Compensation Orders

The purpose of compensation orders is to compensate for proportions of property not derived or realised from the commission of any offence.

A court that made a forfeiture order (or that is hearing, or is going to hear an application for a forfeiture order) must make a compensation order[1] if:

• a person has applied for a compensation order;[2]
• the court is satisfied that:
  • the applicant has an interest in property specified in the forfeiture order or in the application of the forfeiture order;[3]
  • a proportion of the value of the applicant’s interest was not derived or realised (directly or indirectly) from the commission of any offence;[4]
  • the applicant’s interest is not an instrument of any offence;[5] and
  • if a court is currently hearing or is to hear an application for a forfeiture order, the court makes the forfeiture order.[6]

A compensation order will direct the Commonwealth (once the property has vested absolutely in it) to dispose of the property (if it has not already been disposed of), and pay the applicant the proportion of the value of the applicant’s interest that was not derived or realised (directly or indirectly) from the commission of any offence minus AFSA’s costs, charges, and expenses payable to or incurred in connection with the disposal of the property.[7]

For example, if the forfeited property was a $200,000 house which had been obtained with $150,000 from the proceeds of an offence and $50,000 from legitimately obtained income, the person would be entitled to 25% of the value of the house. After the house is disposed of and the costs etc. of the OT [AFSA] have been met… the person would be entitled to compensation equal to 25% of the net amount.[8]

A person can apply for a compensation order if an application for a forfeiture order is on foot that could specify property in which the person claims an interest. The application for compensation can be made before the actual forfeiture order has been made.[9]

A person who claims an interest in property can apply for a compensation order after a forfeiture order has been made if they were not notified of the forfeiture application[10] or other special grounds apply.[11]

It is incumbent upon the applicant for compensation to provide written notice to the AFP or CDPP of both the application and grounds[12] on which the order is sought.[13]

If the AFP[14] or CDPP[15] have had a reasonable opportunity to conduct examinations in relation to the application, then the AFP or CDPP must give the applicant notice of any grounds on which it proposes to contest the application.[16]

Furthermore, it should be noted that an application for an exclusion order cannot be heard until the AFP or CDPP has had a reasonable opportunity to conduct examinations in relation to the application. As examinations compel an examinee to answer questions, it may not be in the applicant’s interest to seek exclusion.

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[1] S 77(1) Proceeds of Crime Act 2002 (Cth).

[2] S 77(1)(a) Proceeds of Crime Act 2002 (Cth).

[3] S 77(1)(b) Proceeds of Crime Act 2002 (Cth).

[4] S 77(1)(c) Proceeds of Crime Act 2002 (Cth).

[5] S 77(1)(d) Proceeds of Crime Act 2002 (Cth).

[6] S 77(1)(c) Proceeds of Crime Act 2002 (Cth).

[7] S 70(1)(b) Proceeds of Crime Act 2002 (Cth).

[8] Proceeds of Crime Bill 2002 Revised Explanatory Memorandum.

[9] S 78(1) Proceeds of Crime Act 2002 (Cth).

[10] S 78(3) Proceeds of Crime Act 2002 (Cth).

[11] S 78(4) Proceeds of Crime Act 2002 (Cth).

[12] “grounds” cannot simply restate the statutory regime. ‘The applicant should particularise … not merely recite the statutory formation of the test…’ (Commissioner of the Australian Federal Police v Nguyen [2016] NSWSC 883, [8]).

[13] S 79(1) Proceeds of Crime Act 2002 (Cth).

[14] For section 47 and 49 forfeiture orders.

[15] For section 48 forfeiture orders.

[17] S 79(3) Proceeds of Crime Act 2002 (Cth).

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