Curran v The State of Western Australia [No 2]
[2012] WASC 464
•30 NOVEMBER 2012
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: CURRAN -v- THE STATE OF WESTERN AUSTRALIA [No 2] [2012] WASC 464
CORAM: HALL J
HEARD: 23 - 24 OCTOBER 2012
DELIVERED : 30 NOVEMBER 2012
FILE NO/S: CPCA 18 of 2010
BETWEEN: CHLOE MIRANDA CURRAN
First Plaintiff
BRIAN GEOFFREY MIFFLING
Second PlaintiffCARLA PHILOMENA MIFFLING
Third PlaintiffAND
THE STATE OF WESTERN AUSTRALIA
Defendant
Catchwords:
Proceeds of crime - Criminal Property Confiscation Act 2000 (WA) - Drug trafficker declaration - Whether property owned or effectively controlled - Real property registered in parents' names - Whether held in trust - Whether held for ultimate benefit of declared drug trafficker - Lump sum payments - Taking over of mortgage - Whether declaration of confiscation should be made
Legislation:
Criminal Property Confiscation Act 2000 (WA), s 8, s 30, s 156
Result:
Declaration made
Category: B
Representation:
Counsel:
First Plaintiff : No appearance
Second Plaintiff : Mr C E Chenu
Third Plaintiff : Mr C E Chenu
Defendant: Mr A D Hills-Wright & Ms F A Humphries
Solicitors:
First Plaintiff : No appearance
Second Plaintiff : Bennett & Co
Third Plaintiff : Bennett & Co
Defendant: Director of Public Prosecutions (WA)
Case(s) referred to in judgment(s):
Allen v Snyder (1977) 2 NSWLR 685
Brandling v Weir [2003] NSWSC 723
Cambouya Pty Ltd v Buchanan [2005] NSWSC 743
Carruthers v Manning [2001] NSWSC 1130
Director of Public Prosecutions (NT) v Dickfoss [2011] NTSC 4; (2011) 28 NTLR 71
DPP (Cth) v Hart [2005] 2 QdR 246; [2005] QCA 51
Grant v Edwards [1986] Ch 638; [1986] 2 All ER 426
Green v Green (1989) 17 NSWLR 343
Grey v The Official Trustee in Bankruptcy (1991) 29 FCR 166
Hendricks v The State of Western Australia [2002] WASC 86
Parianos v Melluish [2003] FCA 190
Re Smith; Ex parte Director of Public Prosecutions (WA) (No 3) [2004] WASC 157
HALL J:
Introduction
On 27 May 2010 Ryan Miffling was declared to be a drug trafficker. As a consequence all of the property that he owned or effectively controlled as at that date was confiscated to the State of Western Australia: s 8 Criminal Property Confiscation Act 2000 (WA) (CPCA).
The State applied for a declaration under s 30 of the CPCA that Ryan Miffling's property had been confiscated. Some items of property were specifically identified. One of these was a house and land at 6 Lawley Street, Collie. That property is not, and has never been, registered in the name of Ryan Miffling. However, the State contends that Ryan Miffling effectively controlled the property or that it was held in trust for him as at 27 May 2010.
The property is registered in the name of Ryan Miffling's parents, Brian and Carla Miffling. They are the second and third plaintiffs. The first plaintiff, Chloe Curran, is the de facto partner of Ryan Miffling. At all material times she has resided in the property; initially together with Ryan Miffling, until his arrest and incarceration. Ms Curran did not seek to make any claim in respect of the property or to participate in these proceedings. She was, however, called as a witness for the other plaintiffs. The second and third plaintiffs oppose a declaration in respect of the property. They contend that the State has not established that the property was owned or effectively controlled by Ryan Miffling.
The State relied on the following as proving ownership or effective control:
1.four lump sum payments by Ryan Miffling to Brian Miffling totalling $151,496;
2.that three of those lump sum payments, totalling $125,000, were transferred directly into Brian Miffling's loan account which was secured against two properties, one of which was 6 Lawley Street;
3.that Ryan Miffling occupied the property with Chloe Curran from early 2009; and
4.that throughout 2009 Ryan Miffling made fortnightly payments which were equivalent to the interest on the loan secured against the property.
Some other matters were also raised on the hearing, but the State did not ultimately place great reliance on them. These were allegations that Ryan Miffling had undertaken extensive renovations on the property and that Chloe Curran had made a statement to the police to the effect that Ryan Miffling had taken over the mortgage.
There was also a suggestion that another property, 7 Patterson Street, Collie, had been transferred from Ryan Miffling to his father on favourable terms. Ultimately, it was impossible to determine whether those terms were favourable or not, however it will be necessary to refer to the transaction in relation to 7 Patterson Street as it provides background.
Background - Uncontested facts
Ryan Miffling has twice been declared to be a drug trafficker. The first declaration was made in the District Court on 25 January 2005. At that time he was sentenced to a term of 4 years' imprisonment for drug offences.
