relies on a person being charged and convicted (as defined in this Act) of a confiscation offence and is administered by the DPP.
(7) Despite the similarities between the schemes, each is separate and none of the schemes are to be construed as limiting either of the other schemes, unless this Act otherwise expressly provides.”
The State particularly relied on s 4(1) and s 4(2)(e). It was said, I think correctly, that because of the language used in s 4(2)(e) that particular object was particularly relevant to the chapter 2A scheme pursuant to which this application is made. The Crown also relied on the fact that the Act is clear that, under the chapter 2A scheme, all property of an offender is liable to confiscation, not just property which is purchased with illegal gains, or which has been used in committing the offences.
The Crown relied on certain statements of the High Court in Attorney-General (NT) & Anor v Emmerson & Anor.[3]That case concerned legislation which allowed the Director of Public Prosecutions of the Northern Territory to apply, in certain statutorily defined circumstances, for a declaration from the Court that a person was a drug trafficker. Once a declaration was made, that person’s property was forfeit to the Northern Territory Government without further curial order. In the course of upholding such a law, the majority in the High Court (Gageler J dissenting) made reference to the political wisdom of such a law, and its fairness and proportionality, being matters of a political rather than legal nature. Those comments were made in the context of a case which concerned legislative and executive power, not one which concerned the interpretation of a provision such as s 93ZZB(2). I must act judicially in considering whether or not to refuse to make a confiscation order and, in considering whether or not I am satisfied it is not in the public interest to make such an order. The comments in Emmerson are not applicable to my task.
[3] [2014] HCA 13, [80]-[85].
To some extent, forfeiture of property to the State will always be in the public interest insofar as it increases the State’s wealth.[4] But if that were the only matter to be considered in an assessment of the public interest, there would be no need for a provision such as s 93ZZB(2). As Hayne J said in Osland v Secretary, Department of Justice:[5]
“It may also be accepted that questions about what is in ‘the public interest’ will ordinarily require consideration of a number of competing arguments about, or features or ‘facets’ of, the public interest. As was pointed out in McKinnon v Secretary, Department of Treasury, ‘a question about “the public interest” will seldom be properly seen as having only one dimension’.”
[4] Assuming that the amount of property forfeited exceeds the value of making the application to forfeit it and the costs of acquiring ownership and, in this case for example, taking over the obligations of the mortgagor, etc.
[5] (2008) 234 CLR 275, [137].
In the case of O’Sullivan v Farrer[6] the High Court cited Dixon J in Water Conservation and Irrigation Commission (NSW) v Browning:[7]
“Indeed, the 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’.”
[6] (1989) 168 CLR 210, 216.
[7] (1947) 74 CLR 492, 505.
The explanatory notes to the Bill which introduced the relevant provisions of the Act do not particularly explain the provision at s 93ZZB(2) – see p 24 – but says generally in an introduction at p 3:
“The provision of a public interest discretion to the Supreme Court is used throughout the [Act]. It enables the Supreme Court to make an important value judgment with respect to the specific facts in the proceedings before them, [sic] guided by the subject matter, scope and purpose of the [Act].”
That is, by including the provision at s 93ZZB(2), it must be accepted that the legislature contemplated there would arise factual circumstances where, notwithstanding the offender was liable to have their property confiscated, and that that confiscation would be of financial benefit to the State, it would not be in the public interest to make a confiscation order. Those factual circumstances are not to be confined by reading the recitation of the objects of the Act as if they were a definition. The wide words “public interest” take their context from the objects, scope and purpose of the Act. The relevant principle is no more than that.
Looking at s 4(1) of the Act, the main object of the Act is expressed to be twofold. In this case, the first limb is inapplicable – confiscating the respondent’s property will not remove financial gain associated with illegal activity. Depending on how the second limb of s 4(1) is interpreted, the factual circumstances here may fall within it: confiscating the respondent’s property would cause him financial loss and that loss would be imposed because he has undertaken illegal activity. Section 9 of the Act compels the conclusion that the legislature had no object of imposing financial loss on the respondent as a punishment for his offending (although in real terms it undoubtedly would be). Looking to identify a legislative object, the object of the imposition of that loss would apparently be to deter crime – see s 4(2)(b), for, apart from increasing the wealth of the State, it is difficult to discern objects of the Act which are not connected with depriving offenders of property obtained from, or used in, criminal activities.
Preventing the respondent committing crime seems unlikely to be achieved by confiscating his home. It seems to me not in the public interest to render the respondent financially and socially vulnerable, so that he no longer has the security of owning his home, but must enter the rental market, which must be particularly uncertain for him, given his limited financial means. Given his age, health and gambling problems, it seems to me that if he were rendered financially vulnerable and socially unstable, it would likely increase the chances that he might once again turn to crime, given the psychological and emotional stress he would experience. It must also increase the chances that his health would deteriorate and that, in many ways short of returning to criminal activity, the respondent might cease to live independently and care for himself. One can imagine that he may be put in a position where he needs medical or other assistance from the State. None of this could be in the public interest.
While I cannot see that confiscating the respondent’s home would deter him from committing crime in the future, I would allow that there is a possibility that, should other people come to hear of the respondent’s treatment by the State, they may be deterred from trafficking in illegal drugs. Given that trafficking in drugs is already punishable by condign sentences, having regard to the Court’s cognisance of the great damage drug dealing does in our society, I do not know how real that possible general deterrence would be. There was certainly no material before me from which I could form any conclusions as to this matter.
In those circumstances, and in circumstances where there is no suggestion that the respondent’s criminal activity was in any way associated with the home the State seeks to confiscate; where the respondent has made little profit from his offending, is remorseful and seeking to rehabilitate himself, particularly so far as his gambling addiction is concerned, it seems to me not at all in the public interest to confiscate his home and thus render him financially and socially vulnerable. I therefore dismiss the application made by the State because I am satisfied it is not in the public interest to make the order sought. The respondent did not seek costs.
I will record that I have reservations about whether or not confiscation of property which is in no way associated with criminal offending is not a second punishment (notwithstanding s 9 of the Act). If such a confiscation did amount to punishment, questions as to, for example, s 16 of the Criminal Code might arise and, indeed, constitutional questions might arise. These matters were not argued before me and, given the views I take, I need not determine them.
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