7.58 A wide range of Commonwealth laws may be seen as interfering with property rights. Some apply to personal property, some to real property, and some to both. Grouped into areas, provisions affecting personal property will be considered under the following headings:
personal property securities;
intellectual property laws;
7.59 These laws are summarised below. Some of the justifications that have been advanced for laws that encroach on property rights, and public criticisms of laws on that basis, are also discussed.
Unclaimed money laws
7.60 Laws dealing with unclaimed money have a long history. On a person’s death, in default of ‘next of kin’, the person’s personal property would default to the Crown as ‘bona vacantia’ (vacant or ownerless goods). This became, over time, part of the consolidated revenue of the states and territories, with an ability for certain persons to seek ex gratia payments in deserving cases.
7.61 Banking is a head of Commonwealth legislative competence under s 51(xiii) of the Australian Constitution. In 1911, the Commonwealth enacted unclaimed money laws analogous to the laws concerning bona vacantia in intestate estates, including the concept of property vesting in the Crown. The Commonwealth Bank Act 1911 (Cth) provided that all moneys in an account which had not been operated on for ‘seven years and upwards’ would be transferred to a designated fund and if not claimed for a further ten years, would become the property of the Bank.
7.62 The modern successor to the 1911 Act provision was s 69 of the Banking Act 1959 (Cth), which provided that, after a designated period, if there have been no deposits or withdrawals from an account, it is deemed ‘inactive’ and the bank is required to close the account and transfer the balance to the Commonwealth of Australia Consolidated Revenue Fund. The money remains in the possession of the Commonwealth until claimed, which requires an administrative process on behalf of the inactive account holder.
7.63 In 2012, the Treasury Legislation Amendment (Unclaimed Money and Other Measures) Act 2012 (Cth) reduced the relevant period to three years. Similar changes were made to first home owner accounts, life insurance and superannuation under the same amending Act.
7.64 The Explanatory Memorandum to the Treasury Legislation Amendment (Unclaimed Money and Other Measures) Bill 2012 asserted that the amendments to the Banking Act 1959 (Cth) were ‘compatible with human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011’. However, it did not elaborate on this proposition.
7.65 The Hon Bernie Ripoll, the then Parliamentary Secretary to the Treasurer, noted that ‘the reforms will ensure this lost money is properly protected so people can get what is rightfully theirs’.
7.66 The Parliamentary Joint Committee on Human Rights (Human Rights Committee) considered the 2012 Bill. It stated that a person’s right to property is ‘not guaranteed as a freestanding right in the human rights treaties’ that fell under its consideration. However, it noted that any ‘discrimination in the enjoyment of the right to property’ would be contained in a number of human rights guarantees, such as art 26 of the ICCPR.
7.67 Article 26 provides:
All persons are equal before the law and are entitled without any discrimination to the equal protection of the law. In this respect, the law shall prohibit any discrimination and guarantee to all persons equal and effective protection against discrimination on any ground such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status.
7.68 The Human Rights Committee applied the three-pronged test set out in Chapter 2. First, the Committee noted that the objective to ‘preserve a person’s funds from being eroded by fees and charges … could be seen as a legitimate objective’. Secondly, the Human Rights Committee considered that the removal of funds and the procedure in place to reclaim them did have a rational connection to preserving bank account balances. Thirdly, with respect to whether the limitation was proportionate to the restriction, the Committee considered this point less clear:
The objective advanced is thus to preserve the person’s funds from being eroded by fees and charges, which could be seen as a legitimate objective. The removal of funds to the ATO and the establishment of procedures for the reclaiming of those funds as well as the requirement to pay interest on balances, would have the effect of preserving balances. The issue of proportionality is less clear, and the explanatory memorandum does not offer an justification for the dramatic reduction in the period that must elapse before the obligation to transfer the funds to the ATO is activated.
The committee seeks clarification of the basis for determining that the significant reduction in the time which must elapse before funds are required to be transferred is a proportionate means of achieving the objectives pursued by the bill.
7.69 The Senate Standing Committee on Economics conducted an inquiry into the 2012 Bill. The Committee endorsed the Bill, arguing that the amendments
will be of significant benefit to consumers … The amendments will help reunite people with their unclaimed money sooner, and will protect the real value of that money while it remains unclaimed.
7.70 The Committee went on to address concerns that the reduction in the period of inactivity before accounts were treated as unclaimed could potentially lead to moneys that are not genuinely unclaimed being treated as such. However, the Committee considered that the Bill provides an ‘appropriate measure of flexibility to address the concerns of financial institutions and protect the interests of consumers as required’.
7.71 In contrast, criticism of the 2012 legislation was reflected, for example, in a press release by the Institute of Public Affairs, that stated:
People should be able to leave money in bank accounts for as long as they wish without the fear that the government might come along and steal it from them. To do so is an arbitrary acquisition of property by the government. …
Parents saving for their children’s education, young people saving for a home and others putting money aside for retirement are all at risk of losing their savings as a result of these changes …
7.72 In 2015, following a change of government, amending legislation was introduced.
7.73 The Explanatory Guide to the Exposure Draft Bill set out the reasons for the shift in policy, on the basis of the regulatory burden for authorised deposit-taking institutions (ADIs) and account holders:
Evidence suggests that many of the accounts that are declared unclaimed and transferred to the Commonwealth are effectively active as the account holder remains aware of them. For example, around 15 per cent of unclaimed funds transferred from ADIs are reclaimed in the same year they are transferred to the Commonwealth. Approximately 50 per cent of all funds transferred to the Commonwealth as unclaimed are reclaimed within two years.
The high proportion of effectively active accounts transferred to the Commonwealth each year under the current provisions increases the regulatory burden of the unclaimed moneys provisions for ADIs and account holders. ADIs have to assess and transfer all accounts with unclaimed moneys to the Commonwealth even though many of the accounts are still effectively active. Once these accounts are transferred, account holders have to complete the necessary paperwork and verify their details in order to reclaim their accounts.
