Modern Criminal Property Confiscations and Proceeds of Crime legislation is designed to disgorge ill-gotten gains and is typically drafted broadly to achieve that objective. Specifically:
- Any property that is ‘derived’ from the commission of a wide category of offences is at least prima facie liable to confiscation or forfeiture,
- There will be provision to allow property to be traced, and
- Even if property is only partially derived from crime it will remain tainted and liable to forfeiture.
Statutory recognition of victims rights
Some legislation, such as the Confiscation Act 1997 (Vic), ((See for instance s 1(h).)) contemplates the obvious possibility that property may be both the proceeds of crime (ie derived from crime) and also property of an identifiable victim or group or class of victims. The Victorian Act allows the Director of Public Prosecutions to apply to restrain property of a suspect in order “to satisfy any order for restitution or compensation” that may be made under the Sentencing Act 1991 (Vic). ((See s 15(1)(e) of the Confiscation Act 1997 (Vic).))
Victims rights in Western Australia
In contrast, neither the Criminal Property Confiscation Act 2000 (WA) (CPCA) nor the Proceeds of Crime Act 2002 (Cth) (POCA) recognise victims.
In many cases common sense will prevail and the authorities will not, as a matter of public policy, take action that is prejudicial to a victim. History suggests that in some cases litigation between victims and the authorities will nevertheless occur.
Exclusion of property from proceeds of crime or confiscation actions
Where that occurs the following are capable of providing some relief to victims:
- The POCA provides that people with an interest in property can apply for exclusion of that property from restraint, ((See sections 29 – 31.)) and/or forfeiture. ((See sections 73, 94.))
- The CPCA provides for objections to confiscation. ((See sections 82 – 84.)) It also provides ((See section 152.)) that people with a charge over an asset may be compensated upon the sale of the asset by the State after confiscation. In the case of real property it may also be open to a person with an ‘interest’ in property to have that interest excluded from the declaration of confiscation. ((See section 30. Also note section 9(2) which on a literal interpretation provides that confiscated property vests in the State “free from all interests” (including registered interests). However in practice the State does not administer the Act in that fashion. See for instance Pellew v WA [2010] WASCA 103 at [11] per Pullin JA: “By some method of interpretation the State in fact does not treat [s 9(2)] as terminating a mortgagee’s interests in property but, as in this case, allows the mortgagee’s interests to continue to be recognised and paid out if there is eventually a sale of the property by the State.”))
In each case there is a catch.
Interest in property liable to forfeiture
The victim will need to establish an interest in the property that is liable to confiscation or forfeiture. Merely establishing an in personam right to damages, whether in tort, contract, misleading and deceptive conduct or otherwise, against the offender will not provide the victim with an interest in any such property. Accordingly, the victim will not be able to defeat confiscation. As such damages are likely to be an inadequate remedy.
I suggest equitable interests, particularly constructive trusts but perhaps also equitable liens and charges, can in some cases provide the answer.
Examples
Scenarios in which victims’ rights may come into conflict with the Commonwealth or State include:
Bank victim scenario
A rogue employee of a bank steals from or defrauds the bank thus obtaining a sizeable sum. The funds are used to purchase an investment property which appreciates significantly in value. The State or Commonwealth ((Perhaps via an allegation of money laundering contrary to s 400.9 of the Criminal Code (Cth).)) pursues the property, including that part of its value derived from the appreciation, on the basis that it is all derived from the criminal offence.
The bank could argue that the employee, as a fiduciary, is liable to account for his profits made as a result of a breach of that duty. The bank could seek the imposition of a constructive trust, aided by equitable tracing, to make a claim over the property. The full value of the property can be excluded from confiscation and realised by the bank.
Casino victim scenario
A customer of a casino, by fraudulent means, makes sizeable winnings. The winnings are clearly the proceeds of the fraud and would be susceptible to confiscation.
The casino may have an action in breach of contract; namely that the customer has breached the gaming rules. However damages will not defeat confiscation.
Equitable relief, for instance a constructive trust, is also likely to be open. As in the first scenario, if the Court accepts this claim it will provide a defence to confiscation in favour of the victim.