Prior to his 2005 conviction, Ryan Miffling had owned a house at 7 Patterson Street, Collie together with his then de facto partner, Megan Hunter. That house had been purchased in 1999 with a first home owner's grant. In about 2001, Ryan Miffling and Ms Hunter separated and he returned to live with his parents. Ms Hunter continued to live at 7 Patterson Street for a short time but then moved out and the property was left vacant.
On 6 April 2004 Ryan Miffling was arrested and charged with drug offences. Realising that he was likely to be imprisoned and would be unable to maintain the mortgage on 7 Patterson Street he spoke to Ms Hunter as to whether she wished to take over the mortgage and ownership of the property. She was unable to do so and Ryan Miffling then offered the property to his parents. They agreed to purchase it for the amount of the outstanding loan secured against the property. The transfer was registered on 24 January 2005.
On 25 January 2005 Ryan Miffling was sentenced to 4 years' imprisonment for the drug offences and was declared to be a drug trafficker. There was not, and has never been, any suggestion that the transfer of the 7 Patterson Street property was undertaken to avoid the effect of the drug trafficker declaration. Nor is it suggested that Ryan Miffling sold the property to his parents for less than its true value.
On 10 February 2005 Brian and Carla Miffling also became the registered owners of 6 Lawley Street, Collie. That property is situated next door to their home at 2 Lawley Street. The purchase price was $108,000. The total amount required to effect the purchase, including stamp duty and settlement costs, was $122,002. The moneys used to effect this purchase were borrowed from the Collie Miner's Credit Union.
The same loan account was used for both the purchase of 6 Lawley Street and for the amount borrowed to purchase 7 Patterson Street (being $70,000). The principal of the loan was approximately $185,000 until March 2007 when a further $20,000 was drawn by Brian Miffling for the purposes of effecting renovation work.
From the time that the two properties were purchased until early 2008, repayments were of interest only and the principal amount remained static. On 31 December 2007 the repayment amount rose from $693 per fortnight to $714 per fortnight. Between 23 January 2008 and 3 December 2009 four lump sum payments were made by transfer from Ryan Miffling's Collie Miner's Credit Union account to Brian Miffling's accounts. The amounts were $36,000 on 23 January 2008, $14,000 on 6 May 2008, $75,000 on 30 June 2009 and $26,496 on 3 December 2009. The first three deposits were made to the loan account. These deposits had the effect of reducing the loan account to approximately $63,000.
Relevant law
Section 8 of the CPCA relevantly provides as follows:
Declared drug trafficker, certain property of confiscated
(1)When a person is declared to be a drug trafficker under section 32A(1) of the Misuse of Drugs Act 1981 as a result of being convicted of a confiscation offence that was committed after the commencement of this Act, the following property is confiscated -
(a)all the property that the person owns or effectively controls at the time the declaration is made;
(b)all property that the person gave away at any time before the declaration was made, whether the gift was made before or after the commencement of this Act.
The word 'property' is defined in the glossary of the Act as real or personal property of any description, wherever situated, whether tangible or intangible, and whether a legal or equitable interest in any such property.
The glossary defines 'owner' in relation to property as a person who has a legal or equitable interest in the property.
The glossary provides that effective control in relation to property has the definition which is given in s 156. Section 156 of the CPCA provides that:
Term used: effective control (in relation to property)
(1)For the purposes of this Act, a person has effective control of property if the person does not have the legal estate in the property, but the property is directly or indirectly subject to the control of the person, or is held for the ultimate benefit of the person.
(2)Without limiting subsection (1), when determining whether a person has effective control of any property, the following matters may be taken into account -
(a)any shareholdings in, debentures over or directorships of any corporation that has a direct or indirect interest in the property;
(b)any trust that has a relationship to the property;
(c)family, domestic and business relationships between persons having an interest in the property;
(d)family, domestic and business relationships between persons having an interest in or in a corporation that has a direct or indirect interest in the property;
(e)family, domestic and business relationships between persons having an interest in a trust that has a relationship to the property;
(f)any other relevant matters.
Effective control is established if it is shown that the property is directly or indirectly subject to the control of the person or if the property is held for the ultimate benefit of the person. It is not necessary for both of these circumstances to be met; if either one of them is proven then effective control is established. In determining whether either of the criteria has been met the factors referred to in s 156(2) should be taken into account. Notwithstanding the use of the word 'may' this is clearly intended to be a non‑exclusive list of relevant considerations.
The object of s 156 is to allow for the confiscation of property owned by persons other than the offender if the property is directly or indirectly subject to the offender's control or held for his ultimate benefit. The evident purpose is to prevent offenders escaping forfeiture by relying on trusts, company ownership and other mechanisms to protect their assets. See in respect of similar legislation: Director of Public Prosecutions (NT) v Dickfoss [2011] NTSC 4; (2011) 28 NTLR 71 [115].
A common intention, although not amounting to a contract, may give rise to a trust. In such a case what is enforced is an actual intention, which may be inferred as a matter of fact, and not an imputed intention which the parties never had. The common intention has to be an actual intention either expressed by the parties or one which can be inferred from the facts: Allen v Snyder (1977) 2 NSWLR 685, 690 (Glass JA). The presence of detriment or material disadvantage is essential to the imposition of this type of trust: Cambouya Pty Ltd v Buchanan [2005] NSWSC 743 [41].
