High Court: Civil forfeiture proceedings may need to await the finalisation of criminal proceedings
Case Note by Simona Gory
Commissioner of the Australian Federal Police v Zhao  HCA 5
Civil forfeiture of asset proceedings may need to be stayed pending finalisation of the relevant criminal proceedings, at least in circumstances where the offences and circumstances relied on in the forfeiture proceeding are substantively identical to the criminal proceedings and there is no prejudice to the Commissioner arising from a delay to the forfeiture proceedings.
The Commissioner for the Australian Federal Police brought proceedings against the respondents for the forfeiture of property as proceeds of a crime under the Proceeds of Crime Act 2002 (Cth) (“POC Act”). The crime relied on in the forfeiture proceedings was the dealing with proceeds of a crime worth $100,000 or more contrary to s 400.4(1) of the Criminal Code by the second respondent. At the same time, criminal charges were pending against the second respondent in relation to the same offence (ie dealing with proceeds of a crime worth $100,000 or more).
As the High Court observed, the offence specified as the basis for the forfeiture proceedings was therefore the same as the offence to be prosecuted in the criminal proceedings.
The respondents applied to stay the forfeiture proceedings. In his affidavit in support of a stay the second respondent stated that he was concerned that if he were required to give evidence in relation to the forfeiture proceeding there was a real risk that this evidence would prejudice his criminal case as such evidence was “directly relevant” to the criminal charges.
The decisions below
The primary judge refused the application for a stay holding that the second respondent was required to point to specific evidence demonstrating a risk of prejudice before a stay could be granted. The mere fact of the existence of a criminal proceeding was not sufficient. The primary judge relied on s 319 of the POC Act, which provides that ‘the fact that criminal proceedings have been instituted … is not a ground on which a court may stay [a civil] proceedings’.
The Victorian Court of Appeal reversed the primary judge’s decision and ordered that the forfeiture proceedings be stayed pending determination of the criminal proceedings.
The High Court decision
The High Court upheld the Court of Appeal’s decision.
The Court found that in this case the risk of prejudice to the second respondent in the absence of a stay was ‘plain’. It was not necessary for the second respondent to do any more than he did to identify that risk ‘given that the offences and the circumstances relevant to both proceedings are substantively identical’. To require any more from the second respondent ‘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.’
The Court accepted that the civil proceedings provided for under the POC Act were separate and distinct from any criminal proceedings and that civil proceedings might be conducted notwithstanding any criminal proceedings. It also accepted that forfeiture proceedings should not be unduly delayed. However, the Court concluded that it was not intended by the POC Act that forfeiture proceedings should continue where this would put the respondent at risk of prejudice in the defence of his or her criminal trial.
Accordingly, given that the risk of prejudice to the respondent was plain, it was in the interests of justices that the stay be granted, especially since a delay would not cause any relevant prejudice to the Commissioner.