Meredith v State of Queensland[2006] QSC 9

SUPREME COURT OF QUEENSLAND

Forfeiture without conviction

1. Section 28 of the Criminal Proceeds Confiscation Act 2002 (“the Act”) provides that:

“The State may apply to the Supreme Court for an order (‘restraining order’) restraining any person from dealing with property stated in the order (the ‘restrained property’).”

2. An application for a restraining order is to be supported by an affidavit of an officer of the Crime and Misconduct Commission or a police officer stating that the officer suspects that the person “has engaged in 1 or more serious crime related activities”, and “the reason for the suspicion”.^[1] A serious criminal offence is a “serious crime related activity”.^[2] And an offence is a serious criminal offence if it is, among other things, “an indictable offence for which the maximum penalty is at least 5 years imprisonment”.^[3]

3. A restraining order, which “may relate to all or any”^[4] of the suspect’s property, is a “preliminary step”^[5] in confiscation proceedings. If, within 28 days of the making of the order, an application is brought seeking “a forfeiture order for the restrained property” or “a proceeds assessment order against a person whose property is restrained”, the restraining order “continues in force”.^[6]

4. By s 56(1) of the Act,

“The State may apply to the Supreme Court for an order (‘forfeiture order’) forfeiting to the State particular property restrained under a restraining order.”

5. Relevantly, a forfeiture order may^[7] be made if it is more probable than not that the person whose property is subject to a restraining order “engaged during the limitation period in a serious crime related activity”.^[8] Property the subject of a forfeiture order is “forfeited to” and “vests absolutely in the State”.^[9]

6. These provisions are part of a legislative regime that aims “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”.^[10]

7. Applications for restraining and forfeiture orders initiate civil, not criminal, proceedings.^[11] The rules of evidence in civil proceedings apply.^[12] And questions of fact are to be decided “on the balance of probabilities”.^[13] The effect of these provisions is that in a forfeiture application the State bears the burden of proving, by evidence admissible in a civil proceeding, the commission within the limitation period of a serious criminal offence by a person whose property is affected by a restraining order.

An examination is ordered

8. In April 2003, a restraining order was made in respect of almost all the applicant’s property. In September that year, a judge of this Court ordered that:

“Pursuant to section 38(1)(c) of the Criminal Proceeds Confiscation Act 2002, [the applicant] attend for examination on oath before the Court …”

9. Other than by the reference to s 38(1)(c), the order does not prescribe the scope of the examination.

10. The examination has not taken place; but already there is disputation about the inquiries that may be made of the applicant at it. The State wishes to interrogate him about matters that have nothing to do – even indirectly – with financial circumstances or property. These contentious questions relate solely to whether he committed serious drug offences.

11. By s 40 of the Act:

“(1)   A person examined under an examination order is not excused from answering a question, or from producing a document or other thing, on the ground that –

(a)answering the question or producing the document may tend to incriminate the person or make the person liable to a forfeiture or penalty;

…

(2)    A statement or disclosure made by a person in answer to a question asked in an examination under an examination order, or a document or other thing produced in the examination, is not admissible against the person in any civil or criminal proceeding, other than –

…

(b)a proceeding on an application under this Act; …”

12. In view of s 40, the applicant accepts that he may be examined about matters that touch upon his property or financial affairs, even if his answers tend to show that he has engaged in the serious criminal activity upon which the State relies to found the forfeiture proceedings. He contends, however, that he may not be questioned about things that exclusively concern whether he engaged in such serious criminal activity.

Decisive issue

13. Does the order^[14] authorise the proposed line of inquiry?

Aiding a restraining order

14. Section 37 of the Act stipulates:

“(1) The Supreme Court may make the other orders in relation to a restraining order the court considers appropriate, including, but not limited to, orders mentioned in section 38.”

