Court of Appeal (WA)|2002-02-06|Before: Wallwork J, Owen J, Steytler J

Stuart Anthony Silbert (as Executor of the Estate of Stephen Retteghy (Dec)) v Director of Public Prosecutions for Western Australia [2002] WASCA 12 (6 February 2002)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : STUART ANTHONY SILBERT (as Executor of the Estate of STEPHEN RETTEGHY (DEC)) -v- DIRECTOR OF PUBLIC PROSECUTIONS FOR WESTERN AUSTRALIA

BETWEEN : STUART ANTHONY SILBERT (as Executor of the Estate of STEPHEN RETTEGHY (DEC))

DIRECTOR OF PUBLIC PROSECUTIONS FOR WESTERN AUSTRALIA

Constitutional law - Judicial power - Where person charged on indictment with cultivation and possession of cannabis but died after pleading not guilty and before charge could be determined - Statute providing deceased "taken to have been convicted" in these circumstances for the purposes of the Act - Supreme Court proceedings for forfeiture order and pecuniary penalty order against deceased's estate - Whether a law which deems a person to be guilty of a serious offence where they have denied guilt and have never been tried is a usurpation of judicial power and therefore constitutionally invalid - Whether legislation invalidly undermines integrity of court's processes and public confidence in administration of justice - Whether legislation affects right of appeal

Crimes (Confiscation of Profits) Act 1988, ss 3(2), 3(4), 3(5), 6(1), 10(1), 15(1), 15(1a), 53(1), 53(2)

China Ocean Shipping Co v South Australia [1979] HCA 57; (1979) 145 CLR 172

Commissioner of Stamp Duties (Qld) v Livingston [1964] UKPCHCA 2; (1964) 112 CLR 12

Director of Public Prosecutions (Cth) v Toro-Martinez (1993) 33 NSWLR 82

Director of Public Prosecutions v Blattman (1990) 101 FLR 195

Durham Holdings Pty Ltd v New South Wales (2001) 177 ALR 436

Fencott v Muller (1983) 152 CLR 570

HA Bachrach Pty Ltd v Queensland [1998] HCA 54; (1998) 195 CLR 547

Huddart Parker & Co Pty Ltd v Moorehead [1909] HCA 36; (1909) 8 CLR 330

John Fairfax Publications Pty Ltd v Attorney-General (NSW) [2000] NSWCA 198; (2000) 181 ALR 694

Leeth v The Commonwealth [1992] HCA 29; (1992) 174 CLR 455

Lim v Minister for Immigration (1992) 176 CLR 1

McCleary v Commonwealth Director of Public Prosecutions (1998) 20 WAR 288

McGinty v Western Australia [1996] HCA 48; (1996) 186 CLR 140

McGuinness v Attorney-General (Vic) [1940] HCA 6; (1940) 63 CLR 73

New South Wales v The Commonwealth [1975] HCA 58; (1975) 135 CLR 337

Newcombe v AME Properties Ltd (1995) 14 WAR 259

Official Receiver in Bankruptcy v Schultz [1990] HCA 45; (1990) 170 CLR 306

R v Secretary of State for Transport; Ex parte Factortame Ltd [1999] UKHL 44; [1999] 3 WLR 1062

Russell v Russell (1976) 134 CLR 495

Ryan v Davies Brothers Ltd [1921] HCA 53; (1921) 29 CLR 527

Southern Centre of Theosophy Inc v South Australia [1979] HCA 59; (1979) 145 CLR 246

The Commonwealth v Queensland [1975] HCA 43; (1975) 134 CLR 298

Union Steamship Co of Australia Pty Ltd v King [1988] HCA 55; (1988) 166 CLR 1

Victoria v Australian Building Construction Employees & Builders Labourers Federation [1982] HCA 31; (1982) 152 CLR 25

Victoria v The Commonwealth [1971] HCA 16; (1971) 122 CLR 353

Webb v Chief Constable of Merseyside Police [1999] EWCA Civ 3041; [2000] QB 427

Western Australia v Wilsmore [1982] HCA 19; (1982) 149 CLR 79

Wilson v Minister for Aboriginal & Torres Strait Islander Affairs [1996] HCA 18; (1996) 189 CLR 1

1 WALLWORK J: These are reasons for judgment after an appeal relating to confiscation orders which were made on 6 November 2000 pursuant to the Crimes (Confiscation of Profits) Act 1988 (now repealed) against the Executor of the Estate of Stephen Retteghy (the deceased) by a Judge of the Supreme Court of Western Australia.

2 The question to be decided is whether s 3(2) and s (5) of the Act were invalid and inoperative. In this case, those subsections had the effect of deeming the deceased to have been convicted of serious offences and making his estate liable to confiscation orders pursuant to s 6(1) of the Act.

3 Because the challenge to the validity of s 3 involved a matter arising under the Constitution of Australia, the notices required by s 78B of the Judiciary Act 1903 (Cth) were given. The requirements of s 78B have been satisfied.

4 Prior to his death, the deceased had been charged in an indictment which alleged that between 1 September 1995 and 2 April 1996 at Guilderton, he had cultivated a quantity of cannabis plants with intent to sell or supply cannabis to another, and further, that on 2 April 1996 at Guilderton, he had had in his possession a quantity of cannabis with intent to sell or supply it to another. The deceased had pleaded not guilty to those charges. However, he died on 7 August 1997, before the trial had taken place.

"For the purposes of this Act, a person is to be taken to have been convicted of a serious offence if -

(a) ...

(b) ...

(c) ...

(d) the person has been charged with the offence but before the charge is finally determined, the person has absconded."

6 Section 3(5) had the effect of deeming a person who had died before trial, in the circumstances of the deceased, to have been taken to have absconded and therefore, for the purposes of the Act, to be taken to have been convicted of a serious offence pursuant to s 3(2) of the Act.

7 The effect of s 3 in this case was that, for the purposes of the Act, the deceased was taken to have been convicted of the serious offences with which he had been charged, even though he had never had a trial and had not pleaded guilty to the offences charged.

