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House of Assembly - Fifty-Second Parliament, First Session (52-1)
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CRIMINAL ASSETS CONFISCATION (PRESCRIBED DRUG OFFENDERS) AMENDMENT BILL

Introduction and First Reading

The Hon. A. KOUTSANTONIS (West Torrens—Minister for Mineral Resources Development, Minister for Industry and Trade, Minister for Small Business, Minister for Correctional Services) (15:39): Obtained leave and introduced a bill for an act to amend the Criminal Assets Confiscation Act 2005. Read a first time.

Second Reading

The Hon. A. KOUTSANTONIS (West Torrens—Minister for Mineral Resources Development, Minister for Industry and Trade, Minister for Small Business, Minister for Correctional Services) (15:40): 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.

Labor's 2010 Serious Crime election policy stated that 'This proposal will amend the Criminal Assets Confiscation Act to target persistent or high level drug offenders to provide for total confiscation of the property of a "Declared Drug Trafficker"'. The policy details were:

New powers will be given to the Director of Public Prosecutions to allow criminal drug dealers who commit three prescribed offences within a span of 10 years to be 'declared a drug trafficker.

Under this proposal, which targets high level and major drug trafficking offenders, all of a convicted offender's property can be confiscated, whether or not it is established as unlawfully acquired and whether or not there is any level of proof about any property at all. Property and assets could also be restrained pending prosecution of matters before the court.

The legislation will attack repeat drug offenders. The offences that will attract the declaration if committed three or more times within a span of 10 years include:

Trafficking in controlled drugs;

Manufacture of controlled drugs for sale;

Sale of controlled precursor for the purpose of manufacture;

Cultivation of controlled plants for sale;

Sale of controlled plants; and

Any offence involving children and school zones.

The Bill, with a modification, fulfils this election pledge.

Prescribed Drug Traffickers

The idea that all of the property of certain drug traffickers (described in the Bill as prescribed drug traffickers) should be confiscated, whether or not it has any link to crime at all and whether or not legitimately earned or acquired, originated in the Western Australian Criminal Property Forfeiture Act 2000. If a person is taken to be a declared drug trafficker under either s 32A(1) of the Drugs Misuse Act of that State or is declared under s 159(2) of the Confiscation Act, then, effectively, all of their property is confiscated without any exercise of discretion at all, whether or not it is lawfully acquired and whether or not there is any level of proof about any property at all. The two situations are a convicted drug trafficker of a certain kind and an absconding accused. The first category is the most general.

An absconding accused aside, there are two situations catered for. The first is the repeat offender. The second is the major offender (whether repeat or not).

The repeat offender is caught if he is convicted on a third (or more) offence for nominated offences within a period of 10 years. The nominated offences are: possession of a prohibited drug with intent to sell or supply, manufacturing or preparing; or selling or supplying, or offering to sell or supply, a prohibited drug; possession of a prohibited plant with intent to sell or supply, or selling or supplying, or offering to sell or supply, a prohibited plant; attempting to commit these offences; and conspiring to commit these offences.

The major offender is caught if the person commits any one offence at any time about a prohibited drug or prohibited plant that exceeds a prescribed amount. Those amounts are prescribed in Schedules to the Act (not regulations) and list, for example, 28 grams of amphetamine, three kilograms of cannabis, 100 grams of cannabis resin, 28 grams of heroin and 250 cannabis plants.

Section 159(2) says that a person will be taken to be a declared drug trafficker if the person is charged with a serious drug offence within the meaning of section 32A(3) of the Misuse of Drugs Act 1981 and the person could be declared to be a drug trafficker under section 32A(1) of that Act if he or she is convicted of the offence, and the person absconds in connection with the offence before the charge is disposed of or finally determined. A serious drug offence within the meaning of section 32A(3) of the Misuse of Drugs Act 1981 means a crime under section 6(1), 7(1), 33(1)(a) or 33(2)(a) of that Act. The content of these crimes has been outlined immediately above.

The Northern Territory Criminal Property Forfeiture Act contains very similar provisions, obviously modelled on the Western Australian Act. However, the Northern Territory Act contains only the repeat offender version of the first category and the second category (death and absconding). It does not contain what is described as the major offender category described above. No other Australian jurisdiction has anything like either of these Acts. The provisions fall to be considered on their merits.

Under the WA scheme and its counterpart in the Northern Territory, all of the declared drug trafficker's assets are subject to forfeiture. Absolutely everything. Baby clothes, washing machine, garden hose, children's toys—the lot. The Government has taken the view that, under the current attitude of the High Court, such a scheme is, if challenged, likely to be held unconstitutional. So, in order to ameliorate the harshness of the scheme, it is proposed that the prescribed trafficker forfeit everything except what a bankrupt would be allowed to keep. These are to be found in r 6.03 of the Commonwealth Bankruptcy Regulations 1996. The lists are extensive, but the general principle is:

Subsection 116 (1) of the Act does not extend to household property (including recreational and sports equipment) that is reasonably necessary for the domestic use of the bankrupt's household, having regard to current social standards.

