The Commissioner of the Australian Federal Police v James Henry Kinch

1. [1]

   In these proceedings the Commissioner of the Australian Federal Police (the Commissioner) makes application by way of Notice of Motion filed on 17 August 2016 in which declaratory relief is sought in the following terms:

2. [2]

   The application is supported by the following affidavits relied upon by the Commissioner:

   1. (1)

      Affidavit of Alexandra Navarrete sworn 16 August 2016;

   2. (2)

      Affidavit of Erica Jayne Last sworn 11 May 2016; and

   3. (3)

      Affidavit of Erica Jayne Last sworn 16 August 2016.

3. [3]

   The application was heard in the Duty Judge list yesterday, 5 October 2016. Mr Daniel Tynan of counsel appeared on behalf of the Commissioner. Ms Sheridan Goodwin of counsel appeared on behalf of the respondent, James Henry Kinch.

4. [4]

   The Commissioner’s Notice of Motion relates to proceedings commenced by Mr Kinch on 10 August 2016 (as to which see below) in which proceedings Mr Kinch sought:

The Evidence

1. [5]

   The above affidavits were read without objection on behalf of the Commissioner.

2. [6]

   The affidavit of John Buddy Hajje, solicitor, sworn 5 October 2016 was read on behalf of the respondent, James Henry Kinch. Objection was taken to the affidavit, firstly, on the ground that the affidavit was late and that Mr Tynan had only received a copy of it that morning; secondly, that the material could only go to an application under s 93(1)(c) of the Act; and thirdly that the reference contained within para [2] to the agreement between Mr Kinch and his former solicitor, Ms Elamrousy, had little weight. Objection was also taken to para [3] of the affidavit on a similar basis.

3. [7]

   Ms Goodwin accepted, in relation to the last sentence of para [2] that there could be “some admissibility issues with respect to that sentence” (T 8). She submitted that, at its highest, it would go to the state of mind of Mr Hajje in pursuing the proceedings (as to the fact that he had not been able to obtain the full file and was hindered by that) (T 8 [10]-[15]). I determined to admit the evidence of the last sentence of para [2] on that basis as going to an issue as to state of mind. Paragraph [3] was admitted provisionally subject to relevance and, if relevant, its weight.

4. [8]

   Ms Goodwin sought and was granted leave to call oral evidence from the respondent. This evidence is noted below.

Background

1. [9]

   On 2 June 2008 this Court made an order pursuant to s 17 of the Act restraining certain property (Restrained Property). The order was made in respect of all of the property owned by Mr Kinch and any property acquired by him after the date of the restraining order.

2. [10]

   The Restrained Property is identified in Schedules 1 to 6 of the Notice of Motion and in Ms Navarrete’s affidavit at [7]. It includes a property in Portugal, cash, traveller’s cheques and funds held in numerous bank accounts.

3. [11]

   On 12 February 2016 the respondent was convicted and sentenced by this Court (Hidden J) in respect of the following:

4. [12]

   Following Mr Kinch’s conviction, pursuant to s 92(3)(a) of the Act, the Restrained Property was due to be automatically forfeited to the Commonwealth at midnight on 11 August 2016 (being the end of the six month period which started on “conviction day” as specified in s 92(3)(a) of the Act).

5. [13]

   On 8 April 2016 Mr Kinch was served with a s 92A Notice which advised him that pursuant to s 92 of the Act, the Restrained Property would be automatically forfeited to the Commonwealth at midnight on 11 August 2016. A copy of the Notice was attached to Ms Last’s May affidavit at [3]. The Notice included the following statement:

6. [14]

   On 8 April 2016 Mr Kinch signed an acknowledgment of receipt of the s 92A Notice.

