JEFFREY v DIRECTOR OF PUBLIC PROSECUTIONS (CWLTH) SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL HANDLEY, COLE JJA and GILEs AJA 26 July 1995, 3 August 1995 [1995] NSWCA 217 Proceeds of Crime Act 1987 — applicable principles of statutory construction construction of s48(4) — not retrospective — meaning of "unlawful activity' — meaning of "derived". Handley JA I agree with Cole JA. Cole JA On 16 July 1991 the appellant, Edward Malcolm Jeffrey was found guilty of having been knowingly concerned in bringing into Australia a commercial quantity of cannabis. The importation event occurred in June 1988 and involved more than 3 tonnes of cannabis. The cannabis was brought to Australia from Asia on board a sailing vessel, the ketch "Jalina", it being transhipped from that vessel to two hired clipper motor boats off the entrance to Broken Bay. It was seized by customs when brought into Broken Bay. The appellant, who was then ashore, went into hiding, assumed the false identity of one Townsend, and escaped detection until arrested in March 1990. When arrested he had in his possession currency comprising USD27,573 and AUD4,559.44. In 1971 the appellant bought a 1969 Triumph motor vehicle for $1,200. In 1979 he purchased a Glebe property for $41,000 and in 1983 he purchased a rural property at Nundle for $105,000. In 1984 he purchased a 1962 Rolls Royce for $10,000. The crime for which the appellant was convicted is a "serious offence" within the meaning of s7 Proceeds of Crime Act 1987. Accordingly, the consequence of s30 of that Act is that, if a restraining order is made pursuant to s43 of the Act regarding property of the appellant, that property is forfeited to the Commonwealth upon the expiration of 6 months from the date of conviction unless, within that time, a declaration is made pursuant to s48(4) of the Act that the restraining order in respect of the property be disregarded for the purposes of 30. At various times after 10 June 1988 appropriate restraining orders were made in respect of the Triumph motor vehicle, the Rolls Royce, the Glebe and Nundle properties and the American and Australian currency. Various orders were also made that the Public Trustee take control of the currency. The 6 months, within which the making of an order pursuant to s48(4) to negate the forfeiture effected by s30, expired on 15 January 1992. Application for such an order was not brought by the appellant until 23 December 1991. In consequence of that, preparation for and hearing of that application was rushed, with Hunt CJ at CL sitting throughout vacation to deliver judgment on 15 January 1992. His Honour made the appropriate declaration relieving against forfeiture in respect of the 1969 Triumph motor vehicle but declined to make that declaration in respect of the Glebe and Nundle properties, the Rolls Royce or the American 2 UNREPORTED JUDGMENTS and Australian currency. In respect of the Rolls Royce, his Honour was not satisfied that it was not used in or in connection with the cannabis importation. In respect of the real estate and the currency his Honour was not satisfied that it was not derived directly or indirectly from other unlawful activity on the part of the appellant. S48(4) Proceeds of Crime Act provides: "(4) Where: (a) a person (in this subsection called the "defendant") has been convicted of, or has been charged or is about to be charged with, a serious offence; (b) a court, in reliance on the conviction, charging or proposed charging, makes a restraining order against properly; (c) the defendant has an interest in the property; (d) the defendant applies to the court for a declaration under this subsection in relation to the interest; and (e) the court is satisfied that: (i) the property was not used in, or in connection with, any unlawful activity and was not derived, directly or indirectly, by any person from unlawful activity; and (ii) the defendant's interest in the property was lawfully acquired; the court may, by order, declare that the restraining order, to the extent to which it relates to the property, shall be disregarded for the purposes of s30." The learned trial judge excluded the possibility that the real property and the currency derived from the "serious offence" for which the appellant was convicted. His Honour said: "The issue is thus limited to other unlawful activity from which the property may have been derived in the manner described by para(i)." The other unlawful activity identified by Hunt CJ at CL was, so far as the real property was concerned, offences committed between 1974 and 1983 against s8C, s8K, s8N and s8P of the Taxation Administration Act being essentially failure to lodge tax returns. So far as the currency was concerned, the other unlawful activity found was an offence in 1988 contrary to s31 Cash Transactions Reports Act. Regarding the Rolls Royce