What should I do if I am served with a restraining order?
You should seek legal advice because your property is at risk of being forfeited. The sole purpose of a restraining order is to prevent you dealing with your property so that it is available to be forfeited. For a list of things that you should discuss with your lawyer when you first seek legal advice, click here.
If you want to avoid forfeiture of your property, you usually have to make an application to the Court. There are strict time lines that apply in various jurisdictions for the making of such applications. The timelines differ from jurisdiction to jurisdiction.
In Victoria, if you are arraigned and plead guilty you will be deemed to be convicted under the Confiscation Act 1997, even if you have not had your plea heard or been sentenced. That is very significant because the 60 day time period after which automatic forfeiture takes effect starts to run from the date of conviction. See DPP v Nguyen & DPP v Duncan.
What is the difference between property being restrained and forfeited?
Whilst property is restrained, you cannot deal with it but it remains your property. If, for example, your family home is restrained you can continue to live there whilst it is restrained but you cannot sell it or mortgage it further. You also remain liable to pay the rates and other expenses associated with your property.
Once property is forfeited, it vests in the Government (either Commonwealth, State or Territory). After that, restrained property (other than cash) must be converted to cash and the cash is retained by the Government. If your family home is forfeited, you will need to move out and it will then be sold.
What can I do with restrained property?
You must not deal with restrained property. That means you cannot, amongst other things, sell it or encumber it (e.g. grant a mortgage over it). If you have a redraw facility with a bank which is secured by a property that has been restrained, you cannot draw further funds on that facility. If you have a property that is restrained, you cannot enter into a lease in respect of that property.
However, where a rental property is restrained the rent earned is generally not restrained unless the rent is expressly mentioned in the restraining order.
The restrictions on dealing with property differ slightly from jurisdiction to jurisdiction. For example, where a car is restrained under the Victorian Confiscation Act 1997, the owner is generally still permitted to drive the car provided that it does not leave Victoria.
How do I pay for my living and business expenses once a restraining order is made?
If, as a result of a restraining order, you are no longer able to pay your reasonable living expenses (or those of your children or spouse) or you are no longer able to pay your reasonable business expenses, most Australian jurisdictions enable you to apply to the Court to use restrained assets to pay such expenses.
However, the Court will require you to put on evidence of your total assets and liabilities, income and expenditure, so as to ascertain whether you are able to meet your expenses and liabilities from unrestrained assets. If you have sufficient unrestrained assets with which to meet your expenses and liabilities, the Court will not permit you to pay your expenses from restrained assets.
Special restrictions apply to using restrained property to pay for legal expenses. That is explained below.
Can I access restrained assets to pay my legal costs?
There are differences in the various jurisdictions.
For example, under the Commonwealth Proceeds of Crime Act 2002 and the Victorian Confiscation Act 1997, there is no ability to use restrained property to pay for legal costs. See for example Siddique v DPP  VSC 99.
In NSW under the Criminal Asset Recovery Act 1990, there is a limited ability to access restrained assets to pay for legal costs.
In many instances, the legal costs are paid from unrestrained assets or paid by friends or family members. You may also be eligible to receive a grant of legal aid if you cannot source funding of your legal costs.
Can I sell property which I cannot afford to maintain?
It is common for people to experience financial stress once a restraining order is made. At times, that can arise from the fact that an income earner has been taken into custody or from the pressure of suddenly having to fund significant legal expenses. Where that occurs, it may be advisable to downsize.
It is usually possible to obtain an order from the Court to be permitted to sell restrained property on the basis that any sale costs and encumbrances are discharged from the sale proceeds and the net balance is paid into an account which remains restrained pending the finalisation of the proceeds of crime litigation.
You must not sell any restrained property until you have obtained the permission from the Court to sell such property.
Can property be forfeited if there is no conviction?
Yes. All jurisdictions have a civil forfeiture regime (in various guises) which can result in forfeiture without any person ever being charged or convicted of an offence.
Ultimately, it depends on the type (or purpose) for which the relevant restraining order has been made.
