Applicant v 1st Respondent

1 The DPP has brought proceedings pursuant to s.16(2)(a) of the Confiscation Act 1997 (the Act) seeking a restraining order in respect of real property situated at 495 Tunnecliff's Lane, Knowsley, Victoria ("the property") and $6,500 cash seized by Victoria Police at 341 Albert Street, Brunswick, Victoria.

2 Section 16(2)(a) permits an application for a restraining order where:

"a member of the police force suspects on reasonable grounds that the property is tainted property in relation to a Schedule 2 offence".

3 The purpose of the application for the restraining order is described in the following terms:

"To satisfy any civil forfeiture order that may be made under Part 4 of the Confiscation Act."

Khodi Ali has been served with the application. He is and was at all material times the registered proprietor of the property and had possession of the $6,500. He opposes the application. He argues that, in the particular circumstances of this case, an application for a restraining order cannot be made under the Act.

4 Khodi Ali's wife, Dounia Ali, sought and was granted the opportunity to appear and oppose the application. She relies upon the submissions of counsel for the first respondent. If they are unsuccessful, she wishes to argue that any restraining order be confined to the property of Khodi Ali, she claiming an equitable interest in the land. That issue was deferred pending a decision on the issue raised by Khodi Ali.

5 In 2004, an investigation commenced into the suspected commission of Schedule 2 offences - in this instance conspiring to traffic in methylamphetamine. In August 2005, a search warrant was executed on the property. Laboratory equipment and chemicals associated with the manufacture of methylamphetamine were located on the property in a garage and in the house. Some 700 grams of methylamphetamine was also found. It is alleged that the property, having been so used, was tainted property. In addition, $6,500 was found at the Brunswick premises. It is alleged that it was rent received by Khodi Ali from leasing the property to the other defendants. It was, therefore, derived from the use of the property for a Schedule 2 offence and it also is tainted property[1].

6 Khodi Ali was arrested and charged with drug offences on 21 August 2005. On 27 September 2005, the County Court granted the DPP a restraining order over the property pursuant to s.16(2)(c), which states:

(2) The DPP or a prescribed person, or a person belonging to a prescribed class of persons, may apply, without notice, to the Supreme Court or the County Court for a restraining order in respect of property if -

(c) a person has been charged with a Schedule 2 offence and that person has an interest in the property or the property is tainted property in relation to that offence; ..."

The restraining order stated that it was made for the purpose of satisfying any forfeiture order made, automatic forfeiture that may occur and any pecuniary penalty order that may be made.[2]

7 In 2007, Khodi Ali was joined in a presentment with other accused persons but only in respect of counts 2 and 3. He was charged with conspiring to traffick in a commercial quantity of methylamphetamine and conspiring to traffic in methylamphetamine. The offences came within Schedule 2 of the Confiscation Act 1997.

8 The trial of the criminal proceeding commenced in the Supreme Court on 8 November 2007. At the conclusion of the Crown case, the learned trial Judge upheld a no case submission on behalf of Khodi Ali. His Honour took the view that the Crown would not be able to prove beyond reasonable doubt that Khodi Ali had conspired to engage in the activity described in the count, namely trafficking in methylamphetamine, because it could not prove that he knew and agreed to what was being manufactured. The three remaining accused were convicted on count 1, conspiring to traffick in a commercial quantity of methylamphetamine, a Schedule 2 offence. As noted above, Khodi Ali was not charged on count 1. He does not dispute, however, that there is evidence that the property was used in respect of the alleged count 1 offence.

9 With the acquittal, the original restraining order ceased to be in force. This was the result of the operation of s.27(3b), which provides:

"27. Duration and setting aside of restraining order

(3) If, when a restraining order was made in reliance on the charging, ... of a defendant with a Schedule ... 2 offence ... -

(b) the defendant is acquitted of the charge and the defendant is not charged with a related offence that is a Schedule 1 offence or a Schedule 2 offence by the time of the acquittal, whether or not in the same Schedule as the original offence, the restraining order ceases to be in force when the acquittal occurs."

10 The submissions of counsel focused on the operation of the legislation to the application for a restraining order in respect of the property, not the $6,500 cash. I will proceed in the same way but will refer specifically to the application for an order in respect of the $6,500 at the conclusion of these reasons.

The scheme of the legislation - property forfeiture

11 Before referring to the submissions made by counsel, it is desirable to briefly refer to the scheme of the Act in relation to the forfeiture of property.

12 The Act provides for several methods of forfeiture of property

• Forfeiture on court order under s.32 of Part 3 Division 1 of the Act where a defendant is convicted of a Schedule 1 offence.
• An automatic forfeiture of property under Part 3 Division 2 of the Act upon conviction on Schedule 2 offences where a restraining order is or was made on that property for the purpose of automatic forfeiture in reliance on the defendant's conviction of the offence or the charging or proposed charging of the defendant with that offence or a related offence.
• A civil forfeiture order made pursuant to Part 4 of the Act.

13 In the present case the restraining order is sought for the purpose of a civil forfeiture order. Application for civil forfeiture orders are dealt with in ss.37 and 38. It will be seen that the making of a restraining order under s.18(2) in respect of property is a prerequisite to the DPP applying for a civil forfeiture order in respect of that property. Sections 37 and 38 provide the following:

the Court means the Supreme Court or the County Court.

(1) If a restraining order is in force under section 18(2) in respect of property, the DPP or a prescribed person, or a person belonging to a prescribed class of persons, may apply to the Court for a civil forfeiture order in respect of the property.

(4) The applicant must give written notice of the application to every person who the applicant has reason to believe has an interest in the property.

(5) The Court may waive the requirement under subsection (4) to give notice if -

(b) the Court is satisfied either that any person who has an interest in the property is present before the Court or that it is fair to waive the requirement despite any such person not being present.

(6) The Court may, at any time before the final determination of the application, require the applicant to give notice of the application to any person, in any manner and within any time that the Court thinks fit.

(7) Any person notified under subsection (6) and any other person who claims an interest in the property are entitled to appear and to give evidence at the hearing of the application but the absence of a person does not prevent the Court from making a civil forfeiture order.

