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House of Assembly - Fifty-First Parliament, Third Session (51-3)
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SERIOUS AND ORGANISED CRIME (UNEXPLAINED WEALTH) BILL

Committee Stage

In committee.

(Continued from 10 September 2009. Page 3971.)

Clause 3.

Ms CHAPMAN: I have moved an amendment on this clause, which essentially inserts the definition of the DPP in anticipation of clause 9. I think we have all spoken on it, and we are about to vote on it.

The CHAIR: Is there any further debate on the amendment? In that case, the question before the chair is that amendment be agreed to.

The committee divided on the amendment:

AYES (14)
Chapman, V.A. (teller) Evans, I.F. Goldsworthy, M.R.
Gunn, G.M. Hamilton-Smith, M.L.J. Hanna, K.
McFetridge, D. Pederick, A.S. Penfold, E.M.
Pengilly, M. Pisoni, D.G. Such, R.B.
Venning, I.H. Williams, M.R.
NOES (25)
Atkinson, M.J. (teller) Bedford, F.E. Bignell, L.W.
Breuer, L.R. Caica, P. Ciccarello, V.
Conlon, P.F. Fox, C.C. Geraghty, R.K.
Kenyon, T.R. Key, S.W. Koutsantonis, A.
Lomax-Smith, J.D. Maywald, K.A. McEwen, R.J.
O'Brien, M.F. Piccolo, T. Portolesi, G.
Rankine, J.M. Rann, M.D. Rau, J.R.
Snelling, J.J. Stevens, L. White, P.L.
Wright, M.J.
PAIRS (4)
Redmond, I.M. Foley, K.O.
Griffiths, S.P. Simmons, L.A.

Majority of 9 for the noes.

Amendment thus negatived; clause passed.

Clause 4.

Mr HANNA: One of the problems that arises with the current confiscation of profits legislation and this proposed legislation is the impact on people who are not actually targeted by the state in terms of their assets being questioned. In the case of a family or perhaps a business partnership, where one of the people involved is targeted under this legislation, does the government acknowledge that, by taking assets which are actually enjoyed by more than one person, completely innocent people could be affected by the confiscation of assets?

The CHAIR: That was a comment rather than a question, member for Mitchell?

Mr HANNA: I am not sure whether you heard the last bit, Madam Chair: it was a question, quite clearly.

The Hon. M.J. ATKINSON: Can the member repeat the question?

Mr HANNA: Fortunately, the Attorney-General's adviser was listening, and he may be able to suggest an answer to the Attorney.

The CHAIR: Member for Mitchell, if you have a question, the Attorney has asked whether you would repeat it. The chair also asks, because the chair did not hear the question, either.

Mr HANNA: That is fine; I will do that, Madam Chair. But then I need to place on record that the Attorney-General simply was not paying attention when I was asking the question.

The CHAIR: Order! Member for Mitchell, please repeat the question.

Mr HANNA: Well, what is out of order about that, I wonder. But I am quite happy to repeat the question. My question was in relation to clause 4, and it deals with effective control of assets. I was asking about the situation where there is a family or a business partnership, where a number of people enjoy the same asset, whether it be a home, business, car or something else. Does the Attorney-General acknowledge that people who are innocent—that is to say, not targeted under this legislation when an order for confiscation is sought—can nonetheless be seriously affected if an application is successfully pursued against the target?

The Hon. M.J. ATKINSON: Madam Chair, the situation was that the member for Mount Gambier was asking me a question and I did not catch the question at the end of the member for Mitchell's statement. If, as members, we are to be indignant and insulting to each other each time that happens and place on the record that another member was derelict in not hearing one of the sentences spoken in the committee, we will be going down a slippery path.

Mr Hanna: I think we are well down that path, Attorney.

The Hon. M.J. ATKINSON: I agree that, over the years, the member for Mitchell has taken the house down that path. The question by the member for Mitchell arises out of a constituent case. I, too, have met with those constituents, twice—

Mr Hanna interjecting:

The CHAIR: Order, member for Mitchell!

