Crime, profits, penalties and confiscation

Press, 20 September 1978, Page 16

Crime, profits, penalties and confiscation

TONY BLACK, in an editorial in the “New Zealand Law Journal” entitled “Forfeiture and Criminal Profits,” argues that the applications of the penalty of forfeiture—whether applied to fishing boats or illegal currency transactions—needs clarification in New Zealand law. A slightly edited version of Mr Black’s article is reprinted here.

The price of a good fishing boat ranges from about that of a substantial house to that of a reasonable farm. Following a conviction for unlawful fishing the boat involved is forfeited and will be disposed of as the Minister of Fisheries thinks fit. Unlawful fishing includes fishing in a prohibited area and it makes no difference how slight the incursion may be. In 1976 Mr D. B. Wilson, S.M., had before him a defendant charged with fishing in prohibited waters. The incursion was slight. Conviction would have meant forfeiture of his $65,000 fishing boat. It is understandable that the Magistrate elected to discharge the defendant without conviction under Section 42 of the Criminal Justice Act, 1954. He was in a position where he could not see justice done between the State and the citizen and so elected the course that he thought was least unjust. History provides ample precedent for that approach. His decision was challenged on the bases that the forfeiture provision (Fisheries Act, 1908, Section 53) was a minimum penalty and therefore the Magistrate had no jurisdiction to dismiss the charge without conviction. The case came before the Court of Appeal (Department of Agriculture and Fisheries V Turner, Court of Appeal, May 18, 1978), where a distinction was drawn between pen-1-ties imposed by the Court and the forfeiture that follows as a statutory consequence of conviction.

It was held that the type of statutory forfeiture in the fisheries legislation was not a minimum penalty and the Magistrate’s jurisdiction to make the order he did was confirmed.

The consequences of conviction would probably not have been as Draconian as

the forfeiture provisions would suggest for it emerged in the course of judgment that a practice has developed whereby the owner of a forfeited vessel is invited to make submissions to the Minister who, after considering, them, sets the price at which the boat may be redeemed. The maximum fine that may be imposed by the Court is $4OOO. The Minister may impose a monetary penalty up to the value of the boat which in this case was $65,000.

This leaves the Court in an invidous position. It can only do half-justice by ensuring a fair trial. As to the other half, the sentencing, the reality of the matter is that that is done by the Minister.

It is not suggested for a moment that the Minister is doing anything wrong or unlawfu’i. He is not. It is just that this inversion of values between fine and forfeiture has reversed : tradition according to which the Courts penalise and the Executive may pardon. The present situation is not satisfactory. The Courts are in an impossible position when it comes to sentencing and. the Minister can hardly be happy with the Court of Appeal’s decision. As for the defendant, he remains in a state of complete uncertainty and has no appeal against the Minister’s decision.

Amending legislation would come as no surprise. The importance of our fisheries, policing difficulties and the need for deterrent penalties is not disputed. But there are< wider issues that need to be taken into account and not the least of these is that the imposition of penalties is a matter for the Courts, acting within statutory limits and imposing sentences that are subject to appeal. In his judgment Mr Justice Richardson reviewed the

statutory provisions for forfeiture of property and disqualification from certain activities as a result of criminal conduct. He divided them into four categories and it is worth setting these out:

“(i) Where the forfeiture of property or disqualification is a statutory consequence of involvement in unlawful activity. Examples are the forfeiture provisions of the Distillation Act 1971, especially Section 93, and of Part XII of the Customs Act 1966, Section 54 (5) of the National Parks Act 1952 relating to animals taken into a park and Section 53 of the Fisheries Act before its amendment in 1948.

“In such a case the forfeiture is not dependent upon the institution of criminal proceedings and is entirely separate from penalties imposed by the Court. This is made clear in Section 89 of the Distillation Act which provides that all penalties under the act are in addition to and independent of any forfeiture, and all forfeitures under the act are independent of any proceedings in respect of an offence. Section 265 of the Customs Act, 1966, is to the same effect.

