In this article we will discuss the different orders, procedures and circumstances in which your assets can be forfeited by looking at each of the agencies that can apply for such orders.
If you are convicted of a serious crime, or even just suspected of being involved in a serious crime, there are certain circumstances in which you can be forced to forfeit your assets or money to law enforcement agencies.
Various orders can be made and the type of order will depend on many factors, including whether or not you have been charged with an offence, and whether it is an offence under NSW or Commonwealth law. Assets may be forfeited to the Commonwealth Director of Public Prosecutions, the NSW Director of Public Prosecutions (DPP), or the NSW Police as well as to the NSW Crime Commission.
Assets forfeiture by the NSW director of public prosecutor on NSW police
In this section we will look at the 4 orders that the NSW DPP or the NSW Police can apply for to confiscate your assets.
A restraining order is an order stating that no-one is allowed to dispose of, or attempt to dispose of, the property specified in the order, in any manner other than specified in the restraining order.
An application for a restraining order can be made to the Supreme Court of NSW if:
- You have been charged with a serious offence, or
- You are about to be charged with a serious offence, or
- You have been convicted of a serious offence
The order can be made relating to property that the authorities suspect is tainted property. Property is regarded as “tainted” if it was used to commit an offence, or used in connection with the commission of an offence, or if it was obtained, directly or indirectly, as a result of the commission of a serious offence.
To obtain an order in the Supreme Court, the authority applying for such a restraining order must support their application by an affidavit that sets out the grounds for the applicant’s belief that:
- The person against whom the order is sought committed a serious offence, and
- The property for which the order is sought is tainted, and
- The property belongs to the person against whom the order is sought
The applicant must satisfy the court that these beliefs are based on reasonable grounds.
The Court can order the following with a restraining order
a)That you be questioned under oath about the nature and location of certain assets
That no one may dispose of, or otherwise deal with the said property, except in a manner as specified by the court.
b)That the property, or the interest in the property, be transferred to the Public Trustee.
Take note: If you are examined under oath as a result of a restraining order, you have no protection against self-incrimination during the examination. You have to answer all the questions and you have to produce all requested documents, even if such answers or documents will make you liable for forfeiture or a penalty. The answers or documents may however not be admissible in future criminal proceedings against you.
Once a restraining order is made, written notice must be given to all persons whose interests are be affected.
Contravening a restraining order (if the person was given notice that the property was subject to a retraining order) is a criminal offence, punishable by a fine equivalent to the value of the property, or the interest in such property, and/or imprisonment to a maximum of two years.
A forfeiture order is an order allowing the State to confiscate and dispose of property allegedly used in, or in connection with, committing a serious offence. A serious offence includes any offence against NSW laws that may be prosecuted on indictment.
An application for a forfeiture order must be made within 6 months from the conviction to the court that imposed the conviction. After 6 months an application will only be allowed with the leave of the Supreme Court.
What happens in the 6 months between conviction and the application?
If you have been convicted of a serious offence and it is likely that the state will bring an application for a forfeiture order, the Court can order that the property listed in the application may not be disposed of except in a manner specified by the court.
The forfeiture process
Once an application for a forfeiture order is made to the court, written notice must be given to any person believed to be interested in the property. The order can only be granted after a hearing in court and any person claiming an interest in the property can appear and give evidence at the hearing. The court will presume that the property was used in, or in connection with, the commission of a serious crime, unless the contrary is proven.
Who bears the onus of proof?
The Crown must prove on a balance of probabilities that the property is tainted property.
During the forfeiture process, the authorities can obtain a production order from the court to inspect any property-tracking documents. The production order must specify the time, the place and the person to whom documents must be produced.
If you are served with such an order, you have to produce the property-tracking documents or make it available for inspection. The fact that such documents might be incriminating or that producing these documents might breach an obligation to another person not to disclose the existence or the content of the document, is not an excuse for non-compliance.
Failing to comply with a production order is an offence and you can be sentenced to a maximum of two years imprisonment and/or 100 penalty units. If you are a corporation it is 500 penalty units.
If the Court makes a forfeiture order, the following will happen.
The State will take, or retain, possession of the property, and the State may, after a certain period of time, dispose of such property. The State may not dispose of the property straight away.
Remedies against a forfeiture order
The convicted person may decide to appeal the conviction of the serious offence or the forfeiture order; thus, the property may not be disposed of until after the period given to appeal the conviction and/or the forfeiture order. This applies even if no appeal is actually lodged.
If an appeal is lodged against the conviction or forfeiture order, the property cannot be disposed of until the appeal is finalized.
