The intersection of criminal prosecutions and private property rights often creates legal complexity, particularly where property is both the subject of private contractual dealings and potential criminal forfeiture. The recent case of Erin Patterson—convicted in July 2025 in relation to the tragic mushroom poisoning of three family members—has raised critical legal issues about the priorities between registered mortgage interests and government restraint orders.
Here, we explore the legal tension between:
- A mortgage registered by Ms Patterson’s legal representatives, Doogue & George, over her home to secure unpaid legal fees; and
- A restraining order filed by the Director of Public Prosecutions (DPP) after conviction, seeking to freeze and potentially forfeit the same property for the benefit of victims.
Background
According to public reporting, Doogue & George lodged a mortgage over Patterson’s home shortly before her trial commenced in April 2025. This is a standard legal practice used by law firms to secure legal costs for protracted and high-profile criminal trials.
On July 16, 2025—nine days after Ms Patterson’s conviction—the DPP filed a secret application for a restraining order under the Confiscation Act 1997 (Vic). That order prevents the property from being sold or otherwise dealt with, pending forfeiture proceedings to compensate the victims’ families.
This has raised a pressing question: Who has priority over the property—the mortgagee law firm or the DPP?
Legal Framework
1. The Mortgage: A Registered Interest
Under the Transfer of Land Act 1958 (Vic), registration of a mortgage grants the mortgagee a legal interest in Torrens land. Once registered, that interest becomes indefeasible—immune from most prior or subsequent unregistered claims (s 74, TLA; Fisher & Lightwood’s Law of Mortgage, Ch 4).
Such indefeasibility is subject only to limited exceptions: mainly fraud, statutory exclusions, or overriding interests such as government powers under confiscation statutes.
If Doogue & George’s mortgage was registered before the DPP’s restraining order took effect, it would usually have priority as a registered proprietary interest, provided it was made in good faith and for value.
2. The DPP’s Restraining Order: Statutory Freezing Power
The DPP’s restraining order likely arises under Part 2 of the Confiscation Act 1997 (Vic). These orders allow authorities to restrain property suspected of being the proceeds or instrument of crime, even without a prior conviction (though in this case, a conviction had occurred).
A restraining order does not transfer title but freezes dealings in the property. The Act can also render certain transactions void—including mortgages—if they were entered into with intent to defeat confiscation (s 44).
Thus, even if the mortgage predates the restraining order, the DPP may challenge it on the grounds that:
- It was entered into with knowledge of impending confiscation, or
- It was not a bona fide arm’s-length transaction, particularly if the lawyers knew of the risks connected to the property (e.g., the crime occurred in the home kitchen).
Competing Priorities: Who Wins?
This will likely turn on three key questions:
A. Was the mortgage registered before the restraining order?
If yes, the law firm has a legal proprietary interest in the land, which generally ranks higher than later equitable or statutory interests.
B. Was the mortgage granted in good faith?
A court may consider whether the lawyers:
- Knew or ought to have known the property was vulnerable to restraint,
- Were deliberately seeking to frustrate confiscation, or
- Merely secured fees in the ordinary course of legal practice.
If good faith is found, the mortgage is more likely to withstand challenge.
C. Does the Confiscation Act override Torrens indefeasibility?
Statutory powers can override common law and property law principles, particularly where Parliament has clearly expressed that intention. In DPP v Phan Thi Le (2000) VSCA 123, courts have upheld the DPP’s powers to restrain even interests arising before conviction, subject to fairness and good faith.
What Happens Next?
This case presents an important test of the boundaries between:
- Private rights of secured lenders (including legal practitioners), and
- Public interest in criminal asset forfeiture.
Should the DPP succeed in setting aside the mortgage, the firm may become an unsecured creditor, forced to recover legal fees from other sources—likely with little success.
On the other hand, if the mortgage is upheld, the legal fees would take precedence and dilute the pool of property available for compensation to the victims’ families.
Either way, judicial discretion will play a major role. Courts may be asked to weigh competing equities and determine whether public interest justifies setting aside the mortgage, despite its earlier registration.
Conclusion
This case reminds practitioners and the public alike that property law is not immune to the reach of criminal justice. The Torrens system’s promise of certainty and indefeasibility must sometimes yield to statutory powers designed to redress serious wrongdoing.
At Hayton Kosky, we closely monitor developments where criminal, civil, and property interests intersect, and we advise both private clients and legal professionals on how to secure their interests in such complex landscapes.
If you have questions about secured transactions, asset restraint, or priority disputes, our experienced team is here to help.
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Disclaimer: This article is for general information only and does not constitute legal advice. Seek tailored legal counsel before acting on any of the issues discussed.