GAGELER J.
Introduction
On 20 April 2002 police found a bag in the boot of a hire car parked outside a motel in Cairns. The bag contained $598,325 in cash and 23.3 grams of cannabis. Three days later, police deposited the money in a bank account operated by the Queensland Police Service.
The bag belonged to John William Henderson, formerly named William Marijancevic, whom police suspected of having engaged in serious crime related activity.
On 1 January 2003, operative provisions of the Criminal Proceeds Confiscation Act 2002 (Q) ("the Act") entered into force. On 10 February 2003, on the application of the State of Queensland made that day under s 28(3)(a) of the Act, the Supreme Court of Queensland made a restraining order under s 31(1) of the Act restraining any person from dealing with identified property of Mr Henderson. The order, as subsequently varied, identified the restrained property as the money held on deposit in the bank account.
On 22 November 2011, on the further application of the State made on 5 March 2003 under s 56(1) of the Act, the Supreme Court made an order under s 58(1)(a) of the Act forfeiting to the State the money then held on deposit in the bank account, being the principal sum of $598,325 deposited on 23 April 2002 together with accrued interest. The forfeiture order was based on the Supreme Court finding it more probable than not that Mr Henderson had engaged in a serious crime related activity, constituted by his conviction, early in 2002 in Victoria, of a charge of possessing cannabis and alternatively his possession of the 23.3 grams of cannabis found in his bag on 20 April 2002.
Before making the forfeiture order, the Supreme Court dismissed an application by Mr Henderson made on 30 May 2003 under s 65 of the Act for an order excluding the whole of the money from the application for the forfeiture order. The Supreme Court was permitted and obliged by s 68 of the Act to make the exclusion order which Mr Henderson sought if, but only if, the Supreme Court was satisfied that Mr Henderson had an interest in the money and that it was more probable than not that the money was not "illegally acquired property". It will be necessary in due course to refer to the text of s 68, to the definition of illegally acquired property in s 22, and to related provisions of the Act.
The primary judge (Peter Lyons J) found that the evidence adduced by Mr Henderson established that the $598,325 contained in the bag constituted the proceeds of the sale sometime in or about December 2001 of jewellery which had been given to Mr Henderson in or about December 1996 for the benefit of Mr Henderson and three of his siblings by their father, Franjo Marijancevic, who was born in Yugoslavia in 1923 and who died in Victoria on 29 April 2001. His Honour nevertheless held that he was unable to reach the satisfaction required to make the exclusion order because Mr Henderson was unable to establish how his father came into possession of the jewellery. His Honour characterised that result, to which he considered himself driven by reason of the lack of evidence about how Mr Henderson's father came into possession of the jewellery, as "anomalous". The Court of Appeal (Holmes and White JJA and Daubney J) dismissed an appeal by Mr Henderson.
The ultimate question in Mr Henderson's further appeal, by special leave, to this Court is whether the evidence adduced by Mr Henderson and accepted by the primary judge ought to have been sufficient for Mr Henderson to have discharged his burden of satisfying the Supreme Court that it was more probable than not that the money was not illegally acquired property.
Before turning in more detail to the circumstances which give rise to that question and to the issues which arise in its resolution, it is convenient to set out the relevant statutory provisions and to locate them within the scheme of the Act in its applicable form.
The Act
The Act identifies as its main object to remove the financial gain and increase the financial loss associated with "illegal activity", whether or not a particular person is convicted of an offence because of that activity. The expression illegal activity encompasses a "serious crime related activity". A serious crime related activity is anything done by a person that was, when it was done, a "serious criminal offence". That includes any indictable offence for which the maximum penalty is at least five years' imprisonment. The expression illegal activity also encompasses an act or omission that is an offence against the law of Queensland or the Commonwealth, as well as an act or omission committed outside Queensland that is an offence against the law of the place in which it is committed and that would be an offence against the law of Queensland or the Commonwealth if it were committed in Queensland.
