King v De Villiers[1997] QCA 419

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 5904 of 1997

Brisbane

[King v D’Hotman De Villiers]

BETWEEN:

KENNETH BRUCE KING

(Defendant) Appellant

AND:

GERARD FRANTZ ALAIN D'HOTMAN DE VILLIERS

(Complainant) Respondent

Pincus JA

Thomas J.

de Jersey J.

Judgment delivered 25 November 1997

Separate reasons for judgment of each member of the Court; Thomas J and de Jersey J concurring as to the orders made, Pincus JA dissenting in part.

APPEAL ALLOWED WITH COSTS. ORDERS BELOW WITH RESPECT TO THE APPELLANT KING SET ASIDE AND REPLACED BY AN ORDER DISMISSING THE CHARGE AGAINST HIM.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 5904 of 1997

Brisbane

Before Pincus J.A.

Thomas J.

de Jersey J.

[King v D’Hotman De Villiers]

BETWEEN:

KENNETH BRUCE KING

(Defendant) Appellant

AND:

GERARD FRANTZ ALAIN D'HOTMAN DE VILLIERS

(Complainant) Respondent

REASONS FOR JUDGMENT - PINCUS J.A.

Judgment delivered 25 November 1997

I have read the reasons of Thomas J and gratefully adopt his Honour’s explanation of the facts of the case.

Was the law correctly applied?

As Thomas J stresses, the prosecution had to show that the appellant possessed the property in question;  that had to be proved beyond reasonable doubt.  In the present case it is not absolutely clear that the learned magistrate who decided the case kept that firmly in mind.  His Worship said, among other things:

"It is said - was said that the Crown bears the onus of proving that there is some evidence capable of proving, one, that a defendant received, possessed, concealed, disposed or bought (sic) into Queensland the subject property . . .

Now, to come to possession . . . I’m satisfied that Banney was an occupier and that there is sufficient evidence available to classify King as a person in the position to exercise control over the money, based on the frequency, regularity and familiarity of his visits to the premises".

The references to "some evidence capable of proving" and "sufficient evidence available to classify" do not unequivocally indicate that his Worship had at the forefront of his thinking, in applying the rather difficult provision in question (s. 92 of the Crimes (Confiscation) Act 1989 (the "1989 Act")) that the matters in subs. 1 of that provision must be proved beyond reasonable doubt.  The prosecution had to prove, in order to obtain a conviction, that the appellant possessed the property in question and also that such property "may reasonably be suspected of being tainted property".  I am not, however, able to conclude on the whole that the magistrate made a mistake as to the onus or standard of proof with respect to the question of possession.

A greater difficulty arises with respect to the second element of s. 92(1) of the 1989 Act - "that may reasonably be suspected of being tainted property".  The subsection does not in terms indicate who is the person who has to hold the suspicion.  But the provision has been construed by this Court, following previous authority, as requiring the court to determine objectively whether it is satisfied beyond reasonable doubt that the property might reasonably be suspected of being tainted property:  McGee v. McKeever (1994) 71 A.Crim.R. 586 at 593.  This involves reading the section, which makes no reference to suspicion held by the police or indeed any other person, quite literally.  The description "that may reasonably be suspected of being tainted property" is one which the court has to be satisfied, beyond reasonable doubt, attaches objectively to the goods:  McGee at 592, quoting from Cleary v. Hammond [1976] 1 N.S.W.L.R. 111.  To take a simple example, if the prosecution proves that the defendant is in possession of a house in which are located, hidden away, commercial quantities of illegal drugs, packaged for sale, and also large amounts of cash, there would be little difficulty in the court being satisfied objectively that the cash "may reasonably be suspected of being tainted property".  But the idea of proving facts beyond reasonable doubt does not mesh easily with the mention of suspicion and in that sense the concept is rather a difficult one.

A substantial part of the magistrate’s reasons, dealing with the question of suspicion, consisted in quotations from the decision of the Court of Criminal Appeal in Gough v. Braden [1993] 1 Qd.R. 100, and in particular from the analysis by Byrne J (with whom Thomas J agreed) of authorities relevant to the construction of s. 10A of the Drugs Misuse Act 1986;  that is a provision analogous to s. 92 of the 1989 Act.  Gough v. Braden was concerned with the construction of that part of s. 10A of the Drugs Misuse Act 1986 which corresponds (roughly) to s. 92(2) of the 1989 Act.  The decision, however, was of no particular assistance in the present case, where the real question was whether s. 92(1) was satisfied.  The magistrate said little about the effect of the second part of s. 92(1) "property that may reasonably be suspected of being tainted property", as opposed to s. 92(2).  What his Worship said relevant to the question of reasonable suspicion in s. 92(1) was, principally, as follows:

"Overall whether or not there was a reasonable suspicion on the part of  police that the money was tainted . . .

