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[2026] NSWCA 144
respondent. Appeal dismissed with costs. The primary judge’s substituted serious crime use property declarations and assets forfeiture orders in respect of the appellants’ interests in the net proceeds of...
The Court of Appeal upheld forfeiture orders connected to a house where two brothers had concealed methylamphetamine and where the evidence supported a finding that they had refined the drug. The Court rejected a rule that the connection between property use and crime must always be labelled “substantial”. Instead, the court must assess the statutory words in context: the property or one of its features must have been purposefully used to advance or facilitate the crime, and the connection must be significant rather than remote or fortuitous. The Court considered the evidence about chemicals, equipment, residue, concealment, utilities, and surveillance sufficient to support the finding that the house was used in connection with manufacture. Because that finding was enough, the Court did not decide whether the drug storage also met the test in relation to the deemed supply offence.
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The appeal concerned forfeiture proceedings under the Criminal Assets Recovery Act 1990 (NSW) (CAR Act), not a criminal trial. Ross and Geoffrey Hitchen, brothers who had lived at a South Penrith property, were found to have possessed approximately 1.3 kg of methylamphetamine concealed in plastic bottles and bags beneath a step in the garage. The property also contained chemicals and equipment associated with manufacture or refinement of methylamphetamine. Traces of the drug were detected on equipment and at several locations in the garage and kitchen. These facts are summarised at [88]-[90] and [107]-[109].
The property had been sold before the proceedings. The NSW Crime Commission therefore sought substituted serious crime use property declarations and assets forfeiture orders concerning the brothers’ interests in the net sale proceeds. The primary judge granted that relief, finding that the property had been used in connection with manufacturing methylamphetamine, as well as making findings concerning possession for supply: [89]-[90], [103], [106], [123]-[127].
The appeal raised three practical questions. First, did the evidence support the finding that manufacture by refinement occurred at the house, rather than the detected residues being caused by smoking methylamphetamine? Secondly, did section 9B(1) require a “substantial” connection between use of the house and the criminal activity? Thirdly, even if the primary judge’s factual findings stood, did the property qualify as having been used “in, or in connection with” serious crime related activity?
The Court dismissed the appeal with costs. All three judges agreed with that result. Leeming JA and Kirk JA considered the connection with manufacture sufficient, so it was unnecessary to decide whether storage of the drug was sufficiently connected to the deemed supply offence: [29], [33], [86]-[87]. Griffiths AJA also addressed the supply-related reasoning: [176]-[184].
The Court’s central interpretive holding was that section 9B(1) should not be rewritten to include the word “substantial”. Leeming JA said the Court unanimously rejected insisting on a “substantial” connection: [1]. Griffiths AJA reasoned that inserting that word would add a qualification that Parliament had not enacted and would not meet the established conditions for reading words into legislation: [135]-[139]. Kirk JA likewise rejected treating “substantial” as a necessary verbal formula, while explaining that courts can still identify the part of a relationship spectrum that the provision covers: [64]-[73].
That does not mean any relationship between a property and an offence is enough. Kirk JA’s four propositions at [84], which Leeming JA endorsed at [1] and Griffiths AJA agreed with at [188], supply the framework:
The purpose requirement explains why a house is not automatically serious crime use property merely because an offence occurred there. Kirk JA drew on the ordinary idea of “use” as employing or making use of something for a purpose, and observed that activity occurring at a property without use of a feature or attribute will generally be insufficient: [59]-[60]. The Court also recognised that post-offence use, such as using property to conceal consequences, can be connected with criminal activity: [60].
The absence of a judicial discretion to refuse forfeiture once the statutory conditions are met was relevant context. Kirk JA considered that this feature did not favour an especially expansive construction and that Parliament was unlikely to have intended confiscation based on only a slender link to crime: [74], [77]. But he did not treat that context as authorising a fixed “substantial” threshold or a discretionary proportionality test. The statutory question remains whether the property was used in or in connection with the activity, properly construed: [80]-[84]. Griffiths AJA similarly described the forfeiture consequence as serious and significant, and said the nature and degree of connection must be assessed in that statutory setting: [148].
The factual finding of manufacture was supported by several strands of evidence. Leeming JA identified chemicals including acetone, hydrochloric acid, toluene and methanol; purchases of acetone and hydrochloric acid; filter paper and hotplates with methylamphetamine detected on them; a Buchner flask and related equipment; and a drum containing residue analysed as including methylamphetamine: [5]. He also noted the presence of methylamphetamine on surfaces in the garage and kitchen, which the hypothesis of manufacture elsewhere followed by transfer did not explain: [6]-[8].
The appellants proposed that the residue could have resulted from smoking. The experts accepted that smoking was possible in the abstract, but the Court considered the evidential support for that alternative inadequate. There was no direct evidence of smoking in the garage or kitchen, no identified visitor or occasion, and no expert support for the proposition that smoking had caused the detected deposits: [156]-[165]. Griffiths AJA concluded that the alternative was speculation or conjecture, not a reversal of the onus of proof: [165]. Leeming JA added that even if Ground 1 had succeeded in showing a possibility, that alone would not have altered the civil finding that manufacture was established to the requisite standard: [3]-[4].
The evidence also included surveillance conversations. Leeming JA referred to a conversation about the step being left open and Ross Hitchen’s statement, “If the cops come here we’ve got real problems. If they come here, we’ll be doing 20”: [14]. Griffiths AJA discussed the primary judge’s treatment of conversations about “cooking the gear” and the brothers’ references to police attending the property: [159]-[170]. Considered with the physical evidence, these matters supported the inference of manufacture at the house.
Finally, the connection between the house and manufacture was not merely that the offence happened there. The primary judge found that the house concealed activity from outside observation; held equipment, chemicals, and drugs; supplied electricity and water; and provided air-conditioning and probably an extractor fan to assist with fumes: [126], [185]. Kirk JA considered the extent and distribution of the residue relevant to showing that use was no minor matter: [86]. Those features supported the required purposive, significant connection.
Before this decision, authorities interpreting similar confiscation wording had taken different approaches. Some decisions had used “substantial connection” language. Kirk JA discussed R v Ward and Director of Public Prosecutions (Cth) v Jeffery, which adopted or suggested such a requirement in the settings of different statutes: [42], [44]. Other authorities, including R v Hadad and Director of Public Prosecutions (SA) v George, rejected a fixed substantiality qualification or instead described the inquiry in practical terms: [43], [45]-[46].
The Court treated those decisions as informative, not determinative. The provisions and statutory schemes differed, including whether a court had discretion to refuse forfeiture. Griffiths AJA emphasised that none of the earlier cases had construed section 9B(1) itself, and that statutory construction must begin with the enacted text in its context: [131]-[134]. The case therefore resolves the NSW Court of Appeal’s construction of this CAR Act provision, rather than declaring one universal meaning for similar phrases across all confiscation statutes.
After Hitchen, the governing approach to section 9B(1) is expressed most clearly in Kirk JA’s four propositions at [84]. The decision rejects a mandatory “substantial connection” formula, but does not reduce the test to any conceivable association. The relationship must still be sufficiently significant in the statutory setting, and property must have been employed purposively rather than being merely the fortuitous location of an offence.
The decision also separates two questions that can otherwise be conflated. One is statutory characterisation: was property used in or in connection with the activity? The other is whether the statutory facts have been proved on the civil standard. Here, the Court considered both the legal test and the evidence supporting manufacture. Griffiths AJA expressly addressed the evidence on rehearing and found insufficient evidence that someone had smoked methylamphetamine in the relevant rooms: [162]-[165].
At [1], Leeming JA said it was “wrong to insist that there be a ‘substantial’ connection”. In plain English, parties and courts should not treat “substantial” as an extra word Parliament placed in section 9B(1). The intensity of the connection still matters, but it must be assessed through the statutory test rather than a rigid verbal threshold.
At [59], Kirk JA described the statutory idea as purposive: a property feature must have been employed or made use of to advance or facilitate the criminal activity or a connected purpose. In plain English, a crime happening inside a house is not enough by itself. The evidence needs to show meaningful use of the house or some feature of it for the criminal purpose.
At [84], Kirk JA said the inquiry is a practical question of characterisation involving fact and degree, and that the assessment is evaluative but not discretionary. In plain English, the statute requires a judgment based on the relationship between the property’s use and the activity, but does not give the court a free-standing choice to refuse an order because it considers forfeiture undesirable.
Also at [84], the Court said no causal link, necessity, or unique contribution is required. In plain English, the property need not be indispensable to the crime. A significant facilitating use can be enough, even if the crime could have occurred without that particular property.
At [86], Kirk JA concluded there was a significant connection between use of the house and manufacture. The practical basis was that the house was used for more than incidental storage or as a coincidental location: its facilities and characteristics helped facilitate and conceal the refinement activity.
The decision is most directly relevant where the Commission seeks an order under the CAR Act and alleges that property was used in or in connection with a serious crime related activity. It is particularly relevant where a party argues that “in connection with” requires a substantial connection as a separate legal threshold. The Court rejects that formulation for section 9B(1): [1], [64]-[65], [139].
The decision also matters where criminal activity occurred at a residence, shed, vehicle, or other property and the disputed question is whether the property was more than a passive location. Relevant factual questions, identified at [84], include how the property was used, how extensively it was used, and what part of it was involved. Features such as concealment, access to utilities, storage of equipment or materials, and the practical suitability of the location may be relevant, as they were here: [126], [152], [185].
The judgment cautions against assuming that the same conclusion follows whenever an offence takes place on property. Kirk JA’s framework requires a significant connection and a purposive use, and states that happenstance location without significant use of a property feature will generally be insufficient: [84]. The Court’s result depended on the combination of evidence specific to the South Penrith property, not merely on the fact that the appellants lived there.
The decision also addresses evidential disputes involving alternative explanations for forensic traces. It illustrates that an expert’s acceptance that a cause is possible does not itself establish that the cause is a realistic evidential alternative. The Court considered the full record, including the absence of direct evidence or specific details supporting the smoking hypothesis: [163]-[165].
The judgment is dated 29 July 2026. The supplied judgment contains no later decisions applying or distinguishing Hitchen v New South Wales Crime Commission. It would therefore be unsupported to describe how later courts have treated it.
Within the judgment itself, the Court considered a range of earlier decisions and explained their relevance. George, Chalmers, White and Hart were used to discuss the meaning of use and connection in related statutory schemes: [45]-[56], [83], [149]-[153]. The Court cautioned that decisions under differently worded legislation do not replace construction of the CAR Act’s own text: [131]-[134]. Its treatment of those authorities is therefore an important limit on how broadly the judgment’s reasoning should be transferred to another statute.
The Court expressly left unresolved whether storage of the 1.3 kg of methylamphetamine was sufficiently connected to the deemed supply charge to satisfy section 9B(1). Leeming JA and Kirk JA said the finding concerning manufacture was sufficient: [29], [87]. The supply issue should therefore not be treated as a holding necessary to their disposition.
The decision also does not catalogue every relationship that would be sufficiently significant under section 9B(1). Kirk JA cautioned against going further than needed when construing relational terms, because further generalisation may be confounded by later cases: [65]. The four propositions at [84] guide the inquiry, but their application remains fact-sensitive.
Nor does the judgment specify a quantitative or numerical threshold for significance. It rejects “substantial” as a required inserted word, while describing the connection as significant and towards the more significant end of the spectrum: [81]-[84]. Future disputes may therefore turn on how courts characterise particular property features, the extent of use, and the relationship between those features and the alleged activity.
Finally, the supplied judgment does not determine how the framework applies to every offence category under the CAR Act. Leeming JA confined his factual application to manufacture because the elements and practical setting of deemed supply differ: [29]-[31]. The framework is general to section 9B(1), but its application to other kinds of alleged activity remains dependent on their elements and the facts proved.
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Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Hitchen v New South Wales Crime Commission [2026] NSWCA 144
Hearing dates: 4 June 2026
Date of orders: 29 July 2026
Decision date: 29 July 2026
Before: Leeming JA at [1]
Kirk JA at [33]
Griffiths AJA at [88]
Decision: Appeal dismissed with costs.
Catchwords: CRIME — Confiscations — Forfeiture orders — Substituted serious crime use property declarations — Proper construction of “used in, or in connection with”, in s 9B(1) of Criminal Assets Recovery Act 1990 (NSW) — Whether primary judge erred in finding that there was no sufficiently realistic possibility or probability that methylamphetamine had been smoked in garage and kitchen of South Penrith property — Whether primary judge erred in finding on the balance of probabilities that appellants had manufactured methylamphetamine at that property — Whether primary judge erred in finding that the property had been “used in, or in connection with”, a serious crime related activity
Legislation Cited: Confiscation of Proceeds of Crime Act 1989 (NSW)
Conveyancing Act 1919 (NSW) s 88K
Crimes (Confiscation of Profits) Act 1985 (NSW)
Criminal Assets Confiscation Act 2005 (SA) ss 7, 47
Criminal Assets Recovery Act 1990 (NSW) ss 3, 4, 5, 6, 7, 9B, 22, 22AA, 24, 25
Drug Misuse and Trafficking Act 1985 (NSW) ss 3, 23, 24, 24A, 25, 29, 30, Sch 1
Drugs Misuse Act 1986 (Qld)
Evidence Act 1995 (NSW) s 140
Proceeds of Crime Act 1987 (Cth)
Proceeds of Crime Act 2002 (Cth)
Trade Practices Act 1974 (Cth)
Cases Cited: Allianz Australia Insurance Ltd v GSF Australia Pty Ltd (2005) 221 CLR 568; [2005] HCA 26
Athavle v New South Wales (2021) 290 FCR 406; [2021] FCA 1075
Attorney-General (NT) v Emmerson (2014) 253 CLR 393; [2014] HCA 13
Australian Casualty Co Ltd v Federico (1986) 160 CLR 513; [1986] HCA 32
Australian Securities and Investments Commission v DB Management Pty Ltd (2000) 199 CLR 321; [2000] HCA 7
Berry v Federal Commissioner of Taxation (1953) 89 CLR 653; [1953] HCA 70
Brawn v The King [2025] HCA 20; (2025) 99 ALJR 872
Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34
Chalmers v R (2011) 37 VR 464; [2011] VSCA 436
Cini v Commissioner of Australian Federal Police [2016] VSCA 227; (2016) 312 FLR 432
Coal & Allied Operations Pty Ltd v Crossley (2023) 112 NSWLR 130; [2023] NSWCA 182
Coco v The Queen (1994) 179 CLR 427; [1994] HCA 15
Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280; [1993] FCA 456
Commissioner of the Australian Federal Police v Brooks [2026] NSWSC 683
Commissioner of the Australian Federal Police v Hart (2018) 262 CLR 76; [2018] HCA 1
Commonwealth Superannuation Scheme Board of Trustees v Kitching (2004) 139 FCR 272; [2004] FCAFC 299
Construction Forestry Mining and Energy Union v Mammoet Australia Pty Ltd (2013) 248 CLR 619; [2013] HCA 36
Conway v Leeroy Property Investments Pty Ltd [2026] NSWCA 123
Cottle v NSW Commissioner of Police (2020) 109 NSWLR 584; [2020] NSWCA 159
Darkan v The Queen (2006) 227 CLR 373; [2006] HCA 34
Director of Public Prosecutions (Cth) v Jeffery (1992) 58 A Crim R 310
Director of Public Prosecutions (NSW) v King (2000) 49 NSWLR 727; [2000] NSWSC 394
Director of Public Prosecutions (SA) v George (2008) 102 SASR 246; [2008] SASC 330
Director of Public Prosecutions (WA) v White (2010) 41 WAR 249; [2010] WASCA 47
Elliott v Minister Administering Fisheries Management Act 1994 (2018) 97 NSWLR 1082; [2018] NSWCA 123
Farshchi v The King [2025] HCA 46; (2025) 426 ALR 185
Grain Growers Ltd v Chief Commissioner of State Revenue (NSW) (2016) 93 NSWLR 415; [2016] NSWCA 359
He Kaw Teh v The Queen (1985) 157 CLR 523; [1985] HCA 43
HP Mercantile Pty Ltd v Federal Commissioner of Taxation (2005) 143 FCR 553; [2005] FCAFC 126
Hurt v The King (2024) 281 CLR 286; [2024] HCA 8
IceTV Pty Ltd v Nine Network Australia Pty Ltd (2009) 239 CLR 458; [2009] HCA 14
Inco Europe Ltd v First Choice Distribution (a firm) [2000] 1 WLR 586
John Fairfax Publications Pty Ltd v Ryde Local Court (2005) 62 NSWLR 512; [2005] NSWCA 101
Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8
Jones v Wrotham Park Settled Estates [1980] AC 74
Kassam v Hazzard (2021) 106 NSWLR 520; [2021] NSWCA 299
Lee v New South Wales Crime Commission (2013) 251 CLR 196; [2013] HCA 39
LPDT v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (2024) 280 CLR 321; [2024] HCA 12
Maraya Holdings Pty Ltd v Chief Commissioner of State Revenue [2013] NSWCA 408; (2013) 97 ATR 818
Marshall v Director-General, Department of Transport (2001) 205 CLR 603; [2001] HCA 37
McCulloch v Maryland, 4 Wheat 316 (1819); 17 US 316
Minister for Home Affairs v DLZ18 (2020) 270 CLR 372; [2020] HCA 43
Minister for Immigration and Citizenship v Haneef (2007) 163 FCR 414; [2007] FCAFC 203
Mulholland v Australian Electoral Commission (2004) 220 CLR 181; [2004] HCA 41
New South Wales Crime Commission v Hitchen [2025] NSWSC 1268
New South Wales Crime Commission v Kelaita (2008) 75 NSWLR 564; [2008] NSWCA 284
New South Wales Crime Commission v Pettit [2021] NSWSC 980; (2021) 292 A Crim R 89
North Australia Aboriginal Justice Agency Ltd v Northern Territory (2015) 256 CLR 569; [2015] HCA 41
NSW Commissioner of Police v Cottle (2022) 276 CLR 62; [2022] HCA 7
O'Grady v Northern Queensland Co Ltd (1990) 169 CLR 356; [1990] HCA 16
Palmanova Pty Ltd v Commonwealth (2025) 99 ALJR 1362; [2025] HCA 35
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28
R v Hadad (1989) 16 NSWLR 476
R v Sultana (1994) 74 A Crim R 27
R v Ward [1989] 1 Qd R 194
R v Young (1999) 46 NSWLR 681; [1999] NSWCCA 166
Re Director of Public Prosecutions; Ex Parte Lawler (1994) 179 CLR 270; [1994] HCA 10
SkyCity Adelaide Pty Ltd v Treasurer of South Australia (2024) 282 CLR 479; [2024] HCA 37
South East Forest Rescue Inc v Forestry Corporation of New South Wales (No 2) [2024] NSWCA 113
Stirling Harbour Services Pty Ltd v Bunbury Port Authority [2000] FCA 38
Sydney Metro v Expandamesh Pty Ltd [2023] NSWCA 200
Taylor v The Owners – Strata Plan No 11564 (2014) 253 CLR 531; [2014] HCA 9
The Queen v Khazaal (2012) 246 CLR 601; [2012] HCA 26
Tillmanns Butcheries Pty Ltd v Australasian Meat Industry Employees’ Union (1979) 42 FLR 331
Travelex Ltd v Commissioner of Taxation (2010) 241 CLR 510; [2010] HCA 33
Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority (2008) 233 CLR 259; [2008] HCA 5
Ward v Hoenig [2025] NSWCA 180
White v Director of Public Prosecutions (WA) (2011) 243 CLR 478; [2011] HCA 20
Texts Cited: P Herzfeld and T Prince, Interpretation (2024, Thomson Reuters, 3rd ed)
Category: Principal judgment
Parties: Ross Andrew Hitchen (First Appellant)
Geoffrey John Hitchen (Second Appellant)
New South Wales Crime Commission (Respondent)
Representation: Counsel:
T Kent and M Voleynik (Appellants)
T Glover SC and A Tembe (Respondent)
Solicitors:
Mark Mulock & Co (Appellants)
New South Wales Crime Commission (Respondent)
File Number(s): 2025/00454343
Publication restriction: Nil
[This headnote is not to be read as part of the judgment]
The appellants, Mr Ross Hitchen and Mr Geoffrey Hitchen, concealed approximately 1.3kg (impure weight) of methylamphetamine in plastic bottles and bags underneath a step in the garage at the South Penrith property where they resided prior to their arrest in 2018 (the property). The respondent, the New South Wales Crime Commission, commenced proceedings in the Supreme Court seeking substituted serious crime use property declarations and assets forfeiture orders under s 22AA and s 22 of the Criminal Assets Recovery Act 1990 (NSW) (CAR Act) in respect of the proceeds of sale of the property. The primary judge made those declarations and orders.