The Act goes on to identify what it describes as another important object. That other identified object includes ensuring that property rights are affected by orders made under the Act only through procedures which ensure that persons who may be affected by those orders are given a reasonable opportunity to establish the lawfulness of the activity through which they acquired the relevant property rights. It also includes protecting from forfeiture property honestly acquired by persons innocent of illegal activity.
Subject to immaterial inclusions and exclusions, a reference in the Act to "property" is to "any legal or equitable estate or interest ... in real or personal property of any description (including money)", whether situated in Queensland or elsewhere (including outside Australia). The term "money" in this context refers to money in any form, whether corporeal (such as when held in notes) or incorporeal (such as when held on deposit in a bank account).
Other than a prosecution for an offence against the Act, a proceeding under the Act is not a criminal proceeding. The rules of evidence applicable in proceedings under the Act are those applicable in civil proceedings. Importantly, questions of fact must be decided on the balance of probabilities.
Chapter 2 of the Act makes provision for the procedures which were invoked by the State and by Mr Henderson in the present case. That chapter authorises the State to bring proceedings in the Supreme Court which are capable of resulting in the Supreme Court making orders forfeiting to the State all or any property of a person who the Supreme Court is satisfied on the balance of probabilities engaged in a serious crime related activity. The proceedings are in two stages.
The first stage is initiated by the State applying to the Supreme Court under s 28 for an order restraining any person from dealing with property stated in the order. The application must be supported by an affidavit of an officer authorised under the Crime and Misconduct Act 2001 (Q) or a police officer. Section 28(3)(a) permits such an application to relate to all or any of the property of a person suspected of having engaged in one or more serious crime related activities. Such a person is referred to as a "prescribed respondent". Section 29(1)(a) provides that the relevant officer's affidavit must state, for property mentioned in s 28(3)(a) if the serious crime related activity involves an offence of a kind stated in Pt 1 of Sched 2 to the Act, that the officer suspects that the prescribed respondent has engaged in one or more serious crime related activities and the reason for the suspicion. Offences stated in Pt 1 of Sched 2 include any offence, punishable by imprisonment for five years or more, involving a dangerous drug as defined under the Drugs Misuse Act 1986 (Q). Under s 31(1), subject to s 31(2), the Supreme Court must make a restraining order in relation to property if, after considering the application and affidavit, the Supreme Court is satisfied that there are reasonable grounds for the suspicion on which the application is based.
The second stage is initiated by the State applying to the Supreme Court under s 56(1) for a forfeiture order, forfeiting to the State particular property restrained under the prior restraining order. Under s 58(1)(a), subject to s 58(4), the Supreme Court must make a forfeiture order in respect of property that has been restrained on an application relating to property mentioned in s 28(3)(a) if the Supreme Court finds it more probable than not that the prescribed respondent mentioned in that application engaged in a serious crime related activity during the period of six years before the day the application for the forfeiture order was made. Subject only to that limitation period, Ch 2 is expressed to apply in relation to illegal activity or serious crime related activity whether happening before or after 1 January 2003.
An application for a restraining order may be made without notice to the person to whom it relates. In contrast, notice of an application for a forfeiture order must be given to a person whose property is restrained under the restraining order and to anyone else considered by the Crime and Misconduct Commission or the Commissioner of the Police Service to have an interest in the property.
Where an application for a forfeiture order has been made, but the application has not been decided, s 65 allows a person who claims an interest in property to which the application relates to apply to the Supreme Court for an exclusion order. The applicant can be a prescribed respondent. An exclusion order is an order which states the nature and extent of the applicant's interest in the property and which, if made before the application for the forfeiture order has been decided, excludes the applicant's property from the application for the forfeiture order. The making of an exclusion order also stops the restraining order continuing to have effect in relation to the excluded interest.
Section 68(1) authorises the Supreme Court to make an exclusion order on an application under s 65. Section 68(2), the construction and operation of which lies at the heart of the present case, provides:
"The Supreme Court must, and may only, make an exclusion order if it is satisfied -
(a) the applicant has or, apart from the forfeiture, would have, an interest in the property; and
(b) it is more probable than not that the property to which the application relates is not illegally acquired property."