7. [15]

   On 13 July 2016 Mr Kinch’s solicitors, John B Hajje and Associates, filed a Notice of Appearance in the Supreme Court in these proceedings. On 13 July 2016 the Commissioner served Mr Kinch’s solicitors with a copy of the s 92A Notice and a notice pursuant to s 183 of the Act for Mr Kinch to attend a compulsory examination before an Approved Examiner: Ms Last’s August affidavit; and Ms Navarrete’s affidavit at [15]-[16].

8. [16]

   On 19 July 2016 Mr Kinch was examined pursuant to s 180 of the Act. He was represented by counsel at the examination. Mr Hajje also appeared on that occasion.

9. [17]

   No application was made for an extension of the forfeiture date following service of the s 92A Notice until 10 August 2016, that is to say, a day before the date for automatic forfeiture of the Restrained Property. Mr Kinch, by his Notice of Motion, sought two orders:

10. [18]

    Mr Kinch’s Notice of Motion was supported by a three-paragraph affidavit of Mr Hajje sworn on 9 August 2016.

11. [19]

    Mr Hajje’s affidavit did not contain any written notice of the grounds on which Mr Kinch sought an exclusion order as required by s 94(3) of the Act. The affidavit in para [2] merely stated:

12. [20]

    In the submissions in the present matter, the Commissioner submitted that the respondent’s Notice of Motion was liable to be dismissed for want of compliance with the requirement of notice of grounds as stipulated in s 94(3): Commissioner of the Australian Federal Police v Nguyen [2016] NSWSC 883 at [7]-[10].

13. [21]

    The only matter advanced in Mr Hajje’s affidavit in support of the extension application was in the following terms:

The Proceeds of Crimes Act 2002 (Cth)

1. [22]

   The relevant provisions relating to forfeiture on conviction of a serious offence are set out in Part 2-3 of the Act.

2. [23]

   The provisions of ss 92, 92A, 93 and 94 are central to the present application. Accordingly, they are reproduced below.

3. [24]

   It is also noted that s 96 provides the property forfeited under s 92 vests absolutely in the Commonwealth at the time of the forfeiture.

Submissions

1. [25]

   I have had the benefit of Mr Tynan’s written submissions dated 30 September 2016 and Ms Goodwin’s written submissions dated 4 October 2016. It is appropriate that I express my appreciation to both counsel for the high quality of their written and oral submissions, which have been of great assistance and have facilitated an early determination of the issues arising in the proceedings.

2. [26]

   The submissions for the Commissioner regarding the terms of s 92 of the Act was expressed in very clear language. Section 92(1) provides for the automatic forfeiture of property of the Commonwealth at the end of the “period” if the conditions there stated have been met by that time.

3. [27]

   As observed, the “period” is set out in s 92(3) which states that the period at the end of which the property is forfeited is:

4. [28]

   Section 93, which provides a power in the court to make an extension order specifies the necessary preconditions, namely,

5. [29]

   By s 94 it is mandatory for the Court to make an exclusion order if it is satisfied of the various matters which include that the applicant’s interest in the property has been lawfully acquired and that it is neither the proceeds of unlawful activity, nor an instrument of unlawful activity.

6. [30]

   As noted above, s 94(2) of the Act importantly provides:

7. [31]

   The further submissions for the Commissioner were expressed in the following terms:

8. [32]

   Attention was drawn to a number of decisions including in particular the decision in The Commissioner of the Australian Federal Police v Halac [2015] NSWSC 520 (Hidden J); Hall v Director of Public Prosecutions [2015] SASCFC 19; and DPP v Alex Chan [2001] NSWCA 249.

9. [33]

   The Commissioner’s position was succinctly stated in the submissions, namely, that in the absence of an extension order having been made by the Court by 11 August 2016, no extension order under s 93 nor any exclusion order under s 94 can be made by this Court: Written Submissions at [48].

10. [34]

    It was accordingly submitted for the Commissioner that at midnight on 11 August 2016, the Restrained Property vested in the Commonwealth, accordingly the Commissioner sought the declaration sought in the Notice of Motion.