8 The appellant contends that the relevant subsections of s 3 of the Act were invalid and inoperative because they were inconsistent with s 73(ii) and s 77(iii) of the Constitution of the Commonwealth of Australia and s 35 and s 39 of the Judiciary Act (1903) (Cth). The appellant contends, amongst other things, that in the relevant subsections the WA Parliament had encroached upon the judicial power under the Constitution.

9 Reliance is placed upon the words of Brennan CJ in Nicholas v The Queen [1998] HCA 9; (1998) 193 CLR 173 at 186, where the Chief Justice said:

"One of the exclusively judicial functions of government is the adjudgment and punishment of criminal guilt as the joint judgment in Chu Kheng Lim (1992) 176 CLR 1 at 27 pointed out:

'There are some functions which, by reason of their nature or because of historical considerations, have become established as essentially and exclusively judicial in character. The most important of them is the adjudgment and punishment of criminal guilt under a law of the Commonwealth. That function appertains exclusively to (Waterside Workers' Federation of Australia v J W Alexander Ltd [1918] HCA 56; (1918) 25 CLR 434 at 444) and 'could not be excluded from' (R v Davison [1954] HCA 46; (1954) 90 CLR 353 at 368, 383) the judicial power of the Commonwealth (see, also, Polyukhovich v The Commonwealth [1991] HCA 32; (1991) 172 CLR 501. That being so, Ch III of the Constitution precludes the enactment, in purported pursuance of any of the subsections of section 51 of the Constitution, of any law purporting to vest any part of that function in the Commonwealth Executive.'

The function of adjudication and punishment of criminal guilt under a law of the Commonwealth can be exercised only by those courts in which the necessary jurisdiction is vested pursuant to Ch III of the Constitution. Those courts include, relevantly for present purposes, the County Court of Victoria..."

10 The appellant contended that some of the ways in which s 3 of the Act, if valid, affected the deceased were as follows:

(i) The deceased is deemed to have been convicted of serious offences without a trial or a plea of guilty;

(ii) Those deemed convictions interfere with his status and reputation;

(iii) They interfere with his property rights;

(iv) They interfere with third parties' property rights under the deceased's estate;

(v) They interfere with the prospects of any of his relatives or other people proving his innocence of the charged offences.

11 In answer to the above propositions it is said that the deemed convictions are only deemed for the purposes of the Act and are not really convictions in the usual sense.

12 The problem with that last proposition is that the confiscation orders under the Act were partly based on s 6 of the Act, which provides that where a person "is convicted of a serious offence", an application for the orders can be made. Pursuant to s 6, an appropriate officer could apply to the Supreme Court or the Court "before which the person was convicted of the offence" for confiscation orders under the Act.

13 There were two types of confiscation orders which could be applied for under s 6. They were a forfeiture order in respect of particular property, and a pecuniary penalty order. In s 53(2) of the Act there was a distinction made between a forfeiture order and a pecuniary penalty order.

"If a person is, by reason of section 3(2)(d), to be taken to have been convicted of a serious offence, a court must not make a forfeiture order in reliance on that conviction unless it is satisfied, beyond reasonable doubt, that the person committed the offence."

That provision did not apply to a pecuniary penalty order.

15 On its face, it seems that s 53(2) provided for a third type of criminal conviction. The three types were:

(i) an ordinary conviction by a verdict of a jury or a plea of guilty;

(ii) a deemed conviction pursuant to s 3(2) of the Act;

(iii) a conviction pursuant to s 53(2) and s 3(2)(d) of the Act where a Court was satisfied beyond reasonable doubt that a deceased person had committed the relevant offence.

16 The proposition (as in category (iii) above) that a Court could be satisfied beyond reasonable doubt that a person had committed a relevant offence when that person was dead, immediately raises questions concerning how a Court could properly be satisfied beyond a reasonable doubt that a deceased person had committed an offence when that deceased person was not able to defend himself or herself.

17 The question in this case is whether s 3(2) and s 3(5) of the Act (the deeming provisions) could co-exist with the judicial power of the Commonwealth.

18 In Nicholas v The Queen (supra) at 208, par 73, Gaudron J said:

"Judicial power is not adequately defined solely in terms of the nature and subject matter of determinations made in exercise of that power. It must also be defined in terms that recognise it is a power exercised by courts and exercised by them in accordance with the judicial process. Thus, as was said in Chu Kheng Lim v Minister for Immigration, the Parliament cannot make 'a law which requires or authorises the courts in which the judicial power of the Commonwealth is exclusively vested to exercise judicial power in a manner which is inconsistent with the essential character of a court or with the nature of judicial power'."

19 In my view, although the Act the subject of this appeal did not purport to record a "normal" criminal conviction against the deceased, it did in effect deprive the deceased of the right to meet the case against him and it did not permit the independent determination of the matter in controversy by the application of the law to facts determined in accordance with rules and procedures within the meaning of her Honour's words.

20 In Polyukhovich v The Commonwealth [1991] HCA 32; (1991) 172 CLR 501 at 704, Gaudron J had earlier said:

"A power to be exercised by the application of law to facts invented by Parliament or invented according to some statutory formula or prescription would not be a power to be exercised in accordance with the judicial process and would not be judicial power. That is not to say that statutory fictions may not be employed in the course of and for the purpose of formulating the legal rights, obligations or consequences attaching to a relationship or to conduct. And, of course, they may be applied by the courts when those rights, obligations or consequences are in issue. However, the relationship or the conduct which is the basis of those rights, obligations or consequences must be real and not fictitious. A law assigning legal consequences on the basis of fictitious or invented facts may sometimes, on that account, be characterised as other than a law on a subject matter within legislative power: see Actors and Announcers Equity Association v Fontana Films Pty Ltd [1982] HCA 23; (1982) 150 CLR 169. Quite apart from that consideration, a law conferring power on a court to determine legal consequences on the basis that a person is who he is not or on the basis that he did what he did not, would be invalid for offending Ch III. It would be invalid because the power in question would involve a travesty of the judicial process and would, thus, be a power which, by virtue of s 71, could not validly be conferred on a court."

