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Australia–The High Court Upholds the Forfeiture of a Drug Offender’s Castle: Attorney-General (NT) v Emmerson

Dr. Lael Weis, Melbourne Law School

[Cross-posted from Opinions on High Court Blog]

Should the state be able to seize ‘all or any’ property ‘owned or controlled by’ persons convicted of multiple drug-related offences, regardless of the connection of that property to the commission of crime?

In a recently decided case, Attorney General (NT) v Emmerson [2014] HCA 13, the High Court upheld Northern Territory criminal forfeiture legislation that authorises exactly that. In upholding the legislation, the Court held that the constitutional requirement that laws for the acquisition of property must be on ‘just terms’ is categorically inapplicable to criminal forfeiture, no matter how harsh, on the basis that it falls within a historically well-established exemption for punitive laws.

Reginald Emmerson’s crimes and possessions

In February 2011 Reginald William Emmerson was charged with two offences: the supply of 18.6646 kilograms of cannabis (with an estimated commercial value between $184,500 and $918,400, depending on the quantity in which it was sold), and the possession of $70,500 obtained from the commission of drug related-offences in the Northern Territory. In conjunction with prior convictions for possession and use (but notably not the supply or sale) of drugs, this made him eligible to have all of his property restrained in anticipation of him becoming eligible to be declared a ‘drug trafficker’ under s 36A of the Misuse of Drugs Act (NT) if he was convicted. The Director of Public Prosecutions applied to restrain his property and, after his conviction for the February 2011 charges, to have the Northern Territory Supreme Court make such a declaration. The sole and direct legal consequence of that declaration was forfeiture of Mr Emmerson’s restrained property to the Territory, pursuant to s 94(1) of the Criminal Property Forfeiture Act (NT). That particular section of the Forfeiture Act provides for the forfeiture of ‘all property … that is owned or effectively controlled by the person’ and ‘all property that was given away by the person, whether before or after the commencement of this Act’ for any person declared a ‘drug trafficker’ under s 36A of the Misuse of Drugs Act.

When Mr Emmerson was ultimately convicted of the February 2011 charges in September of that year, he forfeited property valued in excess of $850,000 to the Northern Territory, including: his home, 12 vehicles (including a ute, a boat and trailer and motorcycles) and bank accounts. All parties accepted that, apart from the $70,050 seized from Mr Emmerson’s most recent offence, the forfeited property had been acquired through legitimate means and had no connection to any criminal offence.

Mr Emmerson challenged the forfeiture on two bases: (1) on the basis that the relevant statutory provisions violated the separation of judicial power under ch III of the Commonwealth Constitution, and (2) on the basis that it effected an acquisition of property that was otherwise than on ‘just terms’ in contravention of s 50(1) of the Northern Territory Self-Government Act 1978 (Cth).

Both challenges were rejected by a 6:1 majority of the High Court (with Gageler J not deciding the ch III issue, and dissenting on the property issue).

With apologies to any Kable fans out there, this entry focuses exclusively on the acquisition of property issue. What follows is a fairly lengthy — and, OK yes, at times indulgent — discussion of some of the ins and outs and twists and turns of constitutional property jurisprudence issues implicated by the Court’s strict adherence to this categorical exemption for forfeiture laws in the Emmerson case.

Those of you who are not particularly interested in going on such a ride are probably better jumping off here, and checking out the judgment summary.

For the rest of you, welcome aboard. As Justice Hayne mused in oral argument, ‘[h]ours of innocent amusement await us on acquisition, do they not … ?’

How do constitutions protect property rights?

Part of the purpose of this blog is educational, and despite being one of the top constitutional property movies of all time, I fear that The Castle hasn’t done us any favours in this regard. I will therefore begin by providing some background to help frame my discussion.

S 50(1) of the Northern Territory Self-Government Act 1978 (Cth) states that the law-making power of the Territory’s Legislative Assembly ‘does not extend to the making of laws with respect to the acquisition of property otherwise than on just terms’. It is functionally parallel to s 51(xxxi) of the Commonwealth Constitution, which gives the Australian Parliament the power to make laws relating to ‘the acquisition of property on just terms’.Both provisions are ‘constitutional property clauses’ in the sense that they impose constraints on legislative power to revoke or otherwise redefine the incidents of property. ‘Just terms’ extends both to compensation for losses and to fair dealing: the overriding objective of the requirement is to prevent arbitrariness and abuse of power.

