| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : CONDO -v- COMMISSIONER OF POLICE OF WESTERN AUSTRALIA [2011] WADC 155 CORAM : DAVIS DCJ HEARD : 17 MAY 2011 DELIVERED : 28 SEPTEMBER 2011 FILE NO/S : CIVO 1025 of 2011 BETWEEN : FRANCESCO CONDO Claimant
AND
COMMISSIONER OF POLICE OF WESTERN AUSTRALIA
Respondent
Catchwords: Application pursuant to s 26 Criminal and Found Property Disposal Act 2006 - 'Person entitled' to property - Ownership - Possession - Turns on own facts Legislation: Criminal and Found Property Disposal Act 2006
Criminal Investigation Act 2006, s 152
Rules of the Supreme Court 1971, O 81G
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Result: Part of claimant's claim for $50,000 admitted
Balance of claim rejected Representation: Counsel:
Claimant : Mr C J Caldicott
Respondent : Mr D E Leigh
Solicitors:
Claimant : David Manera
Respondent : State Solicitor for Western Australia
Case(s) referred to in judgment(s):
Au v Keelty [2007] FCA 77; (2007) 94 ALD 132
Bell Group Ltd (in liq) v Westpac Banking Corp (No 9) [2008] WASC 239; (2008) 225 FLR 1
Bropho v The State of Western Australia (1990) 171 CLR 1
Brybay Pty Ltd v Esanda Finance Corporation Ltd [2002] WASC 309
Burnett v Randwick City Council [2006] NSWCA 196
Clambake Pty Ltd v Tipperary Projects Pty Ltd [No 3] [2009] WASC 52
Eastern Construction Co Ltd v National Trust Co Ltd [1914] AC 197
Gatward v Alley (1940) 40 SR (NSW) 174
Goldsborough, Mort and Co Ltd v Maurice (1937) 58 CLR 773
Goldsmith v Sandilands (2002) 190 ALR 370
Gollan v Nugent (1988) 166 CLR 18
Jones v Dunkel (1959) 101 CLR 298
National Crime Authority v Flack (1998) 86 FCR 16; (1998) 156 ALR 501
Piddington v Bennett & Wood Pty Ltd (1940) 63 CLR 533
Potter v Minahan (1908) 7 CLR 277
Russell v Wilson (1923) 33 CLR 538
The Anderson Group Pty Ltd v Tynan Motors Pty Ltd [2006] NSWCA 22; (2006) 65 NSWLR 400
The Winkfield [1902] P 42; [1900-1903] All ER Rep 346
Wilson v Lombank Ltd [1963] 1 All ER 740
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1 DAVIS DCJ: On 2 February 2009, the claimant in this matter, Mr Condo, was driving a motor vehicle accompanied by a passenger, Mr Stephen Wallace, when he was stopped by police. The police conducted a search of the vehicle and seized, among other items, two bundles of cash totalling $89,500.
2 The money and other items in the vehicle were seized pursuant to s 146 of the Criminal Investigation Act 2006. Section 152 of the Criminal Investigation Act provides that if, under that Act, anything is seized the Criminal and Found Property Disposal Act 2006 applies to and in relation to it. 3 On 14 February 2011 Mr Condo brought an application to this court pursuant to s 26 of the Criminal and Found Property Disposal Act for the return of the $89,500 to him. I must determine whether he is entitled to that money.
The legislative framework of the Criminal and Found Property Disposal Act 2006 4 The Criminal and Found Property Disposal Act, according to its long title, provides for the disposal of: • property seized in the course of certain criminal investigations;
• property that has been found and that is in the possession of the police or certain government agencies; and
• for related matters. 5 The Act deals with different types of property as defined. Part 3 deals with seized property. As defined in s 3 this is property which has been seized in the course of a criminal investigation, with some exceptions which are not relevant to this case. Part 4 of the Act deals with found property which is, as defined in s 3, any property (other than seized property) which has been found, irrespective of whether it had been lost or abandoned before it was found. Part 5 of the Act deals with held property. As defined in s 3, held property means any property, other than seized property and forfeited property, that is in the possession of the chief officer of a prescribed agency by virtue of s 5. It is necessary to set out in full what is provided in s 5: 5. Chief officer deemed to be in possession of certain property For the purposes of this Act, the chief officer of a prescribed agency is taken to be in possession of any property that is in the possession of the agency, or an employee or officer of the agency, and that is: (Page 4)
(a) found property that has been found by the agency or an employee or officer of it or by some other person; (b) seized property that has been seized in the course of a criminal investigation by the agency; or (c) seized property that has been seized in the course of a criminal investigation by the agency and that becomes forfeited property. 6 The chief officer of a prescribed agency is defined to mean, in the case of the police force, the Commissioner of Police appointed under the Police Act 1892: see the definition of 'chief officer' in s 3. 7 A chief officer may delegate a function conferred under the Act, provided that it is in writing: s 31. Produced at the trial of this application was a written delegation from the Commissioner of Police delegating his functions under the Act to all police officers, other than some specified functions (which are not relevant to this case). 8 Part 6 of the Act deals with determining who is entitled to property. A person who claims to be a person entitled to any property in the possession of the chief officer of a prescribed agency by virtue of s 5, may give notice of the claim to that officer, in writing: s 24. Pursuant to s 25(1)(a) the chief officer who receives the notice of the claim may then either reject or admit the claim. Section 25(1)(a) sets out that the claim is to be admitted if the officer: 9 If the chief officer rejects the claim, the officer must not release the property or dispose of it until the time for making an application under s 26 has elapsed, which is 21 days (s 26(2)), or such application has been determined: s 25(3). 10 The court's powers on an application made under s 26 are set out in s 27. The court may order that a claim be admitted or rejected, give any directions it thinks fit in relation to a claim, make other orders as may be just in relation to a claim, make orders as to the payment of holding expenses for the property and also orders for the payment of the costs of the application. (Page 5)
