Scrutiny of Acts and Regulations Committee

Alert Digest No 11 of 2007

Tuesday, 21 August 2007

[Back to Table of Contents]


Confiscation Amendment Bill 2007

Introduced: 7 August 2007
Second Reading Speech: 8 August 2007
House: Legislative Assembly
Member introducing Bill Hon. Rob Hulls MLA
Portfolio responsibility: Attorney-General


Purpose

By way of general background the Committee notes this extract from the explanatory memorandum –

A person, whose interest in property is restrained, is entitled to apply to the court for an order excluding his or her property interest from restraint. Similarly, a person, whose interest in property is forfeited, is entitled to apply to the court for an order excluding his or her property interest from forfeiture.

The primary focus of the Confiscation Amendment Bill 2007 is on amendments to the provisions in the Principal Act dealing with applications for, and the making of, exclusion orders. These provisions relate to restraining orders made for the purposes of a forfeiture order, automatic forfeiture or civil forfeiture and to forfeiture orders, automatic forfeiture and civil forfeiture orders.

The Bill amends the Act –

  • to make it clear that exclusion orders can only be made in relation to an applicant's interest in the property, rather than the entire property.

The Committee notes this extract from the Second Reading Speech –

The most critical of these amendments arises from a recent Court of Appeal decision in the Director of Public Prosecutions v. Phan Thi Le [2007] VSCA 18.

The effect of the majority's decision in that case is that, where a court is satisfied an exclusion order should be made, the court must exclude the whole of the property, rather than the applicant's interest in the property, from the restraining order or forfeiture (as the case requires). As was observed in the dissenting judgement in Phan Thi Le, the exclusion of the whole of the property would undermine the policy goal of the act, which is intended to prevent people convicted of serious offences from profiting from the fruits of their crime'.

To avoid these consequences and ensure the regime remains an effective tool in the fight against organised crime, the Bill amends the Act to make clear that exclusion orders can only be made in relation to an applicant's interest in the property, rather than the entire property. The Bill validates exclusion orders made prior to the Phan Thi Le decision, and the amendments also apply to applications that have been made but are yet to be determined.

It is necessary to cover pending exclusion order applications to ensure that criminals cannot defeat the confiscation regime where another person with an interest in restrained property obtains an exclusion order. This is fair and appropriate, noting that the amendments merely confirm the law as it was understood and applied prior to the Phan Thi Le decision, and that applicants continue to have a right to seek to protect their property interests.

  • to include a definition of ‘derived property’ and insert that term in a number of sections of the Act to ensure that restraining orders for automatic or civil forfeiture cannot be defeated by arguing that the property was not ‘tainted’ in relation to the specific offence with which the defendant has been charged or a person is reasonably suspected of having committed.

Note: The applicant for the exclusion order will bear the onus of proving that the property itself was not used in, or acquired directly or indirectly through, any illegal activity.

  • to clarify the operation of the ‘effective control’ test in applications for exclusion of an interest in property from a restraining order or forfeiture by non-defendant applicants.

The Committee notes this extract from the Second Reading Speech –

This amendment is designed to address arguments that where, for example, a defendant is in custody, he or she no longer has effective control of the property.

Note: The amendment will require the applicant to satisfy the court that the applicant's interest in the restrained or forfeited property was not subject to the effective control of the defendant at the time the defendant was charged or his or her property restrained, whichever occurred earlier. The same amendment is made in respect of restraining orders for the purposes of civil forfeiture or a civil forfeiture order, except that it applies to the person reasonably suspected of having committed a Schedule 2 offence.

  • to insert a definition of sufficient consideration in the Act.

The Committee notes this extract from the Second Reading Speech –

It makes clear that transfer of an interest in property for less than market value is not a sufficient basis on which to have a property interest excluded from restraint or forfeiture. This is consistent with the original policy intent indicated in the second-reading speech for the Confiscation Bill that 'The bill enables a court to restrain and confiscate tainted property that has been transferred for less than full value'.

Note: This definition will mean that, to succeed in obtaining an exclusion order, a non-defendant applicant must prove that (among other things) he or she acquired his or her interest in the property at market value and not, for example, by way of gift or transfer based on natural love and affection.

Content and Committee comment

[Clauses]

[2]. The provisions in the Bill come into operation on the day after Royal Assent.

[5]. Amends section 21 of the Act which deals with the determination of applications for an exclusion order relating to a restraining order for an alleged Schedule 1 offence and makes it clear that an application for, or making of, an exclusion order relates to an applicant's interest in the restrained property, rather than the entire property.

[6]. Amends section 22 of the which deals with the determination of applications for an exclusion order relating to a restraining order for the purposes of automatic forfeiture (i.e. on the basis of an alleged Schedule 2 offence) and makes it clear that an application for, or making of, an exclusion order relates to an applicant's interest in the restrained property, rather than the entire property.