Hunt CJ at CL was not satisfied that it was not used in, or connection with, the importation in circumstances where the vehicle had been used as security for a loan which may have been used to fund expenses involved in organising the importation. PRINCIPLES APPLICABLE TO THE CONSTRUCTION OF THE PROCEEDS OF CRIME ACT 1987 The Proceeds of Crime Act permits the confiscation of the property of a citizen without compensation if he be convicted of a serious offence. The appellant correctly submitted that the enjoyment of property is a fundamental right under our legal system and any statutory derogation of it is exceptional!. In those circumstances, when construing the provisions of a statute which purports to effect confiscation or derogation from property rights, the following principles of construction are applicable: 1. An intention to abrogate or curtail fundamental property rights will not be imputed by the courts. It must be "clearly manifested by unmistakable and unambiguous language. General words will rarely be sufficient for that purpose if they do not specifically deal with the question because, in the context in which they appear, they will often be ambiguous on the aspect of interference with 1. NSW Crime Commission v Younan and Anor (1993) 34 NSWLR 44 at 48. URJ JEFFREY v DIRECTOR OF PUBLIC PROSECUTIONS (CWLTH) (Cole JA) 3 fundamental rights"2. 2. A legislative intention to take away property without compensation requires expression of that intention with "irresistible clearness" because it is presumed that the legislature would not "overthrow fundamental principles, infringe rights, or depart from the general system of law, without expressing its intention with irresistible clearness. " Accordingly such an intention is not to be ascribed from use of "general words, simply because they would have that meaning in their widest, or usual, or natural sense, because so to construe those words would be to 'give them a meaning in which they were not really used"3. 3. Any statutory ambiguity should be interpreted so as to respect a person's property rights+. Unless no other interpretation is possible, justice requires that statutes should not be construed so as to enable the confiscation of an individual's property without payment of just compensation. A fortiori where the statute does not provide for any compensations. 4. In construing a penal statute, and confiscation of property without compensation constitutes a penalty, if there are two reasonable interpretations, the more lenient of which will avoid the imposition of the penalty, that more lenient construction must be adopted.° These well known canons of construction must be applied in the interpretation of s48(4) of the Act. ONUS OF PROOF As it is the appellant whose property has been made the subject of a restraining order pursuant to s43 who must bring application and persuade the Court that the property the subject of the restraining order "was not used in, or in connection with any unlawful activity and was not derived, directly or indirectly, by any person from any unlawful activity; and the defendant's interest in the property was lawfully acquired", the onus of so satisfying the court lies upon the applicant for such a declaration. Satisfying that onus in relation to the matters addressed in s48(4)(e)(i) but not (ii), involves establishing a negative. Depending upon the circumstances of each particular case, "slender evidence may suffice to satisfy an evidential burden in relation to a negative state of affairs".7 RETROSPECTIVITY A major contention of the appellant was that s48(4)(e) "does not have retrospective application so as to apply to property derived prior to commencement of the Act''8. The Act commenced on 5 June 1987. The Glebe and Nundle properties and the Rolls Royce were acquired prior to that date. The contention was that property permitted to be forfeited to the Commonwealth pursuant to s30 must be property that came within the possession or control of a person after the commencement of the Act. It was submitted that "any other interpretation would give an unintended retrospective operation to the Act, contrary not only to well established principles of interpretation, but also contrary to the Act's intention". 2. Coco v The Queen (1994) 179 CLR 427 at 437; Clissold and Ors v Perry (1904) 1 CLR 363 at 373. 3. Bropho v State of Western Australia and Anor (1990) 171 CLR 1 at 17-18. 4. DPP v Saxon (1992) 28 NSWLR 263 at 270; Saffron v DPP (Commonwealth) (1989) 87 ALR 151 at 155. 5. Attorney General v De Keyser's Royal Hotel Ltd (1920) AC 508 at 576. 6. Tuck and Sons v Priester (1887) 19 QBD 629 at 638 per Lord Esher MR. 7. Brauer v DPP (1989) 91 ALR 491 at 499. 8. Submissions, paral7. 9. Submissions, paral8. 