Published
July 7, 2025The recent decision by the Court of Appeal in The Commissioner of the Australian Federal Police v Danny Zayneh & Ors [2025] VSCA 65 looks at the process of seeking a stay to a Proceeds of Crime (POC) proceeding. The decision focuses on the difference between “systemic prejudice” and what is in the “interests of justice.” The case is particularly interesting because both the primary judge (Fraatz J) and the Court of Appeal found that the interests of justice applies to hardships on the alleged criminal and not just to protect the potential POC.
The Proceeds of Crime process
The Proceeds of Crime Act 2002 (Cth) (POCA) allows the Government to seize property that is connected to alleged criminal activities. Orders can be made to freeze property (such as bank accounts) or restrain the property.
The property may be permanently confiscated by the Commonwealth when a forfeiture order is made. The order may be automatic if a person is found guilty of a serious offence or made by a court on various grounds either with or without a criminal conviction.
A court may stay proceedings under s319(1) of the POCA if it is in the interests of justice to do so considering factors outlined in s319(6). The factors include ensuring both the POC and criminal proceedings are as expeditious as possible, the cost and inconvenience to the Commonwealth in retaining property, the risk of proceeds of crime authority suffering prejudice, any prejudice a person may suffer, and any orders the court may make to address the prejudice.
The POCA also outlines the circumstances where a court must not stay proceedings in ss319(2) to (5). These include where criminal proceedings have been or are proposed to be instituted, where evidence may need to be called from a person and where the evidence may be relevant to the criminal proceedings.
Given that POCA proceedings are often closely related to criminal proceedings, there is inevitably the potential for systemic prejudice against the defendants of the criminal proceedings. Sections 319(2) to (6) were enacted following the High Court decision in Commissioner of the Australian Federal Police v Zhao (2015) 255 CLR 46 to clarify that more than systemic prejudice is required to stay proceedings. In this case, the High Court held that where there is a criminal proceeding as well as a POC proceeding, the risk if a stay isn’t granted in the POC proceeding is manifest and sufficient to grant a stay.
To prevent interference with the administration of criminal justice, s319A of the POCA also allows a court to order that proceedings be heard in closed court.
The facts in the current case
Danny Zayneh (Zayneh) was charged with conspiring to import a commercial quantity of a border-controlled drug and trafficking a border-controlled drug under the Criminal Code Act 1995 (Criminal Code). He was also charged with possessing a handgun without a licence under the Firearms Act 1996.
Zayneh’s wife, Agnes Szwedzik (Szwedzik), was also suspected of committing money laundering offences.
The prosecution was part of a police operation called “Operation Ironside”, where law enforcement authorities deployed and monitored encrypted communications software (AN0M) which was alleged to have been used by organised crime. The AN0M communications were critical evidence that led to the charges against Zayneh and Szwedzik.
Two restraining orders and subsequently forfeiture orders were made under the POCA for certain assets of Zayneh and Szwedzik. Zayneh (and others) applied to stay the POC proceedings until the criminal charges against him were fully determined or withdrawn under s319 of the POCA.
Zayneh’s application for a stay of POC proceedings was made on three main grounds:
- Challenging the admissibility of the AN0M messages was central to his criminal defence. If the POC proceedings were held before the criminal trial, Zayneh would also need to challenge the admissibility of the AN0M messages, which would create a substantial burden in terms of costs to Zayneh and the Court time.
- Zayneh may have to choose between exercising his right to silence or waiving that right in the POC proceedings compromising his criminal defence.
- The cost of defending both proceedings would be burdensome on Zayneh.
The Commissioner argued that the Australian Federal Police did not disclose information between its sections. They also argued that if the POC proceeding was stayed it would limit their ability to progress the POC investigation and identify any other property that they should restrain.
The primary judgement
Judge Fraatz found in favour of Zayneh. He acknowledged that Zayneh had to demonstrate more than systemic prejudice to justify a stay of POC proceedings, stating that they would need to demonstrate “real and acute” prejudice to the conduct of their defence. He found the prejudice to Zayneh was demonstrated because there would be substantial overlap in proving the admissibility of the AN0M messages in both criminal and POC proceedings. This overlap would result in a significant burden of costs to Zayneh and the need to file material for the exclusion applications would create an unacceptable risk of compromise to Zayneh’s criminal proceedings, particularly regarding his right to silence. It was found, on the other hand, that the Commissioner had not established any real prejudice if the stay was granted.