. . . the Crown bears the onus of proving that there is some evidence capable of proving, one, that a defendant received, possessed, concealed, disposed or bought (sic) into Queensland the subject property.  . . . Secondly, perhaps, that the subject property may reasonably be suspected by the Court of being tainted property"

"I’m satisfied that there was reasonable cause for police to suspect the money to be tainted, given the information that they’d received and the fact that this money was located, it would seem, as a result of the information they received.  And that they have received no information from any source to negate that suspicion and still hold that suspicion."  (emphasis added)

The magistrate then went on to quote from Gough v. Braden as I have mentioned.

It may be that there is in the present case little practical difference between considering whether there was "a reasonable suspicion on the part of police" or "reasonable cause for police to suspect", on the one hand and the question which the magistrate was in reality required to consider, as explained above, on the other.  But one could not be confident that, in considering the second s. 92(1) issue, the magistrate was uninfluenced by the thought that a question in issue was whether the police held a reasonable suspicion. 

Gough v. Braden sets out grounds (at 109 and 110) for requiring that statutes of this kind be applied with precision rather than loosely.  It is my opinion that the magistrate’s apparent inclination to treat proof of suspicion on the part of the police as probative, under s. 92(1), requires the conclusion that the trial miscarried;  it is, at best for the respondent, doubtful whether the magistrate correctly applied the language of s. 92(1) in determining to convict.  Further, in my opinion, it could not be said that the magistrate would inevitably have convicted, using a correct interpretation of s. 92(1).

Factual conclusion

I am in general agreement with the analysis of Thomas J of the inferences which might be drawn from the evidence, on the question of possession;  I agree with his Honour that the evidence was insufficient to satisfy the onus lying on the Crown, as to that issue.  I would add only that it is not clear to me that it is necessarily correct that possession "is a state of affairs that exists because of what a person who is in possession does in relation to the thing possessed", as was said in Brauer [1990] 1 Qd.R. 332 at 360.  If an accused is proved to be in possession of a building in which, to his knowledge, tainted property is from time to time stored, it may be irrelevant whether or not he has done anything in relation to the stored property.  However, it is unnecessary to discuss that point further, in the present case.

I would allow the appeal, make the order nisi to review absolute and set aside the conviction of the appellant King and the orders made by the magistrate against him.  Under s. 214 of the Justices Act 1886 there is power in the court to make an order as to costs, but I do not see why that jurisdiction should routinely be exercised for or against the accused, where the matter before the court involves an ordinary criminal prosecution.  I would not make any order as to costs.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 5904 of 1997

Brisbane

Before Pincus JA

Thomas J

de Jersey J

[King v D’Hotman De Villiers]

BETWEEN:

KENNETH BRUCE KING

(Defendant) Appellant

AND:

GERARD FRANTZ ALAIN D'HOTMAN DE VILLIERS

(Complainant) Respondent

REASONS FOR JUDGMENT - THOMAS J

Judgment delivered 25 November 1997

The appellant (Mr King) and Lindy Banney were convicted by a magistrate of possession of $50,000 reasonably suspected of being tainted property.  The appellant was fined and ordered to pay certain costs.

The prosecution was brought under s. 92 of the Crimes (Confiscation of Profits) Act.  That section provides–

“Possession etc. of property suspected of being tainted property

92.(1)  A person must not receive, possess, dispose of, bring into Queensland, conceal or disguise property that may reasonably be suspected of being tainted property.

Maximum penalty—100 penalty units or 2 years imprisonment.

(2)  If a person is charged with an offence against this section, it is a defence to the charge if the person satisfies the court that the person had no reasonable grounds for suspecting that the property mentioned in the charge was either tainted property or derived from any form of unlawful activity.”

An essential element to be proved by the Crown is that the defendant did something with respect to specified property, and in this case that he possessed it.  Proof of this, and of the fact that such property may reasonably be suspected of being tainted property, are prerequisite to any question concerning the making out of the special defence recognised in s. 92(2).

“Tainted property” is defined in section 13.