7.74 The unclaimed moneys legislation is an example of an interference with vested personal property rights in the form of deposit accounts, forms of choses in action. Such interference has a long history. The period after which the interference occurs, and the process by which a person may seek to reclaim what has been deemed to be ‘unclaimed’ are both relevant to any consideration of whether the interference is justified. The parliamentary review processes may provide an effective vehicle for the assessment of the justification for any proposed legislation.
7.75 The Tax Institute suggested a range of provisions that may be considered as interfering with property rights. The Institute referred in particular to the Commissioner of Taxation’s powers to withhold refunds and to attach property.
7.76 The practice of staff of the Australian Taxation Office (ATO) is guided by Law Administration Practice Statements, ‘which provide instructions to ATO staff on the way they should perform certain duties involving the application of the laws administered by the Commissioner’.
7.77 Under s 8AAZLGA of theTaxation Administration Act 1953 (Cth), the Commissioner of Taxation has the power to withhold a refund, pending verification of certain information. The Tax Institute suggested that a ‘right to a refund’ had certain property characteristics and that ‘a lay person would see a right to a refund of tax as a practical and important property right’.
7.78 The Tax Institute pointed to a number of ‘defects’ in the Commissioner’s power to withhold a refund that should be addressed:
The power does not contain a requirement for written notice, giving rise to uncertainty as to the time at which the power has been exercised. There is also uncertainty as to time at which the Commissioner must begin considering entitlement to refund, and when the Commissioner must conclude that consideration.
7.79 The Institute also noted that a taxpayer has limited review rights in relation to the exercise of the Commissioner’s power to withhold a refund.
7.80 Section 8AAZLGA of the Taxation Administration Act includes a number of matters to which the Commissioner must have regard when considering whether to withhold a refund, including, for example
(c) the impact of retaining the amount on the entity’s financial position;
(d) whether retaining the amount is necessary for the protection of the revenue, including the likelihood that the Commissioner could recover any of the amount if the notified information were found to be incorrect after the amount had been refunded.
7.81 The ATO’s administrative practices with respect to the collection of tax liabilities is framed within the following expectations:
We expect tax debtors to pay their debts as and when they fall due for payment because:
we are not a lending institution or a credit provider
we expect tax debtors to organise their affairs to ensure payment of tax debts on time
we expect tax debtors to give their tax debts equal priority with other debts.
7.82 The Taxation Administration Act includes provisions to facilitate the collection of taxation debts by attaching to property in the hands of third parties through ‘garnishee’ powers:
Any third party who pays money to the Commissioner as required by a notice is taken to have been authorised by the tax debtor or any other person who is entitled to all of part of that amount. The third party is indemnified for any money paid to the Commissioner.
7.83 The Tax Institute acknowledged the existence of Practice Statements guiding the ATO’s actions in this area, but submitted that ‘there is no prior external oversight’. For example, a Practice Statement on enforcement measures provides for the Commissioner to give directions to ATO officers as to the appropriateness, timing of and amounts subject to garnishee notices. The Tax Institute expressed concern with respect to this power in that this direction ‘represents the only oversight of this power prior to its exercise, and it occurs within the Commissioner’s own office’. It submitted that
[t]he Commissioner’s powers to act without prior external oversight are extraordinary. There are policy reasons for those extraordinary powers, such as the necessity for the Commissioner to move quickly to prevent the withdrawal of funds from Australian shores. However, the existence of these powers makes it essential that there are quick, cost-effective and clearly defined mechanisms for reviewing those decisions once made.
7.84 While the Practice Statements are for the guidance of ATO staff, they are regularly updated and available online. There are public interest arguments in support of the powers, including the preservation of revenue and encouraging taxpayer compliance, notwithstanding that there may be some interference with property rights. Decisions of the Commissioner are reviewable as administrative decisions under the Administrative Decisions (Judicial Review) Act 1977 (Cth),s 39B of the Judiciary Act 1903 (Cth)and s 75(v) of the Constitution.
Personal property securities
7.85 The Personal Properties Securities Register has replaced a number of Commonwealth, state and territory government registers for security interests in personal property, including those for bills of sale, liens, chattel mortgages and security interests in motor vehicles such as the Register of Encumbered Vehicles and the Vehicle Securities Register. As noted above, schemes such as these have rules of priority of interests.
7.86 The Arts Law Centre submitted that the Personal Property Securities Act 2009 (Cth) encroaches on property rights by determining the circumstances in which an owner of personal property may be deprived of their vested property rights in commercial transactions that are deemed to be arrangements for personal property securities. The Centre drew attention to the impact on individual artists and Indigenous Art Centres of the complexity of the registration system and commercial consignment arrangements.
7.87 A review of the operation of the Personal Property Securities Act was conducted in 2014–15 by Bruce Whittaker. One aspect of the review considered commercial consignment arrangements for artworks. Whittaker recommended an amendment to the definition of ‘commercial consignment’ in s 10(e) of the Act, on the basis that
a sale of an artwork on consignment through an art gallery is unlikely to give rise to a commercial consignment for the purposes of the Act, and the artist should not need to register a financing statement or take other steps to protect their interest.
7.88 Regular review mechanisms for new statutory schemes provide a way of ensuring that the operation of legislation is meeting its objectives. Whittaker made 394 recommendations for reform of the legislation and advocated that they be implemented ‘as a package’. He urged that a collaborative drafting process be conducted, with private-sector input and public consultation, through an exposure draft bill. Whittaker also recommended that whether a further review was needed be considered five years after his review. Regular reviews of such a kind are one mechanism for assessing whether the justifications for legislation still apply.
Acquisition and the Constitution
7.89 It was claimed in JT International SA v Commonwealth that the Tobacco Plain Packaging Act 2011 (Cth) (TPP Act) interfered with vested intellectual property rights. The TPP Act imposed significant restrictions upon the colour, shape and finish of retail packaging for tobacco products. It prohibited the use of trade marks on such packaging, other than as permitted by the TPP Act, which allowed the use of a brand, business or company name for the relevant tobacco product. In addition, pre-existing regulatory requirements for health messages and graphic warnings remained in place.
