Fines Enforcement and Debt Recovery (Miscellaneous) Amendment Bill

Second Reading

Adjourned debate on second reading (resumed on motion).

The Hon. S.C. MULLIGHAN (Lee—Treasurer, Minister for Defence and Space Industries, Minister for Police) (17:11): This is an important bill. I am grateful for everyone's contributions and I commend it to the house.

Bill read a second time.

Committee Stage

In committee.

Clauses 1 to 41 passed.

Clause 42.

Mr TELFER: Treasurer, obviously we have had the in-depth contributions to this amendment bill. There is an aspect that stood out to me in both your contribution and also in my dissection. Under this clause, the bill will:

…delete 'the land or personal property of a debtor' and substitute:

land or personal property owned (whether solely or as co-owner) by a debtor

Can you give me some explanation as to why you think it is appropriate to have the capacity to seize the assets of an individual who potentially has committed no crime, as in the co-owner?

The Hon. S.C. MULLIGHAN: I am advised that this clause in this bill aligns the provisions of this bill with the provisions that currently exist for court-imposed fines. So a court can impose this same sanction, for want of a better term, on a person's property whether it is solely owned or jointly owned in a court setting, and this merely picks up that capacity of a court to do that and brings it into the sphere that this bill enables the Chief Recovery Officer to have the same power.

Mr TELFER: Can I just unpack this a little bit for the sake of the committee and put a bit of a hypothetical. Take a married couple and say that one part of that partnership misrepresented their business interests and were forced into paying a fine and refused to do so. Would I be right in saying that with that refusal under these proposed laws the other partner hypothetically could lose their share of the family home, with the Chief Recovery Officer having the capacity to be able to seize that asset in that scenario?

The Hon. S.C. MULLIGHAN: As a hypothetical, yes, that could happen. It has not happened to date, I should say. Usually in these matters the threat of that capacity usually has the impact of ensuring that another means can be arranged for the debt to be settled or to be attended to. But you can imagine the counterfactual where somebody who had the protection of co-ownership of assets could use that in order to protect themselves and continue on either becoming liable for these sorts of fines and so on without any recourse, and not just in a domestic relationship or a domestic setting that you point out but potentially in a commercial relationship as well. That is why it is important for this bill, as other existing legal powers enable the courts to, to look behind the relationship and ensure that those debts to the Crown can be made good.

Mr TELFER: Just to follow up from that, obviously we are talking then about a business partnership arrangement. Given this bill would allow for the seizure of the jointly owned assets, would the innocent parties in a scenario like that be compensated financially for the loss of an asset? What is the process as far as the recompense for that innocent party in the scenario that was put forward, whether it is a domestic or a business or otherwise partnership?

The Hon. S.C. MULLIGHAN: No, they would not be compensated, otherwise that would defeat the purpose of having the capacity to go and seize an asset to realise its monetary value in order to settle the debt that is owed to the Crown. But I should emphasise that this recourse is usually the last resort in order to try to settle an outstanding fine or obligation to pay a monetary sum to the Crown.

There is a very lengthy and detailed process where not only are there many multiples of opportunities provided to the person who owes the outstanding debt to either settle the debt or enter into an arrangement where over time they can settle the debt—like some sort of payment plan, for example—but failing all of those efforts to try to reach a reasonable outcome then this power exists in the same way that the courts have the capacity to seize and liquidate property or other assets, so that ultimately the punishment which is levied under various existing pieces of legislation for some type of behaviour which is prohibited or made illegal can be visited on the person who does not meet their obligations.

If you do not have this sort of recourse, the risk is that some enterprising person will work out that there is a limited extent to which the state can pursue them to settle their debts and obligations to the Crown, and they will hide behind whatever that threshold is so that they never have to meet their obligations.

Again, the first piece of advice that has been provided to me so that I can provide it to the house is that this is not in itself a new provision. It is something that already exists elsewhere. It has just been replicated for the benefit of the Chief Recovery Officer.

Mr TELFER: With your allowance, sir, I will ask a fourth on this one.

The ACTING CHAIR (Mr Odenwalder): Please do.

Mr TELFER: This will be the only clause that I will be questioning. So this section could potentially see, in the scenarios that I have put forward, innocent parties deprived of what are their legally owned assets. Those assets do not necessarily have any connection to an offence; it is the connection to a partner who has racked up a series of fines.

I do not know if you remember the speech that you made in the introduction to this piece of legislation in particular, but I want you to reflect on the converse: where an innocent party has no involvement or knowledge of a scenario where there is a fine that their partner has racked up, do you think that may leave an innocent party looking for help—to quote what you said in your speech, 'regardless of how small or large their problem might be', looking for 'someone to turn to or a voice when they feel neglected or disenfranchised'? I wonder if in trying to fix one at-risk or disenfranchised cohort, the risk or potential risk might be that you could be creating another at-risk or disenfranchised cohort?