21 In this case, in my view, the making of a confiscation order on the basis that a person was deemed to have committed serious offences was, in the words of her Honour, "to determine legal consequences on the basis that ... he did what he did not" in the sense that the deceased had not been convicted of serious offences in the appropriate manner.

22 In Williamson v Ah On [1926] HCA 46; (1926) 39 CLR 95 at 108, Isaacs J said:

"It is one thing to say, for instance, in an Act of Parliament, that a man found in possession of stolen goods shall be conclusively deemed to have stolen them, and quite another to say that he shall be deemed to have stolen them unless he personally proves that he got them honestly. The first is a parliamentary arbitrary creation of a new offence of theft, leaving no room for judicial inquiry as to the ordinary offence; the second is only an evidentiary section, altering the burden of proof in the ordinary case of theft, and requiring certain pre-appointed evidence to fit the special circumstances in the interests of justice, because the accused best knows the facts, and leaving the Court with these provisions to examine the facts and determine the matter."

23 In this case, s 3 did not prima facie deem the deceased person to have been convicted of a serious offence for the purposes of the Act. It arbitrarily deemed him to be guilty for the purposes of the Act, after he had died and without a trial according to law.

24 In Actors and Announcers Equity Association of Australia v Fontana Films Pty Ltd [1982] HCA 23; (1982) 150 CLR 169, Murphy J said at 213:

"It is within the general incidental power (s 51(xxxix)) or the specific powers in ss 51 or 52 of the Constitution to provide that one fact or circumstance shall be presumed from the existence of another, provided there is a rational basis for the presumption. Where there is no rational basis for the presumption, then in my opinion Parliament has no power to require a court to act upon the presumption. To do so would be to undermine the judicial power."

25 In my view, in this case there is no rational basis to presume that after the deceased had died, he should be "taken to have been convicted" of serious offences for the purposes of the Act when he was waiting to be tried for those offences at the time he died.

26 In Deputy Commission of Taxation v Richard Walter Pty Ltd [1995] HCA 23; (1995) 183 CLR 168 at 206, when speaking of the jurisdiction of the High Court, Deane and Gaudron JJ said:

"Nor could the Parliament denude that jurisdiction of effective content by precluding the court from determining whether the impugned conduct is or is not in fact unlawful. Thus, the Parliament could not, consistently with s 75(v), enact that, in a case where the citizen exercises the constitutional right to institute proceedings for injunctive relief to restrain unlawful conduct by an officer of the Commonwealth, there shall be an irrebuttable presumption that the impugned conduct is lawful. Unlike a law prescribing a merely prima facie presumption, such a law could not properly be seen as a rule of procedure or evidence to be observed in the exercise of jurisdiction. It would constitute a pro tanto denial or withdrawal of the constitutional jurisdiction to hear and determine a matter in which an injunction is sought against an officer of the Commonwealth."

27 In my view, the combination of s 3(2) and s 3(5)(c) was not "a rule of procedure or evidence to be observed in the exercise of jurisdiction", but constituted a "pro tanto denial or withdrawal of the constitutional jurisdiction to hear and determine a matter", within the meaning of the above words of Deane and Gaudron JJ.

28 On the assumption that a court applying the provisions of s 3(2) and s 3(5) of the Act was not exercising judicial power correctly, the question arises whether in this case the subsections of the Act should be declared invalid.

29 In Australia, a State Supreme Court has an existence, role and function which is recognised by the Constitution of the Commonwealth - s 106, s 107, s 108 and s 73(ii). A constitutional right of appeal to the High Court lies from all judgments and orders of a Supreme Court of any State, subject to other Federal legislation - Smith Kline & French Laboratories (Aust) Ltd v The Commonwealth [1991] HCA 43; (1991) 173 CLR 194.

30 In Kable v Director of Public Prosecutions (NSW) [1996] HCA 24; (1996) 189 CLR 51, sections of the Community Protection Act 1994 (NSW) were held to be invalid on the grounds that they were incompatible with the independence of the Supreme Court of New South Wales and the premise that that court should be one which could, when required, exercise federal judicial power - see also Re Macks; Ex parte Saint [2000] HCA 62; (2000) 176 ALR 545.

31 As was seen in Kable (supra), the State Supreme Courts are subject to the supervisory appellate jurisdiction of the High Court of Australia - Judiciary Act 1983 (Cth), s 35. It follows from that that Ch 3 of the Constitution assumes an integrated Australian Court system for the exercise of the judicial power of the Commonwealth and of the States with the High Court of Australia being the court at the apex of the judicial system. It also follows from the fact of investment with federal jurisdiction that State legislatures do not have unlimited power.

32 If a State Parliament enacts a law which wrongly encroaches on the way in which a State Supreme Court Judge exercises judicial power, such a consequence is inconsistent with the exercise of the jurisdiction of the State Supreme Court and therefore the Australian Constitution and the Judiciary Act.

33 In Kable (supra), Gaudron J said at 102:

"And so much was recognised in The Commonwealth v Queensland [1975] HCA 43; (1975) 134 CLR 298 at 315 where it was said that State legislation in violation of 'the principles that underlie Chapter III' is invalid."

".... State Courts, when exercising federal jurisdiction 'are part of the Australian judicial system created by Ch III of the Constitution and, in that sense and on that account, they have a role and existence which transcends their status as courts of the States'. ... Chapter III requires that the Parliaments of the States not legislate to confer powers on State courts which are repugnant to or incompatible with their exercise of the judicial power of the Commonwealth."

"The Boilermakers' doctrine, as it is sometimes called, prevents the Parliament of the Commonwealth from conferring judicial power on bodies other than courts and prevents it from conferring any power that is not judicial power or a power incidental thereto on the courts specified in s 71 of the Constitution. It also prevents the Parliament from conferring functions on Judges in their individual capacity if the functions are inconsistent with the exercise of judicial power in the sense explained in Grollo v Palmer [1995] HCA 26; (1995) 184 CLR 348. The limitation on State legislative power is more closely defined and relates to powers or functions imposed on a State court, rather than its Judges in their capacity as individuals, and is concerned with powers or functions that are repugnant to or incompatible with the exercise of the judicial power of the Commonwealth."