11 Part 3 of the Act also deals with the determination of the right to a person to seized property. Section 11 allows for a person to apply to the appropriate court for an order for the release of seized property to that person, or an order permitting that person to deal with seized property. Section 13(2) provides that on an application made under s 11 by a person, defined as the aggrieved person, the court must not order that seized property be released to that person unless satisfied that: Should this application be brought pursuant to s 11 or s 26 of the Act? 12 In this case a preliminary question of law arose as to whether the application by Mr Condo was to be dealt with pursuant to the provisions relating to seized property, s 11 of the Act, or the provisions relating to the determination of who is entitled to property, s 26 of the Act. 13 It was not in dispute that after the search of the motor vehicle and the seizure of the money, the police undertook investigations. The police had suspected that the money seized was the proceeds of illicit drug sales. On the correspondence produced on this application, Mr Condo had by letter from his solicitors dated 25 August 2009 claimed both bundles of cash seized. The police investigations, including forensic examinations, took a considerable time, prompting a further letter from Mr Condo's solicitors dated 26 August 2010. On 14 September 2010 Detective Sergeant Anthony Thompson advised Mr Condo's solicitors, by an email, that there was insufficient evidence in relation to the seized monies for the Western Australian Police to proceed with charges against any person and that a claim for the money should be made pursuant to the Criminal and Found Property Disposal Act. 14 Section 9(2)(e) provides that once it is no longer necessary for the property to be retained to undertake a forensic examination, the chief officer's authority to retain the property as 'seized property' ceases. Section 9(3) of the Act provides that when a chief officer's authority to retain seized property ceases under subsection (2) the property is to be taken for the purposes of the Act to have ceased to be seized property and to become held property. Thus the Act contemplates that seized property will ordinarily become held property in time, assuming that the property is (Page 6)
not forfeited to the State pursuant to any order: s (9)(2)(b). Once seized property becomes held property, pt 6 of the Act then governs its disposal. 15 From these provisions I have concluded that the purpose of s 11 of the Act, allowing an application to the court for orders relating to seized property, is to provide an opportunity for a person entitled to the property to access that property while it is still classified as seized property. 16 Mr Condo gave the Commissioner of Police written notice of a claim pursuant to the Act. The claim was by a document dated 15 December 2010. After a request from police for further information, which was provided, Detective Sergeant Thompson considered the documentation and on 31 January 2011 made a determination pursuant to s 25 of the Act to reject Mr Condo's claim. 17 Both at the time of Mr Condo's written notice of the claim to the Commissioner of Police and the application to this court there were no charges against Mr Condo and no ongoing police investigation. Accordingly the $89,500 was 'held' property and Mr Condo's application has been properly brought pursuant to s 26 of the Act.
A person entitled to property 18 As defined in s 3 of the Act, a 'person entitled' to property means: 19 The onus of proving that the applicant is a 'person entitled' to property is on the applicant. Pursuant to O 81G r 2 of the Rules of the Supreme Court 1971, proceedings on a claim under the Criminal and Found Property Disposal Act are proceedings in the court's civil jurisdiction and the civil standard of proof applies. The relevant standard of proof is the balance of probabilities. 20 Under par (a) of the definition of 'person entitled' to property, the Act does not define 'owner'. It is necessary to consider what is meant by 'owner' at common law. In Gatward v Alley (1940) 40 SR (NSW) 174, 178, Jordan CJ said in relation to a question as to ownership of a car: A good title to property, in the sense of such ownership as the law allows, consists in having the legal right to exercise with respect to it all such (Page 7)
rights, as against all such persons, as by law are capable of being exercised with respect to property of the class in question. A person who has possession of property but not ownership has, as a general rule, the same legal rights as the owner, save to the extent to which those rights are qualified as against the owner ... 21 In relation to par (b) of the definition of a 'person entitled' to property, which is 'a person who is otherwise legally entitled to possession of the property', as 'possession' is also not defined, it is necessary to consider the common law position relating to possession. Because of the nature of this case, I will consider only possession of personal property, in the sense of goods or chattels (and not land). 22 There are three elements of possession of personal property at common law. The first is whether, as a matter of fact, there is an actual relation between a person and the property. The second is legal possession, the state of being a possessor in the eye of the law. The third is the right to possess or have legal possession. These elements sometimes combine: Pollock F and Wright R S, An Essay on Possession in the Common Law, Oxford: Clarendon Press, 1888, pages 26 - 27. 