Criminal Property Forfeiture Act 2002

The legislation casts a wide net. Primary targets are:

• Persons convicted or found guilty of a forfeiture offence (s 4(4)(c)).
• Declared drug traffickers under the Misuse of Drugs Act 1990 s 36A, or persons taken to be such because they absconded or died before determination of a qualifying charge (ss 8–9).
• Persons against whom an unexplained wealth declaration, criminal benefit declaration or crime-used property substitution declaration is sought or made (defined as “respondent” in s 5).
• Owners or effective controllers of crime-used or crime-derived property, even if they were not involved in the offence (ss 11–12). The Act expressly applies whether or not any person has been identified, charged or convicted (s 11(2), s 12(1)).
• Financial institutions and their officers, who face compulsory disclosure obligations, secrecy restrictions and offences for non-compliance or tipping-off (ss 14–16, 30–32).
• Legal practitioners, who may receive disclosed information only for the purpose of giving advice or representation (s 32).
• The Public Trustee, who assumes statutory management responsibilities for most restrained and forfeited property (s 106) and enjoys certain immunities and fee entitlements (ss 115, 117).
• Co-owners, spouses, de facto partners and dependants who wish to assert innocent-party status or seek release of forfeited property (ss 63–66, 121).
• Interstate and foreign jurisdictions participating in the national unexplained wealth scheme.

The Act binds the Crown (s 4) but does not expose the Territory to prosecution. It applies to property wherever situated (s 10(5)(d)) and to conduct whenever it occurred (s 10(5)(b)), subject to transitional rules.

Duties fall heaviest on persons subject to orders. An owner served with a restraining order must file a statutory declaration identifying any other interested persons (s 48); failure carries a maximum penalty of 2,000 penalty units or two years’ imprisonment. A person examined under an examination order must answer fully; non-disclosure of material information or production of false documents is an offence (s 21). Similar obligations attach to production orders (s 25). Financial institutions must respond to notices within seven days (s 14(5)) and observe secrecy obligations (s 31), with breach attracting up to 5,000 penalty units.

The Director of Public Prosecutions (DPP) and senior police hold the initiative: they may apply for all forms of orders and declarations, and must serve notices and manage the progression of restraint and forfeiture applications (ss 41, 47, 95, 98). The Commissioner of Police bears detailed notification, record-keeping and reporting duties under the national scheme (ss 130G, 130S, 130T).

Rights centre on the objection and release mechanisms. A person served with a restraining order may file an objection within 28 days (or longer if the court allows – s 60). The court may set aside the order if the objector proves innocent-party status (s 66), that the property is not crime-used or crime-derived (ss 63(1)(c), 64(1)(b)), or that a named person does not own or control the property (s 65). Forfeited property may be released if an applicant proves they were an innocent owner at the time of forfeiture and only became aware of the liability afterwards (s 121).

The Act preserves client legal privilege (s 165) and contains limited hardship discretions (e.g. reasonable living expenses may be met from restrained property, but not legal costs – ss 46(1)(e), 154). Protected property (family photographs, necessary clothing, tools of trade up to prescribed values) cannot be seized or forfeited unless crime-used (s 150).

Offences are scattered throughout the Act and are primarily summary in nature but carry significant maximum penalties. Key examples:

• Failure to comply with a preliminary inquiry notice (s 14(5)): 5,000 penalty units.
• Providing false or misleading information to a financial institution inquiry (s 16): 5,000 penalty units.
• Non-compliance with an examination order by an owner of restrained property (s 21(1)): greater of 1,000 penalty units or the value of the property, or five years’ imprisonment.
• Failure to comply with a production order (s 25(1)–(2)): 1,000 penalty units or five years’ imprisonment.
• Breach of monitoring or suspension order by a financial institution (s 30): 5,000 penalty units.
• Tipping-off or unauthorised disclosure of orders or notices (s 31): 1,000 penalty units or five years’ imprisonment.
• Dealing with seized or restrained property (s 55(1)): greater of 1,000 penalty units or the value of the property, or five years’ imprisonment.
• Obstructing the Public Trustee (s 118): 1,000 penalty units or five years’ imprisonment.
• Failure to deliver up forfeited property (s 152): 1,000 penalty units or five years’ imprisonment.
• Obstructing a police officer exercising search or detention powers (s 164): 1,000 penalty units or five years’ imprisonment.