Take note: Any person who has an interest in the property may lodge an appeal against the forfeiture order within 28 days of the making of the order.
An innocent third party who claims an interest in the property that is subjected to a forfeiture order, may within 6 months of the order being made, apply to the court to have the order set aside, at least to the extent that it applies to their interests. To succeed with such an application the court must be satisfied on a balance of probabilities, that:
a)The applicant was not in any way involved with the commission of the serious offence, and
b) The applicant had no reasonable suspicion that the property was tainted.
Do you need a lawyer?
Once you receive notice of an application for a forfeiture order against you, you need to get legal advice as soon as possible. The court always has a discretion whether or not to grant the forfeiture order. If you can show the normal and intended use of the asset and/or that any hardship might arise if the asset is forfeited, the court can decide not to grant the order. For example you used the family car in the commission of a serious offence and the police seeks a forfeiture order.
The car actually belongs to the father, who was completely unaware of the commission of the crime and the normal use of the car is to get the children to school and the father to work to support the family. In such circumstances the court might use its discretion and refuse the forfeiture order.
A Pecuniary Penalty Order is an order forcing an offender to pay an amount of money for the benefits derived from criminal activity.
It is not always easy to calculate the amount of money derived from criminal activity, the court will take a few factors into account:
- The money gained by the defendant as a result of criminal activity,
- The defendant’s income and expenditure before and after the criminal activity
- The street or market value of the “illegal items”.
- Any expenses incurred by the defendant in the commission of the crime will not be taken into account
The police can apply for a pecuniary penalty order as well as a forfeiture order. If the court grants both orders, the value of the forfeiture order will be taken into account and the amount of the pecuniary penalty order my be reduced accordingly. Payment of the pecuniary order amount is enforceable as a civil debt to the State under civil procedure law.
Take note: A pecuniary order is not available for drug trafficking offences, where drug trafficking is involved a drugs proceeds order may be obtained.
A Drugs Proceeds Order is an order forcing an offender to pay an amount of money for benefits derived from a drug trafficking offence.
In determining the amount of money derived from drug trafficking, the court takes a similar approach as to pecuniary penalty orders. The court will take the following factors into account:
- The money made by the defendant as a result of the drug trafficking,
- The market value of the drugs at the time, and
- The defendant’s income and expenses before and after the drug trafficking.
Again any expenses incurred by the defendant relating to the drug trafficking will not be taken into account. Whatever the defendant spent on buying or getting the drugs, is his loss.
A drugs proceeds order can also be made with a forfeiture order and the court will take into consideration the value of any forfeiture order when determining the amount of the drug proceeds order. As above, the amount is seen as a civil debt to the State and civil proceedings can enforce payment.
Forfeiture to the NSW crime commission
If you are suspected of being involved in serious criminal activity, even if you haven’t been convicted of a serious offence, you may be ordered to forfeit assets or money to the NSW Crime Commission under certain circumstances. A serious criminal offence includes an offence against NSW laws that is punishable by at least 5 years imprisonment.
The NSW Crime Commission has the following options available to get control over assets suspected of being the proceeds of serious crime.
A Restraining order as described above can be applied for, but in this case it can be applied for in relation to property that is suspected that you have acquired through your suspected involvement in serious criminal activity.
The application must be supported by an affidavit, and the Supreme Court must grant the order if the affidavit states the grounds for the applicant’s belief that:
- The person whose assets or interests are the subject of the application was engaged in serious criminal activity, or
- The person acquired the property due to his/her involvement in any serious criminal activity or due to the involvement of another person in such criminal activity, or
- The property has been acquired because of serious criminal activity
The Court can make the same restraining orders as discussed above in an application brought by the NSW DPP or NSW Police. The same rule against self-incrimination applies. Once an order is made, a written notice of the order must be given to any person whose interests are affected.
What can you do if a restraining order is made against you?
You may apply to an exclusion order to exclude all or some of the property from the order. To succeed, you have to prove on a balance of probability that the property was not obtained illegally or fraudulently.
Any person with an interest in the property can lodge an appeal in the Supreme Court within 28 days from when the order was made, to have the restraining order set aside. To succeed with the appeal the applicant needs to satisfy the court that:
a) The restraining order was obtained illegally or against good faith; or
b) The NSW Crime Commission failed to prove that there are reasonable grounds for believing that the person whose property is the subject of the restraining order was involved in serious criminal activity.
When lodging an appeal the applicant can present arguments/evidence to support the application.
Contravening a restraining order (if the person was given notice that the property was subject to a restraining order) is a criminal offence, punishable by a fine equivalent to the value of the property or the interest in such property and/or imprisonment to a maximum of two years.