(8) The Court may, at any time before the final determination of the application, amend the application as it thinks fit, either at the request of the applicant or with the approval of the applicant.

(10) If an application under subsection (1) has been finally determined, no further application may be made under that subsection in relation to the same Schedule 2 offence, except with the leave of the Court.

(11) The Court must not grant leave under subsection (10) unless it is satisfied that -

(a) the property to which the new application relates was derived, realised or identified only after the earlier application was determined; or

(b) necessary evidence became available only after the earlier application was determined; or

(c) it is otherwise in the interests of justice to do so.

(a) order that the whole or any part of the proceeding be heard in closed court; or

(b) order that only persons or classes of persons specified by it may be present during the whole or any part of the proceeding; or

(c) make an order prohibiting the publication of a report of the whole or any part of the proceeding or of any information derived from the proceeding.

(13) The court must cause a copy of any order made under subsection (12) to be posted on a door of the court house or in another conspicuous place where notices are usually posted at the court house.

(14) A person must not contravene an order posted under subsection (13).

Penalty: Imprisonment for 12 months or 1000 penalty units.

Section 14 provides that a restraining order may be made in respect of property or an interest in property.

1. Determination of application for civil forfeiture order

the Court means the Supreme Court or the County Court.

(1) On an application under section 37(1), the Court must order that the restrained property be forfeited to the Minister if the Court is satisfied that -

(a) the requirements of section 37 as to notice of the application have been complied with; and

(b) not less than 30 days have elapsed since the last notice given in accordance with section 37; and

(c) there are no pending applications under section 20 in relation to the restrained property.

(2) The Court may exclude particular property or any particular interest in property from the operation of a civil forfeiture order if satisfied that otherwise hardship may reasonably be likely to be caused to any person by the order.

(3) A civil forfeiture order must specify the interests in property to which it applies.

(4) The Court may, subject to any rules of court, take into account in determining the application any material that it thinks fit.

(6) The making of a civil forfeiture order does not prevent the making of a pecuniary penalty order."

14 The applicant submitted that it can apply for another restraining order over the same property pursuant to section 16(2)(a). Section 16(2) and subsequent sub-sections provide so far as relevant:

(2) The DPP or a prescribed person, or a person belonging to a prescribed class of persons, may apply, without notice, to the Supreme Court or the County Court for a restraining order in respect of property if -

(a) a member of the police force suspects on reasonable grounds that the property is tainted property in relation to a Schedule 2 offence; or

(b) a member of the police force or a person authorised by or under an Act to prosecute the relevant type of offence believes that -

(i) within the next 48 hours a person will be charged with a Schedule 2 offence; and

(ii) that person has an interest in the property or that the property is tainted property in relation to that offence; or

(c) a person has been charged with a Schedule 2 offence and that person has an interest in the property or the property is tainted property in relation to that offence; or

(d) a person has been convicted of a Schedule 2 offence and that person has an interest in the property or the property is tainted property in relation to that offence.

(2A) An application under subsection (2) for the purposes of civil forfeiture may only be made in respect of property that is reasonably suspected to be tainted property.

(3) An application under subsection (2) for the purposes of automatic forfeiture may only be made before the end of the relevant period in relation to the conviction.

(4) An application under subsection (1) or (2)(b), (c) or (d) must be supported by an affidavit of -

(b) a person authorised by or under an Act to prosecute the relevant type of offence -

setting out any relevant matters and stating that the member or person believes the following matters and setting out the grounds on which the member or person holds those beliefs -

(c) in the case of an application made in reliance on the proposed charging of the defendant with an offence, that the defendant will be so charged within the next 48 hours; and

(d) that the defendant has an interest in the property or the property is tainted property, as the case may be; and

(e) if the restraining order is being sought for a purpose referred to in paragraph (a), (d) or (e) of section 15(1), that -

(i) a forfeiture order may be made in respect of the property; or

(ii) a pecuniary penalty order may be made against the defendant; or

(iii) an order for restitution or compensation may be order under the Sentencing Act 1991.

(5) An application under subsection (2)(a) must be supported by an affidavit of a member of the police force setting out any relevant matters and stating that the member suspects that the property is tainted property in relation to a Schedule 2 offence and setting out the grounds on which the member has that suspicion."

Section 15 sets out the purposes for which a restraining order may be made and requires the application to state the intended purpose[3]. Section 15 provides:

"15 Purposes for which a restraining order may be made

(1) A restraining order may be made to preserve property or an interest in property in order that the property or interest will be available for any one or more of the following purposes-

(a) to satisfy any forfeiture order that may be made under Division 1 of Part 3;

(b) to satisfy automatic forfeiture of property that may occur under Division 2 of Part 3;

(c) to satisfy any civil forfeiture order that may be made under Part 4;

(d) to satisfy any pecuniary penalty order that may be made under Part 8;

(e) to satisfy any order for restitution or compensation that may be made under the Sentencing Act 1991.

(2) An application for a restraining order must state the purpose for which it is sought.

(3) If a court makes a restraining order in respect of property or an interest in property-

(a) the court must state in the order the purpose for which the property or interest is restrained; and

(b) if the court excludes property or an interest in property from the order in respect of a purpose, the court must state in the order whether the property or interest remains restrained for any other purpose and, if so, state that other purpose.

(4) If a court makes a restraining order on application under section 16(2)(a) and a person is subsequently charged with a Schedule 2 offence in relation to which the restrained property or interest in property is tainted property, the court may vary the restraining order to add to or substitute the purpose for which the property or interest is restrained."

15 The determination of applications for restraining orders is dealt with by s.18 of the Act. It provides:

(1) On an application under section 16(1) or (2)(b), (c) or (d), the court must make a restraining order if it is satisfied that the defendant -

(a) has been, or within the next 48 hours will be, charged with; or

a Schedule 1 offence or a Schedule 2 offence (as the case may be) and -

(c) it considers that, having regard to the matters contained in the affidavit supporting the application and to any other sworn evidence before it, there are reasonable grounds for making the restraining order; and

(d) if the restraining order is being sought for a purpose referred to in section 15(1)(e), it is satisfied that -

(i) applications have been, or are likely to be, made for restitution or compensation under the Sentencing Act 1991 in respect of the Schedule 1 offence or Schedule 2 offence; and

(ii) the order of the court under the Sentencing Act 1991 is likely to exceed $10 000.