[8]. Amends section 24 of the Act, which deals with the determination of applications for an exclusion order relating to a restraining order for the purposes of civil forfeiture. Such a restraining order is made on the basis that a police member suspects on reasonable ground that the property is tainted property and makes it clear that an application for, or making of, an exclusion order relates to an applicant's interest in the restrained property, rather than the entire property.

[10]. Amends section 50 of the Act, which deals with the determination of applications for exclusion orders for property subject to a forfeiture order and makes clear that an application for, or making of, an exclusion order relates to an applicant's interest in the forfeited property, rather than the entire property.

[11]. Amends section 52 of the which deals with the determination of applications for exclusion orders for property subject to automatic forfeiture and makes it clear that an application for, or making of, an exclusion order relates to an applicant's interest in the property subject to automatic forfeiture, rather than the entire property.

[12]. Amends section 54 of the Act, which deals with the determination of applications for exclusion orders for property subject to a civil forfeiture order and makes it clear that an application for, or making of, an exclusion order relates to an applicant's interest in the property subject to a civil forfeiture order, rather than the entire property.

Retrospective validation – Interest in excluded property

[17]. Inserts new 176 to 178 in Act.

The new section 176 validates any exclusion orders made prior to the commencement of these amendments that would have been valid had the amendments clarifying that such orders can only relate to the applicants' interest in property (rather than the whole property) then been in operation.

Notes

  1. The amendments exclude from their operation the rights of the parties in the Court of Appeal proceedings in DPP v Phan Thi Le (No. 3723 of 2006).

  2. The new section 177 provides that applications for exclusion orders that were made before, on or after 15 February 2007 (the date on which the Court of Appeal handed down its judgement in DPP v Phan Thi Le [2007] VSCA 18), but have not been determined before the commencement of the Bill, are to be determined as if clauses 5(1), 6(1), 8(1), 10(1), 11(1) or 12(1) of the Bill, as the case requires, had been in operation at the time the application was made. This ensures that any exclusion order resulting from a pending application relates to the applicant's interest in the property, rather than the entire property.

New section 178 provides that the new definition of sufficient consideration only applies to applications for exclusion orders made after the commencement of that definition.

[19]. Provides for the automatic repeal of this amending Act on the first anniversary of its commencement.

Charter of Human Rights and Responsibilities Act 2006

Charter rights – Right to property, Protection of family and children (residency and family unity), Right to privacy (interference with a person’s home)

Keywords: Restraint and forfeiture of property – Excluded property to mean any interest in property not just the whole of the property – validation of past orders saving for proceedings currently on foot

Amendments made by the Bill make it clear that an application for an exclusion order relates only to the applicant’s interest in the property and not the whole of the property. The Committee notes that the amendment does not affect any applicant adversely rather the amendment clarifies the original intent of the Act. The Bill also validates past exclusion orders that have been made in the past on the basis that those orders when made were considered to interpret the law as it was thought to have been commonly interpreted prior to a decision of the Supreme Court which cast doubt on that common interpretation. New sections 176 and 177 respectively validate past orders and apply the amended sections to existing applications. The Committee notes that whilst pending applications are to be treated under the amended provisions there is an exception in respect to a proceedings currently before the courts.

Keywords: Ambit of property subject to Act – ‘derived property’ as well as ‘tainted property’ – new definition catches property derived from any unlawful activity whether the immediate subject of the charge or not.

The Committee notes that the insertion of ‘derived property’ in a number of relevant sections to the Act further limit the circumstances in which an exclusion order may be made. After these amendments take effect an applicant must prove that property is not derived from any unlawful conduct whether the property is the object of the immediate charge or not. These amendments have the effect of narrowing the scope of exclusion orders in the sense that a wider net is cast on the property available fro restraint or forfeiture. Therefore the amendments engage the Charter right to property (section 20).

The Committee notes that in respect to exclusion orders the applicant bears the onus of proof on the balance of probabilities to satisfy the court that the applicants interest in property in not tainted or derived property. The Committee accepts that a reverse onus of proof may be justified in circumstances where knowledge of factual circumstances may be peculiarly in the possession of one party, in this case the applicant for the exclusion order.

The Committee notes the Statement of Compatibility concerning the inclusion of ‘derived property’ in a number of sections in the Act and considers that a reasonable and proportionate balance must be struck between the interests of the State in discouraging criminal activity through confiscation and the property rights of individuals with innocent interests in property. The Committee notes generally that international law regards confiscation and forfeiture in the administration of the criminal justice system does not breach human rights (right to property).

