CRIMINAL ASSETS CONFISCATION (MISCELLANEOUS) AMENDMENT BILL

Introduction and First Reading

Received from the House of Assembly and read a first time.

Second Reading

The Hon. G.E. GAGO (Minister for Agriculture, Food and Fisheries, Minister for Forests, Minister for Regional Development, Minister for Tourism, Minister for the Status of Women) (18:01): I move:

That this bill be now read a second time.

I seek leave to have the second reading explanation inserted in Hansard without my reading it.

Leave granted.

The contents of this Bill were originally a minor part of the Criminal Assets Confiscation (Prescribed Drug Offenders) Amendment Bill 2011. The Opposition, with the support of sufficient independents, saw fit to strip out and defeat the substance of that Bill. They revealed no opposition to the necessary miscellaneous amendments proposed and so this Bill is designed to propose those amendments again.

The Bill makes amendments in three general areas.

Pecuniary Penalty Provisions

The Bill also amends the pecuniary penalty provisions of the Act. The necessity for this amendment arose directly from the decision of the Full Court in the case of DPP v George [2008] SASC 330. The appellant George was convicted of an offence of producing cannabis. The subject of the charge was 12 mature cannabis plants and 20 seedlings with roots attached. The plants were being grown hydroponically in a shed on his residential property in Seacombe Gardens. He was also convicted of knowingly abstracting (stealing) electricity. He was fined $2,500 for both charges. Under the law applicable at the time the maximum penalty for this offending would have been 25 years imprisonment. Under current law, 10 plants is a trafficable quantity and he was over that, not counting seedlings, so there would be a presumption of sale.

The DPP intended to pursue the defendant under the Criminal Assets Confiscation Act. Accordingly, a restraining order was placed over the residential property. After conviction, the defendant applied for an order excluding the property from forfeiture. In the meantime, the DPP applied for a pecuniary penalty order forfeiting a sum of money equivalent to the defendant's interest in the property. The house was valued at $255,000 with a mortgage of $164,731. It follows that the pecuniary penalty would have been about $90,000. It can be accepted that the defendant would have to sell the property to pay the pecuniary penalty.

The question then arose whether the court had a discretion whether to impose a pecuniary penalty order or not. On the face of it, the legislation seemed to say that there was no discretion. The legislation says that the court must make a pecuniary penalty order about the proceeds of a crime or an instrument of crime. All had assumed hitherto that 'must' meant 'must' and that was that. The magistrate below had threaded a way out of what he thought to be an injustice by holding that the house and land were not instruments of crime. That was an ingenious argument and the Supreme Court on appeal divided 2/1 on the facts, holding that the property was an instrument.

But White J, with whom Doyle CJ and Vanstone J agreed on point, said that must did not mean must. There was a discretion after all. The key passage was:

Moreover, the construction for which the DPP and the Attorney-General contend has the potential to bring the administration of justice into disrepute. This is likely to engender a lack of respect for such proceedings and the authority of the courts conducting them is likely to be undermined. The DPP could, for example, take the attitude before a court hearing an application under ss 47 or 76 that its decision will be immaterial, and conduct the proceedings accordingly. It is inimical to proper respect of judicial authority for one party to an application before the court to be able to take such an attitude.

I referred earlier to the absence of any provision in the CAC Act which would enable a court to take account of, or to ameliorate, the harsh consequences of a PPO or the interests of others in the subject property. Nor is there any provision enabling the court to take account of the public interest in the way in which s 76(1)(c) requires in relation to statutory forfeiture. The absence of such provisions is stark if s 95(1) is construed as obliging a court, upon satisfaction of the specified matters, to make a PPO. It is difficult to identify any reason why Parliament should have considered provisions to that effect to be appropriate in relation to forfeiture orders, but not in relation to PPOs. Similarly, it is difficult to identify any reason why Parliament should have intended consideration of the public interest to be relevant in relation to applications for exemption from statutory forfeiture, but not in relation to PPOs. The absence of provisions permitting a court to ameliorate the harsh consequences of a PPO, or to consider the public interest, loses much of its significance however if s 95(1) is construed as vesting a discretionary power, rather than imposing an obligation. (emphasis added)