In Allen v Snyder Glass JA said that this type of trust is properly described as an express trust which may be enforceable despite not being in writing, rather than a constructive trust. Subsequent cases have accepted that a constructive trust may arise where the parties have an actual intention that one of them should have a beneficial interest in property where the legal title is held by the other and where the former party has acted to his or her detriment in a way that is referable to the agreement or common intention: Green v Green (1989) 17 NSWLR 343; Brandling v Weir [2003] NSWSC 723; Carruthers v Manning [2001] NSWSC 1130; Parianos v Melluish [2003] FCA 190; Grant v Edwards [1986] Ch 638; [1986] 2 All ER 426.
If the existence of a common intention constructive trust can be inferred on the available evidence it would establish the existence of an equitable interest. Such an equitable interest would fall within the definition of property owned by an offender.
The existence of such a trust would not necessitate reliance upon the effective control provision. That provision is broader in its ambit and may cover situations which would not fall within the recognised categories of legal or equitable interests in property. If there is a trust but it is arguable whether it creates an equitable interest, the existence and nature of the trust would be a relevant consideration in determining whether there is effective control. In the context of other similar legislation, courts have warned against paraphrasing or redefining the concept of effective control: Grey v The Official Trustee in Bankruptcy (1991) 29 FCR 166, 173 (Heerey J) and DPP (Cth) v Hart [2005] 2 QdR 246; [2005] QCA 51 [21].
The evidence
The State, as applicant for the declaration, accepted that it bore the onus of proving, on the balance of probabilities, that 6 Lawley Street was owned or effectively controlled by Ryan Miffling at the relevant time. The State relied on affidavits from a police officer and a banker to establish the facts set out in the uncontested facts above. The State also relied on recorded interviews with Brian Miffling and Chloe Curran. The admissibility of those records of interview was not contested. Those interviews will be referred to in dealing with their evidence.
The second and third plaintiffs called Brian Miffling, Ryan Miffling and Chloe Curran. Affidavits from them, and from a banker were tendered. Copies of tax returns were also tendered. The principal evidence was that of Brian Miffling, Ryan Miffling and Chloe Curran. The outcome of the case turns substantially on that evidence and it is now summarised.
Brian Miffling
Brian Miffling was interviewed by police officers attached to the WA Police Proceeds of Crime Squad on 19 January 2010. Mr Miffling said that he and his wife owned 7 Patterson Street and 6 Lawley Street and that they were financed by the Collie Miner's Credit Union. He said that there was a single loan account in respect of the two properties and that payments were automatically made each month. He was asked what the balance of the account was and said that it was probably around $60,000. He then consulted some documents and said that the amount was $63,000. The documents included statements for the investment loan account which Mr Miffling said he received on a regular basis.
Mr Miffling said he maintained three accounts designated S1 (his personal savings account), S2 (the rental account) and L7 (being the relevant loan account). He said that tenants paid rent into the S2 account and that automatic withdrawals were then made on the S2 account and paid into the L7 account.
He said that both properties were currently rented. His best recollection of the rent on the Patterson Street property was that it was $180 per week. He said that the tenants at 6 Lawley Street were his son Ryan, Chloe Curran and their infant daughter. He estimated that the weekly rental for that property was $380 per week. He said that Ryan and Chloe had moved into 6 Lawley Street when Chloe had fallen pregnant. This placed the commencement of their residency at about 12 months earlier. Mr Miffling said he had had other tenants in the property prior to that time. The previous tenant was paying approximately $200 per week.
Mr Miffling denied that Ryan or Chloe had any interest in 6 Lawley Street. He said that he had indicated that Ryan might inherit the property one day but that was the extent of anything that he had said regarding the property.
Mr Miffling was asked:
Q.Now is Ryan paying any money towards 6 Lawley Street, Collie?
A.Ryan is paying his rent.
Q.Is he paying any money above his rent?
A.No, only paying us back what he owes us, ie last time cost us a lot of money for lawyers.
Q.Okay. Now how much did the legal fees cost last time?
A.Oh Jesus, geez I could find that out for you but it's Anthony Scudd (sic). Off hand what would it have cost us? 60, something. Somewhere around that 50 because it was lodged in different payments because as he - as he done something Mr Scudd works, you put the money in the bank and when I do something I'll take me bit out that I want for that and when that runs low you've got to put your hand in your pocket and put some money in that - more in that account and he takes a bit more out till it goes low so that's how he works. He doesn't send you a bill and you pay it, he takes it out of a - out of a kitty in a bank account (EROI, 19/01/10, pages 15 - 16)
Mr Miffling said that Ryan was paying about $700 a fortnight which was for rent and to 'pay enough back a little bit at a time for the others'. When asked how much Ryan owed him for legal fees and other related debts, Mr Miffling said that he could not say. He said that he did not pay all of his son's legal fees on the previous occasion because Ryan had money saved from his work and that was used first. He estimated that the amount that he had paid was somewhere around $30,000.
