The High Court has unanimously dismissed an appeal brought by the Commissioner of the Australian Federal Police against a decision by the Court of Appeal of the Supreme Court of Victoria to stay forfeiture proceedings. The case revolved around the intersection between the civil forfeiture proceedings and a related set of criminal proceedings.
The second respondent, Xing Jin, was charged with aiding and abetting another to deal with money or property that was the proceeds of crime and was worth $100,000 or more. He has been committed to stand trial under section 11.2 and 400.4 of the Criminal Code (Cth). The first respondent, Qing Zhao, is the wife of the second respondent and has not been charged with any offence.
Shortly after Xing Jin was charged, the Commissioner applied for an order under s 19 of the Proceeds of Crime Act 2002 (Cth) (“the Act”) which restrained the disposition of the respondents’ home (registered to Qing Zhao), a residential unit in Xing Jin’s name and a motor vehicle. The Commissioner then applied for forfeiture of that property under section 49 of the Act, on the grounds that the property is the proceeds of crime under the Criminal Code.
The respondents applied to the County Court of Victoria on a range of grounds, including exclusion of the properties from the order, and made an application for the forfeiture proceedings to be stayed until the completion of the criminal proceedings. The County Court refused the application, and the respondents appealed.
Their appeal to the Court of Appeal of the Supreme Court of Victoria was successful. The Court concluded
“if the proceedings were not stayed, the prosecution would be informed, in advance of the second respondent's trial, of his defence because he could not realistically defend the forfeiture proceedings without telegraphing his likely defence. The result would be that the prosecution would be advantaged in a manner which fundamentally alters its position vis-a-vis the second respondent and renders the trial unfair. [at 19]”
The Commissioner argued that the Act “may be taken to require that forfeiture proceedings continue regardless of whether criminal proceedings are pending” [at 37]. However, their Honours noted that the Commissioner also accepted “it may be going too far to say that, in every case where the issues in the civil and criminal proceedings are identical, the forfeiture proceedings should proceed regardless of the effect that their continuance may have on the person's defence of the criminal proceedings” [at 38]. The Court found this left the Commissioner in a difficult bind:
“The Commissioner is then obliged to limit his submission to one that the POC Act implies that, ordinarily, the forfeiture proceedings should continue. But the Commissioner has not explained how the POC Act can be said to imply this and for what reason, other than achieving efficiency, it would be necessary to forfeiture proceedings that they be pursued with such urgency. [at 38]”
The Court also rejected the argument that had been accepted by the primary judge, which was that the second respondent had to state specifically how he would be prejudiced by the forfeiture proceedings before a stay could be granted. Their Honours decided:
“to require the second respondent to do so would be to make the risk of prejudice a reality by requiring him to reveal information about his defence, the very situation which an order for a stay seeks to avoid.” [at 43]
The High Court found that the Court of Appeal was correct in ordering the stay, and dismissed the appeal with costs.
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Commissioner of the Australian Federal Police v Zhao  HCA 5 (12 February 2015) & judgement summary
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