In general, what can be said about the structure and operation of s 51(xxxi) applies to s 50(1). In what follows, I refer to s 51(xxxi) because it is the better-developed source of constitutional property doctrine and for present purposes the two are interchangeable.

Section 51(xxxi) is an unusual constitutional property clause. By all appearances it is a grant of legislative power that contains a condition for its own limitation, rather than a freestanding limitation on the legitimate exercise of political power. Its inclusion among the grants of legislative power in s 51 was evidently to ensure that the Commonwealth had the power to acquire property, and not primarily to require compensation for laws that infringe property rights. Consequently, although s 51(xxxi) is ‘right-like’ — and perhaps importantly so, as the Court itself has at times suggested, in a Constitution with such few explicit rights guarantees — it is not, technically speaking, a right in the manner in which we ordinarily think of constitutional rights.

This unique structural character of our ‘property clause’, to be sure, explains some of the awkwardness one sees in certain applications of s 51(xxxi). But this should not be overstated. In many other respects, s 51(xxxi) functions analogously to property clauses found in other constitutions. It is now well-established that s 51(xxxi) is a general limitation on legislative power in the sense that the federal Parliament cannot evade the requirement of ‘just terms’ simply by nominating an alternative head of power.

What sorts of laws trigger Australia’s constitutional property clause?

So: when, exactly, does s 51(xxxi) kick in? There is no question that laws for the compulsory acquisition of property that straightforwardly implicate the power of eminent domain (eg, land assembly to expand public infrastructure such as a highway or airport, recall: The Castle) are laws with respect to the acquisition of property. The trickier issue is when a law whose purpose is not to acquire property but rather to achieve some other objective (eg, an environmental law that prohibits development within a coastal zone) nevertheless amounts to an ‘acquisition of property’, making it subject to the ‘just terms’ requirement. Thus, whereas legal controversies involving compulsory acquisition tend to centre on the issue of ‘just terms’, the converse is true in the case of regulatory laws, where the focal point is the question of whether there is an ‘acquisition’ of ‘property’ in the first place.

The standard test for determining whether a regulatory law invokes the ‘just terms’ requirement requires demonstrating that the law both (i) deprives the affected party of an interest that is proprietary in nature (‘the deprivation requirement’); and (ii) transfers a proprietary interest (although not necessarily the same one) to another party (‘the acquisition requirement’).

The acquisition requirement importantly distinguishes the Australian approach to constitutional property from the American approach. Under the Fifth Amendment ‘takings clause’ of the US Constitution, a mere deprivation of property — a ‘taking’ — is sufficient for a constitutional challenge. So, for instance, one reason that the challenge to the Tobacco Plain Packaging Act 2011 (Cth) failed in Australia when it very likely would have succeeded in the United States is that, although the tobacco companies were deprived of the use of their intellectual property, no one else gained the right to use it (or any proprietary benefit related to its non-use).

The choice between the two approaches would appear to be one where the text is the determinative factor: whereas the takings clause uses the language of ‘taking’ (‘nor shall private property be taken for public use, without just compensation’), s 51(xxxi) uses the language of ‘acquisition’. Even so, there is an impression that the takings approach is the more liberal one (in the sense of being less deferential to government), and that the acquisition requirement is more consistent with a progressive perspective (in the sense of being more deferential). It is on this basis, for instance, that the Constitutional Court of South Africa has recently followed Australia in interpreting their own constitutional requirements for regulatory expropriations of property even though the South African Constitution uses the term ‘deprivation’.

How do courts test whether a law affecting property rights is valid?

This straightforward assessment of the two approaches along liberal/progressive lines is complicated, however, by an additional factor that influences constitutional property analysis. This is the choice between a ‘one step’ and ‘two step’ approach to analysing burdens on property rights.