(2) On an application under section 16(2)(a), the court must make a restraining order if it is satisfied that -

(a) the deponent of the affidavit supporting the application does suspect that the property is tainted property in relation to a Schedule 2 offence; and

(b) there are reasonable grounds for that suspicion."

16 Counsel for the applicant submitted that the intention of the statutory regime was that a person's property may be confiscated even though that person is acquitted. Counsel referred to the Second Reading Speech given on 3 December 1997 introducing the original Confiscation Bill where it was stated:

"If a person is charged with a serious drug offence and is found not guilty of that offence, the state can still make application to the Supreme Court to confiscate any property belonging to that person unless it can be established that the property was acquired lawfully."

Section 16(2) of that earlier legislation provided:

"For the purposes of civil forfeiture, it does not matter that the charge has been withdrawn or finally determined".

Counsel for the applicant submitted that that was the intention of the statutory regime before the amendments which became operative in January 2005 and with which we are concerned. Counsel submitted that that intention continues under the amended legislation. It should be noted, however, that s.16(2) was repealed by the amending legislation.[4]

17 Counsel also referred to the Second Reading Speech given on 5 October 2004 by the Attorney General when introducing the amendments. Counsel referred to the following.

"Although the current civil forfeiture scheme does not depend on the conviction of a defendant,[5] it focuses to a large degree on the charging of a person with an offence and the issue of whether or not the State can prove that the person committed that offence."[6]

Counsel also referred to a later passage where the following was stated:

"The second key change is that it will no longer be necessary for a person to be charged with an offence. Instead, the Bill will make it possible to apply for an order to restrain property if a member of the police force suspects on reasonable grounds that the property is "tainted" with respect to a relevant offence.

Tainted property is already defined in the Act. It includes property that was used in, or was intended to be used in, or in connection with, the commission of the offence. This could include, for example, a house in which police suspect that amphetamines were manufactured."[7]

Counsel for the applicant also referred to passages in that Second Reading Speech dealing with the procedures for obtaining exclusion orders to exclude property from a restraining order and, in particular the following:

"If the court is not satisfied the property is not tainted property, it may still make an exclusion order if it is satisfied of other matters, such as that the person seeking to have the property excluded was not involved in the commission of the offence that tainted the property and that he or she was not aware of certain issues relating to the tainting of the property.

The person seeking to have the property excluded must prove these matters on the civil standard of proof, which is the balance of probabilities.

If the person claiming an interest in the property is unable to exclude it, the property can be forfeited. It will no longer be necessary to prove that a person committed any offence." [8]

18 Counsel submitted that in the present case, while Mr Ali was acquitted, the other three accused were found guilty of manufacturing drugs at the property. As a result, the property was tainted property because it was used for the manufacture of Schedule 2 drugs. Counsel submitted that the issue then for Mr Ali is that, in the event that a restraining order be made in respect of the property, it will be incumbent upon him to disassociate himself and do that by showing that he did not know the property was being used in that way. He has the opportunity to do that at the s.24 stage of the process, the application for an exclusion order.

19 Counsel for the applicant submitted that it is erroneous for the respondents to contend that the civil forfeiture regime as it currently stands only applies in cases where no charges have been laid. Counsel submitted that the amendments to s.37 simply removed the existence of charges as a prerequisite to an application for civil forfeiture. They did not remove the entitlement to seek civil forfeiture in those cases where an acquittal had occurred. Counsel submitted that to restrict the civil forfeiture scheme to those cases where charges had not been laid would be to attribute to that scheme an intention which was not evident in the Act and contrary to the clear intention expressed in the Second Reading Speech. The applicant drew particular attention to the purpose of the Act, and in particular

"(c) To provide for the forfeiture by the Supreme Court ... of property restrained on suspicion that it is tainted property in relation to a Schedule 2 offence."

20 This submission overstates the position of the respondents. They accept that it is the intention of Parliament in the current legislation that a confiscation order can be obtained in the form of a civil forfeiture order pursuant to s.37 of the Act where no-one had been charged with a relevant Schedule 2 offence. I note that Nettle JA in DPP v VU[9] stated:

"It is also now no longer necessary that a person had been charged or be about to be charged with an offence before application for a restraining order is made in relation to tainted property. It is sufficient to found an application for a restraining order in relation to tainted property that the member of the police force believes on reasonable grounds that property is tainted property with respect to a relevant offence."

The issue raised by the respondents is whether s.16(2)(a) can be used to obtain a Restraining Order in the circumstances of this case. The answer to that question turns on the definition of tainted property and on the construction of s.16(2).

"Tainted Property" - Submissions of the Applicant

21 Section 16(2)(a) applies in respect of "tainted property". Counsel for the applicant submitted that the property in question is tainted property because it comes within the following definition:

"Tainted property, in relation to an offence, means property that -

(a) was used, or was intended by the defendant to be used in, or in connection with, the commission of the offence;

22 The applicant argued that "tainted property" includes

• property which was used, whether by the defendant or not, in or in connection with the commission of the offence and

• property which was intended by the defendant to be used in or in connection with the commission of the offence.

23 Counsel submitted that the positioning of the commas supports that conclusion, arguing that they perform a disjunctive function intended to have the effect that the reference to defendant is an alternative. Thus if it had been intended by the Parliament to limit the "was used [in] or in connection with" category to property so used by the defendant, then it would have read:

"was used, or was intended to be used, by the defendant in, or in connection with, the commission of the offence;"

24 Counsel argued that the disjunctive construction he advances is supported by a reading of the broad range of sections within the Act to which it applies, such as the sections concerning forfeiture, automatic forfeiture and civil forfeiture.

25 Counsel for the applicant submitted that this approach is consistent with the definition of "defendant in relation to an offence" in s.3 of the Act. That definition is as follows:

"Defendant, in relation to an offence, means the person who -

(a) has been or will be charged with the offence; or

(b) has been convicted of the offence - and in respect of whom an application is made under this Act".