7.90 The plaintiff tobacco companies argued that the TPP Act effected an acquisition of their intellectual property rights and goodwill other than on just terms, contrary to s 51(xxxi) of the Constitution. The TPP Act was enacted pursuant to the power of the Commonwealth Parliament to make laws with respect to external affairs, giving effect in this instance to the World Health Organization Framework Convention on Tobacco Control.
7.91 The High Court held that these statutory requirements for the plain packaging of tobacco did not constitute an acquisition of the intellectual property rights of the cigarette companies in their trademarks, designs and get up. French CJ concluded:
In summary, the TPP Act is part of a legislative scheme which places controls on the way in which tobacco products can be marketed. While the imposition of those controls may be said to constitute a taking in the sense that the plaintiffs’ enjoyment of their intellectual property rights and related rights is restricted, the corresponding imposition of controls on the packaging and presentation of tobacco products does not involve the accrual of a benefit of a proprietary character to the Commonwealth which would constitute an acquisition. That conclusion is fatal to the case of both [tobacco company plaintiffs].
7.92 The case is an illustration of an ‘interference’ with the enjoyment of vested property rights, in the trade marks held by the plaintiff companies, that did not amount to an acquisition by the Commonwealth invoking the compensation provision under the Constitution.
7.93 Protection of intellectual property rights was an aspect of property rights identified in the Rights and Responsibilities consultation conducted by the AHRC in 2014. Protection from ‘music theft’ and online copyright infringement were concerns expressed during the consultation. The Copyright Amendment (Online Infringement) Act 2015 (Cth), passed on 22 June 2015, is intended to address some of these concerns.
7.94 One stakeholder in this Inquiry drew attention to the ALRC’s Copyright report, in recommending a ‘fair use’ exception to copyright. Dr Lucy Cradduck made a property rights argument from the perspective of the user, in arguing that
just as authors/owners of copyright have vested rights regarding copyright works, so do users of those works—these are the vested rights represented in the statutorily created fair dealing exceptions to fairly deal with copyright works. These rights are being ‘intruded upon’ by the ongoing ‘advancement’ of authors/owners rights ‘beyond proper limits’ by means of contracting out of the fair dealing exceptions.
7.95 This is essentially an argument for recognising another novel kind of property interest. Such a proposed ‘right’ has not been identified yet in law. In the AHRC’s Rights and Responsibilities consultation, one online survey response suggested that current copyright laws did not provide ‘adequate protections for fair use for comment and artistic expression’.
7.96 The Arts Law Centre of Australia also pointed to intellectual property issues, but from the perspective of the copyright owner.
Arts Law advocates for artists to be rewarded for their creative work so that they can practise their art and craft professionally. The recognition and protection of property rights are argued to be essential for promoting the intellectual and cultural development of society. The generally accepted rationale for those property rights is that the income that can be generated from copyright material is the incentive to innovation and creativity.
7.97 Such arguments were traversed by the ALRC in the copyright inquiry and the recommendations are still under consideration by the Australian Government.
Proceeds of crime
7.98 Each Australian jurisdiction has legislation concerning the confiscation of the proceeds of crime. An expansion of such laws sought to attach ‘unexplained wealth’. As explained by Dr Lorana Bartels:
Laws of this nature place the onus of proof on the individual whose wealth is in dispute. In other words, in jurisdictions with unexplained wealth laws, it is not necessary to demonstrate on the balance of probabilities that the wealth has been obtained by criminal activity, but instead, the state places the onus on an individual to prove that their wealth was acquired by legal means.
7.99 The Commonwealth laws include the Proceeds of Crime Act 1987 (Cth) and the Proceeds of Crime Act 2002 (Cth). The 1987 Act was developed in consultation with the states and territories ‘in what was intended to form a consistent, if not uniform, Commonwealth wide legislative package providing for conviction based forfeiture of property with orders made in one jurisdiction being capable of enforcement in any other’. In its 1999 report, Confiscation that Counts—A Review of the Proceeds of Crime Act 1987, the ALRC proposed legislation that is reflected in the 2002 Act, recommending the expansion of the earlier legislation to include a civil forfeiture regime.
7.100 The 1987 Act is a conviction-based forfeiture regime; the 2002 Act, as explained in the Explanatory Memorandum, is ‘a civil forfeiture regime, that is, a regime directed to confiscating unlawfully acquired property, without first requiring a conviction’. One particular aspect was the targeting of ‘literary proceeds’. As set out in the Explanatory Memorandum to the 2002 Bill:
The Bill introduces provisions for the forfeiture of literary proceeds, which are benefits a person derives from the commercial exploitation of their notoriety from committing a criminal offence. The expression ‘literary proceeds’ is intended to include ‘cheque-book journalism’ related to criminal activity. In general those proceeds tend to fall outside the scope of recoverable proceeds of crime as they are often not generated until after the person has been convicted (and achieved notoriety). The Bill sets out provisions for the confiscation of proceeds derived from the exploitation of criminal notoriety by means of a type of pecuniary penalty order against the person.
7.101 Proceeds of crime legislation and other laws providing for forfeiture of property have a long history. As the ALRC commented in the 1999 report, ‘[f]orfeiture as a consequence of wrongful action is a concept whose origins in English law can be traced back to antiquity’. The ALRC cited two early examples: the feudal law of ‘deodand’ (Deo—to god; dandam, to be given), and the felony forfeiture rule. The effect of deodand was ‘to render forfeit any instrument or animal that was the cause of accidental death of a person’. With respect to forfeiture, the ALRC cited the common law rule under which the goods and chattels of a person convicted of a felony ‘became forfeit to the Crown’ and the related concept of ‘attainder’, ‘under which all civil rights and capacities were automatically extinguished on sentence of death upon conviction for treason or felony’.