Judge Fraatz did consider closing the Court under s319A but felt it would be a departure from the principles of open justice and was not satisfied that the prejudice to Zayneh would be overcome.
The appeal
There were six grounds for appeal:
- The stay was granted by the judge on grounds prohibited under s319(2) of POCA
- The judge was incorrect in holding that the possibility of unarticulated objections to the admissibility of the AN0M messages gave rise to prejudice that justified a stay
- The judge’s decision to stay was premature
- The judge incorrectly found that Zayneh’s criminal trial would be prejudiced by Szwedzik giving evidence in these proceedings
- The judge failed to give effect to ss319(6)(e) and 319A of the POCA
- The judge incorrectly found that the prosecutor in the criminal proceedings might rely on tendency evidence and this possibility justified the stay
The decision of the Court of Appeal was made on the basis of the first two grounds that were considered together. The Court of Appeal looked specifically at the need to prove admissibility of the AN0M messages in both proceedings and whether it was in the interests of justice to stay the POC proceedings and not just systemic prejudice.
They agreed with Judge Fraatz’s decision that the enormous cost to challenge the admissibility of the AN0M messages in both proceedings would not be in the interests of justice. This decision was based on a combination of factors – “the complexity of the evidence concerning the AN0M messages, the centrality of that evidence to the criminal proceedings, and the prejudice to the respondent should the admissibility of that evidence be required to be agitated in the POC proceedings before the conclusion of the criminal proceeding against them.”
To challenge the admissibility of the AN0M evidence would require considerable time, cost and expert witnesses. There are also several accused people who are coordinating the challenge together, and this is still being developed. While this challenge could be made in the POC proceedings, the prosecution has a greater duty to fully disclose all matters relating to the admissibility of the AN0M evidence in the criminal trial. Therefore the Court held that the interests of justice are best served by the admissibility of this evidence being considered in the criminal proceedings.
On this basis the Court of Appeal believed that Judge Fraatz did not grant the stay on grounds prohibited by 319(2) of the POCA.
In addition, the Court of Appeal did not consider that there was any prejudice to the Commissioner by staying the POC proceedings. There was no additional cost to restrain the assets and the Commissioner was also still able to conduct their examinations under s180 of the POCA.
For the third ground of appeal, the Commissioner argued that they need to be given a reasonable opportunity to conduct examinations under s76 of the POCA. The Commissioner argued that any additional materials they were able to access might enable them to elicit admissions of a conspiracy between Zayneh and Szwedzik. This was rejected by the Court of Appeal as a matter of mere conjecture.
The fourth ground of appeal was also rejected by the Court because of the risk of unnecessary duplication of resources and the potential for inconsistent outcomes if the stay wasn’t granted.
The Court of Appeal found that Judge Fraatz had erred in his findings under the fifth ground of appeal. This is related to s319A which allows for a court to be closed for a POC proceeding. While Judge Fraatz had interpreted this section as only being relevant to “exceptional circumstances”, the Court of Appeal said it was not necessary for a court to be satisfied that there are exceptional circumstances to justify the closure of the court. However, given the findings on the first two grounds, this error did not impact the decision in this case.
The final ground of appeal was also dismissed because of the Court of Appeal’s findings on the first two grounds
Applying for a stay of POC proceedings
To be successful in applying for a stay of POC proceedings, you must go beyond simply demonstrating systemic prejudice and establish that continuing the proceedings would result in real and acute prejudice to your criminal defence. This includes showing that the interests of justice would be better served by delaying the POC matter— such as where there is substantial overlap in evidence or legal arguments that may compromise the right to silence, increase costs, or duplicate proceedings unnecessarily. Providing clear, concrete reasons why the timing and conduct of the POC proceedings would unfairly burden your ability to mount a proper defence in the related criminal case will also strengthen your case.
As experts in Proceeds of Crime proceedings, Madison Branson Lawyers can help you understand your rights and advise you on applying for a stay of POC proceedings. For a confidential discussion, contact us today.