The Hon. M.J. ATKINSON: The situation is that the husband and wife share a house. The husband was found to be growing 80 marijuana plants and found with thousands upon thousands of dollars of cash. He was charged accordingly, convicted and given a suspended sentence. The Crown is in the process of seeking—under the existing legislation, of course—to confiscate his share of the home, which is the instrument of crime.

My understanding is that his wife has been detached from the proceedings, which was not disclosed to ABC television before Stateline covered the program. The confiscation is proceeding in the form of a pecuniary penalty, that is, the Crown does not seek to take the home but to take the husband's share of the home; therefore, should magistrate Gumpl in his judgment later this week uphold the pecuniary penalty, the husband, the offender, will have to pay the equivalent of half the value of the house to the Crown.

Magistrate Gumpl may decide that that is disproportionate to the offending. I do not know; that is a matter before the courts. However, what the member for Mitchell seeks to do is to pressure me as Attorney-General into intervening in a proceeding brought by the Office of the Director of Public Prosecutions and before the courts. If I gave into his importuning, the member for Mitchell would then turn around and say, 'Oh, that shows the need for an ICAC.' I have resisted the member for Mitchell's blandishments.

I have done my job as Attorney-General and allowed the matter to be determined according to law, but I have sought information about the case from the Office of the DPP. However, the way in which the member for Mitchell plays it, I'm damned if I do and I'm damned if I don't. People of goodwill will have different opinions about how this case should be decided. I must admit that I am not sure what would be a just outcome. Nevertheless, I have confidence in an independent judiciary to adjudicate the matter, and I will not be influenced by the member for Mitchell in interfering in that process.

Mr Hanna: Good!

The Hon. M.J. ATKINSON: The honourable member says 'Good!'—good that I am not doing what he is trying to pressure me into doing. I think that it illustrates the point. The situation with this legislation is that, yes, it is quite true that if someone is part of a family and one member of the family is subject to one of these orders, namely, one member of the family must account for how he or she acquired his or her wealth and cannot explain that he or she acquired it lawfully, there is a risk that the other family member who has had access to the use of the property, the enjoyment of the property, may thereby be deprived. That is quite true; we concede that.

Mr HANNA: I need to place on the record that my question was deliberately cast in general terms. I have not sought to pressure the Attorney-General in any way, in terms of intervening—

The Hon. M.J. Atkinson: Not much!

The CHAIR: Order!

Mr HANNA: —in the constituent case to which he referred. I have not even invited the Attorney-General to comment on a matter that is sub judice. However, I am glad that the Attorney-General answered the question that I asked in general terms in the affirmative. It does show the dangers of this legislation.

Mr PISONI: I want to bring to the attention of the Attorney-General a situation that arose in my electorate, and I would like to know how this clause or other parts of this bill might change that kind of situation in the future. A very beautiful specimen of an old bluestone maisonette in Scott Street at Parkside was purchased by a couple of 'developers' and some extensive work was done on the electricity supply to the house not long after the new owners took over the house. Six months later, a large marijuana bust occurred at that location. I was made aware of that and I popped around and had a chat to the police who were there, and large hydroponic equipment and plants of between three and four feet high were being pulled out.

I am not sure what the outcome of that has been but I am led to believe that, before any legal proceedings took place, a demolition application was approved and the beautiful home has now gone. I am just wondering whether this legislation would in the future prevent a situation such as that, with respect to the effective control of a property before the courts have made a decision to confiscate the asset—whether the asset would be protected from any further work or expenditure or plans. The house was demolished because there were plans to build a couple of two-storey Tuscan villas in its place. Is the Attorney-General able to explain, for the benefit of my constituents, whether a situation like that would be avoided in the future under this legislation?

The Hon. M.J. ATKINSON: Under the Criminal Assets Confiscation Act, the Office of the DPP would apply for a restraining order to make sure that the property was there to meet the dollar value of any order that was subsequently made by a court. So, if it were alleged to be an instrument of crime, the idea would be to preserve its value so that when a court subsequently ruled that it was an instrument of crime the value would be there to meet the order. That is nothing to do with preserving heritage value; that is all to do with preserving the value. So, if it is as valuable or more valuable as a Tuscan villa—

Mr Pisoni: Or an empty block?

