Azizi v Director of Public Prosecutions
[2021] VCC 423
•16 April 2021
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMON LAW DIVISION | Revised Not Restricted Suitable for Publication |
CONFISCATION LIST
Case No. CI-15-00980
| ZARLASHT AZIZI | Applicant |
| v | |
| DIRECTOR OF PUBLIC PROSECUTIONS | Respondent |
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JUDGE: | HIS HONOUR JUDGE DYER | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 16 & 17 June 2020 | |
DATE OF JUDGMENT: | 16 April 2021 | |
CASE MAY BE CITED AS: | Azizi v DPP | |
MEDIUM NEUTRAL CITATION: | [2021] VCC 423 | |
REASONS FOR JUDGMENT
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Subject: Confiscation
Catchwords: Exclusion application; serious drug offence restraining order;
nature of interest; “directly or indirectly”
Legislation Cited: Confiscation Act 1997, s 22A
Cases Cited:Jeffrey v DPP (Cth) (1995) 121 FLR 16; Sypott v R [2003] VSC 41; Myenvironment Inc v VicForests [2013] VSCA 356; 24th Trengganu Pty Ltd & Anor v Director of Public Prosecutions [2009] VSC 525; Lordianto v Commissioner of the Australian Federal Police; Kalimuthu v Commissioner of the Australian Federal Police (2019) 266 CLR 273; Smith v Federal Commissioner of Taxation (1987) 164 CLR at 513; Calverley v Green (1984) 155 CLR 242; Bennet v Bennet (1897) 10 Ch.D 474; State of Queensland v Brooks (2008) 1 Qd.R 484; Craig Williams Pty Ltd v Barrowcliff [1915] VLR 450 at 452
Judgment: Application dismissed
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr C. Juebner | Garde-Wilson Lawyers |
| For the Respondent | Dr P Vout | Office of Public Prosecutions |
HIS HONOUR:
Introduction
1On 3 March 2015 a serious drug offence restraining order was made under s 18 of the Confiscation Act 1997 (“the Act”) restraining certain property, including a residential property situated at 10 Redrock Road, Wollert (“the property”). The property was jointly registered in the names of Mohammad Osman (“the accused”) and his wife, Zarlasht Azizi.
2On 1 April 2015 Ms Azizi, the present applicant, filed an application seeking an exclusion order in respect of her interest in the property.
3The parties have largely agreed the factual matters which are now set out in an agreed statement of facts dated 12 June 2020. The remainder of the evidence filed in this proceeding is set out in an affidavit affirmed by the applicant on 5 May 2020.
4The parties informed the court that there had been three earlier affidavits sworn by Ms Azizi, but those affidavits were not required given the extent to which the parties had otherwise agreed the factual background.
5The claim made by Ms Azizi in the present application was to exclude a 50 per cent interest in the property from the operation of the restraining order.
Agreed statement of facts
6The parties agreed on the following facts for the purpose of this proceeding:
1.On 13 October 2012, the applicant and her husband, Mohammad OSMAN (the accused), signed a Contract of Sale to purchase the property situated at 10 Redrock Road, Wollert, more particularly described in Certificate of Title Volume 11208 Folio 134 (the Property) for $422,500 from Commonwealth Bank of Australia (as mortgagee in possession).
2.Prior to 13 October 2012, neither the Applicant nor the accused had an interest in the Property.
3.On 15 October 2012, a deposit of $42,250 was paid by the accused by means of a cheque drawn upon a Westpac Banking Corporation Account held in his name t/as Tattan Import Export (First Westpac Account). The amount standing to the credit of the accused in the First Westpac Account were funds of the accused in which the Applicant had no legal or beneficial interest.
4.On 11 January 2013, the balance of the purchase price for the Property was paid on settlement by the accused by means of several Westpac Banking Corporation bank cheques dated 11 January 2013. The funds used to purchase the bank cheques were drawn from the First Westpac Account and another Westpac Banking Corporation Account held in the name of the accused (Second Westpac Account). The amount standing to the credit of the accused in each of the First Westpac Account and the Second Westpac Account were funds of the accused in which the applicant had no legal or beneficial interest.
5.On 17 January 2013 the Applicant and the accused were registered as joint proprietors of the Property.
6.No loan was taken out by the Applicant or the accused to purchase the Property and no mortgage with respect to the Property was registered.
7.The Applicant and the accused remain registered as joint proprietors of the Property.
8.The Property has been the family home of the Applicant and (until his incarceration) the accused, their two children and the accused’s mother.