23 As to the first element of possession in fact, usually this is physical control, but it can also be detention or de facto possession of property. A person can have possession of property by physically holding it, or by having it in a place under his or her control, with the intent to exercise control and dominion over that property. This is sometimes referred to as 'physical possession' or 'actual possession'. It requires effective occupation or control over the property in question: An Essay on Possession in the Common Law, pages 12, 14, 20 - 25, 26 - 27 and 118 - 119; Brybay Pty Ltd v Esanda Finance Corporation Ltd [2002] WASC 309 [21] - [23] and [112]. As stated in An Essay on Possession in the Common Law at page 118 there is possession when: [A] person is in such a relation to a thing that, so far as regards the thing, he can assume, exercise or resume manual control of it atpleasure, and so far as regards other persons, the thing is under the protection of his personal presence, or in or on a house or land occupied by him, or in some receptacle belonging to him and under his control. 24 As to the second element, possession at law, in the eye of the law there is a legal relation of the possessor to the thing possessed. In its most obvious form it co-exists with the fact of physical control and with other facts making the exercise of that control rightful. But it may exist either with or without detention, and either with or without a rightful origin: An Essay on Possession in the Common Law, pages 17 and 26. (Page 8)
25 It does not matter whether possession was acquired with or without a good title. A possessor may be a wrongdoer against the true owner, but as against all third persons not claiming under the true owner his possession is not only legal but fully protected by the law. Possession confers a title of its own, which is sometimes called a 'possessory title'. Possessory title is as good as the absolute title as against every person except the absolute owner: An Essay on Possession in the Common Law, 91- 93, 147, 148; Russell v Wilson (1923) 33 CLR 538, 546 - 547. Possession of property alone gives the right to an action against a wrongdoer for damages for interference with, loss of or damage to that property: Russell v Wilson; Goldsborough, Mort and Co Ltd v Maurice (1937) 58 CLR 773, 798 - 799 (Dixon J); ; Fleming's The Law of Torts (10th ed) [4.10], [4.30], [4.50], [4.60], [4.170] and [4.250]. It is no defence to such a claim for the defendant to raise jus tertii, which is to say that a third party has a superior right to or is the owner of the property, unless the defendant is able to establish that it is the true owner or is resisting the claim by, or on behalf of, the true owner or as a result of rights acquired from the true owner: Clambake Pty Ltd v Tipperary Projects Pty Ltd [No 3] [2009] WASC 52 [215], applying Eastern Construction Co Ltd v National Trust Co Ltd [1914] AC 197 and Wilson v Lombank Ltd [1963] 1 All ER 740; see also The Winkfield [1902] P 42; [1900-1903] All ER Rep 346, 349 and 352; Fleming's The Law of Torts [4.30], [4.40] and [4.190]. 26 A director of a company in possession of property owned by that company or an employee having possession of property in the course of his or her employment for the owner, his or her employer, would have possession on the owner's behalf and not on his or her own behalf. This would not constitute possession at law because possession requires not merely the intent to exclude the world at large from interfering with the world property in question, but to do so in a personal capacity: An Essay on Possession in the Common Law at 18, 21, 56, 58 - 60; Burnett v Randwick City Council [2006] NSWCA 196 [64] - [76], [94] - [113]. This in my view is one reason why par (a) of the definition refers not only to the owner but also to a person 'authorised by the owner to possess the property'. 27 As to the third element, at common law a right or entitlement to possession can exist without actual possession of or title to the property. The owner of the property has, of course, the right to possession, but there can exist an 'entitlement to possession' or 'right to possession' by a person who is not the owner and who no longer has possession. For example, the right to possession remains to a rightful possessor immediately after (Page 9)
he or she has been wrongfully dispossessed: An Essay on Possession in the Common Law at 27; see also Au v Keelty [2007] FCA 77; (2007) 94 ALD 132 [9] and [10]; The Anderson Group Pty Ltd v Tynan Motors Pty Ltd [2006] NSWCA 22; (2006) 65 NSWLR 400 [38].That right to possession confers the same title as if the person had actual possession, and is good against all but the true owner. 28 Paragraph (b) of the definition refers to the person being 'otherwise legally entitled' to possession. In my view, those words reflect the common law principles of possession as I have set out. As the Act does not expressly or by necessary implication override or alter these common law principles, the common law is presumed to apply: Potter v Minahan (1908) 7 CLR 277; Bropho v The State of Western Australia (1990) 171 CLR 1, 18. 29 Having regard to s 152 of the Criminal Investigation Act 2006, the purpose and provisions of the Criminal and Found Property Disposal Act, and the common law, once the powers of the police and the right to hold property as seized property are exhausted, a person's entitlement to that property is determined by reference to the position which existed immediately before the search and seizure by the police: Russell v Wilson (548 - 549); Gollan v Nugent (1988) 166 CLR 18, 47 and 70; National Crime Authority v Flack (1998) 86 FCR 16, 27; (1998) 156 ALR 501, 511 - 512 (Heerey J) and 514 (Tamberlin J). I consider that a person in possession of property before its seizure by the police has a right to possession and is therefore a 'person entitled' to the property. That person's entitlement to the property is subject only to the chief officer knowing or having notice of the identity or whereabouts of another person entitled to the property. 30 If there are competing claims to property, in other words if another person claims to be entitled to the property - and that could be the true owner, or someone authorised by the true owner, or another person claiming that he or she is entitled to or has a right to possession - that is a matter which can be either determined by the chief officer or referred to the appropriate court for determination: s 25(a)(ii) and s 26(3) of the Criminal and Found Property Disposal Act.
