DPP v Le [2007] VSCA 18

DPP v Le [2007] VSCA 18 - VSCA 2007 case summary — Zoe

[5]

1 Roy Le ("Le") is a convicted drug trafficker. He is serving a sentence of four years' imprisonment, with a non-parole period of two years. At the time the trafficking offence was committed, Le was living with his second wife, Phan Le ("Phan"), in an apartment in Sunshine ("the property"). Because Le used the property to store, and prepare, heroin for sale, the property is "tainted property" in relation to the offence, for the purposes of the Confiscation Act 1997 (Vic).[1]

2 Le and Phan were married in Vietnam in September 1997. There are no children of the marriage. Phan came to Australia in July 1999. Le had purchased the property before she arrived. Until his imprisonment, Le and Phan lived together at the property. It is their family home.

3 After Le was charged (with trafficking in not less than a commercial quantity of heroin), the Director of Public Prosecutions applied to the County Court for a restraining order in respect of the property. The application was made under s 16(2)(c) of the Act. A restraining order was made, on 18 September 2003, pursuant to s 18(1)(a) of the Act. As required by s 15(3)(a), the court declared that the property had been restrained for the purpose, amongst others, of satisfying "automatic forfeiture of property that may occur under Division 2 of Part 3".

4 The combined effect of s 35(1) and (2) was that the property would be forfeited to the Minister 60 days after Le's conviction, unless within that period an application had been made for an exclusion order under s 22. Phan did make such an application but, apparently because of her solicitor's misunderstanding of the time from which the 60 days was to be calculated, it was not made within the 60-day period. As a result, the property was forfeited to the Minister at the expiry of that period.

Application for exclusion from automatic forfeiture

5 Phan then made an application pursuant to s 51(1) for an order excluding the property from automatic forfeiture under s 35. It is not disputed that she had standing to make that application, being a person who -

[9]

"(142)(1) Without affecting any other right of appeal, a person who has an interest in property in respect of which -

(a) a forfeiture order is made; or

(b) the Supreme Court or the County Court has made, or refused to make, an exclusion order under section 22 or 52(1) -

may appeal against that order or refusal -

(c) in the case of a person convicted of an offence in reliance on which the order was made - in the same manner as if the order were, or were part of, the sentence imposed in respect of the offence; or

(d) in any other case - in the same manner as if the person had been convicted of the offence in reliance on which the order was made and the order were, or were part of, the sentence imposed in respect of the offence.

(2) Without affecting any other right of appeal, a person who has an interest in property in respect of which -

(a) a civil forfeiture order is made; or

(b) the Supreme Court or the County Court has made, or refused to make, an exclusion order under section 24 or 54(1) -

may appeal against that order or refusal in the same manner as if the person had been convicted of the Schedule 2 offence in relation to which the order was made and the order were, or were part of, the sentence imposed in respect of the offence.

...

(4) On appeal, a forfeiture order, a pecuniary penalty order, an exclusion order under section 22, 50(1), 52(1) or 54(1) or a refusal to make an exclusion order under section 22, 50(1), 52(1) or 54(1) may be confirmed discharged or varied or the matter may be remitted for re-hearing to the court which made the order, or refused to make the order, with or without any direction in law.

(5) The DPP or a prescribed person or a person belonging to a prescribed class of persons may appeal to the Court of Appeal against -

(a) a civil forfeiture order or against the refusal of the Supreme Court or the County Court to make a civil forfeiture order; or

(b) the making of an exclusion order under section 24 or 54(1); or

(c) the making of a pecuniary penalty order under Division 2 of Part 8 or against the refusal to make a pecuniary penalty order under Division 2 of Part 8 -

in the same manner as if the order or refusal were, or were part of, a sentence imposed in respect of the offence.

(6) On appeal, a civil forfeiture order, an exclusion order under section 24 or 54(1) or a refusal to make an exclusion order under section 24 or 54(1) may be confirmed, discharged or varied or the matter may be remitted for re-hearing to the Supreme Court or the County Court, as the case may be, with or without any direction in law."