High Level or Major Traffickers

Whether or not a person can be presumed to be, in common usage, a high level or major trafficker will depend largely, but not wholly, on the amount of the drug with which he or she is associated. The table below illustrates various amounts for the purposes of comparison. The SA amounts listed are those prescribed as a result of a national consultative process fixing amounts.

1. Drug 2. SA Trafficking Amount 3. SA Commercial Amount 4. SA Large Commercial Amount 5. WA Declared Drug Trafficker Amount
Amphetamine 2 gms (mixed) 0.5 kgs (mixed) 1 kg (mixed) 28 gms
Cannabis 250 gms (mixed) 2.5 kgs (mixed) 12.5 kgs (mixed) 3 kgs
Cannabis Resin 25 gms (mixed) 2 kgs (mixed) 10 kgs (mixed) 100 gms
Heroin 2 gms (mixed) 0.2 kgs (mixed) 1 kg (mixed) 28 gms
Cannabis Plants 10 plants 20 plants 100 plants 250 plants


It can be seen at once that the WA amounts do not correspond to any nationally agreed amount nor to any fixed proportion of them. The nationally agreed amounts were settled on the basis of research across Australia on the actual activities of the illicit drug markets informed by police expertise. The basis on which the WA. amounts were fixed is not apparent, but given that the national exercise was the first of its kind, they are not likely to have a logical basis. The obvious way to proceed is to fix on the amounts already settled in the SA Controlled Substances (General) Regulations as indicating commercial activity.

Repeat Offenders

The legislation also attacks repeat offenders. The key to this category is settling the offences to which it applies—that is, what offences will attract the declaration if committed three or more times within a span of 10 years. It is suggested that the offences to which it should apply are any serious drug offences that are indictable. These are those offences listed in that part of the Controlled Substances Act 1984 under the headings 'Commercial offences' and 'Offences involving children and school zones'.

The Fund

The proceeds from the existing criminal assets confiscation scheme must be paid into the Victims of Crime Fund (after the costs of administering the scheme are deducted). It is proposed that funds raised by the application of this new initiative be devoted to another fund, to be called the Justice Resources Fund. This Fund will be devoted to the provision of moneys for courts infrastructure, equipment and services and the provision of moneys for justice programs and facilities for dealing with drug and alcohol related crime. Disbursements will not overlap with those made from or eligible for moneys from the existing Victims of Crime Fund. The Government does not believe it to be proper that money from the Fund be spent on law enforcement or criminal investigation purposes.

Other Aspects of the Scheme

The Western Australian scheme has also been modified so that a court has a discretion to ameliorate the inflexible application of this scheme if the offender has effectively co-operated with a law enforcement agency relating directly to the investigation or occurrence or possible occurrence of a serious and organised crime offence. For these purposes, a serious and organised crime offence is defined in a way that mirrors the definition in the Australian Crime Commission (South Australia) Act 2004. Every encouragement should be given to serious criminals to inform on their co-offenders and any criminal organisations to which they belong or are party.

As is the case with the WA and NT legislation, a person is a prescribed drug trafficker where there is sufficient evidence to conclude that a person would have been liable to be a prescribed drug trafficker and the person either absconds or dies.

The Bill also adopts the Northern Territory innovation that the time period of 10 years in relation to the repeat offender does not run if and while the offender is imprisoned.

Pecuniary Penalty Provisions

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 flirted with it. In the end they 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. But if, like White J, neither the applicant nor the court could work out this additional layer of complexity, an injustice could well be done.

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 long title

This clause amends the long title of the principal Act to reflect the changes made by this measure.

5—Amendment of section 3—Interpretation

This clause amends section 3 of the principal Act to include, or to consequentially amend, definitions of terms used in respect of the amendments made by this measure. Of particular note is the insertion of 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, rather than the current limitation of an offence under Part 5 Division 2 of the Controlled Substances Act 1984. The definition of extension order is deleted consequentially to clause 20.

6—Amendment of section 6—Meaning of effective control

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

7—Insertion of section 6A

This clause inserts new section 6A into the principal Act. It sets out what is a prescribed drug offender, namely a person who is convicted of a commercial drug offence after the commencement of the proposed section, or who is convicted of another serious drug offence and has at least 2 other convictions for prescribed drug offences, those offences and the conviction offence all being committed on separate occasions within a period of 10 years. However, the 10 year period does not include any time spent in government custody. The proposed section makes procedural provision in respect of the convictions able to be used in the determining whether a person is a prescribed drug offender. The proposed section also defines key terms used in respect of prescribed drug offenders, including setting out what are commercial and prescribed drug offences.