“13.(1)“Tainted property”, in relation to a serious offence, means property–

1. used, or intended to be used, by a person in, or in connection with, the commission of the serious offence;  or
2. derived by a person from property mentioned in paragraph (a); or
3. derived by a person from the commission of the serious offence.

(2)  If the serious offence is conspiracy to commit a serious offence, the references to the serious offence in subsection (1)(a) and (c) are taken to include a reference to the serious offence the subject of the conspiracy.

(3)  A reference to a serious offence in this section is taken to include a reference to an interstate serious offence when tainted property is used in the following sections–

• section 90 (Money laundering)
• section 92 (Possession etc. of property suspected of being tainted property).”

Possession

The first question in this case is whether the evidence was sufficient to justify the stipendiary magistrate’s finding that the appellant was in possession of the $50,000.

The essential feature of possession is that a person has control or the right of control of the relevant property.  The concept necessarily imports a mental element.  The defendant must know of the existence of the property, and something of its character.  In R v Brauer in reliance on He Kaw Te v R (1985) 157 CLR 523, it was observed that having something in possession

“is a state of affairs that exists because of what a person who is in possession does in relation to the thing possessed, and involves the state of mind with respect to that thing.  The actus reus of possession is that the thing should be physically in, or under, the control of the accused.”

(Per Cooper J at p 360.)

Reference was made in that case to Lord Diplock’s statement in DPP v Brooks [1974] AC 862, 866–

“In the ordinary use of the word ‘possession’, one has in one’s possession whatever is, to one’s knowledge, physically in one’s custody or under one’s physical control.”

The property does not have to be on the defendant’s person or be something that he owns.  If someone else has it, the defendant must have the right or the de facto power to control it before he can be in possession of it.  However it does not need to be in the defendant’s sole possession;  there may be joint possession.

The money in question was found in a house tenanted by Lindy Banney at 19 Regency Place, Mudgeeraba, when police executed a search warrant on 23 November 1996.  They found $50,000 under the carpet in the main bedroom, near the bedhead of the double bed.  No attempt was made to fingerprint the money or the wrappers which bound it.  There were ten bundles, each consisting of fifty $100 notes.

Ms Banney was the sole tenant of the house.  The tenancy had commenced some two or three years earlier in the names of herself and another man (not the appellant) and she had been the sole tenant for some time.  She paid the rent over the full period of the tenancy.  The appellant’s only connection with the premises was as a visitor.  The frequency of his visits is difficult to summarise, coming as it does from evidence of police surveillance (the frequency or regularity of which was not stated) and from what are largely impressions of neighbours.

One neighbour, Mrs Wells, at one stage said she had seen him at the premises during the daytime, “two or three times per week” since mid-July.  She had occasionally seen him doing some gardening in the premises, although this was “not too common”.  She had occasionally seen him walking Ms Banney’s dog.  Her evidence does not include any reliable observation of him at night time.  While he could have been there at night time, she cannot say that he ever stayed overnight.  His daytime activity however suggests a degree of friendship or trust between him and Ms Banney.  Another neighbour, Mrs Head, saw the appellant at the premises “a few times”.  Once or twice she saw him walking the dog and another time she saw Ms Banney’s little girl (Melanie) in the appellant’s car.  She assumed that he was driving her to school.  The appellant was introduced to her as “Ken”.  She had seen Melanie in the appellant’s car “once or twice, not often”.  She did not know if the appellant ever stayed there overnight.

The results of police surveillance (through Constable Moate) provide some further details but give no clear picture.  On 27 and 28 August 1996 at 9.22 a.m. Constable Moate saw Ms Banney alone in a white Hyundai motor vehicle (which may be inferred to have been the appellant’s) in the vicinity of the Mudgeeraba Post Office.  Later that morning he saw the appellant driving the same car.  On 28 August, he noticed the Hyundai in Ms Banney’s driveway at 6 a.m.  Later that morning he noticed the appellant alone in the vehicle outside a hotel in Mudgeeraba.

On 16 November, the appellant hired a white Commodore.  That car was observed to be parked at Ms Banney’s house at 3.15 a.m. on 14 November.  At that time a light was on in a rear room of the premises, and there was a television glow, but no activity was observed.  Later that morning (at approximately 9 a.m.) Ms Banney (alone) was seen to be using the vehicle in the vicinity of the Mudgeeraba State School.  She apparently went to a service station and drove home at about 9.30 a.m. The appellant (alone) was later (at 11.09 a.m.) observed driving the vehicle at a place described as the Nielsen’s Road/Alexander Road roundabout where he met the occupant of another vehicle.  Some time after this the appellant was detained by police and taken to Ms Banney’s premises where a police search ensued.  Nothing relevant was found.