9.The Applicant was not, in any way, involved in the commission of the serious drug offence by the accused.
10.The date on which the accused was charged with the serious drug offences was 17 December 2014.
11.If the Court finds that the Applicant acquired her interest in the property from the accused, directly or indirectly (as contended by the Respondent and denied by the Applicant), the Applicant concedes that her interest in the Property was not acquired for sufficient consideration within the meaning of ss 3(1) and 22A(1)(c) of the Confiscation Act 1997 (Vic).
7The parties acknowledged that the effect of a finding by the court in accordance with paragraph 11 of the agreed statement of facts would compel an order dismissing the applicant’s exclusion application.
8The Act provides for the determination of the application in s 22A:
“(1)On an application made under section 20, the court may make an order excluding the applicant’s interest in property from the operation of a serious drug offence restraining order made in relation to a serious drug offence if the court is satisfied that -
(a) the applicant was not, in any way, involved in the commission of the
serious drug offence; and
(b) the applicant’s interest in the property was not subject to the effective control of the accused on the earlier of –
(i)the date that the accused was charged with the serious drug
offence; or
(ii) the date that the serious drug offence restraining order was
made in relation to the property; and
(c) where the applicant acquired the interest from the accused,
directly or indirectly, that it was acquired for sufficient
consideration.”
9The agreed facts dispose of the first of the three pre-conditions set out in the statute. They also acknowledge that where a finding is made adverse to the applicant’s contention in relation to the third pre-condition, Ms Azizi has not acquired her interest in property for sufficient consideration as defined in s 3(1) of the Act.
10Mr Juebner, on behalf of the applicant, accepted that his client bore the onus of proving on the civil standard the remaining matters in issue. The relevant date for the determination of the question of effective control of the property was 17 December 2014, being the date on which the accused was charged with the relevant serious drug offence.
The contested evidence
11Ms Azizi affirmed an affidavit on 5 May 2020 which was tendered into evidence.[1] The substance of the affidavit was as follows:
· Ms Azizi and the accused signed a contract to purchase the property on 13 October 2012. The vendor was the Commonwealth Bank of Australia as mortgagee in possession.[2]
· Ms Azizi and the accused were registered as joint proprietors of the property on 17 January 2013.[3]
· Home and contents insurance and rate notices were recorded jointly in the names of Ms Azizi and the accused.[4]
· When the property was purchased by Ms Azizi and the accused it was effectively a new home, although some completion of items such as the driveway and exterior landscaping was required to complete the build.[5]
[1]Exhibit A, Joint Court Book (“JCB”) pp 3 to 31 with minor redactions which were not the subject of any objection
[2] Exhibit A, JCB Tab 2, ZA-1, JCB 4 & 7 to 10
[3] JCB p 4 at [8]
[4] JCB p 4 at [9] & pp 20 to 27
[5] JCB p 5 [17] to [19]
12Ms Azizi’s affidavit also described her family situation, including marrying the accused in 2003 and inspecting a number of other properties before the purchase of the property in Wollert.
13When cross-examined I noted the following evidence as relevant to the issues in dispute:
· The deposit for the purpose of the property was paid from a Westpac Bank account in the name of the accused. Ms Azizi did not have direct access to that account.[6]
· The payment of the balance of the purchase price also came from the accused’s Westpac Bank account in which Ms Azizi had no direct interest.[7]
· Ms Azizi disagreed with the proposition that she would agree to transfer the property if the accused requested her to do so:
“… If he told you to sign a transfer of the house or a contract to sell the house you would have signed that document?---I would have given his 50 per cent back but I wouldn’t give my 50 per cent to him.”[8]
[6] Transcript (“T”) 26, Line (“L”) 17 to T 27, L 28
[7] T 28, L 20-25
[8] T 29, L 6-29
The applicant’s submissions
14The applicant filed a written outline of submissions dated 15 May 2020.[9] Mr Juebner made oral submissions at the hearing before the court on 16 June 2020 following the agreed statement of facts being filed.
[9] JCB pp 33-42
15
In essence the submissions addressed the two live issues to be determined, that is:
1.Whether the applicant’s interest in the property was not subject to the
effective control of the accused on the relevant date; or
2.Where the applicant acquired her interest from the accused, either directly
or indirectly, it was acquired for sufficient consideration.