The reference in s 68(2)(b) to illegally acquired property must be read with the definition of that expression in s 22. Section 22 provides in part:
"(1) Property is illegally acquired property if it is all or part of the proceeds of an illegal activity.
(2) Property is also illegally acquired property if -
(a) it is all or part of the proceeds of dealing with illegally acquired property; or
(b) all or part of it was acquired using illegally acquired property.
(3) For subsection (2), it does not matter whether the property dealt with or used in the acquisition became illegally acquired property because of subsection (1) or subsection (2).
(4) Subsections (1) and (2) apply whether or not the activity, dealing or acquisition because of which the property became illegally acquired property happened before the commencement of this section."
The definition in s 22 must itself be read with related definitions in ss 18 and 21, and with ss 25 and 26.
Section 18 defines "[p]roceeds, in relation to an activity" to include "property and another benefit derived because of the activity ... by the person who engaged in the activity ... or ... by another person at the direction or request, directly or indirectly, of the person who engaged in the activity". Section 21 provides that "benefit" includes "service and advantage" and that a "benefit derived" by a person includes "a benefit derived by someone else at the person's request or direction". Schedule 6 defines "derived" to include "directly or indirectly derived" and "realised".
Section 25, read with the definition of "character" in s 24, provides in part:
"Illegally acquired property ... retains its character [as illegally acquired property] - even if it is disposed of, including by using it to acquire other property - until it stops being property of that character under section 26."
Section 26 provides in part:
"Property stops being illegally acquired property ...
(a) when it is acquired by a person for sufficient consideration, without knowing, and in circumstances not likely to arouse a reasonable suspicion, that the property was illegally acquired property ...; or
(b) when it vests in a person on the distribution of the estate of a deceased; or
(c) when it is disposed of under this Act ...; or
(d) when it is the proceeds of the disposal of property under this Act ...; or
(e) when it is acquired by Legal Aid as payment of reasonable legal expenses payable because of an application under this Act or in defending a charge of an offence; or
(f) in circumstances prescribed under a regulation."
The definition in s 22 must also be read in light of what s 7(1) describes as examples of the practical operation of its application set out in Pt 1 of Sched 1. The first of those examples usefully illustrates the interaction of ss 22 and 25. Of the elaborate sequence of events referred to in the example, it is sufficient to consider the first three. The first event is that A acquires money as the proceeds of an illegal activity: the money is illegally acquired property by operation of s 22(1). The next event is that A uses the money to buy land from B in circumstances which do not attract the operation of s 26(a): the money paid by A to B remains illegally acquired property by operation of s 25, and the land becomes illegally acquired property by operation of s 22(2)(b). The next event is that A sells the land to C for a larger sum of money in circumstances which again do not attract the operation of s 26(a): the land remains illegally acquired property by operation of s 25, and the larger sum of money paid by C to A becomes illegally acquired property by operation of s 22(2)(a).
Mr Henderson's application
The restraining order in respect of the money held on deposit in the bank account was made by the Supreme Court under s 31(1) on an application of the State under s 28(3)(a) of the Act. Mr Henderson was necessarily mentioned in that application as the prescribed respondent. The subsequent making by the State of the application for the forfeiture order on 5 March 2003 triggered the ability of Mr Henderson to apply under s 65 of the Act for the whole of that amount to be the subject of an exclusion order.
To obtain the exclusion order for which he applied, it was incumbent on Mr Henderson to establish to the civil standard of proof that the conditions set out in s 68(2)(a) and (b) of the Act were met in respect of the money which police found in his bag on 20 April 2002 and which they subsequently deposited in the bank account.
There was and could be no dispute between the State and Mr Henderson that Mr Henderson, having possession of the money, also had title to the money in the absence of a superior claim by someone else: that was the basis on which the State had sought and obtained the restraining order. There could therefore be no dispute that the Supreme Court ought to be satisfied that Mr Henderson had an interest in the money which met the condition in s 68(2)(a) of the Act.
The substantial contest between Mr Henderson and the State concerned the condition in s 68(2)(b) of the Act: whether or not the Supreme Court ought to be satisfied that it was more probable than not that the money was not illegally acquired property.
