Astill v The State of Western Australia - [2020] WASC 119

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   ASTILL -v- THE STATE OF WESTERN AUSTRALIA [2020] WASC 119
CORAM:   HILL J
HEARD:   16 MARCH 2020
DELIVERED          :   14 APRIL 2020
FILE NO/S:   CPCA 28 of 2016
BETWEEN:   CRAIG KENNETH ASTILL
First Plaintiff

AK NONG EADIANG
Second Plaintiff

AND

THE STATE OF WESTERN AUSTRALIA
Defendant

Catchwords:

Criminal law - Confiscation of property - Objection to confiscation of property - Property interest owned or effectively controlled by first plaintiff - Whether second plaintiff has equitable interest in the first plaintiff's property interest

Trusts - Constructive trust - Common intention constructive trust - Whether common intention that second plaintiff have a beneficial interest in the first plaintiff's property interest

Trusts - Constructive trust - Muschinski v Dodds - Whether there was a joint endeavour

Legislation:

Criminal Property Confiscation Act 2000 (WA), s 8(1), s 34(3), s 84(2)
Family Law Act 1975 (Cth), s 79
Misuse of Drugs Act 1981 (WA), s 32A

Result:

Objections to confiscation of property dismissed
Declaration of confiscation made

Category: B

Representation:

Counsel:

First Plaintiff	:	In Person
Second Plaintiff	:	No appearance
Defendant	:	Mr T Staples

Solicitors:

First Plaintiff	:	In Person
Second Plaintiff	:	In Person
Defendant	:	Director of Public Prosecutions (WA)

Case(s) referred to in decision(s):

Bamess v The State of Western Australia [2015] WASC 259
Bevan v Bevan [2013] FamCAFC 116; (2013) 279 FLR 1
Calverley v Green (1984) 155 CLR 242
Campana v The State of Western Australia [2008] WASC 230
Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353
Director of Public Prosecutions v Ali (No 2) [2010] VSC 503
Fisher v Fisher [1986] HCA 61; (1986) 161 CLR 438
Green v Green (1989) 17 NSWLR 343
Lloyd v Tedesco [2002] WASCA 63; (2002) 25 WAR 360
Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583
Stowe v Stowe (1995) 15 WAR 363
Tomcsanyi v National Australia Bank Limited [2019] WASC 347
Trajkoski v The State of Western Australia [2017] WASC 273
Urbano v The State of Western Australia [2006] WASCA 147
Willis v The State of Western Australia [No 3] [2010] WASCA 56

HILL J:

By summons filed 4 September 2018, the defendant seeks an order for the dismissal of the plaintiffs' objections to the confiscation of frozen property lodged in July 2016 and for a declaration pursuant to the Criminal Property Confiscation Act 2000 (WA) (Act) that certain property of Mr Astill has been confiscated.
Ms Nong did not file any submissions in support of her objection or appear at the hearing of the application. I was informed by Mr Astill that Ms Nong was unwell and did not intend to appear at the hearing but that he would make submissions on behalf of both of the plaintiffs. I was satisfied that Ms Nong had been given notice of the hearing and that it was appropriate to proceed in her absence.
For the reasons set out below, it is my view that the objections by the plaintiffs should be dismissed and the declaration made.