On appeal, the appellants challenge various factual findings made by the primary judge as well as his Honour’s construction of s 9B(1) of the CAR Act. That section provides that “a reference to serious crime use property is a reference to property that was used in, or in connection with, a serious crime related activity”. The appellants further challenge the primary judge’s conclusion that the property constituted “serious crime use property”.
The Court held (Griffiths AJA, Leeming JA and Kirk JA agreeing with the proposed orders and writing separately), dismissing the appeal with costs:
Ground 1: fact**ual finding about smoking of methylamphetamine
2. Per Griffiths AJA (Kirk JA agreeing)**: The primary judge did not err in concluding that the evidence did not raise a sufficiently realistic possibility that methylamphetamine was smoked in the garage and the kitchen: [163] (Griffiths AJA, Kirk JA agreeing at [33]).
Ground 2: factual finding about manufacture of methylamphetamine
Ground 3: proper construction of s 9B(1) of the CAR Act
Per curiam: It is wrong to insist that there be a “substantial” connection between the use of the property and the serious crime related activity in order to satisfy the test in s 9B(1): [1] (Leeming JA, for the Court).
Per curiam: In applying the notion of “used in, or in connection with, a serious crime related activity” in s 9B(1) of the CAR Act, courts will be assisted by the following four propositions:
a. The notion involves a practical question of characterisation raising issues of fact and degree. The difference between “used in” and “used in connection with” is one involving the directness with which the property is used in relation to the relevant criminal activity. It is not necessary to draw a sharp distinction between the two aspects. Use of property can be connected to criminal activity in various ways, and a broad range of facts may be relevant to the assessment. To be so characterised the connection must be significant, in the sense of being at the more significant end of the connection spectrum. The assessment is evaluative but not discretionary.
b. The notion is purposive, requiring that the property or some feature of it has been employed or made use of to advance or facilitate the criminal activity or a purpose connected with the activity (such as covering up the crime). In general it will not suffice merely to show that the criminal activity occurred at the location or involved use of the property in a happenstance way, such as happening to be the location where the activity occurred, but without any feature of the property being significant in it having occurred.
c. It commonly will be relevant to consider how the property was used in or in connection with unlawful activity; the extent to which the property was so used; and how much or what part of the property was used in that unlawful activity.
d. It is not necessary that there be a causal link between the property and the activity, nor that the property was necessary for the activity to be undertaken, nor that it made a unique contribution to that occurring: [84] (Kirk JA, Leeming JA agreeing at [1], Griffiths AJA agreeing at [188]).
Per Leeming JA: If the use of the property is an essential aspect of the serious crime related activity then the property will have been used “in” the serious crime related activity. As for whether property is used “in connection with” serious crime related activity, simply because the property was necessary in a “but for” sense to the commission of the activity does not mean that this limb of s 9B(1) has been satisfied. Rather, the “in connection with” aspect of the test carries with it an assessment of the nature and degree of the connection, in light of the particular aspects of ownership or control of the property which were carried out by or on behalf of the person and the elements of, or other conduct relating to, the commission of a serious crime related activity. Distant and remote connections between the use of the property and the serious crime related activity will not suffice: [21]-[23], [25].
Per Kirk JA (Leeming JA agreeing)**: Where a phrase is used in a statute which may involve a spectrum of connection or relationship, it is meaningful and entirely orthodox to explain that for this statutory phrase in this statutory context it is intended to identify this part of the spectrum and/or not encompass another part of the spectrum: [64]-[72] (Kirk JA, Leeming JA agreeing at [1]).
Per Griffiths AJA: The meaning of the phrase, “used … in connection with” takes its meaning from the statutory context. That statutory context involves the making of an assets forfeiture order in respect of property, which could be a serious and significant matter in the eyes of a property owner. For such an order to be made, the Court must be satisfied, on the balance of probabilities and having regard to s 140 of the Evidence Act 1995 (NSW), that the nature and degree of connection between the use of the person’s property and the serious crime related activity are sufficient to justify the making of such a serious and significant order. A broad range of circumstances may bear upon that judicial task: [148].
Ground 4: challenge to primary judge’s ultimate conclusions
9. Per Leeming JA and Kirk JA: It is not necessary to consider whether storage of 1.3kg of methylamphetamine at the house was a use sufficiently connected to the deemed supply charge as to satisfy s 9B(1): [29] (Leeming JA), [33], [87] (Kirk JA).
I agree that there was no error in the primary judge concluding, to the civil standard having regard to s 140 of the Evidence Act 1995 (NSW) and the principles in Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34, that the property had been used in connection with the appellants’ activity of manufacturing methylamphetamine. I would supplement what Griffiths AJA has said by the following.
Ground 1 would be insufficient to alter the outcome even if it were made out. This ground maintained that the primary judge erred in concluding that the evidence did not raise a sufficiently realistic possibility that the methylamphetamine at the property could have been caused by smoking. But this was not a criminal trial, nor did the primary judge proceed as if it were. His Honour’s finding was that he was satisfied to the requisite standard that methylamphetamine was manufactured by refining at the South Penrith property by the defendants during the period when the chemicals, equipment and unrefined methylamphetamine were at the property in 2017 and 2018: at [74]. An intermediate step to that finding, upon which this ground of appeal latched, was the statement at [67] that:
the evidence as a whole does not raise a sufficiently realistic possibility, let alone a significant degree of probability, that methylamphetamine was smoked in the garage and the kitchen which led to it being detected on the walls in the garage and around the circular opening above the hotplates in the kitchen.
As is clear from that statement, it was not sufficient, in order for the Crime Commission to fail, for the evidence to raise a sufficiently realistic possibility. The issue was whether the Crime Commission had established, to the civil standard albeit having regard to the seriousness of the finding, that methylamphetamine was being refined and therefore manufactured at the property (noting that the serious offence of manufacturing a prohibited drug includes the process of extracting or refining it: s 24 read with the definition of “manufacture” in s 3 of the Drug Misuse and Trafficking Act 1985 (NSW)). Even if there had been evidence to raise a possibility, that alone would not have altered the outcome of the Crime Commission’s application for a forfeiture order.
Ground 2 challenged the relevant finding. But I do not accept that the challenge is made out. As Griffiths AJA explains, a great deal of evidence supported the proposition that methylamphetamine had been refined at the property. That included:
the presence on the property of acetone, hydrochloric acid, toluene and methanol, all of which may be used to manufacture methylamphetamine;
the purchase of quantities of acetone and hydrochloric acid by both brothers in October 2017;
the presence on the property of filter paper, and three electric hotplates, on each of which methylamphetamine was detected (noting that one method of refining methylamphetamine by crystallisation uses a process of slow heating, adding acetone and filtration);
a 5 litre Buchner flask, a Buchner funnel, measuring cannisters, plastic funnels, measuring jugs and a connecting sleeve purchased by one of the brothers and taken to the property in November 2017;
a 20 litre drum located in the garage with a small quantity of brown liquid with sediment which was analysed to contain methylamphetamine and N,N-dimethylamphetamine, and
a 20 litre plastic bucket and a respirator mask, samples from which contained methylamphetamine.
Prominent in the appellants’ submissions was the possibility that methylamphetamine had been manufactured at another location and transferred to the property. That possibility cannot be definitively excluded. However, it seems most unlikely. After all, both refined and unrefined methylamphetamine were found on the property, together with the equipment and raw materials necessary for the manufacturing process.
Critically, the possibility of manufacture elsewhere followed by a transfer of the equipment and product and raw materials and unrefined methylamphetamine fails to explain the presence of traces of methylamphetamine on the walls of the garage, behind a refrigerator, underneath the air conditioning unit and in the kitchen around the circular opening above the hotplates.
Q. There was methylamphetamine on frying pans, and there was methylamphetamine underneath the air-conditioning unit in your house. Is there a way that you can explain that, if not that drugs were actually being –
A. Well, everything was brought to that premises that he’s spoken about. The underneath the air-conditioning unit, I don’t – I don’t believe it. I don’t believe it.
It was during these exchanges that he speculated, “I never went in the garage. Could that be smoking meth in there, possibly? I don’t know. Maybe somebody was smoking – smoking meth in there”.
Again, when asked whether he had any response to the methylamphetamine found in the circular opening in the ceiling above the hotplates in the kitchen, he said:
Well, it never happened when I was – like, I never saw anything like that. I don’t believe that. I’d want to get a second expert to look at it.
Q. If you go to the expert report and at page 10 at 44. There’s a swab that’s taken from the electric induction cooktop with residue of methylamphetamine.
A. Yeah.
Q. On the page that’s over there’s a swab that’s taken from the circular opening in the ceiling above the hotplates in the kitchen that comes back for methylamphetamine.
A. Mm.
Q. There’s also a swab taken from the underside of the air conditioner in the garage that has methylamphetamine.
A. All right.
Q. Are you able to explain how, or why there is kind of traces of methylamphetamine in parts of your house if there wasn’t people heating it, or cooking it, or refining it.
A. I don’t know. I doubt there is. I think it’s a mistake or something. There was definitely no - no manufactures in my house.
Q. You say that even though there’s waste material left over from the process of filtering.
A. Where was that?
Q. So at paragraph 35, which is on page 10, “The following exhibits may represent the waste material left after the bulk of methylamphetamine has been filtered.” And that’s a drum of acetone containing a small quantity of brown liquid.
A. Yeah.
Q. There’s Ice residue on various frying pans, hotplates, bottles, stirrers.
A. Yeah, it’s all on that stuff that was dropped over.
The appellants chose not to give evidence to support the hypothesis they advanced which was inconsistent with the property being used to manufacture methylamphetamine. The absence of evidence from the appellants in support of the submission is not some impermissible reasoning contrary to Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8, but is an observation that the hypothesis for which the appellants contended was unsupported by any evidence as opposed to conjecture.
Finally on this point, there is the covertly recorded conversations between the appellants, including that on 22 January 2018. That conversation included the first appellant asking and the second appellant answering why “the step was left open” (being a reference to the concealed location under the step where five bottles of refined and unrefined methylamphetamine weighing some 1386.54g were located). In the same context, the first appellant was recorded as saying, “If the cops come here we’ve got real problems. If they come here, we’ll be doing 20”. It is difficult to understand that comment as reflecting anything other than an appreciation by both brothers that the property was being used for manufacturing methylamphetamine.
Looking at the entirety of the evidence, it was amply open to the primary judge to conclude that the property had been used by the appellants to manufacture methylamphetamine.
9B Meaning of “serious crime use property” and “available interest relating to serious crime use property”
(1) In this Act, a reference to serious crime use property is a reference to property that was used in, or in connection with, a serious crime related activity.
(2) In this Act, an interest in property is an available interest relating to serious crime use property if—
(a) the interest is an interest of a person who has engaged in serious crime related activity (the offender), and
(b) the offender’s activity resulted in the property, or any other property, becoming serious crime use property for the purposes of this Act, and
(c) the property is either the serious crime use property or, if that property is not available for forfeiture as referred to in subsection (3), any other property that is the subject of a substituted serious crime use property declaration.
(3) Serious crime use property is not available for forfeiture if—
(a) the offender does not own, and does not have effective control of, the property, or
(b) the property has been sold or otherwise disposed of or cannot be found for any other reason.
This series of nested definitions requires careful examination. The starting point is the three sufficient conditions in s 9B(2)(a), (b) and (c) for the conclusion that an interest in property is an available interest relating to serious crime use property. The first and third conditions are easily analysed. The first condition amounts, for practical purposes, to the proposition that the person who has engaged in serious crime related activity owns and controls the property (it must be an interest “of” that person, and if the person does not own and does not have effective control of the property, it is not available for forfeiture). The first condition also requires the person to have engaged in serious crime related activity. The third condition extends the scope of the definition to cases (including the present) where property is sold.
The second condition is much more complex. It is that the person’s serious crime related activity has resulted in the property or any other property becoming serious crime use property. I shall put to one side the words “or any other property” because they were not relied upon and introduce needless complication. As a matter of ordinary English, the second condition involves a causal relationship between the serious crime related activity and the status of the property: the former must result in the property becoming “serious crime use property”.
Substituting the definition in s 9B(1) where the defined term appears in s 9B(2)(b), the result is that the second condition for an interest in property being an available interest relating to serious crime use property is that the person’s serious crime related activity has resulted in the property becoming property that was used in or in connection with a serious crime related activity. That is to say, the second limb of the definition contains two relational terms:
there is the causal connection between the serious crime related activity of the person and the status of the property (“resulted in”), and
there is a relationship between the use of the property and the serious crime related activity (“in or in connection with”).
The second relationship is expressed disjunctively: “in” or “in connection with”. Evidently the latter is broader than the former, but equally evidently, the two are capable of overlap. For example, a firearm may be used “in” an armed robbery, but it would not be awkward to regard the firearm as being used “in connection with” the armed robbery.
In light of the relationship between the use of the property and the serious crime related activity being either use “in” or use “in connection with”, there is no reason to give a strained meaning to the word “in”. If the use of the property is an essential aspect of the serious crime related activity (in the example above because it is an element of the offence) then the property will have been used “in” the serious crime related activity. It is not necessary for present purposes to consider the outer limits of “in”. In this appeal, reliance was placed on “in connection with”.
Where that context includes a mandatory forfeiture order of a relevant interest if the definition is satisfied, the degree and nature of the connection required are to be such that it would be appropriate and justified for such a connection to attract potential judicial intervention by way of a mandatory forfeiture order, in all the circumstances having regard to the scope and purpose of the CAR Act. (Footnotes omitted.)
It requires, before that intervention can be invoked, that there be a purpose, effect or likely effect of the impugned conduct on competition which is substantial in the sense of meaningful or relevant to the competitive process. There is, of course, a certain circularity in these attempts at exposition. It could be said that a substantial lessening of competition describes a purpose or outcome of conduct which is deserving of the intervention of the Court in the protection of the competitive process according to law. So to say, is to identify the functional character of the statutory standard.
