Contents

Appendix 3
Other forms of penalty

Criminal gain disgorgement penalties

The Criminal Proceeds (Recovery) Act 2009 contains a civil restraint and forfeiture scheme, based on property and profits derived from “significant criminal activity”. Unlike its predecessor (the Proceeds of Crime Act 1991), there is no need for a conviction for the 2009 Act to kick in. A judge can order forfeiture if s/he is satisfied that the property in question is derived from “significant criminal activity”, regardless of whether the offending has been proved beyond reasonable doubt.726
The Act declares proceedings for a whole range of orders to be civil (except for instrument forfeiture orders which require a conviction). Forfeiture orders do not involve imposing a pecuniary penalty, but they can have a significantly punitive effect by depriving someone of their property or assets, despite no criminal offence having been proved. Although the purpose clause of the Act makes no reference to punishment,727  it has been argued that the scheme is punitive because of the stigma that may attach to a person subject to such an order.728
A number of specific Acts also contain criminal disgorgement gain penalties.729  These are dependent on the defendant first being convicted of a criminal offence. But matters such as whether the gain occurred in the course of committing the offence, and the quantum of the gain, are determined on the civil standard of proof. An example is the Fair Trading Act 1986, in which operating a pyramid selling scheme amounts to an offence and defendants can be ordered to pay a financial gain penalty up to the amount of the financial gain.730  Under the Resource Management Act 1993, offences relating to the discharge of waste in marine coastal areas may be subject to an additional penalty of up to three times the value of the financial gain made from the offence.731
726Criminal Proceeds (Recovery) Act 2009, s 5(1) definition of “tainted property” and s 6 definition of “significant criminal activity”.
727Above, s 3(2). It states: “The criminal proceeds and instruments forfeiture regime established under this Act proposes to— (a) eliminate the chance for persons to profit from undertaking or being associated with significant criminal activity; and (b) deter significant criminal activity; and (c) reduce the ability of criminals and persons associated with crime or significant criminal activity to continue or expand criminal enterprise; and (d) deal with matters associated with foreign restraining orders and foreign forfeiture orders that arise in New Zealand.”
728See P Wright “Criminal Punishment without Civil Rights: the Criminal Proceeds and Instruments Bill’s Punitive Civil Sanctions” (2006) 37 VUWLR 623 and G Faramarzi “Criminal Proceeds Recovery” [2010] NZLJ 205.
729For example, the Civil Aviation Act 1990, s 47, Fair Trading Act 1986, s 40A, Health Act 1956, s 69ZZW, Immigration Advisers Licensing Act 2007, s 72, Resource Management Act 1991, s 339B, Telecommunications Act 2001, s 156R, United Nations Convention on the Law of the Sea Act 1996, s 8 and Waste Minimisation Act 2008, s 67.
730Fair Trading Act 1986, s 40A.
731Resource Management Act 1993, s 339B.