Evidence
Mr Henderson gave evidence in support of his application in which he gave the following account of how he came into possession of the money. In or about December 1996, Mr Henderson was visiting his father in his father's house in Picola in Victoria. His father then gave him some jewellery, comprising a pair of earrings, a bracelet, a necklace and a brooch, which his father had kept in a box under a bed, saying to him "[l]ook after your family". Mr Henderson understood his father to be referring to his brothers, Joseph and Frank Marijancevic, and to his sister Dianne Murphy. Mr Henderson regarded himself from then on as holding the jewellery on behalf of those siblings and himself in equal shares. Mr Henderson took the jewellery home to Melbourne where it was initially kept in a safety deposit box in a bank.
The account continued that, after the death of their father in April 2001, Mr Henderson and his siblings together decided to have the jewellery valued and sold, and to invest the proceeds. In or about December 2001, Mr Henderson took the jewellery to a jeweller in Melbourne, Mr Theodosis Komianos, who sketched the jewellery and told Mr Henderson that it had a wholesale value of between $600,000 and $700,000 and a retail value of $1,000,000. Sometime later, a person whose first name was Daniel contacted Mr Henderson and ultimately purchased the jewellery for $620,000, which he paid Mr Henderson in $50 notes. Mr Henderson and his wife went to different banks and a casino, where they exchanged the $50 notes for $100 notes. Mr Henderson then kept that cash in a safety deposit box in a bank. Mr Henderson and his siblings held a family meeting in which they decided that the cash should be invested in the Queensland property market. In or about January and February 2002, Mr Henderson travelled to Cairns several times, where he met with a Mr John Dredge to negotiate the possible purchase of an investment property. Mr Henderson then reached a verbal agreement with Mr Dredge to purchase a property in Kuranda, but he and Mr Dredge were continuing to negotiate on the price. They agreed to meet in a coffee shop in a shopping plaza in April 2002. Mr Henderson travelled to Cairns for that meeting, bringing with him the cash which was the proceeds of the sale of the jewellery. He thought he could use the cash as a bargaining tool to encourage Mr Dredge to accept the lowest possible price. That cash (which he maintained should have been $620,000 and from which an amount was therefore missing) was the cash which on 20 April 2002 police found in his bag in the boot of a car which Mr Henderson had hired.
Joseph and Frank Marijancevic and Dianne Murphy each gave evidence generally supportive of Mr Henderson. None had seen the jewellery during their father's lifetime. Each first saw it when Mr Henderson showed it to them after their father's death. They explained that they associated the jewellery with their mother and father having told them that jewellery had been given to their great grandfather as a reward for providing transportation services for Russian royalty. No objection was taken to the hearsay nature of that evidence.
An affidavit of Mr Komianos was also read in Mr Henderson's case. Mr Komianos deposed to having carried on business as a jeweller in Melbourne in December 2001, when a man he later came to know as Mr Henderson came into his office with jewellery in respect of which Mr Komianos gave a verbal valuation at approximately $600,000 wholesale and over $1,000,000 retail. Mr Komianos described the jewellery and also produced a sketch of the jewellery which he deposed to having made at the time. He explained in his affidavit that he recalled telling a few people that Mr Henderson had items for sale but that he could not recall the names of those people. Mr Komianos was not required for cross-examination. Medical certificates concerning him, tendered in evidence by Mr Henderson, explained that Mr Komianos was an alcoholic who had chronic brain damage and resulting memory loss, that he "became mentally unfit a few years ago", and that he was unfit to travel.
The State called Mr Kenneth Penfold, a registered valuer and jeweller operating his business in Brisbane, to give an opinion as to the age of the jewellery based on Mr Komianos' sketch. Mr Penfold's opinion was that all of the items of jewellery were relatively modern, indeed that they were all manufactured after 1950.