American takings jurisprudence exemplifies the ‘one step’ form of analysis. At the risk of greatly oversimplifying, takings analysis proceeds on the basis of an all-things-considered multi-factor balancing, with courts weighing the public benefits of regulation against the burdens to the property owner, and evaluates the relationship between legislative means and ends. In addition, there is a narrow set of categorical rules that constitute ‘per se takings’, meaning that that a law that can be characterised as falling within one of the relevant categories (eg, permanent physical invasions, total deprivations of economically viable use) effectively circumvents the weighing of benefits and burdens and results in a finding in favour of the property owner. The key thing to observe is that the outcome of the multi-factor balancing analysis is dispositive of whether the state or the property owner prevails unless a categorical rule applies.

The competing and more widespread approach, exemplified by countries such as Germany (where the approach originates) and South Africa, is the ‘two step’ version of this analysis, more commonly known as ‘proportionality analysis’. Again, at the risk of greatly oversimplifying, the approach taken here is to first ask whether there is an infringement of a constitutionally protected property interest. If there is not, then the state prevails. Finding that there is a right infringement is not, however, dispositive. In this case, the court moves on to the second task, which is to ask whether that infringement is nevertheless justified by examining: (i) whether the law has a rational connection to a legitimate regulatory objective; (ii) whether there are less rights-restrictive means available; and (iii) whether the benefits of regulation outweigh the burdens.

There is a degree of scepticism among constitutional law scholars as to whether there is any real practical difference between these two approaches. Nevertheless, there are at least two conceptual differences with the potential to affect the jurisprudential analysis that are worth noting.

The first difference is that by bifurcating the analysis into two steps, the proportionality approach explicitly leaves open the possibility that there is a special definition of ‘property’ for constitutional purposes, thus inviting an inquiry into the values that property serves such that it merits constitutional protection. This occurs at step one, where the court considers whether there is a constitutionally relevant interest at stake. Significantly, this suggests that the broader the definition of the interest protected by the constitutional right, the more work that is likely to be done in the second step; conversely, if the right is defined narrowly, the second step may rarely be necessary. By contrast, the takings approach defers to standing law on the question of what is ‘property’ and does not, in general, attempt to define the constitutionally relevant property interest at the outset. What is central to the takings approach is preventing certain kinds of government-imposed burdens on property, not protecting a particular set of property interests. Thus, although it is undeniable that considerations concerning the value of property influence takings analysis, they are not treated in a systematic way (this is a common critique of US constitutional property jurisprudence).

The second and more obvious difference between the two approaches is that proportionality analysis accepts the idea that there can be legitimate infringements of rights; thus, in an important sense, rights are not ‘trumps’. By contrast, the takings approach (at least arguably) lends itself to an either/or approach: either there is a taking, in which case compensation is required; or else there is no taking, in which case compensation is not required.

For this reason, it has often been assumed that the American preference for ‘one-step’ balancing over ‘two-step’ proportionality (which, it should be noted, is hardly unique to the analysis of property) lends itself to a ‘categorical’ or ‘classificatory’ approach to the right. In takings analysis in particular, this is characterised by a preoccupation with what constitutes a ‘taking’ of property, versus a mere ‘interference’ with or ‘burden’ on proprietary interests, which is seen most clearly in the jurisprudential trend toward the development of per se rules.

This strikes me as an oversimplification, however. The temptation to create ‘categories’ of property that are exempt (at least in part) from the weighing of benefits and burdens exists in both models. It just occurs in slightly different ways. In proportionality analysis, it occurs at the outset in defining what constitutes ‘property’ for constitutional purposes such that a rights infringement has occurred (thus triggering the proportionality analysis). Some kinds of property interests might therefore be taken off the constitutional ‘table’, so to speak: for example, because they are inconsistent with the constitutional rationale for protecting property in the first place, or because they are incompatible with other constitutional values. In takings analysis, by contrast, the creation of categorical rules comes in as a way of counteracting the uncertainty and ‘ad hoc’ reasoning that is associated with unstructured balancing approaches. The key difference, it seems to me, is that the American tendency toward categories is less systematically driven by notions of the constitutional value of property than it is driven by concerns about judicial role (even if underlying ideas about property are really doing the work).

Where, then, does the Australian approach fit in among these possibilities?