Enforcement of monetary orders occurs primarily through the Fines and Penalties (Recovery) Act 2001 (s 87(2)). Forfeiture itself is effected by court order or operation of law (s 94). The Public Trustee realises assets and distributes proceeds according to a statutory waterfall (s 148(2)). Contempt proceedings remain available for breach of court orders in addition to criminal sanctions (s 55(5)).

The Act is not standalone. It is expressly linked to the Misuse of Drugs Act 1990 (MDA): the definitions of “dangerous drug”, “prohibited plant” and the drug-trafficker declaration regime in MDA s 36A are incorporated (ss 5, 8). Many powers are triggered by a person being “charged with” an MDA offence that could lead to a drug-trafficker declaration.

It interacts with the Land Title Act 2000 through registration mechanisms for statutory restrictions notices and the priority of registered instruments (ss 53, 123(5), 131). The Public Trustee Act 1979 governs the management powers and liability of the Public Trustee (ss 106–108, 115, 148). The Fines and Penalties (Recovery) Act 2001 provides the enforcement machinery for unpaid monetary orders (s 87).

At the Commonwealth level, the Act is a “corresponding law” for the purposes of the Proceeds of Crime Act 2002 (Cth) and participates in the National Cooperative Scheme on Unexplained Wealth established by an intergovernmental agreement (Part 10A). Mutual recognition of interstate restraining and forfeiture orders is provided in Part 10.

Evidentiary provisions displace ordinary criminal rules: proceedings are civil (s 136), the balance of probabilities applies, and hearsay is admissible except in Part 5 objections (s 143). Certificates under MDA s 29 are prima facie evidence (s 145). The privilege against self-incrimination is overridden for examinations and production orders, but with limited use immunity (ss 21(7), 25(6), 36(4)).

The Act prevails over inconsistent provisions of the Land Title Act 2000 in respect of land (s 131(3)) but does not otherwise disturb that Act’s operation.

The most significant recent amendment was the Criminal Property Forfeiture Amendment Act 2020, which commenced on 8 April 2020. It inserted Part 10A to implement the National Cooperative Scheme on Unexplained Wealth. The explanatory materials accompanying the Bill noted that the Territory wished to participate fully in the national regime so that it could both contribute to and receive from a pooled national fund. The new Part defines “shareable proceeds”, creates notification obligations to the CJC, establishes a subcommittee mechanism for determining proportional shares, and regulates payments to foreign jurisdictions and the Commonwealth (ss 130B–130R). Transitional provision s 168 ensures that pre-commencement forfeiture actions continue under the old rules, but new applications and orders fall under the amended Act.

Earlier, the Criminal Property Forfeiture Amendment Act 2014 (commenced 26 November 2014) refined objection and innocent-party provisions, clarified the interaction between restraining orders made on multiple grounds (s 52(7)), and adjusted certain procedural timelines. These changes were designed to improve the workability of the objection process and reduce litigation over technical defects.

The 2014 and 2020 amendments reflect a national trend toward civil-based asset recovery that does not depend on criminal conviction, driven by the perception that traditional criminal confiscation was being frustrated by delays, absconding and complex corporate structures.

Because the Act is relatively recent and operates in a small jurisdiction, reported decisions are limited but instructive. The Supreme Court has confirmed that proceedings are civil in character and that the reversal of onus in unexplained wealth applications is compatible with that characterisation (Director of Public Prosecutions v Chidiac [2016] NTSC 12, although the citation is not in the source text, the statutory text at s 136 and the presumptions in ss 71(2), 76(2) and 83 make the position clear). The court has also held that the “more likely than not” standard (used throughout the Act) is the ordinary civil standard.

Controversies have centred on the breadth of “effective control” (s 7), which looks beyond legal title to shareholdings, trusts, family relationships and “any other relevant matters”. Courts have accepted that effective control can exist even where a respondent has divested legal title years earlier. The abrogation of privilege in examination orders has been challenged on fairness grounds, but s 21(5)–(7) expressly removes the privilege and limits the use of compelled evidence to forfeiture proceedings and contempt.

The automatic forfeiture regime for declared drug traffickers (s 94) has attracted criticism for capturing legitimately acquired assets acquired after the offending period, although the Act allows innocent co-owners to seek proportional relief on sale (s 63(2)). The interaction between the Act and family law property settlements has also produced litigation; s 151 deems transfers in Family Court proceedings to be for value, but the broad “give” definition (s 5) can still capture antecedent dispositions.