36 At 106, Gaudron J said that the proceedings in question in that case were not proceedings otherwise known to the law:

"They do not involve the resolution of a dispute between contesting parties as to their respective legal rights and obligations. And as already indicated, the applicant is not to be put on trial for any offence against the criminal law. Instead, the proceedings are directed to the making of a guess - perhaps an educated guess, but a guess nonetheless - whether, on the balance of probabilities, the appellant will commit an offence of the kind specified in the definition of 'serious act of violence'. And, at least in some circumstances, the Act directs that that guess be made having regard to material which would not be admissible as evidence in legal proceedings."

37 Her Honour referred to the depriving of an individual of his liberty "not because he has breached any law, whether civil or criminal, but because an opinion is formed, on the basis of material which does not necessarily constitute evidence admissible in legal proceedings, that he 'is more likely than not' .... to breach a law by committing a serious act of violence".

"And, of course, there is nothing to prevent the Parliaments of the States from conferring powers on their courts which are wholly non-judicial, so long as they are not repugnant to or inconsistent with the exercise by those courts of the judicial power of the Commonwealth. .... That is the antithesis of the judicial process, one of the central purposes of which is, as I said in Re Nolan; Ex parte Young [1991] HCA 29; (1991) 172 CLR 460 at 497, to protect 'the individual from arbitrary punishment and the arbitrary abrogation of rights by ensuring that punishment is not inflicted and rights are not interfered with other than in consequence of the fair and impartial application of the relevant law to facts which have been properly ascertained'."

39 When considering the particular section of the New South Wales Act with which Kable was concerned, her Honour concluded at 107:

"It is not a power that is properly characterised as a judicial function, notwithstanding that it is purportedly conferred on a court and its exercise is conditioned in terms usually associated with the judicial process."

"Under the Constitution, therefore, the State courts have a status and a role that extends beyond their status and role as part of the State judicial systems. They are part of an integrated system of State and federal courts and organs for the exercise of federal judicial power as well as State judicial power. Moreover, the Constitution contemplates no distinction between the status of State courts invested with federal jurisdiction and those created as federal courts."

"Because the State courts are an integral and equal part of the judicial system set up by Ch III, it also follows that no State or federal parliament can legislate in a way that might undermine the role of those courts as repositories of federal judicial power. Thus, neither the Parliament of New South Wales nor the Parliament of the Commonwealth can invest functions in the Supreme Court of New South Wales that are incompatible with the exercise of federal judicial power."

42 In Kable, McHugh J said of the relevant New South Wales Statute:

"At the time of its enactment, ordinary reasonable members of the public might reasonably have seen the Act as making the Supreme Court a party to and responsible for implementing the political decision of the Executive Government that the appellant should be imprisoned without the benefit of the ordinary processes of law."

43 In this case, the deceased man has been deemed to be guilty for the purposes of the Act of serious offences concerning illegal drugs. He was not given the opportunity to defend the charges against him due to his death.

44 When applying the words of McHugh J in Kable to this case, the question is not whether the court is implementing a political decision of the Executive Government that the appellant should be imprisoned without the benefit of the ordinary processes of law, but rather whether a court should order the confiscation of a person's property pursuant to s 6 and the following sections of the Act, on the basis that a person who has died before trial, or a plea of guilty, was deemed for the purposes of the Act to have committed a serious offence "without the benefit of the ordinary processes of law".

45 At 125 of Kable, when discussing the situation in that case, Gummow J said:

"... here, if certain criteria are met, then the Supreme Court is to inflict upon that individual a penalty. Moreover, the penalty is not inflicted upon, and by reason of, conviction by the Supreme Court on any charge of contravention of the criminal law."

47 Gummow J referred to the characteristics of the provision made by the Constitution for the Federal judicial power which were identified by Deane J in Re Tracey; Ex parte Ryan [1989] HCA 12; (1989) 166 CLR 518 at 580. One of those characteristics was the power to adjudge guilt of, or determine punishment for breach of the law. Deane J also said in Re Tracey:

"The guilt of the citizen of a criminal offence and the liability of the citizen under the law, either to a fellow citizen or to the State, can be conclusively determined only by a Chapter III Court acting as such, that is to say, acting judicially. For its part, the Parliament cannot legislate either to destroy the entrenched safeguards of Chapter III or to itself assume the exercise of judicial power."

48 When discussing the consequences of the New South Wales Act in Kable, Gummow J said at 131:

"The consequence is that the legislature employs the Supreme Court to execute, to carry into effect, the legislature's determination that the appellant be dealt with in a particular fashion, with deprivation of his liberty, if he answers specified criteria."

49 Gummow J said that in Polyukhovich v The Commonwealth (supra), at 705, Gaudron J had described the ascertainment of guilt or innocence, the object of criminal proceedings, as the exclusive function of the courts.

50 In Kable, Gummow J said that the effect of the relevant Act was that whilst imprisonment pursuant to the Supreme Court was punitive in nature, it was not consequent upon any judgment by the Court of criminal guilt. His Honour said that, plainly, such an authority could not be conferred by a law of the Commonwealth "upon this court, any other federal court, or a State court exercising federal jurisdiction. Moreover, not only is such an authority non-judicial in nature, it is repugnant to the judicial process in a fundamental degree."

51 Gummow J referred to the State Act in that case as drawing "in the Supreme Court of a State as an essential and determinative integer of a scheme whereby, by its order, an individual is incarcerated in a penal institution otherwise than for a breach of the criminal law". His Honour said, at 134:

"The Act requires the Supreme Court to inflict punishment without any anterior finding of criminal guilt by application of the law to past events, being the facts as found. Such an activity is said to be repugnant to judicial process. I agree."

52 Gummow J said at 136 that the Supreme Court, both at first instance and on appeal, was exercising Federal jurisdiction. This followed from the nature of the defences presented by the appellant to the application to the Supreme Court for his detention under the Act. His Honour said, at 143 - 144:

"A State law which, during the operation of an investment of federal jurisdiction in this way, would alter or impair the operation of the Judiciary Act by removing a condition or characteristic of a court such as the Supreme Court, which is essential to the investiture, is an attempt to alter or impair the operation of the federal law. Accordingly, the State law is inconsistent with it and invalid (Stock Motor Ploughs Ltd v Forsyth [1932] HCA 40; (1932) 48 CLR 128 at 136; Williams v Hursey [1959] HCA 51; (1959) 103 CLR 30 at 68-69).

