High Court Considers The Burden of Proof In Exclusion Orders For Criminal Forfeiture [2014] HCA 52
Tuesday 16 December 2014 @ 11.56 a.m. | Crime | Legal Research
The High Court, by majority, has upheld a decision made in the Queensland Court of Appeal, holding that Mr Henderson had not sufficiently proven that cash seized by the Queensland Police was not proceeds of illegal activity. Henderson v Queensland [2014] HCA 52 revolved around the construction of section 68 of the Criminal Proceeds Confiscation Act 2002 (Qld) (“the Confiscation Act”), under which Mr Henderson had applied to exclude a sum of cash from a forfeiture order made by the State of Queensland.
Facts
In 20 April 2002, police found $598,325 in cash and 23.3 grams of cannabis in the boot of a hire car parked outside a motel in Cairns. The State of Queensland made an application under the Confiscation Act in 2003, shortly after the Act came into force, which prevented anyone from dealing with the money, which was being held in a Queensland Police Service bank account. In 2011, the Queensland Supreme Court made an forfeiture order under the Confiscation Act, based on their finding that it was “more probable than not that Mr Henderson had engaged in a serious crime related activity” [at 38]. Mr Henderson had a previous conviction for possessing cannabis, as well as the cannabis in his possession on 20 April 2002. Mr Henderson then made an “exclusion order” under section 68 of the Act, purporting to exclude the cash from the forfeiture order.
According to Mr Henderson, the money was the proceeds of the sale of jewellery, given to him by his father in 1996. His father gave him the jewellery and instructed him to look after his family. Mr Henderson initially kept the jewellery in a safety deposit box, but after his father’s death in 2001, he and his siblings decided to have it valued and sold and then invest it in the Queensland property market. Mr Henderson took it to a jeweller in Melbourne, who made a sketch of the pieces, and told him that it had a wholesale value of between $600,000 and $700,000. Mr Henderson sold the jewellery to someone named “Daniel”, who paid him $620,000 in cash. When the cash was found by police, Mr Henderson was en route to a meeting to negotiate the purchase of an investment property using the cash as a “bargaining tool”.
Mr Henderson’s siblings testified that they had only seen the jewellery after their father’s death. They all agreed that “they associated the jewellery with their mother and father having told them that jewellery had been given to their great grandfather as a reward for providing transportation services for Russian royalty.”
In response, the State called a registered valuer and jeweller, who gave his opinion (based on the initial jeweller’s sketch), that all the items of jewellery were manufactured after 1950. This would mean that the family’s account could not be true. There was no other information as to how Mr Henderson’s father acquired the jewellery.
“Illegally Acquired Property”
The debate in the case revolved around the proper standard of proof to be used when deciding if the jewellery was “illegally acquired property”. The primary judge and the Court of Appeal both concluded that the Court could not be satisfied, on the balance of probabilities, that the jewellery itself was not illegally acquired property. Mr Henderson argued that it was sufficient for him to prove that he himself did not acquire the jewellery illegally, and in the alternative that there was no reason for the Court to assume that the jewellery was illegally acquired property.
Section 68 of the Confiscation Act is:
68 Making of exclusion order
(1) The Supreme Court, on an application under section 65 or 66, may make an exclusion order
(2) The Supreme Court must, and may only, make an exclusion order if it is satisfied—
(a) the applicant has or, apart from the forfeiture, would have, an interest in the property; and
(b) it is more probable than not that the property to which the application relates is not illegally acquired property.
Decision
The Court unanimously rejected the argument that it was enough for Mr Henderson to prove that he had not illegally acquired the jewellery. Their Honours agreed that the appellant needed to satisfy the Supreme Court that it was more probable than not that his father had not illegally acquired the jewellery. The majority of the High Court (French CJ, Kiefel J, Bell J and Keane J, all in separate Acts) agreed that Mr Henderson had not done this, with French CJ finding “there was no available hypothesis to explain how the appellant's father acquired the jewellery. The appellant failed to discharge the onus placed upon him” [at 15]. Bell J similarly found [at 31]:
“It is a large step for this Court to hold that it was not open to the primary judge to fail to be satisfied that the jewellery was not illegally acquired property, particularly when the evidence given at the trial is not before the Court on the appeal. Moreover, it is wrong to approach the determination of an exclusion application under the Act upon a presumption that individuals ordinarily do not engage in criminal activity. Such a presumption is inconsistent with the allocation of the burden of proof.”
Gageler J dissented on this last point, finding that “due weight” should have been given to the “conventional perception that persons do not ordinarily engage in criminal conduct”, and concluding
“Absent some basis in the evidence for considering that conventional perception to be inapplicable to Mr Henderson's father, or to any earlier owner of the jewellery, the absence of evidence as to how any of them acquired title to the jewellery leaves as the more probable inference that it was not as a result of some illegal activity” [at 98].
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Sources:
Henderson v Queensland [2014] HCA 52 (10 December 2014) & judgment summary