16Mr Juebner’s submissions focused largely on the second issue and urged me to initially make a finding as to the interest held by Ms Azizi in the property. This was described by Mr Juebner as a two‑stage process, noting that Ms Azizi had initially acquired an equitable interest at the time of signing the contract of sale. Critically, both the applicant and her husband had both acquired the same equitable interest at exactly the same time:
“At no point in time did my client’s husband have an interest in the property that preceded or predated the interest which she held. At no point in time did my client’s husband hold any interest in the property on trust for my client.”[10]
[10] T 32, L 21-25
17Mr Juebner’s submissions noted that his client’s current interest was a legal interest as a joint proprietor of the property as set out in the agreed statement of facts. She obtained this interest at precisely the same time as the accused when the transfer of land was registered on 17 January 2013.
18Mr Juebner’s submissions urged a finding that s 22A(1)(c) would have no application to Mrs Azizi as she had not “acquired the interest from the accused, directly or indirectly…”, but her interest, initially equitable and subsequently the legal interest, was obtained from the Commonwealth Bank as vendor and not from the accused.
19Mr Juebner’s submissions made reference to a number of authorities including DPP v Le[11] as authority for the proposition that an exclusion application focused upon the interest claimed by the applicant - in this case a 50 per cent interest as joint tenant in the property. Mr Juebner accepted that the High Court’s decision in Le recognised a transfer for “love and affection”. Amending legislation was enacted following the decision in Le to amend the legislation to specifically exclude transfers “for love and affection” from the definition of “sufficient consideration” in s 3 of the Act.[12] The agreed facts accept an absence of “sufficient consideration” by the applicant if s 22A(1)(c) was found applicable in this case.
[11] [2007] HCA 52
[12] Criminal Organisations Control and Other Acts Amendment Act 2014
20Mr Juebner’s submissions noted that joint tenancy of real property was rarely based on equal financial contributions from marital partners.[13] Reference was also made to a number of authorities addressing the issue of “wilful blindness” insofar as such a concept relates to Ms Azizi’s knowledge or belief as to the source of the funds used to purchase the property.
[13] The Trustees of the Property of John Daniel Cummins v Cummins & Anor [2006] HCA 6 at [71] to [72]
21Mr Juebner stressed in submissions the importance of interpretation of any statutory ambiguity in a manner favouring the applicant, who would otherwise be deprived of her interest in the property without compensation. In support I was referred to Jeffrey v DPP (Cth)[14], which set out the following principles relevant to interpretation of the then applicable Proceeds of Crime Act 1987 (Cth):
“1. An intention to abrogate or curtail fundamental property rights will not be imputed by the courts. It must be ‘clearly manifested by unmistakable and unambiguous language. General words will rarely be sufficient for that purpose if they do not specifically deal with the question because, in the context in which they appear, they will often be ambiguous on the aspect of interference with fundamental rights.’
2. A legislative intention to take away property without compensation requires expression of that intention with ‘irresistible clearness’ because it is presumed that the legislature would not ‘overthrow fundamental principles, infringe rights, or depart from the general system of law, without expressing its intention with irresistible clearness.’ …
3. Any statutory ambiguity should be interpreted so as to respect a person’s property rights … Unless no other interpretation is possible, justice requires that statutes should not be construed so as to enable the confiscation of an individual’s property without payment of just compensation. …
4. In construing a penal statute, and confiscation of property without compensation constitutes a penalty, if there are two reasonable interpretations, the more lenient of which will avoid the imposition of the penalty, that more lenient construction must be adopted.”
[14] (1995) 121 FLR 16 at [19]
22Reference was also made to a decision of Redlich J in the Supreme Court of Victoria in Sypott v R[15]. In that case the court ruled against a variation of a restraining order made under the Confiscation Act 1997 to permit funds to be made available for legal assistance where no specific provision was contained in the relevant sections of the Victorian Act:
“These provisions provide relief against forfeiture which has typically been regarded as being beneficial and protective of the rights of individuals. Such provisions should not be construed narrowly.”[16]
[15] [2003] VSC 41
[16] Ibid at [21]
23Mr Juebner referred to further examples where the courts had imposed a narrow interpretation to penal statutes in State of Queensland v Brooks[17] and Nguyen v Director of Public Prosecutions and Another.[18] Mr Juebner emphasised that the Court of Appeal in Nguyen supported a statutory construction affirming the principle of legality whereby statutory provisions:
“… are not to be construed as abrogating fundamental rights or important common law rights, privileges and immunities in the absence of clear words or necessary implication to that effect.”[19]
[17] [2006] QCA 431 at [636]; Commissioner of Australian Federal Police v Fysh [2013] NSWSC 81 at [7] to [14]
[18] [2019] VSCA 20 at [101] to [102]
[19] Ibid at [101]
24Mr Juebner additionally referred to a decision of Myenvironment Inc v VicForests[20] as further support for the approach to be adopted in interpreting s 22A:
“To assume that the apparently confined words of a provision must be given an expansive operation on the basis of what is perceived to be the legislation’s primary purpose may frustrate rather than effectuate legislative intent.”[21]
[20] [2013] VSCA 356
[21] Ibid at [14]
25The use by the legislature of the word “from” rather than expressions such as “because of” in s 22(1)(c) directed the court to conclude that this provision did not apply to the facts of the present case, given that Ms Azizi had never acquired her interest, either equitable or legal, from the accused.