Procedural history

On 11 May 2016, Mr Astill was charged with one count of attempted possession of prohibited drugs with the intent to sell or supply contrary to s 6(1)(a) of the Misuse of Drugs Act 1981 (WA), one count of wilfully destroying evidence contrary to s 132 of the Criminal Code (WA) and one count of possession of a prohibited, drug namely methylamphetamine, with intent to sell or supply contrary to s 6(1)(a) of the Misuse of Drugs Act.
On 13 May 2016, a freezing notice was issued pursuant to s 34(3) of the Act on the basis that Mr Astill had been charged with an offence which, if convicted, could lead to a declaration that he was a drug trafficker. The notice froze Mr Astill's interest in the land at Lot 2 on Survey Strata Plan 70342 in Certificate of Title Volume 2864, Folio 136, commonly known as 2A Graphic Court, Beldon (Property) and Bank of Queensland bank account number 22403011 in Mr Astill's sole name (Bank Account). A memorial was lodged against the title of the Property on the same date.
On 7 July 2016, the plaintiffs commenced this action by filing a notice of originating summons, which constituted their notice of objection pursuant to s 79(1) of the Act.
On 28 April 2017, Mr Astill was convicted after a plea of guilty to the offences he was charged with. He was sentenced to a total of 7 years' imprisonment and declared to be a drug trafficker pursuant to s 32A of the Misuse of Drugs Act.
On 4 September 2019, the defendant filed a summons to dismiss the plaintiffs' objections and for a declaration that the Property and Bank Account has been confiscated.
On 12 December 2019, Le Miere J made orders that, subject to any objections as to admissibility, the affidavits filed by the parties stand as their evidence‑in‑chief.
At the hearing, the defendant relied upon four affidavits: an affidavit of Morgan Charlotte Paling filed 4 September 2018; an affidavit of Martine Baker filed 16 August 2019; an affidavit of Lisa Telford filed 14 October 2019; and an affidavit of Amanda Jane Staier filed 14 October 2019. The affidavit of Ms Paling annexed a copy of the freezing notice, the certificate of title of the property, the transcript of Mr Astill's sentencing, and the certificate of final outcome of the prosecution.
In opposing the application, the plaintiffs relied on five affidavits: an affidavit of the second plaintiff sworn 12 March 2019; affidavits of the first plaintiff sworn 18 July 2019, 29 August 2019 and 11 November 2019; and an affidavit of Justin James Carpenter sworn 21 November 2019. The defendant objected to a number of paragraphs of the affidavit of Ms Nong and the affidavits of Mr Astill sworn 18 July 2019 and 11 November 2019. Mr Astill conceded that it was appropriate that the paragraphs to which objection was taken be struck out.

Relevant Provisions of Act

Pursuant to s 8(1) of the Act, when a person is declared to be a drug trafficker under s 32A(1) of the Misuse of Drugs Act as a result of being convicted of a confiscation offence that was committed after the commencement of the Act, all property that the person owned or effectively controlled at the time they were declared to be a drug trafficker and all property that the person gave away at any time before the declaration was made, is confiscated to the State of Western Australia.
Pursuant to s 34(3) of the Act, a freezing notice can be issued if a person has been charged with an offence and could be declared to be a drug trafficker under s 32A(1) of the Misuse of Drugs Act if convicted.
Where a person has been served with a freezing notice, they may file an objection within 28 days after the date of service.[1] On the hearing of the objection, the court may release property frozen under s 34(3),[2] if they find that it is more likely than not that the person charged with the offence does not own or effectively control the property.[3]
[1] Criminal Property Confiscation Act 2000 (WA), s 79.
[2] Criminal Property Confiscation Act 2000 (WA), s 81.
[3] Criminal Property Confiscation Act 2000 (WA), s 84(2).
Once a person has been convicted of an offence and declared to be a drug trafficker, all property the person owned or effectively controlled is confiscated and s 84(2) has no further role to play.[4] However, to the extent that another person has an interest in the property, this interest has not been confiscated under s 8 of the Act.
[4] Urbano v The State of Western Australia [2006] WASCA 147 [1], [34] and [39]; Campana v The State of Western Australia [2008] WASC 230 [38].
The issue in this case is whether the first plaintiff owns or effectively controls the Property and the Bank Account or whether it was, in whole or in part, given away by him before 28 April 2017.

Mr Astill's objection

In my view, Mr Astill does not have any arguable defence to the defendant's application for orders that his objection be dismissed and that his interest in the frozen property has been confiscated.
The effect of s 8 of the Act is that all property which Mr Astill owned or effectively controlled when he was declared to be a drug trafficker on 28 April 2017 was confiscated.
I accept that on the evidence before me, the plaintiff is the registered proprietor of the Property and the account holder of the Bank Account. The evidence filed by the plaintiffs does not dispute these matters.
The affidavits of Mr Astill filed in opposition to this application, sworn on 5 August 2019 and 21 November 2019, do not address the confiscation of his interest in the Property and the Bank Account. Rather, the affidavits concern the second plaintiff's contention that she has a 50% interest in the property of Mr Astill as his de facto wife.
Subject to the question of whether Ms Nong has an interest in the property the subject of the freezing notice, it is appropriate to make the confiscation declaration sought by the defendant and to dismiss Mr Astill's objection.