The lesson was plain. 'Must' does not really mean 'must' because of the harsh, arbitrary and unjust consequences it would bring. 'Must', said the Court, really means 'may'. The Act is amended to fix this. This State should not have on the books a law that is thought to be so unfair and unjust that a Court has to strain the ordinary use of language in that way in order to bring about a fair result. The amendment gives the court a discretion to impose a pecuniary penalty in relation to instruments of crime, just as it does in relation to the forfeiture of instruments of crime. That discretion is informed by an inclusive list of factors identical to those legislated in relation to the forfeiture of instruments of crime.

Restraining Orders

In the course of deciding the main issue in DPP v George, the court, (particularly the contribution of White J) points out another technicality that poses problems. In summary:

The Act contains provision for what is known as 'automatic forfeiture'. The essence of the scheme is that property subject to a restraining order will be forfeited by operation of law after the expiry of a certain time period after conviction.

The only way for a defendant (or any other interested party) to escape this process it to apply for and win an order excluding property from the restraining order.

White J pointed out that a literal reading of the Act could say that the property will be automatically (and irretrievably) forfeited even though an application to exclude that property is on foot and has yet to be resolved. He regards such an outcome (with considerable justification) as unfair and unjust.

White J held that this problem deserved the attention of the Parliament. His Honour did not observe that the legislation permits a person in this position to apply to the court for an 'extension order', which has the effect of postponing the automatic forfeiture. But that omission is in itself telling. The system is just too complicated. And the necessity for a separate extension order is not obvious. If the applicant for an exclusion order knew about it, he or she would surely apply for it and, equally surely, a court would grant it routinely in order to avoid the injustice to which White J referred.

The problem is fixed in this Bill. The way in which it is done is to abolish what used to be called extension orders as a separate phenomenon and instead provide that any person may apply for the exclusion of property from forfeiture and, when that application is made, the forfeiture of property is subject to an extended period terminating when the application for exclusion is finally determined.

Other Amendments

South Australian Police and the DPP asked for an amendment to the Act so that a person who is the beneficiary of a discretionary decision to discount a sentence because of the consequences of forfeiture cannot also be the beneficiary of an amelioration of forfeiture for the same reason. In other words, the defendant cannot get the same benefit twice. This has been done, except for those who have co-operated with law enforcement in cases of serious and organised crime, who may get a sentence discount for their co-operation and also a discretionary form of relief from total forfeiture under the prescribed drug trafficker scheme contained in this Bill. The reason for that is good public policy—every encouragement should be given and every lever should be applied to those who are in a position to inform on serious and organised criminals.

The Bill makes minor amendments to clarify the provisions relating to the forfeiture of a security given by a defendant or other person on the making an application for an exclusion order.

I commend the Bill to Members.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Commencement

3—Amendment provisions

These clauses are formal.

Part 2—Amendment of Criminal Assets Confiscation Act 2005

4—Amendment of section 3—Interpretation

This clause makes a consequential amendment by deleting the definition of extension order and inserts a new subsection (2), providing that a reference in the principal Act to an indictable offence includes an indictable offence of a kind that is required to be prosecuted, and dealt with by the Magistrates Court, as a summary offence under a provision of any Act. The amendment to the definition of serious offence is consequential to this latter amendment.

5—Amendment of section 6—Meaning of effective control

This clause makes an amendment of a statute law revision nature, to ensure consistency of language.

6—Amendment of section 34—Court may exclude property from restraining order

Subclause (1) makes a statute law revision amendment consistent with clause 5.

Subclause (2) prevents property being excluded from a restraining order on application by a person convicted of the offence to which the restraining order relates where the convicted person has had the possible forfeiture of the property taken into account in sentencing for the offence.

7—Amendment of section 46—Cessation of restraining orders

This clause amends section 46(4) of the principal Act to reflect the fact that restrained property may vest in the Crown under an Act other than the principal Act.

8—Amendment of section 47—Forfeiture orders

This clause makes a minor amendment to section 47(5) of the principal Act to make it clear that subsection only relates to forfeiture orders under section 47(3).