Counsel argued that if the definition of "tainted property" was restricted to property used or intended to be used by a defendant, it could not apply with reference to the sections concerning civil forfeiture because in none of those sections is there any reference to a defendant. An application for restraining order for the purpose of civil forfeiture, however, can only be made in the circumstances in which there is a suspicion that the property in question is "tainted"[10]. It was put that it followed, therefore, that tainted property included property used in a Schedule 2 offence whether by the defendant or not - thus supporting the alleged disjunctive use of commas in the definition of "tainted property".

26 Counsel for the applicant also submitted that, if the definition of "tainted property" was confined to property used, or intended to be used, by the defendant, there would be no need for ss.16(2)(a), 16(2)(A), 18(2) and 24. Counsel argued that these sections do not rely on the existence or contemplation of criminal charges as the basis for seeking the restraint or exclusion of property. Counsel also submitted that because s.16(2)(a) contemplates a restraining order being made before criminal charges have been laid, there will be no defendant identifiable - and may never be one. Counsel submitted that the respondents' definition would defeat s.16(2)(a). The same proposition might also apply with respect to s.16(2)(b), although to a lesser extent - one could have situations where it is not possible to identify a defendant although it is anticipated that that will occur within 48 hours.

27 Sections.16(2)(a), 16(2)(A), 18(2) are referred to above. Section 24 is as follows:

"24 Determination of exclusion application - restraining order - civil forfeiture

On an application made under section 20, where the restraining order has been made in relation to a Schedule 2 offence for the purposes of civil forfeiture -

(a) the court may make an order excluding the applicant's interest in the property from the operation of the restraining order if the court is satisfied that -

(b) the court may make an order excluding the applicant's interest in the property from the operation of the restraining order if the court is not satisfied that the property in which the applicant claims an interest is not tainted property or derived property but is satisfied that -

(i) the applicant was not, in any way, involved in the commission of the Schedule 2 offence; and

(ii) where the applicant acquired the interest before the commission, or alleged commission, of the Schedule 2 offence, the applicant did not know that the property would be, or was intended to be, used in, or in connection with, the commission of the Schedule 2 offence; and

(iii) where the applicant acquired the interest at the time of or after the commission, or alleged commission, of the Schedule 2 offence, the applicant acquired the interest without knowing, and in circumstances such as not to arouse a reasonable suspicion, that the property was tainted property or derived property; and

(iv) the applicant's interest in the property was not subject to the effective control of the person who is suspected to have committed the Schedule 2 offence on the earlier of the date on which that person was charged with the Schedule 2 offence (if such a charge was filed) or the date that the restraining order was made in relation to the property; and

(v) where the applicant acquired the interest, directly or indirectly, from the person who is suspected to have committed the Schedule 2 offence, that it was acquired for sufficient consideration."

28 In my view, the respondents' construction would not necessarily render the above provisions redundant. It may be said, however, that it is much simpler to apply the definition of tainted property throughout the Act if it incorporates property used by anybody in or in connection with the offence and property intended to be used by a defendant in such offences.

"Tainted Property" - Submissions for the respondents

29 Counsel for the respondents submitted that the definition of "tainted property" was ambiguous. Counsel submitted that there was an alternative interpretation, namely, that it meant property that was used by the defendant or intended by the defendant to be used in, or in connection with, the commission of the offence. Counsel relied upon the fact that the placing of the commas in the definition of "tainted property" was inappropriate, if only because the second comma was placed after the word "in" instead of before it. That "in" needed to be attached to the phrase "was used", therefore contradicting what might otherwise have been thought to be an intended disjunctive use of the commas.

30 Counsel also submitted that there was no sensible basis for distinguishing between use and intended use by someone of property. Counsel argued that the intention to use will precede the actual use.

31 Counsel also argued that the applicant's construction would have an extremely unfair impact on any person seeking an exclusion order pursuant to s.22 in respect of a restraining order made for the purpose of automatic forfeiture. Counsel submitted that under s.22, for example, the person seeking the exclusion would have to prove that the property was not tainted and it would be too onerous a task to require that person to prove more than that he or she did not use or intend to use the property in or in connection with the commission of a Schedule 2 offence.

32 Counsel for the respondents submitted that there was a further ambiguity in the present circumstances where Mr Ali was acquitted. Counsel argued that if Parliament had intended the words "was used" to be referable to any person, it would have done so, as was done in the definition in paragraph (c) of tainted property, namely:

"(c) was derived or realised, or substantially derived or realised, directly or indirectly, by any person from the commission of the offence."

Counsel also submitted that there was no sound policy basis upon which the use of property, as opposed to the intended use of property, ought to be distinguished. Counsel relied upon the explanatory memorandum which stated:

"This definition covers a number of different situations. For instance, if a defendant used their car from which to conduct their drug deals, this car would be tainted property. If the defendant sold the car and purchased a boat with the proceeds of the sale of the car, the boat would be tainted property because it was derived or realised from property which was used in or in connection with the offence. If the defendant purchased a surround sound stereo system with the money obtained from those drug deals, the stereo would be tainted property because it was derived or realised from the commission of the offence."[11]

I note that the passage quoted does not purport to be exhaustive.

Counsel for the respondents also argued that the definition[12] of "defendant in relation to an offence" is unworkable in the context of civil forfeiture applications.

It was put that the definition of "defendant" focuses on the parts of the Act which relate to charge-based confiscation proceedings. If no person is ever charged or convicted of any offence, counsel asked how they can be "defendant" within the definition. Counsel submitted that, if there is no "defendant", the definition of "tainted property", insofar as it relates to civil forfeiture, becomes unworkable.

Counsel relied upon the following observation of the Court of Appeal (Maxwell P, Chernov and Neave JJA) in DPP v Phan Thi Le (No 2) [2007] VSCA 57[13]

"In an Act punctuated with unexplained - and inexplicable - omissions and inconsistencies, as this Act is, such an implication is unwarranted. If that truly is Parliament's intention, it should be stated expressly."

Counsel for the respondents submitted that the definition of "tainted property" insofar as it relates to civil forfeiture, contains unexplained and inexplicable omissions and inconsistencies. As to the use of Hansard by the applicant, counsel submitted that the passage relied upon does not say what the Act says and the task is to interpret what the Act says [14].

