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KOGARAH OFFICE
Suite 309 – 310, Level 3
13A Montgomery Street
KOGARAH NSW 2217


SYDNEY CITY OFFICE
Ground Floor
54 Martin Place
SYDNEY NSW 2000


Email: solicitors@gmhlegal.com
Phone: (02) 9587 0458
Facsimile: (02) 9587 2936


ASSET FORFEITURE



Asset forfeiture is a form of confiscation of assets by the state or federal government, pursuant to law.

The main purposes of asset forfeiture include:

  • To deter crime by reducing its profitability
  • To diminish the offender’s ability to finance further criminal activity
  • To demonstrate to the community that crime ‘does not pay’.

In Australia there are 2 means by which proceeds of crimes can be recovered

  • Conviction based recovery: Enables the recovery of assets associated with a crime after a conviction for that crime has been secured;
  • Non-conviction (or civil) based recovery: Allows the restraint and recovery of assets suspected of criminal origins without the necessity of securing a criminal conviction.

Assets may be forfeited to one of the following agencies:

  • NSW Director of Public Prosecutions
  • NSW Police
  • NSW Crime Commission
  • Commonwealth Director of Public Prosecutions

The NSW Crime Commission (NSWCC) recovers assets associated with indictable drug offences while the Director of Public Prosecution (DPP) recovers assets associated with other offences under the Confiscation of Proceeds of Crime Act 1989 (NSW) (COPOCA).

For more information, please refer to the Australian Government’s ‘Review of confiscation schemes in Australia’ publication.

ASSET FORFEITURE TO NSW DPP

Once a person is convicted of a serious offence, the following confiscation orders can be made by the NSW DPP or the NSW police:

  • Restraining order
  • Asset forfeiture order
  • Pecuniary penalty order
  • Drug proceeds order

RESTRAINING ORDER

A restraining order prevents dealings with the property of persons reasonably suspected of having engaged in serious crime-related activity or of persons whose interests in property are reasonably suspected of being property derived from serious crime-related activity.

All restraining order applications are to be decided by the Director on a case-by-case basis and should be made as early as possible to preserve property for possibly confiscation and/or compensation for victims of crime.

A restraining order operates in rem (i.e. against the property) and is enforceable at large. As such, there is no respondent to an application for a restraining order. This is to be contrasted with an in personam order which operates against a person (e.g. a pecuniary penalty order).

A restraining order can be made subject to any conditions that the Court thinks fit, including making provision for meeting an affected person’s reasonable living expenses or reasonable business expenses, but cannot include provision for the payment of legal expenses of any nature.

Where can an application for a restraining order be made?

As a general rule, the DPP can make an application for a restraining order in the Supreme Court when:

  • The prosecution of the criminal matter is in the Supreme Court
  • The matter involves organised crime
  • The confiscation matter is likely to involve significant legal or asset complexity
  • The confiscation matter involves high asset value
  • The matter is high profile
  • The property is located outside Australia
  • A trustee is required to control the property
  • The application is based on the civil forfeiture procedure
  • The matter is of high public policy

When can the DPP make an application for a restraining order?

An application for a conviction-based restraining order can be made:

  • At any time during the course of criminal proceedings
  • Up to 48 hours before a person is charged
  • After a person has been convicted.

How is an application for a restraining order formulated?

An application for a restraining order must contain the following information:

  • It must specify the purpose for which the property is to be restrained
  • It must be supported by an Affidavit by a member of the police force or a person authorize to prosecute the relevant offence type
  • The deponent must state out the grounds for holding their beliefs including:
    • That the accused will be charged with an offence within 48h; and
    • That the accused has an interest in the property or the property is tainted property; and
    • That there is a likelihood of a forfeiture order, pecuniary penalty order or restitution or compensation order being made.

How is a restraining order served?

Once an order is made, the document must be personally served by the police on every person who is believed to have an interest in the restrained property.

It is an offense for a person to fail to give a declaration of property interests within 14 days after the notice is given without a reasonable excuse.

For more information, please refer to the Australian Federal Police’ ‘Proceeds of crime’ section.

ASSETS FORFEITURE ORDER

A forfeiture order is an order where the State may confiscate and dispose of property that is alleged to have been used in, or in connection with, the commission of a serious offence.