[A]nother long-standing species of forfeiture arose at common law, as Blackstone put it “from the misfortune rather than the crime of the owner” of a chattel. Until its abolition in 1846, a deodand – a personal chattel occasioning accidental death – was forfeit to the Crown, originally as “an accursed thing” which might fund pious acts of expiation and, later, compensation to relatives, but it came over time also to be part of the Crown’s revenue. (Footnotes omitted.)
The abolition of the law of deodands by 19th century statutes seems to me to be an insecure basis for the operation of a principle said, at least in some formulations, to be based on fundamental aspects of the common law; see for example Hurt v The King (2024) 281 CLR 286; [2024] HCA 8 at [49]-[50] and [106].
Turning now to applying the test to the facts of this case, s 6 of the Criminal Assets Recovery Act defines “serious crime related activity” to mean a suite of serious criminal offences, including the manufacture of prohibited drugs contrary to s 24 of the Drug Misuse and Trafficking Act. In order to determine a relationship between the use of property and a serious criminal offence, one has regard to the elements of the offence and the conduct involved in those elements. Relevantly for present purposes, the manufacture of drugs requires chemical and physical processes to occur, using particular equipment, in a particular place. They include shelter from the elements, a supply of heat, ideally an effective form of ventilation, and a place to store equipment, precursors and the product. It will also be necessary for the chemical and physical processes not to be visible to members of the public. Other offences may be less closely connected with a particular place, but it is unnecessary to address those offences in order to resolve this appeal. Because I am conscious that the deemed supply of prohibited drugs involves quite different elements from manufacture, I prefer to resolve this appeal on the basis of the latter offence.
In the case of manufacturing a prohibited drug, where the storage of equipment, precursors and product occurs on a property which provides shelter, heat, ventilation and concealment, there is a powerful relationship between the use of the property and the serious crime related activity. At least in most ordinary cases, the property will have been used in connection with the drug manufacture for the purposes of s 9B.
As explained above, there is no occasion to resort to the false comfort of reading the word “substantial” into s 9B. Instead, the statute requires an evaluation of the activities said to involve a use of the property, and their connection with what is alleged to be the serious crime related activity, with a view to answering the statutory question: did the person’s serious crime related activity result in the property being used in connection with that serious crime related activity? A close direct relationship may suffice; a remote or indirect relationship may be insufficient. The context in which the relationship falls to be assessed is that, if the property was used in connection with the serious crime related activity, it is apt to be forfeited, subject to satisfaction of other aspects of the regime including defences. The issue is evaluative and involves a measure of judgment. But ultimately the issue requires applying the words of the statute, and is not assisted by substituting different words.
The Criminal Assets Recovery Act 1990 (NSW) (CAR Act) provides for a range of orders that may be made whereby assets belonging to those involved in or connected to crime are taken from them and forfeited to the Crown (note also the Confiscation of Proceeds of Crime Act 1989 (NSW)). The CAR Act can apply whether or not the person in question has been charged with an offence; indeed, it can apply even if they have been acquitted of it: s 6(1).
One such type of order applies where property has been used in or in connection with certain types of crime, described as “serious crime”. The property may be realty or personalty: s 7. Pursuant to s 22(2B), the Supreme Court must make an assets forfeiture order at the request of the New South Wales Crime Commission with respect to an interest in identified property if the Court finds it more probable than not that the interest is “an available interest relating to serious crime use property”. A property is “serious crime use property” if it “was used in, or in connection with, a serious crime related activity”: s 9B(1). The interest is an available interest in relation to such property if: the interest is that of the offender; the offender’s activity resulted in the property becoming serious crime use property (put simply, they undertook the relevant serious crime related activity); and the property is either the serious crime use property itself, or is the subject of a “substituted serious crime use property declaration”: s 9B(2).
The latter notion, relating to substituted property, arises where the interest in the serious crime use property is not available for forfeiture because the offender neither owns nor effectively controls it, or because it has been sold or otherwise disposed of or cannot be found: see s 9B(3). In such cases the Commission may apply for a “substituted serious crime use property declaration” pursuant to s 22AA. Under s 22AA(5), the Supreme Court must make such a declaration if: the Court finds it more probable than not that the offender engaged in serious crime related activity; that activity resulted in particular property becoming serious crime use property; and the property is not available for forfeiture.
Whether the Commission proceeds directly against claimed serious crime use property, or against other property because the serious crime use property is not available, the core issue in such cases is whether some identified property is or was serious crime use property because it was “used in, or in connection with, a serious crime related activity” (as identified in s 9B(1)).
The term “serious crime related activity” of a person is defined in s 6(1) of the CAR Act to be anything done by the person that was at the time a “serious criminal offence”, whether or not they have been charged, tried, convicted or acquitted. The term “serious criminal offence” is defined in s 6(2) to mean various offences including, notably, “a drug trafficking offence”. That latter term is defined in the same provision to mean an offence under certain identified provisions of the (NSW) (), including s 23. Some aspects of the statutory scheme focus on indictable offences: eg other aspects of the definition of “serious criminal offence” in s 6(2); s 22(2). But where what is sought is an assets forfeiture order, or a substituted serious crime use property declaration, then there is no requirement per se that the offence be indictable. It is an offence under s 23(1) of the DMT Act to cultivate a prohibited plant. Schedule 1 of that Act identifies cannabis as such a plant, and nominates 5 plants as the “small” quantity. There is a statutory presumption that offences for such an amount will be dealt with summarily unless the prosecution otherwise elects: DMT Act, s 30. If dealt with summarily, the maximum penalty is a fine of 50 penalty units and/or imprisonment for 2 years.
The statutory phrase at issue here is that property was “used in, or in connection with, a serious crime related activity”. This case is, it appears, the first time that phrase as employed in s 9B of the CAR Act has come to be considered in this Court. However, that phrase, or close variants of it, has long been employed in a number of proceeds of crime statutes. There are many cases dealing with such provisions. The following are noteworthy.
In R v Ward [1989] 1 Qd R 194, at 199-200, the Queensland Court of Criminal Appeal inclined to the view (but noting it was without the benefit of full argument) that the notion of being “in connexion with” in Queensland proceeds provisions required something like a “substantial” connection.
The Court of Criminal Appeal in this State did not follow that approach in R v Hadad (1989) 16 NSWLR 476 at 481-482, in relation to a statute of this State (now repealed). A key part of the reasoning was that the provision at issue there “has reposed in the courts a very wide discretion on the question of whether or not forfeiture orders should be made” (at 481). Chief Justice Gleeson and Handley JA followed Hadad in R v Sultana (1994) 74 A Crim R 27 at 31 and 32.
Subsequently, in Director of Public Prosecutions (Cth) v Jeffery (1992) 58 A Crim R 310, at 316-317, Hunt CJ at CL distinguished Hadad with respect to a provision in the Proceeds of Crime Act 1987 (Cth) on the basis that the provision at issue was not discretionary and could not take hardship into account. His Honour followed what had been suggested in Ward, saying:
Use in connection with any unlawful activity within the meaning of s 48(4) therefore requires a substantial connection between the activity in question and the use of the property; it is not sufficient for there to be a mere accidental or incidental connection.
In Director of Public Prosecutions (SA) v George (2008) 102 SASR 246; [2008] SASC 330 the Full Court of the South Australian Supreme Court was considering provisions in that State’s confiscation legislation. Importantly, the Court construed the power at issue there as providing the court with a discretion as to whether to make a forfeiture order (see at [80], [170] and [245]). Issues arose as to the meaning of property being an “instrument” of an offence because “used in, or in connection with, the commission of an offence” and as to the application of that criterion. Chief Justice Doyle, with whom White J generally agreed on that issue (see at [177]), considered that it was relevant that “a conclusion that property is an instrument of an offence has serious adverse consequences for the owner” (at [59]), but it was also relevant that giving a wide meaning to that notion did not necessarily mean that a forfeiture order would be made given the court’s residual discretion (at [60]).
His Honour considered it clear that “there is no basis for qualifying the statutory definition by requiring that any connection be a ‘substantial connection’”, and taking that approach “is to introduce an expression which the draftsman has not used” (at [62]). He also rejected any requirement that there be a causal link between the property and the offence; or that the property be something that is essential or necessary for the commission of the offence; or that it makes a unique contribution to the commission of the offence; or that the offence was the single or dominant use of the property (at [63]). His Honour concluded his discussion by saying:
[65] Bearing these matters in mind, what is the link, or kind of link, between property and the commission of an offence that parliament has identified by its definition of “instrument”? As a matter of ordinary language, and bearing in mind that the word defined is “instrument”, I consider that the definition refers to a use of property that facilitates, assists or contributes to the commission of an offence. That is a starting point, not a conclusion. The use of the property must be sufficiently significant (I realise that this is question begging) to warrant a conclusion (especially when the property is the place where the offence is committed) that the property is used in connection with the commission of the offence. This invites attention to the role that the property plays in the commission of the offence, to the extent to which the property is so used, and to how much of the property, or what part of it, is used. I doubt whether one can usefully go any further than that.
Justice Vanstone had originally been inclined to take a more confined view of the notion of “instrument”. Her Honour said she tended to approach the issue consistently with the view of Hunt CJ at CL in Jeffery (at [167]). However, having subsequently read White J’s reasons concerning the existence of a discretion as to whether to make such an order, she did not adopt that construction, being persuaded that the discretion ameliorated the effects of an expansive construction of “instrument”. Contrary to the headnote in the 191 A Crim R 95 report of the judgment, and contrary to some subsequent judicial observations, her Honour was not in dissent. She agreed in the orders made. She was not even ultimately in disagreement as to the construction adopted.
In Director of Public Prosecutions (WA) v White (2010) 41 WAR 249; [2010] WASCA 47 (White CA) the Western Australian Court of Appeal considered State confiscation legislation which provided a range of ways in which property could be “crime-used”, including if it was “used, … directly or indirectly, in or in connection with the commission of a confiscation offence”. Speaking for the Court, McLure P explained that the expression “in connection with” requires “that there be a link between the relevant use of, or act or omission on, the property on the one hand and the commission or facilitating the commission of a confiscation offence on the other” (at [31]). Her Honour considered that it was clear from the statutory language that the relationship did not have to be “direct and immediate”, but, taking account of the consequences of property being “crime-used”, she considered that it was “not sufficient if the relationship be merely tenuous and remote” (at [33]). In that case a residential dwelling was held to have been used at least indirectly in connection with a murder, because its high fencing and gates had been used to impede the victim’s departure, and it had been used to store the body pending disposal (see at [39]).
The case then went to the High Court, which dismissed the appeal: White v Director of Public Prosecutions (WA) (2011) 243 CLR 478; [2011] HCA 20 (White HC). That appeal turned on specific aspects of the Western Australian legislation not relevant here. The plurality did note, however, that the “relevant ordinary meaning of the verb ‘use’ is to ‘[m]ake use of (a thing), esp for a particular end or purpose; utilize, turn to account’” (at [21], citation omitted). Their Honours explained that “[o]n the face of it, the mere doing of an act in or on a property in connection with the commission of a confiscation offence, does not necessarily fit comfortably within the concept of use applied to property” (ibid).
The Victorian Court of Appeal addressed that State’s confiscation legislation in (2011) 37 VR 464; [2011] VSCA 436. The relevant statutory phrase identified “tainted property” as property that “was used, or was intended by the accused to be used in, or in connection with, the commission of the offence”. The court had a discretion to make a forfeiture order under the scheme. The Court adopted the following propositions drawn from earlier appellate authorities (at [77], citations omitted):
1.The word “used” should be given its ordinary meaning of “employed, or made use of, for a particular end or purpose”.
2.The statutory phrase is of wide scope. The inclusion of the words “in connection with” was plainly intended to extend the scope of the definition of “tainted property” beyond circumstances where the property could be said to have been “used in the commission of” the offence.
3.Whether there is a connection between the use of the property and the commission of the crime is a question of fact and degree. It is not necessary for it to be established that there was a “substantial” connection, or that the crime could not have been committed without using the property.
4.The nature, extent and significance of the use of the property in connection with the commission of the crime will be matters which go to the court’s discretion whether or not to order forfeiture of the property.
[78] Very often, the decisive issue will be whether the relevant property can be said to have been “used”, since “use” is (by definition) employment for a purpose. Once it is concluded that the offender “used” the property at or around the time of the commission of the offence, it will usually follow that there was the requisite connection between the use of the property and the commission of the offence. Put differently, if the offender (or some other person) “employed or made use of” the property for a purpose associated with the offending, then it would follow that the property was “used in connection with the commission” of the offence. …
[80] Express statutory provision apart, the mere fact that an act is done in or on a particular property will ordinarily not suffice to bring that property within the definition. That is because, as a matter of ordinary language, this could not be characterised as a “use” of the property. …
[81] It is only when the property, or some feature or attribute of it, has been turned to advantage by the offender, or enlisted to the offender’s purpose, that it will be possible to say that the property has been “used”. …
[82] Conduct after an offence is completed may also constitute a use of property in connection with the commission of the offence. …
[89] At one end of the spectrum are cases where the property is deployed in an instrumental sense to commit the offence. An obvious example is the weapon that is used to inflict an injury. Land can be used to cause death or injury, such as where a domestic pool is used to drown the victim. …
[90] At the other end of the spectrum are cases where the property is merely the passive location at which the offence is committed. An example is where a discussion takes place in the offender’s home which constitutes a conspiracy to commit an offence at another location. Another example is where, during dinner in the family home, a domestic dispute erupts spontaneously which leads to one person reaching across the table and assaulting another person. …
In the case at hand the accused had murdered his wife in a premeditated fashion in the apartment in which they lived. The Victorian Court of Appeal held that the apartment had not been “used” either in the course of the murder or, in any meaningful way, in the immediate aftermath. There was “nothing about the property itself which facilitated or furthered the commission of the offence” (at [96]). The position “might well have been different if the trial judge had found that the applicant had chosen the apartment as the location for the killing because of particular features which he utilised” (at [99]).
The Victorian Court of Appeal subsequently addressed the federal proceeds of crime legislation in Cini v Commissioner of Australian Federal Police [2016] VSCA 227; (2016) 312 FLR 432. That legislation involves a reverse onus and gives the court no residual discretion. The relevant statutory phrase was that property was an “instrument” of an offence if it was “used in, or in connection with, the commission of an offence”. The Court rejected arguments that the connection required had to be “substantial” or “sufficiently significant” (the latter phrase being one taken from Doyle CJ’s judgment in George), saying that the argument sought to “add a gloss to the statutory language” (at [48]). It said that “the absence of any discretion to give relief from forfeiture cannot affect the plain meaning of the words” (at [53]). The principle of legality favoured a construction minimising encroachment upon fundamental property rights, but that could not justify notionally reading in words (ibid). In the case at hand a residence was held to have been used in connection with a drug importation offence because the purported imported drugs (in fact a drug substitute) had been relocated and stored there for a while because of a fear of robbery, where the house was more secure than the previous location. Applying Chalmers, the Court said that in that way a feature or attribute of the property had been turned to advantage and enlisted to the criminal purpose (at [54]-[56]).
The High Court considered the federal legislation in Commissioner of the Australian Federal Police v Hart (2018) 262 CLR 76; [2018] HCA 1. As regards the relevant “use condition”, the plurality said this (citation omitted):
[10] Satisfaction of the use condition requires proof by an applicant on the balance of probabilities that the thing forfeited was not used in, or in connection with, an act or omission that constituted a relevant offence, and that no legal or equitable estate or interest in that thing and no right, power or privilege in connection with that thing was used in, or in connection with, an act or omission that constituted a relevant offence. Consistently with the construction of equivalent language adopted by the Full Court of the Supreme Court of South Australia in Director of Public Prosecutions v George, use in or in connection with an act or omission that constituted a relevant offence is a broad conception involving practical considerations which do not readily admit of detailed exposition in the abstract. The conception requires neither a causal link between the property and the offence nor that the property was necessary for the commission of the offence or made a unique contribution to the commission of the offence. Implicit in the expression of the condition is that the use can be by any person. Implicit also is that the degree of use need not be proportionate to the forfeiture that has occurred.
Their Honours held that the owner of an aircraft had not discharged its onus relating to a use condition because it had spent an amount on repairs of the aircraft which was “not trivial”, where the owner had not established that that use of the money did not involve laundering the proceeds of crime (at [26]). They also held that the proffering of some realty as security for a loan which was part of a fraudulent act involved use of that realty in connection with that act, even though that use of the realty was not itself fraudulent (at [27]).
Justice Gordon said that the words “in connection with” in the use condition involve “an inquiry which seeks to identify a connection between the use of the property and unlawful activity” (at [81]). Her Honour explained (emphasis in original):
[82] Identifying that relationship or connection may, and commonly will, direct attention to, and require consideration of, one or more of the following questions: how the property was used in or in connection with unlawful activity; the extent to which the property was so used; and how much or what part of the property was used in that unlawful activity [citing George at [60]].
[83] Further, because the use limb is cast in negative and broad terms, it is not necessarily decisive for an applicant to show that:
(a) there is no causal link between the property and unlawful activity — something less than a causal link may result in the use limb not being established;
(b) the property was not essential or necessary for the commission of an offence;
(c) the property did not make a unique contribution to the commission of an offence; or
(d) the use in the unlawful activity was not the sole or dominant use of the property.