Mr Miffling was asked about the lump sum payments into his accounts totalling in excess of $150,000. He said:
A.Well I wouldn't - I don't know why that's put in there because I don't - we don't own $150,000 dollars.
Q.Well you must know. You said legal - you said you believe your mortgage for the 6 Lawley Street property was down to about $60,000 dollars.
A.It's back up to that now about 60 odd thousand yeah.
Q.So you must know where some of that money comes from because a lot of that's - the majority of it's been coming from Ryan which is why I'm asking you what's going on.
A.Well that's news to me (EROI, 19/01/10, page 22)
Mr Miffling continued to repeat that he did not know that the lump sum payments had been made and that the money was not his. He said:
Q.You don't know. So whose money is that?
A.I don't know, it's not mine. I haven't got that much money.
Q.Well didn't you keep a track of your mortgage account? You said it was down to $63,000 dollars.
A.Well you've got proof of it, there it is there.
Q.I know it is but you also knew it was down to $60,000 dollars. Didn't you think that was a bit miraculous that your mortgage had got that low?
A.I don't know. No.
Q.Brian, I'm not trying to be difficult.
A.I'm not trying to be smart or funny, I don't know. I don't know where it's come from (EROI, 19/01/10, page 25).
In regard to the last payment of $26,000 Mr Miffling accepted that he had sold a car to his son and that this could be in relation to that sale.
It was suggested by Mr Miffling (and also by his wife who was present during the interview) that Ryan owed money to his parents for the expenses they had incurred because they had 'kept him for three years' (EROI, 19/01/10, page 26). This was said to include food and board for a period of 12 months when Ryan had lived with them following his release from prison in 2007. Mr Miffling accepted that there was no formal arrangement between them. Given that he was unaware of the lump sum deposits Mr Miffling was asked whether he had any interest in that money and he said that he did not, at least to the extent of $125,000 (that is, excluding the $26,000 payment for the car).
Mr Miffling filed an affidavit and gave oral evidence at the hearing. He maintained that he was not aware of the lump sum payments at the time they were made. He denied any arrangement or agreement with his son that 6 Lawley Street would be held for his son's benefit. In regards to renovations at the property, Mr Miffling said that these had been undertaken by him and at his expense. He said there had been occasions when Ryan had assisted him but this was limited to lending a hand to carry heavy items. This was inconsistent with evidence given by Detective Sergeant Harmer who said that Mr Miffling had told him following the interview on 19 January 2010, that Ryan had been working night and day on the renovations on number six. Mr Miffling denied having made such a statement.
In cross‑examination, Mr Miffling agreed that the renovations had been paid by drawing an additional $20,000 against the loan account. When asked how it was possible that he could be ignorant of the lump sum payments, yet know that the balance of the loan account was $63,000 when interviewed on 19 January 2010, Mr Miffling said he could not explain that and that he had never contacted the bank to inquire how the balance had reduced to this level. When asked why he had made no enquiries in that regard he said:
A.I didn't make any enquiries or I didn't do - I did nothing about it.
Q.Why not?
A.I don't know why not. I just carried on my merry way like I normally do because I just - I don't know what goes in and out of my account (EROI, 23/10/12, page 104)
Mr Miffling then said that Ryan had said to him that he wanted to pay him some money and that he had told Ryan to put it into the Collie Miner's Credit Union. He said he did not tell him which account to put it in and did not direct him to put the money into the loan account. He denied a suggestion that he had given such a direction and written down the account number on a piece of paper.
As regards the fortnightly payments of $714, Mr Miffling said that he was not sure how that figure had been reached, though he accepted that it was the minimum fortnightly repayment on the mortgage. He denied, however, that the amount of $714 was fixed because Ryan was, in fact, taking the mortgage over.
Chloe Curran
An affidavit of Ms Curran dated 21 June 2012 was tendered, and she gave oral evidence at the hearing.
Ms Curran stated in her affidavit that she first met Ryan Miffling in or around March or April 2007. Around April or May 2008 she began living with Ryan and his parents at his parents' house at 2 Lawley Street, Collie. Towards the end of February 2009 she and Ryan moved into the house next door; that is, 6 Lawley Street. She said that 6 Lawley Street had always been referred to by Ryan and his parents as his parents' house and she had always understood it to belong to his parents. She said that she always assumed that Ryan was paying his parents for she and Ryan to live at 6 Lawley Street but she did not know what the arrangement was or how much or how often he paid.
Ms Curran was also interviewed by police officers on 19 December 2009. In that interview she was asked who owned the premises and said that Brian Miffling did. She said in the interview that as far as she knew Ryan paid his father rent, but she did not know how much. She was asked whether she had any knowledge of any debt that existed between Ryan and his father in relation to the property. She said that she did not discuss things like that with Ryan. She said that as far as she knew Brian Miffling was funding all of the renovations to the house.
A search was also conducted by the police at 6 Lawley Street on 19 December 2009. Ms Curran was present during that search, which was video taped and played at the hearing. In the course of the search Ms Curran was asked some questions regarding how long she and Ryan had been living at the house:
Q.Okay. Right. How long have you and Ryan been together.