Findings
The primary judge accepted the evidence of Mr Komianos that in December 2001 Mr Henderson produced jewellery to him, as depicted in his sketch, which at the time he had valued. His Honour also accepted the opinion of Mr Penfold that the jewellery had been manufactured after 1950. It followed that the account of the jewellery having been given to Mr Henderson's great grandfather as a reward for providing transportation services for Russian royalty could not be true. The jewellery, on that account, would have had to have been manufactured before 1920.
The primary judge accepted, on balance, the evidence of Mr Henderson that the cash found by police in his bag in the boot of the hire car in Cairns was the product of the sale of the jewellery that had been valued by Mr Komianos. His Honour also accepted that the jewellery was given to Mr Henderson by his father and shown by him to his brothers and sister shortly after his father's death. His Honour treated it as significant that the evidence of Mr Henderson to that effect had been corroborated by his siblings. Notwithstanding criticisms made by the State as to the reliability of their evidence, there was, his Honour said, no better explanation.
His Honour continued:
"The consequence of these findings, however, is that it is unknown how Mr Marijancevic came into possession of the jewellery."
His Honour concluded:
"Since Mr Henderson has been unable to establish how Mr Marijancevic came into possession of the jewellery, and consequently that the jewellery was not illegally acquired property, it follows that the property the subject of the exclusion application has not been shown on the balance of probabilities not to be illegally acquired property, and the exclusion order sought by Mr Henderson cannot be made."
In the Court of Appeal, to which Mr Henderson had a right of appeal under s 263 of the Act, Mr Henderson framed one of his grounds of appeal as follows:
"In all the circumstances - including the learned judge's acceptance of the evidence of the appellant and his siblings, the absence of any evidence that the appellant's father had unlawfully acquired the jewellery and the inherent limitations in the evidence of Kenneth Penfold - it was not open to fail to be satisfied on the balance of probabilities that it was more probable than not that the jewellery was not illegally acquired."
White JA, with whom Holmes JA and Daubney J agreed, responded that:
"it was for Mr Henderson to persuade his Honour that his father had not unlawfully acquired the jewellery. The primary judge was quite entitled to conclude that Mr Henderson had not discharged that onus."
Mr Henderson's arguments in this Court
Mr Henderson argues in this Court that s 68(2)(b) of the Act, on its proper construction, required only that he prove that it was more probable than not that the jewellery was not derived by him because of an illegal activity in which he had engaged or in which someone else had engaged at his direction or request. Having proved that he had acquired the jewellery lawfully from his father, it was unnecessary for him to go further and to prove that his father had not unlawfully acquired the jewellery.
Mr Henderson's construction argument is that, as applied to that expression in s 68(2)(b), the primary definition of illegally acquired property in s 22(1) is confined to property that is all or part of the proceeds of an illegal activity which was engaged in by the applicant for the exclusion order or by another person at the direction or request of the applicant for the exclusion order.
Mr Henderson invokes the objects of the Act in support of that construction. He also raises the spectre of any other construction leading to the absurdity of infinite regression. If the family story of the jewellery having been given to his great grandfather as a reward for providing transportation services for Russian royalty had been accepted as true, Mr Henderson asks rhetorically, would he also have needed to have proved that the unknown and now long dead giver of the jewellery had not acquired the jewellery unlawfully?
As an alternative to his construction argument, Mr Henderson advances in this Court a version of the argument he put unsuccessfully to the Court of Appeal challenging the ultimate finding of the primary judge. The argument as refined in the course of oral submissions is that, given the findings of primary fact which he made and notwithstanding the primary judge's rejection of the family story, the primary judge ought to have been satisfied on the balance of probabilities that the jewellery was not illegally acquired by Mr Henderson's father.
Mr Henderson's construction argument cannot be sustained. His alternative argument is sound, and I accept it.
Construction
There is no textual or contextual warrant for construing the reference to illegally acquired property in s 68(2)(b) in the restrictive manner for which Mr Henderson argues. To do so would run counter to the plain words of s 22. It would also effectively negate the operation of ss 25 and 26.
