Wednesday, 21 May 2014

Crime doesn’t pay: Northern Territory's tough stance on proceeds of crime gets tick of approval from High Court

The idea that offenders shouldn't be allowed to profit from their criminal behaviour isn't a new or a controversial one. Forcing an offender to forfeit gains derived from a criminal offence is accepted as part and parcel of criminal punishment, and all Australian governments have some form of legislation allowing them to confiscate the proceeds of crime from a convicted offender.

But while its common practice to confiscate property derived from offending, most states and territories (including Victoria) confine it to that. That is, the property the State can seize from the offender needs some sort of link with the offending. In Victoria, for example, the property must be 'tainted'.  It has to have been used or intended for use by the offender in connection with the offence, or must have been derived and/or realised from the offence.  Regardless of whether the property belongs to, or was used by, the offender or some other person, if it's found to be 'tainted', the State of Victoria can apply to confiscate it.

The Northern Territory however, took this one step further in relation to drug trafficking and enacted legislation that allows the Director of Public Prosecutions to apply to the NT Supreme Court to have a person officially declared a 'drug trafficker'.  Once labelled a 'drug trafficker', section 94(1) of the Criminal Property Forfeiture Act (NT) mandates that all of that individual's property must be forfeited to the Territory. There is no requirement that the property be connected to or derived from a particular offence or criminal activity generally, it applies to all property owned or effectively controlled by that person, and all property they may have given away, whether acquired before or after the legislation was introduced. Once a person's been tarred with the drug trafficker brush, if the NT DPP makes a forfeiture application in accordance with s 94(1), everything they have goes to the Territory.

The law was bound to be tested, and sure enough, the High Court recently had the opportunity to consider an appeal brought by NT resident, Reginald William Emmerson. Between August 2007 and September 2011 Mr Emmerson was convicted of a range of drug-related offences, including supply of 18.6646kg of cannabis. In 2012, the NT DPP successfully had Mr Emmerson declared a drug trafficker under s 36A of the Misuse of Drugs Act (NT). He was therefore obliged to surrender not only the $70,050 he obtained from the sale of cannabis, but also in excess of $850,000 worth of assets acquired through legitimate means. Mr Emmerson appealed to the NT Court of Appeal, where they set aside the declaration as unconstitutional, saying that the law was not compatible with the sort of powers governments are able to give courts, which are part of the wider court hierarchy in Australia and have to be independent from other branches of government. Some of you may know this as the Kable doctrine, which preserves the institutional integrity of the courts of the States and Territories, preventing them from being used as a mere tool of the executive government.

Next, the NT Attorney-General appealed to the High Court. On 10 April 2014, the High Court handed down a 6:1 majority judgment giving the NT forfeiture laws their tick of approval.  The High Court said that the NT is constitutionally permitted to give its Supreme Court the power to declare a convicted offender a 'drug trafficker' with the consequent loss of all his property: it's not incompatible with the Supreme Court's constitutional role, and in bad news for Mr Emmerson, it was not an acquisition of property otherwise than on just terms. As some of you will know, that is one of the few rights enshrined in our Constitution: s 51(xxxi).

To a modern eye, the NT law may seem harsh, but the High Court majority seemed to almost relish setting out its finding that there is nothing unconstitutional about the State seizing a convicted crim's worldly goods.

In a 'back to the future' approach, the High Court noted that forfeiture laws of this kind have a long history in English law (which, of course, provides the blueprint for Australia's legal system). Up until 1870, a convicted felon in England routinely forfeited all his property. The Court said at para [16], 'Blackstone noted the severe deterrent effect of [old English] forfeiture as a punishment for serious crime because it affected posterity as well as the individual offender.' In other words, the kids weren't inheriting dad's land and titles if he committed a serious crime. The history buffs among you will enjoy the short tour through the history of criminal forfeiture law contained in the majority judgment.

From a Victorian perspective the case is interesting because the High Court did not find that the NT law required the NT Supreme Court to act at the behest of the NT DPP or to give effect to government policy without following ordinary judicial processes. In other words, there is no 'Kable' limitation on the ability of Australian State governments to enact such laws.  

If you are in the Victorian Government and would like advice on constitutional limitations regarding courts in State legislation, please contact

Sky Mykyta
sky.mykyta@vgso.vic.gov.au
8684 0220

Rachel Amamoo 
rachel.amamoo@vgso.vic.gov.au
8684 0899

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