The Hon. M.J. ATKINSON: —or an empty block; quite—and the proceeds would be there to meet the order so that justice is done under the act, then that is not something that the Office of the DPP would interfere with. However, we are talking about another act; we are not talking about this act.

Ms CHAPMAN: I think the member for Unley's concern is that under the current act a situation has arisen where it appears that the use of the confiscation act has overridden the heritage requirements. I do not know the full facts, only what has been presented to the parliament today, but it is suggested that the assets were taken under control under the confiscation act—there was a place of crime and the process was followed—but this is a property that was worth a lot more if the land was vacant. So, the demolition of the property on it, which would have impeded the increased value, took place, which has overridden the normal local government development planning rules, or whatever rules might have otherwise been enacted to protect it. So perhaps it is a matter that is worth looking at in the future.

My question, however, is in relation to the discretionary trust process. Essentially, if 10 beneficiaries are identified under the discretionary trust, I suppose this bill proposes that one-tenth of the value of that trust will be the subject of the unexplained wealth order if it is under the effective control of the person against whom the action is being taken. My concern about these discretionary trusts is twofold, and I suppose it raises the question whether this is just too simplistic or whether there is some capacity for the court hearing this matter to vary them.

The discretionary trust is just that—whoever is the director can determine which of the beneficiaries will receive a distribution—so a nominal one-tenth, for example, if there are ten beneficiaries, may produce an inequitable result. I wonder whether, for the purposes of this legislation, there is any discretion for the judge to vary the value of the amount that is under the effective control of the subject person. That is purely on numbers at this point.

The Hon. M.J. ATKINSON: There is no discretion. The answer is no; it is much too hard to draft as the member for Bragg would want it.

Ms CHAPMAN: Clause 4(2) sets out some of the things to be taken into account and provides:

(c) family, domestic and business relationships between persons having an interest in the property, or in companies of a kind referred to in paragraph (a) or trusts of the kind referred to in paragraph (b), and other persons.

That appears on the face of it to give the judge hearing this matter the capacity to receive evidence of the family, domestic and business relationships between the parties the subject of this, and the piece of property in question. On the face of it, it seems to give the trial judge some capacity to hear some evidence. If there is no discretion, it begs the question about why you would even bother to have this clause in there. The Attorney might be able to explain that.

Secondly, for the other parties in a family or beneficiaries of the trust, leaving aside the potential beneficiaries of the discretionary trust at this point (because they can be other heirs and successors in a discretionary trust—those who are alive and identified at the time of the application), how do they come to the court? What is the process for them to be able to come to the court to say, 'Hang on a minute, Uncle Joe's one-tenth share really doesn't represent the true situation. I want to be able to present evidence either to diminish that entitlement or to have a declaration made of some kind to increase the other beneficiaries' entitlement'?

The Hon. M.J. ATKINSON: The answer to the question from the member for Bragg is that there is no relationship between subclauses (1) and (2), and a reading of clause 9(3) will show that the court is able to determine that it would be manifestly unjust to make such an order. So, there is scope for discretion there.

Ms CHAPMAN: How do they apply to the court?

The Hon. M.J. ATKINSON: The member for Bragg will find her answer in clause 9(4), immediately under subclause (3), which she asked me about. That is to say, subclause (4) sets out how the other parties get before the court.

Ms CHAPMAN: Clause 9(4) says that there has to be a specification of the person's wealth and that any other person who might be affected has to be served. It does not say how they apply to the court.

The Hon. M.J. ATKINSON: My advice is that, because it is a civil proceeding, one would be served and then you would apply to be a party, that is, under subclause (4).

Ms CHAPMAN: Is the position then that there is no discretion as to what the division would be under a discretionary trust but, ultimately, when the application is made, the other beneficiaries would receive notice and they would have an opportunity to apply? Then there is an overall discretion, of course, in the judge hearing a matter pursuant to subclause (3). Do I have the procedure correct?