[15]

9 Counsel for Phan makes the perfectly valid point that Parliament could readily have made provision in s 142(5)(b) for the Director to appeal from the making of an exclusion order under s 52(1). He argues that we should infer, from Parliament's not having done so, that it was intended that the Director should have no right of appeal from such an order. Senior counsel for the Director, on the other hand, argues that the right of appeal is a fundamental matter and that the Court should not impute to Parliament an intention to deny the Director a right of appeal against an exclusion order under s 52(1) unless we were satisfied that s 142 was intended to "cover the field"[3] with respect to appeals, including appeals by the Director. He draws attention to the general right of appeal conferred by s 74(1) of the County Court Act 1958 (Vic) (from any order made by the County Court in a civil proceeding) and points out that, by s 133(1) of the Confiscation Act, proceedings under the Act are civil in nature.

10 In our view, the Director's submission must be upheld. It would be a very significant thing for Parliament to deny the Director a right of appeal from an exclusion order made under s 52(1). No such intention having been stated expressly, it is not to be implied, in our view. First, the appeal provisions lack the clarity and internal consistency which would be a pre-requisite before any inference could be drawn that Parliament had deliberately (rather than inadvertently) denied the Director a right of appeal from the making of an exclusion order under s 52. Secondly, we are unable to see - and neither counsel was able to suggest - any policy rationale which might explain the conferral of a right to appeal from the making of certain exclusion orders and the denial of a right to appeal from the making of other exclusion orders. Moreover, as we have pointed out, the reference to s 50(1) in s 142(4) makes it clear that s 142 does not cover the field with respect to rights of appeal. The right of appeal from an exclusion order made under s 50(1) - a right not conferred by s 142 itself, but clearly contemplated by s 142(4) - must be found elsewhere and the only source of that right is s 74(1) of the County Court Act.

11 Clearly, the position we have described is quite unsatisfactory. The appeal provisions need to be reviewed urgently. If s 142(5) is intended to define exhaustively the Director's rights of appeal, the Act should say so explicitly. Consideration will need to be given to the very question with which we are dealing, namely, whether it is intended to deny the Director a right of appeal from the making of an exclusion order under s 52. Self-evidently, the position should not be allowed to continue where rights of appeal are derived partly from the County Court Act and partly from s 142 itself.

12 There was also discussion, in the course of argument, about whether the statutory analogy with sentence appeals was appropriate. Where the appeal is brought by the person convicted of the relevant offence,[4] it may be thought appropriate, and practicable, for the Court to treat the question - whether the forfeiture order was correctly made - as being equivalent to the question whether a sentence is "manifestly excessive". But the questions are obviously not the same, and the relevant considerations are unlikely to be the same. When (as here) the applicant is a person who has not been and will never be sentenced for the relevant offence - indeed, under s 52(1)(a)(i), she must establish that she was not in any way involved in the offence - there is no apparent reason in policy or logic why the appeal court should be required to deal with the appeal from the making of, or the refusal to make, an exclusion order as if it were an appeal against sentence.

13 If all that was intended by the statutory analogy was that the making, or the refusal to make, an exclusion order was to be treated as a decision made in the exercise of discretion, so as to attract the principles laid down in House v R[5] as governing discretionary appeals, then the Act should say so. For reasons which follow, however, we do not consider this to be an appeal from an exercise of discretion.

[48]

40 Once again, in our opinion, his Honour's conclusion, and the reasons for it, are unimpeachable. The reason which Phan had given in her affidavit, and which she repeated in her viva voce evidence, was that she, not Le, had proposed that she be given an interest in the property. She had given a reasonable explanation for proposing the transfer, namely, her anxiety that if anything happened to her husband she might have nowhere to live. In the absence of any challenge to that evidence, the making of the transfer in consideration of "love and affection", rather than for a monetary sum, was wholly unsurprising.