7.102 With the disappearance of the old common law rules, new ones were developed, such as the rule that prevented a killer from benefiting from the estate of the person killed. In addition, new statutory forms of forfeiture have been introduced: ‘in rem forfeiture laws which permit confiscation of goods employed for, or derived from, illegal activity’. In the Australian context, the Customs Act 1901 (Cth) was an early Commonwealth example—a modern iteration of the old law of deodand as its focus was upon the goods themselves, rather than upon conviction.
7.103 The Proceeds of Crime Act 2002 (Cth) was said to implement Australia’s obligations under the International Convention for the Suppression of the Financing of Terrorism, and resolutions of the United Nations Security Council relevant to the seizure of terrorism related property.
7.104 In 2010 the reach of the legislation was expanded to include ‘unexplained wealth’ provisions. These provisions
allow the court to make orders with respect to the restraint and forfeiture of assets where the court is satisfied that there are reasonable grounds to suspect that a person’s total wealth exceeds the value of the person’s wealth that was lawfully acquired.
7.105 The Revised Explanatory Memorandum said that the expansion of the legislation invoked art 20 of the United Nations Convention Against Corruption, entitled ‘Illicit Enrichment’:
Subject to its constitution and the fundamental principles of its legal system, each State Party shall consider adopting such legislative and other measures as may be necessary to establish as a criminal offence, when committed intentionally, illicit enrichment, that is, a significant increase in the assets of a public official that he or she cannot reasonably explain in relation to his or her lawful income.
7.106 The Commonwealth unexplained wealth regime draws on the Northern Territory and Western Australian experience, but the Commonwealth’s scheme is limited to confiscating unexplained wealth derived from offences within Commonwealth constitutional power. In the background to the Commonwealth provisions was an agreement by the Standing Committee of Attorneys-General, in April 2009, to a set of resolutions ‘for a comprehensive national response to combat organised crime’, including to strengthen criminal asset confiscation by the introduction of unexplained wealth provisions.
7.107 However, proceeds of crime legislation may raise concerns about its breadth. In 2006, Tom Sherman AO, conducted the first independent review of the 2002 legislation, pursuant to the requirement for such a review in s 327 of the Act. He stated:
Unexplained wealth provisions are no doubt effective but the question is, are they appropriate considering the current tension between the rights of the individual and the interests of the community?
7.108 The Law Council submitted to this ALRC Inquiry that civil confiscation proceedings and unexplained wealth proceedings under the Proceeds of Crime Act 2002 (Cth) ‘have the potential to interfere with property rights’ and that consideration should be given as to ‘whether these schemes contain adequate safeguards to ensure proportionality and that intrusion upon property rights is justified’. Similarly, in the Rights and Responsibilities consultation, concern was expressed particularly about state and territory legislation:
Property rights may be undermined by disproportionate criminal confiscation laws, which provide for the forfeiture of all assets owned by a person who is a declared ‘drug trafficker’. The submission from the Australian Lawyers Alliance noted:
… [C]riminal confiscation laws in the Northern Territory and Western Australia are currently grossly disproportional to an offence, and deeply impact upon an individual and their family’s rights to own property and for any acquisition to be on ‘just terms’.
7.109 In 2014, in Attorney-General (NT) v Emmerson, the High Court considered the forfeiture scheme of the Northern Territory. The Northern Territory Court of Appeal had held that a statutory scheme for the forfeiture of property of those convicted three or more times within a 10 year period of drug trafficking was invalid. One ground of alleged invalidity of the scheme was that it provided for an acquisition of property otherwise than on just terms.
7.110 The objectives of the scheme were two-fold: to deter criminal activity and to prevent the unjust enrichment of persons involved in criminal activities. The objects were penal and in addition to punishment imposed in criminal proceedings.
7.111 A majority of the High Court (French CJ, Hayne, Crennan, Kiefel, Bell and Keane JJ) in Emmerson upheld the Northern Territory legislation. The Court stated:
The proper inquiry … is the subject of the statutory scheme. The question is whether the statutory scheme can be properly characterised as a law with respect to forfeiture, that is, a law which exacts or imposes a penalty or sanction for breach of provisions which prescribe a rule of conduct. That inquiry must be answered positively, which precludes any inquiry into the proportionality, justice or wisdom of the legislature’s chosen measures.
7.112 As the Court further explained,
The provisions comprising the statutory scheme in respect of declared drug traffickers do not cease to be laws with respect to the punishment of crime because some may hold a view that civil forfeiture of legally acquired assets is a harsh or draconian punishment. As Dixon CJ said, concerning the customs legislation providing for forfeiture considered in Burton v Honan:
‘once the subject matter is fairly within the province of the Federal legislature the justice and wisdom of the provisions which it makes in the exercise of its powers over the subject matter are matters entirely for the Legislative and not for the Judiciary’.
7.113 With respect to the argument that the provisions in their breadth amounted to an acquisition of property without provision of just terms, the Court said that characterising them in this way was ‘erroneous’:
It is within the province of a legislature to gauge the extent of the deleterious consequences of drug trafficking on the community and the soundness of measures, even measures some may consider to be harsh and draconian punishment, which are thought necessary to both ‘deter’ and ‘deal with’ such activities. The political assessments involved are matters for the elected Parliament of the Territory and complaints about justice, wisdom, fairness or proportionality of the measures adopted are complaints of a political, rather than a legal, nature.
7.114 As the law was considered outside s 51(xxxi), the Court’s judgment is an example of an application of the principle of legality in the context of proceeds of crime legislation: the legislature having made its intention clear, the question of assessing things like ‘proportionality’ were not a matter for the Court, but for the ‘elected Parliament’.
7.115 In 2012 the Parliamentary Joint Committee on Law Enforcement recommended strengthening the proceeds of crime legislation further (the 2012 report). The Crimes Legislation Amendment (Unexplained Wealth and Other Measures) Act 2014 (Cth)was passed on 9 February 2015 to amend the Proceeds of Crime Act 2002 (Cth).
7.116 The Parliamentary Joint Committee on Law Enforcement recommended ‘major reform of the way unexplained wealth is dealt with in Australia as part of a harmonisation of Commonwealth, state and territory laws’.
