The High Court, by majority, upheld the validity of a statutory scheme for the forfeiture of property. The scheme provided that, on application by the DPP, the Supreme Court of the Northern Territory could declare a person who had been convicted of three or more drug related offences within a ten year period to be a “drug trafficker”, and consequent upon the declaration, all property owned, effectively controlled or given away by that person was forfeited to the Northern Territory.
Section 36A of the Misuse of Drugs Act (NT) provides that, on application by the DPP, the Supreme Court of the Northern Territory can declare that a person who, within a 10 year period, has been convicted of three or more qualifying drug related offences is a “drug trafficker”. The qualifying offences predominantly have a connection with commercial drug operations, but also include simple possession. Section 94(1) of the Criminal Property Forfeiture Act (NT) requires the forfeiture to the Northern Territory of property owned, effectively controlled or given away by that person without any further action (together, the NT Drugs Forfeiture Law).
Emmerson was declared a drug trafficker and as a result, forfeited to the Northern Territory property valued $70,500 which was the proceeds of crime, and property valued at $850,000 that was not established as being the proceeds of crime.
Emmerson successfully challenged the validity of the NT Drugs Forfeiture Law in the Court of Appeal of the Northern Territory, arguing that it effectively conscripted the Supreme Court to perform the work of the Executive, cloaking that work in the neutral colours of the judiciary. Emmerson was unsuccessful in his argument that the NT Drugs Forfeiture Law effected an acquisition of property otherwise than on just terms, contrary to s 50(1) of the Northern Territory (Self-Government) Act 1978 (Cth) (which is relevantly identical to the guarantee in s 51(xxxi) of the Constitution).
The Attorney-General of the Northern Territory appealed to the High Court.
Chief Justice French, Hayne, Crennan, Kiefel, Bell and Keane JJ delivered a joint judgment upholding the validity of the NT Drugs Forfeiture Law.
Their Honours noted the long history of criminal forfeiture laws, and accepted that their rationale was generally compatible with Chapter III of the Constitution– an economic penalty to render crime unprofitable.
The NT Drugs Forfeiture Law did not conscript the Supreme Court to perform the work of the Executive, because on its proper construction, it did no more than require the Supreme Court to adjudicate on a question that left genuine decisional independence to the Supreme Court, pursuant to a process that was subject to the ordinary incidents of an exercise of judicial power including the power to stay proceedings as an abuse of process. It is common for Courts to make orders, consequent upon which legislation operates to modify or restrict an individual’s rights or liberties.
Their Honours also rejected the argument that the NT Drugs Forfeiture Law effected an acquisition of property, as on its proper construction, it was a law of a penal character adjunct to the criminal process. Such laws have long been accepted to stand apart from laws that “acquire property” and so, must provide “just terms”, because of the incompatibility of that penal quality and any requirement to provide just terms.
Their Honour’s also rejected the argument that the NT Drugs Forfeiture Law was disproportionate in its operation. Whatever disproportionality might result (starkly illustrated by the nature of Emmerson’s forfeiture) was a matter for Parliament alone.
Justice Gageler dissented. His Honour considered that legal history and principle supported the existence of legislative power to enact laws for the forfeiture of property obtained through unlawful means, exempt from any requirement that just terms be provided. However, his Honour considered that neither legal history nor principle supported the existence of legislative power to enact laws for the forfeiture of property that was obtained by lawful means. Therefore, insofar as the NT Drugs Forfeiture Law required the forfeiture of untainted property, it was a law “with respect to the acquisition of property”. There being no provision of “just terms”, the NT Drugs Forfeiture Law was invalid. His Honour did not need to consider the Kable principle.
Impact of the decision
This decision confirms the relative narrowness of the Kable principle, as a protection in relation to the processes and procedures of Courts operating under Chapter III of the Constitution, and is not of itself a substantive protection against “unfair” outcomes.
This decision also confirms that laws of a penal character are not properly characterised as laws with respect to the acquisition of property, in light of the inherent incompatibly between a penal law and a requirement to provide just terms.
Arguably, the acceptance that the untainted property of a criminal falls within this category extends the scope of laws that might be characterised as “penal”: it seems possible to not only render crime unprofitable, but to impoverish criminals.