[84] Some facts and circumstances will be more straightforward. If a house is used as the place to manufacture drugs, or a car is used to distribute drugs, the asset will be caught by s 102(3)(a) and the applicant will not be entitled to an order under s 102(3). Other facts and circumstances will be more complicated. If, for example, the unlawful activity is money laundering proceeds of crime through the sale or purchase of assets (or both), a question may arise whether a particular asset in that series of transactions was used in, or in connection with, the unlawful activity of money laundering. That conduct may, in certain circumstances, support a finding that a court cannot be satisfied that the property was not used in, or in connection with, any unlawful activity.
[85] Each inquiry will be fact-specific and often fact-intensive. It is a question of fact and degree. …
[86] I apply the reasoning of the Court of Criminal Appeal in Hadad and of Hunt CJ at CL in Director of Public Prosecutions (Cth) v Jeffery and, in so doing, I conclude that, in the absence of a judicial discretion to avoid an assets forfeiture order that would be disproportionate to the offence, a narrow interpretation of the phrase in s 9B(1) of the CAR Act is appropriate. The phrase “used … in connection with” obliges the Court to be satisfied that there is a substantial connection between the property that is the subject of the assets forfeiture order and the offence.
[87] I note that my conclusion coincides with the reasons expressed in Director of Public Prosecutions (SA) v George, Doyle CJ and Vanstone J both being of the view that whether there was a discretion in making final orders was a relevant consideration in the construction of the phrase. In the absence of such a discretion, Vanstone J preferred a narrow construction, that a “substantial” connection was required.
[123] In my view, it is not helpful to frame the question of construction of s 9B(1) in terms of an “ordinary grammatical meaning” approach or a “substantial connection” approach. The better view is to treat the statement in Pettit and the other decisions which refer to a requirement that any connection was required to be “substantial” as, in effect, attempting to indicate that the words “used … in connection with” take their meaning as to the nature and degree of the required connection from their statutory context. Where that context includes a mandatory forfeiture order of a relevant interest if the definition is satisfied, the degree and nature of the connection required are to be such that it would be appropriate and justified for such a connection to attract potential judicial intervention by way of a mandatory forfeiture order, in all the circumstances having regard to the scope and purpose of the CAR Act. The potential range of circumstances that might fall to be considered in any particular case is virtually without limit. Some illustrative examples of different types of circumstances that may arise were discussed by O’Keefe J in King.
Section 9B(1) of the CAR Act states that “a reference to serious crime use property is a reference to property that was used in, or in connection with, a serious crime related activity”. Although the focus of submissions was on the words “in connection with”, it would be a mistake to view them in isolation. The two alternatives in the phrase both depend upon the property being used. As the Victorian Court of Appeal explained in Chalmers – consistently with what had been said in White HC – that notion is purposive, and it is often that notion which will be decisive: note also Director of Public Prosecutions (NSW) v King (2000) 49 NSWLR 727; [2000] NSWSC 394 at [33]. The purpose in question is the commission of activity which falls within the category of “a serious crime related activity”, being activity which was an offence falling within the scope of that category (see s 6). The property or some feature of it must have been employed or made use of to advance or facilitate the relevant criminal activity or a purpose connected with the activity. The mere fact that the activity occurred on or from the property, without making use of any particular feature or attribute of it, would not generally suffice (note White HC at [21]; Chalmers at [80]).
It is clear that the words “in connection with” are intended to broaden what types of use will be encompassed, as many cases have observed. To give one example illustrated by White and Cini and discussed in Chalmers, use of property after the crime had occurred – such as subsequent use of the property to hide its consequences – could be use in connection with the crime. The difference between “used in” and “used in connection with” is one involving the directness with which the property is used in relation to the relevant criminal activity. It is not necessary to draw a sharp distinction between the two notions.
A “statutory reference to a connection between one thing and another poses questions of proximity and degree”: Sultana at 31; see also White CA at [31]. As has been said of the similar phrase “connected with”, they are “capable of describing a spectrum of relationships ranging from the direct and immediate to the tenuous and remote*”: Collector of Customs v Pozzolanic Enterprises Pty Ltd* (1993) 43 FCR 280 at 288 (Neaves, French and Cooper JJ). The “range of relationships to which the words apply for the purpose of the Act depends upon a judgment about that purpose”: ibid, 289.
The phrase “in relation to” is similar in that regard. In Travelex Ltd v Commissioner of Taxation (2010) 241 CLR 510; [2010] HCA 33 at [25], French CJ and Hayne J said that that phrase is one that “can be used in a variety of contexts, in which the degree of connection that must be shown between the two subject matters joined by the expression may differ”, and where “‘the subject matter of the enquiry, the legislative history, and the facts of the case’ are all matters that will bear upon the judgment of what relationship must be shown…”. Their Honours cited in that regard the judgment of Hill J, with whom Stone and Allsop JJ agreed, in (2005) 143 FCR 553; [2005] FCAFC 126 at [35]. His Honour there said:
It was common ground that the words “relates to” are wide words signifying some connection between two subject matters. The connection or association signified by the words may be direct or indirect, substantial or real. It must be relevant and usually a remote connection would not suffice. The sufficiency of the connection or association will be a matter for judgment which will depend, among other things, upon the subject matter of the enquiry, the legislative history, and the facts of the case. Put simply, the degree of relationship implied by the necessity to find a relationship will depend upon the context in which the words are found. …
It is implicit in that passage that it can be meaningful and appropriate to say that in some particular statutory contexts the relational words may require a substantial connection or association, while in other contexts, an indirect connection might suffice. As the High Court later said, consistently with Hill J’s analysis, resolution of such issues depends upon “the text, context, legislative purpose and history of the provision, and, of course, the facts of the case”: Minister for Home Affairs v DLZ18 (2020) 270 CLR 372; [2020] HCA 43 at [43].
In this context, I respectfully disagree with those judges who have expressed the view that to say that the phrase “in connection with” in the current context requires a “substantial” connection is to put a gloss on the statute or to read in a word. That is no more the case than saying, at the other end of the spectrum, that the phrase does not extend to connections which are, for example, “trivial” or “merely fortuitous” (to quote the position adopted by the primary judge here at [109]). Indeed, the point is illustrated by the irony that Doyle CJ in George rejected use of the word “substantial”, then suggested a notion of “sufficiently connected”, and then that notion too was rejected by the Victorian Court of Appeal in Cini as a “gloss” on the statutory language.
Of course, one should be wary of substituting a judicial phrase for the statutory language. And one should also be wary of seeking to be more definitive than is necessary or justified. “Generally speaking it is not desirable, in construing relational terms, to go further than is necessary to determine their application in a particular case or class of cases”, because doing so “may be confounded by subsequent cases”: The Queen v Khazaal (2012) 246 CLR 601; [2012] HCA 26 at [31] (French CJ). But where a phrase is used in a statute which may involve a spectrum of connection or relationship, it is meaningful and entirely orthodox to explain that for this statutory phrase in this statutory context it is intended to identify this part of the spectrum and/or not encompass another part of the spectrum.
In Minister for Immigration and Citizenship v Haneef (2007) 163 FCR 414; [2007] FCAFC 203, Black CJ, French and Weinberg JJ explained that this type of issue does not involve resolution of ambiguity, but determining the limits of the range which is encompassed by the phrase:
[106] Acts of Parliament frequently use words of wide import which require courts to make constructional choices. They may be words capable of two or more meanings, each of which might make sense in the context in which it appears in the Act. Such a case is one of ambiguity and reference to extrinsic materials may point in the direction of one intended meaning rather than another. Alternatively, words may be used which have an ambulatory significance capable of a wide range of applications. Construction involves determining the limits of that range. Terms such as “in relation to”, or “in connection with” raise that kind of problem which, strictly speaking, is not a problem of ambiguity at all. The word “association” falls into this category.
Much the same point subsequently was made by French CJ in Khazaal at [31].
Describing what parts of a spectrum are or are not encompassed by a relational phrase can only be done, at least in a written judgment, by using words. That does not mean that the construction inserts words into the text. Chief Justice Spigelman made that point in R v Young (1999) 46 NSWLR 681; [1999] NSWCCA 166:
[6] In order to construe the words actually used by parliament, it is sometimes necessary to give them an effect as if they contained additional words. This is not, however, to introduce words into the Act. This involves the construction of the words actually used. …
Consistently with that understanding, in Farshchi v The King [2025] HCA 46; (2025) 426 ALR 185 at [59]-[60], Edelman and Steward JJ elucidated the difference – which can be one of degree – between using language to explain a legal phrase or notion and using language to define it. What is involved in the current context is seeking to explain what part of the spectrum is encompassed by the notion of “in connection with” in s 9B(1).
Instances in which further explanatory words have been employed by courts to delineate the degree of connection or relation required are myriad. For instance, to pick up an example noted in Ward, in Berry v Federal Commissioner of Taxation (1953) 89 CLR 653 at 659; [1953] HCA 70, Kitto J suggested that consideration paid could be said to be “in connection with goodwill”, in the context of a taxation provision, “so long as the receipt of the payment has a substantial relation, in a practical business sense, to that property”.
Examples noted by Hill J in HP Mercantile included:
In Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 at [87], the plurality held that a requirement that broadcasting standards “relate to” the Australian content of programs was “a matter for judgment depending on the facts of the case”, but “must be a relevant one in the sense that it cannot be accidental or so remote that the Standard has no real effect or bearing” on that matter.
In O'Grady v Northern Queensland Co Ltd (1990) 169 CLR 356 at 374; [1990] HCA 16, Toohey and Gaudron JJ explained that a requirement that a proceedings in a court be one “arising in relation to” mining or a mining tenement “presupposes a direct connexion between a presently existing action, suit or proceeding and mining or a mining tenement, not merely an incidental connexion”.
Similar issues of degree arise in a range of legal contexts, where it is meaningful, useful and often necessary to identify the type of degree required; for instance:
The notion of “necessary”, or “reasonably necessary”, is employed in countless areas of common and statutory law. The Supreme Court of the United States explained over 200 years ago that necessary “has not a fixed character, peculiar to itself” but “admits of all degrees of comparison”: McCulloch v Maryland, 4 Wheat 316 (1819) at 413-14; 17 US 316 at 413-14. Chief Justice Gleeson explained in Mulholland v Australian Electoral Commission (2004) 220 CLR 181; [2004] HCA 41 at [39] how in different contexts “necessary” had been construed on a spectrum from “essential” through to “appropriate and adapted”. There are innumerable lines of cases where in one legal context or another courts have explained what is connoted by the notion in the context at hand. For instance, Spigelman CJ observed in (2005) 62 NSWLR 512; [2005] NSWCA 101:
[40] Although identified as a test of necessity, such a test can be applied with varying levels of strictness. Where the principle of open justice is engaged, as it is when determining whether a court may sit in camera or prevent publication of its proceedings and orders, the test will be strictly applied. … (citations omitted)
Causation can connote a more or less proximate, immediate, effective or dominant cause: eg Australian Casualty Co Ltd v Federico (1986) 160 CLR 513 at 534-535; Allianz Aust**ralia Insurance Ltd v GSF Aust**ralia Pty Ltd (2005) 221 CLR 568; [2005] HCA 26; at [95]-[103].
That an issue or an error is “material” can convey different degrees of materiality. In administrative and criminal law in recent times that test has been explained in terms which have described it as setting a threshold which is “not demanding or onerous”: LPDT v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (2024) 280 CLR 321; [2024] HCA 12 at [14]; see also Brawn v The King [2025] HCA 20; (2025) 99 ALJR 872 at [10].
The High Court has now upheld the use of some limited words of explanation even for the previously sacrosanct notion of “beyond reasonable doubt”: Farshchi; cf Darkan v The Queen (2006) 227 CLR 373; [2006] HCA 34 at [69].
The word “substantial” itself can involve some ambiguity, as Leeming JA notes above at [24]. To focus on the use of one particular word is something of a distraction. The issue in dispute here is seeking to identify, at least in broad terms, what degrees of connection are or are not involved in the notion as employed in s 9B of the CAR Act. That involves an exercise of construction of the phrase as employed in this particular statute.
In my view the absence of any discretion in the court is one relevant consideration which, at the least, does not militate in favour of a very encompassing construction of the term. That view is consistent with the analysis of Doyle CJ and Vanstone J in George, the reasoning of Hunt CJ at CL in Jeffery, what was implicit in the analysis in Hadad, and what arguably was implicit in Chalmers. The High Court in Hart referred approvingly to the construction adopted in George even though the federal legislation being construed there did not provide for such a discretion. However, it is not apparent whether the point had been the subject of argument.
The objects of the CAR Act identified in s 3 were argued to be relevant to the issue. Section 3(a) states that a principal object of the Act is to “provide for the confiscation, without requiring a conviction, of property of a person if the Supreme Court finds it to be more probable than not that the person has engaged in serious crime related activities”. There is no dispute that ss 9B, 22 and 22AA, amongst others, give effect to that object. The issue is how far the legislation goes in pursuit of that object with respect to the degree of connection. Section 3(a) does little if anything to help resolve that question, as no legislation pursues its purposes at all costs: (2013) 248 CLR 619; [2013] HCA 36 at [41].
The primary judge found that two offences constituting serious crime related activity were relevant, namely supply of 1.3 kg of methylamphetamine contrary to s 25(2) of the DMT Act, and manufacture of methylamphetamine by refinement contrary to s 24(2) of the DMT Act (at [87] and [125]).
As Griffiths AJA explains with respect to Grounds 1 and 2, the better view of the evidence is that methylamphetamine was manufactured at the house in question. And as his Honour explains with respect to Ground 4, by reference to the primary judge’s conclusions, such a use of the house was not simply a chance location but involved employing features of the house in order to facilitate and conceal the drug manufacture. That use of the property was no minor matter in terms of the extent to which the property was used and how much of it was used, as illustrated by the number of locations where methylamphetamine residue was located (see primary judgment at [63]). There was a significant connection between use of the house and the manufacture of the drug.
That conclusion suffices to uphold the primary judgment. It is not necessary to consider whether storage of 1.3kg of methylamphetamine at the house was a use sufficiently connected to the deemed supply charge as to satisfy s 9B(1).
GRIFFITHS AJA: This appeal is from the judgment and orders made on 29 October 2025 by the primary judge (Wright J) in New South Wales Crime Commission v Hitchen [2025] NSWSC 1268 (primary judgment or PJ). His Honour granted declaratory relief and made assets forfeiture orders under the Criminal Assets Recovery Act 1990 (NSW) (CAR Act). There was no dispute that the appellants (who are brothers) were in possession of approximately 1.3kg (impure weight) of methylamphetamine contained in plastic bottles and bags hidden underneath a step in the garage at the property where the appellants resided prior to their arrest in 2018 (the property). Nor was there any contest that various items and equipment associated with the manufacture of methylamphetamine were stored at the property.
The primary judge concluded that the property had been “used in, or in connection with, a serious crime related activity” based on findings that, having regard to the whole of the evidence, on the balance of probabilities the presence of the methylamphetamine in plastic bottles and bags under the step in the garage amounted to a use of the property by way of storage and concealment in circumstances where the drug was for the purposes of future supply (PJ [127]-[130]).
The primary judge separately concluded that the property had been “used in … connection with serious crime related activity” based on findings that the manufacture by way of refinement of methylamphetamine base in crystal form had occurred at the property (PJ [131]-[133]).
The long title to the CAR Act states that the Act provides “for the confiscation of interests in property that are interests of a person engaged in serious crime related activities; to enable proceeds of serious crime related activities to be recovered as a debt due to the Crown; and for other purposes”.
The principal objects of the CAR Act are set out in s 3 and, relevantly, include the following:
(a) to provide for the confiscation, without requiring a conviction, of property of a person if the Supreme Court finds it to be more probable than not that the person has engaged in serious crime related activities, and
…
(c) to enable law enforcement authorities effectively to identify and recover property.
It is unequivocally stated in s 5(1) that proceedings on an application for a confiscation order are not criminal proceedings and that the rules of evidence applicable in civil proceedings apply to proceedings under the Act (and not those applicable only to criminal proceedings).
The meaning of “serious crime related activity” is stated in s 6(1) (emphasis added):
(1) In this Act, a reference to a serious crime related activity of a person is a reference to anything done by the person that was at the time a serious criminal offence, whether or not the person has been charged with the offence or, if charged—
(a) has been tried, or
(b) has been tried and acquitted, or
(c) has been convicted (even if the conviction has been quashed or set aside).
“Serious criminal offence” is defined in s 6(2) as including a “drug trafficking offence”. A “drug trafficking offence” is defined to mean an offence under various provisions of the Drug Misuse and Trafficking Act 1985 (NSW) (DMT Act), including offences relating to the manufacture and production of prohibited drugs (s 24), offences relating to the possession of precursors for the manufacture or production of prohibited drugs (s 24A) and offences relating to the supply of prohibited drugs (s 25).
Section 9B is at the heart of the issue of construction which is raised by ground 3 of the notice of appeal. It provides:
9B Meaning of “serious crime use property” and “available interest relating to serious crime use property”
(1) In this Act, a reference to serious crime use property is a reference to property that was used in, or in connection with, a serious crime related activity.