26The final aspects of Mr Juebner’s submissions dealt with the question of effective control as relevant to s 22A(1)(b).
27Mr Juebner’s submissions on this point acknowledge the somewhat confusing evidence given by Ms Azizi when cross-examined. Mr Juebner submitted that her affidavit remained unchallenged in cross‑examination and her somewhat ambiguous answers in cross-examination may indicate no more than some degree of confusion or lack of understanding as to the questions she was being asked.
28He submitted that I should conclude that the applicant would make decisions jointly with her husband in relation to the property. Mr Juebner referred to two recent decisions of the Supreme Court of Victoria in 24th Trengganu Pty Ltd & Anor v Director of Public Prosecutions (Vic)[22] and Director of Public Prosecutions (Vic) v Ferguson.[23]
[22] [2009] VSC 525
[23] [2006] VSC 484
29In the more recent decision of 24th Trengganu Pty Ltd & Anor v Director of Public Prosecutions[24] Kaye J referred to his earlier judgment noting:
“(In Ferguson) I gave some consideration to the meaning of ‘effective control’ in the Act. As I there noted, the authorities have cautioned against redefining, or paraphrasing, those words. Nevertheless, as I concluded in that case, the authorities, to which I had reference, describe the concept of ‘effective control’ in terms of control which is ‘practically effective’, in the sense that the person concerned has in fact (while not necessarily de jure) the capacity to control the possession, use or disposition of the property.”[25]
[24][2009] VSC 525
[25] Rizzo & Anor v DPP (Vic) [2009] VSC 525 at 43
The respondent’s submissions
30Dr Vout, on behalf of the respondent, submitted that Ms Azizi’s interest in the property, both legal and equitable, was indirectly acquired from the accused by way of a gift, as he had paid the whole of the purchase price. Such a situation had been considered by the High Court recently in Lordianto v Commissioner of the Australian Federal Police; Kalimuthu v Commissioner of the Australian Federal Police (“Lordianto”).[26]
[26] (2019) 266 CLR 273
31Dr Vout submitted that the acquisition of the beneficial interest in the property by Ms Azizi and the subsequent registration of the legal interest should properly be regarded as a gift from the accused. The accused had paid the whole of the purchase price. Dr Vout submitted that there was similarity between the present case and the example raised in Lordianto where a person dealing drugs had provided funds from that activity to his mother who then purchased a car.[27]
[27] Ibid at [86]
32Dr Vout submitted that Mr Juebner’s proposed interpretation of the phrase “acquired the interest from the accused, directly or indirectly,” in s 22A(1)(c) is impermissibly narrow and does not give effect to the clear intention of the amendments relating to the serious drug offender regime contained in the Criminal Organisation Control and Other Acts Amendment Act 2014 (“the amending Act”). Dr Vout referred to the statement of compatibility tabled in the Legislative Assembly by the Attorney General on 26 June 2014:
“The bill provides for the confiscation of all property of serious drug offenders …
… the charter act does not protect the family home from forfeiture where it is reasonable to assume that it has been obtained using the proceeds of serious crime. Even so, the bill specifically mitigates the risk that family dependants will be left without a home as a result of forfeiture of their residence. After forfeiture, dependants are able to apply to the court for the payment of prescribed amount of money from the sale of property to secure alternative accommodation. The court has the discretion to order this payment if satisfied that the residence is not tainted property and the dependant does not have sufficient financial resources to purchase or rent alternative accommodation.