When s 22(1) is read with s 18, it is plain that property has the character of illegally acquired property if it is all or part of property derived because of any illegal activity either by any person who engaged in that illegal activity or by any other person at the direction or request of the person who engaged in that illegal activity. When s 22(2) is then read with s 22(1), it is equally plain that once property attains the character of illegally acquired property under s 22(1), any further property that is all or part of the proceeds of dealing with that property, or that was acquired using that property, also attains the same character. Section 22(3) then makes clear that s 22(2) operates to produce the same effect in relation to subsequent dealings and acquisitions.
Section 25 operates in addition to produce the result that property that has once attained the character of illegally acquired property by operation of s 22 retains that character until the happening of one of the events referred to in s 26(a) to (f). If there could be any doubt about that operation of s 25, that doubt could only be dispelled by the examples set out in Pt 1 of Sched 1, to the first of which reference has already been made.
Interpreted in light of those elaborate and interlocking definitional and illustrative provisions, the reference in s 68(2)(b) to illegally acquired property is, clearly enough, to any property that has at any time in the past attained the character of illegally acquired property by operation of s 22(1) or (2), provided only that it has not stopped retaining the character of illegally acquired property by reason of the happening of an event referred to in s 26(a) to (f).
The objects of the Act do not suggest to the contrary. The main object, expressed in terms of removing the financial gain and increasing the financial loss associated with illegal activity, contains nothing to confine the illegal activity to which it refers to activities of persons within a particular class. Nor is any such confinement suggested by inclusion within the other identified object of the Act of reference to procedures which ensure that persons who may be affected by orders made under the Act are given a reasonable opportunity to establish the lawfulness of the activity through which they acquired relevant property. The further reference within that object to protecting from forfeiture property honestly acquired by persons innocent of illegal activity is best read as a shorthand reference to the operation of s 26(a).
The consequence for the present case is as follows. If the jewellery had attained the character of illegally acquired property by operation of s 22(1) or (2) or s 25 at or before the time it came into the possession of Mr Henderson's father, the jewellery retained that character in Mr Henderson's possession by operation of s 25: his father's gift of the jewellery to Mr Henderson was not an event referred to in s 26(a) to (f). If the jewellery had so attained and retained the character of illegally acquired property, the money Mr Henderson received from the sale of the jewellery also became illegally acquired property by operation of s 22(2)(b). To discharge his legal burden of satisfying the Supreme Court that it was more probable than not that the money was not illegally acquired property, Mr Henderson therefore needed to satisfy the Supreme Court that the jewellery did not have the character of illegally acquired property when the jewellery was in the possession of his father.
The spectre which Mr Henderson raises of him, or another applicant for an exclusion order, facing the potentially impossible task of needing to lead specific evidence to establish that no predecessor in title anywhere in the world ever derived title as a result of an illegal activity does not arise on the proper construction of s 68(2)(b). The spectre, however, is not avoided by any implicit limitation in the section's reference to illegally acquired property on the expression as defined in s 22 and explained in s 25: there is none.
The spectre is avoided by the emphasis which the section gives, through its express reference to satisfaction of what is more probable than not, to proof that property is not illegally acquired property needing only to be proof to the ordinary civil standard. Neither the existence of the restraining order nor of the application for the forfeiture order gives rise to any presumption that property is illegally acquired property which the applicant for the exclusion order is required to overcome.
Proof: inference and probability
Two explanations of the ordinary civil standard of proof, although lengthy, are usefully recalled in this context. One is that of Dixon CJ in Murray v Murray, with reference to Briginshaw v Briginshaw:
"What the civil standard of proof requires is that the tribunal of fact, in this case the judge, shall be 'satisfied' or 'reasonably satisfied'. The two expressions do not mean different things but as in other parts of the law the word 'reasonably', which in origin was concerned with the use of reason, makes its appearance without contributing much in meaning. However, its use as a qualifying adjective seems to relieve lawyers of a fear that too much unyielding logic may be employed. But the point is that the tribunal must be satisfied of the affirmative of the issue. The law goes on to say that he is at liberty to be satisfied upon a balance of probabilities. It does not say that he is to balance probabilities and say which way they incline. If in the end he has no opinion as to what happened, well it is unfortunate but he is not 'satisfied' and his speculative reactions to the imaginary behaviour of the metaphorical scales will not enable him to find the issue mechanically. The passages cited in Briginshaw's Case ... show that in English law there never were more than two standards of persuasion ... But they show that from the beginning of the nineteenth century courts did not impose on the parties, or one may perhaps say claim from the parties, the same strictness or exactness of proof about all questions arising in a civil trial without regard to their triviality or importance, the unlikelihood or the probability of their occurring. In other words the tribunal might reason upon the evidence to a conclusion as a responsible and sensible man would in all the circumstances."