Mr Condo's claim to be the owner of the money 31 A DVD recording of the police search of the vehicle which Mr Condo was driving on 2 February 2009 was produced and played during the course of the hearing. One bundle of cash amounting to $50,000 was found in a black bag located behind the driver's seat, (Page 10)
where Mr Condo had been seated. Mr Condo's evidence, which was not disputed, was that this was his bag, and the evidence was that this bag contained other items belonging to him. The other bundle of cash totalling $39,500 was located in a plastic bag inside a plastic container (or what was described as a plastic tub) behind the passenger's seat where Mr Wallace was sitting. 32 Mr Condo claimed that both bundles of cash were his, not just the $50,000 which was in his bag. 33 At the hearing of this application all witnesses, including Mr Condo, gave evidence in the form of a witness statement which stood as the witness' evidence-in-chief, with cross-examination then taking place. In Mr Condo's case, he did not appear personally in court for that cross-examination but appeared by a video-link, as he was a serving prisoner in South Australia. 34 Before I review Mr Condo's evidence it is necessary to record that it was submitted to me on behalf of the Commissioner that Mr Condo's credibility was questionable because of his criminal convictions and his admitted association with a motorcycle gang. These are matters which, in my view, do not necessarily affect his credibility in this case or mean that I should reject Mr Condo's evidence out of hand. I must determine this case on the evidence as presented to me. 35 Mr Condo's evidence as set out in his witness statement was that the $89,500 was the balance of $100,000 loaned to him by Mr Patrick Baftirovski pursuant to a loan agreement dated 17 October 2008. The loan agreement, made in New South Wales, was produced at trial. Mr Baftirovski gave evidence confirming that he had lent that sum of money to Mr Condo pursuant to the written loan agreement and provided the money to him in cash. 36 Mr Condo's evidence in his witness statement was that at the time of entering into the loan agreement he operated a family-run business which involved construction and civil works. The purpose of the loan was to enable him, through another company, to purchase earthmoving trucks and/or semi-trailers and a tandem tip-truck for the purpose of completing a proposed contract with Steven Silvestro, a resident of Western Australia. Mr Condo stated he was attempting to purchase tandem tip-trucks in particular and had travelled to Western Australia in February 2009 for that purpose. On this trip in February 2009 he brought $50,000 in cash. (Page 11)
On an earlier trip to Western Australia, he had brought the $39,500 which Mr Wallace had held in his safe on Mr Condo's behalf. 37 Mr Condo's claim as the owner of the money is, therefore, based upon the money in the vehicle being the same money he received from Mr Baftirovski pursuant to the loan agreement. 38 On behalf of the Commissioner it has been submitted that I should not accept Mr Condo's evidence of the loan agreement and a more likely explanation is that Mr Condo requested assistance from Mr Baftirovski to complete a loan agreement and then backdate it so that Mr Condo could claim the seized money. There is, however, no evidence that the loan agreement was backdated. I found Mr Baftirovski a generally credible witness and I believed his denial when it was put to him in cross-examination that the loan agreement was actually created by him at a later date. I am satisfied on the balance of probabilities, based on the written loan agreement and the evidence given by Mr Baftirovski, that Mr Condo did obtain a loan from Mr Baftirovski in October 2008. Other aspects of Mr Condo's evidence I do not accept, however, for the following reasons. 39 On his own evidence Mr Condo was at the time managing two companies and operating a construction business with construction work in South Australia and New South Wales, employing a large number of personnel and travelling extensively between South Australia, Western Australia and New South Wales. He agreed he was a sophisticated and capable businessman. 40 The details of the arrangements that Mr Condo had with Mr Silvestro, both contained in Mr Condo's statement and as also provided during the course of his cross-examination, were vague. The nature of the proposed contract with Mr Silvestro was not explained in Mr Condo's witness statement. In cross-examination, however, he said the contract with Mr Silvestro was for supplying trucks. Mr Condo said there was a contract being done in Western Australia in the northern region and Mr Silvestro was in a construction company of his own and required a large amount of trucks and the opportunity arose to 'put a couple of trucks in there'. Mr Condo was asked whether in relation to this opportunity for supplying trucks he had ever completed the contract and his response was 'I didn't get a chance, no', explaining that he had to produce the trucks and without the trucks he could not get the work. Immediately after that, however, when he was asked a further question about what Mr Condo had described as a proposed contract, Mr Condo (Page 12)
said 'I had entered into an agreement with Mr Silvestro, to supply two trucks' (ts 16). He went on to say the agreement was oral but would become documented when the trucks were there. Within the space of a few questions Mr Condo's evidence concerning the arrangements he had with Mr Silvestro changed, and did so in what I consider to be a material way. 41 Initially Mr Condo said he could not even recall the months, dates and periods of when he was speaking with Mr Silvestro about these arrangements (ts 18). Later, however, Mr Condo said he had started negotiations with Mr Silvestro a long time before, in the middle of 2008, and 'we were constructing the way we were going to do the contract and how we were going to do the job, how many trucks we needed' (ts 49). When I asked what job he was referring to, Mr Condo was extremely vague saying only that it was in northern Western Australia, that the place in Western Australia started with a 'K' and he could not remember the actual job site, although he identified that the job was for McMahons. His inability to remember these details raises considerable issues concerning the reliability and credibility of his evidence, given both his evidence that he was a capable businessman, and his earlier evidence that he had been negotiating with Mr Silvestro for some time, working out how the job was going to be done and how many trucks were needed. 