A.Um. It would be three years in March.
Q.Have you lived in this house the whole time.
A.We moved here a year ago - ever since last year.
Q.Okay. Are you renting this property.
A.Um. It's his dad's property - so -
Q.Is he renting from his dad or is he taking over the mortgage from his dad.
A.Yeah. Taken over the mortgage (EROI, 19/12/09, page 11).
In her affidavit, Ms Curran said that she did not recall why she said that Ryan had taken over the mortgage and that she now believes that she must have misunderstood the question. She said it had always been her assumption that Ryan paid rent and she had never thought he was taking over the mortgage. She said that she felt very intimidated at the time of the search because there were three police officers present and they had made her feel very nervous.
In cross‑examination, Ms Curran conceded that she had received cash sums from Ryan and that he had also paid some money into her account, but she said there was not much discussion between them about his money and where he got it from. She said that at the time he had a good job and she was not aware of other sources of income.
It was put to Ms Curran that on 19 December 2009 when she told police that Ryan had taken over the mortgage at 6 Lawley Street she did not yet know that he had been charged with possession of a significant number of ecstasy tablets. She denied a suggestion that she had changed her position in respect of the house because she became aware that he was likely to be declared a drug trafficker. She said that she was confused when she spoke to the police and did not appreciate the difference between paying rent and paying off a mortgage.
Ryan Miffling
Ryan Miffling was a serving prisoner at the time of the hearing. He gave evidence by way of video link from Bunbury Regional Prison. He had also sworn an affidavit dated 18 June 2012 which was tendered.
In his affidavit Ryan said that he and his former de facto, Megan Hunter, bought 7 Patterson Street in or about May 1999. Prior to purchasing that house Ryan had lived with his parents at 2 Lawley Street. He and Ms Hunter had purchased 7 Patterson Street by obtaining a first home owner's grant and borrowing from a bank. Ryan said that the relationship became rocky and he never fully moved into 7 Patterson Street but kept his room at his parents' house and stayed there from time to time. The relationship with Ms Hunter ended about two years after they had purchased 7 Patterson Street. Ryan then moved out and returned to live with his parents. Ms Hunter continued to live at 7 Patterson Street but moved out when Ryan began a relationship with another woman. The property was then vacant.
In about April 2004 Ryan was arrested with 8 oz of methamphetamine. At that stage he was living at his parents' house at that stage. After his arrest he was remanded in custody at Bunbury Regional Prison for two to three months before being granted bail. He then remained on bail for about eight to nine months before being convicted. While on bail he lived at his parents' house.
Ryan stated that due to his arrest and to being remanded in custody he lost his job. He did 'bits and pieces of work here and there' but was basically earning no income and was being supported by his parents. He said that he could no longer keep up the repayments on the mortgage on 7 Patterson Street and spoke to Ms Hunter about her taking over the mortgage. She said that she was unable to do so. Ryan then spoke to his father who said that he, Brian Miffling, would buy the house for whatever was owing on it. Ryan obtained a letter showing the payout figure which he gave to his father. The property was then sold to his parents for an amount equivalent to the payout figure and they became the registered proprietors on 24 January 2005.
Ryan stated that he was represented on the criminal charges in 2005 by a lawyer and that $30,000 of his legal fees were paid by his father. He said that he was convicted on the first occasion on or about 16 January 2005. He was sentenced to 4 years' imprisonment but served 2 years and was released in late 2006 on parole. He then returned to live with his parents at 2 Lawley Street.
Ryan said that it was around the time of his first conviction that his father purchased 6 Lawley Street. He said that his father told him that he was purchasing 6 Lawley Street as part of his retirement planning. He said that there was never any discussion between he and his father that 6 Lawley Street was to belong to Ryan or had been bought for him or that he had any interest whatsoever it in. He said that at time his father purchased 6 Lawley Street he was in gaol and had just cost his father a lot of money. He said that the last thing he would have expected his father to do at that time would be to buy him a house.
Ryan said that after being released from gaol in 2007 he returned to live with his parents. He was on unemployment benefits for a few weeks but soon returned to his previous employment. He said that his father said words to the effect: 'You are living in my house and you must live under my rules' and 'You have to pay me back all the money that you owe me'. Ryan said that he understood this to be a reference to the legal fees, the money that his father had given him whilst he was on remand and for all the money he had spent on his living expenses. He said that he and his father did not talk about a particular amount of money: 'But I knew the amount was a lot'. He said that his father said words to the effect of: 'I am going to take control of your money. If you want some then you come and see me. I don't want you having access to money and going back into drugs'.
Ryan said that he was earning good money from employment at this stage and his pay went into a savings account with the Collie Miner's Credit Union. He said that he lived reasonably cheaply because he was living at home with his parents and did not have many expenses. He gave all of his income to his father and obtained money from his father as he needed to. He said that this was his father's way of 'keeping an eye on me'.
Ryan said that he asked his father what account he should direct his pay into. He said that his father said he would consult his accountant about that and then went off to make a phone call. When his father came back he had a piece of paper with a name and bank account number on it. His father said words to the effect: 'Put it into this account with CMCU'. Ryan said that he went to the CMCU office and gave the teller the piece of paper and asked her to transfer an amount of money from his account to his father's account. The first amount of money he transferred was $36,000 on 23 January 2008.