4 UNREPORTED JUDGMENTS Apart from the question of the proper interpretation of the Proceeds of Crime Act to determine whether it displays an intention to change the law retrospectively, it seems to me that the appellant's submission is based upon a misconception of the meaning of retrospectivity. In the King v Commonwealth Court of Conciliation and Ors: Ex parte Federated Clerks Union of Australia. NSW Branch and Anor!®, Fullagar J said: "Tn Maxwell on the Interpretation of Statutes, 8th ed, (1945) at 189, it is said that 'it is fundamental rule of English law that no statute shall be construed to have a retrospective operation unless such a construction appears very clearly in the terms of the Act or arises by necessary and distinct implication." This statement of the rule was approved by Kennedy LJ in West v Gwynne (1). But in the same case Cozens-Hardy MR(2) said: Retrospective operation' is an inaccurate term. Almost every statute affects rights which would have been in existence but for the statute." And (3) Buckley LJ (in a passage adopted by Isaacs J in South Australian Land Mortgage and Agency Coy. Ltd v The King (4) said: 'Retrospective operation is one matter. Interference with existing rights is another. If an Act provides that as at a past date the law shall be taken to have been that which it was not, that Act I understand to be retrospective." A little later his Lordship said there is, so to speak, a presumption that an Act speaks only as to future. But there is no presumption that an Act is not intended to interfere with existing rights. Most Acts of Parliament do, in fact, interfere with existing rights.""' Properly construed, the Proceeds of Crime Act does not purport to alter the law retrospectively from the date of its assent. It does purport to affect property rights existing at that time which, absent the legislation would remain unaffected. Interfering with existing property rights does not result in a statute having retrospective application. To affect existing proprietary rights from the date of commencement of a statute is not to "attach new legal consequences to facts or events which occurred before its commencement"!!. It is to affect, in the future, the maintenance of those proprietary rights. That is sufficient to dispose of the contention of the appellant in relation to retrospectivity. However in deference to the careful argument of Mr Biscoe QC, I will address the submissions advanced. The argument advanced that the Act should be construed as applying only to property acquired after the date of assent may be summarised as follows. Pt2 of the Act deals with confiscation. A "confiscation order" is defined in s4 to mean "a forfeiture order or a pecuniary penalty order". Forfeiture orders are dealt with in Division 2 of the Pt2 of the Act commencing with s19 and permits the making of an order for forfeiture of tainted property which is defined to mean "property used in or in connection with the commission of the offence or proceeds of the offence". Pecuniary penalty orders are dealt with in Division 3 of Pt2 commencing with s24 which provides: "24. This Division applies to: (a) Property that comes into the possession, or under the control of the person either within or outside Australia and either before or after the commencement of this Act; and 10. (1950) 81 CLR 229 at 245. 11. Fisher v Hebburn Ltd (1960) 105 CLR 188 at 194. URJ JEFFREY v DIRECTOR OF PUBLIC PROSECUTIONS (CWLTH) (Cole JA) 5 (b) benefits that are provided to a person either within or outside Australia and either before or after the commencement of this Act. " Forfeiture in the case of a serious offence is dealt with by Division 4 of Pt2 commencing with s30. Division 4 contains no provision corresponding to s24. Thus, in relation to forfeiture pursuant to s30, there is no express provision relating the application of s30 to property coming into possession or control before the commencement of the Act. That absence makes clear a legislative intent that it should apply only to property coming into possession or control after commencement of the Act. As s48(4) operates to permit negation of the confiscation provided by s30, it also could operate only in relation to property coming into possession or under control or acquired after commencement of the Act. In my opinion this submission should not be sustained for a number of reasons. First, it neglects the effect of s13 which provides: "13.