42 Mr Condo's evidence about how many trucks he intended to purchase or needed for the contract with Mr Silvestro (whether it was a proposed contract or concluded oral contract) varied. In his witness statement he said the purpose of the loan agreement was to purchase 'earth moving trucks and/or semitrailers and a tandem tip truck' (par 4) and then he stated that he had travelled to Western Australia for the purchase of 'tandem tip trucks' (par 5). The number of trucks was not specified. As I have observed, in cross-examination Mr Condo talked initially about 'a couple of' trucks. Later (ts 16) he said the contract was to purchase two trucks. However, during another part of the cross-examination he spoke about having previously tried to supply 10 trucks and failing to get finance (ts 24) and having conversations with Mr Silvestro about getting 10 trucks 'for this job', again being unable to get finance, so 'I went out on a limb and got this finance', referring to the loan agreement (ts 38). 43 There was a considerable delay of over three months between the date of the loan agreement, 18 October 2008, and the date of Mr Condo's visit to Perth in February 2009, the purpose for which he said was to purchase the trucks. Mr Condo, knowing that he needed to buy trucks, had not brought all the money over to Perth in one trip. According to his (Page 13)
evidence-in-chief (par 12 of his witness statement) he brought an amount of $39,500 over on an earlier trip to Perth, the date of which was not specified, when he had been looking to purchase 'the said vehicles' and he had given that cash to Mr Wallace. Mr Condo stated he had brought the other $50,000 over on his most recent trip to Perth hoping that 'having the ability to pay for the purchase of the trucks in cash would allow me to obtain a substantial discount'. Whether Mr Condo had a proposed or concluded contract with Mr Silvestro to provide trucks, I find it improbable that Mr Condo would bring cash over in two separate trips to Western Australia for the purpose of purchasing those trucks. I consider it also improbable that he would wait until February 2009 to bring the second, larger amount of cash with him. 44 The location of the money as found in the vehicle during the police search, in two separate bundles, one in Mr Condo's bag and the other in another container behind Mr Wallace's seat, is in my view inconsistent with Mr Condo's evidence that all of this money was for the purpose of purchasing trucks. If that were the case I would expect Mr Wallace to have given the $39,500 to Mr Condo for this purpose, and all of the money to have been in Mr Condo's bag. 45 There was no evidence given by Mr Condo that he had actually found trucks to purchase and was on his way to a specific place or to see a specific person with the cash to buy the trucks. The thrust of Mr Condo's evidence was that he had the money and was 'looking for' the trucks. I find it objectively improbable that any person, particularly an experienced businessman, would carry around large amounts of cash simply while 'looking' for goods to purchase. 46 There was evidence that one of the companies Mr Condo operated had a bank account. The cheque book for that company was found in Mr Condo's bag during the search. Under the terms of the loan agreement Mr Condo was paying interest of 25% per annum. When he was asked why the money could not be left in a bank account earning interest while he was finding the trucks, Mr Condo responded 'it never crossed my mind'. Immediately after this the following exchange took place (ts 50): As a successful businessperson very much aware of finance and the doing of deals------Well - - - - - - you never thought about interest on money---- - - I had - what - I had no intention of putting money in a bank for a period of less than - less than - we're talking three months. My intention was, and my actions were, to (Page 14)
buy a vehicle, to buy vehicles. So by putting money in a bank, then having to pull it out, it becomes a - a headache. 47 Mr Condo's first answer that it never crossed his mind to put money in the bank is inconsistent with his statement that he had no intention of putting money in a bank for a period of three months. He then claimed that it was a 'pain' to withdraw money from the bank and disagreed with the proposition that the pain was worth the benefit he would have gained from three months of bank interest: And you're essentially saying that pain is not worth the benefit that you would have gained from three months of standard bank interest, which might itself be $2,000---No, I don't - I disagree with that. How is that, sir---I disagree with your claim. You're saying why wouldn't I put the money in a bank to earn $2,000. That's right---Correct. Well, I needed the money to buy a purchase. So I'm a busy - I - I'm a businessman. Time is money for me, okay? I'm travelling South Australia, New South Wales, to Western Australia, okay? Now, we are talking maybe one to two days to get that money out of a bank, okay? I did not have that sort of time on my hands to be able to do that. 48 Mr Condo's statement that 'time is money for me' is inconsistent with the delay of over three months between the date of the loan agreement in October 2008 and his travel to Western Australia in February 2009 for the stated purpose of purchasing the trucks. 49 If in fact the money was needed to purchase the trucks and time was money for him, I would have expected Mr Condo to say something at the time of the search. Mr Condo did in fact protest when police wanted to seize his mobile telephone. He agreed that in his discussions with Detective Senior Constable Shannon Curchin, the police officer who conducted the search, Mr Condo said words to the effect of 'I don't care about anything else, my phones are my work. No work, no business. I need to answer my phone. I don't care about nothing else, I'm running a business'. Nothing, however, was said about the money being needed for the purchase of trucks as part of that business. Mr Condo's explanation for this was that 'I didn't have to get upset about the money, because I knew we'd be having this day in court.' When further challenged about not expressing the same concern about the money as he did about his mobile phone, the following exchange took place: [Y]ou became extremely concerned immediately about phones, but - - ----That's correct. (Page 15)