Ms Nong's objection

The second plaintiff contends that she has an equitable interest in 50% of the Property and the Bank Account. As noted above, the basis for Ms Nong's contention is that she is the de facto partner of Mr Astill.
From the evidence before me, I accept and find the following matters. Ms Nong has known Mr Astill since 2013 and has been in a de facto relationship with him since that time. They initially lived together at a rental property at 39 Lynn Street, Trigg and subsequently at 5 Sewell Place, Hillarys. They are awaiting approval to be married while Mr Astill is in prison.
After they commenced their relationship, in or about 2013, Ms Nong and Mr Astill orally agreed that Ms Nong would cease work prior to the birth of any children they might have, she would attend to all domestic duties of the household and be the primary care giver for any children they might have. Mr Astill would continue to work full-time and be the primary financial contributor to the maintenance of any children. It was agreed that Mr Astill's income would be used to meet general household living expenses including mortgage repayments, rates, taxes and other expenses associated with the maintenance of any property they might purchase.
On 11 November 2015, Mr Astill became the sole registered proprietor of the Property.
Prior to Mr Astill's incarceration, Ms Nong worked part‑time at a café and contributed to costs associated with the Property as well as their joint living expenses. Mr Astill and Ms Nong have a joint bank account with the Commonwealth Bank of Australia which was used for their general living expenses.
In 2018, Ms Nong and Mr Astill had a daughter. Since Mr Astill's imprisonment, Ms Nong has been the sole caregiver and financial provider for their daughter.
Ms Nong's evidence is that she has suffered financial hardship and is dependent on limited financial assistance from family and friends to support herself and their daughter. Ms Nong says that the purchase of the Property was intended to enrich the lives and increase the wealth of both her and Mr Astill and that her interest in the Property is the most significant asset she has. She says that she intends to use the net proceeds of the sale of the Property to support their daughter.
Ms Nong's evidence did not specifically address the Bank Account or the basis of her claim to it. The only reference to the Bank Account is in the affidavit of Mr Astill. Mr Astill submitted that as his de facto wife, Ms Nong was entitled to 50% of all of his property including the Bank Account. In support of this submission, he relied on the terms of the Family Court Act which applies to de facto relationships.
There was no evidence and it was not suggested that any proceedings had been commenced in the Family Court by either of the plaintiffs. In fact, the evidence was to the contrary, namely, that the relationship between them was continuing and they intend to legally marry.