8—Amendment of section 10—Application of Act

This clause makes a consequential amendment to section 10 of the principal Act.

9—Amendment of section 24—Restraining orders

This clause inserts new subsection (5a) into section 24 of the principal Act, which prevents a court from specifying protected property (the definition of which is inserted by this measure) in a restraining order unless there are reasonable grounds to suspect that the property is the proceeds of, or is an instrument of, a serious offence.

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

This clause amends section 34 of the principal Act by inserting new subparagraph (ia), adding to the list of matters a court must be satisfied of before it may exclude property from a restraining order. The subparagraph is divided into parts dealing with where the suspect has, and has not, been convicted of the serious offence to which the restraining order relates.

The first such matter is that the court can only exclude property where the suspect has not, or would not, become a prescribed drug offender on conviction of the serious offence. Alternatively, the property may be excluded if the court is satisfied it is not owned by, nor under the effective control of, the suspect in the circumstances spelt out in the provision (even if the suspect is, or will be upon conviction of the relevant offence, a prescribed drug offender).

The power to correct an error in respect of the inclusion of the relevant property when making the restraining order is given to the court because the property restrained in respect of prescribed drug offenders is not necessarily proceeds nor an instrument of crime.

Subclause (2) makes a statute law revision amendment consistent with clause 6.

Subclause (3) 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.

11—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.

12—Amendment of section 47—Forfeiture orders

This clause amends section 47(1)(a) of the principal Act to include the fact that a person is a prescribed drug offender as a ground for the making of a forfeiture order under that section (provided that the relevant property was owned by or subject to the effective control of the person on the conviction day for the conviction offence).

13—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).

14—Amendment of section 57—Relieving certain dependants from hardship

This clause makes a consequential amendment due to the amendment of section 47(1)(a) by this measure.

15—Amendment of section 58—Making exclusion orders before forfeiture order is made

This clause amends section 58 of the principal Act to provide that property sought to be excluded from a forfeiture order must not, in the case of a forfeiture order to which section 47(1)(a)(ii) applies (ie a prescribed drug offender order), at the relevant time be owned by, or under the effective control of, the prescribed drug offender (unless it is protected property of the person).

16—Amendment of section 59—Making exclusion orders after forfeiture

This clause amends section 59, consistent with clause 15, to provide that property sought to be excluded from a forfeiture order must not, in the case of a forfeiture order to which section 47(1)(a)(ii) applies (ie a prescribed drug offender order), at the relevant time be owned by, or under the effective control of, the prescribed drug offender (unless it is protected property of the person).

17—Insertion of section 59A

This clause inserts new section 59A into the principal Act. That section allows a person to apply for property to be excluded from a restraining order because the person has cooperated with a law enforcement authority in relation to a serious and organised crime offence, be it one that has occurred or may occur in future.

The mechanisms and procedures in relation to an order excluding the property are similar to other such provisions in the principal Act.

18—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 (unless the cooperation provision in proposed section 59A applies).

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

This clause is consequential to clause 20.

20—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).

21—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), to ensure the provision works properly in relation to securities given under section 38 or 44 and to prevent exclusion of property owned by or under the effective control of a prescribed drug offender (other than protected property).

22—Insertion of sections 76A and 76B

This clause inserts a provision similar to the provision in clause 17 allowing for exclusion from forfeiture based on cooperation with a law enforcement agency and a provision similar to clause 18 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 (unless the cooperation provision in proposed section 76A applies).

23—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.

24—Amendment of section 96—Additional application for a pecuniary penalty order

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

25—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.

26—Amendment of section 99—Determining penalty amounts

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

27—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.

28—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 25 of this measure.

29—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.

30—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 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.

31—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.

32—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.

33—Substitution of section 203

This clause amends the structure of section 203 of the principal Act to reflect the changes made by this measure.

34—Amendment of heading

This clause is consequential to clause 36.

35—Amendment of section 209—Credits to Victims of Crime Fund

This clause is consequential to clause 36.

36—Insertion of section 209A

This clause provides for the establishment of the Justice Resources Fund, to be administered by the Attorney-General, and for the proceeds of confiscated assets of prescribed drug offenders to be paid into the fund.

37—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.

38—Substitution of section 224

This clause substitutes section 224 of the principal Act to reflect the changes made by this measure as they relate to prescribed drug offenders, and 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.

The clause also inserts new section 224A which regulates the release of sensitive information relating to cooperation with law enforcement agencies.

Debate adjourned on motion of Mr Williams.

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