Case: R v Smithers; Ex parte McMillan [1982] HCA 76 ; (1982) 152 CLR 477
Outcome: discussed
This contention must fail. It is a matter for the Parliament to determine which measures it will adopt in order to secure compliance with legislation which is enacted pursuant to one of the heads of power conferred by s 51 of the Constitution . Parliament may determine to visit contraventions of an Act with criminal sanctions. It may also provide for civil remedies. It may determine to do both. In R v Smithers; Ex parte McMillan [1982] HCA 76 ; (1982) 152 CLR 477 the High Court dealt with a challenge to the validity of provisions of the Customs Act 1901 (Cth) which enabled certain office-holders to apply to this Court for an order that a person, who had been involved in the importation of narcotic substances, pay a pecuniary penalty to the Commonwealth. The application could be made whether or not the person had been charged or convicted of any offence under the Customs Act . The Customs Act also made importation of such substances a criminal offence. The Court held (at 485) that: "It would be a legitimate exercise of the power [s 51(i) of the Constitution when read with s 51(xxxix)] and this is conceded to make it an offence to engage in dealing in narcotic goods, being prohibited imports, that have been imported in contravention of the Act and to impose severe penalties in respect of that offence. Similarly it would be a legitimate exercise of the power to make that conduct the occasion for liability to a civil action for penalties of the traditional kind. Section 243B, in providing for the imposition of pecuniary penalties of the class provided for in Div. 3, stands in no different position. It penalises dealings in narcotic goods that have been imported in contravention of the Act . In so doing it constitutes a deterrent to importation in breach of the statutory provisions and provides a further sanction with a view to ensuring compliance with the statutory provisions governing importation. Its importance in this respect is that it seeks to deprive the dealing in narcotic goods of the considerable financial rewards which are the chief inducement for importing them into Australia and for dealing in them." 11 Sections 7 and 66 of the Act form part of a legislative scheme, protective of members of the public, which regulates the conduct of banking in Australia. Only approved persons may conduct banking businesses. Persons providing other forms of financial services may not adopt the title "bank" and thereby mislead the public as to their status. People may thereby be induced to deposit funds with the "bank". If conduct which contravenes the Act is discovered charges may be laid. The prosecution of criminal charges, however, will do nothing to protect depositors' funds. Nor will a pending trial prevent the defendant continuing to advertise that he or she is conducting a banking business. Section 65A fills this void. It enables this Court to grant immediate and long term relief where contraventions of the Act have occurred, are occurring or, it is proposed, should occur. Injunctions may issue restraining persons from engaging in contravening conduct and may require such persons to take remedial action. Such provisions are, in my opinion, incidental to the enforcement of the regulatory regime which falls squarely within the banking power. 12 Acquisition Of Property Other Than On Just Terms. The "freezing order" to which Mr Siminton refers was made by Gray J on 10 January 2006 under s 65A of the Act . There were, in fact, multiple orders. Those orders prevented Mr Siminton from dealing with funds and property held by him including deposits held in the Terra Nova Cache. Mr Siminton argues that, under the order of Gray J, the Commonwealth has acquired his property, namely his money and other assets. He has effectively been deprived of that property while the order remains in force. This, he submits, involved a contravention of s 51(xxxi) of the Constitution . 16 In Smithers the High Court also upheld the constitutional validity of s 243E(2)(c)(i) of the Customs Act which empowered this Court to direct the Official Trustee to take control of specified property of a person if there existed reasonable grounds for the belief that the person had engaged in narcotics dealing and derived benefits therefrom. The Court held that s 51(xxxi) had no application because it did not involve an acquisition of property by the Commonwealth, much less an acquisition on just terms. The property was placed under the control of the Official Receiver in order to ensure that the pecuniary penalty provisions in s 243B could not be rendered nugatory by disposition of property. In Commissioner of Australian Federal Police v Cox (1986) 78 ALR 509 at 514-515 Pincus J held that the same reasoning supported the validity of s 243E(2)(c)(ii) which empowered the Court to make an order directing the Official Trustee to take control of all of the property of the person involved in narcotic dealings.