Legal Principles

I note from the outset that the originating summons filed by the plaintiffs does not state what section of the Act Ms Nong relies upon in support of her objection.
The hearing proceeded on the basis that the objection was made pursuant to s 84(2) of the Act. Section 84(2) provides that:
The court may set aside a freezing notice issued for property under section 34(3) or a freezing order for property that was frozen under section 43(5) if the court finds that it is more likely than not that the person who is or will be charged with the offence does not own or effectively control the property, and has not at any time given it away.
That is, in order for Ms Nong's objection to succeed, it is necessary for her to establish that she has an equitable interest in the Property and the Bank Account. The onus is on Ms Nong to make out this objection on the balance of probabilities.
Unless the second plaintiff can establish an equitable interest in the Property and the Bank Account, the beneficial interests of the parties in this property is fixed at the date it was acquired.[5]
[5] Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353, 365; Calverley v Green (1984) 155 CLR 242, 252 (Gibbs CJ), 262 (Mason & Brennan JJ), 269 (Deane J).
The basis for Ms Nong's submission that she has an equitable interest in the Property and the Bank Account is that she is and has been since 2013 in a de facto relationship with Mr Astill.
De facto spouses do not, by that reason alone, have a right to each other's property unless and until an order is made under s 79 of the Family Law Act1975 (Cth) altering the rights each has.[6]
[6] Tomcsanyi v National Australia Bank Limited [2019] WASC 347 [26] citing with approval Bevan v Bevan [2013] FamCAFC 116; (2013) 279 FLR 1 [80] (Bryant CJ and Thackray J) and Fisher v Fisher [1986] HCA 61; (1986) 161 CLR 438, 452 ‑ 454 (Mason and Deane JJ).
On this basis, Ms Nong did not and does not have an equitable interest in the property of her de facto partner, Mr Astill, by reason of the Family Law Act.
It has previously been held that the existence of a de facto relationship in and of itself is insufficient to give rise to an interest in property at common law or equity. In Green v Green[7] Gleeson CJ observed:
It is clear that the mere existence of a matrimonial or de facto relationship combined with expressed or implied understandings to provide support and accommodation will not form a sufficient basis for concluding that there is a constructive trust by virtue of which a proprietary interest in the home occupied by the parties is created … In a legal system which does not include concepts of family or community property, and where an obligation on the part of a husband to house and provide for his wife is commonly regarded as an incident of the matrimonial relationship, an undertaking of the kind referred to cannot of itself confer upon a wife a legal or equitable interest in the matrimonial home … The acceptance of an obligation on the part of the husband to house his wife would not normally be regarded as an undertaking to give her a proprietary interest in the home in which they live, and wives usually have reasons for living with their husbands other than an expectation that they will increase their assets.
[7] Green v Green (1989) 17 NSWLR 343, 353; Lloyd v Tedesco [2002] WASCA 63; (2002) 25 WAR 360 [16], [84].
That said, there are circumstances in which a court can intervene to declare that a de facto partner has a proprietary interest in a family home. These circumstances will arise where it would be unconscionable for a party to refuse to recognise the existence of their partner's (or former partner's) equitable interest.
One well‑established category of constructive trust is where there is a common intention between the legal owner of the property and the party making the claim that the claimant will have a beneficial interest in the property. The common intention trust arises where the claimant is induced by the words or conduct of the legal owner to act to their detriment in the belief that they are acquiring a beneficial interest in the property.[8]
[8] Stowe v Stowe (1995) 15 WAR 363, 367 ‑ 368; Trajkoski v The State of Western Australia [2017] WASC 273 [27].
In considering whether there is a common intention constructive trust, it is necessary to look at the actual intention of the parties; such an intention can be imputed.[9]
[9] Trajkoski v The State of Western Australia [27].
Another basis for imposing a constructive trust arises from the principle set out by Deane J in Muschinski v Dodds that:[10]
The principle operates in a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specially provided that the other party should so enjoy it. The content of the principle is that, in such a case, equity will not permit that other party to assert or retain the benefit of relevant property to the extent that it would be unconscionable for him so to do.
[10] Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583, 620.
This principle has been approved and applied in this State.[11]
[11] Bamess v The State of Western Australia [2015] WASC 259 [71] and the cases cited therein.
In a joint endeavour constructive trust, the guiding principle is one of unconscionability. As was noted by Murray J in Lloyd v Tedesco: [12]
In this, as in every such case of a failed de facto relationship, there must be more than simply the performance by the plaintiff of the valuable role of the provision of love, care and support. The provision of such a contribution will be sufficient only if it is related in some factual way to the generation of wealth as part of a joint effort or endeavour to provide for the parties' mutual material welfare and security. That need not, of course, be the only purpose of the provision of such assistance to the defendant, but it must be one of the material purposes because it is that which marks out the character of the joint endeavour as being one which will generate a claim, upon the failure of the relationship, without the fault of the plaintiff, to a share in the property created, acquired, maintained and improved during the course of the relationship, where the endeavour can be seen to be related to particular items of property, or will generate a claim for compensation representing the value of the contribution made by the claimant to the increase in the material wealth which was intended to be enjoyed by the parties jointly.
A joint endeavour of this character is one which has the aim of adding to the parties' material wealth for their mutual benefit rather than being one where the plaintiff simply provides loving care and support to the defendant as a normal incident of a de facto relationship. In that sense it is right to say that the joint endeavour must be one intentionally or deliberately entered into for the purpose of advancing the parties' mutual material wealth. Only if it bears that character will it be unconscionable to allow the defendant to retain the entirety of the beneficial interest in that wealth.
[12] Lloyd v Tedesco [30] ‑ [31].
It is necessary for a plaintiff claiming an equitable interest in property to identify with precision the nature, purpose and scope of the alleged joint endeavour. Cohabitation without more is not enough.[13]
[13] Willis v The State of Western Australia [No 3] [2010] WASCA 56 [72].
In respect of both categories of constructive trust, any financial contributions that are made after the date a person has been declared a drug trafficker cannot be relied on; the relevant period for consideration is prior to this date.[14]
[14] Willis v The State of Western Australia [No 3] [67].