11. [35]

    In Ms Goodwin’s oral outline of submissions, it was foreshadowed that the respondent intended to submit that to the extent that the judgment of Hidden J in Halac, supra, establishes that there is an automatic forfeiture of the process six months after conviction in circumstances in which an application for exclusion and extension has been filed but not yet determined was erroneous (T3).

12. [36]

    Ms Goodwin indicated that reliance would be placed upon the authority of the Court of Criminal Appeal in Chan, supra, and that Hidden J was in error in seeking to distinguish or differentiate the decision in Chan from that determined by his Honour in Halac. In that respect it was submitted that provisions of s 94 in the 2002 Act did not justify the departure from the authority of the Court of Criminal Appeal in Chan.

13. [37]

    Ms Goodwin in her oral outline of submissions, stated that

14. [38]

    In Ms Goodwin’s written submissions, it was stated that the issue was whether s 92 of the Act applies so as to result in automatic forfeiture of proceeds six months after conviction when an application for an extension order has been filed but not yet determined.

15. [39]

    Ms Goodwin’s written submissions helpfully reviewed in detail many of the relevant authorities concerned with statutory construction including those which emphasise that the legal meaning will correspond with the grammatical meaning of a provision, but that sometimes the context of the words, the purposes of the legislation, or the consequences of such an interpretation necessitate another interpretation: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 384.

16. [40]

    It was submitted that if the law permits two or more constructions then a construction which avoids a capricious, unreasonable, inconvenient or unjust interpretation is to be inferred, even if it is not the most obvious or grammatically accurate approach. The submissions set out an extract to support that proposition from the judgment of Gibbs J in Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99; HCA 36.

17. [41]

    It was submitted that the considerations of fairness are also relevant as noted in Commissioner for Railways (NSW) v Agalianos (1955) 92 CLR 390; HCA 27 as cited in the Project Blue Sky case.

18. [42]

    Authority was cited for the proposition that an interpretation which renders legislation inoperative or nonsensical is to be avoided: Coco v the Queen (1994) 179 CLR 427 at 446; HCA 15 and it was submitted equally the interpretation that would be “unreasonable” is also to be avoided: Submissions p 3.

19. [43]

    Emphasis was also given to the importance of the right to own property as one of the rights usually protected by the common law. Legislative abrogation of such a right, it was submitted (permitting confiscation of property) must be clear and unambiguous: Submissions p 4.

20. [44]

    In addition, it was submitted that legislations should be read such that it is construed consistently with the language and purpose of all of its provisions and the meaning of the provision must be determined by reference to the language of the instrument viewed as a whole. The relevant authorities in support of those submissions are set out on pp 4 and 5 of the respondent’s submissions. In the present case it was submitted that whilst the general purpose of the Act might be stated to be “to deprive persons of property which is the result of criminal activity” that does not necessarily mean that that intention was to be pursued at all costs throughout every provision, especially when such a provision might be seen as “remedial or a beneficial provision” citing the observations in Commissioner of the Australian Federal Police v Hart and Ors [2016] QCA 215 at 882 ff.

21. [45]

    In the present case it was submitted that the safeguards that exist within the Act (including ss 92 and 93) would not be interpreted to promote to the fullest extent possible, the power of the Government to confiscate property. Their reason for existence, it was said, is to provide protections against the regime. Any ambiguity ought to be resolved in favour of upholding them.

22. [46]

    In the context of the legislative provisions that apply in this case, it was said that interpretation of the relevant provisions must be undertaken having regard to all of the provisions. This included s 93, the provision intended to govern extensions. The absence of a phrase stipulating as a precondition that there must have been a (successful) determination of an extension order within six months indicates that no such condition was intended to be placed upon the operation of s 93: submissions at p 8.

23. [47]

    It was further submitted that the effect attributed to s 92 by the Court in Halac, supra, would frustrate the effect intended and expressed by s 93. Accordingly, it was submitted that the interpretation in Halac would exclude the operation of s 93 in circumstances not contemplated by s 93, and that this interpretation was incorrect. It could also result in an outcome that was unjust, unfair and unreasonable.

