Criminal Proceeds Confiscation Act-Pecuniary Penalty Order – Enforcement Where Effective Control Of Respondent

What the law says

Section 198 of the Criminal Proceeds Confiscations Act Queensland states:

1. The State may apply to a court for an order declaring that particular property is under the effective control of a person against whom the court has made a pecuniary penalty order (the controlling person).
2. The State must give written notice of the application to-
   • (a) the controlling person; and
   • (b) anyone else the appropriate officer making the application for the State considers may have an interest in the property.
3. The controlling person, and anyone else who claims an interest in the property, may appear at the hearing of the application.
4. If the court is satisfied that the property is under the effective control of the controlling person, the court may make an order declaring that the property is available to satisfy the pecuniary penalty order to the extent to which property of the controlling person is not readily available for the purpose.
5. The pecuniary penalty order may be enforced against the property, to the extent stated in the declaration, as if the property were the controlling person’s property.
6. The court may also make a restraining order in relation to the property as if the property were the controlling person’s property.
7. The absence of a person required to be given notice of the application does not prevent a court from making the order.

Section 20 of the Criminal Proceeds Confiscations Act Queensland defines effective control as follows:

1. Property may be under a person’s effective control even if-
   • (a) the person does not have a direct or indirect right, power or privilege over, or in relation to, the property; or
   • (b) the person does not otherwise have an interest in the property.
2. Regard may be had to all relevant matters in deciding-
   • (a) whether or not property is under a person’s effective control; or
   • (b) whether or not there are reasonable grounds to suspect that property is under a person’s effective control.
3. Matters to which regard may be had include, for example-
   • (a) shareholdings in, debentures over, or directorships of, a corporation that has a direct or indirect interest in the property; and
   • (b) a trust that has a relationship to the property; and
   • (c) family, domestic, business and other relationships between any of the following and other persons-
     •  (i) persons having an interest in the property;
     • (ii) corporations that have a direct or indirect interest in the property;
     • (iii) trusts that have a relationship to the property.
4. However, property is under the effective control of a person (the first person) if the property-
   • (a) is held by another person for the ultimate benefit of the first person; or
   • (b) was a gift given by the first person to another person within 6 years before the making of an application for a restraining order, whether or not the gift is still in the other person’s possession.

Note that the definition of “effective control” is set to change later this year.  It will be extended to property that under a Restraining Order or is held by the public trustee subject to a Restraining Order. Keep an eye on this page for updates on when this law comes into effect.

What the police must prove

In order for the State to be successful in their application at Court, it must show the following:

1. It made an application to the Supreme Court for a Pecuniary Penalty Order against the Respondent; AND
2. The Supreme Court granted that application; AND
3. It made application to the Supreme Court to enforce that Proceeds Assessment Order against property owned by some person other than the Respondent to the PPO; AND
4. It gave written notice to the Respondent to the PPO and all other persons whom have an interest in the property that the State seeks to enforce the Pecuniary Penalty Order against; AND
5. That it is reasonable to suspect that Respondent to the PPO had effective control over the property as:
   • (a) the property was held by the other person for the ultimate benefit of the Respondent to the PPO; OR
   • (b) the Respondent to the PPO had given that property to the other person as a gift during the 6 year period prior to the application for a Restraining Order being made; OR
   • (c) the Respondent to the PPO in effect, had control over property.

Maximum penalty

The application is for the enforcement of a Pecuniary Penalty Order (PPO) against property that is not in the name of the Respondent to that PPO. If the application is successful, the Court will make orders that:

1. The prescribed property is under the effective control of the Respondent that has a Pecuniary Penalty Order (PPO) against them;AND
2. The prescribed property be used to satisfy the debt of the Respondent to the State pursuant to that Pecuniary Penalty Order (PPO).

The effect is that even where the property is not in the name of the Respondent, it can still be used to satisfy the debt to the State where the Court finds that the property was under the effective control of the Respondent.

If the application is unsuccessful, the property will not be made available to the State in order to satisfy the Respondent’s debt pursuant to the PAO.

Note that the absence of any interested person (i.e. anyone with an interest in the prescribed property) will not prevent the Court from making an order against the prescribed property.

Which court will hear the matter

The application will be heard in the Supreme Court.

Possible defences

There are no defences to this application, but rather grounds upon which a person can oppose the application or at least the alleged amount sought in the application. Possible grounds to oppose this application include:

1. The Respondent to the PPO or the property owner was not given reasonable notice of the application (note this would really only buy you more time to prepare your opposition).
2. The Respondent to the PPO did not have effective control of the property as:
   • (a) the property was not held by the other person for the ultimate benefit of the Respondent to the PPO; OR
   • (b) the Respondent to the PPO did not give that property to the other person as a gift during the 6 year period prior to the application for a Restraining Order being made; OR
   • (c) the Respondent to the PPO did not in effect, have control over property.
3. The property was derived from legitimate sources.
4. The property was accumulated prior to or after the relevant 6 year period.