(1) Subject to subs(2), Pt2 and Pt3 (other than s59) do not apply to a person's conviction of an offence if the person was convicted of the offence before the commencement of this Act. (2) Subs(1) does not apply in relation to interstate forfeiture orders, interstate pecuniary penalty orders, interstate restraining orders, foreign forfeiture orders, foreign pecuniary penalty orders or foreign restraining orders. (3) Subject to subs(1) this Act applies to: (a) an offence committed, or believed to have been committed, at any time (whether before or after the commencement of this Act); and (b) A person's conviction at any time of an offence (whether before or after the commencement of this Act)." $13(1) makes clear that the confiscation provisions and the provisions relating to control of property liable to confiscation found in Pt2 and Pt3 do not apply to a pre-Act conviction. $13(3) makes equally clear that those provisions, being part of "this Act" do apply where the person's conviction occurs after the commencement of the Act, and irrespective whether the offence which triggers the right to seek confiscation occurred before or after the commencement of the Act. There is thus a clear legislative intention that confiscation of property held after the commencement of the Act may be confiscated where there is a conviction after the commencement of the Act in respect of an offence committed before or after the commencement of the Act. Mr Biscoe's response to this was to stress that s13 dealt only with an offence occurring retrospectively in the sense of being prior to commencement of the Act: it did not deal with property acquired prior to that time. However the expression "this Act" in s13(3), where a conviction is obtained after commencement of the Act, clearly makes applicable the provisions of Pt2 and m to property held at or after the date of commencement of the Act. Second, the reason for the inclusion of s24 in Division 3 is explicable. Division 3 deals with pecuniary penalty orders. Such orders were introduced into the Customs Act in 197912. Application for a pecuniary penalty order may not be made until after the 6 months from the date of conviction!3. That means it cannot be sought until after any forfeiture pursuant to s30 has occurred. A pecuniary penalty order may be made where a person has derived a benefit from the 12. See Pt(12), Division 3, s243A and following. 13. s25(1). 6 UNREPORTED JUDGMENTS commission of an offence and to the extent of that benefit!4. In determining any penalty amount any property forfeiture is to be considered and the penalty amount reduced accordingly.!5 Similarly any pecuniary penalty under the Customs Act is to be taken into account!6. There are thus provisions determining how the arnount of the pecuniary penalty is to be assessed. The legislature may have thought it necessary to specify that property acquired prior to the commencement of the Act could be regarded when determining the extent of any benefit derived from the commission of the offence preliminary to assessing any pecuniary penalty. However, there is no such requirement in relation to forfeiture of property because a forfeiture order operates, and can operate only in respect of property which has been the subject of a restraining order under s43. S43(1)(c) and s43(1)(d) makes clear that property held may be the subject of a restraining order whensoever acquired. Third, usual principles of construction require that the expression "property" where used in s30(1), s43(1) and s48(4)(e) be given the same meaning. There is no warrant for reading down "property' in s43(1)(d) to property acquired after the commencement of the Act. If one did so read down the expression "property", the provisions of Pt2 and Pt3, made applicable specifically in respect of convictions obtained after the commencement of the Act in respect of offences committed before the commencement of the Act by s13(3), would be rendered nugatory. Consistency of interpretation coupled with s13 thus make clear that property includes property acquired prior to the commencement of the Act. The argument addressed regarding retrospectivity should thus be rejected. UNLAWFUL ACTIVITY The appellant submitted that "unlawful activity" where used in s48(4) related only to an indictable offence. This argument was necessary because of the trial judge's finding that the real property was derived, in essence, from the unlawful activity of the failure to lodge tax returns, contrary to s8E, s8M, s8R and s8ZA Taxation Administration Act, because the funds thus retained undiminished by payment of tax permitted or contributed to the acquisition of these properties. None of the offences against the Taxation Administration Act are indictable offences. Thus if "unlawful activity" is restricted to indictable offences, the finding by Hunt CJ at CL must be reversed. The arguments in support of the submission may be briefly summarised. First, reliance was placed upon the long title to the Act: "An Act to provide for Confiscation of the Proceeds of Crime", and for related purposes. The expression "proceeds of crime was seized upon. It is defined in s4 to mean: "(a) Proceeds of any indictable offence; or (b) any property that is derived or realised directly or indirectly, by any person from acts or omissions that: (i) occurred outside Australia; and (ii) would, if they had occurred in Australia, have constituted an indictable offence." Thus it was said by using the expression "proceeds of crime" in the long title, a legislative indication had been given that "unlawful activity" was restricted to indictable offences. 