“(ii) Where the forfeiture or disqualification is a statutory consequence of conviction rather than of the commission of an offence. Examples of forfeiture of property in this category, in addition to Section 53 of the Fisheries Act as amended, are Section 24 <rf the Terri-

toria; Sea and Exclusive Economic Zone Act, 1977 (foreign fishing craft engaged in unlawful fishing). Section 52 of the Reserve Bank of New Zealand Act, 1964 (the currency involved in a currency offence which is the property of the person convicted). Sections 11, 15 and 28 of the Explosives Act, 1957 (explosives and containers involved in the offence) and Section 32 of the Misuse of Drugs Act 1975 (articles in respect of which the offence was committed and which are in the possession of the offender). “Disqualification from office is a statutory consequence of a conviction under a number of statutes, for example, the Electoral Act, 1956, and the Municipal Corporations Act, 1954. Disqualification under the demerit points system in Section 48 of the Transport Act, 1962, is a further example in this category. In some cases, too, a conviction affects the civil liberties of the person concerned. By way of illustration, he may be automatically disqualified from jury service under Section 5 Of the Juries Act, 1908, or barred from entry to a racecourse under rules approved by the Minister of Internal Affairs under Section 10! of the Racing Act 1971.

“(iii) Where the forfeiture or disqualification is imposed by the Court as part of its judgment pursuant to a provision requiring the Court to impose that penalty on conviction. An example

is a deportation order under Section 20 of the Immigra* tion Act, 1964.

“(iv) Where the Court has a discretion to impose forfeiture or disqualification. In some enactments the Court is expressly given a discretion to impose forfeiture on or as part of the conviction of the offender. Examples ar. included in the Arms Act, 1958, the Explosives Act, 1957, the Food and Drug Act, 1969. the Gaming and Lotteries Act, 1977 and the Criminal Justice Act, 1954. In other cates it may have a qualified obligation. Thus, under Section 30 of the Transport Act, 1962, on conviction for certain driving offences, the Court is obliged to order disqualification from holding or obtaining a driver’s licence ‘unless the Court for special reasons relating to the offence thinks fit to order otherwise’.”

Later in his judgment his Honour commented that this division shows two different approaches to forfeiture and disqualification. “In (iii) and (iv) (Parliament) has treated it as part of the sentence to be imposed by the Court: in some cases leaving it to the Court’s discretion and in other cases requiring the Court to impose a particular penalty. “In (i) and (ii) it has treated it as not part of the Court’s function; so in one it is entirely independent of any criminal proceeding and in two it is a statutory consequence -of conviction, not part of the judgment of the Court. . .”

Essentially, the provisions relating to forfeiture have been incorporated in legislation on a subject by subject basis and one wonders whether it is not time to consider rationalising the principles underlying forfeiture and incorporating them all in the general sentencing process.

This suggestion is made not only because the difficulties that arisj when the value of the property forfeited is out of all proportion to the offence committed, but aiso oecause indications are that the principles underlying forfeiture are likely to be further extended with the proposid amendment to the Misuse of Drugs Act. 197 b. The proposal is that the Court be empowered to in-

crease the amount of a fine th would otherwise be imposed to take into account asset' of the offender that had been acquired wholly or partially from drug trafficking. This is a form of forfeiture in that the fine that would otherwise have been imposed relates to the nature of the offence while the additional fine is in effect confiscation of the profi. of crime.

Here, again, we see a continuation of the subject by subject approach to forfeitun. Drug trafficking is not the only source of criminal profit. Profit is made also front prostitution, purveying pornography, theft, receiving and numerous other criminal activities.

Accordpig to the “New Yorker” an action has been commenced in America in an attempt to prevent H.R. Haldeman from receiving the profits of his book “The Ends of Power,” it being felt that no-one should benefit at all from their own criminal acts. It seems a pity not to take the opportunity to consider whether this principle or somethins similar should have more general application.

Once the property of convicted felons was forfeited to the Crown. Felons endured torture to avoid that consequence. Maybe the modem equivalent will be fishing boat skippers leaping over the stem for the sake of the company’s assets.