(2) In this Act, an interest in property is an available interest relating to serious crime use property if—
(a) the interest is an interest of a person who has engaged in serious crime related activity (the offender), and
(b) the offender’s activity resulted in the property, or any other property, becoming serious crime use property for the purposes of this Act, and
(c) the property is either the serious crime use property or, if that property is not available for forfeiture as referred to in subsection (3), any other property that is the subject of a substituted serious crime use property declaration.
(3) Serious crime use property is not available for forfeiture if—
(a) the offender does not own, and does not have effective control of, the property, or
(b) the property has been sold or otherwise disposed of or cannot be found for any other reason.
22 Making of assets forfeiture order
(1) The Commission may apply to the Supreme Court for an order forfeiting to, and vesting in, the Crown specified interests, a specified class of interests or all the interests, in property of a person (an assets forfeiture order).
…
(2B) The Supreme Court must make an assets forfeiture order in respect of an interest in property if the Court finds it more probable than not that the interest is an available interest relating to serious crime use property.
The phrase, “available interest relating to serious crime use property”, is defined in s 4 to mean “an interest in property that is an available interest relating to serious crime use property as provided by section 9B”.
The CAR Act also provides in s 22AA for what is described as a “substituted serious crime use property declaration”. Such a declaration provides a basis for the making of a forfeiture order under s 22 in respect of “an interest in property” as opposed to the property itself. Substituted serious crime use property declarations were made here by the primary judge in respect of both brothers' interests in the relevant property, being their respective interests in the net proceeds of sale of the property, reflecting the fact that the property had been sold prior to the proceedings below. Section 22AA relevantly provides:
(1) The Commission may apply to the Supreme Court for a substituted serious crime use property declaration against a person.
(2) A substituted serious crime use property declaration is a declaration to the effect that an interest in property (or a combination of interests in properties) of a person who has engaged in serious crime related activity is available for forfeiture instead of serious crime use property that was used in, or in connection with, that activity.
(3) Any such application may be made—
(a) in conjunction with an application for a restraining order or assets forfeiture order, or
…
(5) The Supreme Court must make a substituted serious crime use property declaration against a person if the Court finds that it is more probable than not that—
(a) the person has engaged in serious crime related activity, and
(b) the activity has resulted in particular property becoming serious crime use property for the purposes of this Act, and
(c) the serious crime use property is not available for forfeiture as referred to in section 9B (3).
(6) When making a substituted serious crime use property declaration against a person, the Supreme Court is to—
(a) assess the value of the serious crime use property and specify its value in the declaration, and
(b) specify an interest in property (or a combination of interests in properties) of the person that the Court considers to be available for forfeiture instead of the serious crime use property.
…
(9) If the Supreme Court makes a substituted serious crime use property declaration, the interest in property (or combination of interests in properties) specified in the declaration as being available for forfeiture instead of serious crime use property is to be treated as an available interest relating to serious crime use property for the purposes of this Act (including in connection with the making of assets forfeiture orders) in relation to the serious crime related activity concerned.
A notable feature of the legislation (which distinguishes it from comparable legislation in some other States) is that the Supreme Court is obliged under s 22(2B) to make an assets forfeiture order in respect of an available interest in property as defined if the Court finds it more probable than not that the interest is an “available interest” (as defined) relating to “serious crime use property” (as defined). A similar obligation is imposed by s 22AA(5) in respect of the making of a substituted serious crime use property declaration. Unlike some other jurisdictions, the Court does not have a residual discretion whether or not to make such an order or declaration in the specified circumstances. However, the CAR Act contains provisions which ameliorate the obligation to make an assets forfeiture order in specified circumstances. Thus, where the Supreme Court is satisfied that an assets forfeiture order will operate to cause hardship to any dependant of the person who will forfeit an interest in property under the order, the Court is empowered by s 24 to order that the dependant is entitled to be paid a specified amount which the Court thinks is necessary to prevent that hardship.
The Court is also empowered to make an order excluding an interest in property from the operation of an assets forfeiture order in the circumstances specified in s 25.
(a) substituted serious crime use property declarations under s 22AA of the CAR Act that the appellants’ interests in the net proceeds of sale of the property are available for forfeiture; and (b) assets forfeiture orders under s 22 of the CAR Act forfeiting to, and vesting in, the Crown both appellants’ interests in the net proceeds of sale of the property.
The principal, if not the only, issue for determination was in effect whether the property met the description of “serious crime use property” in s 9B(1) of the CAR Act. A key issue in dispute at trial was whether methylamphetamine had been manufactured at the property. Oral and written evidence was given by the two expert chemists, Mr Shane Cameron and Emeritus Professor Brynn Hibbert.
The primary judge found that both experts effectively accepted that the chemical evidence was not inconsistent with the items found at the property being used to manufacture methylamphetamine by refinement at the property, or, alternatively, items having been brought to the property after manufacture at another location (see at PJ [55]). His Honour also found that both experts generally agreed that the presence of methylamphetamine as revealed by swabs taken at three locations in the garage and one location in the kitchen of the property could have been caused by the drug being heated to a temperature sufficient to convert it to a gas, which may have occurred as a result of either:
(a) somewhat inexpert attempts at refinement involving overheating or spillage of solid or liquid methylamphetamine; or (b) consuming the drug by smoking it (see at PJ [59]).
(a) An affidavit of Mark Pulvirentei sworn 26 March 2025, including the following documents which formed part of exhibit MP1 and MP2:
(i) statement of facts dated 5 December 2019 regarding Ross Hitchen; (ii) statement of agreed facts dated 23 April 2020 regarding Geoffrey Hitchen; (iii) transcript of examination of Geoffrey Hitchen on 15 October 2024; (iv) transcript of examination of Ross Hitchen on 17 October 2024.
(b) Affidavit of Shane Cameron (including an exhibit) affirmed 26 March 2025. (c) Report of Emeritus Professor Brynn Hibbert dated 13 August 2025. (d) Expert certificate of Shane Cameron dated 29 August 2025. (e) Concurrent oral evidence of Shane Cameron and Emeritus Professor Brynn Hibbert on 8 September 2025.
I shall defer summarising the primary judge’s findings of fact which are challenged by grounds 1, 2 and 4 of the notice of appeal. I will now focus on the primary judge’s construction of s 9B(1).
The primary judge identified the relevant principles of statutory construction by reference to the observations of Gageler CJ, Gordon, Jagot and Beech-Jones JJ in Palmanova Pty Ltd v Commonwealth (2025) 99 ALJR 1362; [2025] HCA 35 at [4]-[6]. Those principles are well-established and, unsurprisingly, are not contested in the appeal.
At PJ [90], his Honour also referred to SkyCity Adelaide Pty Ltd v Treasurer of South Australia (2024) 282 CLR 479; [2024] HCA 37 at [32], where Gageler CJ, Gordon, Edelman, Gleeson and Beech-Jones JJ made the following observations about legislative definitions:
A definition "shortens, but is part of, the text of the substantive [provision] to which it applies". The defined term itself forms part of the context within which the definition so applying must be construed. The point of the orthodox interpretative principle is not to deny that the defined term itself forms part of the context but to emphasise that the purpose of a definition is to fix or to clarify the meaning of the defined term. Fidelity to that purpose makes it of "fundamental importance" that a definition is construed in the context of the substantive provision to which it applies according to its "natural and ordinary meaning unless some other course is clearly required" and that "limitations and qualifications are not read into a statutory definition unless clearly required by its terms or its context".
The primary judge referred to the long title of the CAR Act (at PJ [92]), the principal objects as set out in s 3 (at PJ [93]) and to other provisions in s 5 which emphasise that proceedings on an application for a confiscation order under the CAR Act are civil and not criminal proceedings.
The primary judge then turned to the text of s 9B(1) of the CAR Act (which is set out at [100] above). His Honour considered that property is “used” in relation to an activity “when the whole, or some part or characteristic, of the property is employed in order to carry out that activity” and that, understood this way, there generally needs to be a “connection between the activity and the property that is purposive and not merely fortuitous” (at PJ [96]).
The primary judge then drew a distinction between property that is used “in” a serious crime related activity and property that is used “in connection with” a serious crime related activity (at PJ [96]). His Honour noted that the phrase “in connection with” is context dependent, is capable of considerable breadth but “requires something less then [sic] use ‘in’ [the requisite] activity” (at PJ [98]-[99]).
The primary judge went on to observe that the context and purpose of the CAR Act and the second reading speech did not suggest that a “substantial” connection was required between the property and the serious crime related activity (at PJ [100]-[102]). The broad purpose of the CAR Act – “deterring serious crime related activity by seeking to ensure that any property used in or in connection with such activity is confiscated from those who have engaged in that activity” – did not support a construction of s 9B(1) that required any use of the property “in connection with” serious crime related activity to be “substantial” (at PJ [104]-[105]). The second reading speech indicated “an intention to enhance or strengthen powers of confiscation under the CAR Act with a view to deterring serious crime”, which was also not consistent with a substantial connection threshold (at PJ [106]-[107]). His Honour’s construction is challenged by ground 3 in the appeal.
The primary judge concluded that the phrase, “in connection with” in s 9B(1) should be construed as requiring a “nature and degree of connection” between the property and serious crime related activity that “would make mandatory forfeiture of a relevant interest appropriate and justified, having regard to the scope and purpose of the CAR Act”. That would be “a matter of fact and degree in any given case and context”; however, it could be said that “a trivial or merely fortuitous” connection would not suffice (at PJ [108]-[109]).
Finally, at PJ [110]-[124], the primary judge considered whether any of the authorities required a different construction of s 9B(1) to this construction. His Honour noted that there did not appear to be any appellate authorities in this State considering the proper construction of that particular provision. But one first instance judgment was (2021) 292 A Crim R 89; [2021] NSWSC 980.
A common thread in some cases in relation to the interpretation of the phrase ‘used … in connection with’ is a divergence into two views that could be characterised as the “literal” or “ordinary grammatical” view and the “substantial use” view. The literal view is often adopted on the basis that the relevant legislative scheme allows the court a wide discretion in order to avoid what might be regarded as an injustice, such as the scale of the forfeiture being disproportionate to the offence.
I apply the reasoning of the Court of Criminal Appeal in [R v] Hadad [(1989) 16 NSWLR 476] and of Hunt CJ at CL in Director of Public Prosecutions (Cth) v Jeffery [(1992) 58 A Crim R 310] and, in so doing, I conclude that, in the absence of a judicial discretion to avoid an assets forfeiture order that would be disproportionate to the offence, a narrow interpretation of the phrase in s 9B(1) of the CAR Act is appropriate. The phrase “used … in connection with” obliges the Court to be satisfied that there is a substantial connection between the property that is the subject of the assets forfeiture order and the offence.
I note that my conclusion coincides with the reasons expressed in Director of Public Prosecutions (SA) v George [(2008) 102 SASR 246; [2008] SASC 330], Doyle CJ and Vanstone J both being of the view that whether there was a discretion in making final orders was a relevant consideration in the construction of the phrase. In the absence of such a discretion, Vanstone J preferred a narrow construction, that a “substantial” connection was required.
If Ierace J intended by the conclusion at [86] of Pettit to state that the definition in s 9B(1) should be read as if the word “substantial” was interpolated so that the definition only included “property that was used in, or substantially in connection with, a serious crime related activity”, I would not agree with his Honour for all of the reasons I have set out earlier. I do not, however, understand that this is what his Honour intended. In Pettit at [87], Ierace J stated that his conclusion coincided with the reasoning of Doyle CJ in George. As noted above, Doyle CJ’s reasoning included at [62]:
“There is one thing which I consider to be clear. It is that there is no basis for qualifying the statutory definition by requiring that any connection be a “substantial connection”. To take that approach is to introduce an expression which the draftsman has not used.”
In my view, it is not helpful to frame the question of construction of s 9B(1) in terms of an “ordinary grammatical meaning” approach or a “substantial connection” approach. The better view is to treat the statement in Pettit and the other decisions which refer to a requirement that any connection was required to be “substantial” as, in effect, attempting to indicate that the words “used … in connection with” take their meaning as to the nature and degree of the required connection from their statutory context. Where that context includes a mandatory forfeiture order of a relevant interest if the definition is satisfied, the degree and nature of the connection required are to be such that it would be appropriate and justified for such a connection to attract potential judicial intervention by way of a mandatory forfeiture order, in all the circumstances having regard to the scope and purpose of the CAR Act. The potential range of circumstances that might fall to be considered in any particular case is virtually without limit …
His Honour proceeded to apply this construction to the evidence concerning the property and the relevant serious crime related activities, namely supply of 1.3kg of methylamphetamine contrary to s 25(2) of the DMT Act and manufacture of methylamphetamine by refinement contrary to s 24(2) of the DMT Act.
For reasons which will be developed further below, the primary judge concluded at PJ [129] that the property was “used in” the brothers’ serious crime related activity of supplying a prohibited drug contrary to s 25(2) of the DMT Act. In addition, his Honour found at PJ [130] that the property had been “used … in connection with” serious crime related activity contrary to s 25(2) of the DMT Act given that the property was sufficiently related to the storage of the drugs for resupply.
His Honour then turned his attention to the question whether the evidence demonstrated to the requisite standard that the property had been either “used in” or “used … in connection with” the serious crime related activity of manufacturing methylamphetamine. His Honour found at PJ [131] that although the equipment and chemicals found at the property could have been “used in” manufacturing methylamphetamine, as could water and electricity available at the property, the property itself was not employed in those processes so as to meet the description of being “used in” the relevant activity.
Therefore, the critical issue was whether the property was “used … in connection with” the refinement of methylamphetamine. His Honour explained at PJ [132]-[133] why he considered that this question should be answered affirmatively:
Refinement, as I have found, occurred at the South Penrith property and, being a house, it provided a measure of concealment from outside observation of what was being undertaken inside. This was important to Ross and Geoffrey because, if police attended and saw what was being done at the property, they thought they would go to gaol for 20 years. Further, equipment and chemicals used in the refinement process were stored at the property together with unrefined and refined methylamphetamine. The South Penrith property also provided access to electricity and water consumed in carrying out the processes involved in refinement as well as providing air conditioning and probably an extractor fan to assist in disposing of fumes from the process. Various parts and characteristics of the property were employed because they were necessary or suitable for carrying out, or facilitated carrying out, refinement of methylamphetamine. The South Penrith property was much more than simply a chance location where refinement happened to occur unconnected with any particular part of, or facility provided by, the property.
Accordingly, having regard to the evidence as a whole and my relevant findings, I am satisfied to the requisite standard that the South Penrith property was so related to the refinement of methylamphetamine there that it is proper to characterise the property as being “used … in connection with” the defendants’ activity of manufacturing methylamphetamine contrary to s 24(2) of the DMT Act, even taking into account the consequences which might flow from that conclusion under the CAR Act.
The critical issue is whether the connection between the use of the property in question and the serious crime related activity must be substantial for a forfeiture order to be made. This involves an issue of statutory construction.
The appellants submit that in order for property to constitute serious crime use property, there must be a substantial connection between the property in question and the commission of serious crime related activity by the offender. The Commission argues that this contention should be rejected as it adds an unwarranted “statutory gloss of substantiality” to s 9B(1).
The words, “in connection with”, are words of “wide import”. As a relational term, its meaning is “highly dependent upon context” such that “[l]ittle assistance is gained in ascertaining the meaning of the particular provision at hand by relying upon the meaning that those words have been given in a different statutory context”: Grain Growers Ltd v Chief Commissioner of State Revenue (NSW) (2016) 93 NSWLR 415; [2016] NSWCA 359 at [122]-[124] per Beazley P, Bathurst CJ and Leeming JA agreeing. That is largely because “[t]he construction of a statutory provision begins and ends with the statutory text understood in context and in light of the statutory purpose”: Palmanova at [4].
Both the appellants and respondent cite numerous authorities that have considered the meaning of the phrase, “used … in connection with”, in the context of criminal assets recovery legislation in several different jurisdictions. Some decisions have held that it is necessary for the Court to find a “substantial” connection between the use of the property and the commission of the relevant offence: see eg R v Ward [1989] 1 Qd R 194 at 199-200 per Carter J, Kneipp and Demack JJ agreeing (Drugs Misuse Act 1986 (Qld)) and Director of Public Prosecutions (Cth) v Jeff**ery (1992) 58 A Crim R 310 at 316-317 per Hunt CJ at CL (Proceeds of Crime Act 1987 (Cth)). Other decisions have not accepted the existence of any threshold requirement based on the notion of substantiality: see eg R v Hadad (1989) 16 NSWLR 476 at 482 per McInerny J, Enderby and Allen JJ agreeing (Crimes (Confiscation of Profits) Act 1985 (NSW)), Director of Public Prosecutions (NSW) v King (2000) 49 NSWLR 727; [2000] NSWSC 394 at [33] per O’Keefe J (Confiscation of Proceeds of Crime Act 1989 (NSW)), Director of Public Prosecutions (SA) v George (2008) 102 SASR 246; [2008] SASC 330 at [62] per Doyle CJ (and see the view of Vanstone J at [167]) (Criminal Assets Confiscation Act 2005 (SA)), and Commissioner of the Australian Federal Police v Brooks [2026] NSWSC 683 at [21]-[28] per Campbell J ( (Cth)).