- - - did not express that same concern about money---Well, there's not much I could do about the money, because the money was being taken. All right---But if my job - if my jobs had fallen down, I would have lost the other work, which then would have stopped income coming into my business. So do you understand the urgency of making sure my jobs continue and that I make sure everything is running smoothly? The only thing is, sir, you didn't just say that you cared particularly about the phones, you actually said: I don't care about anything else. You said that you didn't care about the money. But you've also told the court this morning that the money was of vital importance for this contract that you were looking to enter into with Mr Silvestro---Yes, that's correct. Do you accept that that's inconsistent, sir---Why's it inconsistent? It's not inconsistent when you have no control of what is going to happen. I need to be in control of what is happening. Once the money has been taken, I have no - don't have any control of that. 50 These explanations, and the manner in which I observed Mr Condo to give them, were unconvincing. 51 Overall I formed the impression that Mr Condo's evidence was tailored to suit his claim and that many of his answers were thought of on the run. Mr Condo was often argumentative with counsel and answered questions with questions. 52 During the period when Mr Condo had the money in cash and not in the bank he was paying interest on the loan. In his witness statement he said he paid interest of $10,500 and that is why the amount of the cash at the time of the seizure was $89,500. Mr Condo agreed that the interest due on the loan had been paid from the capital of the loan itself. When Mr Condo was cross-examined regarding what interest payments were due, he stated the interest was $2,000 per month but that he had agreed to pay $5,000. His explanation for using the capital of the amount he had borrowed to pay interest at a greater rate than he was obliged to was that he had made a verbal agreement, he was a man of his word and that he had to 'hurry up and buy a vehicle that could start to make money' (ts 28). This evidence is, in my view, simply implausible. 53 Mr Condo's actions in not banking the loan monies he obtained in October 2008, agreeing to pay more than the monthly rate of interest payable under the loan agreement, paying that interest from the capital of the loan, bringing the money to Western Australia in two separate trips, in cash, with the second trip occurring over three months after the date of the loan agreement, do not reflect the actions of a self described (Page 16)
sophisticated and capable businessman, for whom time was money and who needed to purchase trucks 'in a hurry' in order to start making money. 54 Given all the inconsistencies and difficulties in Mr Condo's evidence as I have identified, I am not satisfied that his account is credible or reliable. Even if I accept that Mr Condo had some business dealing with Mr Silvestro, I consider that Mr Condo's evidence concerning how the $89,500 came to be in the vehicle and the stated purpose for which he had that money, is inherently improbable. Mr Condo has failed to prove, on the balance of probabilities, that the money the subject of the loan agreement of 18 October 2008 is the same money that he had in the vehicle at the date of the police search on 2 February 2009. Accordingly, on the balance of probabilities I am not satisfied that Mr Condo was the owner of the money as he has claimed.
Jones v Dunkel submissions 55 In written closing submissions counsel for both parties asked me to draw an adverse inference against the other, on the basis of Jones v Dunkel (1959) 101 CLR 298. 56 On behalf of the Commissioner it was submitted that an adverse inference should be drawn against Mr Condo because he did not call two witnesses, Mr Silvestro and Mr Condo's own lawyer. The latter submission arises because during cross-examination Mr Condo suggested that his lawyer did not comply with instructions concerning the claim to police for return of the money. 57 On behalf of Mr Condo it has been submitted that there is evidence that the police had in their possession telephone intercepts taken while Mr Condo was under surveillance while in Western Australia in late 2008 and early 2009. These telephone intercepts included calls between Mr Condo and Mr Silvestro. It is submitted that these telephone intercepts support Mr Condo's position that he made arrangements to purchase trucks and business equipment to carry on business. There had been a failure or refusal to provide the evidence of the telephone intercepts to the Court, by which an adverse inference should be drawn. On behalf of Mr Condo it was submitted 'Clearly the surveillance and the telephone intercepts which are within the custody and control of the defendant would clearly indicate whether the claimant's (Mr Condo's) story can be refuted' (par 21 of the submissions). 58 Whether the failure to call a witness gives rise to any inference pursuant to the rule in Jones v Dunkel depends upon a number (Page 17)