24. [48]

    It was submitted that the alternative interpretation is one to be preferred, that is so long as the application has been filed within six months of the conviction date, then a s 93 order can be made. Issues of timeliness and delay are taken into account within that section. Reference was made and passages cited from the Court of Appeal’s judgment in Chan were set out in the written submissions at pp 8-9 with particular emphasis to the dicta at [13].

25. [49]

    It was submitted that the provisions of the 1987 legislation, the subject of consideration in Chan, do not differ in any relevantly significant way from the Act. The absence of s 94 in the earlier legislation it was said was not significant to the argument at hand, it simply confirms that once forfeited, the property cannot be the subject of an exclusionary order.

26. [50]

    It was submitted that Chan ought to be followed and that the Court would find that there is jurisdiction to entertain the defendant’s motion for exclusion and would not make the declaration sought by the plaintiff.

27. [51]

    Mr Kinch gave oral evidence by AVL. He gave evidence that he had instructed a solicitor, Ms Elamrousy to act for him in relation to the criminal proceedings. He said that he also had instructed her to act for him in the confiscation proceedings. He said that after he had received the s 92A Notice, he became concerned and tried to contact Ms Elamrousy on the same date.

28. [52]

    At some unspecified date, he said that he sent a fax to Mr Hajje’s office explaining the position to him.

29. [53]

    He said that he had earlier given instructions to Ms Elamrousy in relation to the confiscation proceedings and at a later stage instructed her to provide all documents to Mr Hajje who, he said, was having difficulties obtaining documents from her. He said that Mr Hajje managed to collect some documents. He again spoke to Ms Elamrousy as to why she had not given “the proceeds of crime documents” to Mr Hajje (T 12). He said that she said that so far as she was aware, she was still representing him in the confiscation matter.

30. [54]

    He said that he was moved from Long Bay Prison to Lithgow Gaol and gave evidence of the difficulties he had in accessing use of the telephone.

31. [55]

    His evidence was that he had applied unsuccessfully for Legal Aid and set about raising funds from friends and relatives overseas in respect of the confiscation proceedings.

32. [56]

    He was asked as to how often he spoke by telephone with Mr Hajje between 13 July 2016 and 10 August 2016. He said that it would have been less than ten times.

33. [57]

    Ms Goodwin asked him whether he had any legal training. He said he had not, that he did not even finish high school. He said he was although “not a dummy” he did not understand some of the legal jargon and did not understand everything said in legal papers (T 14).

Consideration

1. [58]

   It is to be observed that the provisions of ss 92 and 94 concern substantive rights, that is, s 92 relates to the forfeiture of property; whilst s 94 provides for a power in the Court to exclude property from forfeiture under Part 2-3 of the 2002 Act.

2. [59]

   On the other hand, ss 92A and 93 are provisions respectively concerned with specified procedures as to notice in relation to the former and as to a power in the Court to extend the time or period in terms of s 92(3) (an extension order). Section 92A imposes an obligation on the “responsible authority” to give a written notice in accordance with the terms of s 92A. Section 93 specifies the preconditions of the making of an extension order.

3. [60]

   It is noteworthy that ss 92 and 93 do not stand independently of one another. The two sections form part of the statutory scheme established under divisions of Part 2-3. Section 92(3) makes reference to an “extension order”, a reference to an order that may be made under s 93. Section 93 in turn expressly is linked to s 92. Section 93(1) expressly refers to subs 92(3) in the chapeau to that section.

4. [61]

   Accordingly, ss 92 and 93 are interlocking or interconnected provisions that operate together as part of the scheme established under Division 1 of Part 2‑3.

5. [62]

   The issue for determination in the present proceedings requires, inter alia, consideration of the submission made that the decision of Hidden J in Halac, supra, is incorrect or erroneous insofar as the construction of the relevant provisions under Part 1 of the Act, in particular, those contained within ss 92 and 93 of the Act. Additionally, I am required, of course, to undertake the task of statutory interpretation as an independent exercise in order to determine whether there is any basis upon which there exists a construction of the provisions that differs from that determined in Halac.