33 Counsel also submitted that the legislation, being confiscation legislation, must be interpreted so as to preserve the rights of property owners. Counsel relied upon the statements of Kirby ACJ in DPP v Logan Park Investments Pty Ltd[15] and Cole JA in Jeffery v Director of Public Prosecutions (Cth)[16]. Counsel submitted that because there is ambiguity in the definition of "tainted property" as to whether or not the property in question can be described as "tainted property" the Court should refuse to make the restraining order. Putting his argument another way, counsel submitted that s.18(2) has not been satisfied.

34 The submissions made on the question of the interpretation of "tainted property" highlight the complexities and difficulties of the Act and the challenge it poses for anyone trying to construe it, understand it, formulate (and follow) arguments as to its construction and apply it.

35 I have come to the conclusion that the placing of commas ultimately does not help in the construction of the expression. To accord with the definition of the applicant, the comma after "to be used in" must be both used and ignored. It must be used to support the disjunctive construction but ignored because otherwise the definition would read "was used, ..., or in connection with, the commission of the offence". At the same time, it may be said that, for the construction sought by the respondents, a degree of rewriting is required - "was used, or was intended to be used, by the defendant in, or in connection with, the commission of the offence". No doubt criticism can also be made of that use of commas. While the trend has been to give weight to and rely upon punctuation,[17] the problem in this instance is that one has to reposition the commas to make sense of each of the constructions advanced. Ultimately what is more important is consideration of what support there is in other provisions for the constructions the parties seek.

36 It seems to me that two propositions are reasonably clear and should guide the construction of "tainted property". The first is that a restraining order made for the purpose of obtaining a civil forfeiture order, is intended, as all parties agreed, to be available where no-one is charged with an offence.[18] The second is that that purpose is likely to be defeated, or significantly thwarted, if the definition of tainted property is confined to property used by, or intended to be used by, a defendant. It seems to me, that the applicant's interpretation best enables the purpose of the civil forfeiture order system to be achieved and, therefore, should be accepted. I accept that this creates difficulties for innocent people who bring exclusion order applications, but that is part and parcel of the draconian nature of these provisions. The explanation for limiting intended use to the intention of the defendant probably lies in the need to limit the scope of that part of the definition. If property is used in or in connection with the commission of an offence, the intention of the legislation is that there need be no inquiry into the intended use of the property - at least at the restraining order stage.

37 It is necessary, therefore, to determine the construction and scope of s.16(2)(a), the provision relied upon by the applicant in seeking a restraining order.

Construction of s.16(2)(a) - applicant's submission

38 Counsel for the applicant submitted that s.16(2)(a) entitles the DPP to apply for a restraining order in all cases where property is suspected of being tainted. It differs from s.16(2)(c) which is premised on a person being charged. Counsel submitted that the provisions confer different statutory rights. In relation to the 16(2)(c) power, the application can be made if the property is either tainted or the alleged offender has an interest in it. It is not necessary to satisfy both aspects. Counsel submitted that the critical precondition for an application under sub-section 16(2)(a) is that the property sought to be restrained is suspected, on reasonable grounds, to be tainted in respect of a Schedule 2 offence. Counsel emphasised that the avenues afforded by the sub-sections of s.16 are alternatives and this is made clear by the use of the word "or" following each sub-section. Section 16(2)(a) provides the lowest threshold and the fact that it would also apply in the other situations was an intended consequence. Counsel submitted that there is no provision in the Act which bars an application under s.16(2)(a) if an acquittal has occurred or if the property had previously been restrained on a different basis, such as in this case, under s.16(2)(c), and the restraining order has ceased to operate.

39 Counsel for the applicant submitted that in the present case, while Mr Ali had been charged with the offence and acquitted, the three others charged were convicted and there was clear evidence that the manufacturing of the drugs concerned occurred on the property and therefore it was tainted. Applying the applicant's construction, counsel submitted that it then becomes necessary for Mr Ali to show that he was not involved so that he can have his interests excluded. His wife can also apply on the grounds set out in the legislation. Counsel submitted that this was a strong case in which the DPP should be permitted to use s.16(2)(a).

Construction of s.16(2)(a) - respondents' submission (and some applicant's responses).

40 Counsel for the respondents advanced arguments that turn on the structure of s.16(2). Like counsel for the applicant, counsel for the respondents submitted that paragraphs (a), (b), (c) and (d) offer alternative bases upon which the DPP can apply for a restraining order. They identify different factual scenarios. Counsel conceded that there is some overlap.[19] Counsel submitted, however, that the intention was that the most specific factual scenario that applies to the circumstances of the case would be the one to be used. Counsel also submitted that the paragraphs are intended to operate as a progression

• para (a), prior to charges;
• para (b), anticipated charges in 48 hours;
• para (c), charges laid; and
• para (d), conviction.

Counsel argued that this construction is supported by s.15(4). It provides:

"(4) If a court makes a restraining order on application under section 16(2)(a) and a person is subsequently charged with a Schedule 2 offence in relation to which the restrained property or interest in property is tainted property, the court may vary the restraining order to add to or substitute the purpose for which the property or interest is restrained."

Counsel submitted that this indicated that Parliament intended s.16(2)(a) to apply prior to any charge being laid.

41 Counsel for the respondents also submitted that Parliament intended that the DPP apply under the particular scenario that was applicable. So far as paragraph (a) is concerned Parliament was intending to describe a situation where no-one has been charged. Counsel put that the previous s.16 was very different. The relevant provisions read as follows:

(1) If a person has been, or within the next 48 hours will be, charged with or has been convicted of -

(a) a civil forfeiture offence, the DPP or a prescribed person, or a person belonging to a prescribed class of persons may apply without notice to the Supreme Court;

for a restraining order in respect of property in which the defendant has an interest or which is tainted property.

(2) For the purposes of civil forfeiture, it does not matter that the charge has been withdrawn or finally determined."