Unexplained wealth legislation represents a new form of law enforcement. Where traditional policing has focused on securing prosecutions, unexplained wealth provisions contribute to a growing body of measures aimed at prevention and disruption. In particular, unexplained wealth provisions fill an existing gap which has been exploited, where the heads of criminal networks remain insulated from the commission of offences, enjoying their ill-gotten gains.
7.117 The Crimes Legislation Amendment (Unexplained Wealth and Other Measures) Bill 2014 was reviewed by the Senate Legal and Constitutional Affairs Legislation Committee and the Senate Standing Committee for the Scrutiny of Bills (Scrutiny of Bills Committee). The Legal and Constitutional Affairs Committee supported the amendments to strengthen the Proceeds of Crime Act 2002 (Cth), informed by its view that ‘serious and organised crime poses a significant threat to Australian communities’.
7.118 The Parliamentary Joint Committee on Law Enforcement made two recommendations of relevance to this chapter that were included in the Bill: one concerning the evidence relevant to unexplained wealth proceedings that could be seized under a search warrant; the other concerning the removal of a court’s discretion to make unexplained wealth restraining orders where a person’s wealth is over $100,000.
7.119 There are three types of orders that can be sought in relation to unexplained wealth: unexplained wealth restraining orders—s 20A; preliminary unexplained wealth orders—s 179B; and unexplained wealth orders—s 179E.
7.120 The removal of discretion was traversed fully in the 2012 report and by the Legal and Constitutional Affairs Committee. As explained in the 2012 report:
In the making of final orders for most proceedings under the [Proceeds of Crime Act], if the appropriate conditions and tests are satisfied, then the court must make that final order. In the case of unexplained wealth orders, however, the court retains a discretion and may, rather than must, make the order, even though the CDPP or the agency bringing the application meets all of the requirements.
7.121 The 2012 report recommended that the court’s discretion to make a restraining or preliminary unexplained wealth order be removed in cases where the amount of unexplained wealth was more than $100,000. The Legal and Constitutional Affairs Committee supported this approach, noting the additional safeguards in cases concerning unexplained wealth restraining orders and final unexplained wealth orders, which provided that the court may refuse an order if ‘it is not in the public interest to make the order’:
In relation to concerns raised in respect of removing the court’s discretion to make an unexplained wealth order, the committee considers that the safeguards provided by the bill to retain the discretion where unexplained wealth is less than $100,000 or where it is not in the public interest to make the order are adequate and will reinforce the purpose of the unexplained wealth provisions to target the ‘Mr and Mrs Bigs’ of organised crime.
7.122 The kinds of concerns addressed by the Legal and Constitutional Affairs Committee are reflected in the submission of the Law Council, which was concerned about there being ‘adequate safeguards … to protect individual rights, or clear limits on the scope of prescribed power’.
7.123 An assessment that takes into account safeguards and issues of proportionality is one that may occur within the parliamentary context, forming part of the scrutiny mechanisms applying to parliamentary bills. This is discussed in Chapter 2. As noted above, the various bills to expand or ‘strengthen’ the proceeds of crime legislation have been subject to such scrutiny. The 2002 legislation expressly included a review requirement. This is one mechanism for ensuring that the potential width of legislation is reviewed periodically. Since 2010 the confiscation scheme has been expressly subject to the oversight of the Parliamentary Joint Committee on Law Enforcement.
7.124 With the expansion of the legislation in 2015, to achieve a national coordinated approach, a review that considers the operation of the legislation across Australia may be appropriate. Such a review could also take into account issues of proportionality and scope. Specific areas of review may concern safeguards and procedural fairness issues.
Search and seizure provisions
7.126 Under provisions introduced into the Crimes Act 1914 (Cth) through the Crimes Legislation Amendment Act 2011 (Cth) electronic equipment may be temporarily removed from warrant premises for the purposes of examination. An executing officer need not inform the person where and when the equipment will be examined if he or she believes on reasonable grounds that having the person present might endanger the safety of a person or prejudice an investigation or prosecution. The Law Council submitted that the 14 day time limit allowed for examination of removed electronic equipment, ‘may involve a significant disruption to business and unjustifiably interfere with property rights, if a more proportionate measure is available to achieve the same end’.
7.127 While the Crimes Legislation Amendment Bill 2010 was discussed by the Scrutiny of Bills Committee, there was no comment on these provisions.
7.128 The Law Council also drew attention to pt 1AAA of the Crimes Act, whichwas introduced by the Counter-Terrorism Legislation Amendment (Foreign Fighters) Act 2014 (Cth). These provisions allow an Australian Federal Police member or special member to search a property under a delayed notification search warrant without immediate notification to the occupier. The Law Council submitted that, as there is ‘only provision for compensation for damage to electronic equipment (section 3ZZCI) rather than other property owned by an individual, questions arise as to whether the scheme is reasonable or proportionate’.
7.129 In reviewing the Counter-Terrorism Legislation Amendment (Foreign Fighters) Bill 2014, the Scrutiny of Bills Committee commented that there was a ‘potential for a delayed notification search warrant scheme to trespass on personal rights and liberties (by allowing AFP officers to covertly enter and search premises, without the knowledge of the occupier of the premises)’. However, these comments addressed the extension of powers to issue warrants to new categories of legal officers, rather than addressing issues of interference with personal property.
7.130 The Parliamentary Joint Committee on Intelligence and Security’s Advisory Report into the Bill also noted that submissions had raised the ‘adequacy of compensation’ as a concern with the delayed notifications search warrant scheme. The Committee did not make specific recommendations about compensation for the seizure of property.