The appellant however was kept in custody and not released until 21 November.  The hire of the Commodore vehicle ended whilst he was in custody.  The appellant was not observed again at or anywhere in the vicinity of Ms Banney’s premises before the search, two days later  on 23 November, when the $50,000 was found.  Indeed there is no evidence that he was ever in the vicinity of the premises again after he was taken to them in police custody on 14 November.

There was also evidence from which it might be inferred that the money came from Jupiter’s Casino.  Three of the $5000 bundles were wrapped in “note strap stickers” identified as being used at the casino to bind currency issued to winners.  The usual casino procedure was that a date would be stamped on the sticker when the bundle was put together, and generally speaking such a bundle would be turned over to a customer within two days of its being stamped.  Two such bundles were identified as containing straps dated 5 November 1996.

There was also some evidence suggesting relatively extensive gambling activity on the part of the appellant and of Ms Banney at the casino.  A card issued in the name of the appellant indicates that between 10 November 1994 and 5 March 1997 he or others using his card bet a total of over $300,000 through use of that card.  That of course includes a period after the date of the alleged offence, and the evidence shows that persons other than the owner of the card may use it.  Even so it raises an inference of relatively extensive gambling by him or his privies.  The casino records also show that a person using the name of the appellant and using his card was paid $10,416 on 6 November 1996.  The evidence further indicates that a person using his card lost money on 9 and 11 November 1996, and that the card was not used between 11 and 23 November 1996.

There was also a card in Ms Banney’s name, and on 6 October 1996 a person using that card won $12,967.74.  The card does not indicate any further winnings between that date and 23 November 1996.  One of the paper folders found in Ms Banney’s house was dated 6 October 1996.

At material times the appellant was on sickness/unemployment benefits and Ms Banney (who had a child to support) was in receipt of a single mother’s pension.

It was submitted on behalf of the respondent that the appellant and Ms Banney were “on the cusp of being in a de facto relationship lived out at Banney’s house”.  However I do not think that the evidence shows a sexual relationship, or suggests that the appellant was more than an intermittent visitor.  The main bedroom where the money was located contained only women’s clothing.  There was no evidence of any male clothing either in the bedroom or anywhere else in the house.  Indeed, no property of the appellant was found in the house, and there was no evidence of his in any way contributing to household expenses such as rent, telephone or any other outgoings.

There was no satisfactory evidence that the appellant had ever stayed the night.  The most that could be said is that he was an intermittent visitor who was obviously on friendly terms with Ms Banney, and that they both obviously had a serious interest in or addiction to gambling.  She trusted him to drive her daughter in his car, she was sometimes permitted the use of his vehicle and he was interested in the premises (or in assisting Ms Banney) to the extent that he occasionally did gardening there.  The evidence however falls well short of suggesting any real control of the premises, or anything that could fairly be called occupation or control. 

The prosecution case is weakened by circumstance that the raid conducted on 14 November shows that the money was probably not then at the premises.  Evidence was given of a concentrated search on that earlier occasion, including specific search in the bedroom at the place where the money was eventually found on 23 November.  The natural inference is that it is probable that somebody (most likely Ms Banney) put the money there between 14 and 23 November.  But the appellant was in actual police custody between 14 and 21 November, and there is no evidence of his having been at the premises in the critical period 21 to 23 November.  The neighbours did not observe him there at that time, and their attention was certainly drawn to the question of when it was that he last visited the premises.

In my view the prosecution clearly fails to the extent to which it attempts to show possession of the money through control or occupation by the appellant of the premises.  A more difficult question arises however as to whether possession is shown by means of his control of or association with Ms Banney having regard to their gambling activities.

It is true that each of them had his or her own card, and that each might have permitted the other to use the cards interchangeably.  But whether they did so is speculative and it is impossible to say whether their activities in this respect involved loans to each other or whether in the end their activities were joint or separate.