Counsel argued that a quite different approach had been taken in the current provision - in particular, the three situations adverted to in the original s.16(1) were separated, drafted as alternatives and were the subject of separate scenarios and a fourth added - all alternatives. Counsel also noted that under s.27(2), where a restraining order is made under s.16(2)(a), the order ceases to be in force on the expiry of 90 days after it is made unless an application for a civil forfeiture order in respect of the restrained property is then pending before the Supreme Court or County Court.

42 Counsel for the respondents also relied upon the fact that s.16(2) in the original legislation was repealed by the 2004 amendments which remodelled s.16 into its present form. Counsel submitted that this revealed an intention on the part of Parliament to withdraw its direction that it did not matter that the charge had been withdrawn or finally determined; Parliament did not want to preserve the situation where an acquittal did not matter. The same provision in the civil forfeiture section of the original legislation, s.37(2) was also repealed.

43 In response to this argument, counsel for the applicant argued that the repeal of s.16(2) occurred because s.16(2)(a) covered the ground originally covered by that sub-section. This response, in my view, assumes the parliamentary intention that the applicant seeks to establish.

44 As to s.16(2)(a) counsel for the applicant also submitted that anything above the level of reasonable suspicion was simply surplus to the requirements of that paragraph. Counsel put that it was intended to cover situations including that where the fact that the property was "tainted property" was clear and beyond reasonable suspicion. Counsel argued that it must be borne in mind that it was intended to make available, for confiscation orders, property which owners had allowed to be used for the proscribed purposes. Again, the response in my view, assumes the parliamentary intention that the applicant seeks to establish.

45 Referring to the statements quoted above from the Second Reading Speeches given in 1997 and 2004, counsel for the applicant made the further submission that what was involved was a beefing up of the civil forfeiture procedure, not a relaxing of it. Counsel argued that the significant change was to include s.16(2)(a) to enable a restraining order to be obtained where there was reasonable suspicion that property was "tainted property" in relation to a Schedule 2 offence.

46 I accept that the inclusion of s.16(2)(a) can be described as a "beefing up" of the civil forfeiture procedure. But the question to be resolved is how far did Parliament intend to extend that "beefing up" process.

47 Returning to the submissions for the respondents, their counsel submitted that s.16 did not authorise more than one application in respect of the same property in the event that an application that was made failed or has been finally determined. Counsel submitted that if that had been Parliament's intention it would have included provisions like ss.32(9) & (10), 37(10) & (11) and 58(8) & (9). Those provisions are in substance the same. Section 37(10) & (11) are referred to above. The relevant sub-sections of s.32 provide:

"(9) If an application under sub-section (1) [an application for a forfeiture order after conviction] has been finally determined, no further application may be made under that sub-section in relation to the same conviction, except with the leave of the Supreme Court or the court which dealt with the earlier application.

(10) A Court must not grant leave under sub-section (9) unless it is satisfied that -

(a) the property to which the new application relates was derived, realised, or identified only after the earlier application was determined; or

(b) necessary evidence became available only after the earlier application was determined; or

(c) it is otherwise in the interests of justice to do so."

Counsel for the respondents submitted that a pattern emerges from those provisions indicating that Parliament was well aware of the issue of whether a proceeding may be brought for a particular order more than once and had expressly dealt with that issue by imposing a ban which can only be lifted with leave of the Court in the limited and special circumstances defined in the second sub-section.

Counsel argued that it followed that Parliament did not intend that civil forfeiture would be sought in circumstances where a prior charging-based restraining order ceased to have effect after acquittal.

48 In response, counsel for the applicant submitted that, if that was the intention, it would have been open to the draftsperson to introduce such a prohibition into the provisions of s.16(2)(a) of the Act. Counsel relied upon the fact that no such prohibition appears and argued that, therefore, no such intention should be inferred. Counsel submitted that the respondents were seeking to carry out a form of surgery that was so substantial and radical that it should not be permitted.[20]

49 The Director of Public Prosecutions is seeking a construction of s.16(2) of the Act which will enable

• an application to be made under s.16(2)(a) for a restraining order over property in the circumstances covered by one or more of each of the sub-paragraphs of s.16(2) and

• a further application under s.16(2)(a) to be made in respect of property where a previous application for a restraining order, using another sub-paragraph, in respect of the same property against the same person had been made and had failed or the restraining order obtained had lapsed.

Further, such an application would be allowed to be made against a person's property after he or she has been acquitted of the offence which allegedly tainted the property.

50 In the circumstances of the present case, the first issue raised is whether an application may be made under s.16(2)(a), in respect of the property, on the grounds of reasonable suspicion as to it being tainted property where a person

(b) has been charged and convicted (the other accused)

and so sub-paragraphs (c) and (d) of s.16(2) apply.

51 The second issue raised is whether more than one application can be made under s.16(2) in respect of the same property.

52 As to the first issue, the highest it may be put for the DPP is that s.16 is, at best, not explicit as to whether, in bringing an application, the applicant can use paragraph (a) when paragraphs (c) and (d) are applicable. The construction that paragraph (a) is not available in those circumstances is, however, supported by a number of considerations.

(1) Parliament plainly attempted to set out four alternative situations and no more and did so with considerable care. It would be inconsistent with the existence of carefully drawn alternatives that Parliament intended that more than one of them be used at the same time or that one of them was intended to be available to be used when any other alternative was more specifically applicable. If that was the intention the phrase "under one or more of the following paragraphs" would have been appropriate and its inclusion to be expected.

(2) The Act is structured in a number of areas by distinguishing the (a) category from the (b), (c) and (d) categories.

• Category (a) is confined to tainted property. The categories other than (a) include property other than tainted property, namely, property of the defendant[21]. Thus in the situations referred to in the other three categories, Parliament thought it appropriate to broaden the net to include any property of the person about to be charged, or charged and convicted.

• The category relied upon in obtaining a restraining order has a direct connection with the form of forfeiture procedure that is available; in particular, whether it is automatic forfeiture (s.35) or civil forfeiture (s.37).

• Separate sub-sections are included in s.16(4) & (5) to deal with applications under s.16(2)(b), (c) & (d) on the one hand, and s.16(2)(a) on the other.

