Henderson v State of Queensland [2014] HCATrans 102 (16 May 2014)

Last Updated: 16 May 2014

[2014] HCATrans 102

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Brisbane No B28 of 2013

B e t w e e n -

JOHN WILLIAM HENDERSON

Applicant

and

STATE OF QUEENSLAND

Respondent

Application for special leave to appeal

CRENNAN J
KIEFEL J

TRANSCRIPT OF PROCEEDINGS

FROM CANBERRA BY VIDEO LINK TO BRISBANE

ON FRIDAY, 16 MAY 2014, AT 10.34 AM

Copyright in the High Court of Australia

MR S. GILLESPIE-JONES: May it please, your Honours, I appear with MS E. McKINNON for the applicant. (instructed by Gary Prince Lawyer)

MR M.D. HINSON, QC: May it please the Court, I appear for the respondent. (instructed by Director of Public Prosecutions (Qld))

CRENNAN J: Mr Gillespie-Jones.

MR GILLESPIE-JONES: This case was described, your Honours, by the trial judge as an anomalous situation and if I can go to the application book, page 12, more particularly at paragraph [65], the trial judge says:

However, it would appear to be anomalous that property may be confiscated, because the ultimate origin of the property is beyond the knowledge of, and means of proof available to, a prescribed respondent. Such a case would appear to be well outside the intended scope of the legislation –

and his Honour refers to sections 13(1) and 13(4). Indeed, that position was followed on appeal and it is contended by my friend that this is no error.

KIEFEL J: Do you say that it is a question of construction of the Criminal Proceeds Confiscation Act section 68(2)(b)?

MR GILLESPIE-JONES: In my submission, there are two aspects to it. Firstly, is the question of what “proceeds” is, which provides the causation between the illegal activity and the property that is generated from the illegal activity.

KIEFEL J: Well, do you say that the reference to “illegally acquired property” in the subsection is to property illegally acquired by the person who is seeking to exclude it from the effects of the confiscation order?

MR GILLESPIE-JONES: Indeed, I do.

KIEFEL J: They do not have to trace title back beyond that?

MR GILLESPIE-JONES: Indeed. In my submission, it is covered by the Act but not dealt with by the judge or the appellate court. Having said that, the other side of the coin is that Mr Henderson would ordinarily rely on his common law possessory title and that has really been the subject of distraction, perhaps before the court at first instance and the appeal court.

KIEFEL J: Well, I suppose it is a rather curious explanation of - the provenance of these jewels is quite a story and Mr Penfold, the jeweller’s evidence, seems to put paid to the likelihood that that story is true but your case, I take it, is that it does not really matter. Once the primary judge found as a fact that the applicant had received the jewels from his father, there was no question of the applicant having illegally acquired them.

MR GILLESPIE-JONES: That is correct.

KIEFEL J: That is your case.

MR GILLESPIE-JONES: That is my case and that is my point, really. All of the Confiscation Acts refer to either an interest or ownership and if the situation is that those words impute a question of having to establish a chain of title on something such as a jewel or something that is portable, like my father’s watch that he has given to me in 19 – but he could not produce a receipt from 1962, in those circumstances I would fall foul of the Queensland legislation were I to be a prescribed person. It is a short point, your Honour, but it is an important point because it is of widespread application.

CRENNAN J: We would be assisted at this stage by calling on Mr Hinson, Mr Gillespie-Jones.

MR GILLESPIE-JONES: Thank you, your Honours.

CRENNAN J: Yes, Mr Hinson.

MR HINSON: Your Honours, the applicant’s submissions involves reading into section 68(2)(b) some words of limitation that refer to the applicant’s interest in the property rather than the property itself and an illegal acquisition by the applicant as opposed to any illegal acquisition. In my submission, such a construction is not supported by the terms of section 68(2)(b) or the terms of section 22.

KIEFEL J: But, Mr Hinson, would not your construction of subsection 2(b) be “property to which the application relates is not and never has been illegally acquired property”? I mean, in construing this provision, it is going to be necessary to read some words in, I would think, to make sense of it, is it not?

MR HINSON: In a particular case, the words that may need to be read in would be derived from section 22, depending on the circumstances.

CRENNAN J: Well, also, one would consider the scope and purpose of this legislation in the context of determining precisely what the reference to property was intended to cover.

MR HINSON: To cover, yes. The relevant purpose is to – do your Honours have a full copy of the Act, may I ask, because I do not think I have referred to the purpose in the materials that I have provided to the Court and I am not sure - - -

KIEFEL J: Yes, we do in the applicant’s material, Mr Hinson. Which section are you referring us to?

MR HINSON: Section 4 sets out the main objects:

The main object of this Act is to remove the financial gain . . . associated with illegal activity -

and under 2(b) reference is made to protecting -

property honestly acquired by persons innocent of - - -

KIEFEL J: Looking at section 4(1) it seems to be focused upon the person whose property is to be confiscated and it is their activity that is involved. That would tend away from your argument, I would have thought?