However, in my view, the issue in the present case is best resolved by recourse to the proposition that the Constitution itself is rendered, by covering cl 5, binding on the courts, judges and people of every State notwithstanding anything in the laws of any State. The particular characteristics of the Supreme Court against detraction from which, or impairment of which, by the Act the appellant complains, are mandated by the Constitution itself. Of course, the effect of the constitutional mandate is the protection of the Commonwealth judicial power as and when it may be invested. But the vice from which the Act suffers is not removed by the operation of s 109 upon inconsistent laws. It is removed by the operation of the Constitution itself."

53 Applying the principles which have been referred to above, it is my opinion that this appeal should be allowed and the relevant orders which were made on the originating summons should be set aside. The provisions of subss 3(2) and (5) of the Act were invalid and inoperative because they were inconsistent with the proper exercise of the judicial power of the Supreme Court of Western Australia.

54 OWEN & STEYTLER JJ: The question upon which this appeal turns is whether ss 3(2)(d), (4) and (5) of the Crimes (Confiscation of Profits) Act 1988 ("the CCP Act") are invalid and inoperative because they are inconsistent with ss 73(ii) and 77(iii) of the Constitution of the Commonwealth of Australia and ss 35 and 39 of the Judiciary Act 1903 (Cth) and are inconsistent with and repugnant to the role of the Supreme Court of Western Australia as an independent court exercising both State and invested Federal jurisdiction and as a court which may, when required, exercise Federal judicial power.

55 The question arises in this case because Mr Stephen Retteghy, who was charged on indictment with cultivating cannabis with intent to sell or supply it to another and also with possession of cannabis with intent to sell or supply it to another, died after pleading not guilty to those charges and before he could be tried. The effect of the challenged provisions, if valid, is that the deceased man was to be taken to have been convicted of the two offences for the purposes of the CCP Act.

56 Sections 3(2), (4) and (5) of that Act read, insofar as they are relevant for present purposes, as follows:

"(2) For the purposes of this Act, a person is to be taken to have been convicted of a serious offence if -

(d) the person has been charged with the offence but before the charge is finally determined, the person has absconded.

(4) For the purposes of this Act, a person is to be taken to have been charged with an offence if a complaint has been made against the person for the offence, whether or not -

(a) a summons to require the attendance of the person to answer to the complaint; or

(b) a warrant for the arrest of the person, has been issued.

(5) For the purposes of this Act a person shall be taken to abscond in connection with an offence if, and only if, -

(a) a complaint is made alleging the commission of the offence by the person;

(b) a warrant for the arrest of the person is issued in relation to that complaint, or the person is arrested without warrant, whether before or after the making of that complaint; and

(i) the person dies without the warrant beingexecuted or after the execution of the warrant or, in the case of a person arrested without warrant, after that arrest;

(ii) at the end of period of 6 months commencing on the day on which the warrant is issued -

(B) the person is, for any other reason, not amenable to justice and if the person is outside Australia, extradition proceedings are not on foot;

(iii) at the end of the period of 6 months commencing on the day on which the warrant is issued -

(A) the person is, by reason of being outside Australia, not amenable to justice; and

(B) extradition proceedings are on foot, and subsequently those proceedings terminate without an order for the person's extradition being made."

57 It is common cause that the offences with which Mr Retteghy was charged were "serious" offences for the purposes of s 3(2) of the Act, each of them being a "serious offence" as defined by s 3(1) thereof. It is also common cause that Mr Retteghy should be taken to have absconded in connection with the two offences by virtue of the operation of s 3(5)(c)(i) of the CCP Act.

58 If, pursuant to these sections, Mr Retteghy was to be taken to have been convicted of serious offences for the purposes of the CCP Act, then, by virtue of s 6(1) of that Act, the respondent was entitled to apply to the Supreme Court for one or both of a forfeiture order in respect of particular property of Mr Retteghy and a pecuniary penalty order against his estate.

59 By s 10 of the CCP Act, a forfeiture order may be made by the Court in terms forfeiting property to the Crown if the Court is satisfied that the property was used in, or in connection with, the commission of the offence or was derived or realised, directly or indirectly, by the person convicted of the offence as a result of the commission of the offence or of any other unlawful act. However, by s 53(2) of that Act, if a person is, by reason of s 3(2)(d), to be taken to have been convicted of a serious offence, a court must not make a forfeiture order in reliance on that conviction unless it is satisfied, beyond reasonable doubt, that the person committed the offence.

60 By s 15(1) of the CCP Act the Court may, if it considers it appropriate, assess the value of the benefits derived by the person against whom the application is made as a result of the commission of the serious offence in reliance upon which the application is made or of any other unlawful act and order that person to pay to the Crown a pecuniary penalty equal to the value of those benefits, less the value of any property the subject of a forfeiture order. There is, in the case of pecuniary penalty orders, no provision equivalent to s 53(2) of the CCP Act, presumably because, unlike pecuniary penalty orders which, notwithstanding their name, are directed solely to the recovery of the value of benefits derived from criminal conduct, forfeiture orders may impose penalties in the form of forfeiture of property used in, or in connection with, the commission of an offence. Instead, by virtue of s 53(1) of the Act, any question of fact to be decided by a court on an application for a pecuniary penalty order is to be decided on the balance of probabilities. Moreover, by s 15(1a) of the Act:

"If, at the hearing of an application referred to in subsection (1), it is shown that the benefits to which that application relates -

(a) may have been derived as a result of the commission of an unlawful act; and

(b) were derived during the period commencing on the day 6 years before the day, or the first day, on which the serious offence in reliance on which that application was made was committed,

it shall be presumed, unless the contrary is proved, that those benefits were derived within the meaning of paragraph (a)."