The Hon. M.J. ATKINSON: The member for Bragg has the procedure correct.

Clause passed.

Clause 5.

Mr HANNA: An interesting question arises about the extra territorial operation of the bill. If the target of an application has an apartment in Sydney or money in a bank account in London, to what extent can those assets be confiscated?

The Hon. M.J. ATKINSON: The member for Mitchell misunderstands the entire basis of the bill. The bill is not a confiscation of assets bill; that is, we are not seeking to seize real estate or chattels held in another jurisdiction. What we are doing is saying, 'This is the value of the assets you hold, even if they are in another jurisdiction. Explain how you acquired them. Should you not be able to explain lawful acquisition of them, then you will be billed for an equivalent amount.' The state of South Australia does not seek to seize, for argument's sake, assets in Dagenham, London, or chattels in Sydney. We seek the payment of money equivalent to the assets unable to be lawfully explained.

Mr HANNA: I am really going to the end of the process. If you successfully get an order for a payment of money which far exceeds the assets existing in South Australia, what do you then do? Does the person simply say, 'I do not have anything more in South Australia and I will not provide you with anything from outside South Australia.'

The Hon. M.J. ATKINSON: The assets held interstate could be seized under the Service and Execution of Process Act, and I believe there is commonwealth legislation dealing with property outside the commonwealth jurisdiction.

Mr HANNA: That is the answer to my first question, thank you.

Clause passed.

Clause 6.

Ms CHAPMAN: This is a provision to secure the information that might have been gathered and then used in some way, perhaps if the proceedings do not go through their full course or they are unsuccessful. I think it is one that is very important if this whole process is to be enacted in the manner the government wants it enacted. I do not think there is any similar criminal intelligence clause or protection of that information in relation to the current confiscation legislation, so why does there seem to be a need for it here, when it was not deemed necessary under our current confiscation legislation?

The Hon. M.J. ATKINSON: The answer is that the actions contemplated under this bill are civil actions. I am sorry; does the member for Bragg have a malady? She seems to be somewhat agitated.

The proceedings here would attract the civil discovery rules, so we wanted to change them to the extent necessary for this law. The difference with criminal assets confiscation is that that is clearly a crime-related proceeding, and we are happy with the rules applying in criminal law and procedure for criminal assets confiscation and did not need to do what we are doing here. We are doing what we are doing here because these are civil proceedings.

Ms CHAPMAN: That may be so; we have a slightly different view in relation to the approach taken in this legislation. Essentially, if criminal intelligence is gathered, this clause will prohibit it being transferred to persons other than yourself, Attorney, or your successor, and someone conducting a review. However, criminal intelligence can be accumulated and made available for the purposes of the confiscation, and I wonder why there should be a difference in the protection of it. Obviously, under our current legislation one can confiscate assets from someone who has committed a crime, but other criminal intelligence could be gathered during that process and there is no protection of that under this legislation in the same way. So we are not talking about protection of the offender in some way; we are talking about protection of the intelligence information.

The Hon. M.J. ATKINSON: Let me contrast the two proceedings. Under the criminal assets confiscation proceeding that the member for Mitchell was canvassing earlier, if the target of the order says, 'How do you know that I grew 80 dope plants at home?', the answer would be, 'Well, you were convicted of the same, and here is the transcript of proceedings.' You are not relying on criminal intelligence under criminal assets confiscation; you are relying principally upon a conviction, and there will be a record of proceedings. Here, in this civil proceeding, criminal intelligence can play a role. That is the difference.

Mr PISONI: I would like clarification on the information provided. I am interested to know the definition of 'criminal intelligence' and whether it extends to other jurisdictions. For example, I believe it is a crime to avoid tax; therefore, if your investigations determine that assets were not gained by illegal activities, however, they were still unexplained and therefore of interest to the Australian Taxation Office, is it the intention of this legislation then to pass on information to the Australian Taxation Office?