• The Act includes specific provisions in s.27 relating to the duration of restraining orders depending on, and reflecting, the bases on which they are obtained and the purposes for which they are sought. For example, a restraining order sought in support of a civil forfeiture order will lapse after 90 days unless an application for a civil forfeiture order is then pending.

(3) Paragraphs (a), (b), (c), & (d) of s.16(2) are placed sequentially reflecting the normal progress of a police investigation into, for example, drug trafficking, and its ultimate resolution with conviction. As the investigation progresses, and greater certainty arises, the requirements in paragraphs (a) to (d) change from suspicion, to belief and to the fact of the property being tainted. The situation becomes one where the requisite belief can be asserted as opposed to suspicion. That sequential analysis is supported by s.15(4), a provision relied upon by counsel for the respondents. It provides that if a restraining order has been made on the basis of a police officer suspecting on reasonable grounds that the property is tainted (s.16(2)(a)) and, subsequently, a person is charged with a Schedule 2 offence in relation to which the restrained property or interest is tainted property (s.15(2)(c)), the restraining order can have added to it, or substituted, the purpose for which the property interest is restrained. This lends support to the conclusion that Parliament did not consider it appropriate, and therefore did not intend, that s.16(2)(a) be used or available where a person is subsequently charged or convicted.

(4) Artificial situations would be created if sub-paragraph (a) could apply in situations where the matter had progressed to the point where someone had been charged or had been convicted. If the applicant's construction is accepted, s.16(2)(a) and s.16(5) would require a police officer to swear[22] an affidavit that he or she "suspects" that the property is "tainted property" in relation to a Schedule 2 offence and the "grounds" of that suspicion even when the situation is one where the officer legitimately has no doubts - for example, after conviction.

In my view, therefore, a consideration of the legislation itself supports the respondents' construction. Properly construed, s.16(2)(a) is only available prior to charges being laid. Alternatively, the circumstances of this case do not come within any of the circumstances described in s.16(2).

53 Turning to the second issue, the applicant submitted that the Act permits a second application in respect of the same property. Counsel for the respondents drew attention to provisions in the Act which address the issue of whether a second application may be brought for forfeiture orders[23]. There is no similar provision for restraining orders. The question that is raised is what conclusion should be drawn from the failure of the Act to address the issue of whether subsequent applications for restraining orders may be brought. In particular, did Parliament proceed on the basis that none would be permitted unless it specifically provided for them or on the basis that they would be permitted in the absence of any express provision?.[24]

54 There are several reasons why express provisions would be expected if Parliament intended that more than one application could be made in respect of the same property.

(1) In our legal system, there are two well recognised and long accepted public policies that

• no-one should be sued more than once[25].

A number of common law rules[26] have been developed to give effect to those policies. One would expect Parliament to address such fundamental policies in legislation if it was intended to depart from them.

(2) Further, if the applicant's construction is correct, Parliament chose to leave control of the issue of repeat applications to common law principles. Leaving the common law to apply inevitably leaves open the opportunity to mount arguments[27] relying on the above rules in respect of any subsequent applications; for, as here, in relation to the property, there will be situations involving the same litigants, the same property, the same offence and the same reliance on "tainted property". Generally, much will be at stake. Further, if the construction of the applicant is correct, there is no statutory limit to the number of times an application may be brought.

(3) When regard is had to the whole Act, it is difficult to accept that Parliament chose to leave the issue unaddressed if it intended that second applications for restraining orders could be brought. It attempts in the Act to cover all aspects and potential issues in detail and so attempts to minimise uncertainty. It is that attempt, among other things, that gives rise to the Act's complexity. Further, the Act did address the issue of subsequent applications in relation to confiscation orders on three occasions. In all the circumstances it would be remarkable with such detailed and complex legislation for Parliament not to address the issue if it intended that subsequent applications could be brought.

In my view, the construction arguments supporting the respondents' construction on this issue are to be preferred.

55 But there is a further fundamental, and ultimately fatal, problem facing the applicant. The applicant's construction would expand[28] the operation of confiscatory legislation. It has long been established that provisions for the forfeiture of property should be construed strictly.[29] In addition, under the Act, the procedures for the forfeiture of property are deliberately draconian and reverse or remove what would otherwise be the procedural rights available under the common law for those affected.

56 The making of a restraining order is a pre-requisite to obtaining a civil forfeiture order. Further, once a restraining order is made, the onus is placed upon any person who owns the relevant property or claims an interest in the property to seek to an exclusion order. To do so, the applicant must satisfy a number of difficult requirements, some of them involving the proof of negative propositions. For example, under s.24, the person making the application must satisfy the court that it is either not derived property or not tainted property. Alternatively, if the Court is not satisfied that the property is not tainted property or derived property, the applicant must satisfy the Court, inter alia, that

(i) he or she was not in any way involved in the commission of the Schedule 2 offence;

(ii) where the applicant acquired the interest before the commission or alleged commission of the offence, the applicant did not know that the property would be, or was intended to be, used in or in connection with the commission of the Schedule 2 offence;

(iii) the applicant's interest in the property was not subject to the effective control of the person suspected to have committed the offence on the earlier of the dates on which the person was charged or the date when the restraining order was made; and

(iv) where the applicant acquired the interest directly or indirectly from the person who is suspected to have committed the Schedule 2 offence, that it was acquired for sufficient consideration.

Thus while the restraining order is an interim order, it carries unusual and onerous consequences for those adversely affected by it.

57 It should also be noted that, when an application is made for a civil forfeiture order in respect of property subject to a restraining order, the Court is required to order that the restrained property be forfeited to the Minister if satisfied as to compliance with certain requirements as to notice under s.37, the lapsing of time and the fact that there are no pending applications for exclusion from the restraining order.

