24. Crime (Confiscation of Profits) Act 1993

24.1 Introduction

The Crime (Confiscation of Profits) Act 1993 is designed to divest an accused person of tainted assets or deprive him or her of the benefits of their crime upon conviction. The Act also provides for an unexplained wealth declaration to be made against an individual which is not conviction-based. Additionally, the Act provides mechanisms to restrain a person from dealing with their tainted assets pending the further investigating and disposal of charges.

Unexplained wealth applications are to be dealt with by the Unexplained Wealth Unit (the Unit), comprised of prosecutors and a forensic accountant from the Office of the Director of Public Prosecutions and police officers from Tasmania Police.
Conviction-based confiscation and pecuniary penalty order applications are to be applied for by the prosecutor with conduct of the case.

Such applications should be considered from the outset in all cases and should not be considered as an “optional add-on” to sentencing proceedings or the conduct of a prosecution.

24.2 Forfeiture orders and pecuniary penalty orders

Section 11 provides that upon conviction an authorised officer may apply for a confiscation order (either a forfeiture order or a pecuniary penalty order, or both) but s12 requires that written notice of the application must be given to the accused and any other person who may have an interest in the property. Notice should be given in all relevant cases.

The quantum of a confiscation order can be agreed with defence counsel. If no agreement can be reached then evidence about quantum will be required and the prosecutor must ensure that he or she is in a position to prove the amount.

The prosecutor should be mindful of the effect that the making of a confiscation order has on the sentence to be imposed by the court and make the application for such an order prior to sentencing being concluded (see Stocks v R [2000] TASSC 106 and, in particular, Underwood J at [16]):

…In R v Hoar (1981) 34 ALR 357, the Full Court of the Federal Court was concerned with the provisions of the Fisheries Act (NT), s48, subs(1) and (2) of which provide:

(1) Anything seized under this Ordinance may, on conviction of a person for an offence in connexion with which that thing was seized, at the discretion of the court recording the conviction, be forfeited to Her Majesty.

(2) The forfeiture shall be in addition to and not a part of a penalty imposed under this Ordinance.

Again, notwithstanding the statutory injunction, review of the impugned penalty proceeded upon the basis that the forfeiture was a relevant consideration in fixing an appropriate penalty. This aspect of the case was approved on appeal to the High Court, see R v Hoar (1981) 148 CLR 32 at 39.

Although the scheme of the Act contemplates that a confiscation order may be made after sentence has been imposed, I do not thereby see any warrant for finding an implied fetter on the discretion conferred by the Code, s389(3). The sentencing discretion is quite often exercised in the light of future uncertainties, eg, whether an accused will lose his or her employment by reason of the conviction or whether imposition of a custodial sentence will result in the loss of property or, indeed, even whether an accused will not re-offend as he or she contends.

In concluding, as I do, that there was no inhibition on the learned sentencing judge taking into account the confiscation orders he made when exercising his discretion to fix sentence, I say nothing at all about the weight or impact of those orders in the sentencing process. That is an entirely different matter.

If an application is not made as part of the sentencing process, then the State has six months to make the application following conviction. Once that time has elapsed, no application can be made (s11(2)) and any property which might have otherwise been the subject of confiscation will have to be returned to the accused. Equally, an application made and determined may be revisited with the leave of the court (see the special circumstances in s11(5) and (6)).

The prosecutor should be aware that the quantum of the pecuniary penalty order is that which the accused received. The Act specifically excludes outgoings for the purposes of the assessment of quantum. For example, where an accused admits to purchasing $5,000 worth of drugs which he or she sold for $10,000, the pecuniary penalty order is for $10,000 as the $5,000 is an outgoing which is ignored for the purposes of assessment (s22(6)).

Where a private individual has suffered a loss a compensation order should be sought in the name of that individual under s68 of the Sentencing Act 1997 rather than an order under this Act. Any property or money recovered under this Act cannot be paid to a private individual but is paid into the Crime (Confiscation of Profits) Account (s79).

24.3 Restraining orders

24.3.1 General

Section 26 provides for an application to be made to the Supreme Court for the property of a person convicted, charged or about to be charged to be restrained. In certain circumstances, other persons’ property can be restrained.

The Supreme Court may make a restraining order against a defendant’s property or property he or she effectively controls where they have an affidavit from a police officer stating that the defendant has committed an offence and a belief that the property is either tainted property or the defendant has derived a benefit directly or indirectly from the commission of the offence and the court is satisfied there are reasonable grounds for holding that belief (s27(1), (4) and (5)).