Conclusion
In the vast majority of cases it will be possible to achieve a satisfactory outcome with the authorities either by public interest submission or negotiation. But before any such steps are taken expert advice should be sought on how to frame the client victim’s rights. If the claim is framed incorrectly (in terms that do not give rise to an interest in the subject property) there is a risk of failure.
Please note: While all care has been taken in the preparation of this information, nothing on this website constitutes legal advice and this blog post does not contemplate your specific circumstances.
Wanted to know if someone was in prison awaiting sentencing which may result in confiscation from proceeds of crime, a boat they owned was sold and signed over to someone else is the boat still subject to confiscation from new owner ?
The answer to Shane’s question depends on the details of the situation. I am assuming the confiscation would be in Western Australia under the Criminal Property Confiscation Act 2000. The answer is likely (but not necessarily) going to be the same in other States.
The situation is determined by reference to section 84 (and/or possibly ss 82 or 83) of the Criminal Property Confiscation Act, together with the interpretative provisions.
The most important questions are:
1. Did the buyer know the boat was frozen when it was purchased?
2. Should the buyer have known the boat was frozen when it was purchased?
3. Did the buyer pay market value for the boat?
If the answers are No, No and Yes, the buyer will likely be able to keep the boat.
This is a general answer, and not legal advice. It should not be relied upon. If you would like legal advice on your specific scenario please feel free to call me on 0417 921 300.
Liability limited by a scheme approved under the Professional Standards Legislation.
I was convicted for possision with intent and sentenced. I was deemed a drug trafficker and assets sold but the drug trafficker declaration was made in error and my bank acc was umfrozen and given back. However my assets were not. Assets valued $300 000. Also it remains on my record that I am a drug trafficker which prevents me from employment.
The situation Liza describes is very unusual. Apart from cases where people successfully appeal their drug conviction, its rare to have the drug trafficker declaration overturned. This is because the Courts have no discretion over these declarations. If a person is convicted of a sufficiently serious offence the declaration must be made. Once it is made their property is automatically confiscated.
There is not enough information in Liza’s post for me to say this applies. However there are some grounds other than the drug trafficker declaration that Liza’s assets may have been confiscated on. For instance if Liza did not file an objection with the Court in time, assets can be confiscated. Also the State can confiscate property on the basis that it is crime derived (basically the proceeds of crime) or crime used (for instance if a drug offence is committed on land, that land will be crime used).
Liability limited by a scheme approved under the Professional Standards Legislation.
If ur property has been confiscated can you rent the house out ? This is after a objection notice to the court and police for property? Married couple since house was built husband is facing charges of sell and supply what is the wifes rights if she can no longer keep up the mortgage can she rent out property until it is dealt with in court?
Maria’s question is quite common. Usually the DPP will agree to the Court making orders under s 91 of the Criminal Property Confiscation Act 2000. These are called control and management orders. The DPP may require that the rent be paid to the Public Trustee who will use it to pay the home loan.
Obviously every case is slightly different, and it can depend on the amount of equity, the rent that will be received and the repayments that are due.
The really important thing to know is that nobody should rent out any property that is frozen without the Court’s permission. They would commit an offence under s 50 (punishable by up to 5 years imprisonment and/or a fine equal to the value of the property).
This is general information only and is not advice. I am happy to be contacted on 0417 921 300 to discuss the situation.
I was wondering if I am able to claim for failure to reasonably maintain property. My car was impounded 2yrs ago I have been cleared of all charges and they have returned the car if it isn’t in the same condition as when they took it is there anything I can do please
Although section 137 of the Criminal Property Confiscation Act limits the liability of the State and the police, it is still possible to make a claim against the State if you can establish the police did not in good faith take reasonable steps to protect the property. Every situation is different and whether a claim can be made will depend on how any damage occured.
The above is general information and doesn’t constitute legal advice. However I’m happy to discuss the situation with you Michele on a no obligation basis.
Liability limited by a scheme approved under the Professional Standards Legislation.
