Commissioner of the Australian Federal Police v Zhao

The High Court has unanimously dismissed an appeal from a decision of the Victorian Court of Appeal to refuse to stay civil forfeiture proceedings under the Proceeds of Crime Act 2002 (Cth). The first and second respondents, a husband and wife, were allegedly involved in running a brothel. The second respondent has been charged with dealing with the proceeds of crime, and the first respondent has not been charged. After their assets were seized and restrained pending a forfeiture application, the respondents applied for a stay of proceedings until after the hearing and determination of the charges against the second respondent. Lacava J rejected the application on the basis that there was no evidence as to how the forfeiture proceedings might give rise to a real risk of prejudice in the criminal proceedings. The VSCA held that the judge made errors of fact (namely, that there was indeed evidence relevant to a real risk of prejudice in the criminal proceedings) and law in holding that Lee v NSW Crime Commission [2013] HCA 39 (see also Anna Dziedzic’s post here) dictated that staying the forfeiture proceedings would frustrate the clear intention and purpose of POCA. The VSCA held that POCA did not abrogate the second respondent’s right to the privilege against self-incrimination: if forfeiture proceedings preceded the criminal trial, then those charges would be altered in a fundamental way contrary to the privilege against self-incrimination.

The Court unanimously agreed with the VSCA and held that the stay should have been granted. The risk of prejudice to the second respondent was clear, and it was not necessary for him to specify that risk: ‘to require the second respondent to do so 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’ (at [43]). The Court also rejected the Commissioner’s argument that protective orders to maintain confidentiality could be made or that the evidence could be given in closed court (at [44]). The Court also noted that the current case differed from Lee No 2, in which the High Court held that Lee’s criminal trial was fundamentally altered due to the NSW Crime Commission’s unlawful sharing of evidence with the prosecution, because here the issue arose at an earlier point, placing the second respondent ‘in a position where he must decide whether to prejudice his criminal trial or his defence of the forfeiture proceedings and his case in the exclusion proceedings’ (see at [18]–[19]). While the evidence sharing provision under POCA would not make it unlawful to provide the second respondent’s evidence to the prosecution (contra the situation in Lee), ‘its possession by the prosecution might affect his defence’ and the VSCA’s conclusion that protective orders could not remove this risk was ‘clearly correct’ (see [46]–[47]).

High Court Judgment [2015] HCA 5
Result Appeal dismissed
High Court Documents Zhao
Full Court Hearing [2014] HCATrans 274 4 December 2014
Special Leave Hearing [2014] HCATrans 202  12 September 2014
Appeal from VSCA [2014] VSCA 137 27 June 2014
Decision, VCC
Unreported 3 December 2013
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About Martin Clark

Martin Clark is a PhD Candidate and Judge Dame Rosalyn Higgins Scholar at the London School of Economics and Political Science and Research Fellow at Melbourne Law School. He holds honours degrees in law, history and philosophy from the University of Melbourne, and an MPhil in Law from MLS. While at MLS, he worked as a researcher for several senior faculty members, was a 2012 Editor of the Melbourne Journal of International Law, tutor at MLS and various colleges, a Jessie Legatt Scholar, and attended the Center for Transnational Legal Studies Program.