… it is well settled that, while decisions construing like words in other legislation may be of some assistance, it remains necessary to construe the enacted text. As was stated in McNamara v Consumer Trader and Tenancy Tribunal (2005) 221 CLR 646; [2005] HCA 55 at [40] (per McHugh, Gummow and Heydon JJ):
… It would be an error to treat what was said in construing one statute as necessarily controlling the construction of another; the judicial task in statutory construction differs from that in distilling the common law from past decisions.
The duty of courts, when construing legislation, is to give effect to the purpose of the legislation. The primary guide to understanding that purpose is the natural and ordinary meaning of the words of the legislation. Judicial decisions on similar or identical legislation in other jurisdictions are guides to, but cannot control, the meaning of legislation in the court's jurisdiction. Judicial decisions are not substitutes for the text of legislation although, by reason of the doctrine of precedent and the hierarchical nature of our court system, particular courts may be bound to apply the decision of a particular court as to the meaning of legislation.
The appellants’ construction of s 9B(1) would involve reading that provision as if it contained an additional requirement for the connection between the property and the serious crime related activity to be substantial.
There are some relatively limited circumstances in which words can be read into a legislative provision. As French CJ, Crennan and Bell JJ said in Taylor v The Owners – Strata Plan No 11564 (2014) 253 CLR 531; [2014] HCA 9 at [37]-[38]:
… it should not be accepted that purposive construction may never allow of reading a provision as if it contained additional words (or omitted words) with the effect of expanding its field of operation … it is possible to point to decisions in which courts have adopted a purposive construction having that effect …
The question whether the court is justified in reading a statutory provision as if it contained additional words or omitted words involves a judgment of matters of degree. That judgment is readily answered in favour of addition or omission in the case of simple, grammatical, drafting errors which if uncorrected would defeat the object of the provision. It is answered against a construction that fills "gaps disclosed in legislation" or makes an insertion which is "too big, or too much at variance with the language in fact used by the legislature".
A statute is expressed in language approved and enacted by the legislature. So the courts exercise considerable caution before adding or omitting or substituting words. Before interpreting a statute in this way the court must be abundantly sure of three matters: (1) the intended purpose of the statute or provision in question; (2) that by inadvertence the draftsman and Parliament failed to give effect to that purpose in the provision in question; and (3) the substance of the provision Parliament would have made, although not necessarily the precise words Parliament would have used, had the error in the Bill been noticed. The third of these conditions is of crucial importance. Otherwise any attempt to determine the meaning of the enactment would cross the boundary between construction and legislation:
To similar effect, see also Grain Growers at [128]; Taylor at [39]; Coal & Allied Operations Pty Ltd v Crossley (2023) 112 NSWLR 130; [2023] NSWCA 182 at [54] per Leeming JA, Stern JA and Simpson AJA agreeing.
The Second Reading Speech, whilst of little assistance in understanding the text of the Act in its current form, provides some guidance as to the public purpose behind it, expressed, perhaps more concisely and prosaically, in the long title and s 3. That is not a criticism of the rhetoric in the speech. It reflected an important public policy in attacking criminal undertaking in society, in particular the trafficking in drugs – an aspect of significance for the protection and well-being of any civil society.
Here, there is nothing to suggest that the second condition from Inco Europe has been satisfied: namely, that parliamentary counsel inadvertently failed to give effect to the purpose of the CAR Act in the drafting of s 9B(1). Given that there is “an important public and social policy lying behind the Act in the protection of civil society” from criminal undertaking (Kelaita at [13]) and in light of how “the Act provides in terms for operation of the machinery of recovery in ways that, from one perspective, could be taken to display an element of unfairness” to offenders (Kelaita at [12]), the absence of any qualification in s 9B(1) is not indicative of a disconformity between the provision and the protective purpose of the CAR Act. It follows that there is no basis for inserting the word “substantial” into s 9B(1) so as to have the provision align with the appellants’ preferred construction. To do so would be to introduce an unwarranted gloss on the statute contrary to the established principles of statutory construction.
The same conclusion is reached even if recourse is had to the so-called “principle of legality”. That principle “is a long-established principle of statutory interpretation which generally requires that a court be satisfied of a clear parliamentary intention before concluding that legislation abrogates common law rights, privileges or liberties”. Its application is context-dependent; the required degree of clarity to abrogate common law rights depends on how “fundamental” or “important” the rights in question are and the extent to which those rights would be curtailed under the posited interpretation of the statute: Hurt v The King (2024) 281 CLR 286; [2024] HCA 8 at [106] per Edelman, Steward and Gleeson JJ. See also the discussion and authorities referred to in Athavle v New South Wales (2021) 290 FCR 406; [2021] FCA 1075 at [79]-[83] per Griffiths J; South East Forest Rescue Inc v Forestry Corporation of New South Wales (No 2) [2024] NSWCA 113 at [116]-[117] per Griffiths AJA, Adamson JA and Basten AJA agreeing.
In respect of the CAR Act, the potential role of the principle of legality (and the techniques for resolving residual ambiguities in the language of penal statutes after the ordinary principles of statutory interpretation are applied) was discussed by Allsop P (Giles and Bell JJA agreeing) in Kelaita at [13]-[17]:
[An] important public and social policy [lies] behind the [CAR Act ] in the protection of civil society. Set against that, of course, is the recognition in the common law of the need for clarity in any statute which provides for the confiscation of, or derogation from, property rights. In Studman *v Director of Public Prosecutions (*Cth) [2007] NSWCA 285; 177 A Crim R 34 at 40 [35] McClellan CJ at CL (with whom Spigelman CJ and Handley AJA agreed), said the following:
I accept as the appellant submitted that, being provisions of a statute which provides for the confiscation or derogation from property rights, the statute must be strictly construed. The intention to take away property must be expressed with “irresistible clearness” before it may be applied …
… this formulation … can be accepted as an expression of the principle of legality in the interpretation of statutes ….
The recognition in the common law of the need for clarity in the confiscation of property rights is rooted in the importance of such rights and their legitimate protection in civil society free from the exercise of arbitrary power, in particular in the use of the prerogative power, or in today’s political framework, Executive power. Such concerns are deeply embedded in the common law and are, and have been, reflected in national and international public instruments of government for centuries … Whilst the affectation of property rights in any given context may not necessarily be an interference with “fundamental” rights … the forfeiture of property in circumstances provided by the Act can be seen to be a drastic interference with fundamental rights of property. Of course, that property may have a relationship with criminal activity which engages the Act and its underlying public policy. Nevertheless the interference with property rights is drastic, and the rights at this point in the process can be seen to be fundamental.
The common law principle of interpretation discussed in Studman, does not, however, deny, in the process of construction and interpretation, any role for the recognition of the social or public policy lying behind the Act. The ascertainment of the requisite clarity and the resolution of any ambiguity takes place within the ordinary process of statutory construction and interpretation. Penal statutes, likewise, are construed strictly; but the correct approach to their construction and interpretation is to use the ordinary rules of statutory construction and interpretation, and to recognise that if, after those rules are applied, the language of the statute remains ambiguous or doubtful such ambiguity or doubt should be resolved in favour of the subject because there will not be the requisite clarity to justify the application of the penal statute …
The identification of a relevant canon of construction such as that in Studman and related cases … does not mean that the process of statutory construction and interpretation, as a whole, based on close attention to the text and structure of the relevant provisions by reference to the language of the statute viewed as a whole, set in its proper context and recognising the evident aim and purpose of the legislation should not be undertaken. In other words, the recognition of one canon of construction such as recognised in Studman does not require reversion to a literal analysis of the provision with an eye to the discernment of textual ambiguity through finely spun distinctions …
The appellants did correctly acknowledge, however, that “doubt has been expressed as to the application of [the principle of legality] to legislation which is obviously intended to interfere with rights (as is the case here)”. One example is Australian Securities and Investments Commission v DB Management Pty Ltd (2000) 199 CLR 321; [2000] HCA 7. Gleeson CJ, Gaudron, Gummow, Hayne and Callinan JJ considered that the “presumption that legislation is not intended to interfere with vested proprietary rights” was “of little assistance” when construing a statutory regime that dealt with compulsory acquisition of property, as it would involve “invok[ing] a general presumption against the very thing which the legislation sets out to achieve” (at [43]).
Relying upon this passage, Gageler and Keane JJ in Lee v New South Wales Crime Commission (2013) 251 CLR 196; [2013] HCA 39 at [314] said that the principle of legality “at most can have limited application to the construction of legislation which has amongst its objects the abrogation or curtailment of the particular right, freedom or immunity in respect of which the principle is sought to be invoked”. These remarks were subsequently quoted with apparent approval by Edelman, Steward and Gleeson JJ in Hurt (at [106]). Their Honours went on to note that, even though the purpose of the sentencing provisions under consideration was to “reduce liberty”, the principle of legality still had “some force against an interpretation that treats the prescribed minimum sentences as yardsticks leading generally to a greater average sentence and greater abrogation of liberty” (at [107]). They cited the observations in North Australia Aboriginal Justice Agency Ltd v Northern Territory (2015) 256 CLR 569; [2015] HCA 41 at [11], where French CJ, Kiefel and Bell JJ said:
… the principle of legality favours a construction, if one be available, which avoids or minimises the statute's encroachment upon fundamental principles, rights and freedoms at common law … It is a principle of construction which is not to be put to one side as of "little assistance" where the purpose of the relevant statute involves an interference with the liberty of the subject. It is properly applied in such a case to the choice of that construction, if one be reasonably open, which involves the least interference with that liberty …
The plurality in Hurt ultimately concluded, however, that the principle of legality had “limited force” in that case as it could not “overcome the clear and unequivocal legislative intention that the prescribed minimum sentences serve as a yardstick” (at [107]).
It has been said that the remarks in DB Management and North Australia Aboriginal Justice Agency represent a “difference in view” as to the operation of the principle of legality and that “intermediate appellate courts seem generally to have favoured the narrower view” expressed in DB Management: see discussion in P Herzfeld and T Prince, Interpretation (2024, Thomson Reuters, 3rd ed) at [9.150]. However, any difference may be more apparent than real. As Hurt illustrates, although the principle of legality is not automatically irrelevant where a statute evinces an intention to abrogate common law rights, the principle will likely have “limited force” or “limited application” where the posited narrower construction is not one that is “available” or “reasonably open” (to use the language adopted in North Australia Aboriginal Justice Agency) in light of the identified legislative intention. This coheres with the observation by Basten JA (Beazley P and Payne JA agreeing) in Elliott v Minister A**dministering Fisheries Management Act 1994 (2018) 97 NSWLR 1082; [2018] NSWCA 123 at [40] that the principle of legality “does not override the usual exercise of statutory construction by reference to the text of the statute, its identifiable purpose and the context within which a particular provision is found”. The principle is “not a tool to defeat a clear statement of legislative intention”: Ward v Hoenig [2025] NSWCA 180 at [47] per Bell CJ, Mitchelmore and Kirk JJA. Rather, it is “an occasionally useful, context-dependent adjunct to the ultimate and central judicial task and responsibility of giving effect to legislative intention”: Kassam v Hazzard (2021) 106 NSWLR 520; [2021] NSWCA 299 at [86] per Bell P, Meagher and Leeming JJA agreeing.
Here, one of the stated objects of the CAR Act is “to provide for the confiscation, without requiring a conviction, of property of a person if the Supreme Court finds it to be more probable than not that the person has engaged in serious crime related activities”: CAR Act s 3(a). A construction of s 9B(1) that superimposes a requirement of substantiality to minimise the interference with an offender’s proprietary rights would soften or dilute the express purpose of the CAR Act and is not one which is reasonably open. It is inconsistent with the remarks of Allsop P (Giles and Bell JJA agreeing) in Kelaita at [12], who observed that the CAR Act was:
certainly intended to be “tough” … unless the express safeguards provided for in the Act (often resting on a reversed onus) are engaged, it may be seen as surprising to interpret or construe the Act in a way based on “fairness” to the person proved to have been engaged in serious crime related activities.
That is not to say, however, that the CAR Act operates such that the property of a person is liable to be confiscated merely because the Court is satisfied on the balance of probabilities that the person has engaged in serious criminal activities. That would ignore the express terms of s 9B(1), which requires the Court to be satisfied that the property was “used in, or in connection with, a serious crime related activity”.
With respect to the phrase, “used … in connection with” (which is the subject of ground 3), I do not think it proper to read additional words into that phrase (such as the word “substantial”) so as to qualify the meaning and operation of the phrase. Rather, I respectfully agree with the primary judge at PJ [123] that the phrase ultimately takes its meaning from the statutory context. That statutory context involves the making of an assets forfeiture order in respect of property. Self-evidently, such an order could be a serious and significant matter in the eyes of the property owner, bearing in mind that “property” includes both real and personal property. For such an order to be made, the Court must be satisfied, on the balance of probabilities and having regard to s 140 of the Evidence Act 1995 (NSW), that the nature and degree of connection between the use of the person’s property and the serious crime related activity are sufficient to justify the making of such a serious and significant order. I also respectfully agree with the primary judge’s additional observation at PJ [123] that the potential range of circumstances bearing upon the judicial task is very broad.
As the plurality of the High Court observed in Commissioner of the Australian F**ederal P**olice v Hart (2018) 262 CLR 76; [2018] HCA 1 at [10] with reference to the federal confiscation legislation which is expressed in relevantly similar terms to the South Australian legislation considered in George:
… Consistently with the construction of equivalent language adopted by the Full Court of the Supreme Court of South Australia in Director of Public Prosecutions v George, use in or in connection with an act or omission that constituted a relevant offence is a broad conception involving practical considerations which do not readily admit of detailed exposition in the abstract. The conception requires neither a causal link between the property and the offence nor that the property was necessary for the commission of the offence or made a unique contribution to the commission of the offence. Implicit in the expression of the condition is that the use can be by any person. Implicit also is that the degree of use need not be proportionate to the forfeiture that has occurred.
The potentially broad range of relevant circumstances is well illustrated by Doyle CJ’s judgment in George. Under s 47(3) of the Criminal Assets Confiscation Act 2005 (SA), the Court was empowered to make a forfeiture order if, relevantly, a person had been convicted of one or more serious offences and the Court was satisfied that property was an “instrument” of one or more of the offences. Under s 7, property was an “instrument” of an offence if it was “used in, or in connection with, the commission of an offence”. The offender pleaded guilty to producing cannabis and knowingly extracting electricity from the power system after police found 12 cannabis plants and 20 seedlings grown hydroponically at a shed at the rear of the property where the offender lived. The offender was fined $2,500 in respect of both offences but the magistrate declined to make a pecuniary penalty order because he considered that the property was not an “instrument” of the offence. The Full Court of the Supreme Court of South Australia allowed the appeal by the Director of Public Prosecutions (SA).
After referring to several features of the Criminal Assets Confiscation Act which were potentially relevant to the proper construction of the phrase, “used … in connection with, the commission of an offence” in s 7 (see at [57]-[64]), the Chief Justice concluded at [65]:
Bearing these matters in mind, what is the link, or kind of link, between property and the commission of an offence that Parliament has identified by its definition of “instrument”? As a matter of ordinary language, and bearing in mind that the word defined is “instrument”, I consider that the definition refers to a use of property that facilitates, assists or contributes to the commission of an offence. That is a starting point, not a conclusion. The use of the property must be sufficiently significant (I realise that this is question begging) to warrant a conclusion (especially when the property is the place where the offence is committed) that the property is used in connection with the commission of the offence. This invites attention to the role that the property plays in the commission of the offence, to the extent to which the property is so used, and to how much of the property, or what part of it, is used. I doubt whether one can usefully go any further than that.
(a) It was appropriate to infer that the shed where the cannabis plants were growing concealed the plants and protected them from the elements, also noting that Mr George used electricity and water to grow the plants hydroponically (at [68]). (b) The plants and seedlings were not growing in the ground but it could be inferred that they were growing in some sort of container (at [69]). (c) The shed was a suitable and convenient place to grow the cannabis plants (at [70]). (d) It was reasonable to infer that the plants had been growing there for more than a day or so and had not been brought there only shortly before they were detected, or were about to be moved to another location (at [71]). (e) The growing of the cannabis plants involved the use of only part of the land and otherwise, the land was used for residential and related purposes (at [72]). (f) The land was in no sense a “consumable” being used up in production of the cannabis plant (at [73]). (g) The offence of producing cannabis was not merely committed on the land in the sense of it being an accident or coincidence that the offence was committed there, as would be the case if a visitor called in and sold some cannabis while on the land. Rather, the shed provided a convenient and secure place to grow the cannabis. Moreover, although only part of the land was used to grow cannabis, the area of the shed was not trifling or insignificant and the use of the shed and the land was not unplanned as it could be inferred that Mr George chose the shed as a suitable place to grow the cannabis (at [76]). (h) The use of the land “facilitated and contributed to the commission of the offence” and was not merely the place where the offence happened to have been committed (at [77]).
Although on those scant facts, the case lies close to the limits of the reach of the definition, I consider that it falls within it. Standing back, and bearing in mind the purpose of the CAC Act, it is not surprising that a person who grows cannabis hydroponically on land, or in a building on land, is found to be using the land in connection with the commission of the offence of growing the cannabis.