The Hon. M.J. ATKINSON: The point that the member for Unley raises is not pertinent to this bill. This bill does not have a role in determining whether criminal intelligence acquired by South Australia Police should be passed to the Commissioner of Taxation. I think that is more suitable—

Ms Chapman interjecting:

The Hon. M.J. ATKINSON: The member for Bragg interjects. What is her interjection?

Ms Chapman: If they fail an application under this, the first phone call made will be to the commissioner.

The Hon. M.J. ATKINSON: Of course it could, yes; but, the member for Unley's question is not really a question for the bill, because that would be determined by the legislation under which the Commissioner of Taxation operates, and that would be commonwealth legislation. If he wishes to make a point about sharing criminal intelligence, it is a point better made to the federal government and the Commissioner of Taxation rather than in committee stage on this bill.

Mr PISONI: It is not a point at all; it is a genuine question. I imagine that there is a number of small business people out there who may be in a situation where they have been doing business for somebody, and then the relationship breaks down, or there could be a personal vendetta. I imagine that there could be situations where rivals, or people who may be in dispute with somebody with whom they are in business, may think that allegations, which could lead to an investigation of this type, may have a backup of those allegations being passed on to another jurisdiction, that is, the Australian Taxation Office.

I am seeking clarification for those in the small business community as to whether this may have implications that are unintended by the South Australian government. If a lot of resources are put into obtaining this information and that information does not lead to the purpose of this bill, to confiscate assets, but there is a determination by those investigating or those who may have given information that led to the investigation in the first place, will there be some form of reprisal? What I would like from you, Attorney-General, is clarification as to whether the information that is classified by the Commissioner of Police as criminal intelligence would include tax evasion?

The Hon. M.J. ATKINSON: Yes.

Mr HANNA: Is it fair to categorise criminal intelligence as secret evidence?

The Hon. M.J. ATKINSON: No; and this is a deliberate campaign of lies by Hendrik Gout at TheIndependent Weekly—a deliberate misrepresentation of what criminal intelligence means. The purpose of criminal intelligence is to try to protect people who perhaps have been members or associates of an outlaw motorcycle gang, the kind of gang that may be declared under the Serious and Organised Crime Act, and those people decide to cooperate with police and give police information. What Mr Gout and his allies wish to do is to have those people exposed to being killed or maimed and their families killed or maimed by making that evidence available to the gangs themselves in a court proceedings.

What we do, by contrast, is say—and we follow High Court precedents here—criminal intelligence should be made available to the judge deciding the case, and the judge can determine whether it should be passed on to lawyers for the gangs—the target of the criminal investigation. If the judge so decides, the police, or the government agency prosecuting the matter, can then decide whether to withdraw the case, and therefore protect the criminal intelligence. So, No it is not right to characterise it as secret evidence, and I would hope the member for Mitchell would not go down that path, but I suspect he does.

The government defends its position on criminal intelligence, both in this bill and in the Serious and Organised Crime Act. Our policy on criminal intelligence has been tested at the highest level in the High Court, in the K-Generation case. Mr Gout told us again and again that we would fail in that case—that the likelihood was the High Court would strike it down as unconstitutional. It did not. Therefore, we follow the principles in K-Generation in the subsequent legislation we bring before the house. So, no, it is not secret evidence, and its characterisation as secret evidence is a highly politically partisan characterisation by the criminal gangs and their lawyers.

Mr HANNA: I suspect the Attorney-General reads TheIndependent Weekly much more closely than I do. My question is based on the observation that the Commissioner of Police brings this information to the Crown Solicitor, in a sense, to get permission for the whole application to proceed to court so that the target can be asked to explain their wealth. In that sense, it is evidence and, in the sense that it must be kept away from the target and their representatives, it is secret. So, it is secret evidence.

The Attorney-General might not have a problem with secret evidence. He might think it is very important to have secret evidence, but to me it is just a matter of spin and deception to say that it is not secret evidence. So, I was a bit surprised by the answer in that respect.

Progress reported; committee to sit again.


[Sitting suspended from 13:00 to 14:00]


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