Depriving a person of profits of crime is not punitive and merely prevents their being unjustly enriched. The court will make a forfeiture order if a person is convicted of an indictable offence and the property is a proceeds of that offence. Such order generally coincides with the end of the legal proceedings.

The effect of the order is that the specified property is forfeited to and vests in the State. The Court is not able to make a forfeiture order in relation to land.

When can an application for a forfeiture order be made?

Generally, an application for a forfeiture order must be made to the Court that imposed the conviction within 6 months of the date of the conviction, otherwise leave from Court will be required.

The Court may make an order that specified property is forfeited to the State if:

  • It is satisfied the property is tainted property
  • In the case of property that is the proceeds of the depiction of the offence in a public promotion, the Court is satisfied it is appropriate to treat the property as being derived or realised by the Defendant because of the commission of the offence
  • It has taken into consideration
    • The seriousness of the alleged crime
    • The total value of the assets potentially subject to confiscation action
    • The use ordinarily made or intended to have been made of the property
    • Any hardship to the defendant or other person that is reasonably likely to arise following the making of the order
    • Whether or not such treatment of the property is in the public interest
    • Whether the depiction of the offence has any general social or educational value

Grant of a forfeiture order by the Court

A forfeiture order can only be granted once the Court is satisfied that the property is tainted property.

Tainted property is property previously:

  • Used in, or in connection with, the commission of a serious offence; or
  • Obtained, either directly or indirectly, by the defendant as a result of the commission of a serious offence.

Content of forfeiture orders

Where a forfeiture order is made in relation to property other than money, the Court must specify an amount in the order that it considers to be the present value of the property.

A forfeiture order may be made where a third party has an interest in the property, in such circumstances the Court should specify the extent of the estate, interests or rights in the property that are affected by the order.

Disposal of the property

When a forfeiture order is made, the State is not permitted to dispose or otherwise deal with the property until such time as the period for appealing the order or conviction for the serious offence lapses or any appeal is finally determined (whichever is later).

The Prosecutor will need leave from the Court to dispose of the property before the expiration of this period, particularly in instances where it is argued that the value of property such as a vehicle is likely to depreciate.

For more information, please refer to the Judicial Commission of NSW’s ‘Proceedings under the Confiscation of Proceeds of Crime Act 1989’ section.

PECUNIARY PENALTY ORDER

Upon an application for a pecuniary penalty order, following the conviction of a person for a serious offense, the Court may assess the value of the benefits derived by the person from the commission of the offence and order the person to pay an equivalent pecuniary penalty to the State.

Such an application is made when the defendant is convicted of a serious offence other than a drug trafficking offence.

The order may apply to property in possession or in control of the person, as well as benefits provided for a person, either within or outside New South Wales.

How does the Court assess the value of the benefits?

When assessing the value of the benefits derived from criminal activity, the Court will have regard to the following information:

  • The money or value of other property or other benefit that came into the possession or control of the defendant or another person at the defendant’s request or direction due to the commission of the offence;
  • The value of the defendant’s property before and after the commission of the offence;
  • The defendant’s income and expenditure before and after the commission of the offence.

For more information, please refer to the Judicial Commission of NSW’s ‘Proceedings under the Confiscation of Proceeds of Crime Act 1989’ section.

DRUG PROCEEDS ORDER

An application for a drug proceeds order may me made when the defendant is convicted of a drug trafficking offence.

The Court is required to determine whether the defendant has derived a benefit in connection with drug trafficking, and if so assess the value of the benefit and order the defendant to pay the State a pecuniary penalty in that amount.

Currently the only offence within the definition of ‘drug trafficking offence’ that may be prosecuted in the Local Court is possession of precursors for the manufacture or production of prohibited drugs.

How does the Court assess the value of the benefits derived from drug trafficking?

The process from making a drug proceeds and the matters for consideration in assessing the value of any benefits are substantially similar to those that apply in relation to pecuniary penalty order.

Additional factors the Court may take into account are:

  • The value of the defendant’s property
  • Income and expenditures that appear to have been held since the defendant’s conviction
  • Income and expenditures that appear to have been transferred to the defendant any time within a period of 6 years prior to the date when proceedings against the defendant were commenced.