Ground 1 claims that the primary judge erred by finding at PJ [67] that the evidence did not raise a sufficiently realistic possibility/probability that the detection of methylamphetamine at the property could have been caused by the smoking of that drug at the property and that his Honour's finding was not warranted by the evidence as a whole.
Ground 2 claims that the primary judge erred by finding at PJ [74] that the appellants had manufactured methylamphetamine at the property, such finding not being warranted by the evidence as a whole.
The primary judge’s ultimate finding at PJ [67] is based on a series of earlier findings, which may be summarised as follows:
(a) His Honour was comfortably satisfied on the balance of probabilities (and taking into account the matters specified in s 140(2) of the Evidence Act) that unrefined methylamphetamine and crystalline refined methylamphetamine were surreptitiously stored by the appellants at the property and that the storage was for the purpose of eventual supply (at PJ [61]). (b) Based on the evidence as a whole, particularly the nature of the equipment found at the property and the presence of methylamphetamine on various items of that equipment, together with the fact that Ross Hitchen’s DNA was found on various items, the equipment and chemicals used in the manufacture of methylamphetamine by refinement with Ross’s involvement were stored surreptitiously at the property in the garage, in the carport, in the area under the house and in the roof cavity (at PJ [62]). (c) In determining whether methylamphetamine was manufactured by refinement at the property, his Honour accepted the evidence of Mr Cameron and Emeritus Professor Hibbert that methylamphetamine could have been manufactured by refinement at the property in the period when the equipment and chemicals were present there. Additionally, his Honour found that the presence of methylamphetamine on the walls of the garage, behind the refrigerator and underneath the air-conditioning unit, as well as in the kitchen around the circular opening above the hotplates, was consistent with refinement of methylamphetamine actually having occurred at the property, albeit somewhat inexpertly (at PJ [63]). (d) The primary judge also accepted both experts’ evidence that it was “possible that the presence of methylamphetamine in those locations could have been the result of it being smoked in those rooms”, but his Honour added that, apart from refinement and smoking, there was no other likely explanation proffered for the presence of methylamphetamine in those locations (at PJ [64]). (e) There was no direct evidence of methylamphetamine being smoked in the garage or kitchen at any time. Noting that one brother’s evidence (Geoffrey) was that he never went into the garage except on the one occasion when he ran over the step when parking his car, it was most unlikely that any smoking by him of methylamphetamine in the garage explained the deposits on the walls, behind the refrigerator and under the air-conditioning unit or in the kitchen. As to the other brother’s evidence (Ross), his Honour reasoned that if the evidence he gave during his examination was accepted, Ross did not use drugs at all even socially, had done no more than “try it”, and was not a drug user. Thus, the presence of methylamphetamine on the walls of the garage or kitchen cannot be explained by Ross having smoked methylamphetamine there and no one else who attended the property was identified in the evidence (at PJ [65]). (f) Whether or not the two brothers’ evidence in their examinations regarding their drug use was accepted, the primary judge noted that when told that the swabs from the garage walls and the circular opening in the kitchen above the hotplates contained methylamphetamine, Ross said he thought the swab results were “a mistake or something” and Geoffrey said that he did not believe that methylamphetamine had been found in the swabs (at PJ [66]).
In these circumstances, the evidence as a whole does not raise a sufficiently realistic possibility, let alone a significant degree of probability, that methylamphetamine was smoked in the garage and the kitchen which led to it being detected on the walls in the garage and around the circular opening above the hotplates in the kitchen. Consequently, it is open to find to the requisite standard that the methylamphetamine detected in those locations was the result of methylamphetamine being manufactured by refinement in those rooms of the South Penrith property.
When all of these considerations in [63] to [72] are taken together in light of the evidence as a whole, I am satisfied to the requisite standard that methylamphetamine was manufactured by refining at the South Penrith property by the defendants during the period when the chemicals, equipment and unrefined methylamphetamine were at the property in 2017 and 2018.
(a) The primary judge acknowledged that he had not observed either of the brothers give evidence, but the evidence included copies of the transcripts of their examinations and extracts of conversations between them obtained by police surveillance. Common sense and experience indicated that the evidence of those latter conversations was more likely to be reliable than what they said during their examinations (at PJ [68]). (b) Noting that the surveillance evidence included Ross telling Geoffrey on 15 February 2018 that “you went and cooked the gear, you made it”, and having regard to the evidence as a whole, the primary judge inferred that Ross was saying that Geoffrey had been involved in manufacturing a prohibited drug. Furthermore, addressing the evidence obtained under surveillance that Ross had asked Geoffrey on 22 January 2018 why the step in the garage had been left open and Geoffrey’s response that the step was open when he parked the car, his Honour reasoned that one reason why the step would be open would be to gain access to the unrefined methylamphetamine stored surreptitiously in that area or to return methylamphetamine there after refining. His Honour said that it was difficult to perceive any other reason for the step to be open (at PJ [69]). (c) In addition, the primary judge noted what Ross was recorded as saying to Geoffrey on 22 January 2018 that: “If the cops come round here we’ve got real problems. If they come here, we’ll be doing 20”. The following day, Ross was recorded as saying to Geoffrey: “If you cause a drama at that house, and the coppers come round and lose my mate’s money and gear I will fucking bury you and disown you”. His Honour regarded these statements as supporting the inference that both the brothers were engaged in criminal activity at the property which would be obvious if the police attended there and could attract a severe sentence. His Honour said it was difficult to perceive any other likely or more likely inferences to be drawn in all the circumstances (at PJ [70]-[71]). (d) His Honour added that the combination of the following matters provided substantial support for the inference that “cook[ing] the gear” referred to manufacturing, or taking steps to manufacture, methylamphetamine by refinement at property:
(i) the statements in the conversations that “[i]f the cops come round here we’ve got real problems. If they come here we’ll be doing 20”; (ii) the presence of the necessary equipment and chemicals at the property for refining methylamphetamine; (iii) the presence of both unrefined and refined methylamphetamine under the stairs in the garage; (iv) the methylamphetamine detected on the equipment, extractor fans, walls of the garage and the circular opening in the kitchen above the hotplates, at the property; and (v) the absence of any evidence to suggest that Geoffrey was involved in the manufacture of prohibited drugs elsewhere or otherwise (at PJ [72]).
His Honour then added at PJ [73] that there did not appear to be any other probable or more probable inference available in all the circumstances.
As noted above, ground 1 challenges the primary judge’s finding at PJ [67]. The appellants claim that if the primary judge had properly evaluated the whole of the evidence, he would have found that the traces of methylamphetamine on the swabs could have been explained by methylamphetamine having been smoked at the property, rather than as a result of manufacture on the premises. They emphasise that the mere detection of methylamphetamine as a result of the swabs did not say anything about the quantity, proximity or origin of the drug, nor exclude the possibility that the drug could have been deposited by a single instance of smoking.
This Court is in as good a position as the primary judge to make findings of fact, having regard to the matters set out at [107]-[109] above and noting that the primary judge did not make any adverse credibility findings relating to either of the two experts. Their evidence was accepted. This Court has before it a copy of the transcript of the concurrent hearing of the experts’ oral evidence.
As noted above, the primary judge took into account a series of findings as set out at PJ [61]-[66] before concluding at PJ [67] that the evidence as a whole did not raise a sufficiently realistic possibility that methylamphetamine was smoked in the garage and the kitchen. His Honour considered it was open to find to the requisite standard that the methylamphetamine detected in those locations was the result of methylamphetamine being manufactured by refinement in those rooms at the property. The appellants have not persuaded me that there is appealable error in any of those findings. Moreover, I am satisfied on this rehearing that there is insufficient evidence to find that on the balance of probabilities, someone had smoked methylamphetamine in the garage or kitchen of the property.
The evidence on this matter is very limited. In particular:
(a) Geoffrey gave evidence that he never went into the garage except when he ran over the displaced step when parking the car and that the garage was locked by Ross, who did not allow Geoffrey in there. (b) Geoffrey gave evidence in his examination that he used methylamphetamine about four or five times a year and for about three to four days but he never said that this involved him smoking the drug at the property or, in particular, in the garage or kitchen. When he was asked during his examination whether he was taking methylamphetamine “around this time”, he responded: “Nah - may of once or twice”. The reference to “may of” is presumably meant to mean “maybe” or “may have”. Self-evidently, Geoffrey’s answer was not unqualified. It is also notable that he did not state that the possibility of him having taken methylamphetamine around this time involved him smoking the drug, in circumstances where the drug can be consumed by ingestion, injection or inhalation. When Geoffrey was asked about the positive swab from behind the air-conditioning unit in the garage, he said that he never went into the garage. He then added, somewhat unresponsively, that:
Could that be smoking meth in there, possibly? I don't know. Maybe somebody was smoking - smoking meth in there.
Continuing his unresponsive answers, when the examiner put to him that “It’s a swab from –”, Geoffrey interrupted him and said “Occasionally we have people over”. Notably, he did not identify any particular person nor provide any details of when or where a visitor may have smoked the drug in any of the relevant parts of the property.
(c) Ross’s evidence in his examination was a complete denial that he personally used any drugs beyond “try[ing] it”, including methylamphetamine; he sought to explain the traces of methylamphetamine revealed by the swabs as simply “a mistake or something”. (d) The proposition that someone may have smoked methylamphetamine in the property is not supported by either expert’s evidence. That evidence was neutral as between the competing hypotheses.
In the light of this evidence, I accept the Commission’s submission that the appellants’ proposition that someone other than Geoffrey or Ross may have smoked methylamphetamine in the property is nothing more than speculation or conjecture. This conclusion does not involve any reversal of the onus of proof. Rather, it reflects an objective review of the evidence as a whole.
Turning to ground 2, the appellants claim that the primary judge’s finding at PJ [74] that methylamphetamine was manufactured by refining at the property was not supported by the evidence. For the following reasons I reject that claim.
First, the appellants complain that the primary judge did not take into account the fact that there was evidence of an alternative site where manufacture clearly had and could have taken place. They submit that this evidence, together with the evidence of Ross’s involvement in the manufacture of the drug at the other site, significantly detracts from the strength of the inference drawn by the primary judge that manufacture occurred at the property. I do not accept that submission. The evidence includes Ross’s conviction for conspiracy to manufacture a prohibited drug at the other site and that he stored “rubbish” from that other site at the property. Not only was Ross involved in obtaining and replenishing equipment and supplies for manufacturing the drug at the other site, but evidence of Ross’s DNA was found on a respirator and a glove in the carport of the property. The evidence also establishes that Geoffrey had some, albeit lesser, involvement in manufacturing the drug at the other site, as he bought hydrochloric acid to be used there.
In any event, the primary judge made clear at PJ [74] that all the considerations in PJ [63]-[72] were taken together by him in light of the evidence as a whole. He was satisfied to the requisite standard that the drug had been manufactured by refining at the property by the appellants. The primary judge did not state that each of the considerations at PJ [63]-[72] had the same strength. His Honour stated at PJ [72] that “substantial support” for the finding in that paragraph was provided by a combination of the five individual matters set out in that particular paragraph.
Secondly, the appellants submit that the finding that the surveillance evidence of Ross saying to Geoffrey that “you went and cooked the gear, you made it” was a reference to Geoffrey having manufactured drugs at the property was merely speculative. They argue that this is particularly so in circumstances where there was evidence of manufacturing having occurred at the other site. They submit that the use of the word, “went”, in this intercept strongly suggests that whatever is being referred to occurred somewhere other than at the property. I do not accept that submission. It was reasonable for the primary judge to construe the word, “went” as not being used in a geographical sense but in the more colloquial sense of something having occurred.
Q. Where did that come from? [referring to $20,000 deposited in a bank account].
A. I know we took - we took about 50 - 50 or 60,000 for the builder who didn't 30 do the job, and then we - we started putting that money back in, so it could be some of that. Or it could be some of my father's money. I know I've redeposited, like, 50,000 from the house loan. He wanted to be paid in cash, some dodgy fucking Greek.
…
Q. I suppose, why did you agree to let him [an unidentified third person] keep the drugs in your garage?
A. Why?
Q. Yes.
A. Cause he, he was going to give me some money for it, five grand, but he never did and then that's it. Then he never, he never paid my legals or anything.
Q. Why would he pay your legals?
A. Well, fucking, I got caught with his drugs.
…
Q. Because he was an addict?
A He's not an addict but he's just a fucking pain in the arse. He probably would've been doing something to cause problems. He gets drunk and just does dumb shit.
Thirdly, the appellants complain that the primary judge did not take into account the specific circumstances in which methylamphetamine hydrochloride could have been volatilised and thereby deposited on the surfaces during the process of refinement. They point to the experts’ evidence that methylamphetamine will not volatilise in the course of refinement unless an artificial heat source is applied and the crystals boil to a temperature 200°C higher than the temperature required to boil water. Contrary to that submission, it is evident that the primary judge did take into account at PJ [63] the limited circumstances which could explain the traces of the drug on surfaces at the property; in particular, that the drug could have been volatilised when it was heated to 300°C or more.
Mr Cameron’s expert evidence was that the deposits of the drug on various surfaces could be explained by a lack of expertise on the part of the manufacturer, allowing splatter onto surfaces or allowing the product to “dry boil”. The possibility of the manufacturer permitting the product to “dry boil” was not the only explanation provided by the experts. Both agreed that methylamphetamine could be refined without heat and that the swabs could have detected the presence of the drug on the swabbed surfaces as a result of solid or liquid forms of the drug having been spilled on them.
Fourthly, the appellants reiterate their reliance on the matters raised by ground 1 of the appeal as being relevant to the primary judge’s conclusion that refinement had occurred at the property. I repeat and adopt the reasons given above for rejecting ground 1.
Fifthly, the appellants contend that the primary judge ought to have acted upon the appellants’ evidence in their examinations that manufacturing of the drug had not occurred at the property and that the equipment had been brought there from the other site or had been procured for the purpose of manufacturing the drug at the other site. They submit that their evidence was “plausible, consistent with other evidence and detracted from the likelihood that refinement occurred at the property”. They also point to the surveillance evidence in which Ross referred to “my mate’s money and gear” at the property. The appellants emphasise that although they did not give evidence at trial, no Jones v Dunkel argument was raised against them.
I do not accept these submissions. The primary judge made clear several times that the evidence needed to be considered as a whole. I respectfully agree. On this rehearing, when the evidence is viewed as a whole, I agree with the primary judge’s decision not to act upon the particular claims or denials made by the appellants in their examinations. These claims and denials are inconsistent with the other evidence referred to by the primary judge and as outlined above.
The Primary Judge erred by finding (at J[133]) that, pursuant to s 9B(1) of the Criminal Assets Recovery Act 1990, the South Penrith property had been “used in, or in connection with, a serious crime related activity”.
Ground 4 challenges the primary judge’s finding at PJ [133] which is set out at [126] above. In brief, his Honour found that, having regard to the evidence as a whole and his Honour’s related findings, he was satisfied to the requisite standard that the property was so related to the refinement of methylamphetamine at the property that it should be concluded that property was being “used … in connection with” the appellants’ activity of manufacturing methylamphetamine, contrary to s 24(2) of the DMT Act. This conclusion relates only to the second limb of the serious crime related activities associated with the property, namely those relating to manufacture of methylamphetamine as opposed to the activities relating to supply which constitute the first limb. In their written and oral submissions relating to ground 4, however, the appellants assumed that ground 4 relates to both limbs of those activities. The Commission raised no pleading objection to this view of the ambit of ground 4.
The findings underpinning the primary judge’s conclusion at PJ [129] that he was satisfied to the requisite standard that the property was “used in” the brothers’ serious crime related activity of supplying more than the large commercial and the commercial quantity of a prohibited drug contrary to s 25(2) of DMT Act may be summarised as follows:
(a) After noting the definition of “supply” in s 3(1) of the DMT Act, his Honour considered that the appellants had stored over 1.3kg of methylamphetamine under the stairs in the garage for the purpose of eventual resupply. Thus they were “keeping or having in possession for supply” and thus supplying the drug stored there (at PJ [127]). (b) It was not merely fortuitous that the drugs were stored in that place; rather, they were deliberately hidden there (at PJ [128]). (c) Thus, part of the property was used to hide the items, taking advantage of its configuration, size and location. The drugs were stored there with a view to reducing the risk of them being detected by police or anyone who attended the property, such that his Honour was satisfied to the requisite standard that the property was “used in” the brothers’ serious crime related activity of supplying more than the large commercial and the commercial quantity of a prohibited drug contrary to s 25(2) of the DMT Act (at PJ [129]). (d) In any event, even if that conclusion was wrong, the primary judge found that the storage of the drugs under the stairs “involved deliberately concealing them in a hidden but accessible location provided in the [property] with a view to being able to carry out the activity in question undetected”. Thus his Honour found that the property was sufficiently related to the storage of the drugs for resupply to find the property had been “used in … connection with" the brothers’ serious crime related activity, contrary to s 25(2) of the DMT Act (at PJ [130]).
The appellants challenge the primary judge’s conclusion that the property was used in the offending conduct relating to supply on the basis that the property was nothing more than the location at which the offence occurred, the degree of concealment was opportunistic and unsophisticated, and there was no use of the property in any real sense with regard to the offence of supply. As to the primary judge’s finding that the appellants possessed the drug knowing that it would be supplied in the future, the appellants point to the fact that there was no finding that the supply would be carried out by either of them, nor any finding that the actual supply would occur at the property.