The other is the often repeated explanation of Dixon, Williams, Webb, Fullagar and Kitto JJ in Bradshaw v McEwans Pty Ltd:
"The difference between the criminal standard of proof in its application to circumstantial evidence and the civil is that in the former the facts must be such as to exclude reasonable hypotheses consistent with innocence while [in] the latter you need only circumstances raising a more probable inference in favour of what is alleged. In questions of this sort where direct proof is not available it is enough [if] the circumstances appearing in the evidence give rise to a reasonable and definite inference: they must do more than give rise to conflicting inferences of equal degrees of probability so that the choice between them is mere matter of conjecture ... But if circumstances are proved in which it is reasonable to find a balance of probabilities in favour of the conclusion sought then though the conclusion may fall short of certainty it is not to be regarded as a mere conjecture or surmise".
Applying those principles to the civil case before them, in which the plaintiff bore the legal burden of proving harm to have arisen from the defendant's negligence, their Honours went on to explain:
"Once the plaintiff offers evidence which standing by itself raises a higher degree of probability that the harm arose from negligence for which the defendant is responsible that will support a verdict unless the defendant goes into evidence. ... All that is necessary is that according to the course of common experience the more probable inference from the circumstances that sufficiently appear by evidence or admission, left unexplained, should be that the injury arose from the defendant's negligence. By more probable is meant no more than that upon a balance of probabilities such an inference might reasonably be considered to have some greater degree of likelihood."
Generally speaking, and subject always to statutory modification, a party who bears the legal burden of proving the happening of an event or the existence of a state of affairs on the balance of probabilities can discharge that burden by adducing evidence of some fact the existence of which, in the absence of further evidence, is sufficient to justify the drawing of an inference that it is more likely than not that the event occurred or that the state of affairs exists. The threshold requirement for the party bearing the burden of proof to adduce evidence at least to establish some fact which provides the basis for such a further inference was explained by Kitto J in Jones v Dunkel:
"One does not pass from the realm of conjecture into the realm of inference until some fact is found which positively suggests, that is to say provides a reason, special to the particular case under consideration, for thinking it likely that in that actual case a specific event happened or a specific state of affairs existed."
That description of the ordinary operation of the civil standard of proof applies equally to a case in which the legal burden of a party is to prove the non-happening of an event or the non-existence of a particular state of affairs as to a case in which a party's legal burden is to prove the happening of an event or the existence of a particular state of affairs. As Davidson J earlier explained in the Supreme Court of New South Wales in Ex parte Ferguson; Re Alexander:
"In all legal proceedings the basic principle at common law is that in civil cases a plaintiff must prove the essential elements of his case even if that course involves establishing the assertion of a negative ... He must establish what is really the affirmative in substance, not what is merely affirmative in form ... But if the party bearing the onus furnishes some evidence which gives rise to a presumption or inference of fact in his favor or that presumption already exists, the onus shifts to the other party".
His Honour's reference to evidence adduced by the party bearing the legal burden of proof giving rise to a "presumption or inference of fact" was to nothing more than an inference of fact drawn, in accordance with ordinary processes of inferential reasoning, in the absence of further evidence. His Honour's reference to an "onus" then shifting to the other party was to nothing more than the practical need (sometimes referred to as a "tactical burden") for an opposing party to adduce further evidence if that party wants to prevent such an inference of fact actually being drawn in the circumstances of the case.
