Variation of restraining orders to access funds for reasonable living and business expenses – COVID-19

All confiscation regimes operating in Australia, whether at State or Commonwealth level, contain mechanisms for accessing restrained funds to pay living and business expenses from restrained assets. The tests vary from jurisdiction to jurisdiction but the underlying theme remains the same. If a person whose assets are restrained can demonstrate that they have insufficient unrestrained assets to meet their living and business expenses (and those of their dependents), then the court can vary a restraining order to permit access to restrained funds to meet such expenses.

For example, such applications may be made under:

(a) s.24 of the Proceeds of Crime Act 2002 (Cth);

(b) s.26 of the Confiscation Act 1997 (Vic);

(c) s.10B of the Criminal Assets Recovery Act 1990 (NSW);

(d) s.45(e) of the Criminal Property Confiscation Act 2000 (WA).

Given the unprecedented economic downturn caused by COVID-19, resulting in tens of thousands of employees losing their income, tenants seeking rent reductions and hospitality businesses being effectively shut down, practitioners should consider whether they act for clients in confiscation matters who may be able to now make application to access restrained assets to help make ends meet.

Such applications will need to be supported by an affidavit which sets out assets, liabilities, income and expenditure. The affidavit should describe the impact of the recent economic downturn. It is likely that the courts can accommodate hearing any such applications, insofar as they are opposed, by video.

Further, practitioners ought to consider whether application ought to be made to vary restraining orders to permit the sale of restrained assets, such as investment properties where tenants are seeking rent reductions or, by reason of a loss of income, the property owner can no longer service the mortgage payments. It is always preferable for the property owner to keep control of the sale process, rather than wait for a mortgagee sale.