New Victorian Laws on Seizure of Unexplained Criminal Wealth: A Reversal of Onus

Wednesday 20 August 2014 @ 11.30 a.m. | Crime | Legal Research

The Victorian Government has introduced into the Legislative Assembly on 19 August 2014 the Justice Legislation Amendment (Confiscation and Other Matters) Bill 2014. The proposed legislation establishes an unexplained wealth confiscation scheme in Victoria.

How the Proposed Scheme is to operate

In a Media Release issued by the Victorian Premier, Mr Napthine, the scheme proposed by the legislation is described as allowing the court to order the restraining of "all the property" of a person "suspected on reasonable grounds of serious criminal activity". Where property is restrained, the new laws will then put the onus on the person whose property is restrained to have property released from the restraint by showing that it has "lawful origins". Where the person whose property is restrained cannot do so, the assets or property will be forfeited.

The Media Release also describes the legislation as allowing the court to order the seizure and restraint of "a particular asset or assets" where they are "suspected on reasonable grounds of being unlawfully acquired". Again the usual onus will be reversed, it being on the person(s) claiming ownership to come forward and "demonstrate the lawful origins of the property".

The Government's Argument for Stronger Laws

The Media Release quotes the Premier as saying:

"Unexplained wealth laws are a powerful tool to disrupt and deter serious and organised crime. If serious criminals can't show where their wealth came from, they'll have to hand it over."

The Attorney-General, Mr Clark (the AG) in the same Media Release, is quoted as saying with respect to the reversal of onus that it will improve the efforts of police and the authorities who will not be required to link the assets to the crime:

"At present, before an asset can be confiscated, authorities have to be able to show either that the asset was used in committing a crime or that the particular asset was derived from the proceeds of crime. . . . Under these reforms, authorities won't need to show a link between particular assets and crime – if a person's total assets are greater than they can explain by legitimate sources, the excess will be forfeited".

Proposed Law to also Include Anti-Avoidance Provisions

In the Media Release, the AG indicated that the new laws will also contain anti-avoidance provisions, allowing the State to target lawfully acquired assets where a suspected person tries to frustrate the laws by hiding unlawfully acquired assets from confiscation.

Further, there will be measures to stop people seeking to evade the laws by passing wealth to relatives or friends. Measures, for example, that will require it to be demonstrated that property given as a gift was lawfully acquired by the person who gave it.

Safeguards to Prevent Abuse of Proposed Legislation

In the Media Release the AG indicated safeguards included in the proposed legislation were:

  • restraint orders sought on the basis that the person was engaged in "serious criminal activity" will need to be based on "reasonable grounds". "Serious criminal activity" is to be defined in the proposed legislation, and will capture offences punishable by five years or more imprisonment and involving the generation or concealment of criminal wealth;
  • a person subject to an unexplained wealth restraint order will be able to appeal against that order, including on the grounds that they were not in fact engaged in serious criminal activity;
  • the courts will be able to authorise reasonable living expenses and legitimate business payments to be made out of restrained property until it is determined whether or not the property was lawfully acquired;
  • third parties with a lawful interest in restrained property will be able to apply to have their interest in the property excluded from any forfeiture; and
  • family members and others who can demonstrate they would suffer undue hardship from the forfeiture will be able to apply to the court for a payment from the forfeited assets as relief from that undue hardship.

Reactions

The Victorian Shadow Attorney-General Mr Pakula is reported by News.com as saying it was difficult to comment on the new laws without more detail, but that he was "sceptical about the government's motivation" saying further:

"It seems that the government is dropping out legislation for the purpose of getting a headline, but we won't know just how extreme these provisions are until we see them, . . . It seems highly unusual to have legislation that has asset seizure without any conviction, but it's difficult to comment on it without seeing it and it's difficult to know what the Bill actually says."

The Guardian Australia reports president of the Law Institute of Victoria, Geoff Bowyer, as saying that:

"the Napthine government’s latest initiative, which would enable police to seize assets they believed were the proceeds of crime, 'turned on its head' the principle that a person is innocent until proven guilty".

Mr Bowyer also quoted as going to say:

“It reverse[s] the onus of proof, . . . It’s OK for the government to say they have a right to appeal, but what are they going to appeal with? They won’t have any assets to mount a challenge.”

Comment

It would seem from the press and the reaction of key legal organisations in Victoria, for example, the Law Institute, that the current government’s "law and order program" is thought by many to be more about politics and re-election than sensible law reform.

Speaking of other measures introduced recently by the Victorian Government, namely:

  • “baseline” sentencing;
  • the overhaul of parole rules after the Jill Meagher case; and
  • the weekend announcement of the introduction of Australia’s toughest “one-punch” law;

the Guardian reports, that there is no evidence that any of  the Victorian Government's  harsh measures have made a difference to crime. To support this claim, the Guardian points to Australian Bureau of Statistics information showing Victoria had the highest growth in prisoner numbers in Australia, increasing more than 14% in the period December 2012 and December 2013.

Many of the measures, of which the proposed unexplained wealth laws are just another example, turn concepts like judicial discretion, the onus of proof and standard of proof, upside down to favor the state over the individual. To quote Mr Bowyer of the Law Institute of Victoria:

“The government is simply responding to the view of the populist press which says judges are soft on crime . . . We’ve not seen a scintilla of evidence that any of these measures have reduced the crime rate." 

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