7.131 The Attorney-General’s Department’s submission to that Committee’s report included the following justificatory comments for pt 1AAA:
These amendments are a response to the challenge posed by current requirements to notify the occupier of the premises in relation to the execution of a search warrant. Such notification alerts suspects of police interest in their activities, and can disrupt the investigation allowing a person to avoid further detection, conceal or destroy evidence, or notify their associates, who may not yet be known to police. The item introduces a new scheme, limited to terrorism offences, to allow delaying notification of the execution of the warrant. This will give the AFP the significant tactical advantage of allowing an investigation to remain confidential. An application for a delayed notification search warrant will be subject to multiple levels of scrutiny and authorisation. Extensive safeguards will ensure that the Bill balances the legitimate interests of law enforcement in preventing serious terrorism offences with the need to protect important human rights.
7.132 While not specifying which provisions in the Bill act as ‘extensive safeguards’, it may be understood that they include the threshold for issuing a warrant under pt 1AA of the Crimes Act, which provides that a magistrate may issue a warrant to search premises where there are reasonable grounds for suspecting that there is, or will be in the next 72 hours, any evidentiary material at the premises. Sections 3F and 3J outline the things that are authorised by the search warrant and the powers of executing officers. Section 3M provides that the owner be afforded compensation for damage to equipment sustained in the execution of a warrant, in some circumstances. Powers of search and seizure relating to terrorist acts and offences are subject to a sunset clause. The inclusion of such a clause is one way of counterbalancing concerns about potential encroachment on rights—by giving it a limited duration.
7.133 A further aspect of search and seizure powers raised by the Law Council concerns s 35K of the Australian Security and Intelligence Organisation Act 1979 (Cth) which excuses the Commonwealth from liability to pay a person compensation for property damage in the course of, or as a direct result of, a special intelligence operation. The Law Council submitted that
[t]his may not be justified in many cases as a matter of national security if, for example, the property is owned by a third party or becomes damaged incidentally to the special intelligence operation. Further, precluding payment of compensation tends to increase the likelihood that such an encroachment is disproportionate.
7.134 Section 35K was also introduced by the Counter-Terrorism Legislation Amendment (Foreign Fighters) Bill 2014. The Scrutiny of Bills Committee requested information from the Attorney-General as to whether the payment of compensation in respect of damage to property is consistent with that taken in relation to other controlled operations scheme. The Committee did not note a response. The Explanatory Memorandum to the Bill also did not provide a justification for s 35K, noting only that ‘there remains scope for the payment of compensation to aggrieved individuals in appropriate cases’.
7.135 A number of aspects of counter-terrorism legislation have been raised by stakeholders in this Inquiry, as well as through the parliamentary scrutiny processes. Some of these concerns may prompt further review.
See, eg, Rosalind Croucher and Prue Vines, Succession: Families, Property and Death (LexisNexis Butterworths, 4th ed, 2013) [5.31]. The Uniform Succession Laws Project produced a Model Intestacy Bill in 2007. See Ibid [5.12]. See also the discussion of the National Committee recommendations in New South Wales Law Reform Commission, Uniform Succession Laws: Intestacy Report No 116 (2007).The history of the bona vacantia jurisdiction is described in Brown v NSW Trustee and Guardian  NSWCA 431 –[112.
The Bills Digest concerning the Treasury Legislation Amendment (Unclaimed Money and Other Measures) Bill 2012 notes the origin of the unclaimed money laws in bona vacantia, and also the laws of escheat: Kai Swoboda, Parliament of Australia, Bills Digest, No 50 of 2012–2013 (November 2012) 5. Escheat was a doctrine concerning land, where bona vacantia concerned personal property. Only the latter would concern bank accounts, as choses in action.
Provision was made for the Governor of the Bank, with the consent of the Treasurer, to allow any claim after that period has expired, ‘if he is satisfied that special reasons exist for the allowance of the claim’: Commonwealth Bank Act 1911 (Cth) s 51.
First Home Saver Accounts Act 2008 (Cth); Life Insurance Act 1995 (Cth); Superannuation (Unclaimed Money and Lost Members) Act 1999 (Cth). A number of exceptions and different types of rules apply for particular accounts under the Banking Regulations 1966 (Cth). For example, term deposits and farm management accounts are exempt from s 69 provided the account satisfies the criteria in s 69(1A). Further, children’s accounts must remain inactive for at least seven years before they are characterised as unclaimed moneys: reg 20(10).
Explanatory Memorandum, Banking Amendment (Unclaimed Money) Bill 2012 (Cth). The Act came into force on 1 July 2013.
See The Hon Bernie Ripoll, ‘Media Release’ (Media Release No 051, 26 November 2012).
Parliamentary Joint Committee on Human Rights, Parliament of Australia, Examination of Legislation in Accordance with the Human Rights (Parliamentary Scrutiny) Act 2011, Seventh Report of 2012 (November 2012) [1.104].
Senate Standing Committee on Economics, Parliament of Australia, Treasury Amendment (Unclaimed Money and Other Measures) Bill 2012 (2012) [3.54]. There was a dissenting report released by the Coalition members of the Committee.
Institute of Public Affairs, ‘Gillard Government Seizure of Inactive Bank Accounts Is an Attack on Property Rights’ (Media Release, 28 February 2013).
An exposure draft of the amending legislation was released on 28 May 2015 in the form of the Banking Amendment (Unclaimed Money) Regulation 2015 (Exposure Draft Regulation); Banking Laws Amendment (Unclaimed Money) Bill 2015 (Exposure Draft). Submissions were sought by 26 June 2015.
Banking Laws Amendment (Unclaimed Money) Bill 2015—Explanatory Guide [1.4]–[1.5].
Australian Taxation Office, ‘Law Administration Practice Statements’ (PS LA 1998/1) .
The Tax Institute, Submission 68.
Ibid. The particular provisions identified were: s 14ZW(1)(aad)(i) and s 14ZYA.
Australian Taxation Office, ‘General Debt Collection Powers and Principles’ (PS LA 2011/14) –.
Australian Taxation Office, ‘Enforcement Measures Used for the Collection and Recovery of Tax-Related Liabilities and Other Amounts’ (PS LA 2011/18) –.
The Tax Institute, Submission 68.