24.3.2 Early notification

Where a police officer or a prosecutor forms the view that an alleged offender’s property should be restrained under s26 they should immediately consult the Unit. Generally speaking, such an application will only be made where there is a risk that relevant assets will be disposed of, although the court can make a restraining order irrespective of whether there is a risk of the property being disposed of (s27(6)). Once a referral is made a decision will be made whether the matter will be handled by a prosecutor within the Unit or a prosecutor within indictable crime. Such decision will be made by the Director or the Deputy Director in consultation with the Unit.

Once a referral is received from Tasmania Police, the prosecutor should request an immediate briefing from the investigating officer. If the assets under consideration are of a commercial nature the Public Trustee may be invited to the briefing if it is envisaged that the Public Trustee will have to administer those assets until such time as the charges are finalised.

A preliminary assessment should be made as to whether a restraining order may be required and, if so, what further information will be required for an application. Consideration will need to be given to monitoring orders, production orders and search warrants in the information gathering process.

In considering whether an application should be made, the prosecutor should have regard to the following:

• the nature of the tainted property
• the apparent strength of the State case
• the likely quantum of any confiscation order as against the value of the asset to be restrained
• the risk of dissipation or disposal of the asset

24.3.3 The application

The prosecutor should proceed with an application if sufficient grounds exist. The approval of the Director has to be obtained prior to any proceedings being instituted. The Director should be consulted very early in the process. If approval is given to commence proceedings, the prosecutor will need to prepare an affidavit of the investigating officer containing the following:

• details of the allegation against the person which must amount to a serious offence or details of the conviction for a serious offence (s26(1)(a) and (b))
• if seeking an ex parte order a statement that the person will be charged within 48 hours of the making of the order (s27(2))
• the potential value of any pecuniary penalty order and/or forfeiture order to be sought against the person and the basis for asserting that they are likely to be made (s27(1)(a) and (b))
• a full and truthful account of the evidence including any weaknesses or material pointing away from the person’s guilt
  (Note: the person who is to swear the affidavit must have that obligation specifically drawn to his or her attention before being invited to swear or affirm the affidavit.)
• precise descriptions of the assets to be restrained
• evidence detailing the risk of dissipation

In addition, an originating application either to be served (where there is no real urgency) or not served (where there is an urgent need to protect assets) needs to be prepared. The originating application not intended to be served is an ex parte application to seek an interim restraining order. This application must be forwarded with a covering letter to the Registrar briefly setting out the reasons for urgency, i.e. assets are about to be dissipated or possibly could be if a person is charged.

Ex parte applications are listed before a judge in chambers. The most usual orders, subject to the papers being in order, are the granting of an interim restraining order for a period of 14 days and an order that the application and supporting affidavits be served on affected parties. This is usually the accused but may also be a bank or other third party that holds, or has an interest in, the assets.

An affidavit of the service of these documents on the accused/respondent (and/or third parties) must be filed before the matter comes back before the court. When the matter comes back, usually before the same judge, final restraining orders should be sought. If final orders are made, a further requirement to serve documents may arise.

For the originating application intended to be served, proof of service of the application on the accused and supporting affidavits in the form of an affidavit of service is required to be filed and should be filed before the return date. Instructions to police for service need to make clear the need for personal service.

The matter is listed before the judge generally with the accused/respondent being present in person or being represented by counsel and final orders are made and filed in the usual way.

24.3.4 Important matters to consider

• The court can require that the State give an undertaking as to damages that may flow from the granting of the restraining orders (s27(7)). Instructions need to be obtained from the Director specifically on this point.
• When obtaining the final orders it is important to ensure that the order states that it “remain in force until further order” as without this the restraining order only has a statutory life of six months (s38(1)).
• It is also important to seek that the order includes that the respondent cannot dispose of or otherwise deal with the subject property “without the written consent of the Director of Public Prosecutions or an authorised officer within the meaning of s4 the Crime (Confiscation of Profits) Act 1993”. This is necessary because s26(3) provides the court with the power to make provision from the property restrained for the accused/ respondent’s reasonable living and legal expenses. To negate the need and cost associated with going back to court and varying a restraining order, the Director can authorise the release and sale, if necessary, of items of restrained property for the purpose of satisfying s26(3).
• A restraining order creates a charge against the real property to which it relates and s33(2) provides that a caveat may be lodged over the title to that property. A caveat should be lodged over the relevant title at the Land Titles Office as soon as possible following the making of an order or interim order.

Where the victim is a private individual generally the protection of such assets is a matter for the individual. However, the Director will consider application for a restraining order where the matter is urgent and if but for the restraining order it would defeat a compensation order made under the Sentencing Act 1997.

24.4 Unexplained wealth

In addition to conviction based orders, Part 9 of the Act provides for the Supreme Court to make non conviction-based orders for the forfeiture of an individual’s unexplained wealth upon application by the Director of Public Prosecutions.

Section 138 sets out what constitutes a person’s wealth; that is, all property that was acquired before or after the commencement of Part 9.