Additionally, if a court makes a restraining order, any person claiming an interest in the property other than the accused can apply for an exclusion order, which will exclude certain property from the operation of a serious drug offence restraining order, where the interest was not subject to the effective control of the accused.”[28]
[28] Hansard 26 June 2014 pp 2377-2378
33Dr Vout also referred to the Second Reading Speech delivered by the Attorney General:
“Confiscating the proceeds of criminal activity is one of the most effective methods of targeting and disrupting serious and organised crime. Many serious crimes, in particular the large-scale trafficking of drugs, are motivated purely by profit. In some cases, these profits are reinvested by criminals to pursue further criminal activity. The confiscation of these profits removes the incentive to commit these crimes and prevents their use in supporting further criminal activity.
This bill will establish a regime for the forfeiture of assets of persons declared by the court to be ‘serious drug offenders’.
…
The effect of a serious drug declaration will be the mandatory forfeiture to the state of almost all of the offender’s property. The offender and dependants will be able to retain household goods and clothing, and a modestly priced vehicle. Dependants of the offender will be able to seek relief from hardship caused by the forfeiture, to ensure they are not left homeless.”[29]
[29] Ibid 26 June 2014 at p 2384
34Dr Vout contrasted the regime applicable to serious drug offences to other provisions relating to forfeiture of assets dealt with by the provisions set out in the principal Act.
35The prohibition on a serious drug offender applying for exclusion under this regime gave a clear indication of the parliamentary intention that these provisions be applied harshly. In those circumstances Dr Vout submitted that the operation of s 22A(1)(c) fell to be interpreted in the context of the particular regime of which it was a part. It should not be given the beneficial interpretation urged by Mr Juebner, notwithstanding that other provisions elsewhere in the Act fell to be so applied.
36Dr Vout submitted that the words “directly or indirectly” should be widely interpreted so that the transfer of both the equitable and legal interest to Ms Azizi constituted a gift from the accused. Dr Vout referred to a number of tax cases, including Smith v Federal Commissioner of Taxation.[30] In that case the judgment of Toohey J referred to the use of the words “directly or indirectly” in s 26(e) of the Income Tax Assessment Act. His Honour referred with approval to an earlier authority in Federal Commissioner of Taxation v Dixon[31] where it was stated:
“It is hardly necessary to say that the words ‘directly or indirectly’ extend the operation of the words ‘in relation … to’. In spite of their adverbial form they mean that a direct relation or an indirect relation to the employment or services shall suffice. A direct relation may be regarded as one where the employment is the proximate cause of the payment, and indirect relation as one where the employment is a cause less proximate, or, indeed, only one contributory cause … “[32]
[30] (1987) 164 CLR at 513
[31] (1952) 86 CLR 540 at pp 533-544
[32] Smith v Federal Commissioner of Taxation (1987) 164 CLR at 513
37Plainly the present case was one where the acquisition of Ms Azizi’s interest had resulted indirectly from the payments made by the accused.
38Dr Vout contrasted the circumstances in which Ms Azizi obtained her interests in the property from cases such as Calverley v Green[33] which concerned equitable presumptions which were relevant to determining the beneficial ownership of property to persons otherwise than in accordance with their respective financial contributions. Dr Vout referred to the discussion of those equitable presumptions by the High Court as follows:
1. Where a person pays the purchase price of property and causes it to be transferred to another or to another and himself jointly, the property is presumed to be held by the transferee or transferees upon trust for the person who provided the purchase money. …
2. Where two or more persons advance the purchase price of property in different shares, it is presumed that the person or persons to whom the legal title is transferred holds or hold the property upon resulting trust in favour of those who provided the purchase price in the shares in which they provided it …
3. The third presumption, usually called the presumption of advancement is not … strictly a presumption at all. It is simply that there are certain relationships in which equity infers that the benefit which was provided for one party at the cost of the other has been so provided by way of ‘advancement’ with the result that the prima facie position remains that the equitable interest is presumed to follow the legal estate and to be at home with the legal title.”[34]
[33] (1984) 155 CLR 242
[34] Ibid at pp 266-267 per Deane J
39Dr Vout provided further historical authority in support of the equitable presumption of advancement in Bennet v Bennet[35] where it was stated:
“The doctrine of equity as regards presumption of gifts is this, that where one person’s stands in such a relation to another that there is an obligation on that person to make a provision for the other, and we find either a purchase or investment in the name of the other, or in the joint names of the person and the other, of an amount which would constitute a provision for the other, this presumption arises of an intention on the part of the person to discharge the obligation to the other; and therefore, in the absence of evidence to the contrary, that purchase or investment is held to be in itself evidence of a gift.
