Citation: New South Wales Crime Commission v Gardiner [2001] NSWSC 350
Court: Supreme Court of New South Wales, Common Law Division
Date: 8 May 2001
Judge(s): Dunford J
Background
The New South Wales Crime Commission commenced forfeiture proceedings under the Criminal Assets Recovery Act 1990 following a restraining order originally made in December 1996. That order arose from the conviction of a woman for cultivating 56 cannabis plants contrary to the Drug Misuse and Trafficking Act 1985. The restraining order captured property connected to her and a number of other parties, including her former husband.
The former husband owned a farming property outside Deniliquin. When police attended that property in December 1996, they found $40,700 in cash inside the house. The Commission conceded from the outset that this money belonged to the former husband and was not derived from his ex-wife's drug activities. Nevertheless, it opposed his application to have the cash excluded from the forfeiture order.
The Commission's case was that although the cash was not drug proceeds, a portion of it represented a benefit from the former husband's own illegal conduct: specifically, hiding assets during family provision proceedings in the Equity Division of the Supreme Court, which the Commission characterised as perverting the course of justice and perjury.
Legal Issues
- Whether the $40,700 in cash qualified as "illegally acquired property" under the Criminal Assets Recovery Act 1990, notwithstanding that it was not connected to the drug-related activity that grounded the original restraining order.
- Whether the former husband was entitled to an exclusion order under s 25 of the Act excluding the cash from the assets forfeiture order.
- Whether, if a full exclusion order was unavailable, the former husband could obtain a partial order under s 26 of the Act in respect of the proportion of the cash not attributable to illegal activity.
Decision
Dunford J found that during the Equity Division family provision proceedings in the late 1980s and early 1990s, the former husband had deliberately hidden assets to prevent them being taken into account by the court. This conduct constituted illegal activity within the meaning of the Act. Certain amounts totalling $10,799, withdrawn from a trust account and placed directly into the safe at the property, were found on the balance of probabilities to represent a benefit derived directly or indirectly from that illegal conduct.
On the question of an exclusion order under s 25, the former husband failed. Under s 25(2), an applicant must prove on the balance of probabilities that the relevant property is not "illegally acquired property." Because part of the cash in the safe was tainted by illegal activity, the entire amount constituted "illegally acquired property" under the Act's definition. The Act's structure, read through ss 9(1)(c) and 9(4), means that property is illegally acquired if it was even partly acquired using proceeds of illegal activity. A partial exclusion order under s 25 was therefore not available.
Section 26, however, operates differently. It expressly authorises the court to declare that a specified proportion of forfeited property is not attributable to illegal activity and to order that proportion be returned. Dunford J found that the balance of $29,901 (being the $40,700 minus the $10,799 in tainted withdrawals) was more probably than not derived from legitimate farming activities. The former husband was therefore entitled to a declaration and order under s 26(1) in respect of that sum, but only after the forfeiture order itself was made.
Orders Made
- An assets forfeiture order was to be made in respect of the $40,700 in cash.
- The former husband was entitled to a declaration and order under s 26(1) of the Criminal Assets Recovery Act 1990 that $29,901 (the balance after deducting $10,799 in tainted amounts) was not attributable to the proceeds of illegal activity, entitling him to payment of that proportion from the proceeds of the forfeited interest.
- The proceedings were stood over for the parties to bring in short minutes of declarations and orders to give effect to the judgment.
Key Takeaways
- Under s 25(2) of the Criminal Assets Recovery Act 1990, an exclusion order is unavailable where any portion of the property in question is found to have been acquired using proceeds of illegal activity. The "wholly or partly" language in s 9 means partial taint defeats the entire s 25 application.
- Section 26 provides a distinct remedy available only after a forfeiture order is made, allowing the court to identify and return a specified proportion of the forfeited property that is not attributable to illegal activity. It operates independently of s 25 and is not defeated by partial taint.
- "Illegally acquired property" under the Act is not confined to drug proceeds. It extends to any benefit derived directly or indirectly from an act or omission constituting an offence under New South Wales or Commonwealth law, including offences such as perverting the course of justice and perjury.
- The definition of "proceeds" in s 4 is broad, capturing any advantage or benefit derived or realised, directly or indirectly, as a result of the relevant illegal activity. This breadth was applied to reach cash accumulated through the concealment of assets in civil litigation.
- The onus rests on the applicant for an exclusion order to prove on the balance of probabilities that the property is not illegally acquired. Where an applicant cannot account satisfactorily for the origins of particular amounts, that onus will not be discharged in respect of those amounts.
Legislation and Cases Referenced
Legislation:
- Criminal Assets Recovery Act 1990 (NSW), ss 4, 9, 10, 21, 22, 25, 26
- Drug Misuse and Trafficking Act 1985 (NSW), s 23
- Crimes Act 1900 (NSW), ss 319, 327, 330
- Testator's Family Maintenance Act 1916 (NSW)
- Family Provision Act 1982 (NSW)
- Proceeds of Crime Act 1987 (Cth) (referred to by analogy)
Cases:
- Jeffrey v Director of Public Prosecutions (Cth) (1995) 79 A Crim R 514
- Director of Public Prosecutions v Logan Park Investments Pty Ltd (1995) 37 NSWLR 118
- The Queen v Rogerson (1991) 174 CLR 268