The process of inferential reasoning involved in drawing inferences from facts proved by evidence adduced in a civil proceeding cannot be reduced to a formula. The process when undertaken judicially is nevertheless informed by principles of long standing which reflect systemic values and experience. One such principle, forming "a fundamental precept of the adversarial system of justice", is that "all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted". Another such principle, "reflecting a conventional perception that members of our society do not ordinarily engage in fraudulent or criminal conduct", is that "a court should not lightly make a finding that, on the balance of probabilities, a party to civil litigation has been guilty of such conduct". The reluctance of a court to infer fraudulent or criminal conduct is ordinarily somewhat stronger in respect of a person who is not a party to litigation and who is for that reason denied an opportunity to explain and justify his or her conduct as consistent with the conventional perception.
To discharge his legal burden of proving that the jewellery was not illegally acquired property, Mr Henderson did not need to lead specific evidence affirmatively to establish that each owner in the chain of title to the jewellery had derived that title otherwise than as a result of some illegal activity. It was enough that he adduced evidence within his capacity to produce to establish facts sufficient to allow the opinion to be formed that the more probable inference was that the title to the jewellery was not so derived.
Mr Henderson adduced evidence by which he succeeded in proving to the satisfaction of the primary judge that the money was the proceeds of his own sale of jewellery given to him by his father. Those findings were not inevitable. But they were made. The State did not argue in the Court of Appeal, and does not argue in this Court, that they should be revisited.
On his Honour's findings, Mr Henderson therefore succeeded in giving the innocent explanation that he came into possession of the jewellery as a gift from his father. He and his siblings went on to give an account, which they said they had been given by their mother and father, as to how their father came into possession of the jewellery. Having rejected that account as untrue, the primary judge might well have been justified in inferring that the account had been concocted, by Mr Henderson's parents or more latterly by Mr Henderson and his siblings, as a cover for an inconvenient truth of the jewellery having come into Mr Henderson's father's possession as the proceeds of some undisclosed illegal activity by Mr Henderson's father or someone else. But his Honour did not draw any such adverse inference. His Honour rather treated the evidence as a whole as providing no indication, one way or the other, as to how Mr Henderson's father came into possession of the jewellery. There is no suggestion that Mr Henderson failed to call any other witness who might have provided another account.
Mr Henderson's appeal to the Court of Appeal was an appeal by way of rehearing. His further appeal to this Court is an appeal in the strict sense. To discharge its appellate function, the Court of Appeal was, and this Court is, obliged to reach its own conclusion as to the inference to be drawn from the primary facts found by the primary judge if and to the extent that the correct inference to be drawn is put in issue in the appeal.
Mr Henderson's grounds of appeal to the Court of Appeal were not framed in terms which unambiguously invoked that obligation. Understandably in that circumstance, the conclusion reached in the Court of Appeal, that the primary judge was "entitled" to conclude that Mr Henderson had not discharged the "onus" of persuading the primary judge that his father had not unlawfully acquired the jewellery, was not expressed in terms which unambiguously reflected that obligation.
Mr Henderson's appeal to this Court does sufficiently put in issue the proper inference to be drawn from the primary facts found by the primary judge to permit and require this Court to reach its own conclusion.
When due weight is given to the conventional perception that persons do not ordinarily engage in criminal conduct, the primary judge's findings of fact do not lead to the anomalous outcome to which his Honour considered himself driven. Absent some basis in the evidence for considering that conventional perception to be inapplicable to Mr Henderson's father, or to any earlier owner of the jewellery, the absence of evidence as to how any of them acquired title to the jewellery leaves as the more probable inference that it was not as a result of some illegal activity. That is the inference appropriate to be drawn, to which this Court should now give effect.
Conclusion
The evidence adduced by Mr Henderson and accepted by the primary judge was sufficient for Mr Henderson to discharge the burden placed on him by s 68(2)(b) of the Act of satisfying the Supreme Court that it was more probable than not that the money the subject of the restraining order was not illegally acquired property. The exclusion order for which he applied should have been made, from which it follows that the forfeiture order for which the State applied should not have been made.
I would allow the appeal.