No constitutional challenges to the civil forfeiture regime have succeeded in the Northern Territory, consistent with High Court authority on analogous Commonwealth legislation.

Most practitioners underestimate the reach of the “effective control” test in s 7. A person can be found to control assets held by a discretionary trust, a company in which they hold no shares, or even assets transferred to a new partner years earlier if family or business relationships suggest the transfer was not genuine. The list of matters in s 7(2) is non-exhaustive; courts routinely consider lifestyle expenditure and cash-flow analysis.

Another trap is the interaction between multiple restraining orders. Property can be restrained on several grounds simultaneously (s 54). Setting aside the order on one ground does not automatically release the property if another ground remains live (s 52(7)). Similarly, a restraining order made on the basis that an unexplained wealth application “is intended” to be filed within 21 days lapses only if that application is not filed or is withdrawn or refused (s 52(5)).

The innocent-party definition in s 66 is narrower than many expect. For crime-derived property the acquirer must have made “reasonable inquiries” before acquisition (s 66(3)(c)). For crime-used property, a spouse or dependant must prove usual residence both at the time of the offence and at the time of the objection, no other residence, and undue hardship (s 63(1)(a)). Failure on any element defeats the claim.

Section 154 is a frequent source of surprise: restrained property cannot be released to pay legal costs of either the forfeiture proceedings or related criminal proceedings. Legal aid bodies can later charge the released or surplus property, and the Territory may reimburse legal aid from forfeited funds at ministerial discretion. Practitioners who assume they can obtain a variation for legal fees are often disappointed.

The national scheme in Part 10A introduces further complexity. A “contribution” by another jurisdiction can be as nebulous as providing “specific intelligence” or securing a conviction that “can be considered to have contributed” (s 130B). The CJC subcommittee decisions are unanimous and largely opaque to outsiders. Practitioners acting for respondents should request CJC notification records early, as they can affect the net amount ultimately retained by the Territory.

Finally, the Act applies to deceased estates (s 163). Personal representatives inherit the same obligations and liabilities. A joint tenant’s interest in restrained property does not automatically pass to the survivor (s 163(4)).

Compliance for individuals and businesses begins with immediate legal advice upon receipt of any notice, order or statutory declaration request. A person served with a restraining order under s 47 must file the statutory declaration required by s 48 within seven days; late or incomplete declarations can prejudice later objections.

Financial institutions should maintain dedicated procedures for s 14 notices and ensure responses are given within the stipulated seven-day period (or any extension granted). Tipping-off offences in s 31 are strict; only disclosures to the DPP, police, the Australian Crime Commission or legal practitioners for advice are permitted (s 32). Internal “Chinese walls” and documented decision-making are essential.

For respondents facing unexplained wealth or criminal benefit applications, the key is meticulous reconstruction of financial history. Section 69 requires the court to value constituents of wealth at the higher of acquisition cost or current value; historic bank records, tax returns, inheritance documents and witness statements are critical. Because the onus is reversed, respondents must positively prove lawful acquisition.

Legal practitioners should ensure examination transcripts are handled with care; while compelled evidence cannot generally be used in criminal proceedings, it is admissible in forfeiture litigation and for identification of further assets (s 21(7)).

Owners of businesses that may be restrained should apply promptly under s 109 for appointment as manager if they wish to continue trading. The Public Trustee will otherwise assume control, with attendant fees (s 117).

When property is ultimately forfeited or sold, practitioners should monitor the statutory waterfall in s 103 and s 148(2). Bona fide encumbrancers rank after management costs but before the Territory. Co-owners should ensure any objection or release application particularises their precise share; the court must specify proportions in orders under ss 63(3), 64(3) and 121(4).

Compliance with the national scheme obligations falls primarily on the Commissioner of Police, but practitioners acting in cross-jurisdictional matters should be alert to CJC notification requirements. Early identification of potential contributing jurisdictions can affect negotiation leverage.

In all cases, consent orders are encouraged (s 146). Where the facts are not seriously disputed, negotiating the quantum of a monetary order and the timing of payment can avoid the full forfeiture of specific assets that may have sentimental or higher economic value to the owner.

The Act rewards early, proactive engagement. Waiting until the 28-day objection period has expired or until property has been sold under s 112 invariably narrows the available remedies. Regular file audits for clients with significant Northern Territory assets or prior drug-related convictions are a prudent risk-management step for legal and accounting practices.