 | NORML News: Property Seizure 1: The Proceeds of Crimes Act 1991 - What you need to know |
 LEGAL NEWS - Norml News Winter 2007 - By Rob Weir LLB.
IT has been clear Crown policy for a number of years to recover property from those convicted of drug supply charges. The legislation used is the Proceeds of Crime Act 1991 (“the PCA”).
The PCA comes under the Court’s civil jurisdiction but exists contemporaneously with the criminal Court where property is suspected to have been
derived from “serious criminal
offending.” A “serious offence”
is classified as one punishable by
5 years or more imprisonment.
In practice however it primarily
affects those charged with drug
related offences.
There are important safeguards
in the current legislation such as
that a person has to be charged
with an offence - or charges must
be contemplated against a person.
In addition, the Court will usually
(upon application), provide for a
person’s reasonable legal fees and
reasonable living expenses to be
paid out of restrained funds. The
level of funding is to be decided
by the Court although there are
standard guidelines provided
for in Solicitor General v Panzer
[2001] 1 NZLR 224.
The process
There are two main steps.
They are, firstly, an application
to restrict the use of property
pending the resolution of
criminal proceedings. Secondly,
if convictions follow for serious
offending (as defined in the Act),
an application that the property be
transferred to the Crown.
Restraining orders
Under s.39 of the PCA, the
Solicitor General, upon the arrest
or conviction of a person for an
offence, can apply to the High
Court for a restraining order
against all or part of that person’s
property (which can include
real estate and cash funds). The
key issue is whether there are
reasonable grounds to believe that
the property is tainted property in
relation to the alleged offence. The
Court will look at various factors.
The criteria is covered in s.32
(3) (b) of the PCA and is broad,
but essentially, the Court has to
be satisfied that the property is
subject to the effective control of
the defendant and the defendant
derived a benefit, either directly
or indirectly from the commission
of an offence. In practical terms,
property will usually be considered
‘tainted’ if the Crown can prove
that it has good reason to suspect
that the funds used to purchase the
property were from the proceeds
of crime, or where the property is
used in connection with a crime
(for instance marijuana plants
growing on the property).
Often, the person charged with
an offence may own the property
together with another person (for
instance a spouse). In this case the
other person can apply under s.48
for the exclusion of their interest
from the restraining order. There
may also be third parties such as
mortgagees who can apply to the
Court for relief under s.17. If the
Court is satisfied that the claim to
the interest is valid, it can direct
the Crown to transfer the interest
to the applicant or direct that
the interest not be included in a
forfeiture order.
A person whose property is
restrained will still have an
interest in the property and if
granted bail, will likely still be
able to live in the property but will
not be able to have any dealings
with the property (for example, it
can’t be sold). While property is
restrained it will be administered
by the Official Assignee.
If the Crown makes an
application for restraining order
this can opposed. This is done by
filing a notice of opposition listing
the reasons against the restraining
order and should be supported by
an affidavit.
Forfeiture
If a person is convicted the
Solicitor General will almost
invariably apply for a forfeiture
order under s.15 of the Act
whereby the property is vested in
the Crown. This means that the
property becomes the Crown’s.
The Court may instead apply for
a pecuniary penalty order (rather
like a large fine).
The Crown can ask for the
property that has been restrained
to be made available to pay the
pecuniary penalty order. Again the
Court has a very wide discretion
in what they can consider when
considering such an application.
Some of the considerations are
the use that is ordinarily made
of the property, the nature and
extent of the offender’s interest in
the property, and undue hardship
that is likely to be caused if the
property is forfeited.
The Court of Appeal has upheld
a District Court decision that a
rural property where a significant
amount of marijuana plants were
found was not to be forfeited as it
would leave the owner destitute.
If the convictions are later
overturned, then the property
reverts to the previous owner and
the Crown has to decide whether
to start again.
What to do if you are served
with an application
If you are served with an
application for a restraining order,
or restraining order, you should
remember that the Crown still
have to establish the basis for
what they are asking for. You
are within your rights to oppose
the application and at the earliest
opportunity should consider what
evidence is available to support
your case after consulting with
a practitioner experienced in the
PCA field who can in turn liaise
with the appropriate experts: for
instance, the assistance of an
expert accountant can be important
to show that the property was
purchased from legitimate funds.
An expert in the field of marijuana
plant yields can also be of great
assistance to dispute evidence of
the value of any marijuana that
police attribute to an individual
which is often inflated. If a crop
has been grown on your land by
someone else, a forensic expert
can give evidence showing that
none of your tools could have been
used. You should also provide to
your lawyer a clear history of how
the property was obtained.
The future
Currently a new bill (the Criminal Proceeds (Recovery)
Bill) is before parliament. The
bill, if passed, will replace the
PCA and will have far-reaching
consequences on the New Zealand
public. The full implications of
the new bill, if passed, will be the
subject of another article, which
will also report on progress at the
Law and Order Select Committee
hearing, due to take place on 1
August 2007.
Conclusion
The PCA has serious ramifications for anybody who has an application brought against them. The Court has wide powers and a wide discretion. If an application is brought against you, you should act early and have your positioned reviewed by an expert in the field.
By Rob Weir LLB
Crescent Chambers, Auckland.
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