It is unclear exactly where Australia fits — or, indeed, where it ought to fit — precisely because of the odd structure of the property clause noted at the outset.

In general, I think it is fair to say that the High Court appears reluctant to embrace the idea that it is engaging in any kind of balancing of competing interests to determine the scope of a property right, or an evaluation of appropriate means and ends, as opposed to conducting the ordinary exercise of ‘characterisation’ (ie, determining whether a particular law falls within a head of power).

Even so, it is clear that considerations of burdens to property owners and the benefits of regulation, as well as the appropriateness of the particular law to its objective, must inevitably factor into determining whether the deprivation and acquisition requirements are met. We can thus coherently pose the question whether that process is better conceived as analogous to the one-step balancing approach found in the United States, or as analogous to the two-step proportionality approach found elsewhere.

The High Court itself seems ambivalent — if divided — on this question. On the one hand, the Court has been consistent in pointing out key differences from the ‘takings clause’ that caution against relying on American authorities for guidance. Indeed, this is a key issue the Court took with the tobacco companies’ arguments in the Plain Packaging Case. On the other hand, the Court has had a somewhat mixed reception of proportionality. In the implied freedom of political communication context, for instance, this issue has recently divided the Court. Moreover, even Justice Kiefel, the Court’s most vocal advocate of proportionality, has gone so far as to suggest that it is inapplicable to s 51(xxxi) because s 51(xxxi) is not really a constitutional property right, and it would thus be inappropriate to proceed by asking whether burdens on property rights meet a proportionality test.

The High Court’s ‘categorical approach’ to property in Emmerson

This brings us back to Emmerson.

To get straight to the punchline: the majority engaged in neither kind of analysis because it rejected the acquisition of property argument out of hand. It did so on the basis that forfeiture laws, like s 94 of the Criminal Property Forfeiture Act (NT), which are appropriately characterised as having a punitive purpose are categorically incapable of being characterised as laws with respect to the acquisition of property. That is, punitive forfeiture laws never give rise to the requirement of just terms.

This move requires some explanation.

In general, s 51(xxxi) is special in that the limitation it contains is not capable of being circumvented simply by attracting another head of power. It is an exception, in constitutional law terms, of the general principle that laws are capable of ‘dual-characterisation’: the idea that a law that would be invalid under one head of power is not unconstitutional for that reason if it would be valid under another head of power.

However, the categorical exclusion of some kinds of laws from the ambit of s 51(xxxi) is not unknown. Historically, there is a set of relatively well-defined types of laws that have been held to be exempt from the just terms requirement. This includes taxation, as well as fines and forfeitures, when the latter are imposed as penalties or punishments.

To understand the basis for carving out particular classes of laws from the requirements of s 51(xxxi), it is helpful first to consider tax laws, where the rationale for categorical exclusion is most straightforward. Making tax laws subject to s 51(xxxi) would undermine or even render incoherent the grant of legislative power to enact tax laws. It is not difficult to see why. The very purpose of taxation is to raise revenue, and this comes with the presumption of a power to define the incidents of property ownership. If any tax could potentially be characterised as an acquisition of property, it would not only seriously undermine the power to tax, but it would require courts to analyse the suitability of particular tax laws to their purported revenue-raising objectives, a task that is better suited for the political branches. Were courts charged with that task, they would no doubt end up artificially carving out exceptions from the test, or redefining the deprivation and acquisition requirements in artificial and conceptually unsustainable ways in order to maintain the appearance of institutional legitimacy. The better remedy for bad tax laws is thus the political one: regular elections, and other mechanisms of accountability.

But what about punitive laws? The reasons for categorical exclusion from s 51(xxxi) are not quite as straightforward here. While the problem with laying parking fines and speeding tickets open to constitutional property challenges seems pretty obvious, it is unclear that the possibility of characterising some punitive laws as acquisitions of property would undermine or otherwise render incoherent the power of the state to deal with the breach of rules of conduct. Indeed, the power to declare certain criminal punishments invalid on separation of judicial power grounds (the other legal challenge, recall, brought in this very case) would seem to present a much more serious obstacle to powers to prosecute and punish crime. Yet, no one thinks that that is a reason to exempt criminal proceedings from ch III.