Scenario:
House inheritance from mother title in three names tenants in common;
Younger brother living in house;
He’s found in hotel with drugs (and he has been charged with an offence).
Freezing notice issues on this basis:
1.There are reasonable grounds for suspecting that the property is crime used and/or that the property is crime derived.
2. Potential drug trafficker against the younger brother.
No objection has been filed.
Question:
Is it possible to apply to the courts to control and manage the property while the freezing order is in force.
In answer to Peter’s question, the first thing to say here is that the siblings (all 3 of them) MUST LODGE AN OBJECTION WITHIN 28 DAYS. If they fail to do that the entire house (that is the interest of all 3 of them) will be automatically confiscated on the crime-used/crime-derived ground. There is then nothing that anyone can do to help them.
Answering the question though – the short answer is No. Until an objection is filed the Court does not have any involvement in the matter, and thus does not have a proceeding in which to make a control and management order.
So I repeat, its essential that an objection be lodged in time to the Supreme Court.
As an aside, the fact the property is an inheritance yet has been frozen on the crime-derived ground is curious (to say the least). I would be asking for a copy of the application given by Police to the JP who issued the Freezing Notice. There may be a basis to bring what is called a judicial review challenge (something outside the Criminal Property Confiscation Act) against the issue of the Freezing Notice. If there is a proper basis to do that the DPP will usually direct the Police to withdraw the notice on that ground.
I was declared a drug trafficker and all my assets taken under the CPCA, including my house I had owned 30 years and paid for with proceeds of an MVIT claim. My 2 youngest children, both under 18yo at the time, fought this through the Supreme Court and lost. The Judge said he is not able to consider what is fair and just under this Act. Is there anything else that can be done before they sell my home, or was this the only avenue in which to fight this confiscation?
In answer to Valerie’s question, the only obvious way to fight confiscation on the drug trafficker ground in these circumstances is for the kids to bring an objection in the Supreme Court on the basis that they are a partial owner of the property or that they contributed to the cost of its purchase. Obviously with kids under 18 that will usually be highly unlikely.
This is in contrast to property that the State seeks to confiscate on a crime-used basis. In that scenario if a child can demonstrate undue hardship (along with certain other factors) it may be possible to save the family home.
This is yet another example of the unfairness of the drug trafficker regime.
Indeed I also note that under the drug trafficker regime there is no way to save MVIT or other personal injuries compensation payouts. This is in contrast for instance to bankruptcy, where such assets may be protected.
This is a general comment only and is not legal advice.
My ex partner has been found guilty of drug trafficking
I have a criminal lawyer who comes highly recommended however hoping for anoth opinion
We were together over 10 years
We still have properties in joint names that have be seized and now will head into confiscation
One property (the main family home) he owned prior to meeting me. It has been re-mortgaged with a loan in both our names, but the title remained in his name. He made the mortgage payments from his wages.
I am aware confiscation is nothing similar to what I would have been entitled to in family court which is now not an option
While we were together through my own income I paid our rent and all other living expenses
Can this be a way to try and save some of my house ? I’m aware this will all need to be listed for the DPP
Any advice would be hugely appreciated
The scenario immediately above is fairly common, albeit with at least 1 slightly unusual twist: the fact this person has their name on the loan over a house that has solely the drug trafficker named on title. In a confiscations case that is probably a good thing, as it is hard reliable evidence that the 2 people intended to combine their finances for what is sometimes called a common endeavor.
A case like this wont be easy to prove, and is likely to require a forensic accountant to review the respective income and contributions of the partners. But is a case worth exploring further.
This is a general comment only and is not legal advice.
I was taken to court for drug and suspected proceeds of crime as I had 4700 cash on me. The victoria police ended up withdrawing the proceeds of crime charge but are making it so hard to get the 4700 cash back. What are my rights?
Assuming Jessie’s money has not been the subject of civil (non-conviction based) confiscation action under Confiscation Act 1997 (Victoria), then I would suggest Police have little choice but to return the money. The difficulty in this scenario is that to hire a lawyer to try and recover $4,700 may not be cost effective.