41 The term "sufficient consideration" is not defined in the Act, although courts have sometimes used it as a synonym for adequate or "valuable" consideration.[20] Thus, for example, in describing as "sufficient" the valuable consideration given by the promisee in Wigan, Mason J meant no more than that the consideration was adequate to impose on the promisor an enforceable obligation. Such use of the term "sufficient consideration" is unsurprising given that the ordinary meaning of "sufficient" is "adequate".[21] Similarly, the term "consideration" has had a recognised meaning at common law[22] for over two centuries. "Valuable consideration" ordinarily encompasses a benefit capable of being valued,[23] although it does not include "good consideration" which, in conveyancing transactions, includes natural love and affection. Thus, in the context of the transfer of an interest in land in Victoria, natural love and affection is regarded as "good consideration", but would probably be insufficient to support a simple contract.[24]

42 That "valuable consideration" and "good consideration" constitute different categories of consideration (and have different content) has been recognised, for example, by legislation concerned with fraudulent preferences which has its origins in the Fraudulent Conveyances Act 1571 (Imp). Thus, for example, s 172 of the Property Law Act 1958 (Vic) treats both "valuable consideration" and "good consideration" as sufficient (if given in good faith and without relevant notice) for the purpose of taking the impugned transaction out of its operation. Section 172(3) provides:

[50]

43 On the other hand, in order to exclude the operation of s 121 of the Bankruptcy Act 1966 (Cth), which avoids certain transfers to creditors, it is necessary to establish, at least, that valuable consideration had been provided for the impugned transfer. "Good consideration" is not sufficient. In terms, s 121(4)(a) defines valuable consideration as consideration that is "at least as valuable as the market value of the property". Sub-section (6)(d) declares that, for this purpose, "the transferee's love or affection for the transferor" has no value as consideration.

44 Given the ordinary meaning of "sufficient", and the recognised categories and meaning of "consideration", it may be assumed that the term "sufficient consideration" in the Act was intended to encompass at least "valuable consideration" and "good consideration". Ordinarily, where a word used in an Act - here, "consideration" - has acquired a legal meaning, the presumption is that Parliament intended the word to have that legal meaning unless the contrary intention appears.[25] In our view, no such contrary intention can be gleaned from the Act.

45 In the circumstances, we consider that the term "sufficient consideration" in s 52(1)(a)(v) includes both "valuable consideration" and "good consideration", as those terms have been understood at common law.[26] In the circumstances of this case as found by his Honour, "natural love and affection", stated to be the consideration for the transfer of Le's half interest in the property to Phan, constituted "sufficient consideration" for the purposes of s 52(1)(a)(v) of the Act.

"Not subject to the effective control of the defendant"

46 In our opinion, the evidence given by Phan, in her affidavit and viva voce, established that her interest was what she described it to be, that is, that of a joint tenant. That evidence was sufficient, in our view, to establish that her interest was not subject to her husband's effective control, and there was no evidence to the contrary. As we have pointed out, her unchallenged evidence was that it was at her initiative that she became a joint tenant. The fact that, according to her evidence, her husband complied with this request and arranged for the solicitor to prepare the appropriate documentation was inconsistent with the contention that her interest was subject to effective control by her husband.

47 It is now a matter of speculation as to what Phan might have said had she been cross-examined on this question. But she was not. No question was raised about whether, despite the legal formalities, Le was in effective control.

48 According to the reasons for judgment, no issue was raised on the hearing of the application that Phan's interest in the property was subject to the effective control of Le, "other than by the assertion contained in the Amended Grounds of Opposition" filed by the Director. No doubt what his Honour was referring to was the failure by the Director to challenge Phan's account. In the circumstances, although the Director's brief closing submissions did identify this as a matter in issue, the Director's opposition on this ground was no more than formal.

The extent of the exclusion

49 The power which the Judge exercised, under s 52(1), was the power to -

[52]

The Director submits that the word "property" in this statutory phrase is to be read down, so that the power can only be exercised to exclude "so much of the property as relates to the applicant's interest". Otherwise, the Director argues, a defendant's interest in automatically-forfeited property could be excluded. The Director relies on the fact that "property" is defined in s 3 of the Act to include "any interest in ... real or personal property."

50 In our opinion, this submission must be rejected. First and most importantly, the language of s 52(1) simply does not permit the construction for which the Director contends. What may be excluded under s 52(1) is "property in which the applicant claims an interest". The property, and the applicant's interest in the property, are thus separate and distinct. It is the property which the Court excludes. It is the applicant's interest in the property which gives the applicant standing to seek that exclusion. Precisely the same distinction - between the property forfeited and the applicant's interest in that property - is drawn in each of s 49(1), s 50(1), s 51(1), s 53(1) and s 54(1).