Ryan said that he continued to save all of his wages and then paid them from time to time into his father's bank account. He said that he always paid them into the account that his father had given him the number for. He did not know what type of account that was and it was not until he was interviewed by police officers in 2009 that he was told that it was his father's mortgage account.
Ryan accepted that he had made further transfers of $14,000 on 6 May 2008, $75,000 on 30 June 2009, $15,000 on 11 September 2009 and $26,496 on 3 December 2009. He said that the last payment did not go into the same account as the others only because when he went to the credit union on that day he did not have the piece of paper with the account number written onto it and simply asked the teller to transfer money to his father's account.
Ryan said that whilst in prison his father carried out renovations to 6 Lawley Street. He was aware of this because his mother would tell him that his father was next door doing work when he rang from prison. He also saw some work being done by his father before he went to prison in 2005 and after he got out in 2007.
Ryan said that when Chloe Curran fell pregnant around the middle of 2008 he spoke to his father about needing a home to live in when the baby arrived. His father said words to the effect: 'You and Chloe can move in next door before the baby comes'. He said that they agreed a figure for rent which, to the best of his recollection, was $300 per week. Ryan signed a direct debit form so that the money would be transferred directly by his employer into his father's account. He said that he and Chloe moved into 6 Lawley Street in early 2009 just before their daughter was born in March 2009. He said that the property had previously been rented out but had been vacant for over a year before they moved in. His father continued to do renovation work after they moved into the property.
In his affidavit, Ryan said:
I never tallied up how much exactly I owe dad or whether I have paid him back enough to clear my debt, although at the time I was arrested for the second time in December 2009, I felt that I was getting pretty close to clearing it. I had in my mind that I probably had to pay him around $140,000 or $150,000 taking into account everything he had paid over the years and then I would start asking questions of dad as to whether I was in the clear.
Ryan said that it was never his intention that by making the payments that he did that he would get 6 Lawley Street or any interest in it. He said that the payments were made purely to repay his parents for all the money that he had cost them. He had never said to his father that by making those payments that 6 Lawley Street would be his. His father had never at any stage said that he could have 6 Lawley Street or that he had an interest in it because of those payments or otherwise.
In cross‑examination, Ryan was asked what was the sum total of his legal fees in 2005. He said that it was about $20,000 to $30,000. He said he did not pay any money to the lawyer. He disagreed with a suggestion that the fee could have been in the range of $50,000 to $60,000.
It was put to Ryan that when spoken to by police on 28 December 2009 he had said that the rent for 6 Lawley Street was $150 per week. In light of that he was asked why in his affidavit he had stated it was $300 a week. He said that when he spoke to the police he was not sure, and was still unsure, as to the amount of the rent. He could not explain why he had nominated $300 a week in the affidavit. He said he had signed a piece of paper for the automatic transfers at the time and did not really look at the amounts after that. He said he was unaware that the amount of $714 that was paid fortnightly represented the minimum repayments on the mortgage. He was asked why he had told the police that the amount deducted was 'about minimum repayments'. He could not explain the reference to minimum repayments other than to say that this was a reference to a fair rental for a three bedroom house.
As regards the lump sum payments, Ryan confirmed that he was still living at his parents' house when the first two of these were made. He was asked whether he told his father that the deposits had been made. He said that he remembered making his father aware of the first repayment of $36,000. He said that he told his father that he had some money for him and gave him an approximate figure as being around $30,000. He could not recall discussing the other deposits with his father. He said he asked his father what account he should pay the first sum into and that that was the occasion his father gave him a piece of paper with the account name and numbers written on it. Despite the fact that he had banked with the Collie Miner's Credit Union for most of his life he did not appreciate that an account number designated with the letter 'L' was a loan account.
Ryan was asked how it was possible to reconcile his evidence that his father had been in complete control of his earnings with the fact that he was able to give large cash sums to Chloe Curran. He then agreed that his earnings from his employment did not go directly into his father's account but into his own account, and that he remained in control of that account. He said that as his earnings accumulated in his savings account he made the lump sum payments to his father instead of giving him money every week. He then eventually agreed that some of the cash amounts that he paid to Chloe Curran were from money that he made from selling drugs.
Ryan went on to concede that he had been selling drugs from at least the beginning of 2009. He accepted that this was inconsistent with the basis upon which he had been sentenced in 2010 and with submissions made to the court by his counsel on that occasion. At that time it had been said on his behalf that after the birth of his child his partner had been suffering from depression and he had recommenced using methylamphetamines, had accumulated a large debt and this had led to the offences. He accepted that this was submitted to the court on instructions given by him to his lawyer, but that it was in fact untrue. A certificate under s 11 of the Evidence Act 1906 (WA) was granted in respect of this evidence.