In other words, the presumption of gift arises from the moral obligation to give.”[36]
[35] (1897) 10 Ch.D 474
[36] Ibid at pp 476-477
40Dr Vout further submitted that the Confiscation Act provided different regimes for the determination of exclusion applications, depending on whether the restraining order had been based upon a Schedule 1 offence, Schedule 2 offence or a serious drug offence.
41By reason of those differing regimes, the danger of a “domino effect” resulting from a particular interpretation of s 22A(1)(c) would not in fact occur. Dr Vout referred to the differing regimes particularly apparent when comparing s 21 dealing with restraining orders relating to Schedule 1 offences, and those made under s 22A relating to serious drug offence restraining orders.
42Dr Vout submitted that the examination of the statutory “hurdles” confronting an applicant escalated depending on whether exclusion was sought from restraining orders based upon Schedule 1, Schedule 2 or serious drug offence restraining orders. A further illustration of this reasoning was to be seen in the legislative regime dealing with unexplained wealth restraining orders which presented the most onerous task for an applicant seeking exclusion.[37]
[37]Sections 40T, 40ZC & 40ZD of the Act
43A major distinguishing feature of the present case was that the entirety of the purchase price for the property in which Ms Azizi claimed an interest had been provided by her husband. This distinguished it from the vast majority of cases where joint purchasers had also jointly become liable in respect of loan funds.
44The starting point in the present case was not, as Mr Juebner urged, to analyse the nature of the applicant’s interest, but rather look at the nature of the transactions as the High Court had undertaken in Lordianto.[38]
[38](2019) 266 CLR 273
45Dr Vout referred also DPP v Le[39] which considered that “natural love and affection” could constitute sufficient consideration for the purposes of an application for exclusion from the forfeiture made under s 52(1)(a)(v) of the Confiscation Act 1997. Subsequent to that decision the definition of “sufficient consideration” to exclude such transfers was inserted into the legislation.[40]
[39](2007) 232 CLR 562
[40]Inserted by No 42/2007 s 4(3)
46Dr Vout emphasised that the task that the court in the present application has to determine is the breadth and scope of the phrase “acquired from the accused, directly or indirectly.” A proper analysis of the factual scenario in the present application should lead to a conclusion that the interest claimed by Ms Azizi had been received as a gift and, notwithstanding the timing of the equitable and legal interests being received by her and by the accused.
47The essence of the transaction was that any interest obtained by Ms Azizi remained a gift from the accused. There was no ambiguity in the legislation and therefore no need to interpret any statutory ambiguity so as to respect a person’s property rights as the court had done in Jeffrey v Director of Public Prosecutions (Cth).[41]
[41](1995) 121 FLR 16 at p 19
48Dr Vout also referred to the approach taken by the Queensland Court of Appeal in State of Queensland v Brooks[42] which was relied upon by Mr Juebner in support of a proposition that a strict or narrow interpretation should be given to the phrase “in relation to” which would otherwise be fairly described as an expression of wide ambit. Dr Vout referred in argument to an earlier passage of the judgment where reference was made to the earlier decision in Jeffrey:
“It may be accepted that confiscatory legislation such as the Act will be ‘enforced only where the intention of the legislation is clear’[43] but where the intention is clear it must be given affect.”[44]
[42](2008) 1 Qd.R 484 at 502 [67]
[43]Jeffrey v Director of Public Prosecutions (Cth) (1992) 58 A.Crim.R 310 at 320
[44]State of Queensland v Brooks (2008) 1 Qd.R 484 at p 500[57] per Keane JA
49Dr Vout also submitted that notwithstanding the affidavit material concerning some degree of non-financial contribution to the improvement or maintenance of the property, there was effectively no evidence to enable the court to ascribe any meaningful percentage interest on the basis of the applicant’s limited evidence.
50The applicant’s claim was one based upon the acquisition of an equitable and then a legal interest and any contribution such as the choice of paint colour or the location of children’s playground equipment would at most amount to a minimal contribution. That had never formed the basis of the present application.
51Mr Juebner filed written submissions in reply and spoke briefly to them at the hearing. In essence Mr Juebner submitted that varying contributions by family members, some financial, some of a non-financial nature, are recognised as creating in certain cases equal interests in a property.[45]
[45]Trustees of the Property of Cummins v Cummins (2006) 227 CLR 278 at [71] to [72]
52Mr Juebner accepted the apparent harshness of the serious drug offence provisions in the Act, but referred to the clear intention of Parliament to protect the rights of innocent third parties by providing for their ability to seek an exclusion order in accordance with s 22A. The apparent harsh nature of the legislation should not be viewed in a vacuum. The agreed facts in the present case acknowledged that the applicant was not in any way involved in the relevant offending, and the evidence established, in Mr Juebner’s submissions, that the property was not subject to the effective control of the accused at the relevant point of time.