6. [63]

   In Halac, the defendant was sentenced for an offence of drug trafficking, having pleaded guilty to an offence under s 302.1 of the Criminal Code 1995 (Cth). On 4 October 2011 a Restraining Order was made under s 18 of the Act in respect of certain property.

7. [64]

   Following his conviction on 10 April 2014, the defendant was served with a notice under s 92A of the Act notifying him that on 20 August 2014 six months after his conviction, the Restrained Property would automatically would be forfeited to the Commonwealth pursuant to s 92.

8. [65]

   On 20 August 2014 the defendant filed a Notice of Motion seeking exclusion of property the subject of the Restraining Order, pursuant to s 94 and an extension of time in which to do so, pursuant to s 93.

9. [66]

   His Honour, Hidden J, heard the proceedings on a question as to whether the Court had jurisdiction to entertain the defendant’s application.

10. [67]

    His Honour, inter alia, set out in his judgment the full provisions of ss 92, 93 and 94 of the Act and noted the provisions of s 96 to which reference has been made above.

11. [68]

    In Halac, detailed written submissions were made by Mr A Sullivan QC, who appeared for the Commissioner and his Honour extracted a summary of some of the relevant principles of statutory construction set out in Mr Sullivan’s written submissions: at [9] of the Judgment.

12. [69]

    I have, of course, paid close attention to the principles reproduced in Hidden J’s judgment and the written submissions by Mr Sullivan in that case.

13. [70]

    His Honour noted at [10] the defendant’s conviction on 21 February 2004 was for “a serious offence” for the purpose of s 92(1)(a), that the six month period had expired at midnight on 20 August 2014. As at that date the relevant property was still covered by the restraining order. Accordingly, his Honour noted that the property would be automatically forfeited at that time unless the defendant could obtain an extension of the forfeiture period pursuant to an exclusion application.

14. [71]

    His Honour further noted that the defendant’s application for exclusion and extension of the period for automatic forfeiture was not made until 20 August, the day on which that period expired. The Commissioner argued in that case that an application for an extension could not be entertained because of the terms of s 92(3).

15. [72]

    In the course of his judgment, Hidden J observed at [12]-[17]:

16. [73]

    His Honour then noted that, after the matter had been argued, his attention was drawn to the then recent decision of the South Australian Full Court in Hall, supra. His Honour observed that in his opinion the Full Court’s decision supported Mr Sullivan’s argument and was decisive of the issue in the proceedings before him. His Honour noted at [19]-[20]:

17. [74]

    His Honour later in his judgment noted at [23] observations made by Gray J in Hall as follows:

18. [75]

    His Honour then stated at [24]-[26]:

19. [76]

    Hidden J observed that as the case before him exemplified, the effect of the provision can be draconian. However, his Honour stated at [27]:

20. [77]

    His Honour in conclusion noted that the defendant’s motion was filed on the last day of the six month period prescribed by s 92(3) (there had not then been any order in force extending that period) and that accordingly at midnight on that day, the property was forfeited to the Commonwealth. By virtue of s 94(2), an order excluding any of the property from forfeiture, his Honour observed, could not be made: at [29].

21. [78]

    Upon examination of the relevant provisions, I note the following matters:

    1. (1)

       Section 92 makes provision for automatic forfeiture of property of the Commonwealth at the end of the period applying under subs (3) (in the event that the conditions stipulated in s 92(1), (a), (b) and (c) apply).

    2. (2)

       “The period” at the end of which the property is forfeited, as stated in s 92(3) is either:

    3. (3)

       The expression “extension order is in force at the end of the period” in s 92(3)(b) is unambiguous. No “extended period” can arise unless the Court is satisfied of matters in accordance with that section and an order is made.