Section 139 defines unexplained wealth as the wealth of an individual that is greater than their lawfully acquired wealth.

Section 85 provides that any property or benefit that is a constituent of a person’s wealth is presumed not to be lawfully acquired by the person unless the person proves otherwise. Therefore, the onus is on the respondent to prove that the property or benefit was lawfully acquired.

Section 141 provides that the Director of Public Prosecutions may apply to the Supreme Court for an unexplained wealth declaration to be made against a person. Section 142(1) provides that at the hearing of an application under s141 the Supreme Court may make an unexplained wealth declaration. The court must make an unexplained wealth declaration if satisfied that it is more likely than not that the value of the person’s total wealth is greater than the value of the person’s lawfully acquired wealth.

Section 87 provides that the Director of Public Prosecutions, by written notice, can require a financial organisation to provide information in writing such as any bank accounts held by a person, the identity of the holder of a bank account, whether a transaction has taken place or is about to take place on a bank account, whether an account is open or closed and the balance of any account.

Section 88 provides that the Director of Public Prosecutions, by written notice, can require other organisations, i.e. the MAIB or the Public Trustee, to provide information or produce to the Director any record, information, material or thing in the custody or possession of the organisation.

These notices must be complied with within seven days (unless a longer period is specified) and failure to do so can result in a significant fine. The financial organisations and other organisations are protected, provided they comply with the notice in good faith. There are also secrecy provisions within the Act to prevent the organisations from disclosing that they have given information to the Director.

Please note the Director will not issue the above notices unless there are reasonable grounds to suspect a person has unexplained wealth. All applications by Tasmania Police for such a notice should be submitted in writing, setting out the basis for suspecting that a person has unexplained wealth.

Section 117 provides that upon application by the Director of Public Prosecutions the Supreme Court may make a wealth-restraining order. A wealth-restraining order can be sought ex parte (s117(2)). Section 125 provides that a wealth-restraining order can also be made in relation to co-owned property where the property is not divisible. The court needs to be satisfied that an application for an unexplained wealth declaration has been made or is to be made within 21 days of the wealth-restraining order being made. Section 118 sets out that the Supreme Court is to consider the grounds for making a wealth-restraining order, the primary ground being that the respondent has unexplained wealth. An interim wealth-restraining order can be made, however, it will expire after three days. A caveat should be lodged to secure the State’s interest if a wealth-restraining order is made. A person may object to property being restrained pursuant to s134 and then the State can respond to that objection. An affidavit for a wealth-restraining order should be made setting out the basis of the application.

If the Supreme Court makes an unexplained wealth declaration, the respondent must pay to the State the respondent’s unexplained wealth liability (s144). The respondent must pay the unexplained wealth liability within 31 days. If it is not paid the matter can be referred for recovery under the Monetary Penalties Enforcement Act 2005, as with a fine.

When drafting and filing an originating application intended to be served seeking an unexplained wealth declaration (s142(1)), the order must comply with s142(4). That is, on making an unexplained wealth declaration the Supreme Court is to specify the assessed value of the respondent’s unexplained wealth (s142(4)(a)), order that the respondent pay to the State the amount specified in the declaration as his or her unexplained wealth (s142(4)(b)) and make an ancillary order such as that there be no order for costs (s142(4)(c)). A consent order can be made pursuant to s186.

Any application or investigation into a person’s unexplained wealth must be approved by the Director and conducted by the Unit. Where police or prosecutors suspect an individual of having unexplained wealth they should contact the Unit. In particular, prosecutors should contact the Unit where large sums of money have been seized but cannot be forfeited on a conviction-based forfeiture order.
In determining whether to investigate a person for unexplained wealth, the following factors will be taken into account:

• the amount of the suspected unexplained wealth
• the complexity of proving the unexplained wealth
• the likelihood of recovery
• the potential to disrupt serious crime

As unexplained wealth proceedings are civil proceedings, orders may be made by consent. Thus, the amount of an order can be settled between the parties. The following factors will be taken into account in determining whether to settle a matter:

• the amount in issue
• the amount that could be agreed
• the likelihood of obtaining an order for a greater amount if the application is proceeded with
• the length of any contested application
• the cost of any contested application
• the likelihood of recovering any additional amount if successful in the application
• the effect on third parties
• the circumstances by which the unexplained wealth arose

Although unexplained wealth applications are civil-based and investigations and applications are quite independent of the criminal process, often investigations into a person’s unexplained wealth will coincide with that person being charged with a criminal offence. In those circumstances, prosecutors and the Unit should attempt, if possible, to progress the unexplained wealth application because any order may be a relevant factor in mitigation for the accused person. However, it should be recognised that this will not always be possible due to the complexity of the unexplained wealth investigation and the time frames for the criminal process.