53Mr Juebner referred to longstanding authority in Craig Williams Pty Ltd v Barrowcliff[46] where Hudges J stated:
“I think it is a fundamental rule of construction that any document should be construed as far as possible so as to give the same meaning to the same words wherever those words occur in that document, and that that applies especially to an Act of Parliament, and with especial force to words contained in the same section of an Act. There ought to be very strong reasons present before the Court holds that words in one part of a section have a different meaning from the same words appearing in another part of the same section.”
[46][1915] VLR 450 at 452
54Mr Juebner’s reply submissions identified the exclusion test set out in s 22A(1)(c) as being replicated in the Act in ten further sections. In such circumstances he submitted the court should reject the respondent’s argument absent the precise and explicit wording from the legislature.
Analysis
55It was abundantly clear from the agreed facts and the limited evidence adduced from Ms Azizi at the hearing that the principal area of dispute between the parties concerned the third pre-condition set out in s 22A(1)(c) of the Act. That sub‑section is only engaged where the applicant acquired the interest sought to be excluded from the accused directly or indirectly.
56There is no dispute as to the nature of the interest obtained by Ms Azizi, nor as to the manner in which it was obtained. In simple terms, the applicant’s claim is that her interest, firstly equitable and then legal, was obtained from the vendor of the property and not from the accused. The respondent argues that the circumstances of the transaction lead to a conclusion that the property was received by Ms Azizi indirectly from the accused as a gift.
57I propose to deal initially with the second pre-condition dealing with the issue of whether Ms Azizi’s interest in the property was subject to the effective control of the accused on 17 December 2014, the date recorded in the agreed facts as relevant for a determination to be made in accordance with s 22A(1)(b)(i).
58Ms Azizi’s affidavit records undertaking some completion of items on the property during the period of nearly two years leading up to the relevant date in December 2014. In my view there was nothing in her affidavit suggesting that her actions were subject to any effective control by the accused during that period. Further, in response to a question in cross-examination, she directly denied that she would agree to transfer her 50 per cent interest in the property if the accused had requested her to do so.[47]
[47]T 29, L 6-29
59Notwithstanding the onus resting upon Ms Azizi to establish compliance with this sub-section, the absence of any contradictory factual material is significant. I accept as a matter of law that there is no burden on the respondent to provide evidence on this issue. Nevertheless the absence of any evidence such as an attempt to encumber the property by way of a mortgage benefiting the accused in the relevant period, leaves the matter to be determined solely on the evidence in Ms Azizi’s affidavit and her cross-examination.
60In those circumstances I accept the evidence of Ms Azizi and I am satisfied that on the date relevant for the determination to be made, her interest was not subject to the effective control of the accused.
61The remaining issue to be determined is whether or not Ms Azizi’s 50 per cent interest in the property was acquired indirectly from the accused. Mr Juebner’s argument centred on the legislature’s use of the phrase “from the accused” when plainly Ms Azizi had acquired her interests, both equitable and legal, from the mortgagee in possession rather than from the accused.
62I accept that great caution should be exercised before broadly interpreting the words of a statute where those provisions deal with the potential loss of fundamental property rights. The Court of Appeal in Nguyen[48] gave clear guidance on the principle of legality required in interpreting such statutory provisions.
[48][2019] VSCA 20 at [101] to [102]
63Dr Vout referred in argument to the approach taken by the High Court in Lordianto when dealing with the interpretation of s 330 of the Proceeds of Crime Act 2002 (Cth) (“POCA”). In that case numerous small cash deposits, which were agreed to be either proceeds or instruments of an offence, had been deposited into various bank accounts. A central issue in Lordianto required the Court to determine whether those funds had been:
“… acquired by a third party for sufficient consideration without the third party knowing, and in circumstances that would not arouse reasonable suspicion, that the property was proceeds of an offence or the instrument of an offence (as the case requires)”.[49]
[49]POCA s 330(4)(a)
64Although Lordianto is concerned with different legislation, the guides to the interpretation are of real relevance to my task in the present case. The High Court stated as to the construction issue:
“On appeal to this Court, the parties approached the question of construction of s 330(4)(a) as if the paragraph comprised separate elements which are to be construed in isolation from one another. That is not the proper approach to the construction of s 330(4)(a).