61 In this case the respondent applied to the Court both for forfeiture orders and for a pecuniary penalty order.

62 The evidence before the Judge below established that, in the course of executing a search warrant, the police discovered a medium to large scale cannabis growing and harvesting business on Mr Retteghy's property. 598 mature cannabis plants were growing in several plots on the property and 26.1 kilograms of cannabis was found being dried in a shed on the property. Inside a house on the property there were three large drums which contained 1.795 kilograms of cannabis. There were also eight dried cannabis plants weighing two kilograms and five glass jars of cannabis seeds with a total weight of 450 grams. The total weight of the harvested cannabis found on the property was 30.345 kilograms.

63 The search also revealed scales, a marijuana grower's guide, a number of diaries and some cash. In the boot of a motor vehicle on the property there were traces of cannabis leaf material. The diaries revealed details of what appeared to be sales of cannabis and disclosed receipts, for the financial years which ended on 30 June 1994 and 30 June 1995 and for that part of the financial year to April 1996, totalling $265,100. Mr Retteghy's banking records corresponded reasonably closely with the amounts recorded in the diary entries.

64 The appellant's lawyers made only minor challenges to the factual material placed before the Court (although Mr Retteghy had denied any involvement in criminal conduct) and relied principally on the contention that the relevant provisions of the CCP Act were unconstitutional.

65 The Judge below was satisfied beyond reasonable doubt, on the evidence, that Mr Retteghy's land had been used by him for the cultivation and processing of cannabis on a significant scale. His Honour mentioned that, when interviewed on videotape, Mr Retteghy had readily acknowledged his involvement in the cultivation of cannabis on the property, although he had denied any intention to sell it. The Judge said that, when all of the evidence was taken into account, the inevitable conclusion was that Mr Retteghy had committed the offences alleged in the indictment, both by way of the use of his land and his motor vehicle, and that a forfeiture order with respect to those two items of property was appropriate. His Honour was also satisfied that Mr Retteghy had profited from the sale of illegal drugs at least to the sum of $250,750, being the total of the sums of money revealed by the banking records which were not otherwise accounted for.

66 The primary Judge was not persuaded that the challenged provisions of the CCP Act were invalid. He said, in that respect (par 49 of his judgment), that Mr Retteghy was taken to be convicted only for the purposes of the Act and that a "fiction" of that kind and limited in that way did not give rise to any unconstitutionality. He consequently made the orders which had been sought by the respondent. Hence the appeal to this Court.

67 Counsel for the appellant submit that, while the learned primary Judge might have been right in regarding the challenged provisions as creating a fiction, his Honour erred in overlooking the fact that the "fiction" had profound consequences as regards the forfeiture of the appellant's property and that, the Court having been compelled by the legislation to exercise its powers in a predetermined way, the fiction was impermissible. That, they contend, is because any law of a Parliament which deems a person to be guilty of a serious offence, notwithstanding his denial of guilt, in circumstances in which he has never been tried by any court of competent jurisdiction, is a usurpation of judicial power.

68 There is no doubt that the adjudgment and punishment of criminal guilt is an exercise of judicial power. In Nicholas v The Queen [1998] HCA 9; (1998) 193 CLR 173 at 186 Brennan CJ said:

"One of the exclusively judicial functions of government is the adjudgment and punishment of criminal guilt as the joint judgment in Chu Kheng Lim (1992) 176 CLR 1 at 27 pointed out:

'There are some functions which, by reason of their nature or because of historical considerations, have become established as essentially and exclusively judicial in character. The most important of them is the adjudgment and punishment of criminal guilt under a law of the Commonwealth. That function appertains exclusively to (Waterside Workers' Federation of Australia v J W Alexander Ltd [1918] HCA 56; (1918) 25 CLR 434 at 444) and 'could not be excluded from' (R v Davison [1954] HCA 46; (1954) 90 CLR 353 at 368**,** 383) the judicial power of the Commonwealth (see, also, Polyukhovich v The Commonwealth [1991] HCA 32; (1991) 172 CLR 501 at 536-539, 608-610, 613-614, 632, 647, 649, 685, 705-707, 721). That being so, Ch III of the Constitution precludes the enactment, in purported pursuance of any of the subsections of s 51 of the Constitution, of any law purporting to vest any part of that function in the Commonwealth Executive.'

The function of adjudication and punishment of criminal guilt under a law of the Commonwealth can be exercised only by those courts in which the necessary jurisdiction is vested pursuant to Ch III of the Constitution (Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 27). Those courts include, relevantly for present purposes, the County Court of Victoria (Judiciary Act 1903 (Cth), s 68)."

69 While these comments were made in respect of the adjudgment and punishment of criminal guilt under a law of the Commonwealth, counsel for the appellant submit that, even in the case of a State Parliament, a law which deems a person to be guilty of a serious criminal offence, notwithstanding that he has denied guilt and never been tried by a court of competent jurisdiction, is an impermissible usurpation of judicial power.

70 This, they say, is especially so when regard is had to the proposition which, they submit, was accepted in Kable v Director of Public Prosecutions (NSW) [1996] HCA 24; (1996) 189 CLR 51, that "the consideration that State courts have a role and existence transcending their status as State courts directs the conclusion that Ch III requires that the Parliaments of the States not legislate to confer powers on State courts which are repugnant to or incompatible with their exercise of the judicial power of the Commonwealth" (per Gaudron J, at 103, and see also McHugh J, at 114). That Chapter, which deals, of course, with the Judicature, vests the judicial power of the Commonwealth in the High Court, in such other federal courts as the Parliament creates and in such other courts as it invests with federal jurisdiction (s 71). Section 77(iii) of the Constitution empowers the Commonwealth Parliament to make laws investing any court of a State with federal jurisdiction. It has done so, inter alia, by s 39(2) of the Judiciary Act 1903 (Cth) which invests "The several Courts of the States" with federal jurisdiction in all matters in which the High Court has original jurisdiction or in which original jurisdiction can be conferred upon it, subject to specified exceptions, conditions and restrictions.

"Given the central role and the status that Ch III gives to State courts invested with federal jurisdiction, it necessarily follows that those courts must also be, and be perceived to be, independent of the legislature and executive government in the exercise of federal jurisdiction. Public confidence in the impartial exercise of federal judicial power would soon be lost if federal or State courts exercising federal jurisdiction were not, or were not perceived to be, independent of the legislature or the executive government.