51 Secondly, it is plain enough that the legislation intends, in a case such as the present, that the property which is automatically forfeited to the Minister is the same property as has been made the subject of the relevant restraining order, and it is equally apparent that it is that property which is to be the subject of any exclusion order, whether made before the property is automatically forfeited or after forfeiture. When ss 22 and 52 of the Act speak respectively of excluding "the property", or "property", from the operation of the restraining order or the operation of s 35, they are referring to the property the subject of the restraining order or the automatic forfeiture, as the case may be. In either situation, it is that property which is to be "saved" from automatic forfeiture.

52 A restraining order can, of course, be made in respect of an interest in property. That follows from the definition of "property" in s 3. But once the restraining order has been made, that interest is "the property" to which the later provisions of the Act apply.

53 In short, the Director's submission conflicts with the basic scheme of the Act. In the present case, the Court made a restraining order in respect of "property which is tainted property" (s 16(1)). It is an order which applies (in a case such as the present) to the whole of the property used in connection with the commission of the offence, even where only part of the property - such as a garage erected on it - was actually used in connection with the unlawful purpose.[27] It is the property thus restrained - the whole property - which is automatically forfeited under s 35 of the Act, unless the permitted course is taken to prevent that occurrence. If such a forfeiture occurs, s 52 provides the opportunity to "reverse" that seemingly draconian consequence. Where the requirements of s 52 are established, the Court has the power to order that the property that has been automatically forfeited to the Minister - being the property the subject of the original restraining order - be no longer forfeited.

54 Throughout the Act the clearest of distinctions is drawn between "the property", on the one hand, and "an interest in the property", on the other. Thus -

[62]

59 The Memorandum thus clearly envisaged the making of an order which excluded only the interest claimed by the applicant. Counsel for the Director argued that we should give effect to the clear intention conveyed by the language of the Explanatory Memorandum. But the use to which extrinsic materials may be put does not - cannot - extend to substituting the words of an explanatory memorandum (or, for that matter, a second reading speech) for the words actually used in the enactment. As the High Court has said emphatically in recent years, the words of the statute govern.[30] There is no substitute for giving attention to the precise terms in which the relevant provision is expressed.[31]

60 Where, as here, there is a direct conflict between the wording of the statute and the wording of the Explanatory Memorandum, the words of the statute must prevail.[32] Axiomatically, it is the language of the statute which embodies the intention of Parliament. This is not a case of ambiguity, where the Explanatory Memorandum might help in determining the meaning of the provision. This is a flat contradiction.[33] The statute confers a power to exclude "property in which the applicant claims an interest", whereas the Explanatory Memorandum contemplated power "to exclude that interest".

61 There was debate about whether it was, or was not, a sensible policy to give the Court an "all or nothing" power of this kind. Counsel for the Director argued that there could be "very curious results" if, upon the applicant establishing a small interest in forfeited property, the Court's only choices were to exclude the property altogether from forfeiture, or to refuse the application. A possible counter view is that the process of compulsory forfeiture - that is, by operation of law, with no judicial consideration - is so drastic as to justify giving the Court power, upon the establishment of an interest by an innocent third party, to exclude the entirety of the property.

62 In the end, of course, the question of policy is for Parliament, not for this Court. Where, as here, the words used are clear and unambiguous, and maintain a distinction which is deployed consistently throughout the Act, the Court is bound to give effect to the language used.

63 We would therefore dismiss the appeal.

[71]

does not detract from the conclusion that s 52(1) is confined to excluding the applicant's interest from forfeiture. The power conferred by s 52(2) enables the court to determine the nature and extent of an interest claimed by an applicant, where this is necessary. For example the applicant may be registered as a co-owner of land, but may claim that he or she has a larger equitable interest in the property which arises under a constructive trust. Under s 52(2) the Court may declare the extent of the applicant's interest as part of the process of excluding the applicant's interest from forfeiture.