14. s26(1). 15. s26(3). 16. s27(7). URJ JEFFREY v DIRECTOR OF PUBLIC PROSECUTIONS (CWLTH) (Cole JA) 7 Second, reliance was placed on the Explanatory Memorandum to the Bill which stated that: "The principal purpose is to permit a court to grant orders for the freezing and confiscation of property used in, or derived directly or indirectly from, the commission or an indictable offence against a law of the Commonwealth or of a territory." Third, reliance was placed upon the second reading speech by the Attorney General where he stated: "its purpose is to strike at the heart of major organised crime by depriving persons involved of the profits and instruments of their crimes"!7. Major organised crime would be, so it was said, commit indictable offences. Thus it was said that to be faithful to the purpose of the Act as reflected in the long title, the Explanatory Memorandum and the Second reading speech, "an offence" when used in the context of "unlawful activity" must mean an indictable offence. Further, it was argued that s1SAA of the Acts Interpretation Act 1901 (Commonwealth) required the court to prefer a construction of the Act which would promote the purpose or object underlying it, whether expressed or not. Theses arguments are without substance. In s4 of the Act both "unlawful activity" and "indictable offence" are defined. It can hardly be thought that, in the same section, the legislature in error used the expression "offence" when it meant "indictable offence" which it had shortly before defined. Further, unlawful activity is defined to mean "an act or omission that constitutes an offence against a law in force in the Commonwealth, a State, a Territory or a foreign country". Foreign countries may not have indictable offences. In Re: Bolton and Anor: Ex Parte Beane!8 Mason CJ, Wilson and Dawson JJ said: "The words of a Minister must not be substituted for the text of the law. Particularly is this so when the intention stated by the Minister but unexpressed in the law is restrictive of the liberty of the individual. It is always possible that through oversight or inadvertence the clear intention of the Parliament fails to be translated into the text of the law. However unfortunate it maybe when that happens, the task of the court remains clear. The function of the Court is to give effect to the will of Parliament as expressed in the law." Mr Biscoe emphasised that the expression "unlawful activity" could, if interpreted broadly rather than as indictable offence, be restrictive of rights of the individual and thus the more narrow interpretation should be preferred. The principle, however, is clear that, absent any ambiguity as here, the words of the Act as expressed are to be applied. Here there is no ambiguity in relation to the expression "an offence". Nor is it clear that there was any legislative intent to limit unlawful activity to indictable offences. An alternative argument was addressed that it was not unmistakably clear that *unlawful activity" was intended to apply to the exceptional situation where there was immunity from prosecution" in relation to offences said to constitute the unlawful activity, and where the person whose property is alleged to have derived from the unlawful activity has availed himself of the immunity. This submission was advanced because, in 1984, the appellant took advantage of an "immunity" offered by the Commissioner of Taxation to lodge tax returns in respect of the years 1972 to 1984, and to pay the tax, apparently without penalty, in respect of 17. Hansard, 30 April 1987, at 2314. 18. (1987) 162 CLR 514 at 518. 8 UNREPORTED JUDGMENTS those years. It was said not to be clear that by using the expression "unlawful activity" in the Proceeds of Crime Act 1987, the Parliament intended that where such advantage had been taken, his property should be forfeited if, in later years, he was convicted of an unrelated serious offence. There are at least three answers to this submission. The first is that the offences against the Taxation Administration Act occurred and were complete upon failure to lodge the returns within time. Thus those omissions constituted unlawful activity. Second, there was no "immunity" in the sense of negation of the commission of the offence. There was merely the decision of the Commissioner of Taxation not to prosecute any such offence. Third, there is no warrant for reading into the definition of unlawful activity any qualification in relation to offences not prosecuted. The submissions in relation to unlawful activity must be rejected. DERIVED The Appellant submitted that the real property