9—Amendment of section 48—Instrument substitution declarations

This clause makes a minor amendment to section 48 of the principal Act to distinguish between forfeiture orders made under section 47(3) and those made under section 47(1).

10—Insertion of section 62A

This clause inserts new section 62A into the principal Act. That provision provides that, if a court has taken a forfeiture of a person's property into account in sentencing the person, the person cannot then apply for an exclusion order or compensation order in respect of the property.

11—Amendment of section 74—Forfeiting restrained property without forfeiture order if person convicted of serious offence

This clause is consequential to clause 12.

12—Substitution of section 75

This clause substitutes a new section 75 of the principal Act, replacing the current 15 month extension orders with an extended period which will apply automatically when an application to exclude property has been made, but not finally determined, at the end of the period of 6 months after conviction (when automatic forfeiture would otherwise occur).

13—Amendment of section 76—Excluding property from forfeiture under this Division

This clause amends section 76 to broaden the range of people who can apply for an order excluding property (currently only the convicted person can apply) and to ensure the provision works properly in relation to securities given under section 38 or 44.

14—Insertion of section 76A

This clause inserts a provision similar to the one proposed in clause 10 providing that, if a court has taken a forfeiture of a person's property into account in sentencing the person, the person cannot then apply for exclusion of the property under this Division.

15—Amendment of section 95—Making pecuniary penalty orders

This clause substitutes subsections (1), (2), (3) and (4) of section 95 of the principal Act. New subsection (1) ensures that mandatory pecuniary penalty orders relate only to benefits derived from crime while new subsection (2) provides the court with a discretion to make such an order in relation to an instrument of crime. New subsection (3) sets out matters the court may have regard to when determining whether to make an order under subsection (2). Proposed subsection (4) ensures that the court is not prevented from making a pecuniary penalty order merely because some other confiscation order has been made in relation to the offence.

Section 95(7) is consequentially amended to apply only to benefits.

16—Amendment of section 96—Additional application for pecuniary penalty order

This clause makes minor statute law revision amendments to simplify section 96.

17—Insertion of section 98A

This clause inserts new section 98A into the principal Act, which provides that, for the purposes of the Division, a court may treat as property of a person any property that is, in the court's opinion, subject to the person's effective control.

18—Amendment of section 99—Determining penalty amounts

This clause clarifies references in section 99 of the principal Act.

19—Amendment of section 104—Benefits and instruments already the subject of pecuniary penalty

This clause amends section 104 of the principal Act to include reference to instruments.

20—Repeal of section 105

This clause repeals section 105 of the principal Act and is consequential upon the insertion of section 98A into the Act by clause 17 of this measure.

21—Amendment of section 106—Effect of property vesting in an insolvency trustee

This clause amends section 106 of the principal Act to ensure it applies in relation to instruments as well as benefits of crime.

22—Amendment of section 107—Reducing penalty amounts to take account of forfeiture and proposed forfeiture

This clause amends section 107 of the principal Act to insert a new subsection (2), setting out reductions to penalty amounts under pecuniary penalty orders that relate to instruments of crime where the instruments have been forfeited in relation to the offence to which the order relates, or where an application for such forfeiture has been made.

23—Amendment of section 108—Reducing penalty amounts to take account of fines etc

This clause amends section 108 of the principal Act to ensure it encompasses instruments of crime.

24—Amendment of section 149—Interpretation

This clause amends the definition of property-tracking document in section 149 of the principal Act, to refer, for the sake of consistency, to property owned by or subject to the effective control of a person, rather than simply the property of the person.

25—Amendment of section 219—Consent orders

This clause makes a consequential amendment to section 219 of the principal Act to reflect changes made by this measure.

26—Substitution of section 224

This clause substitutes section 224 of the principal Act to include forfeiture, or pecuniary penalty orders, under the law of other relevant jurisdictions as matters to which a sentencing court must not (under new paragraph (b)) or must (under paragraph (c)) have regard to in determining sentence.

Debate adjourned on motion of Hon. S.G. Wade.