73 Thirdly, an interpretation of s 52(1) which requires exclusion of the whole of the property, rather than the applicant's interest in it, produces an absurd result.

74 An applicant who has a restrictive covenant or an easement over property or a small undivided interest as tenant-in-common may apply for an exclusion order under s 51. Maxwell P and Chernov JA have said that if the court is satisfied as to the five matters in s 52(1) it has no discretion to decline to make an order. This is because the words "may make an order" confers authority on the court to order exclusion if the five conditions in s 52(1) are satisfied, rather than giving the Court a discretion to make or refuse to make an exclusion order.[36]

75 According to this interpretation of s 52, the Court would be required to order exclusion of the whole of the property, even though the applicant's interest in the property was of insignificant value compared with the interest of the person convicted of an offence attracting automatic forfeiture. The exclusion of the whole of the property would undermine the policy goal of the Act, which is intended to prevent people convicted of serious offences from profiting from the fruits of their crime. This would be the case even though the property may remain available to satisfy a pecuniary penalty order made against an offender.[37]

76 It is arguable that, contrary to the view expressed by Maxwell P and Chernov JA, the court has a discretion under s 52 to decline to make an order, where the applicant has only a small interest in the property. In those circumstances person who had an interest in the property would lose that interest, even though the requirements of the section were satisfied.

77 In my view the absurdity of this "all or nothing" result compels an interpretation of the section which enables the Court to exclude only the interest of the applicant from automatic forfeiture. In CIC Insurance Ltd v Bankstown Football Club, Brennan CJ, Dawson, Toohey and Gummow JJ said:

[74]

[1] The property "was used ... in connection with the commission of the offence": para (a) of definition of "tainted property" in s 3.

[2] Of 60 days commencing on the day on which the property was forfeited to the Minister: s 51(2).

[3] See Re Macks & Ors; ex parte Saint [2000] HCA 62; (2000) 204 CLR 158, applying ex parte McLean [1930] HCA 12; (1930) 43 CLR 472 at 483 per Dixon J.

[4] See s 142(1)(c).

[5] [1936] HCA 40; (1936) 55 CLR 499.

[6] Leach v The Queen [2007] HCA 3 at [38] per Gummow, Hayne, Heydon and Crennan JJ, citing Finance Facilities Pty Ltd v Federal Commissioner of Taxation [1971] HCA 12; (1971) 127 CLR 106 and Mitchell v The Queen [1996] HCA 45; (1996) 184 CLR 333.

[7] cf. Australian Heritage Commission v Mt Isa Mines Limited [1997] HCA 10; (1997) 187 CLR 297 at 303; see also FCT v Linter Textiles Aust Limited [2005] HCA 20; (2005) 220 CLR 592 at 659 [215] per Kirby J.

[8] Section 52(1)(a)(iii).

[9] Section 52(1)(a)(iv).

[10] Section 52(1)(a)(v).

[11] [2005] NSWSC 831; (2005) 220 ALR 148 at [249].

[12] [1966] HCA 21; (1966) 115 CLR 266.

[13] At 303 (emphasis added).

[14] Ibid (emphasis added).

[15] Morley v Statewide Tobacco Services Ltd [1993] VicRp 32; [1993] 1 VR 423 at 430 per Ormiston JA whose reasons were approved on appeal by the Full Court (Crockett, Southwell and Hedigan JJ).

[16] Reasons at [35] (emphasis added).

[17] cf Somaghi v Minister for Immigration (1991) 31 115 FCR 100 at 108-9 per Jenkinson J and at 119-120 per Gummow J; NIB Health Funds Ltd v Private Health Insurance Administration Council [2002] FCA 40; (2002) 115 FCR 561 at [133], [135] per Allsop J.

[18] Outline at [15].

[19] Reasons at [38]-[39].

[20] For example see Wigan v Edwards (1973) 1 ALR 497 at 512 per Mason J. See also, Combe v Combe [1952] EWCA Civ 7; [1951] 2 KB 215 at 220-221 per Denning LJ; Barba v Gas & Fuel Corporation of Victoria [1976] HCA 60; (1976) 136 CLR 120 at 132 per Gibbs J; Health Insurance Commission v Peverill [1994] HCA 8; (1993) 179 CLR 226 at 265 per McHugh J; McKay v National Australia Bank Ltd [1998] 1 VR 173 at 177 per Winneke P.