A drug proceeds order can be made by a Court together with a forfeiture order. In such circumstances, the financial penalty is reduced by the value of any forfeiture order made. The amount payable is taken to be a civil debt due to the State and enforceable by civil proceedings.

For more information, please refer to the Judicial Commission of NSW’s ‘Proceedings under the Confiscation of Proceeds of Crime Act 1989’ section.

FORFEITURE TO NSW CRIME COMMISSION

The two principle objectives of the NSW Crime Commission is to reduce both the incidence of illegal drug trafficking and the incidence of organised and other crime.

The NSWCC may apply to the Supreme Court for the following orders:

  • Restraining orders
  • Assets forfeiture orders
  • Proceeds assessment orders
  • Search warrants

RESTRAINING ORDER

A restraining order prevents dealings with the property of persons reasonably suspected of having engaged in serious crime-related activity or of persons whose interests in property are reasonably suspected of being property derived from serious crime-related activity.

All restraining order applications are to be decided by the Director on a case-by-case basis and should be made as early as possible to preserve property for possibly confiscation and/or compensation for victims of crime.

A restraining order operates in rem (i.e. against the property) and is enforceable at large. As such, there is no respondent to an application for a restraining order. This is to be contrasted with an in personam order which operates against a person (e.g. a pecuniary penalty order).

A restraining order can be made subject to any conditions that the Court thinks fit, including making provision for meeting an affected person’s reasonable living expenses or reasonable business expenses, but cannot include provision for the payment of legal expenses of any nature.

Where can an application for a restraining order be made?

As a general rule, the DPP can make an application for a restraining order in the Supreme Court when:

  • The prosecution of the criminal matter is in the Supreme Court
  • The matter involves organised crime
  • The confiscation matter is likely to involve significant legal or asset complexity
  • The confiscation matter involves high asset value
  • The matter is high profile
  • The property is located outside Australia
  • A trustee is required to control the property
  • The application is based on the civil forfeiture procedure
  • The matter is of high public policy

When can the NSWCC make an application for a restraining order?

An application for a conviction-based restraining order can be made:

  • At any time during the course of criminal proceedings
  • Up to 48 hours before a person is charged
  • After a person has been convicted.

How is an application for a restraining order formulated?

An application for a restraining order must contain the following information:

  • It must specify the purpose for which the property is to be restrained
  • It must be supported by an Affidavit by a member of the police force or a person authorize to prosecute the relevant offence type
  • The deponent must state out the grounds for holding their beliefs including:
    • That the accused will be charged with an offence within 48h; and
    • That the accused has an interest in the property or the property is tainted property; and
    • That there is a likelihood of a forfeiture order, pecuniary penalty order or restitution or compensation order being made.

How is a restraining order served?

Once an order is made, the document must be personally served by the police on every person who is believed to have an interest in the restrained property.

It is an offense for a person to fail to give a declaration of property interests within 14 days after the notice is given to that person without a reasonable excuse.

For more information, please refer to the Australian Federal Police’ ‘Proceeds of crime’ section.

ASSET FORFEITURE ORDER

An assets forfeiture order is an order allowing the State to confiscate and dispose of property from a person who has engaged in serious criminal activity.

The order has the effect that the specified property is forfeited to and vests in the State.
For more information, please refer to the Australian Government’s ‘Review of confiscation schemes in Australia’ publication.

When Can an Application be made?

Generally, assets forfeiture applications are made in relation to property already subject to a restraining order.

An application for an assets forfeiture order must be made to the Supreme Court within 6 years of the alleged serious criminal activity.

Court process

Once the NSWCC has made an application to the Supreme Court for an assets forfeiture order, written notice must be given to any person affected by the application.

A judge will subsequently hear the application for an assets forfeiture order in Court. Any person claiming an interest in the property may appear and adduce evidence at the hearing.

If the Court is satisfied on the balance of probabilities that the person was engaged in a serious criminal activity within the 6 years before the application is made, then an order for assets forfeiture is likely to be granted

It is essential to note that the Court does not need to find that any offence was committed, nor that the assets named in the application derived from the alleged criminal activity.