I suggest Jessie contact the Victorian Government Solicitor’s Office. They have responsibility for defending legal actions on behalf of Victoria Police. On their website (https://vgso.vic.gov.au/content/contact-directory) they publish direct contact details for the lawyer in the VGSO who has responsibility for Police. It could be worthwhile contacting him to see if they are able to resolve it.
This is a general comment only and is not legal advice.
Hi, if a staff member has embezzled money from a company and the staff members assets are frozen under POCA. How can the company seek to have the funds returned to them upon sentence? This incident occurred in Canberra.
Anthony should definitely contact the DPP or AFP. They may agree to what is called “exclusion” of property from restraint, to return it to its rightful owner. If the DPP/AFP do not agree the company should seek legal advice.
My partner is in jail awaiting charges for intent to sell/supply but he had less than a trafficable amount. We had 15 grand on us (most which was mine) and I have bank statements to prove all cash withdrawals. We have been issued a freezing notice by the magistrates court but I can not locate the forms for objection anywhere? There are only forms for Supreme Court available? Do I need to file the objection through the Supreme Court? Please help!
Anna MUST file an objection within 28 days of being given the freezing notice or 28 days of becoming aware of it (whichever occurs first).
The objection must be lodged in the Court specified in the freezing notice. If the freezing notice says the Magistrates Court that is where Anna must go. The Magistrates Court at Perth keep blank copies of the objection form at the counter.
There is a filing fee on the objection (about $500, maybe a little more). It can be reduced if you have a concession card or file in another form demonstrating hardship.
Please note this is just general information and not advice.
My wife (seperated not divorced) was living in a property I had recently bought. I wished for her to live there to care for property as I work FIFO. Property deed and mortgage are in my name and I can show savings an income. Wife was just arrested on drug offences and the property frozen. I have been told it could be seized under proceeds of crime! What right do police have to do this and what can I do? I do not want to lose my house!
I assume Fred is in Western Australia.
In Fred’s scenario, Police may have issued the freezing notice for one or both of 2 different reasons:
1st on the basis that the house is “effectively controlled” by her; or
2nd on the basis that she “used” the house to commit her drug offences. If she kept drugs at the property that would be enough for them to freeze it on this basis.
It is essential that Fred gets urgent legal advice. Once he has a copy of (or is aware of) the freezing notice he only has 28 days in which to file an objection with the Supreme Court. If he fails to file in time the house is automatically confiscated. And there is no way of undoing that in many cases.
Assuming he objects in time, Fred may be able to save his house:
– In the first scenario by satisfying a judge that “the property [was not] directly or indirectly subject to the control of [his wife]” and that the property was not “held for the ultimate benefit” of his wife (section 156 of the Criminal Property Confiscation Act).
– In the second scenario by satisfying a judge that he “did not know, and had no reasonable grounds for suspecting, that the property was being or would be used in or in connection with the commission of the relevant confiscation offence” (section 153(2)(a) of the Act)
I stress this *not* legal advice and the comments above are necessarily general in nature.
Hi Edward,
Thankyou for your advice. I’ll find a solicitor. I am in NSW does this make a difference, is the law different?
Thankyou,
Fred
The law in NSW is different but there are some similarities. I am aware of the relevant legislation.
I am happy to speak to you Fred if that would assist. You are welcome to call me on 0417 921 300. I do not charge for initial phone conversations.
I’m trying to buy a vehicle from a private seller and have sought finance to do so. The report from the vehicle inspection the other day said the vehicle had been under the proceedings of crime act and will be for another two years ( which could all be extended).
What is the risk in purchasing the vehicle?
Hi Louise, it would be a big risk to buy the vehicle without further inquiry. You might end up with the debt and no car (if the Police come and take it). I would strongly advise that you get legal advice (if the car is special or unique) or look to find another car.
Please note this is just general information and not advice.
Hi,
I am the victim of a very violent crime. The police confiscated/froze his assets (houses) under the sentencing act. A judge will award damages. How do I receive any compensation awarded? Do the police sell the properties to pay me or do the Courts sell the property?