In the end, we are concerned with $50,000 which was plainly found in Ms Banney’s possession.  The ultimate question is whether it should be inferred that this possession was her possession on behalf of both.  The evidence justifies some suspicion that it may have been, but on this issue suspicion is not enough.  The prosecution must prove beyond reasonable doubt that the appellant, even assuming he had possessed some of this money at an earlier stage, was still in possession of that money at that time.  On the evidence in this case I do not think that this can safely be inferred beyond reasonable doubt.  The circumstantial case does not satisfactorily exclude other hypotheses.  It follows that the prosecution fails on the essential preliminary issue of possession.

“Property reasonably suspected of being tainted”

Further questions were raised on this appeal in relation to alleged misdirections concerning the second element of s. 91(1) and concerning the application of s. 92(2).  In his reasons the stipendiary magistrate stated–

“I am satisfied that there was reasonable cause for police to suspect the money to be tainted, given the information that they had received and the fact that this money was located, it would seem as a result of information they received.”

and

“The provision (s. 92(2)) clearly creates a reversal of onus if the magistrate finds under the first sub-section that there is a case to answer.  It is for the defendant to negative the reasonableness of the suspicion the magistrate may hold, albeit to the civil standard of proof.”

It is enough to say that the first of these statements, which is concerned with reasonableness of the police suspicion, is inconsistent with the objective test required by the authorities (Anderson v Judges of District Court NSW (1992) 27 NSWLR 701, 714 per Kirby P;  R v Chan (1992) 28 NSWLR 421, 435;  McGee v McKeever (1994) 71 A Crim R 586 at 592).  In particular the question whether the property was “property that may reasonably be suspected of being tainted property” must be determined not according to the subjective beliefs of the police at the time, but according to an objective criterion determined by the court at the time of the decision.  Also, that element must be satisfied beyond reasonable doubt.  The second statement (above) is also erroneous in suggesting that the finding of a case to answer under s. 91(1) is sufficient to ground a conviction if a defendant fails to negative the reasonableness of the magistrate’s suspicion.

On these bases it would have been necessary to set aside the conviction and direct a retrial.  However as the prosecution fails on the prerequisite of proof of possession, the appeal will be allowed.  I would be disposed to order the unsuccessful respondent to pay the appellant's costs.  The appeal was by way of order to review, and s 214 of the Justices Act affords the jurisdiction to award costs.  For many years in Queensland it was relatively uncommon for costs to be awarded in appeals in relation to matters of general criminal jurisdiction.  The old rule was that in criminal proceedings the Crown neither received nor paid costs (Attorney General for Queensland v Holland (1912) 15 CLR 46, 49;  compare Lewis v Utting [1985] 1 Qd R 423).  Even in those times the practice on appeals by way of order to review was not uniform, and many instances can be found of costs being awarded to the successful party.  However the approach of courts to the award of costs in criminal proceedings under the Justices Act was substantially changed  by Latoudis v Casey (1990) 170 CLR 534.  While a discretion remains in the primary court, a successful defendant in summary proceedings now has a reasonable expectation of obtaining an order for costs against the informant, though costs may be withheld by reason of the conduct of the defence or on other bases.  Mason CJ said–

'By conferring on courts of summary jurisdiction a power to award costs when proceedings terminate in favour of the defendant, the legislature must be taken to have intended to abrogate the traditional rule that costs are not awarded against the Crown.'  (Ibid p 542)

It may be noted that in the present case the prosecution, when it succeeded before the Magistrate, was bold enough to seek against the appellant what he called the costs of the prosecution.  This was in substance refused although the Magistrate ordered the appellant to pay certain witnesses' expenses.

In the present appeal by way of order to review under the Justices Act, I consider that the proper exercise of this Court's discretion under s 214 is necessarily affected by the reasoning of Latoudis v Casey.  It was necessary for the appellant to come to this court to set aside a conviction that had wrongly been recorded against him.  I can see no reason why the unsuccessful respondent should not be ordered to pay the appellant's costs.

The appeal will therefore be allowed with costs.  The orders below with respect to the appellant Mr King will be set aside and replaced with orders giving effect to a dismissal of the charge against him.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 5904 of 1997

Brisbane

Before Pincus JA

Thomas J

de Jersey J

[King v D’Hotman De Villiers]

BETWEEN:

KENNETH BRUCE KING

(Defendant) Appellant

AND:

GERARD FRANTZ ALAIN D'HOTMAN DE VILLIERS

(Complainant) Respondent

REASONS FOR JUDGMENT - de JERSEY J

Judgment delivered 25 November 1997

I agree with the reasons for judgment of Mr Justice Thomas, and with the orders he proposes.