It was put to Ryan that the lump sum payments were to pay for an interest in 6 Lawley Street. Ryan denied this. He was asked whether he knew at the time of the serious consequences for him if he was again declared to be a drug trafficker. He said that he did know about those consequences, but he did not buy 6 Lawley Street and there was no discussion between he and his father about it at all.
Other evidence
The State called Detective Sergeant Godfrey Harmer and tendered an affidavit from him. Detective Sergeant Harmer produced recordings of the interviews with Brian Miffling and Chloe Curran that I have referred to above. He also produced banking and title records which confirmed the financial transactions, which are not disputed.
Affidavits of Mr Stephen Mann, a bank manager with the Collie Miner's Credit Union, were also tendered by both parties. These affidavits established the bank transactions and the existence and nature of the various relevant bank accounts.
The plaintiffs also tendered, by consent, copies of tax returns for Brian Miffling. These showed that rental income had been declared and mortgage interest claimed as a deduction for the relevant years.
Contentions - Second and third plaintiffs
On behalf of the second and third plaintiffs it is contended that the State has failed to establish that the matters upon which it relies gives rise to a common intention constructive trust or an intention to hold the entirety of 6 Lawley Street for Ryan Miffling's ultimate benefit.
It is submitted that the uncontradicted evidence is that Ryan caused his father and mother to incur substantial expense, essentially because of his earlier criminal conduct. Ryan accepted a responsibility to reimburse his parents for what he had cost them and that his parents held an expectation that they would be reimbursed. Despite the natural inclination of a father to help his son, it is submitted that it would not be unusual or unexpected for Ryan Miffling to form an intention to repay his parents. It is said that it could not be concluded that his parents had forgiven, or intended to forgive, those amounts, or that they intended to treat them as a gift.
It is submitted that there is no evidence of an actual intention between Brian and Ryan Miffling to transfer beneficial ownership of 6 Lawley Street for payment of the lump sums, and the ongoing fortnightly payments. It is said that the payment of money itself cannot be a sufficient basis to draw the inference of a common intention. Put another way, it is said that an inference cannot be drawn that it was the common intention of the parties to treat the payments as consideration for the equitable vesting of 6 Lawley Street and leave Ryan's substantial debt to his parents completely unsatisfied.
It is submitted that whilst the payment of the lump sums may be capable of supporting an inference of an intention to create an interest in equity, the payments can be explained as repayments of the amounts which had been incurred by Ryan's parents for his legal defence and support.
It is further submitted that the fundamental difficulty underlying the State's case is the inability to articulate the actual common intention underlying the asserted express trust at the date of the declaration of confiscation. It is said that it cannot be assumed that because the lump sums were in total greater than the amount originally paid to purchase the Collie property in 2005 that there was an intention to hold the entire beneficial ownership of 6 Lawley Street for Ryan. It is said that the amount paid for the property in 2005 does not necessarily bear a relationship to the value of the property in 2009 and that there is no evidence as to any change in property values over that period. In any event, there is evidence that Brian Miffling carried out extensive renovations over that period which could have resulted in an improved value.
It is also submitted that the State's reliance on the fortnightly payments of $714 as being the 'taking over' of the mortgage needed to be seen in the light of the fact that no further payments were made by Ryan after the date of his arrest and imprisonment in December 2009. After that date Brian and Carla Miffling had remained liable to meet obligations under the investment loan. It is said that any propriety interest in 6 Lawley Street which was capable of being confiscated to the State can be no greater than the propriety interest Ryan enjoyed at the time of confiscation. It is said that the State cannot confiscate an interest under a common intention trust if Ryan could not have asserted against his parents a similar entitlement. It is submitted that Ryan could not assert any beneficial entitlement to the property because he had reneged on any possible arrangement by being imprisoned and failing to continue payments.
It is also submitted that the evidence fails to establish the essential requirement of detrimental reliance. It is said that whilst the payment of the lump sums could support an inference in this regard, there is an available alternative explanation for those payments; being repayment by Ryan to his parents for substantial sums of money owed to them. It is submitted that the fortnightly payments of $714 could not constitute detrimental reliance because there is no basis for concluding that these payments are anything other than the price of Ryan's occupation of the property.
Contentions - The defendant
The State submits that as a general proposition it is accepted that there is a presumption that operates to the effect that beneficial ownership of property is commensurate with possession of the legal title to that property. However, that presumption can be rebutted by evidence.
The State submits that whilst there is no evidence of an agreement in writing or orally between Ryan and his parents, an inference as to beneficial ownership or that the house was being held for Ryan's ultimate benefit should be drawn. In this regard the State particularly relies upon the lump sum payments, the fortnightly payments of $714 made during 2009 and Ryan Miffling's occupation of the house during the same period.
The State submits that there was significant inconsistencies and anomalies in the evidence of Brian and Ryan Miffling which cast doubt on the credibility of their assertions that the house was not owned by Ryan or held for his ultimate benefit. In particular, the State pointed to the fact that Brian Miffling said he was not aware of the first three lump sum payments, whereas Ryan said that they had had a discussion in regards to the first payment. Secondly, Brian Miffling denied that he had directed that the payments be made into his loan account, but this was inconsistent with the evidence of Ryan Miffling who said that his father had given him a piece of paper with the account details written on it at the time they discussed the first lump sum payment. Thirdly, Brian Miffling told police on 19 January 2010 that he was aware that the balance of the investment account was $63,000, but could give no explanation of how it had reduced to that amount. Fourthly, Brian Miffling had claimed ignorance of the lump sum payments and had said that he had no interest in the money, but had also claimed that he was owed large amounts of money by his son.
