If your property is "tainted" by alleged criminal offending, the state may apply to permanently take it away from you. The mechanism used to do this is called a Forfeiture Order, or in the case of certain serious offences Automatic Forfeiture Order. These orders can result in the loss of such assets as your house or car. They are an important and often overlooked consequence of many offences and can arise even once you have already been sentenced and can sometimes even affect the property interests of people who are not themselves accused of committing any crime. Strict timeframes apply in applications to exclude property subject to such orders and so it is important to speak to a lawyer straight away if you think that you may be affected.
What are forfeiture orders?
A Forfeiture Order under the Victorian Confiscation Act is an order that the state applies for to permanently deprive individuals of their property when it is "tainted" by criminal offending. A Forfeiture Order can be applied for when someone has used property for offending, or derived property from criminal activity and they are convicted of a charge under Schedule 1 of the Victorian Confiscation Act. For this reason, Forfeiture Orders are also known as "Schedule 1 Forfeiture". Most indictable offences are schedule 1 offences, including many lesser-known offences for which you would not necessarily expect to lose your property. If subject to a Forfeiture Order, it is important to pay careful attention to the relevant timeframes and tests that apply in order to prevent your property from being lost forever.
What are automatic forfeiture orders?
An "Automatic Forfeiture Order" or "Schedule 2 Forfeiture Order" is a type of order where your property will be automatically forfeited upon your conviction for an offence listed in schedule 2 of the Victorian Confiscation Act. Schedule 2 offences typically involve professional engagement in criminal activity. Such offences include drug trafficking in a commercial or large commercial quantity, or armed robberies in which the amount stolen is $50,000 or more. If your property is forfeited automatically, it is subject to a much stricter regime than with regular Forfeiture Orders, and it is therefore especially important to take steps prior to the order being made in order to get your property back before it is in fact forfeited.
Could this apply to property that belongs to me?
Any property that has been "tainted" could be subject to a Forfeiture or Automatic Forfeiture Order. Property becomes "tainted" if it is either derived from or used or intended to be used in the course of criminal offending. This has the consequence that many people have interests in property that may be subject to these orders whether or not they themselves have committed or are even aware that any wrongdoing has taken place.
Your property will be derived from criminal offending if the alleged offending allowed you to obtain that property. The property in question could be something that is stolen, or purchased using money or profits obtained through criminal activity, and is in that way effectively viewed as " proceeds of crime".
Property can also be tainted purely by being used or intended to be used in the commission of schedule 1 or schedule 2 offences. Examples in which property may be tainted through its use include houses in which people have cultivated or manufactured drugs. People who are not themselves involved in the criminal offence, and sometimes are not even aware of the way in which their property has been used can sometimes lose their property forever if it is so used. Other types of property also subject to being tainted through its use include cars, for example if used in drug trafficking, police pursuits or robberies.
Sometimes, even property that has not been "tainted" can be forfeited via a "Tainted Property Substitution Declaration". This occurs when someone owns some property, but uses some other property that they do own as part of their offending. If this occurs, the state may apply for an order to take your untainted property as a substitute for the property that you have tainted. This means that, for example, using someone else's house or car to commit a crime could result in the loss of your own property, even if your property has nothing to do with any criminal activity.
When will it be applied for?
Police or prosecutors will first make an application to a court for your property to be restrained. This can occur before or after you are charged and can even occur up to 60 days following your conviction. Once your property is restrained, the state can then apply for a Forfeiture Order for as long as 6 months after a conviction. This unfortunately means that even after a matter has finalised, people can be revisited by the consequences of offending through often unexpected confiscation orders, sometimes resulting in the loss of their important assets.
What is the law that allows this to happen?
Part 3 of the Confiscation Act 1997 (Vic) contains the provisions that allow for and govern the operation of Forfeiture and Automatic Forfeiture Orders.
Exclusion applications and important time limits
An application to exclude can be made before a Forfeiture or Automatic Forfeiture Order is put in place by applying at the Restraining Order stage for your property to be excluded. This application can be by any person with an interest in the property, including an accused person. The process and timeframe for applying for exclusion from Restraining Orders are written about here.
Property subject to an Automatic Forfeiture Order will be forfeited without further opportunity for you to apply for exclusion once made. It is therefore essential in relation to Automatic Forfeiture that exclusion is applied for at the Restraining Order stage.
With Schedule 1 Forfeiture, as an accused person you will have a further opportunity to apply for exclusion. This ordinarily takes place in a plea hearing where your lawyer can argue that your property should not be forfeited, generally because it will cause some undue hardship to you or another person should forfeiture occur. If no application for exclusion is made within either 60 days of conviction or 60 days since the forfeiture order was made (whichever is later), your property will be forfeited. It is important to be aware that entering a formal plea of guilty at court will constitute a "conviction" in the confiscation scheme, and your time to have your property excluded will start to run from this point onwards.
- Prior to any Forfeiture Order being made, you will be served with a Restraining Order. As soon as you hear anything about your property being restrained, make sure that you seek legal advice immediately.
- If you think another person has an interest in the property that you are worried about losing, you should ask your lawyer about their property interest too. That person may be able to apply to have their interest excluded or to prevent the property from being lost.
- If you think that your property is being used to commit a crime, it is important to take action and get legal advice right away. Even if you yourself are not committing a crime, you could still risk losing your property through the forfeiture scheme.