Why, then, should punitive forfeiture laws be categorically exempt from the just terms requirement?

The Court’s principal argument here is historical: since early in our history, criminal forfeiture of property has been understood as an incident of an unfettered sovereign power to protect the community, and indeed to regulate its membership, on the basis of criminal wrongdoing and therefore should never be subject to the just terms requirement. The second argument that the Court offers ‘bootstraps’ from the historical one: historical practice demonstrates that criminal forfeiture of property is best understood as punishment of crime, and it is in general thought to be a matter for the legislature — not courts — whether the crime fits the punishment.

As Justice Gageler points out in dissent, however, whatever the merits of this argument on its own terms — and this is unclear, given the questionable validity of some of these historical practices on other constitutional grounds — it is not particularly compelling in this case. For one thing, the forfeiture of property under the Northern Territory legislation at issue is conducted as a separate, civil proceeding; so whatever power the argument for categorical exclusion gets from the idea that forfeiture ‘constitutes’ punishment for criminal wrongdoing is diminished. Moreover, although forfeiture undeniably serves a punitive purpose, it is evident from the terms of the Act itself that forfeiture also has a revenue-raising purpose, namely: ‘to compensate the Territory community for the costs of deterring, detecting and dealing with … criminal activities’: s 10(2). Finally, although less draconian than some of the forfeiture schemes in place earlier in our history, the Territory legislation is much broader than forfeiture schemes currently in place in other Australian jurisdictions: it does not require any connection to the commission of a crime; it defines ‘property’ extremely broadly; and it extends to assets merely controlled by (as opposed to owned by) the subject of the forfeiture order, as well as to assets owned or controlled by innocent third parties.

The majority conceded most of these points, but downplayed their relevance. In doing so, they appear to have accepted an extremely broad view of the exemption: not only are all punitive forfeiture laws exempt from the just terms requirement, but for the purpose of characterising a given forfeiture law as punitive (and therefore not an acquisition of property), it is sufficient that an important objective of the law is punishing criminal offenders.

Hard-line or judicial capitulation?

The Court’s hard-line adherence to the categorical exemption for punitive laws is perhaps unsurprising. Even so, the degree of deference given to the Territory’s submissions about the primary objective of its forfeiture law for the purpose of characterising it as a law falling within that exception is striking — particularly when one of the other, important objectives of the law is plainly revenue-raising.

The generic worry with this kind of judicial capitulation is that it allows the just terms requirement to be circumvented based on the mere pretence of a valid regulatory objective. But when the law burdens unpopular minorities, there may be even greater cause for concern about arbitrariness in state acquisitions of property.

There can, of course, be no doubt that the problem of powerful and wealthy drug lords who hide their crime-derived assets explains the breadth of the Territory legislation. But however laudable that goal, one can plausibly predict that in practice ‘small fish’ like Mr Emmerson are more likely to get netted, while the ‘big fish’ — who are in any case probably savvy enough to ensure that their assets do not become the subject of a forfeiture proceeding — carry on undetected. In this vein, it bears noting that even minor drug offences can attract a ‘drug trafficker’ declaration under s 36Aof the Misuse of Drugs Act; as the trial judge observed, getting caught sharing a joint on three different occasions within the statutory period is sufficient. Although Mr Emmerson got caught with a ‘commercial quantity’ of marijuana, his most serious prior qualifying offences were possession of 5.9 grams of MDMA and possession of 84.9 grams of cannabis products.

The worry, in short, is that there is a disconnect between the punitive aims of the legislative scheme and the revenue-raising aims of the legislation, and that by creating a categorical exemption to the just terms requirement on the basis that criminal punishment is an objective of forfeiture, there is nothing to guarantee that forfeiture applies even-handedly in pursuance of either legislative purpose. In absence of the just terms requirement, the only legal limitation on the power to punish through forfeiture of property is the exercise of prosecutorial discretion, and a very limited judicial discretion (in this case, confined to modifying the restraining order on the basis that the property is not owned or effectively controlled by the subject of the forfeiture proceeding, eg in the case of a third-party mortgagee, and not extended to considerations of the punitive or compensatory objectives of the legislation).