PS LA 2011/18, for example, was issued first on 14 April 2011, and updated on 17 May 2013 and 3 July 2014.
See further Australian Financial Security Authority, Personal Property Securities Register <www.ppsr.gov.au>.
Arts Law Centre of Australia, Submission 50.
Bruce Whittaker, Review of the Personal Property Securities Act 2009—Final Report (2015). The report was tabled on 18 March 2015. A review of the Act was required under s 343.
Ibid rec 17.
JT International SA v Commonwealth (2012) 250 CLR 1.
Tobacco Plain Packaging Act 2011 (Cth) ss 18–19; Tobacco Plain Packaging Regulations 2011 (Cth).
Tobacco Plain Packaging Act 2011 (Cth) s 3(1)(b). See also World Health Organization Framework Convention on Tobacco Control, opened for signature 16 June 2003, 2302 UNTS 166 (entered into force 27 February 2005). The legislation also relied on other constitutional powers, as set out in s 14.
JT International SA v Commonwealth (2012) 250 CLR 1.
Australian Human Rights Commission, Rights and Responsibilities (Consultation Report, 2015).
The Copyright Amendment (Online Infringement) Act 2015 (Cth) allows owners of copyright to apply to the Federal Court for an order requiring a carriage service provider to block access to an online location that has the primary purpose of infringing copyright or facilitating the infringement of copyright.
Australian Law Reform Commission, Copyright and the Digital Economy, ALRC Report 122 (2014).
L Cradduck, Submission 67. Cradduck recommended that contracting out of copyright exceptions should be prohibited.
Australian Human Rights Commission, Rights and Responsibilities (Consultation Report, 2015) 44.
Arts Law Centre of Australia, Submission 50.
See summary in Lorana Bartels, ‘Unexplained Wealth Laws in Australia’ (Trends & Issues in Criminal Justice No 395, Australian Institute of Criminology, 2010).
Ibid. See also Ch 11.
Australian Law Reform Commission, Confiscation That Counts—A Review of the Proceeds of Crime Act 1987, ALRC Report No 87 (1999) [1.6], [2.10]–[2.19].
Australian Law Reform Commission, Confiscation That Counts—A Review of the Proceeds of Crime Act 1987, ALRC Report No 87 (1999).
Explanatory Memorandum, Proceeds of Crime Bill 2002 (Cth).
Australian Law Reform Commission, Confiscation That Counts—A Review of the Proceeds of Crime Act 1987, ALRC Report No 87 (1999) [2.1].
The origin of the word ‘felony’ is referred to by Gageler J in Attorney-General (NT) v Emmerson  HCA 13 . As Gageler J points out, there is a difference of view as to its origin: Blackstone, above n 1, vol IV, bk IV, ch 7, 95; Fredrick Pollock and Frederic Maitland, The History of English Law before the Time of Edward I (Cambridge University Press, 2nd ed) vol II, vol ii, 464–465.
‘This, in turn, had its genesis in the even earlier Anglo-Saxon concept of brana (the slayer) where the object causing death was forfeited and given to the family of the deceased’: Australian Law Reform Commission, Confiscation That Counts—A Review of the Proceeds of Crime Act 1987, ALRC Report No 87 (1999) [2.2]. Deodand became a problem in the age of railways and industrial equipment. It was abolished at the same time as the introduction of a statutory right to seek compensation for wrongful death in Lord Campbell’s Act: see Richard Fox and Arie Freiberg, ‘Fighting Crime with Forfeiture: Lessons from History’ (2000) 6 Australian Journal of Legal History 1, 36.
Australian Law Reform Commission, Confiscation That Counts—A Review of the Proceeds of Crime Act 1987, ALRC Report No 87 (1999) [2.4]. The common law rule required the forfeiture of property in the case of offences punishable by death (the felony forfeiture rule). Dr KJ Kesselring cites two examples from the UK national archives in the public record office: KJ Kesselring, ‘Felony Forfeiture in England, c. 1170–1870’ (2009) 30 The Journal of Legal History 201, 201. For a consideration of the old rules see, also, eg, Jacob J Finkelstein, ‘The Goring Ox: Some Historical Perspectives on Deodands, Forfeitures, Wrongful Death and the Western Notion of Sovereignty’ (1973) 46 Temple Law Quarterly; Richard Fox and Arie Freiberg, above n 132.
Forfeitures for Treason and Felony Act 1870 33 & 34 Vict, c 23. The legislation was followed in Australia: see Richard Fox and Arie Freiberg, above n 132, 44–7.
See, eg, Forfeiture Act 1995 (NSW).
Australian Law Reform Commission, Confiscation That Counts—A Review of the Proceeds of Crime Act 1987, ALRC Report No 87 (1999) [2.5].
Richard Fox and Arie Freiberg, above n 132, 38. Freiberg and Fox trace the customs forfeiture provisions to the reign of Richard II and the attempts to regulate trade and encourage English shipping. To restrict coastal trade to English ships, goods carried on foreign vessels were forfeited. This approach was chosen as it was administratively convenient, and did not require customs staff to have to prove the elements of a crime: 39–41. The authors refer in particular to Lawrence Harper, The English Navigation Laws: A Seventeenth-Century Experiment in Social Engineering (Columbia University Press, 1939); Norman Gras, The Early English Customs System (Harvard University Press, 1918).
Explanatory Memorandum, Proceeds of Crime Bill 2002 (Cth).
Crimes Legislation Amendment (Serious and Organised Crime) Act 2010 (Cth).
Revised Explanatory Memorandum, Crimes Legislation Amendment (Serious and Organised Crime) Bill 2009 18.
United Nations Convention against Corruption, opened for signature 9 December 2003, 2349 UNTS 41 (entered into force 14 December 2005). The Convention entered into force on 14 December 2005. See also, Revised Explanatory Memorandum, Crimes Legislation Amendment (Serious and Organised Crime) Bill 2009 4.
Revised Explanatory Memorandum, Crimes Legislation Amendment (Serious and Organised Crime) Bill 2009 4.