MR HINSON: In my submission, section 4(1) is concerned with activity without ascribing that activity to any particular person. If I could ask your Honours to go to section 22, your Honours will see that there are three classes of illegally acquired property. The first class described in subsection (1) is that which is the “proceeds of an illegal activity”. The remaining two categories are described in subsection (2) as the “proceeds of dealing with illegally acquired property” or property which is “acquired using illegally acquired property”.

So it is not simply illegal activity which may result in the characterisation of property as being illegally acquired property. It may be that there is some other dealing or transaction involving such property which is relevant to its characterisation. In terms of the descriptions in section 22 of “illegal activity”, dealing with illegally acquired or acquired using illegally acquired property, all of those are neutral in terms of the identity of the relevant actor or person engaged in the activity.

CRENNAN J: Are you advancing the proposition that it is necessary for a person seeking an exclusion order to establish a chain of title for however long back?

MR HINSON: In some cases that may be necessary, and in this case it was, and in this case it was common ground that the cash, which is the property the subject of the application, was the proceeds of dealing with the jewellery so that the question - - -

CRENNAN J: Selling the jewellery?

MR HINSON: Yes, selling the jewellery, so that the question that then had to be addressed was the question under section 22(2)(a), whether the jewellery was illegally acquired property. There was undoubtedly a dealing with it by selling it. The cash was the proceeds of that dealing. So the question resolved itself into whether the jewellery was illegally acquired property. The onus of proving that - - -

KIEFEL J: But does not section 22(2)(a) raise the question, illegally acquired by whom?

MR HINSON: In relation to the jewellery, yes, and the case that was put on by Mr Henderson demonstrated or sought to establish his acquisition of it in a particular way. He gave evidence that he acquired it by way of a gift from his father, and he also called - - -

KIEFEL J: That was accepted by the primary judge.

MR HINSON: That was accepted by the primary judge, and he also put on evidence to show how his father acquired it, and that evidence was the subject of challenge and that evidence – Mr Penfold’s evidence was accepted as demonstrating - - -

KIEFEL J: Well, on one view, on the view of construction that is now put forward for Mr Henderson, the evidence he put on about the provenance of the jewels from his father or grandfather’s perspective – or father’s perspective – was irrelevant.

MR HINSON: Was unnecessary, on Mr Henderson’s argument, yes.

KIEFEL J: Is this not a question of general importance, in any event, Mr Hinson?

MR HINSON: Your Honour, to the extent that there are similar provisions in the confiscation legislation of the other States, I accept that. To the extent it does not seem to be a question that has been addressed by the High Court - - -

KIEFEL J: You could not say that there were insufficient prospects here because if the construction that is put forward for Mr Henderson now is correct, the findings would result in his success, would they not; the findings of fact by the primary judge.

MR HINSON: If it is accepted that all that is necessary is to establish that he did not illegally acquire it, then, yes, the findings that have already been made would entitle him to succeed in the proceedings. That is correct. Could I briefly draw your Honours’ attention also to sections 25 and 26 of the Act in this context? Section 25 provides that illegally acquired property retains its character and your Honours will see that word “character” is defined in section 24. It retains its character even if it is disposed of until it stops being property of that character under section 26.

The gift from Mr Henderson’s father to Mr Henderson is a disposal. Section 25 tells us that that disposal did not deprive the jewellery of its character of illegally acquired property, if that indeed was its character. What would stop that jewellery losing the character of illegally acquired property is an event under section 26, the first of which your Honours will see is acquisition:

by a person for sufficient consideration –

in good faith, the bona fide purchase of the value. A second circumstance is vesting:

in a person on the distribution of the estate of a deceased –

person. The other circumstances then deal with a disposition or a dealing with it under the terms of the legislation. They are not presently relevant but there is this notion in the Act that illegally acquired property retains its character unless one of these events in section 26 occurs. In the present case, for example, if one accepted that the purchaser of the jewellery, the purchaser for Mr Henderson, satisfied the description in section 26(a), the jewellery would then cease from that point on to be illegally acquired property.

The proceeds of the sale of it continue to be illegally acquired property under section 22 and the cash proceeds, of course, were what were sought to be forfeited. I simply mention sections 25 and 26 as being relevant to in a general sense this question of whether the activities of a particular person are sufficient by themselves to cause illegally acquired property to alter its character.

CRENNAN J: Thank you. Anything further?

MR HINSON: Your Honours are correct, it is a short point. I otherwise rely upon the written submissions.

CRENNAN J: We do not need to hear from you further, Mr Gillespie-Jones. There will be grant of special leave in this matter. I would have thought the matter would take no more than half a day?

MR GILLESPIE-JONES: That would be right, your Honour.

MR HINSON: From my perspective, your Honour, I think that is correct.

CRENNAN J: Thank you. Counsel are reminded about the relevant time limits.

AT 10.49 AM THE MATTER WAS CONCLUDED