To be clear: this isn’t to suggest that forfeiture laws should routinely be the subject of judicial scrutiny. Nor is it to suggest that property that is unconnected with criminal wrongdoing should be exempt from forfeiture. It is only to suggest that property that is forfeit to the state should not becategorically exempt from just terms considerations simply because an aim of the law is punitive, particularly when there is no connection between the property confiscated and criminal wrongdoing, because there is a real risk that punitive objectives could be used as mere pretence for revenue-raising.

Why is the High Court worried about scrutinising forfeiture laws?

Assuming this critique has some bite, what explains the Court’s hard-line stance on the forfeiture exception? I’d like conclude this post with some tentative thoughts about what the Court’s refusal to budge on this point might tell us about possible directions for constitutional property analysis more generally. I concede that this is a bit of a dangerous game: one can only presume that special leave was granted to deal with the Kable issue and not to make new inroads into constitutional property jurisprudence. But let us live dangerously.

One question we might ask, then, is whether the Court’s view of the forfeiture exception reflects a categorical rule of the kind typically associated with takings analysis, where the purpose of positing an exception to the ordinary process of balancing competing interests and evaluating means and ends is to evade the appearance of judicial impropriety — or, conversely, whether it reflects a statement of constitutional value about property.

Let me consider these in reverse order.

To the extent that it reflects a statement of constitutional value about property, the Court’s position strikes me as an anachronism. It relies on outdated ideas of ‘property ownership’ as constitutive of community membership, and outdated ideas of criminal offenders as a category of persons ‘outside’ of the community, who are wholly unfit for property ownership. Forfeiture of innocently acquired property with no connection to criminal wrongdoing beyond ownership by a criminal wrongdoer perpetuates the view that criminal offenders are the property of the state. These historical understandings that underpin a categorical exception for forfeiture laws are at odds with the contemporary view that at least part of the purpose of the criminal justice system is rehabilitative and corrective. Today there is an expectation that most persons who are incarcerated for criminal offences will re-enter the community; in the main, persons who have committed criminal offences live among us, not in exile.

To the extent that it reflects a desire to avoid engaging in balancing competing interests or evaluating means and ends, the Court’s position strikes me as misguided. The majority suggests that engaging in this exercise would ‘invite a speculative inquiry as to the topics which were the main preoccupation of the Territory’s legislature in enacting the legislation’. But this seems to confuse the requirements of balancing or proportionality analysis with characterisation. The point is not to decide which purpose was the true purpose, but to evaluate whether either of the two asserted (valid) objectives of the law were commensurate with the acquisition.

So, where does this leave us? I don’t propose to decide whether the Court’s adherence to the categorical exclusion of punitive laws from the just terms requirement is better explained by its views about the constitutional value of property, or by its concerns about the appearance of judicial impropriety (pun intended).

But notice that, either way, it is clear that in absence of the categorical rule, the Court would have been forced to engage in some kind of weighing of competing interests, and evaluation of legislative means and ends. Although many s 51(xxxi) challenges are decided on the basis that, although there was a deprivation of property, the acquisition requirement was not met, in the case of forfeiture there is no question that the state gains an interest in property. Therefore to adopt the position that I have suggested and allow that some forfeitures implicate the requirement of just terms — notwithstanding their punitive purpose — means that some kind of analysis of the benefits and burdens at stake, and the legislative means chosen to pursue the end, is unavoidable.

Is a limitation on legislative power still a constitutional right by another name?

This point about the consequences of not adhering to the categorical rule is perhaps the more important observation for the purpose of thinking about the significance of the majority’s use of the categorical exception. It brings us full-circle back to the question posed earlier, namely: whether that analysis would be better conceived in the manner of American-style balancing, or in the manner of proportionality analysis.

Conceived as a one-step balancing approach, one would expect the analysis to be folded into the determination of whether there is a ‘deprivation’ and an ‘acquisition’ of ‘property’, leaving the ‘just terms’ requirement to function simply as a remedy (invalidation of the law unless it is modified to provide compensation). Notwithstanding the High Court’s distaste for American takings jurisprudence, in many respects, this describes the mainstream approach of the High Court in s 51(xxxi) cases. As noted above, that approach tends to follow the ordinary process of characterisation.