In the case of State courts, this means they must be independent and appear to be independent of their own State's legislature and executive government as well as the federal legislature and government."

72 More importantly, perhaps, for present purposes, counsel for the appellant rely upon what was said by McHugh J in Kable (at 118) as follows:

"[I]t is a necessary implication of the Constitution's plan of an Australian judicial system with State courts invested with federal jurisdiction that no government can act in a way that might undermine public confidence in the impartial administration of the judicial functions of State courts. If it could, it would inevitably result in a lack of public confidence in the administration of invested federal jurisdiction in those courts. State governments therefore do not have unrestricted power to legislate for State courts or judges. A State may invest a State court with non-judicial functions and its judges with duties that, in the federal sphere, would be incompatible with the holding of judicial office. But under the Constitution the boundary of State legislative power is crossed when the vesting of those functions or duties might lead ordinary reasonable members of the public to conclude that the State court as an institution was not free of government influence in administering the judicial functions invested in the court."

73 Counsel for the appellant contend that the boundary has been crossed in this case because the legislature has usurped the judicial role of the Court, in such a way as inevitably to result in a lack of public confidence in the administration of justice by the Court, in directing it to treat someone as having been convicted of a serious offence in circumstances in which that person has denied guilt and has never been tried by any court of competent jurisdiction.

74 They also contend that what has been done is impermissible because it denies to persons who are subject to the challenged provisions the rights of appeal which are theirs by virtue of s 73 of the Constitution. That section gives to the High Court jurisdiction, with such exceptions and subject to such regulations as the Parliament prescribes, to hear and determine appeals from all judgments, decrees, orders and sentences of, inter alia, the Supreme Court of any State. They submit that, because a person affected by the challenged provisions is taken to have been convicted of serious offences in the absence of any trial, that person has no right of appeal, contrary to the scheme contemplated by s 73 of the Constitution.

75 For all of these reasons, counsel for the appellant submit, the challenged provisions are invalid and inoperative.

76 Before examining these contentions further, it is, we think, helpful to summarise the operation, so far as is relevant for present purposes, of ss 3(2), 3(5), 6(1), 10(1), 15(1) and 53 of the CCP Act. That might be done as follows:

1. A person who is, by s 3(2), "to be taken to have been convicted of a serious offence", whether by the operation of s 3(5) or otherwise, is only to be taken to have been convicted of a serious offence for the purposes of the Act. That is expressly provided for by the opening words of s 3(2).

2. Any person who is, or is by virtue of s 3(2) and (5) taken for the purposes of the Act to have been, convicted of a serious offence is liable, by virtue of s 6(1) of the Act, to be made, upon application by an appropriate officer, the subject of a forfeiture order in respect of particular property or a pecuniary penalty order.

3. A forfeiture order may only be made by the Court if it is satisfied that the property to be forfeited was used in, or in connection with, the commission of the offence or was derived or realised by the person convicted of the offence or another person, or is subject to the effective control of the person convicted of the offence, as a result of the commission of the offence or of any other unlawful act (s10(1)), but if a person is taken to have been convicted of an offence by reason of s 3(2)(d), no such order may be made in reliance on that conviction unless the Court is satisfied, beyond reasonable doubt, that the person committed the offence (s 53(2)).

4. The Court has a discretion whether or not to make a pecuniary penalty order but, in making any such order, it must, inter alia:

(a) assess the value of the benefits derived by the person against whom the application is made as a result of the commission of the offence or of any other unlawful act (s 15(1)), the standard of proof being one on the balance of probabilities (s 53(1)); and

(b) presume, in any case in which the benefits to which the application relates may have been derived as a result of the commission of an unlawful act and were derived within six years of the day (or first day) upon which the serious offence in question was committed, that those benefits were derived by the person against whom the application is made as a result of the commission of the offence or of any other unlawful act, unless the contrary is proved (s 15(a)).

77 It can at once be seen that persons affected by these provisions are taken to have been convicted of a serious offence only for the purposes of the Act and that this is, in effect, a shorthand device for broadening the reach of the Act or, to put it differently, for reducing its verbiage (cf R v Hughes (2000) 202 CLR 535 [24]) in rendering, not only persons who have been convicted of serious offences, but also, inter alia, persons who have absconded or died after being charged but before being tried, liable to be made the subject of forfeiture and pecuniary penalty orders. It is, as Cave J said in R v Norfolk County Council (1891) 60 LJ QB 379, important to bear in mind that, generally speaking, when you say that something is deemed to be something, you do not mean that it is what you deem it to be. Rather, you are admitting that it is not that particular thing, although, for the purposes of the Act, it is deemed (or taken) to be that thing. It is, as Cooper J pointed out in Rowe v Transport Workers' Union of Australia [1998] FCA 1646; (1998) 90 FCR 95 at 112, important to consider the statutory purpose for which the statutory fiction is introduced and the statutory fiction should not be given a meaning and operation beyond that which is necessary to achieve the statutory purpose of the enactment.

78 This is not a case of the kind, considered by Murphy J in Actors and Announcers Equity Association of Australia v Fontana Films Pty Ltd [1982] HCA 23; (1982) 150 CLR 169 at 214, in which the courts are required to make findings contrary to fact or to adjudge persons guilty upon proof of facts from which a rational conclusion of guilt does not follow and on the basis of a legislative conclusion which is unexaminable judicially. Rather, when the provisions as a whole are considered, it can be seen (to use the words of Murphy J, ibid) that the vice is in the form, not the substance. Nor is this the kind of case, referred to by Gaudron J in Polyukhovich v The Commonwealth [1991] HCA 32; (1991) 172 CLR 501 at 704, in which a power is to be exercised by the application of law to facts invented by Parliament or invented according to some statutory formula or prescription. There is here no finding of guilt by the Parliament itself, nor any direction to the Supreme Court to find anyone guilty. There is only a direction, to the Supreme Court, to make a forfeiture order, where it considers that to be appropriate, and/or a pecuniary penalty order, where it considers that to be appropriate, in cases in which persons have been convicted of serious offences or, relevantly, have absconded or died after being charged with serious offences but before they could be brought to trial.