15. By s 38,

“For section 37, the orders are as follows –

(a)an order varying the property restrained under the restraining order;

(b)an order imposing additional conditions on the restraining order or varying a condition of the order;

(c)an order (‘examination order’) requiring a person whose property is restrained under the restraining order … to attend for examination on oath before the court or a stated officer of the court about the following –

(i)the affairs of any person whose property is restrained under the restraining order;

(ii)the nature and location of any property of a person whose property is restrained under the restraining order;

3. the nature and location of any property restrained under the restraining order that the applicant for the order reasonably suspects is serious crime derived property;

…

(f)an order (‘property particulars order’) directing either of the following to give to the commission or the public trustee, within a stated time, a sworn statement of particulars of the property, or dealings with the property, in which the owner has or had an interest, as the court considers appropriate –

(i)a person who is or was the owner of restrained property;

(ii)if the owner of restrained property is or was a corporation – an executive officer of the corporation;

…

(i)an order (‘property seizure order’) requiring or authorising a commission officer or a police officer to seize property restrained under the restraining order.”

Section 38(1)(c)(i) critical

16. It is, it seems, common ground that the 2003 order is an “examination order”, and that it falls to be construed as if it had stated, in terms, that the applicant is to be examined about the matters set out in s 38(1)(c)(i), (ii) and (iii).

17. Now, (ii) and (iii) are confined to the “nature and location of any property …”. Despite the expansive content of “property” in the Act,^[15] neither of them could sustain the foreshadowed line of inquiry. So the State relies on s 38(1)(c)(i), contending that questions discretely directed to the commission of serious drug offences would inquire “about … the affairs” of the applicant as a “person whose property is restrained under the restraining order” made in April 2003.^[16] Incorporated into the September 2003 examination order by reference, “about … the affairs” of the applicant must, as the arguments on both sides assumed, have the same meaning for the order as those words do in the Act. And in the Act the content of “affairs of any person whose property is restrained under the restraining order” is influenced by context and purpose.

Examination and restraining orders related

18. All the s 38 remedies are, as the opening phrase of subsection (1) puts it, “for section 37”. Section 37 envisages “other orders in relation to a restraining order”. That expression contemplates a connection between those “other orders” – such as an examination order – and a restraining order, whether pronounced simultaneously or previously.^[17]

19. One “condition” of a restraining order is “that the person whose property is restrained … must preserve” it.^[18] Other “appropriate” “conditions” may be imposed.^[19] Typically, these might concern short-term possession of the restrained assets,^[20] sale and retention of the proceeds of any disposal before the conclusion of forfeiture proceedings,^[21] and payment of reasonable living expenses and debts.^[22]

20. That an examination order is ancillary to a restraining order, not to final relief by way of a forfeiture (or proceeds assessment) order, is a significant contextual consideration.

21. Another important indication of the intended breadth of “affairs …” in s 38(1)(c)(i) is the purpose of an examination order. Such an order is one of several remedies (including property particulars and seizure orders) that facilitate the identification and preservation of property pending the determination of forfeiture proceedings.

22. Nothing in this legislative scheme suggests that an examination order – made “for” a s 37 restraining order – was designed to allow compulsory interrogation about matters irrelevant to the effective functioning of a restraining order. Nor do the other sections of the Act that assign a role to an examination order support the State’s contention concerning the meaning and effect of s 38(1)(c)(i).

23. Section 47 permits a “prescribed respondent”, such as the present applicant, to apply for an amendment of a restraining order that would exclude particular property from its operation. It assigns a role to a s 38(1)(c) “examination order” in connection with an application for such a variation: that “the application may not be heard until the DPP has had a reasonable opportunity to examine the applicant under an examination order…”.^[23] Section 49 makes a corresponding provision for someone other than a prescribed respondent whose property is restrained under the order to apply for exclusion of property from the reach of the restraining order. Again, such an application may not be heard “until the DPP has had a reasonable opportunity to examine the applicant” for that relief “under an examination order.”^[24] These provisions anticipate that the examination, if ordered, will concern, in a word, property, not serious criminal activity that is incapable of shedding any light on the range of interests in property that could be subjected to interlocutory restraint.