of circumstances. These were summarised by Owen J inBell Group Ltd (in liq) v Westpac Banking Corp (No 9) [2008] WASC 239; (2008) 225 FLR 1 [1003] - [1022]. The rule only applies where a party is required to explain or contradict something. What a party is required to explain or contradict depends on the issues in the case as thrown up in the pleadings and by the course of the evidence in the case. No inference can be drawn unless evidence is given of facts requiring an answer: [1012]. The rule also does not apply to fill gaps in the evidence or convert conjecture and suspicion into inference: [1004]. The evidence of the missing witness must be such as would have elucidated a matter. Unless the tribunal of fact considers on the balance of probabilities that the witness would have knowledge on a matter, there is no basis for an adverse inference from the failure to call the witness: [1017]. 59 In the circumstances of this case and given the course of the evidence, I am not prepared to draw any Jones v Dunkel inference against either party as each has submitted. 60 I am not prepared to draw an inference that evidence from Mr Silvestro would not have assisted Mr Condo's claim. There was no evidence to suggest that Mr Silvestro knew of any facts relating to the ownership of the money in the vehicle at the time of the search on 2 February 2009. 61 I am not able to draw any adverse inference from the alleged failure of Mr Condo to call evidence from his lawyer. The submissions made on behalf of the Commissioner in respect to the calling of the lawyer relate to a collateral issue concerning Mr Condo's credibility. That evidence on a collateral issue of credit is inadmissible: Piddington v Bennett & Wood Pty Ltd (1940) 63 CLR 533, 545 and 551 and Goldsmith v Sandilands (2002) 190 ALR 370 [32] – [38]. 62 Similarly I am not able to draw an inference that the evidence of the telephone intercepts would not have assisted the Commissioner's case. While Mr Condo's counsel put in cross-examination to Detective Curchin, and he admitted, that the intercepts contained telephone discussions between Mr Condo and Mr Silvestro, there was no evidence concerning the substance of those telephone conversations. Detective Curchin was not asked whether in any of these telephone calls Mr Condo and Mr Silvestro discussed business arrangements or the purchase of trucks. Detective Sergeant Thompson gave evidence that there was no surveillance or telephone intercepts on the day of the search. Further, Detective Sergeant Thompson's evidence, which I accept, (Page 18)
was that he was not told at any stage before the trial that there might be information available in the telephone intercepts which could substantiate Mr Condo's claim. Detective Sergeant Thompson suggested that had this been notified to him, then police employees could have conducted relevant searches. In my view the submissions made on behalf of Mr Condo relate to the disclosure of the telephone intercepts, which could have been the subject of pre-trial discovery, rather than anything about the evidence which required the police to produce a witness to give evidence about the telephone intercepts. To suggest, as the submissions on behalf of Mr Condo have, that the telephone intercepts 'would clearly indicate whether the claimant's story can be refuted' is to convert conjecture or suspicion into inference, which the rule in Jones v Dunkel does not permit.
Mr Condo's claim to be in possession of the money 63 In the alternative to his claim as owner, in written submissions filed on Mr Condo's behalf it is pleaded that Mr Condo was in possession of the money at all material times until it was seized by police. 64 On behalf of the Commissioner of Police, it has been submitted that if I do not accept the explanation provided by Mr Condo and I am not satisfied that he falls within par (a) of the definition of a 'person entitled' to property as the owner, it is not possible for Mr Condo to advance the alternative argument that he also comes within par (b) of the definition, that is a person who is otherwise legally entitled to possession of the property. It is submitted that this is because the two parts of the definition are mutually exclusive and one cannot claim to be entitled to possession by ownership and also otherwise legally entitled to possession. 65 The submissions on behalf of the Commissioner go further to state that the notion of 'entitlement to possession' would not extend to a person who has only a beneficial interest in property in the chief officer's possession. The authority cited for that proposition is Au v Keelty [9] - [11], but I do not consider this case supports that proposition. In Au v Keelty the applicant had been in possession of money seized by the police, and was seeking the return of the money. He was unsuccessful, not because he only had a 'beneficial interest' in the property, but because a court order precluded the applicant's right to immediate possession: Au v Keelty [8], [14], [15], [20] and [21]. 66 Under the Act a person entitled to property can be so entitled in more than one way. The fact that I have not been satisfied to the appropriate civil standard of Mr Condo's claim as owner does not, in my view, (Page 19)
preclude me from determining whether he was otherwise in possession of that money, or any part of it, and therefore has title to it as against anyone but the true owner. This is because, for the reasons I have explained in par [22] to [29], a person who is in actual possession of property prior to its seizure by the police has a right to possession or is 'legally entitled' to possession of that property. Mr Condo's entitlement to the money must be looked at in light of the position which existed immediately before the seizure. Possessory title is good against every person except the absolute owner. In this case there is no competing claim by the owner or any other person entitled to the property, nor is there any other impediment to Mr Condo's right to possession (such as in Au v Keelty). 67 On this issue of possession, Detective Sergeant Thompson explained that Mr Condo was not charged with any criminal offence, in particular an offence of being unlawfully in possession of the money pursuant to s 428 of the Criminal Code, because there was insufficient evidence to show that he was in possession of the money at the time it was seized. The factors which led to the decision not to charge Mr Condo were, in summary: 1. The money was found in a vehicle that was not owned by or registered in the name of Mr Condo; 2. There were two people in the vehicle at the time and two people may have been in possession of the property; 3. Having regard to the position of the money as found it would be a reasonable proposition that Mr Condo could be sitting in the vehicle and not have knowledge of the money in the vehicle. While $50,000 was found in Mr Condo's bag and there were other items in that bag belonging to Mr Condo, it may be possible to draw an inference that while those other items in the bag were his, they were movable items that could have been placed there by another person; 4. When Mr Condo was interviewed by officers at the time of the search there was a lack of explanation or comment about the cash while, on the other hand, he made a comment about his mobile phone, saying that he needed that for his business. Detective Sergeant Thompson construed that as Mr Condo not having any particular interest in the money; and 5. Finally, the money was bundled in two separate bundles, which in Detective Sergeant Thompson's words 'led me to believe that even (Page 20)