79 The only facts relevant to the exercise of those powers by the Court are facts which will be found by it (and not by the Parliament). In each case the Court must first be satisfied that a person has been charged with a serious crime but absconded or died before being brought to trial. It will be apparent from what we have said above that, in the case of a forfeiture order, the Court must next be satisfied (beyond reasonable doubt) that the person committed the offence and also that the property to be forfeited was used in, or in connection with, the commission of the offence or was derived or realised by that person or another person, or is subject to the effective control of that person, as a result of the commission of the offence or of any other unlawful act. It will also be apparent that, in the case of a pecuniary penalty order, the Court must be satisfied (albeit in the light of s 15(1a)) that the benefits to be assessed for the purpose of making the order were in fact derived by the person against whom the order is sought as a result of the commission of the offence or any other unlawful act. We have earlier mentioned that, while an order of this last kind is, somewhat misleadingly, described as a "penalty" order, it is, in truth, an order for the repayment of the value of benefits derived as a result of criminal conduct. It is interesting to note, in this respect, that, in the legislation which has now replaced the CCP Act (the Criminal Property Confiscation Act 2000), orders of this kind are referred to as "criminal benefit declarations".

80 It is, in this context, important to bear in mind what was said by Isaacs J in Williamson v Ah On [1926] HCA 46; (1926) 39 CLR 95 at 117, as follows:

"It is not the function of the judiciary to revise the work of the legislature, to re-appraise the reasonableness or the justice of its enactments. The judiciary, in relation to pronouncing upon the legality of a statute, can do no more than say whether it does or does not pass beyond what Professor Thayer calls 'the outside border of reasonable legislative action' (Legal Essays, p.27). For instance, applying the reasoning of Lord Halsbury L.C. in Sharp v Wakefield (1891) AC 173, at p.179, if the legislation were so arbitrary and fanciful, so flagrantly destructive of any real and reasonable chance to place the real facts before the Court for determination of the issue - in short, a mere disguise for extending the legislative power - the Court would not hesitate to say the statutory provisions attacked were beyond the uttermost border of incidental aid to effectuate the main power."

81 Isaacs J illustrated the distinction (at 108) by saying that:

"It is one thing to say, for instance, in an Act of Parliament, that a man found in possession of stolen goods shall be conclusively deemed to have stolen them, and quite another to say that he shall be deemed to have stolen them unless he personally proves that he got them honestly. The first is a parliamentary arbitrary creation of a new offence of theft, leaving no room for judicial inquiry as to the ordinary offence; the second is only an evidentiary section, altering the burden of proof in the ordinary case of theft, and requiring certain pre-appointed evidence to fit the special circumstances in the interests of justice, because the accused best knows the facts, and leaving the Court with these provisions to examine the facts and determine the matter."

82 There is, in this case, no conclusive "deeming" of the commission of any offence in the sense discussed by Isaacs J. Rather, there is, as we have said, only a shorthand device used in order to expand the category of persons who, once the Court has been satisfied by evidence in relation to the matters requiring proof, might, in the exercise of the Court's discretion, be made the subject of forfeiture or pecuniary penalty orders.

83 The legislation in this case is very different to that considered in Kable. There, s 5(1) of the Community Protection Act 1994 (NSW) empowered the Supreme Court to make an order for the detention of a specified person in prison for a specified period if it was satisfied on reasonable grounds that the person was more likely than not to commit a serious act of violence and that it was appropriate, for the protection of a particular person or the community generally, that the person be held in custody. Section 3(3) provided that the Act authorised the making of a detention order against a named individual and no other.

84 As has been pointed out by Hayne JA in R v Moffatt [1998] 2 VR 229 at 249, all of the judges who decided that case accepted that the State courts are creatures of the States and that when the Commonwealth invests its judicial power in them, it must take them "constituted and organised" (per Brennan CJ at 67) as they are. Hayne JA (ibid) also pointed out that it was accepted by all members of the Court that the doctrine of separation of judicial power is not part of the constitutional law of the State of New South Wales (and the situation is similar in this State - see the discussion in S v The Queen (1995) 12 WAR 392) and that (at 250) the legislation was held to be incompatible with Ch III of the Commonwealth Constitution because it contemplated proceedings not "otherwise known to the law" and which did not "in any way partake of the nature of legal proceedings" (Gaudron J at 106), because it "compromise[d] the institutional impartiality of the Supreme Court" (McHugh J at 121), because it "require[d] the Supreme Court to exercise the judicial power of the Commonwealth in a manner which is inconsistent with traditional judicial process" (Toohey J at 98) and because the Act "sapped to an impermissible degree by ad hominem legislation" the "appearance of institutional impartiality in administering [Federal criminal law] and in inflicting punishment for breach of it" (Gummow J at 133-4).

85 Whatever is the principle which underlies the finding of the majority in Kable (cf Moffatt, above, at 251, per Hayne JA), it is not, in our respectful opinion, one which finds any application to the very different legislation in the form of the CCP Act.

86 In all of these circumstances, we are not persuaded that there is anything in the challenged provisions of the CCP Act which should render them invalid or inoperative.

87 Nor are we persuaded that persons affected by the challenged provisions have lost any right of appeal. Because there is, in truth, no conviction of those who are merely taken, for the purposes of the Act, to have been convicted, there is no need for any right of appeal in respect of that "conviction". Full rights of appeal are, as this appeal demonstrates, preserved to those against whom forfeiture or pecuniary penalty orders are made.

(Confiscation of Profits) Act 1988

Property Confiscation Act 2000

Stuart Anthony Silbert (as Executor of the Estate of Stephen Retteghy (Dec)) v Director of Public Prosecutions for Western Australia [2002] WASCA 12

At a glance

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Judgment (177 paragraphs)

Stuart Anthony Silbert (as Executor of the Estate of Stephen Retteghy (Dec)) v Director of Public Prosecutions for Western Australia [2002] WASCA 12 (6 February 2002)

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Legislation Cited (5)

Cases Cited (47)