The Hon. S.C. MULLIGHAN: I understand the point you are making that, in theory, if this legislative power was carried out—whether it is by the Chief Recovery Officer or whether it is by a magistrate or a judge—it might lead to a domestic partner who is themself not at fault or does not have an unmet obligation to the state being put at significant disadvantage, but I think the practice of both the courts and also in other areas of the Chief Recovery Officer is that at all times the opportunity is provided to enable the person who is at fault to meet their obligations in a way that does not put them at significant disadvantage.

So, for example, for monetary fines, entering into reasonable payment plans that are affordable and manageable for the person. Or, in the scenario that you mention where perhaps you have a joint owner of a property with their spouse who is running around racking up tens of thousands of dollars of fines, when it gets to this point this is not an enforcement which is taken on just one of the owners of the joint asset; it is taken upon both. You would then have an opportunity for there to be a way in which that obligation could be met through some other arrangement.

I have had, I will not say every member of parliament but many, members of parliament write to me and/or the Chief Recovery Officer on behalf of their constituents who feel that they are at threat of being put into difficult circumstances through recovery actions. It has almost exclusively been the case that, unless there are really exceptional circumstances, arrangements are offered and entered into where someone can meet their obligation in a way which does not put them into difficult circumstances.

I have even been advised, not in my capacity as Treasurer but as Minister for Police, that when we talk about—and I will not get the name of the act right—the criminal assets confiscation law that is in place here in South Australia, when a guilty finding is made by a court and it then becomes the task of the office of the DPP to work out how to seize and liquidate those assets, quite often those convicted of serious crimes will be given the opportunity to say, for example, 'Look, please don't seize my house because I have got my wife and three kids who are living in there. Is there some other way that we can reasonably meet the requirements of the act by you seizing assets proportionate to the crime that I have been convicted of?', and so on.

So I think there is a bit of history and a bit of precedent to how these powers are actually used. Hopefully, that will assuage your legitimate concerns that, left unchecked or used inappropriately, powers that are available either to the judiciary or now to the Chief Recovery Officer will not be used in a way which would put innocent parties, as you call them, into impecunious circumstances.

Mr TELFER: Minister, you spoke about a scenario where you do not want an individual to think that there is a limit to the amount that can be clawed back by the state with the asset seizure aspect. Obviously, the changes that have been put in this bill mean that imprisonment has been taken off the table in these scenarios. That would be another deterrent for an escalation of the accumulation of fines. Imprisonment has been taken off, but you have brought in the capacity to be able to seize the assets, including jointly owned assets.

What is greater: the added disincentive that the risk of imprisonment would bring or the disincentive which may be put in place having the capacity to seize the jointly owned assets? You are adding in an extra deterrent which could have the potential, as we have extrapolated, for negative impacts for innocent parties but you have taken out that disincentive for the risk of imprisonment for the offender that could be a disincentive for the escalation.

The Hon. S.C. MULLIGHAN: I think the point I was making before is that if there is a limit to the recovery of monetary value from those people who have outstanding obligations to the state which is drawn earlier than the seizure of either real property or other assets that is contemplated in this bill, then ultimately people who might have a habit of racking up these fines and other obligations to the state know that if they can declare a bank account that has a low balance in it while they are still driving around in their nice vehicle and living in their home it is very difficult for the state to come after them, for example. I think that was the point I was making earlier.

I think rightly you raise the concept: is it a bigger deterrent to go to prison or a bigger deterrent to have all your assets seized? I cannot comment on that, because for different people in different situations one will be a bigger deterrent than the other. If you are a well-practised criminal who engages in conduct that has enabled you to amass a significant amount of assets—real property, cars, jewellery, cash, gold bars, all that kind of carry-on that some serious criminals are able to amass before they are apprehended and brought before the courts—then you might think doing a few weeks or a few months or a reasonably short prison term and protecting all those assets is a small price to pay to discharge the obligation. I think what we are trying to show with these sorts of changes is that those assets should not be beyond the reach of the state.

The other part of it is: parliament has made a decision previously to impose monetary fines for a whole range of offences, and there is no sense creating or continuing a regime where in order to pursue the monetary fine that parliament has already agreed, you start racking up another massive financial obligation for the state by having to accommodate someone in prison as well. That is perhaps another lens through which to see it.

Clause passed.

Remaining clauses (43 to 46), schedule and title passed.

Bill reported without amendment.

Third Reading

The Hon. S.C. MULLIGHAN (Lee—Treasurer, Minister for Defence and Space Industries, Minister for Police) (17:31): I move:

That this bill be now read a third time.

Bill read a third time and passed.