24. A restraining order is an essential pre-condition to the making of a forfeiture order.^[25] Without the restraining order, there is no “property restrained under a restraining order” to attract a forfeiture order. Given the significance of the restraining order to the efficacy of a forfeiture order, it is not surprising that the Act also provides for applications in forfeiture proceedings for the exclusion of property from the impact of the restraining order.

25. By s 65, where an application for a forfeiture order has been made but not decided, a person claiming an interest in property to which the application relates may apply to exclude property from the application for the forfeiture order. The opportunity is not confined to pending forfeiture proceedings. Section 66 makes equivalent provision in respect of “an interest in property that is forfeited under a forfeiture order”. An application for an “exclusion order”^[26] is not to be heard “until the DPP has had a reasonable opportunity to examine the applicant under an examination order”.^[27]

26. Again, there is no hint that the Parliament expected that an examination order could support an inquisition about a topic that has no arguable connection with financial circumstances or property.

The interpretation

27. “Affairs” in s 38(1)(c)(i) comprehends such activity as ventures with a potential to lead to the identification and preservation of interests in property that are or might comprehended by forfeiture orders. As the New South Wales Court of Appeal has said^[28] of a counterpart to s 38(1)(c), an examination about “affairs …” may cover “an ambit wider than a mere inquiry as to the location of real or personal property”. But an examination order does not permit an interrogation that could not possibly touch upon the identification of proprietorial interests that are or might be affected by restraining, forfeiture or proceeds assessment orders.

28. It is not necessary to recall that “statutory provisions are not to be construed as abrogating important common law rights, privileges and immunities in the absence of clear words or a necessary implication to that effect”^[29] to arrive at this view of the scope of “affairs …” in s 38(1)(c).^[30] In context, and having regard to the evident purpose^[31] of the legislative provisions concerning an examination order, “affairs …” in s 38(1)(c)(i) does not extend to matters that have nothing to do with property or financial circumstances and instead relate exclusively to involvement in “serious criminal activity”.^[32]

Confirmatory extrinsic material

29. Section 14B(1)(c) of the Acts Interpretation Act 1954 enables regard to be had to extrinsic material capable of assisting in the interpretation of a provision of an Act if that material tends to “confirm the interpretation conveyed by the ordinary meaning of the provision”: that is, “the ordinary meaning conveyed by a provision having regard to its context in the Act and to the purpose of the Act”.^[33]

30. In assessing the impact on the usual entitlement to decline to answer questions where the answers tend to incriminate or expose to a forfeiture, the Explanatory Notes that accompanied the Bill to the Legislative Assembly say of the clause that became s 40:

“The examination provisions were included in the original confiscation legislation and were introduced because normal powers were considered inadequate to obtain complete information about the affairs of a person subject to a confiscation application. The justification for the power is that it enables investigators to obtain full details of a person’s property and financial dealings which in turn would allow appropriate action to be taken under the Bill to forfeit illegally obtained property or release legitimate property from restraint. The information sought could include information which is exclusively within the knowledge of the person concerned.”

31. Under the heading “Division 3 – Making other orders”, the Notes record:

“Clause 37(1) enables the Supreme Court to make orders ancillary to the restraining order. …

Clause 38(c) authorises the court to order the examination of a person whose property is restrained under the restraining order or another named person. Those persons can be examined about the “affairs” (for example the interests, transactions and ventures) of any person who owns restrained property and also about the nature and location of various property.”

32. The notion that “affairs …” could embrace criminal activity unrelated to property also eluded the Parliament’s Scrutiny of Legislation Committee, which reported:^[34]

“41. These examination provisions are not dissimilar to powers conferred on a range of state and federal law enforcement and regulatory bodies and the Attorney would no doubt argue for their inclusion on the basis that conventional powers are inadequate to obtain full details of a person’s financial dealings and property interests.”