Disposition

The plaintiffs' evidence does not establish the existence of a constructive trust that gives Ms Nong an equitable interest in the Property or Bank Account. There is no evidence that it was the common intention of both Mr Astill and Ms Nong that Ms Nong should have a beneficial interest in the property the subject of this application. There is also no evidence that Ms Nong acted to her detriment on the basis of this common intention such that it would be unconscionable for Mr Astill to have departed from this intention.
The evidence of the plaintiffs is an assertion of a common intention at a high level of generality. There is no evidence that the second plaintiff acted to her detriment in the belief that she would gain a 50% in the Property or Bank Account. The failure to adduce any evidence (either oral or in writing) to support the argument by the second plaintiff that a constructive trust exists is a defect that cannot be overcome.
On the basis of the legal principles summarised above, the second plaintiff is required to prove on the balance of probabilities: first, it was the common intention of the plaintiffs that the second plaintiff hold a 50% interest in the Property and the Bank Account; and second, that she acted to her detriment in the belief she would gain such an interest.
I find that the second plaintiff has failed to demonstrate that there was such a common intention. I also find that the second plaintiff has failed to demonstrate that she acted to her detriment in the belief she would gain a 50% interest in the Property and Bank Account.
In addition, there is no evidence that establishes a joint endeavour constructive trust. On the evidence before me, there is no evidence that Ms Nong contributed financially to the acquisition of the Property or the payments of the mortgage. In submissions, Mr Astill contended that Ms Nong contributed to the payment of rates. Even if there was evidence before me of these payments, which there is not, this would be insufficient to give Ms Nong a beneficial interest in the Property; rather these payments are a contribution to the running expenses of their household.
Both plaintiffs gave evidence of Ms Nong's non‑financial contributions to the maintenance of their household. However, there is no evidence of the specific work done or specific contributions she has made, nor of the value of the Property. There is also no evidence that these contributions increased the wealth of Mr Astill by adding to the value of the Property. Accordingly, there is no wealth which it would be unconscionable for Mr Astill to retain.
While I accept that Ms Nong is in a de facto relationship with Mr Astill during which she has performed domestic duties and met some of the household expenses, this does not constitute expenditure on the Property. As a consequence, Mr Astill has not been enriched such that it would be unconscionable for him to deny Ms Nong an interest in the Property.
The same analysis applies to the Bank Account.
In any event, I do not consider that the principles governing a joint endeavour constructive trust have any application to this case. It is not in dispute that the joint endeavour between the plaintiffs was the de facto relationship. The evidence before me is that this relationship continues and has not broken down. The orders sought by the defendant will not bring this joint endeavour to an end and accordingly, these principles do not apply.[15]
[15] Director of Public Prosecutions v Ali (No 2) [2010] VSC 503 [85].
Finally, while I accept that the confiscation of the Property will cause Ms Nong personal hardship, where the basis for confiscation is the making of a drug trafficker declaration in relation to the person who owned or effectively controlled the property, this is not a ground for objection. This is in contrast to the position that would apply if the Property was sought to be confiscated on the ground that it was crime-used property.[16]
[16] Criminal Property Confiscation Act 2000 (WA), s 82(3)(f).

Conclusion

In my opinion, the defendant has established that the frozen property was owned or effectively controlled by Mr Astill at the time the drug trafficker declaration was made on 28 April 2017. Neither of the plaintiffs has established any basis for resisting confiscation of the frozen property.
Accordingly, the plaintiffs' objections should be dismissed and a declaration in the terms sought by the defendant should be made.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
MG
Research Orderly to the Honourable Justice Hill
14 APRIL 2020