Assets Forfeiture Order

An assets forfeiture order is a court order allowing the State of NSW to confiscate assets or property belonging to a person engaged in serious crime related activities or who has obtained the assets or property illegally. Once confiscated, the assets or property are used to recover proceeds of crime or a debt otherwise owed in connection with criminal activity. 

The Criminal Assets Recovery Act 1990 is the Act that governs assets forfeiture orders and the associated restraining orders. The NSW Crime Commission can apply for orders under this Act.

Restraining Orders

The NSW Crime Commission can apply to the NSW Supreme Court for an order to ‘restrain’ or stop persons from dealing with property (or an interest in property) or assets. This is typically done to stop a person from selling or transferring property or assets that are believed to be the proceeds of crime or substantially derived from crime. Examples include seeking restraining orders over a house which is believed to have been fraudulently purchased (or purchased with stolen money), a restraining order over a luxury car which was said to have been bought with money made from supplying drugs, or a restraining order of money in a bank account which was said to have been made by criminal activity (such as performing a ‘hit’, supplying drugs or ‘washing’ proceeds of crime).

An application can only be made in relation to interests in property ‘derived from’ serious crime related activity’. It can also only be made against a person who lives in New South Wales or where the property is situated in New South Wales.

A restraining order is usually applied for by the Commission before a formal application for forfeiture is made. 

A restraining order must be made by the Supreme Court where:

1.  An authorised officer files an affidavit which states certain things including (but not limited to) that the officer suspects the person has engaged in a serious crime related activity, that they have acquired the property because of serious crime related activity and that the person’s unexplained wealth of $250,000 or more (in cash) or $2,000,000 or more otherwise; and
2. The Court considers that there are reasonable grounds for the Officer’s suspicions. 

When Can an Application for Assets Forfeiture be made?

The NSW Crime Commission can make an application for an assets forfeiture order to the Supreme Court within 6 years of the alleged serious criminal activity.

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

The Assets Forfeiture Process

Once an application has been made to the court for an assets forfeiture order, written notice of the application must be given to any person affected by the application. 

The application for assets forfeiture will be listed before the Supreme Court. There is typically a number of procedural mentions before a hearing date for the application is set. There will typically be orders for the Commission to serve its evidence on the person or persons who the order is sought against, and for those persons to serve any evidence in response. There may be other procedural orders including the filing of written submissions, or setting of other legal arguments. 

An assets forfeiture order can only be granted after a hearing in court. The person who the order is sought against is entitled to appear at the hearing. Failure to do so may result in orders being made in the person’s absence. Another person claiming an interest in the property may also be able to appear. 

What does the Commission have to Prove?

Section 22 of the Criminal Assets Recovery Act contains the test for what needs to be established:

The Supreme Court must make an assets forfeiture order in respect of an interest in property … if the Court finds it to be more probable than not that the person whose suspected serious crime related activity, or serious crime related activities, formed the basis of the application for the assets forfeiture order was, at any time, engaged in—

(a)  a serious crime related activity involving an indictable quantity, or

(b)  a serious crime related activity involving an offence punishable by imprisonment for 5 years or more.

The court must be satisfied on the balance of probabilities. However, the court does not need to find that any particular offence was committed, nor that the assets named in the application derived from the alleged criminal activity.

Opposing a Forfeiture Order

Persons can oppose or argue against an assets forfeiture order being made. They can do this in a number of ways including:

1. By disproving parts of the evidence or case the Commission relies on;
2. By proving the source of funds used to acquire the property named in the application was not derived from serious criminal activity; and
3. By arguing that no serious criminal activity has been engaged in.

Legal advice isn’t strictly necessary, but it is strongly recommended. This is because, in opposing the order, the person will likely need to file evidence and make submissions to the court. 

The evidence and submissions will likely deal with alleged (or sometimes proven) criminal activity. The evidence used to oppose a forfeiture order may be used in any related criminal proceedings, and could adversely impact the person’s ability to defend themselves. In particular, in a criminal prosecution the accused person does not have to give a statement to the prosecution in advance of their hearing or trial. The prosecution therefore is not on notice of what their defence is or evidence might be. However, if the person gives evidence in relation to a restraining or forfeiture order they may reveal their version or defence and allow the prosecution time to gather evidence to undermine or disprove such (which they otherwise wouldn’t have been able to do).  

What Happens if an Assets Forfeiture Order is made?

On an assets forfeiture order taking effect the property is forfeited to the Crown. The NSW Trustee and Guardian may take possession of the property on behalf of the Crown, if it has not already done so.

A person must not dispose of or interfere with property that is the subject of an assets forfeiture order. A person who does is guilty of an offence, punishable by a fine equivalent to the value of the property (as determined by the Supreme Court) and/or by imprisonment for a period of up to 2 years.

The dependants or spouse of a person against whom an assets forfeiture order is made may apply for relief against forfeiture.

An appeal can also be filed in certain circumstances. 

Exclusion Orders

A person who a restraining order is made against may file an application for an exclusion order, which may exclude some or all of the property from the order. The court must be satisfied on the balance of probabilities that the interest in question was not illegally or fraudulently obtained.

An exclusion order may be made before an assets forfeiture order is made (i.e. when there is a restraining order only or when the application for the assets forfeiture order is made). However, after the assets forfeiture order has been made, any application for an exclusion order can only be lodged within 6 months of when the order took effect, and only with leave of the Supreme Court.

Relief Against Forfeiture

The dependants and spouse of a person who an assets forfeiture order is made against may apply to the Supreme Court for relief against forfeiture. The court must be satisfied that:

• The applicants will suffer hardship as a result of the assets forfeiture order; and
• That the applicants had no knowledge of any serious criminal related activities or illegal activities of the person subject to the asset forfeiture order.

Seeking Legal Advice

If you have been issued a restraining order or given written notice of an assets forfeiture order application, it is essential that you seek legal advice immediately.