Consequences of the grant of an assets forfeiture order

The order has the effect that the specified property is forfeited to and vests in the State.
Any person who attempts to dispose of or interfere with property that is already subject to an assets forfeiture order is guilty on offense, punishable by a fine equivalent to the value of the property and/or by imprisonment by up to 2 years.

What to do if an assets forfeiture order has been made against you?

Once an order for assets forfeiture has been granted by a Court against you, you have 6 months to apply for an exclusion order with leave of the Supreme Court

To obtain an exclusion order, you will need to prove to the court that the property in question was not illegally or fraudulently obtained.

You can also apply for relief against forfeiture in the Supreme Court, it is an equitable remedy available to prevent a party from exercising legal rights which arise as a result of a mistake, accident or where the exercise of the rights is otherwise unconscionable in all the circumstances.

If you wish to apply for relief against forfeiture, you must convince the Court that:

  • You have suffered hardship as a result of the assets forfeiture order; and
  • You had no knowledge of any serious criminal related activities or illegal activities of the person subject to the asset forfeiture order.

PROCEEDS ASSESSMENT ORDER

A proceeds assessment order is an order assessing the value of proceeds derived by a person from illegal activities and compelling an offender to pay to the NSW Treasurer the amount of money they have derived from illegal activity.

When Can an Application be made by the NSWCC?

Generally, an application for a proceeds assessment order will relate to a property which is already the subject of a restraining order.

The application by the NSWCC must be made to the Supreme Court within 6 months of the alleged serious crime related activity.

Court process

An order for proceeds assessment order will be granted by the Supreme Court if the judge is satisfied that:

  • The persons derived proceeds from an illegal activity of another person; and
  • The person knew or ought reasonably to have known that the proceeds were derived from an illegal activity of another person; and
  • The other person was, within the 6 years prior to the making of the application for the proceeds assessment order, engaged in a serious crime related activity.

What are the consequences of the grant of a proceeds assessment order?

Once the order has been granted, the Court will start assessment the amount of money derived from the illegal activity. Before reaching a conclusion, the Court will look at different factors including:

  • The market value of the drugs at the time of the illegal activity
  • The money acquired by the defendant because of the illegal activity
  • The defendant’s income before and after the illegal activity
  • The defendant’s expenditures before and after the illegal activity.

UNEXPLAINED WEALTH ORDER

An unexplained wealth order is an order requiring a person to pay to the Treasurer his/her amount of unexplained wealth.

It allows the authorities to seize property connected to illegal activity but without having to establish a direct link between the property concerned and a specific criminal offence.

How is an application for unexplained wealth order made?

Normally an application for an unexplained wealth order will relate to property already subject to a restraining order. However, an unexplained wealth order may be made whether or not a restraining order has previously been made.

An application for an unexplained wealth order can be made to the Supreme Court at any time after the alleged serious crime related activity

Court process

The Supreme Court will make an unexplained wealth order against a person if the NSWCC has satisfied the Court that there is a reasonable suspicion that the person:

  • Has engaged in one or more serious crime related activities; or
  • Has acquired, without giving sufficient consideration, serious crime derived property from any serious crime related activity of someone else; and
  • Some or all of the person’s current or previous wealth was acquired unlawfully.

Then, the responsibility will shift to the person who is the subject of the unexplained wealth order to prove that their wealth and expenditure were lawfully acquired.

For more information, please refer to the Australian Government’s ‘Unexplained wealth law in Australia’ publication.

ASSET FORFEITURE TO THE CDPP

The main function of the Commonwealth Director of Public Prosecutions (CDPP) is to prosecute offences against Commonwealth law and to confiscate the proceeds of Commonwealth crime.

The CDPP has the sole power to freeze and confiscate property.

A- FREEZING ORDER

A freezing order is an order that a person must not allow the balance of a named financial account to be reduced. The purpose is to prevent a defendant or a third party from disposing of his/her assets so as to frustrate or inhibit the process of the Court by depriving the plaintiff of judgment obtained in the action.

How is a freezing order made?

Applications for freezing orders can be made at any stage of the proceedings, including before proceedings are commenced and after judgment.