[21] See the Shorter Oxford Dictionary on Historical Principles (5th ed).

[22] We mention for completeness that consideration is also relevant in the context of equitable remedies. Thus, for example, it is well established that, ordinarily, equity will not assist a volunteer promisee by way of, say, the provision of the remedy of specific performance unless he or she has provided valuable consideration for the promise. In general, valuable consideration in equity is the same as valuable consideration at common law although, in most cases, equity requires the consideration to be adequate. See, for example, Ford and Lee, Principles of the Law of Trusts (2nd ed) at [321] and Chitty on Contracts (29th ed) at [3-021]. For present purposes, however, it is not necessary to analyse further the treatment of consideration by equity because it has not been suggested, appropriately, we think, that the circumstances here give rise to the application of equitable principles.

[23] For historical reasons, it included marriage.

[24] See, for example, Blackstone, Commentaries on the Laws of England, Book 2, Chapter 20, at 297; House v Caffyn [1922] VicLawRp 9; [1922] VLR 67 at 75-76 per Cussen J; Archibald Howie Pty Ltd v Commissioner of Stamp Duty (NSW) [1948] HCA 28; (1948) 77 CLR 143 at 152 per Dixon J; Barton v Official Receiver [1986] HCA 44; (1986) 161 CLR 75 at 86 per Gibbs CJ, Mason, Wilson and Dawson JJ; Re Abbott [1983] 1 Ch 45 at 57 per Megarry VC; Robinson, The Property Law Act Victoria, at 438; and Stuckey, The Conveyancing Act at 18.

[25] Attorney-General (NSW) v Brewery Employees Union of NSW [1908] HCA 94; (1908) 6 CLR 469 at 531 per O'Connor J.

[26] Although it might be argued that the term may include consideration that is less than "valuable" or "good" consideration, in our view it does not encompass nominal consideration - see NSW Crime Commission v Mahoney [2003] NSWSC 1030; (2003) 142 A Crim R 409 at 419 per M Grove J.

[27] See definition of "tainted property" in s 3 of the Act, and s 16 of the Act.

[28] See s 16(1),(2)(b)(ii), (c) and (d).

[29] See s 72.

[30] Weiss v The Queen [2005] HCA 81; (2005) 224 CLR 300 at [9]; Stingel v Clark [2006] HCA 37; (2006) 228 ALR 229 at [26] per Gleeson CJ, Callinan, Heydon and Crennan JJ; Central Bayside General Practice Association Ltd v Commissioner of State Revenue [2006] HCA 43; (2006) 229 ALR 1 and the cases there cited.

[31] Weiss at [31] citing Fleming v The Queen [1998] HCA 68; (1998) 197 CLR 250 at 256 [12].

[32] Re Bolton; ex parte Beane [1987] HCA 12; (1987) 162 CLR 514 at 518 per Mason CJ, Wilson and Dawson JJ.

[33] cf. Avel Pty Ltd v Attorney-General (NSW) (1987) 11 NSWLR 126 at 128B per Kirby P.

[34] In Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49; (2002) 213 CLR 543 at 560 per Gleeson, CJ Gaudron, Gummow and Hayne JJ, it was said that it is "a maxim upon which, it has often been pointed out, it is dangerous to rely." Cited with approval by this Court in Davidson v Victorian Institute of Teaching [2006] VSCA 193 at [13].

[35] This is also the purpose of s 16 (b)(ii) and (c), and (d).

[36] For a recent example of a provision with similar effect see the joint judgement of Gummow, Hayne, Heydon and Crennan JJ in Leach v The Queen [2007] HCA 3 at [38] and the cases therein cited.

[37] Confiscation Act 1997, s 72.

[38] CIC Insurance Ltd v Bankstown Football Club Ltd (1995) 187 CLR 384 at 408.

[39] Stingel v Clark [2006] HCA 37; (2006) 228 ALR 229.

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