Conceived as a two-step approach, by contrast, one would expect the ‘just terms’ requirement to introduce a second stage of analysis, testing whether a particular ‘acquisition’ is justified. Interestingly, this appears to be what Justice Gageler has in mind in his dissent. It’s worth having a look at what he has to say about the process of determining whether a forfeiture law implicates the just terms requirement, at [118]–[121]:

A law which forfeits property for the primary purpose of imposing a penalty or sanction for breach of a norm of conduct and which escapes the just terms condition in s 51(xxxi) is an example of a law which has the general characteristics of a law which acquires property without attracting that condition: the objective of the law must be within power; the acquisition must be a necessary or characteristic feature of the means the law selects to achieve that objective; and the means must be appropriate and adapted to achieving that objective.

Those characteristics … are a reflection of the underlying purpose of the just terms condition to prevent arbitrary acquisitions. … A law forfeiting property which has as its primary purpose imposing a penalty or sanction for breach of a norm of conduct will ordinarily have the first of those characteristics: it will ordinarily have an objective that is within power. The law will not necessarily have the other characteristics. That will depend on whether the particular forfeiture is a necessary or characteristic feature of the means the law selects to achieve that objective and on whether those means are appropriate and adapted to achieving that objective.

The applicable test is more stringent than that which will sometimes apply to determine whether the law is otherwise within power. As befits the application of a constitutional guarantee, the inquiry is … ‘whether the burden or restriction [that is to say, the acquisition of property] is reasonably appropriate and adapted, in the court’s judgment, to the legitimate end in view’.

I personally find this approach more compelling. My own view, much like Justice Gageler’s, is that it would be conceptually and doctrinally preferable to treat forfeiture in circumstances like these (ie, where there is no established connection between criminal wrongdoing and the property forfeited) as a prima facie acquisition, and then to analyse whether the acquisition is nevertheless justified in light of the broader punitive and compensatory objectives of the legislation, rather than to categorically isolate it from the reach of constitutional property considerations. This position is stronger in cases where the objectives of a forfeiture law are, as here, evidently revenue-raising. However, for the sake of being provocative, let me go a step farther and suggest that even if a forfeiture law’s objective is ‘purely’ punitive, absolute deference to the legislature on what kind of punishment is appropriate is undesirable.

Granted, as a constitutional matter, this kind of issue seems better dealt with through ‘due process’ and other ‘fundamental justice’ considerations — the kind of guarantees one doesn’t readily find in Australia’s Constitution. But if you are the kind of person who feels dissatisfied, confused, or otherwise let down by Kable and the separation of judicial power doctrine in its capacity as a second-rate due process clause, then perhaps it is worth pondering whether — barring constitutional amendment — making the property clause do some work here would be the better option. (Can of worms, anyone?)

The suggestion, then, is this. Rather than resolving the issue through the ordinary process of characterisation — a move that leads to the very temptation to carve out dubious categorical exemptions in cases like these, since it is otherwise difficult to resist concluding that there is an acquisition of property — it would be better to treat the just terms requirement not simply as a remedy that follows from characterisation, but as a process of determining whether the acquisition itself is legitimate. To do so, however, clearly requires a greater commitment to the idea of the just terms requirement as a constitutional property right than the High Court may be comfortable with.

To sum things up, we might therefore say that the High Court’s approach in Emmerson reflects what is — jurisprudential lip service notwithstanding — manifestly an unresolved ambivalence about the status of the property clause as a constitutional ‘right’ or ‘guarantee’. Despite the seemingly well-established acceptance of this proposition as a matter of doctrine and precedent, it is apparent from the manner in which the Court approaches constitutional property cases where the appearance of ‘acquisition’ is difficult to resist that there is some uncertainty about the idea of s 51(xxxi) as a constitutional property right and that there is some discomfort with what a whole-hearted endorsement of this position might require.

From this perspective, perhaps limitations on the exercise of legislative power are not — or are at least not exactly — constitutional rights by another name after all.

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Published on May 29, 2014
Author:          Filed under: Analysis
 

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