58 Where a civil forfeiture order has been made, there is also a procedure under which persons may apply to have their interests excluded from the operation of the civil forfeiture order. This is provided in ss.53 and 54. Such an application cannot be made by a person who was given notice of the application for the relevant restraining order, or the making of a relevant restraining order, without the leave of the Court[30]. Under s.54, where the Court is not satisfied that the property in which the interest is claimed is not tainted property or derived property, a person may only obtain an exclusion order if the Court is satisfied that

(i) the applicant was not in any way involved in the commission of the offence;

(ii) the applicant's interest in the property was not subject to the effective control of the person who is suspected to have committed the offence, on the earlier of the date on which the person was charged or the date the restraining order was made;

(iii) where the applicant acquired the interest directly or indirectly from the person who is suspected to have committed the offence that it was acquired for sufficient consideration,

59 The persons affected will include innocent people who can be, and are, caught by the operation of the provisions of the Act and to protect their rights are compelled to expend substantial sums of money. This reversal and removal of common law rights only serves to reinforce the need for a strict approach.

60 A strict approach should be taken and any ambiguities should be resolved against the applicant's construction. As a result, it would be contrary to authority, in my view, to adopt the construction advanced for the applicant. It is no part of the judicial function to fill gaps disclosed in the legislation, or expand its operation, particularly legislation of this kind. To do so would involve the "usurpation of the legislative function under the thin disguise of interpretation"[31]. The construction of s.16(2) sought by the applicant requires clear and specific provision.

61 Looking at the purposes of the Act and its complexity and detail, it may be said that Parliament in fact bore in mind the significant incursion by the Act into property and procedural rights. It has taken a cautious approach and has deliberately and carefully attempted to define four alternative, distinct and sequential categories of circumstances in which the key order, the restraining order, may be sought. Properly construed, they describe the only categories available. In addition, Parliament intended to permit only the one application for a restraining order against the same property. The only variation or departure permitted is that covered by s.15(4).

62 There were other issues raised. Initially the respondent called in aid s.26 of the Charter of Human Rights Act 2007. After notice was served under s.35 of that Act upon the Attorney-General and the Equal Opportunities Commission, the Attorney-General intervened and filed submissions. After discussions between the parties' representatives, the Court was advised on the return hearing date on 17 March 2008 that the respondents no longer sought to rely upon arguments based upon the Charter.

63 I also note that the respondents sought, in the alternative, orders staying the proceedings as an abuse of process in the event that the applicant's construction arguments were upheld. In view of the conclusions I have reached on those issues, it is not necessary to consider and rule on the stay application.

64 For the foregoing reasons the application for a restraining order in respect of the property should be dismissed. The application for a restraining order in respect of the $6,500 differs from the property application because it is made for the first time. But the circumstances come within paragraphs (c) and (d) and, therefore, paragraph (a) is not applicable. Alternatively, the circumstances are not covered by any of the listed alternatives. Accepting that construction, there is no right to apply for a restraining order in respect of that property.

[1] I note that the learned trial judge in his ruling on the no case submission accepted that this sum of cash was received as rental from the leasing of the property to the other defendants: Ruling 11 December 2007, page 1223.

[2] Under Division 1 of Part 3 of the Act.

[5] Originally the Act required proof that the person had committed such an offence.

[6] Hansard Legislative Assembly 5 October 2994, page 620.

[7] At 621. The speech was silent as to what is to happen when the relevant person is charged and acquitted.

[9] [2006] VSCA 188; (2006) 14 VR 249, at 263.

[11] Explanatory Memorandum, 14.11.1997, p 9-10

[14] Stingel v Clark [2006] HCA 37; [2006] 228 ALR 229,238

[15] 37 NSW LR 118, at 125-127.

[16] (1995) 79 ACrimR 514.

[17] Pearce & Geddes, Statutory Interpretation in Australia, 6th edition [4.46]. Note s 36(3B) Interpretation of Legislation Act 1984 does not appear to be applicable.

[18] See passage quoted above from DPP v VU; See also the exclusion application provisions ss.21, 22, 50, 52and 54.

[19] In the sense that, for example, under paragraph (d) a person who has been convicted will also have been charged- paragraph (c).

[20] DPP v Logan Park Investments Pty Ltd and Another (1995) 37 NSWLR 118 at 127 per Kirby ACJ.

[21] Subject to s.16(2A)

[22] Section 16(5)

[23] Forfeiture Orders - Schedule 1 offences - s.32(9)(10); Civil Forfeiture Orders - s.37(10)(11); Pecuniary Penalty Orders - s.58(8)(9).

[24] Does the form of the special provisions dealing with second applications reveal an assumption by the Parliament that but for such provisions a second application could be made; for they are drafted in the form of an express prohibition with a leave exception? If that was the assumption, a much simpler provision would have better reflected the assumption such as - "Before a further application is made, leave of the Court is required". The sub-sections referred to may be said to serve three purposes - to address the issue and to permit further applications while making it clear that they are to be regarded as most exceptional. Their form may be said to reflect drafting needs rather than assumptions.

[25] Jackson v Goldsmith [1950] HCA 22; (1950) 81 CLR 446, per Fullagar J at 466; Spencer Bower, Turner and Handley, Res Judicata, 3rd Edition [10] - [14].

[26] Issue estoppel, res judicata, Anshun estoppel, abuse of process.

[27] Such as the abuse of process issue raised in the alternative submission for the respondents in this case, citing Merry v Fraser (1899) 5 ALR 5; Macdougall v Knight (1890) 25 QBD 1; Bayne v Blake (No 3) [1909] HCA 60; (1909) 9 CLR 366; Scanlan's New Neon Ltd v Tooheys Ltd (1945) 62 WN (NSW) 53; Greenhalgh v Mallard (1947) 2 All ER 255; Shillito v Bent [1973] VicRp 76; [1973] VR 762 at 767_; Hunter v Chief Constable of West Midlands Police_ [1981] UKHL 13; [1982] AC 529; [1981] 3 All ER 727.

[28] Another way of viewing the construction of s.16(2)(a) advanced by the applicant is that the applicant seeks the implication of the phrases "whether or not a person has been charged or convicted" and "whether or not an application has been made previously".

[29] Kirby ACJ, DPP v Logan Park Investments Pty Ltd and Another (1995) 37 NSWLR 118, 125-7; Jeffrey v DPP (Cth) (1995) 79 ACrimR 514; Sybott v R [2003] VSC41

[30] Section 53(4).

[31] Stephen J in Marshall v Watson at 649 citing Lord Simonds in Magor & St Mellons RDC v Newport Corp [1952] AC 189, at 191.