For the following reasons, I do not accept those contentions.
First, as the Commission correctly points out, the appellants’ convictions for the offence under s 25(2) of the DMT Act were based on the deeming provisions in s 29 of the Act. The concept of possession, for the purposes of deemed supply, encapsulates knowledge, physical custody and control (see He Kaw Teh v The Queen (1985) 157 CLR 523; [1985] HCA 43). The evidence is clear that the appellants had possession of the drugs at the property for more than 12 months. Moreover, there is sufficient evidence to support the primary judge’s findings of fact at PJ [129] regarding the appellants taking advantage of the physical features of the property to conceal the drugs.
Secondly, as the primary judge made clear at PJ [130], his Honour proceeded to find that the property was “used … in connection with” the offence of supply contrary to s 25(2) of the DMT Act because storage of the drugs in the particular location involved deliberate concealment by taking advantage of a part of property so as to carry out the activity of supply undetected. His Honour also reiterated the findings set out at PJ [128]-[129].
The evidence contradicts the appellants’ claim that this is a case involving nothing more than possession of a prohibited drug at residential premises. The relationship and connection between the property and possession of the goods is not merely incidental. It involved the appellants taking advantage of a feature of the property, namely the void beneath the steps, to conceal the drugs with a view to future supply.
Finally, the appellants confirm in their written reply submissions that ground 4 is predicated on the claim that the primary judge misconstrued s 9B(1). For the reasons given above, that predicate has been rejected.
Turning now to ground 4 insofar as it relates to the primary judge’s finding at PJ [133] (i.e. that the property had been “used … in connection with” the manufacture of methylamphetamine contrary to s 24(2) of the DMT Act), it is convenient first to summarise the primary judge’s findings which underpin that conclusion:
(a) Noting that the property itself was not employed in the actual processes of the refinement of methylamphetamine so as to meet the description of being “used in” the relevant activity, it was necessary to consider whether the property was “used … in connection with” the refinement of methylamphetamine (at PJ [131]). (b) The primary judge found that the property was not simply a “chance location” where refinement occurred which was unconnected with any particular part of, or facility provided by, the property. His Honour emphasised the following features of the property:
(i) the house provided a measure of concealment of the activities undertaken inside; (ii) the fact that equipment and chemicals used in the refinement process were stored at the property, together with the drugs; and (iii) the property provided access to electricity and water which were consumed in the process of refinement and the property also provided air-conditioning and probably an extractor fan to assist in disposing of fumes from the refinement from the manufacturing process (at PJ [132]).
For all these reasons, I propose that the appeal be dismissed with costs.
For completeness, I should also add that I respectfully agree with that part of [1] of Leeming JA’s reasons for judgment in which his Honour points out that courts will be assisted by applying Kirk JA’s four propositions at [84].
**********
Hitchen
New South Wales Crime Commission
Appeal dismissed with costs. The primary judge’s substituted serious crime use property declarations and assets forfeiture orders in respect of the appellants’ interests in the net proceeds of sale remained undisturbed.
Hence the competing hypothesis emphasised by the appellants was that not only had a panoply of manufacturing equipment, which had in fact been used to manufacture methylamphetamine, been taken to the premises (including the 20 litre drum with traces of methylamphetamine in the residue), together with unrefined methylamphetamine, but also that the drug had been smoked so as to produce traces of methylamphetamine on the garage walls, behind the refrigerator, underneath the air conditioning unit and above the hotplates in the kitchen. No explanation was given as to how that might have occurred. Indeed, as Griffiths AJA points out, there was no credible evidence that methylamphetamine had been smoked at the premises.
The second appellant was asked about this in his examination by the Commission, to which the responses were that he did not believe it:
There may be all sorts of relationships sufficient to be described as “in connection with” property and serious crime related activity. Consider an automobile which is owned by an armed robber. Is the vehicle used “in connection with” an armed robbery if it is the getaway vehicle? What if it is only used to acquire the firearm? What if it is only used in reconnaissance of the target? It is clear that there are many uses of property which, while they may have been necessary in a “but for” sense to the commission of the serious crime related activity, are unlikely to possess a sufficient connection for them to satisfy the second limb of the definition.
Implicitly, the “in connection with” aspect of the test carries with it an assessment of the nature and degree of the connection. That must involve a consideration of (a) on the one hand, the particular aspects of ownership or control of the property which were carried out by or on behalf of the person, and (b) on the other hand, the elements of, or other conduct relating to, the commission of a serious crime related activity.
As Griffiths AJA explains, there is a debate in earlier decisions on this and cognate legislation whether the section should be read as requiring a “substantial” connection between the use of the property and the serious crime related activity. The appellants asked this Court to adopt that construction. What is sought to be achieved as a matter of statutory construction is identical with the legislative change effected, in a completely different context, when the “farm land” exception in the assessment of land tax was amended so as to require not merely the presence of “a significant commercial purpose or character”, as had been held under earlier forms of the legislation, but “a significant and substantial commercial purpose or character”: see the discussion in Maraya Holdings Pty Ltd v Chief Commissioner of State Revenue [2013] NSWCA 408; (2013) 97 ATR 818 at [62]-[65] and [70]-[84]. As Deane J famously observed, the word “substantial” is “not only susceptible of ambiguity: it is a word calculated to conceal a lack of precision”: Tillmanns Butcheries Pty Ltd v Australasian Meat Industry Employees*’* Union (1979) 42 FLR 331 at 348. Gummow, Hayne and Heydon JJ endorsed Deane J’s observation and added that its meaning in any particular case will be determined by context: IceTV Pty Ltd v Nine Network Australia Pty Ltd (2009) 239 CLR 458; [2009] HCA 14 at [154]. Treating s 9B as impliedly turning on a “substantial” connection does little more than conceal the problem posed by an already complex suite of definitions so as to incorporate a notoriously imprecise and ambiguous qualification. I agree with Griffiths AJA that s 9B should not be read as if the word “substantial” qualified “in connection with”.
The result is that the statute leaves unstated how the test of “in connection with” is to be applied. But regard can and should be had to the context in which the statutory test applies. The context is that if, as a result of the application of the definitions, there is an available interest relating to serious crime use property, then on the application of the Crime Commission, the Supreme Court must make a forfeiture order. That context compels the conclusion that distant and remote connections between the use of the property and the serious crime related activity will not suffice. I respectfully agree with the conclusion reached by the primary judge at [123]:
That in substance was the approach adopted by the primary judge. No error has been established in his conclusion. The appeal should be dismissed.
KIRK JA: The facts and issues in this appeal are explained in the judgment of Griffiths AJA. I agree with the orders proposed by his Honour. I also agree with his Honour’s reasons, along with the additional reasons of Leeming JA, save as follows. First, I prefer to express my own views on the issue of statutory construction. Second, like Leeming JA, I consider it sufficient to resolve the ultimate question on the basis that the property in question was used in connection with the manufacture of prohibited drugs, without resolving whether there was a sufficient connection to the deemed supply offence.
Thus, to give an example, growing no more than a handful of cannabis plants in the backyard of a residential house is relevantly a “serious criminal offence”, even though it would generally be dealt with summarily, and where it would be most unlikely to lead to a sentence of imprisonment if prosecuted and found guilty. The terms “serious criminal offence” and “serious crime related activity” are thus something of a misnomer.
In cases involving claims for forfeiture of serious crime use property the Supreme Court is granted no discretion nor required to consider whether making such an order is justified or proportionate in all the circumstances. The closest the CAR Act comes in that regard is that in certain circumstances the Court may order that a dependant of the person in question is paid a specified amount to avoid being caused hardship by an assets forfeiture order: s 24.
The appellants invoked the clear statement principle (the “principle of legality”). Yet, as regards property rights, it is clear that in enacting the relevant provisions of the CAR Act the State Parliament “directed its attention to the question of the abrogation or curtailment of such basic rights … but has also determined upon abrogation or curtailment of them”: quoting Coco v The Queen (1994) 179 CLR 427 at 437; [1994] HCA 15. As explained, the question is how far it has gone in doing so.
That being said, the effect on property rights remains relevant in the sense that it seems unlikely, in the absence of clear language, that the Parliament would have intended to authorise the expropriation of property without compensation when there is only a slender link to commission of a crime. That is so even allowing for the fact that “the degree of use need not be proportionate to the forfeiture that has occurred”, to quote the plurality’s statement in Hart at [10] about the federal regime. This understanding is consistent with the analysis of Doyle CJ in George (at [59]) and McLure P in White CA (at [33]). The approach taken to s 88K of the Conveyancing Act 1919 (NSW) also offers analogical assistance. That provision authorises a court to impose an easement on property over the opposition of the owner (albeit with compensation) if doing so is “reasonably necessary for the effective use or development of other land that will have the benefit of the easement”. What is involved in the notion of “reasonable necessity” in that context has been influenced, to some degree, by the fact that property rights are involved: see the authority summarised in Conway v Leeroy Property Investments Pty Ltd [2026] NSWCA 123 at [79]. Similarly here, I consider the effect on property rights to be one factor in the construction exercise.
An influential judgment in this area is that of Doyle CJ in George. The judgment was referred to approvingly, for instance, in both judgments in the High Court in Hart. His Honour rejected the use of “substantial” as a descriptor, regarding that as introducing “an expression which the draftsman has not used” (at [62]). As indicated, I respectfully disagree with that view. Regardless, it is notable that his Honour went on to indicate that the “kind of link” required was one “sufficiently significant (I realise that this is question begging) to warrant a conclusion (especially when the property is the place where the offence is committed) that the property is used in connection with the commission of the offence” (at [65]). The use of the phrase “sufficiently significant” is indeed question-begging (in the modern sense of that term). It is language of a conclusion, thus simply re-raising the question of how significant the connection must be. However, it is tolerably clear that what his Honour was meaning to communicate is that the connection must be significant. That word itself can be suggested also to be somewhat question-begging, just as for words such as “substantial” or “material”. But again, it is tolerably clear that what is meant is that it is on the more direct or stronger end of the connection spectrum.
In this case the primary judge said that “the degree and nature of the connection required are to be such that it would be appropriate and justified for such a connection to attract potential judicial intervention by way of a mandatory forfeiture order, in all the circumstances having regard to the scope and purpose of the CAR Act” (at [123]). That description can be understood as a longer version of Doyle CJ’s notion of “sufficiently significant”. Again, it begs the question of what degree and nature of connection is sufficient to attract a mandatory forfeiture order. Again, however, it can be understood as meaning a relatively significant degree of connection. His Honour had earlier said that a “trivial or merely fortuitous connection” was unlikely to suffice (at [109], see also [90]).
As both parties recognised, his Honour’s reference to “appropriate and justified” on one view comes “very close to a discretionary consideration being imported into the operation of the statute” (to quote counsel for the Crime Commission). A discretionary judgment should not be introduced through the back door, where it is evident that the Parliament chose not to adopt that model. His Honour’s statement of the correct approach at [123] is thus potentially problematic.
It may be that what his Honour was meaning to emphasise was that assessing whether property has been used in connection with a relevant crime is an issue of characterisation involving “a matter of fact and degree” (quoting what he had said earlier at [109]; see also Hart at [85]; Chalmers at [77(3)]). His Honour seems implicitly to suggest that to be so characterised the connection must be significant, in the sense of being at the more significant end of the spectrum. That, in my view, is the appropriate understanding of the requirement. It takes due account of the statutory context, including the absence of any residuary discretion in the Court and the fact that the Parliament can be understood not to have intended that property be seized for slight degrees of connection to a crime.
That understanding is consistent with the fact that property might be connected to commission of a relevant crime in a range of ways. In that regard, the primary judge emphasised that the potential range of circumstances that might fall to be considered in any particular case is broad. That view is consistent with the plurality’s statement in Hart that “use in or in connection with an act or omission that constituted a relevant offence is a broad conception involving practical considerations which do not readily admit of detailed exposition in the abstract” (at [10]). Such an understanding is apposite as regards the phrase employed in s 9B of the CAR Act.
So, too, are the observations in Hart at [10] and [83] – consistent with Doyle CJ’s view in George at [63] – that there need not be a causal link between the property and the offence, and nor is it required that the property was necessary for the commission of the offence or made a unique contribution to the commission of the offence (and see analogously Commonwealth Superannuation Scheme Board of Trustees v Kitching (2004) 139 FCR 272; [2004] FCAFC 299). Were it otherwise then the notion could not, for example, extend to use of the property after the offence had been committed.
Drawing these threads together, in my view the following can be said about the notion of “used in, or in connection with, a serious crime related activity” in s 9B(1) of the CAR Act:
The notion involves a practical question of characterisation raising issues of fact and degree. The difference between “used in” and “used in connection with” is one involving the directness with which the property is used in relation to the relevant criminal activity. It is not necessary to draw a sharp distinction between the two aspects. Use of property can be connected to criminal activity in various ways, and a broad range of facts may be relevant to the assessment. To be so characterised the connection must be significant, in the sense of being at the more significant end of the connection spectrum. The assessment is evaluative but not discretionary.
The notion is purposive, requiring that the property or some feature of it has been employed or made use of to advance or facilitate the criminal activity or a purpose connected with the activity (such as covering up the crime). In general it will not suffice merely to show that the criminal activity occurred at the location or involved use of the property in a happenstance way, such as happening to be the location where the activity occurred, but without any feature of the property being significant in it having occurred.
It commonly will be relevant to consider how the property was used in or in connection with unlawful activity; the extent to which the property was so used; and how much or what part of the property was used in that unlawful activity.
It is not necessary that there be a causal link between the property and the activity, nor that the property was necessary for the activity to be undertaken, nor that it made a unique contribution to that occurring.
There was a contested issue as to whether methylamphetamine had been manufactured by refinement at the property. Grounds 1 and 2 of the notice of appeal filed 27 January 2026 challenge the correctness of the primary judge’s finding that the evidence did not raise a sufficiently realistic possibility or probability that methylamphetamine was smoked at the property and that instead, refinement had occurred at the property (see PJ [63]-[74]).
Ground 3 challenges the primary judge’s construction of s 9B(1) of the CAR Act (at PJ [123]) to which those findings relate.
By ground 4, the appellants contend that, on its proper construction, s 9B(1) is not met regardless of whether refinement of methylamphetamine occurred at the property. Ground 5 was not pressed.
Having regard to the predominance in the appeal of the proper construction of s 9B(1), it will be convenient to address that issue first. Before doing so, however, it is desirable to summarise the relevant legislative provisions, the evidence before the primary judge (and this Court), and the reasons of the primary judge before addressing the other grounds of appeal.
In Pettit, Ierace J observed at [39] that:
None of those cases considered s 9B(1) of the CAR Act. Nor should the exercise of construing s 9B(1) be constrained by those authorities, each of which considers statutory regimes that are expressed in different terms to the CAR Act. They are not “the first port of call”: Cottle v NSW Commissioner of Police (2020) 109 NSWLR 584; [2020] NSWCA 159 at [59] per Bell P, Basten and Payne JJA agreeing (appeal dismissed in (2022) 276 CLR 62; [2022] HCA 7). Rather, as Leeming JA and Griffiths AJA observed in Sydney Metro v Expandamesh Pty Ltd [2023] NSWCA 200 at [58]:
The language used by Ross in the surveillance intercepts and in his examination indicate that he was not particularly eloquent or precise in his use of language. This is illustrated by the following selected extracts from his examination:
[1938] HCA 34
[2011] VSCA 436
[1994] HCA 15
[1993] FCA 456
[2026] NSWSC 683
[2026] NSWCA 123
(2005) 221 CLR 568
(2021) 290 FCR 406
(2014) 253 CLR 393
(1986) 160 CLR 513
(2000) 199 CLR 321
(1953) 89 CLR 653
(2025) 99 ALJR 872
(1938) 60 CLR 336
(2011) 37 VR 464
(2016) 312 FLR 432
(2023) 112 NSWLR 130
(1994) 179 CLR 427
(1993) 43 FCR 280
(2018) 262 CLR 76
(2004) 139 FCR 272
(2013) 248 CLR 619
(2020) 109 NSWLR 584
(2006) 227 CLR 373
(2000) 49 NSWLR 727
(2008) 102 SASR 246
(2010) 41 WAR 249
(2018) 97 NSWLR 1082
(2025) 426 ALR 185
(2016) 93 NSWLR 415
(1985) 157 CLR 523
(2005) 143 FCR 553
(2024) 281 CLR 286
(2009) 239 CLR 458
(2005) 62 NSWLR 512
(1959) 101 CLR 298
(2021) 106 NSWLR 520
(2013) 251 CLR 196
(2024) 280 CLR 321
(2020) 270 CLR 372
(2007) 163 FCR 414
(2004) 220 CLR 181
(2008) 75 NSWLR 564
(2015) 256 CLR 569
(2022) 276 CLR 62
(1990) 169 CLR 356
(2025) 99 ALJR 1362
(1998) 194 CLR 355
(1989) 16 NSWLR 476
(1999) 46 NSWLR 681
(1994) 179 CLR 270
(2024) 282 CLR 479
(2014) 253 CLR 531
(2012) 246 CLR 601
(1979) 42 FLR 331
(2010) 241 CLR 510
(2008) 233 CLR 259
(2011) 243 CLR 478
(2005) 221 CLR 646