Hardship Relief under s 24 of the Criminal Assets Recovery Act 1990 (NSW)

There is little, if any, authority to guide the determination of an application for hardship relief. In Togias v New South Wales Crime Commission [2019] NSWSC 1556 (‘Togias’), the Court canvassed the few available decisions while observing that the only known cases dealing with s 24 are of limited assistance. Below are the extracted paragraphs of relevance in understanding this section:

[71]  It was held in New South Wales Crime Commission v Kelly; Kelly v New South Wales Crime Commission at [19]–[24] that the word “will” in the term “will operate to cause hardship” is used to emphasise the degree of satisfaction to be reached by the Court before making an order. Where the same word is used in “will forfeit an interest in property”, it should not be read in the future tense so as to require an application under s 24 to be made before an assets forfeiture order is made.

[72]  One of a number of first instance judgments given in a series of proceedings that were ultimately concluded in the Court of Appeal was that of Shaw J in New South Wales Crime Commission v Kelly (No 2) [2003] NSWSC 154. The appeal was not concerned with the part of the judgment in which Shaw J made an order under s 24 in respect of three children, aged 6, 8, and 13, who were dependant on the defendants. The hardship related to the prospect of the family home at Boggabri being sold. Alternative rental accommodation in that region was limited and prices in Gunnedah were said to be much higher. His Honour determined (at [73]) that in the event the home was sold, an amount of $20,000 be paid out of the proceeds for the children’s “welfare in terms of their future education and progress”. It is notable that there was no issue as to whether the children were dependent upon the defendants.

[…]

[76]  It was common ground that Ms Togias bears the onus of establishing on the balance of probabilities that an order pursuant to s 24 should be made.

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[86]  The issue as to whether the assets forfeiture order has operated to cause hardship to Ms Togias and the children is problematic. The Act gives no specific guidance on what is meant by “hardship”. Mr Averre referred to a definition contained in the Macquarie Dictionary: “A condition that bears hard upon one; severe toil, trial, oppression, or need”. Mr Singleton sought to distinguish “hardship” from “detriment” or “inconvenience”; he characterised it as “something that will cause the person’s life, that is the way they live, to become hard”.

[87]  One matter that is clear is that there is a distinct difference between this Court determining an application for relief from hardship under s 24 of the Act and a court determining a property settlement in a family law context. It is also necessary to focus upon hardship caused by the operation of the assets forfeiture order. It was accepted by Mr Averre in his submissions that it is inevitable that the order will operate so as to bring about the sale of the home, leading to the need for Ms Togias and the children to find alternative accommodation.

[88]  Ms Togias has paid a substantial sum of money by way of repaying Mr Subakti’s loan in order for the property at Glenwood to continue to be a family home for her and the children. In the almost 10 years in which this has occurred, the home has appreciated considerably in value. The available equity would now be in the vicinity of $550,000 to $600,000.  Whether Ms Togias would have an entitlement to a share in that equity, and if so, to what extent, is not a matter for this Court to determine. If she has such an entitlement, the assets forfeiture order does not take that away. As Mr Singleton submitted, “the plaintiff’s loss of wealth was caused not by the [assets forfeiture order] but by her decision to assign her funds to repaying Subakti’s loan”.

[89]  Ms Togias has caveats in place in respect of both the Glenwood home and the Seven Hills industrial unit. Her asserted interest in them is protected to that extent, but it remains a matter for her in proceedings other than this to make good her claim.

[90]  There was evidence as to how much Ms Togias had outlaid in making loan repayments on Mr Subakti’s behalf so as to enable her and the children to remain living in the Glenwood home. I have no doubt that it has been financially challenging for her. However, there was no claim that she should be reimbursed the difference between that outlay and the cost of some other form of accommodation she could have chosen to move herself and the children to. No evidence was tendered to enable such a comparison to be made.

[91]  There was evidence, primarily from the report and evidence of Ms Santa de Brigida, directed to the psychological impact that having to move house would have, especially in relation to the children who are now aged 18 and 14. The older daughter, who finished high school last year, has experienced particular difficulties, the cause of which lies elsewhere, but which may be exacerbated by having to move from the family home on account of the operation of the assets forfeiture order. However, nothing was put forward in relation to any monetary sum that might assist in some way to alleviate that concern.

[92]  The loss of the Seven Hills industrial unit is also inevitable. There was evidence as to its purchase price and the amount borrowed to fund the purchase, but there was no evidence as to its current value. It has not been a financial burden which Ms Togias has had to bear because the rental income has covered all of the costs including loan repayments. Mr Averre indicated that emphasis was not placed upon this property; the focus was upon the Glenwood home. In my view, the Seven Hills industrial unit is not significant in relation to the issue of hardship.

[93]  Ms Togias’ evidence was to the effect that she had not derived any income from the Bio-Form business for the past nine months and it has been unable to pay its debts. She has been reliant upon “loans from people and through credit cards”. I note that the current outstanding balances of a personal loan and her credit card are not greatly different from what they were at the time of her 17 April 2018 affidavit.     Aside from her mother, she has not disclosed who the other “people” are who have lent her money, or how much they have lent her.

[94]  There was no evidence as to why the Bio-Form business has not been profitable for the past 12 months. It is not possible to know whether this will persist or improve. In any event, the financial hardship that Ms Togias is now experiencing because of a lack of income from the business is not something that arises from the operation of the assets forfeiture order. Mr Averre made clear in his reply submissions that it was not asserted that hardship arises because of a loss of income resulting from the forfeiture order.

[95]  The evidence was insufficient to enable a conclusion to be drawn that any alternative accommodation Ms Togias may be able to find for herself and her two daughters, inevitably by renting rather than by purchasing, would be inferior to the Glenwood home to any appreciable extent. No submission was made that this would be so. The only evidence in relation to the prospect of renting was Ms Togias’ reference to having no rental history. I appreciate that this might make it difficult, but there is no evidence that this will prevent her from securing rental accommodation.

[96]  With the evidence being in the state it is, I am left with significant uncertainty as to what hardship has been caused to Ms Togias and the children that could be ameliorated by ordering the payment of a specific amount out of the proceeds of sale of the property. It is necessary to bear in mind that she bears the onus in this respect.

[My emphasis added.]

It appears Ms Togias fell down principally on causation. The hardship she pointed to could not be shown to flow from the operation of the assets forfeiture order. Her loss of wealth was traced to her own decision to repay Mr Subakti's loan, and her financial difficulties to business losses unconnected with the order, and, as to the hardship that was attributable to the order, the evidence was insufficient to establish how a payment would relieve it. Bearing the onus, she could not discharge it.