On 16 May 2014 in Henderson v Queensland1 the High Court granted special leave to appeal against the dismissal of an exclusion application brought under the Criminal Proceeds Confiscation Act 2002 (Qld).
On 16 December 2014 a majority of the Court dismissed Mr Henderson’s appeal. Please complete the “Receive updates by email” section on this page to be notified of future blog posts.
The ultimate decision from the High Court will inform the approach to exclusion of property from confiscation under most proceeds of crime and confiscation statutes, including the Proceeds of Crime Act 2002 (Cth).
The facts in Henderson v Queensland
Queensland Police seized nearly $600,000 cash from the boot of Mr Henderson’s hire car. At the same time they seized a quantity of cannabis. Mr Henderson, and some members of his family, had lengthy criminal histories. Despite these circumstances, the trial judge accepted Mr Henderson’s evidence that the cash was the proceeds of the sale of jewellery that had been given to Mr Henderson some years prior by his now deceased father.
As the Court of Appeal observed2 “Others might have reached a different conclusion, but this was very much the province of the primary judge.” It appears the State did not file a notice of contention in relation to this finding.
Notwithstanding the above finding of fact, the trial judge dismissed Mr Henderson’s exclusion application. His Honour held Mr Henderson had
failed to prove that his father lawfully acquired the jewellery.
The Court of Appeal decision
Mr Henderson had raised five grounds of appeal before the Court of Appeal. White JA wrote the leading judgment dismissing the appeal. Holmes and Daubney JJA concurred.
Ground 1 concerned procedural matters and is of limited importance to the development of the law.3 Ground 2 raised issues about the standard of proof applicable on an exclusion application.4 It was disposed of by reference to Briginshaw and Cross on Evidence.
Ground 4 was abandoned. Ground 5 was concerned with the public interest discretion.5 The Court of Appeal noted “The relevant public interest is not about fairness or how difficult it might be to obtain sufficient evidence to discharge the evidentiary burden in s 68(2)” and went on in effect to say that the discretion cannot be used to re-agitate the primary issues upon which a respondent has failed.6
Ground 3 was the ground that found its way to the High Court. Before the Court of Appeal it was in these terms:
“In all the circumstances – including the learned judge’s acceptance of the evidence of the appellant and his siblings, the absence of any evidence that the appellant’s father had unlawfully acquired the jewellery … it was not open to fail to be satisfied on the balance of probabilities that it was more probable than not that the jewellery was not illegally acquired.”7
The Court of Appeal substantially disposed of the ground construing it as as an attempt by Mr Henderson to put the onus of proof on the State by:
“… [S]ubmitting that, in the absence of any evidence that Mr Henderson’s father had unlawfully acquired the jewellery (as well as the limitations in the evidence of Mr Penfold), it was not open to the judge to fail to be satisfied to the requisite standard.”8
and concluding that:
“… [I]t was for Mr Henderson to persuade his Honour that his father had not unlawfully acquired the jewellery. The primary judge was quite entitled to conclude that Mr Henderson had not discharged that onus.”9
The grant of special leave
Justices Crennan and Kiefel heard the special leave application.
Early on, Justice Kiefel inquired of counsel for Mr Henderson:
“… [Y]our case, I take it, is that … Once the primary judge found as a fact that [Mr Henderson] had received the jewels from his father there was no question of [Mr Henderson] having illegally acquired them.”10
After only a page and half of transcript (we can safely say it occurred far less than 20 minutes in) Justice Crennan cut counsel for Mr Henderson short saying:
“We would be assisted at this stage by calling on (counsel for the respondent, the State of Queensland).”
Special leave was granted shortly thereafter.
The significance of Henderson v Queensland
Without wishing to analyse it in any detail, I would suggest the jurisprudence has, until now, proceeded on the basis that an applicant for exclusion must show either:
- That he or she was a bona fide purchaser for value; or
- That he or she acquired the property from a person who was a bona fide purchaser for value; or
- That he or she acquired the property from X, and that X acquired it from Y, and that Y was a bona fide purchaser for value.
This can of course go on forever – the requirement being that at some point in the chain of title it must be shown that the property was purchased by a bona fide purchaser for value. It is this acquisition that will ‘cleanse’ tainted property. The relevant provision in Henderson is s26(a) of the Criminal Proceeds Confiscation Act 2002 (Qld) which provides:
“Property stops being illegally acquired property or serious crime derived property…when it is acquired by a person for sufficient consideration, without knowing, and in circumstances not likely to arouse a reasonable suspicion, that the property was illegally acquired property or serious crime derived property…”
As can be seen, it is in substantially the same terms as s 330(4)(a) of the Proceeds of Crime Act 2002 (Cth):
“Property only ceases to be proceeds of an offence or an instrument of an offence…if it is acquired by a third party for sufficient consideration without the third party knowing, and in circumstances that would not arouse a reasonable suspicion, that the property was proceeds of an offence or an instrument of an offence (as the case requires)…”
It will be interesting to see what the High Court makes of s 26(a). It was not the subject of analysis by the trial judge11 or the Court of Appeal. Counsel for the State did draw the High Court’s attention to the provision at the special leave hearing.12
The circumstances of the grant of special leave could potentially give rise to applications to stay matters affected by the decision, pending its determination.
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