The High Court of Australia has held section 10 of the Criminal Assets Recovery Act 1990 (NSW) (the Act) is constitutionally invalid.
The NSW Crime Commission commenced proceedings in the NSW Supreme Court which sought, amongst other things, restraining orders under section 10 of the Act in relation to various bank and share trading accounts over which the appellants in this case (International Finance Trust Company Ltd and International Finance Trust Company Broking Services Ltd) exercised effective control.
On appeal the Court of Appeal of the Supreme Court of New South Wales set aside the restraining order. However, the Court of Appeal unanimously rejected an argument that section 10 was constitutionally invalid.
By majority the High Court determined that section 10 was invalid. The majority considered that section 10 did not require the Commission to make ex parte applications for restraining orders. However, if the Commission did make an ex parte application, then the Supreme Court was required to make the restraining order if it was satisfied that the authorised officer's affidavit reasonably supported that officer's suspicions about the derivation of the property the subject of the application. Once the order was made, it could only be discharged in two circumstances: if an application for assets forfeiture was no longer pending in the Supreme Court (however the legislation imposed no limit on the time within which an assets forfeiture application had to be determined); or upon an application by the affected party under section 25 of the Act, which could only succeed if the affected party was able to prove it was more probable than not that the relevant property was not fraudulently or illegally acquired - a negative proposition of broad import. The majority concluded that in these circumstances section 10 was "repugnant to the judicial process in a fundamental degree".
The Court allowed the appeal, ordered that the relevant proceedings in the Supreme Court should be dismissed with costs, and declared section 10 invalid.
12 November, 2009