Keywords: Meaning of ‘effective control’ of property – test is effective control of property on earlier date of when person charged or when property restrained

The Committee notes that the amendments will require a person to satisfy the court that his or her interest in the restrained or forfeited property was not subject to the effective control of the defendant at the time they were charged or their property was restrained, whichever occurred earlier. The Committee observes that the amendment is designed to overcome situations where the defendant is in custody and seeks to argue that they are, because of that fact, no longer in ‘effective control’ of the property.

The Committee notes the amendment clarifies the intent of the ‘effective control’ and does not directly engage any Charter right.

Keywords: Exclusion orders where transfer for valuable consideration - What is sufficient or valuable consideration – transfer to reflect market value – ‘love and affection’, ‘gifts’ and certain promises not valuable consideration – sham transactions - Charter rights engaged – Property rights (section 20) – Protection of families and children (section 17) – Right to privacy (family home) (section 13).

The Committee notes that amendments introduce a new definition of ‘sufficient consideration’ which make it clear that transfer of an interest in property for less than market value is not a sufficient basis on which to have a property interest excluded from a restraining order or from forfeiture.

The Committee notes the amendment is designed to prevent criminals shielding criminally acquired property from forfeiture by means of sham transactions.

The Committee notes that this amendment engages Charter rights in that they subject a greater range of property (possibly including a family home) to prospective restraint and forfeiture. One of the Charter rights so engaged is the right of protection of families and children (section 17). In this respect the Committee observes the provisions in respect to a court’s discretion to take into account circumstances that may give rise to hardship (refer to sections 14(4), 26 and 45 of the Confiscation Act 1997 below).

14 Restraining orders

(4) A restraining order may, at the time it is made or at a later time, provide for meeting—

(a) the reasonable living expenses (including the reasonable living expenses of any dependants); and

(b) reasonable business expenses—

of any person to whose property the order applies if the court that makes or made the order is satisfied that these expenses cannot be met from unrestrained property or income of the person.

26 Further orders

(1) The court may, when it makes a restraining order or at any later time, make such orders in relation to the property to which the restraining order relates as it considers just.

45 Relief from hardship

(1) If a court is satisfied that hardship may reasonably be likely to be caused to any person by a forfeiture order or a civil forfeiture order made by that court, the court—

(a) may order that the person is entitled to be paid a specified amount out of the forfeited property, being an amount that the court thinks is necessary to prevent hardship to the person; and

(b) may make ancillary orders for the purpose of ensuring the proper application of an amount so paid to a person who is under 18 years of age.

In light of the ameliorating effect of the provisions relevant to hardship the Committee accepts the need to exclude sham transactions for less than market value from the exclusionary provisions of the restraining and forfeiture order regime provide in the Act.

The Committee makes no further comment

Return to the Table of Contents


Land (Revocation of Reservations) Bill 2007

Introduced: 7 August 2007
Second Reading Speech: 8 August 2007
House: Legislative Assembly
Minister responsible: Hon. Peter Batchelor MLA
Portfolio responsibility: Minister for Community Development


Purpose

The Bill provides for the revocation of reservations relating to the bed and banks of Lake Condah in order to transfer that land to the Gunditjmara people. The Bill also makes revocations relating to certain lands at South Melbourne, Daylesford and Beechworth.

Content and Committee comment

[Clauses]

[2]. The provisions in the Act come into operation on the day after Royal Assent.

[3]. Provides for the revocation of a permanent public purposes reservation relating to the bed and banks of Lake Condah.

The Committee notes this extract from the Statement of Compatibility –

The aspect of the Bill which will limit freedom of movement is the revocation of the public purposes reservations for Lake Condah. On 30 March 2007 the Federal Court made a consent determination for Gunditjmara native title. The purpose of this aspect of the Bill is to enable the completion of a native title settlement package under which the State government has agreed to transfer freehold title of the Lake Condah Reserve to the Gunditji Mirring Traditional Owners Aboriginal Corporation.

The proposed native title settlement furthers section 19 (2) of the Charter which provides that Aboriginal persons and their community must not be denied their right to enjoy their identity and culture, maintain their distinctive spiritual and economic relationship with the land and waters and other resources with which they have a connection under traditional laws and customs.

It is of high importance that the negotiated settlement proceeds to further Reconciliation between the indigenous and non-indigenous community.

[4]. Provides for the revocation of a permanent reservation as a site for a Roman Catholic Orphan Asylum and Crown Grant relating to land at Cecil Street, South Melbourne. The Roman Catholic Trusts Corporation for the Diocese of Melbourne ceases to be a trustee of the land.

[5]. Provides for the revocation of a permanent reservation as a site for an asylum relating to land at East Street, Daylesford.

[6]. Provides for the revocation of a permanent reservation and Crown Grant for benevolent asylum relating to former Beechworth hospital land.

The Committee makes no further comment

Return to the Table of Contents


Scrutiny of Acts and Regulations Committee
Parliament of Victoria