and the currency were not "derived" from the unlawful activity of offences against the Taxation Administration Act or the Cash Transaction Reports Act. The trial judge found that the Glebe and Nundle properties were substantially acquired with borrowed monies. It was argued that funds available as a result of non payment of tax flowing from non-lodgment of returns could only have been used towards liquidation of the loans. Liquidating loans which had been used to acquire the properties was said not to constitute those properties being "derived, directly or indirectly" from the unlawful activity. It was contended that derived referred to the source or origin of the property, and that was the borrowed funds. Within s48(4)(e), a distinction is drawn between a lawfully "acquired" interest in property and property "derived" directly or indirectly from an unlawful activity. "Derived" is thus different to "acquired". Derived involves a wider consideration than merely the specific circumstances involved in acquisition. Whether property is "derived", directly or indirectly, from any unlawful activity is a question of fact. There is no basis for disturbing the trial judge's finding of fact that the appellant had not satisfied him that the property was not derived, directly or indirectly, from any unlawful activity. Particularly is that so where the trial judge rejected the appellant as a witness of credit, and he bore the onus of satisfying the trial judge that the property had not been derived from any unlawful activity. He failed in that onus. THE AMERICAN CURRENCY Not surprisingly, given the pressure of time, the findings of the trial judge in this respect are not entirely clear. His Honour said: "Tn addition to the taxation offences already discussed (the applicant said that the Australian cash which he used to purchase the United States currency had been part of the funds obtained from the Westpac loan and the sale of shares), the Director relies also upon the offence committed by the applicant contrary to s31 of the Cash Transaction Reports Act 1988.19 It is not clear whether the trial judge was making a finding that the Australian currency and the American currency obtained with Australian currency was monies in possession of the appellant in consequence of the "taxation offences". Nor is it clear whether he is accepting or rejecting the evidence of the appellant that the funds were obtained from the two loans and share sale. If the former finding were made there were adequate grounds for his Honour's refusal to make 19. Appeal Book at 908 URJ JEFFREY v DIRECTOR OF PUBLIC PROSECUTIONS (CWLTH) (Cole JA) 9 the declarations sought in respect of both currencies. Having regard to the uncertainty of the findings, in my opinion, this Court should, in the appellant's favour, treat the trial judge's findings in relation to the American currency as being based upon his finding that there was a breach of the Cash Transaction Reports Act 1988, and that the American currency was derived from that unlawful activity. The trial judge found, obviously correctly, that the appellant breached s31 of the Cash Transaction Reports Act 1988 in that he went to 4 different banks to obtain American currency in exchange for Australian currency in amounts less than $10,000 so as to avoid the reporting provisions of the Act. The argument on appeal was that the "source or origin" of the American currency was the Australian funds used to purchase them, not any breach of the Cash Transaction Reports Act. It was said that the "method" by which the foreign currency was purchased constituted a breach of s31. In my opinion that submission should be rejected. The American currency which, in fact, the appellant had in possession when arrested, was currency which came into his possession in consequence of breach of the Cash Transaction Reports Act. It is true that, had the Act not been breached, the appellant may have obtained, in consequence of one reported transaction, an equivalent sum of American currency. However, the currency which in fact he had in possession, although equivalent in amount to that which could have been legally obtained, was not currency so legally obtained. The currency he in fact had in possession came to or was derived by him in consequence of illegal activity contrary to s31 Cash Transaction Reports Act. AUSTRALIAN CURRENCY Having regard to the view I have expressed regarding the trial judge's finding which I have quoted above concerning currency, I am of the opinion that absent a finding by the trial judge that the Australian currency was unlawfully derived in consequence of the non-lodgement of tax returns, or a finding that otherwise he was not satisfied that the appellant had persuaded him that the currency was not derived from any unlawful activity, this Court should uphold the appeal in relation to