The paragraph must be read as a whole and in the context provided by the whole of the statutory framework. As seen earlier, that framework commences with a restraining order (or an application for a restraining order) to prevent identified property being disposed of or otherwise dealt with by any person if there are reasonable grounds to suspect that the property is, relevantly, the proceeds of, or an instrument of, an offence. And then, of course, the circumstances in which property becomes and when it remains proceeds, or an instrument, of an offence are broadly defined in ss 329 and 330 of the POCA. Those sections are intended to, and do, have multiple applications.
As against that background, the exclusion provided by s 330(4)(a), by which property ceases to be proceeds, or an instrument, of an offence, is limited. It is limited to a person who acquired specific property (necessarily, the subject of an existing or proposed restraining order) for sufficient consideration without that person knowing, and in circumstances that would not arouse a reasonable suspicion, that the property was proceeds, or an instrument, of an offence. In many cases, perhaps most, that will be an inquiry very similar to the inquiry under the general law about whether a person is a bona fide purchaser for value without notice.”[50]
[50]Lordianto at [61] to [63] per Kiefel CJ, Bell, Keane & Gordon JJ
65Consistent with the approach adopted by the High Court I am satisfied that a correct analysis of s 22A(1)(c) must be informed by a reading of the precise words used, but in context with the serious drug offender regime culminating with the automatic forfeiture of property set out in Division 4 of Part 3 of the Act. It is clear that the intention of the legislature is to mandate a stern regime in such cases leading to automatic forfeiture save for property that is not protected property, nor property subject to an exclusion order such as sought by the applicant in the present case.
66It is legislation that is stern in its affect on the property of serious drug offenders, but ultimately its interpretation is clear and must be given effect.
67The use of the phrase “acquired the interest from the accused, directly or indirectly” must, in my view, be interpreted so as to give a broader operation to the sub-section than that submitted by Mr Juebner. The analogy of a person taking a relative to a jewellery store and buying a piece of jewellery for them as a gift is a classic example of an interest being received indirectly from the person who pays the jeweller for that gift, notwithstanding that the beneficiary has never received an interest from the benefactor. Without such an interpretation being given to the sub-section, the word “indirectly” would have no work to do.
68The present case cannot be determined on equitable doctrines in circumstances where the agreed facts acknowledge that the totality of the purchase price for the property including the 50 per cent share claimed by the applicant was paid by the accused from funds in bank accounts over which Ms Azizi had no method of access or control. This is not a case where the court must undertake a task of assessing the value of non-financial contributions as fell to the court applying equitable doctrines in many of the authorities relied upon by Mr Juebner.
69If there is any doubt as to the clarity of the words used in s 22A(1)(c) then a reference to the parliamentary debates prior to the legislative amendments following the High Court’s recognition of a transfer for “love and affection” in Le’s case makes it abundantly clear that the amending legislation:
“Will establish a regime for the forfeiture of assets of persons declared by the court to be ‘serious drug offenders’. … The effect of a serious drug declaration will be the mandatory forfeiture to the State of almost all of the offender’s property.”[51]
[51]Hansard 26 June 2014 pp 2377-238
70The end result of my analysis is that the interest claimed by Ms Azizi at the relevant date is a 50 per cent interest in the legal title of the property, but one which has been obtained indirectly from the accused as a gift. Whilst there is force in Mr Juebner’s argument that at the time she jointly entered into a contract with the accused to purchase the property, there was an obligation on her to complete that contract, in the end result the whole of the purchase price was provided by the accused and not Ms Azizi. Whatever obligation she may have faced at an earlier time was removed once the full purchase price had been paid by the accused and the legal transfer completed in January 2013.
71In those circumstances her interest must be captured by s 22A(1)(c). The agreed facts acknowledge that her interest was not acquired for sufficient consideration.
72Ms Azizi’s application for exclusion of her interest in the present proceeding must be dismissed.
73I should finally comment that the legislation provides elsewhere for dependants to apply for relief from the forfeiture of property restrained under the serious drug offence restraining order provision. Although these provisions are not directly relevant to my findings as to the proper application of s 22A, they are nevertheless indicative of consideration being given by the legislature to the predicament faced by dependants of serious drug offenders who are not in any way involved in the commission of the serious drug offence.
74I formally order that the application for exclusion be dismissed.
75I will hear the parties should any dispute arise as to the formal orders sought or on the question of costs.
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