If you are in control of assets which may be subject to a court judgement, a court can make orders that those assets be forfeited to an authority or are ‘frozen’ so that you are unable to dispose of them. For example, if it is suspected that you are in control of money in an account suspected to be the proceeds of crime, the court may order that the account is ‘frozen’ so that you are unable to deal with the money in any way (e.g. send the money where it may not be able to be recovered by the court) before the case has been finalized.
There are different orders which may be made by a court regarding asset freezing or forfeiture. If a court is to make an order, the order will depend upon a few things including whether or not you have been charged with an offence and against which jurisdiction the offence relates. For example, whether you have been charged with an offence under a State or Federal act.
If it is alleged that property has been used in, or in connection with, the commission of a serious offence, the Prosecution can make an application for a forfeiture order. This order allows the State to confiscate and dispose of the property. In NSW A ‘serious offence’ means any offence under NSW law that may be prosecuted on indictment. An indictable offence refers to a more serious offence and generally will attract a harsher sentence, as opposed to a summary offence.
In NSW, assets may be forfeited to the:
The court can only grant a forfeiture order if it is satisfied on the balance of probabilities that the property is ‘tainted property’. This means the property was:
Examples of ‘tainted property’ include where a car has been used during the commission of a robbery, or if a car is alleged to have been stolen and the person in possession of the car is not the lawful owner.
If a court makes a forfeiture order, the State may take possession of the property and after a certain period of time, dispose of the property.
The State cannot dispose of the property as soon as it has taken possession. The State must wait until the end of the period allowed to appeal the conviction or the forfeiture order to dispose of the property if no appeal is lodged.
If an appeal is lodged against the conviction or the forfeiture order, the State cannot dispose of the property until the appeal has been determined by the court.
To make an appeal against a forfeiture order, the party making the appeal must have an interest in the property and the appeal must be lodged within 28 days of the order being made.
The Supreme Court has the power to make freezing orders. These may also be called asset preservation or Mareva orders. These orders are only granted in exceptional circumstances where there is an apprehension that the debtor or prospective debtor may hide, move or spend the relevant money if they fear they may lose it as a result of the court’s judgement. For this reason, freezing orders are usually applied for ex parte (in the absence of the party in control of the assets/money) and without that party being given notice.
Before it will make an order to freeze assets, the court must be satisfied of a number of elements including that there is a danger that a judgement or prospective judgement will be wholly or partly unsatisfied because the judgement debtor (or prospective judgement debtor) may dispose of or deal with the assets in a way which reduces the value.
If the court does make a freezing order, the order can then be served on the relevant bank and the bank will freeze the relevant account(s). The debtor or prospective debtor will then be unable to dispose of or deal with the assets.
If you are subject to a freezing order, you will still be permitted and able to use your assets for legitimate purposes such as payment of ordinary living expenses, reasonable legal expenses and properly incurred business expenses.
If a freezing order has been made against you it is essential to obtain advice and representation from a criminal lawyer experienced in such complex matters to ensure your rights are protected to the highest standard. For more information call George Sten & Co Criminal Lawyers. We are available 24 hours 7 days a week and can be contacted on (02) 9261 8640 or 0412 423 569.