the Australian currency. ROLLS ROYCE The trial judge found that he was not satisfied that the vehicle was not used "in or in connection with any unlawful activity" being the cannabis importation in June 198829. It was found that the vehicle was used as part of the security for a loan taken out in 1988 shortly before that importation. His Honour also referred to the appellant's evidence that the vehicle had been sold to a Mr Manly, although such sale was by way of security for loans said, initially, to have been taken out the previous year, 1987. The bill of sale to evidence that loan was dated 1 May 1988, shortly before the importation. The Director had contended before the trial judge that the loan may have been taken out at that time to fund the importation. The trial judge was not satisfied that the loan had been taken out in 1987 inferring that the security was given at the time of the loan, namely 1 May 1988. His Honour continued: "The amount of that loan is, in my view, far more (like/than) the amount which may be expected to have been required to pay for the expenses involved in the preparation for the importation. Unlike the loan on the Glebe premises, no 20. Appeal Book, at 896H. 10 UNREPORTED JUDGMENTS explanation has been forthcoming from the applicant as to the need for this loan at the time (it has never been repaid). Accordingly, I am not satisfied that the Rolls Royce was not used in, or in connection with, the importation." In the judgment the words in brackets are omitted. The context makes it likely that the word omitted was "Like". Be that as it may, the trial judge's finding was that the appellant had failed to satisfy him of the onus which he bore to establish that the vehicle "was not used in, or in connection with, any unlawful activity". That finding of fact was open to the judge once there was a finding, also available, that the loan was made some five weeks before the importation, and the need for the loan was unexplained. Mr Manly was not called. The appeal in relation to this aspect should be dismissed. COSTS The respondent has, save as to an insignificant extent, succeeded. Accordingly the appellant should pay the respondent's costs. ORDERS I would propose the following orders: 1. Appeal upheld in part. 2. O.1 appealed from varied by adding after the words "motor vehicle" the words "and the Australian currency". 3. O.2 appealed from be varied by inserting before the word "currency" the words "United States". 4. Otherwise orders of the trial judge confirmed. 5. The appellant pay the respondent's costs. Giles AJA. Cole JA has set out the circumstances in which the appellant appeals from the refusal of Hunt CJ at CL to declare that the restraining orders relating to the real property, the Rolls Royce and the currency shall be disregarded for the purposes of s30 of the Proceeds of Crime Act 1987 (the Act). In the light of his Honour's detailed reasons, I can briefly set out why I agree with the orders he proposes. UNLAWFUL ACTIVITY The submission that "unlawful activity" when used in s48(4) was confined to indictable offences was relevant to all of the property. For the reasons given by Cole JA, the words can not be so confined. The legislature has clearly stipulated and used the concept of an offence, going on to distinguish between an offence that may be dealt with as an indictable offence and an offence that may be dealt with as a summary offence. It has used the concept of an offence, not one of its sub-classes, in the definition of "unlawful activity". There is no ambiguity, and the words must be given the scope clearly intended by the legislature. The submission that an offence in relation to which there had been a later amnesty period during which the Commissioner of Taxation did not prosecute those who lodged their overdue tax returns could not constitute unlawful activity was relevant to the real property. It must be rejected for the reasons given by Cole JA. RETROSPECTIVITY The submission was relevant to the real property and the Rolls Royce. It began as a submission that s48(4) did not have retrospective application so as to apply to property obtained prior to commencement of the Act. At first sight, acceptance of the submission would have destroyed any basis on which the appellant might have avoided the forfeiture of the property. As developed, the submission came down to the submission that the property which might be forfeited pursuant to URJ JEFFREY v DIRECTOR OF PUBLIC PROSECUTIONS (CWLTH) (Giles AJA) 114 s30 of the Act was confined to property obtained after the commencement of the Act, from which it followed that the property against which a restraining order might be made pursuant to s43 of the Act was similarly confined: if that were so, then restraining orders should not have been made against the property. The submission must be rejected, in