A Court is empowered to make a freezing order, with or without notice to the respondent, to prevent the frustration or inhibition of the Court’s process by seeking to meet a danger that a judgment or prospective judgment will be unsatisfied because the assets are:

  • Removed from Australia or from a place inside or outside Australia,
  • Disposed or, dealt with or diminished in value

The CDPP does not have to show a positive intention on the part of the respondent ti frustrate any judgment of the Court. It is sufficient that there is a danger that assets will be dealt with in a way which will prevent the applicant from recovering on any judgment.

Content of a freezing order

The value of the assets restrained should usually not exceed the maximum amount of the claimant’s likely claim.

The order should exclude dealings by the respondent with its assets for legitimate purposes, including payment of ordinary living expenses and reasonable legal expenses.

A freezing order remains in force until either the end of the period specified in the order or when the court makes a decision on an application for a restraining order to cover the account, whichever comes first. Generally it extends to a period of up to 3 working days, however extension(s) may apply.

The freezing order may be limited to assets in Australia, or in a defined part of Australia, or may extend to assets anywhere in the world. It may also cover all assets without limitation, assets of particular class or specific assets.

Defence to a freezing order

If a freezing order has been made against you, you will receive a written notice of the application.
You can oppose to the application to the continuance of the freezing order by applying to the Supreme Court for reconsideration.

Please note that contravention of a freezing order is a criminal offence punishable by a fine and/or imprisonment for up to 5 years.

For more information, please refer to the Judicial Commission of NSW’s ‘Freezing orders’ section.

B- RESTRAINING ORDER

A restraining order prevents dealings with the property of persons reasonably suspected of having engaged in serious crime-related activity or of persons whose interests in property are reasonably suspected of being property derived from serious crime-related activity.

All restraining order applications are to be decided by the Director on a case-by-case basis and should be made as early as possible to preserve property for possibly confiscation and/or compensation for victims of crime.

How is an application for a restraining order made?

The CDPP has the right to apply for a restraining order if:

  • A person has been convicted of, charged with, or it is proposed that he or she be charged with, an indictable offence; or
  • A person is suspected of having committed a serious offence within the last 6 years; or
  • There are reasonable grounds to suspect a person has committed a terrorism offence.

In addition, the CDPP must complete an affidavit (sworn statement) affirming that their beliefs the property is subject to the effective control of the suspect; or that the property is proceeds of the offence.

It is important to note that a restraining order may be made by the Court even if there is no risk of the property being disposed of or otherwise interfered with.

Contravention of a restraining order is a criminal offence if the person had notice that the interest was subject to the restraining order. The offence is punishable by a fine and/or imprisonment for up to 5 years.

Court process

During the hearing, the Court may make either of the following orders:

  • That the property must not be disposed of or otherwise interfered with by any person; or
  • That the property must not be disposed of or otherwise dealt with by any person except in the manner and circumstances specified in the order.

Based on the discretion of the Court, the scope of the restraining order may vary as the order may be issued over one or more of the following:

  • All or specified property of the suspect;
  • All property of the suspect other than specified property;
  • Specified property of another person that is subject to the effective control of the suspect;
  • Specified property of another person that is proceeds of the offence.

A restraining order operates in rem (i.e. against the property) and is enforceable at large. As such, there is no respondent to an application for a restraining order. This is to be contrasted with an in personam order which operates against a person (e.g. a pecuniary penalty order).

What are the consequences of a restraining order?

If a restraining order has been made against you, you will receive a written notice of the application.
Once notice is received, you have 6 months to apply for an exclusion order with leave of the Supreme Court. You will need to prove that the property was not used in connection with any unlawful activities, was not derived from any unlawful activity and was lawfully acquired.

If you were not notified that an application for a restraining order was made against you before the restraining order was granted, once you are notified you have 28 days to revoke the restraining order.

To revoke the order, the Court must be satisfied that:

  • There are not grounds on which to make the order at the time of considering the application to revoke the order, or
  • It is otherwise in the interest of justice to do so.

Please note that the restraining order will remain in force until the Court revokes the order. It will not be suspended while you are applying to revoke the order.

Call the experienced team at GMH Legal to assist you in your matter. A free consultation with GMH Legal is an opportunity to gain deep insights into your legal situation and all of your options.

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