if Mr Condo did have a claim, a sufficient claim of the monies in that one bundle of cash' (referring to the $50,000 in Mr Condo's bag) 'then there would surely be suspicion as to why the monies were separate in the vehicle and located in a separate position'. 68 Detective Sergeant Thompson said that these were essentially the same reasons which gave rise to his decision to reject Mr Condo's claim to the money pursuant to the Criminal and Found Property Disposal Act. Detective Sergeant Thompson's witness statement also contained what are described as 'further considerations' including Mr Condo's association with the motorcycle gang, and that he had been charged in June 2009 with another (unrelated) criminal offence. 69 I have difficulty with Detective Sergeant Thompson's reasoning in relation to Mr Condo's claim for the money. In my view, and with all respect to Detective Sergeant Thompson who I am sure was acting conscientiously, the conclusion that he reached that neither of the two bundles of money found in the vehicle was in the possession of Mr Condo is contrary to the facts and the law. 70 I note that it was the belief of Detective Curchin, both as set out in his witness statement (par 33) and in correspondence, that the $50,000 was in Mr Condo's possession. On 3 March 2009 Detective Curchin wrote to Mr Condo's lawyer advising that the amount which appeared to be in Mr Condo's possession totalled exactly $50,000 and that if Mr Condo intended to claim ownership of the second quantity of cash which was 'located in the possession of another person', then he should 'advise of the total amount and any explanation of origin should he wish to provide one at this early stage'. 71 In my view Detective Curchin's belief was well founded. The $50,000 was discovered in Mr Condo's bag, which in turn was found behind where he was seated. Along with the $50,000 cash his bag contained other items which belonged to him and over which he had control. The $50,000 was, in the words I have quoted at [23] from An Essay on Possession in the Common Law 'in some receptacle belonging to him and under his control'. It is conjecture to suggest that other items in the bag belonging to Mr Condo might have been placed there by some other person. The location of the $50,000 in his bag with other items belonging to Mr Condo is in my view good evidence that immediately prior to the discovery of the cash by the police Mr Condo had both physical possession and an intention to exercise control and (Page 21)
dominion over the $50,000 in that bag, and therefore he had possession of it at law. 72 The fact of Mr Condo's connection to a motorcycle gang and that, some months after the search, Mr Condo was charged with an unrelated criminal offence are, in my view, irrelevant considerations when looking at whether Mr Condo was in possession of any or all of the money. The relevant facts are those relating to Mr Condo's possession at the time of the search on 2 February 2009. 73 As to whether Mr Condo was 'legally entitled' to possession, there is no evidence that any other person is the true owner or has a competing claim to possession of the $50,000. There is no evidence that the money found in Mr Condo's bag was, as the police had suspected, the proceeds of illicit drug sales or otherwise unlawfully obtained. Neither at common law nor under the Act is there a general power of the police to reject a claim simply because the circumstances appear suspicious: National Crime Authority v Flack (512) (Henry J); see also s 25(1) of the Act. 74 The police carried out investigations, found nothing illegal and made the decision not to charge Mr Condo. In the absence of any evidence regarding either the true owner or any illegality, it cannot be said that Mr Condo was not legally entitled to possession of the $50,000. The evidence establishes to my satisfaction on the balance of probabilities that Mr Condo was in possession of the $50,000 found in his bag and falls within par (b) of the definition of a 'person entitled to property'. 75 The situation regarding the other bundle of money, containing the $39,500 is, in my view, different. The $39,500 was found in a separate position in the vehicle, in a plastic container behind the passenger seat where Mr Wallace was seated. There were other items in the plastic container and there was no evidence that those items belonged to Mr Condo. One of those items was a helmet which at the time of the search, Detective Curchin stated he believed belonged to Mr Wallace. For reasons I have already discussed when considering Mr Condo's claim to ownership and his credibility on that issue, I find that Mr Condo's explanation that he had given the $39,500 to Mr Wallace on a previous trip to Perth for safekeeping is improbable. I am not satisfied on the balance of probabilities that Mr Condo had possession of the bundle containing the sum of $39,500. (Page 22)
Conclusion 76 I am satisfied on the balance of probabilities that Mr Condo is legally entitled to possession of $50,000 as found in his bag during the search of the vehicle he was driving on 2 February 2009. 77 The appropriate order should be that part of Mr Condo's claim to the extent of $50,000 be admitted, and the balance of his claim rejected. I will hear from the parties as to the exact terms of the orders I should make, including any orders as to the costs of this application.
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