    4. (4)

       It cannot be said that the provisions of s 93 conflict with the provisions of s 92. The two sections are expressed in terms that indicate that they are to operate together as part of the statutory scheme under Div 1 of Part 2-3 – Forfeiture on Conviction of a Serious Offence.

    5. (5)

       The provisions of s 92(3) are fundamental to the operation of the automatic forfeiture scheme as at the specified point in time, namely, at the end of the period referred to in s 92(3)(a) (that is, the six month period) or at the end of the extended period as referred to in s 92(3)(b).

    6. (6)

       Section 94(2) reinforces the provisions of ss 92 and 93 in stating “(2) To avoid doubt, an order under this section cannot be made in relation to property if the property has already been forfeited under this Part”.

    7. (7)

       At the end of the six month period, there being in this case no extension order then in place or “in force”, the Restrained Property was forfeited to the Commonwealth.

22. [79]

    An analysis of the provisions of ss 92, 93 and 94 as referred to above, in my opinion, supports the interpretation of the provisions by Hidden J in Halac. The analysis and judgment of the South Australian Full Court in Hall, supra, and the obiter observations of Button J in The Commissioner of the Australian Federal Police v Klein and Hubble, supra, reinforce and confirm the correctness of the statutory construction made as to those provisions in Halac.

23. [80]

    The judgment of the Court of Appeal in Chan does not, in my opinion, represent an authoritative decision as to the provisions in Part 2-3 of the Act and should not be followed, for reasons discussed in Halac, in approaching the current legislation.

Conclusion

1. [81]

   I have concluded, notwithstanding Ms Goodwin’s very persuasive submissions, that the judgment of Hidden J in Halac was not erroneous or incorrect. Having closely examined the relevant provisions in Division 1 of Part 2-3 of the Act and the authorities to which my attention has been drawn his Honour’s construction in that case in relation to the provisions of s 92 and 93 accords with my own interpretation of those provisions, having due regard to the important principles of statutory construction to which both Hidden J had referred and as detailed by Ms Goodwin in her written submissions.

2. [82]

   I need only add that there is, of course, a well-accepted principle that a single judge should not depart from the considered judgment of another single judge as to the proper interpretation to be placed on uniform national legislation unless he or she forms the view that the previous decision is “plainly wrong”: ASIC v Marlborough Gold Mines Ltd (1993) 177 CLR 485 at 492; HCA 13.

3. [83]

   The Court of Appeal in Gett v Tabet (2009) 254 ALR 504; NSWCA 76 observed at [283] that the term

4. [84]

   As I have stated, not only, in my opinion, has no error been established in the reasoning of Hidden J in Halac, but that I am satisfied that his Honour’s reasoning is plainly correct.

5. [85]

   I am satisfied that the Commissioner is entitled to the declaratory relief.

6. [86]

   On 6 October 2016 I made orders in the following terms (with reasons to follow):

   1. (1)

      Pursuant to s 95 of the Proceeds of Crime Act 2002 (Cth), the items set out in Schedules 1 to 6 in the Notice of Motion filed on 17 August 2016 are forfeited under Part 2-3 of the Proceeds of Crime Act 2002 (Cth).

   2. (2)

      Grant leave to the Commissioner to lodge with my Associate a note dealing with the application for costs of the proceedings. Note is to be served on the defendant’s legal representatives on or before 14 October 2016 at 4.00pm. Any reply note is to be lodged with my Associate by 4.00pm on 21 October 2016.

7. [87]

   On 6 October 2016 Mr Tynan sought an order dismissing Mr Kinch’s Motion filed on 10 August 2016, being the Notice of Motion seeking an extension order and the exclusion order on the basis that that order follows from my Judgment.

8. [88]

   I propose to make the order as sought by Mr Tynan but defer doing so until Ms Goodwin has instructions as to her position in respect of making such an order. If necessary, I will deal with the matter when the proceedings come back into the list on 28 October 2016.