brief because (a) the scheme of the Act provides and requires that the property against which restraining orders may be made includes property obtained prior to the commencement of the Act and the same property is subject to forfeiture pursuant to s30 and avoidance of the forfeiture pursuant to s48(4), and s48(b) the analysis of the wording of the Act in the reasons of Cole JA confirms this operation. In common with his Honour, I do not think that this involves any relevant retrospectivity by which the appellant's submission might be supported. The Act affects existing proprietary rights, but upon an event after the commencement of the Act (the judicial event of making a restraining order) and for the future. DERIVED The submission concerning the meaning of "derived" was relevant to the real property and the currency. Hunt CJ at CL took the ordinary meaning of the word to refer to the origin or source of the thing said to have been derived, while pointing to the significance of the derivation being either direct or indirect. I agree with Cole JA that whether property is "derived", directly or indirectly, from unlawful activity is a question of fact. While the concept of derivation has regard to the origin or source of the thing said to have been derived, I see no point in substituting for the legislature's word a collection of other words: in particular, I consider that reference to the origin or the source may unduly restrict the fact-finding exercise. In relation to the real property, Hunt CJ at CL found that it was substantially acquired with borrowed moneys and that the appellant's unlawful activities made available the funds which were used to liquidate the debts, I consider that it was open to be held that the appellant's interest in the real property was indirectly derived from the unlawful activities and, more particularly, that no error has been shown in his Honour's conclusion that the appellant had not satisfied him to the contrary. In relation to the American currency, for the reasons given by Cole JA I consider that it was derived from the unlawful activity constituting contravention of s31 of the Cash Transactions Reports Act. The Act addresses property; the currency in the possession of the appellant was property; that currency was obtained by the appellant as a result of his conduct in contravention of the Cash Transactions Reports Act; and it does not matter that he might have obtained other property had he taken a course which did not involve contravention of the Cash Transactions Reports Act. In relation to the Australian currency, I agree with, and have nothing to add to, what has been said by Cole JA. THE ROLLS ROYCE There remain the submissions relevant only to the Rolls Royce. Hunt CJ at CL was not satisfied that the Rolls Royce was not used in, or in connection with, the importation of the cannabis. The appellant gave evidence that a so-called bill of sale dated 1 May 1988 purporting to record the sale of the Rolls Royce and another vehicle to a Mr Manly was security for a loan for $30,000, and the respondent suggested that the loan was for expenses involved in organising the importation. His Honour was not impressed with the appellant's veracity, did not accept the appellant's vague recollection that the loan had been obtained in 1987 12 UNREPORTED JUDGMENTS and thought it more likely that the loan was made at the time of the bill of sale, considered that the amount of the loan was of the order of that required for expenses in connection with the importation, and noted that the loan had never been repaid. In the absence of any other explanation as to the need for the loan, his Honour came to the conclusion earlier mentioned. It was contended that his Honour's conclusion should not be upheld because the particulars had not identified the relevant use of the Rolls Royce as an unlawful activity and the matter only arose in the course of cross-examination of the appellant: in those circumstances, it was said, the absence of any other explanation for the loan was understandable. However, once the matter arose it was for the appellant to discharge his onus of satisfying the Court that the Rolls Royce was not used in connection with any unlawful activity. He failed to discharge that onus, and no error has been shown in his Honour's conclusion. ORDERS I agree with the orders proposed by Cole JA. 1. Appeal upheld in part. 2. O.1 appealed from varied by adding after the words "motor vehicle" the words "and the Australian currency". 3. O.2 appealed from be varied by inserting before the word "currency" the words "United States". 4. Otherwise orders of the trial judge confirmed. 5. The appellant pay the respondent's costs. COUNSEL: Appellant: PM Biscoe QC/AS Bell Respondent: T Game SOLICITORS: Appellant: Berne Murray Tout Respondent: Commonwealth Director of Public Prosecutions