This body is now referred to as the Law, Crime and Community Safety Council (LCCSC).
Revised Explanatory Memorandum, Crimes Legislation Amendment (Serious and Organised Crime) Bill 2009 1. SCAG issued a communiqué on a national response to organised crime. In this communiqué, Ministers agreed to ‘arrangements to support the comprehensive national response … to effectively prevent, investigate and prosecute organised crime activities and target the proceeds of organised criminal groups’: Standing Committee of Attorneys-General, Communiqué 6–7 August 2009 <www.lccsc.gov.au>.
Tom Sherman, ‘Report on the Independent Review of the Operation of the Proceeds of Crime Act 2002 (Cth)’ (Attorney-General’s Department, 2006) 37.
Law Council of Australia, Submission 75.
Australian Human Rights Commission, Rights and Responsibilities (Consultation Report, 2015) 46.
Emmerson v DPP (2013) 33 NTLR 1. Under Criminal Property Forfeiture Act (NT) s 94(1). The history of such provisions is described in the judgment of the majority at Attorney-General [NT] v Emmerson  HCA 13 –.
Emmerson v DPP (2013) 33 NTLR 1,  (Barr J in agreement with Riley CJ).
Attorney-General [NT] v Emmerson  HCA 13 . It was argued that the penal aspect of the scheme was revenue-raising and played ‘no legislative role in the enforcement of the criminal law in relation to drug offences or in the deterrence of such activities’.
Ibid ; Burton v Honan (1994) 86 CLR 169, 180.
Attorney-General [NT] v Emmerson  HCA 13 . Compare Gageler J who concluded that the dominant character of the laws was one with respect to the acquisition of property, and as such were laws for acquisition otherwise than on just terms: Ibid .
A clear intention could not have overcome s 51(xxxi), if it applied.
Parliamentary Joint Committee on Law Enforcement, Parliament of Australia, Inquiry into Commonwealth Unexplained Wealth Legislation and Arrangements (March 2012). Legislation reflecting some of the Committee’s recommendations was introduced in November 2012: Crimes Legislation Amendment (Organised Crime and Other Measures) Bill 2012 (Cth) sch 1.This Bill lapsed.
Parliamentary Joint Committee on Law Enforcement, Parliament of Australia, Inquiry into Commonwealth Unexplained Wealth Legislation and Arrangements (March 2012) viii.
Senate Standing Committee on Legal and Constitutional Affairs, Parliament of Australia, Crimes Legislation Amendment (Unexplained Wealth and Other Measures) Bill 2014 (June 2014) [2.43]. There was a single recommendation in the report: to support the passage of the Bill in the Senate: Ibid Rec 1, [2.51].
Parliamentary Joint Committee on Law Enforcement, Parliament of Australia, Inquiry into Commonwealth Unexplained Wealth Legislation and Arrangements (March 2012) rec 5; Crimes Legislation Amendment (Unexplained Wealth and Other Measures) Bill 2014 (Cth) sch 1 items 27–28.
Parliamentary Joint Committee on Law Enforcement, Parliament of Australia, Inquiry into Commonwealth Unexplained Wealth Legislation and Arrangements (March 2012) recs 12–13; Crimes Legislation Amendment (Unexplained Wealth and Other Measures) Bill 2014 (Cth) sch 1 items 2, 4, 18.
Parliamentary Joint Committee on Law Enforcement, Parliament of Australia, Inquiry into Commonwealth Unexplained Wealth Legislation and Arrangements (March 2012) [3.183]. The Committee noted that when the original Bill was first introduced in 2009 it did not include a discretion, but it was included by amendments in the Senate.
Ibid rec 12. Additional statutory oversight mechanisms were recommended: Ibid rec 13.
Proceeds of Crime Act 2002 (Cth) ss 20A(4), 179E(6).
Senate Standing Committee on Legal and Constitutional Affairs, Parliament of Australia, Crimes Legislation Amendment (Unexplained Wealth and Other Measures) Bill 2014 (June 2014) [2.45].
Law Council of Australia, Submission No 5 to Senate Standing Committee on Legal and Constitutional Affairs, Parliament of Australia, Crimes Legislation Amendment (Unexplained Wealth and Other Measures) Bill 2014 (June 2014). See also Parliamentary Joint Committee on Law Enforcement, Parliament of Australia, Inquiry into Commonwealth Unexplained Wealth Legislation and Arrangements (March 2012) rec 13.
Proceeds of Crime Act 2002 (Cth) s 179U. This provision was introduced by the Crimes Legislation Amendment (Serious and Organised Crime) Act 2010 (Cth).
These were matters raised during parliamentary committee scrutiny: see, eg, Parliamentary Joint Committee on Human Rights, Parliament of Australia, Examination of Legislation in Accordance with the Human Rights (Parliamentary Scrutiny) Act 2011, Fourth Report of the 44th Parliament (March 2014).
The definition of ‘property’ in the Crimes Act 1914 (Cth) is very broad, including ‘money and every thing, animate or inanimate, capable of being the subject of ownership’: Ibid s 3.
Law Council of Australia, Submission 75.
Crimes Act 1914 (Cth) ss 3K(3), (3AA).
Law Council of Australia, Submission 75.
Senate Standing Committee for the Scrutiny of Bills, Parliament of Australia, Fourteenth Report of 2014 (October 2014) 786.
Parliamentary Joint Committee on Intelligence and Security, Parliament of Australia, Advisory Report on the Counter–Terrorism Legislation Amendment (Foreign Fighters) Bill (October 2014) [2.49].
Attorney-General’s Department, Submission No 8 to the Parliamentary Joint Committee on Intelligence and Security, Advisory Report on the Counter-Terrorism Legislation Amendment (Foreign Fighters Bill 2014 (2014).
Crimes Act 1914 (Cth) s 3E(1).
Ibid s 3UK.
Law Council of Australia, Submission 75.
Explanatory Memorandum, Counter-Terrorism Legislation Amendment (Foreign Fighters) Bill 2014 (Cth).