The Relationship between the Victorian Charter and Confiscation of Property

DPP v Ali & Anor (No 2) [2010] VSC 503 (10 November 2010)

The Supreme Court of Victoria (Hargrave J) recently considered the operation of the Charter of Human Rights and Responsibilities Act 2006 (Vic) in relation to an application to forfeit a family home that had been used in connection with a criminal offence.

The Attorney-General and the Victorian Equal Opportunity and Human Rights Commission both intervened to make submissions on the Charter issues.

Facts

Khodi Ali was the sole proprietor of a property in rural Victoria.  Mr Ali, his wife Dounia Ali, their three children and a child from Mr Ali’s prior marriage lived in a house on the property.  It was their family home.

In 2004, the family moved to Melbourne and lived with Mr Ali’s family.  Following this move, Mr Ali allowed three men to use the rural house and an adjacent garage for the purpose of manufacturing illegal drugs.  The Court found that Mr Ali had assisted in setting-up the drug manufacturing equipment and in making some physical alterations to the house and garage for that purpose.

Mr Ali and three other men were charged with various counts of conspiracy to traffick a drug of dependence.  Mr Ali was acquitted.  The three co-accused were convicted.  Shortly after Mr Ali’s acquittal, he and his family moved back to the property.

The Confiscation Act 1977 (Vic) permits forfeiture of property used in connection with the commission of serious offences, including drug trafficking.  The Director of Public Prosecutions (DPP) made an application for a forfeiture order for Mr Ali’s house.  This would deprive Mr Ali and his family of their home.

Submissions

The State argued that it could confiscate the property, sell it and forfeit the proceeds of sale under the Confiscation Act.  Mrs Ali resisted the forfeiture of the property on a number of grounds, arguing that:

• The relevant provision of the Act breached or limited certain human rights protected under the Charter and that the limit could not be justified.  Mrs Ali argued that the Court must therefore exercise its discretion to exclude the property from forfeiture on hardship grounds.
• In the alternative, Mrs Ali argued that the Court should exercise its discretion to either exclude the property from forfeiture on hardship grounds, or order payment to her of such portion of the sale proceeds of the property as is necessary to prevent hardship to her.
• Mrs Ali also argued that she is the beneficial owner of half of the property and sought to have that part of the property excluded from forfeiture.

The Victorian Equal Opportunity and Human Rights Commission intervened to make submissions to the Court about how it should exercise its discretion in s 38(2) of the Confiscation Act in accordance with the Charter, and in particular, Mrs Ali’s right to protection from arbitrary interference with one's home (s 13), the right to protection of families and children (s 17), and the right to equality and freedom from discrimination (s 8).

It was submitted by Mrs Ali and the Commission that the hardship discretion under s 38(2) of the Confiscation Act is circumscribed by the relevant human rights and that, unless the making of a civil forfeiture order can be demonstrably justified under s 7(2) of the Charter, the Court must exclude the property from the operation of the civil forfeiture order which is mandated under s 38(1) of the Act.

Alternatively, Mrs Ali and the Commission contended that the Charter required the relevant human rights engaged in the case to be given significant weight in the exercise of the hardship discretion.  The State, through the Attorney-General, accepted that the relevant Charter rights must be afforded considerable weight in the exercise of the Court’s discretion.  However, it contested the submission that the Court must exercise its discretion to exclude the property from the operation of a civil forfeiture order unless the Court is satisfied that a civil forfeiture order is demonstrably justified under s 7(2) of the Charter.

Decision

The Court considered the principles in R v Momcilovic [2010] VSCA 50 and the rights not to have family or home arbitrarily interfered with, the entitlement of families to be protected by society and the State, and the right of a child to such protection as is necessary in his or her best interests by reason of being a child.

The Court found that the Confiscation Act is, by itself, incapable of breaching or limiting any human rights.  His Honour found that [at 41]:

If the Court was required to…exclude the property under s 38(2) unless forfeiture could be justified under s 7(2) of the Charter, that would be inconsistent with the express terms of s 38(1) and would, moreover, defeat its purpose…Section 38(2) remains a purely ameliorative provision according to its terms.  It does not limit any human right protected by the Charter.  In these circumstances, s 7(2) of the Charter has no relevance.

His Honour also noted [at 42]:

Further, the principal submission would have the effect of imposing an obligation on the Court to act in a way that is compatible with human rights.  The Charter does not impose this obligation on courts, only on public authorities.

The Court also found that:

• Mrs Ali had no beneficial interest in the property.  She did not establish a common intention through an express agreement, or conduct from which the necessary common intention could be inferred, as a matter of fact.  The Court also rejected the notion that the principles of a constructive trust applied in this case.  Accordingly, her application to exclude one-half of the property from the operation of the restraining order was dismissed.
• The Court ordered that the property be forfeited to the Minister.
• The Court found that there would be real hardship to the Ali family if the forfeiture order was effectuated and decided to exercise its discretion to provide partial relief against hardship.  The Court ordered that Mrs Ali be paid $125,000 out of the proceeds of the sale of the property.

The decision is at www.austlii.edu.au/au/cases/vic/VSC/2010/503.html.

Kerin Leonard is Manager of the Legal Unit at the Victorian Equal Opportunity and Human Rights Commission