Can I wait until my criminal matter is finished before dealing with the confiscation case?
If you are served with a restraining order and do nothing about it, you run an increased risk that your restrained property will be forfeited. Some types of restraining orders can result in forfeiture without conviction.
In addition, various jurisdictions (including Victoria) require you to provide police with a statement that sets out which persons have an interest in restrained property (so that each person with an interest can be given notice of the restraining order). The failure to provide that statement is an offence in its own right.
You may be able to obtain a stay of the proceeds of crime case until the criminal matter is over, but a Court will need to order such stay. That means you must apply for it. Stays are commonly granted in Victoria under s.20(7) of the Confiscation Act 1997. Obtaining a stay under the Proceeds of Crime Act 2002 (Cth) is more difficult. See for example Commissioner of the Australian Federal Police v Cacu  NSWCA 5.
What happens if I deal with restrained property?
If you knowingly deal with restrained property, you will commit an offence punishable by imprisonment. Further, any such dealing is at risk of being set aside.
Can I claim an interest in property even if my name is not on the title?
Yes, there are many instances in which persons whose names are not registered on the title of property will still be able to assert interests in property for the purpose of proceeds of crime litigation. Commonly, the family home will be registered in the name of one spouse only but both spouses will be able to claim an equitable interest in the property. A good summary of the basic principles is contained in the headnote to Allen v Snyder (1977) 2 NSWLR 685.
Once a restraining order is made, can I go to the Family Court and get an order dividing up the assets of the relationship?
No. The Family Law Act 1975 provides that proceeds of crime proceedings cause a stay of family law proceedings. See section 79C of the Family Law Act 1975 (Cth)
Does bankruptcy extinguish a pecuniary penalty order?
No. A pecuniary penalty order survives bankruptcy and will remain in force until paid in full. It usually attracts interest whist it remains unpaid.
Can I try and settle a case brought against me or my property?
Yes. Most proceedings under proceeds of crime legislation ultimately settle. However, to put you in a position where you have the best prospects of achieving a good negotiated outcome, you need good advice and you need to prepare the evidence in support of your exclusion (or compensation) application. If the evidence is compelling, you have a must better prospect of a good outcome.
What happens if I suffer loss as a result of the restraining order?
The prosecution is generally required to provide an undertaking as to damages when a restraining order is obtained. An undertaking is a promise given to the Court that the prosecution (or the State or Territory which it represents) will pay any damages which are caused by the restraining order should it later turn out that the person has suffered damage and forfeiture of property fails. Often the undertaking expressly excludes liability to any person involved in unlawful conduct.
Can the Court make costs orders?
Although there are some exceptions, in general proceeds of crime litigation is litigation to which the civil costs rules apply. That means that usually the looser has to pay the winner’s costs on a scale of costs. That means that if you succeed, you may get a costs order in your favour. However, it also means that if you loose, you are likely to have a costs order made against you.
What legislation exists in Australia governing proceeds of crime litigation?
- Commonwealth – Proceeds of Crime Act 2002 (Cth);
- Victoria – Confiscation Act 1997 (Vic);
- New South Wales – Criminal Assets Recovery Act 1990 (NSW);
- Western Australia – Criminal Property Confiscation Act 2000 (WA);
- Northern Territory – Criminal Property Forfeiture Act 2002 (NT);
- South Australia – Criminal Assets Confiscation Act 2005 and Serious and Organised Crime (Unexplained Wealth) Act 2009 (SA); and
- Queensland – Criminal Proceeds Confiscation Act 2002 (QLD).
How can Christian assist?
Christian can provide advice on every aspect of proceeds of crime litigation, including:
- the effect of restraining orders;
- how to take steps to best protect property from forfeiture, including by making exclusion and compensation applications;
- how to oppose forfeiture applications;
- how to seek to avoid pecuniary penalty orders;
- how forfeiture affects sentencing; and
- the cost consequences associated with litigation.
Christian has assisted hundreds of clients to navigate proceeds of crime issues. If you want any more information, contact Christian on (03) 9225 8203 or 0410 657 177.
The information above is of a general nature only