State’s arguments

33. The interpretation of s 38(1)(c)(i) the State propounds is said to be supported by three considerations: the impact of ss 40 and 265 of the Act; that an examination order may be made before the hearing of applications for exclusion of property from both restraining and forfeiture orders; and the interpretation given in New South Wales Crime Commission v Murchie^[35] to the New South Wales analogue to s 38(1)(c)(i).

Abolition of privileges

34. By s 40(1), a person examined under an examination order is not excused from answering on the ground that the response may tend to incriminate or to render the examinee liable to a forfeiture or penalty. By subsection (2), the answers may be used in “a proceeding on an application under this Act”, such as for a forfeiture order. And s 265(2)(d) stipulates that “in a proceeding on an application for an order under this Act … the transcript of an examination under an examination order is evidence of the answers given …”. The State contends that these provisions “would be otiose if serious criminal activity was (sic) not able to be the subject of examination”.^[36]

35. There is, however, abundant scope for the sensible operation of ss 40 and 265 even if an examination order may not be deployed for the sole purpose of interrogating a suspect about topics irrelevant to forfeiture and proceeds assessment orders. Those provisions facilitate the identification of property – an exercise that assists in promoting the efficacy of a subsequent forfeiture order. They also authorise the use of responses to questions about property to support the State’s case in forfeiture and proceeds assessments applications that the suspect was engaged in serious criminal activity.

Examinations pertaining to forfeiture proceedings

36. The Act does envisage the use of examination orders in connection with applications to exclude property from both pending and completed forfeiture proceedings. But there is no hint in any of these provisions – ss 47(8)(b), 49(7)(b), 65(8)(b), 66(8)(b) – that such an order might be called in aid for a purpose wholly unrelated to property. To the contrary, these provisions^[37] afford good reason to construe “affairs” in s 38(1)(c) as relating to financial concerns or assets with a potential to bear upon property that might eventually be the subject of orders in forfeiture proceedings.

New South Wales analogue

37. The State’s third argument is of more moment.

38. The New South Wales counterparts to s 37(1) and s 38(1)(c) look to be materially the same, as White J has observed.^[38] And in Murchie, the legislation in that State was held to justify questions directed exclusively to the commission of an offence.

39. Greg James J considered that:^[39]

“…‘the affairs’ of which the section speaks are those activities of persons suspected of serious crime related activity whose property is restrained by a restraining order under the Act which activities might affect the making of further orders under the Act.

Such a wide construction reflects the breadth of potential effect under the Act of the restraining order and accords with the statutory scheme under which the examination is ancillary, not only to the order, but also to an order for forfeiture …

The ancillary orders available … have the common feature of assisting the operation of the restraining order in its application to property, but they also are apt to assist the proper determination of applications for forfeiture orders by enabling the ascertainment of matters to which s 22 relates. I see no reason to cut down the width that the language, context and purpose of the Act suggests should be accorded to those measures.

I therefore conclude that the examination is intended to allow the eliciting of information of such activities as might be relevant to the existence of serious crime related activity within the six year period … This construction allows the examination to supplement the effect of the order in its full statutory operational effect, that is, it allows assistance to the operation of the order not only as freezing property interests, but as potentially triggering forfeiture or as assisting the making and enforcement of proceeds assessment orders.”

40. It will be apparent from my analysis of the legislation and the informative extrinsic material that such an expansive perception of the scope of the permitted inquiries under an examination order does not accord with the meaning and effect of “affairs …” in s 38(1)(c)(i).

41. The measures in ss 37 and 38 do bespeak a legislative anxiety to facilitate useful Chapter 2 orders for forfeiture.^[40] However, it does not follow that a s 38(1)(c) examination allows a compulsory interrogation about the commission of serious criminal activity where the particular inquiry cannot possibly bear on the efficacy of a forfeiture order should the evidence otherwise establish a sufficient ground for the making of such an order.

42. On the proper interpretation of the 2003 examination order, the State has not been authorised to ask, and the applicant is not obliged by s 40 of the Act to answer, questions exclusively about whether he has engaged in serious criminal activity.

Disposition

43. I will hear the parties with respect to the form of order.