Changes to Unexplained Wealth Laws Being Considered In The Senate
Wednesday 8 October 2014 @ 1.10 p.m. | Crime
The Crimes Legislation Amendment (Unexplained Wealth and Other Measures) Bill 2014, which was introduced in March this year, has now made it to the Senate. The Bill was designed to implement eight of the 18 recommendations made by the Parliamentary Joint Committee on Law Enforcement (the PJC-LE) in an inquiry conducted from 2011-2012.
In his second reading speech, the Minister for Justice, Michael Keenan, said:
Unexplained wealth laws turn the tables on criminals who live off the benefits of their illegal activities at the expense of hardworking Australians. They also provide an avenue to target the criminal kingpins who enjoy the proceeds of crime, without committing actual crimes themselves.
Groups such as the Law Council of Australia, Civil Liberties Australia and Victoria Legal Aid have raised objections to a number of the proposed reforms in their submissions to the Senate Standing Committees on Legal and Constitutional Affairs. However, the changes were supported by the Australian Federal Police and the Australian Customs and Border Protection Service.
Removal of Court Discretion for Unexplained Wealth Over $100,000
Currently, courts always have discretion over whether or not to make an “unexplained wealth order” or a “unexplained wealth restraining order”. The proposed amendments remove this discretion for wealth amounts above $100,000, although an exemption would be available where it is not “in the public interest”. Mr Keenan said the new provisions would “improve certainty for all parties”.
The Law Council of Australia argued in their submission that this provision is unwarranted, saying:
“The making of unexplained wealth orders in matters where unexplained wealth exceeds $100,000 has the potential to significantly impact on a person’s livelihood and accordingly, warrants judicial discretion in the making of such an order.”
Restrained Assets Cannot Be Used For Legal Expenses
The current scheme allows a court to order property to be dealt with for the purpose of meeting a person’s reasonable legal expenses. The proposed amendments would repeal this section, following a recommendation of the PJC-LE. The Explanatory Memorandum for the Bill says that:
“The ability of a person to dispose of restrained property [or property subject to an order under subsection 179S(1)] to meet their legal costs weakens the effectiveness of the unexplained wealth provisions by allowing the wealth suspected to have been unlawfully acquired to be used to contest proceedings. This may lead to fewer assets being available for confiscation if an unexplained wealth order is successful and is likely to cause more protracted litigation.”
However, critics had concerns that unexplained wealth litigation was likely to be difficult and protracted, and if people had to rely on legal aid it was unlikely to be successful. Victoria Legal Aid was concerned that this change would lead to “an increase in applications for aid for proceedings that are usually strongly contested and involve protracted litigation with sizeable payments to legal representatives and forensic experts”. The Law Council believed there were “adequate safeguards” already in place, including that the dealings with property was up to the discretion of the courts and the court could require certification by a costs assessor.
Other Issues
The Law Council also highlighted the problem depicted in Lee v New South Wales Crime Commission [2013] HCA 39, where the applicants were subjected to concurrent civil and criminal proceedings. The Law Council said:
“The Lee decision helps to illustrate the stark and difficult choices which may present themselves to individuals who may be the subject of confiscation orders, including Commonwealth unexplained wealth orders. For example, individuals who have been charged with criminal offences may find themselves choosing between:
(a) making a case in the confiscation proceedings which may disclose in advance their defence in the criminal proceedings, and in so doing possibly providing an unfair advantage to the prosecution; or
(b) if they decide not to make arguments which may disclose their defence, losing a substantial asset - such as their home - prior to any conviction being determined.”
Civil Liberties Australia also raise objections to unexplained wealth laws in general, saying they “reverse the onus of proof” and that “the laws have targeted the Mr Littles of crime, not the Mr Bigs as intended.” They had concerns that the bill would unfairly target “people who had lived through regular periods of unemployment, people who worked seasonal jobs or people who worked cash-in-hand jobs” who may not have the records to prove their car or assets were obtained legitimately.
The Committee has recommended that the bill be passed by the Senate. The Bill’s Second Reading for the Senate was moved on 30 September 2014.
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Sources:
Crimes Legislation Amendment (Unexplained Wealth and Other Measures) Bill 2014 (Cth) & Secondary Material (Explanatory Memorandum and Second Reading Speech) - available from TimeBase's LawOne Service
Report: Crimes Legislation Amendment (Unexplained Wealth and Other Measures) Bill 2014 (Legal and Constitutional Affairs Legislation Committee) & Submissions