In regard to the fortnightly payments of $714, the State accepts that the fact that this amount represented the minimum repayment on the mortgage does not of itself prove that Ryan was taking over the mortgage or had become the beneficial owner of the house. It is accepted that the loan account also covered the 7 Patterson Street house. However, it is submitted that in combination with the fact that Ryan was living in the house during 2009 and that the lump sum payments into the investment account were of an amount far greater than the purchase price of 7 Patterson Street, the fortnightly payments demonstrate an intention on the part of Brian and Ryan Miffling that the latter 'take over the mortgage'.
The State accepts that it cannot be suggested that the purchase of 7 Patterson Street prior to Ryan Miffling being declared a drug trafficker in January 2005 was designed to subvert confiscation proceedings. However, it is suggested that that transaction is evidence of a desire to keep property within the family unit, for the benefit of members of the family. It is also said to be relevant because both Brian and Ryan Miffling acknowledged that they understood from their experiences in 2005 that the potential consequences of a drug trafficker declaration were that assets held by an individual could be confiscated.
It is said that the risk of confiscation must have been appreciated by Ryan from the time that he recommenced dealing in drugs in mid 2008. This is a factor which should be borne in mind in considering whether an inference can be drawn that continued possession of the legal title by Brian and Carla Miffling, despite significant financial payments towards the mortgage by Ryan Miffling, would operate to avoid the potential consequences of a drug trafficker declaration.
The State submits that suggestions by Ryan and Brian Miffling that the lump sum payments were to repay an outstanding debt for legal expenses incurred in 2005 and for other debts are not credible. The State notes that Brian Miffling did not seek to justify lump sum payments in the total amount paid. Ryan referred in his affidavit to a debt of between $140,000 and $150,000, but there was no satisfactory explanation or justification for a debt of that magnitude having accrued. It is noted that there was also inconsistency between Ryan and his father regarding the total amount of legal fees incurred in 2005.
The State says that it does not rely upon direct evidence in order to establish Ryan's beneficial ownership or effective control of the house. Rather the case is based on an inference drawn from the accumulated evidence. It is said that either of those bases for confiscation can be inferred from the established facts. It is said that the evidence only fails to establish detrimental reliance if a finding is made that the lump sum payments were, as a matter of fact, for the purpose of repayment of a debt. Any finding in that regard would have to rely upon the evidence of both Ryan and Brian Miffling which is said to be so fundamentally flawed that little reliance should be placed upon it. It is said that the very untruthfulness of critical aspects of their evidence, when viewed in the context of their admitted knowledge of the effect of the operation of the Act, makes the inferences contended for by the State all the more likely.
Findings
The critical issue in this case is the purpose of the lump sum payments. It is not disputed that three of those payments were made by Ryan Miffling directly to the loan account which was secured against 7 Patterson Street and 6 Lawley Street. The payments also occurred in a context where Ryan Miffling had recommenced drug dealing and was conscious that if arrested and convicted he would be declared a drug trafficker and any assets owned by him would be confiscated to the State. In these circumstances the lump sum payments must raise the likelihood that the payments were intended to create an interest by Ryan in one or other of those properties.
The suggestion that the payments can be explained as being to repay a large debt due by Ryan to his parents depends entirely upon the evidence of Ryan and Brian Miffling. That evidence was significantly deficient and the witnesses lacked credibility in a number of respects.
I am unable to accept Brian Miffling's evidence in regards to the lump sum payments. This is for the following reasons. First, Brian Miffling denied any knowledge of the lump sum payments. This is unlikely in circumstances where the payments were made directly to accounts in his name and which were made at times when Ryan was either living in the same house or living next door to Brian Miffling. It is also inconsistent with Brian Miffling's admitted receipt of regular bank statements in relation to the loan account and his knowledge that the current balance was $63,000 when spoken to by the police. It is also inconsistent with the evidence of Ryan that he obtained the loan account details from his father when they discussed the first lump sum payment. Secondly, Brian's claim that the lump sum payments were to repay large sums of money owed by Ryan is inconsistent with his initial denial to the police that he had any claim to that money. Thirdly, Brian was unable to quantify or adequately explain the debt said to be owed by Ryan. The only part of the debt that was quantified related to legal expenses and this amount, of $30,000, fell far short of the full total of the lump sum payments made. Suggestions that money was owed for living expenses and support were at best vague and unconvincing.
As regards Ryan Miffling's evidence in respect of the lump sum payments, I do not accept it for the following reasons. First, he initially claimed that his father was in complete control of his money, but later conceded that he accumulated money in his savings account and chose the times when he would make a lump sum payment. Secondly, he claimed that the total amount of money he owed to his parents was between $140,000 and $150,000 but, other than in respect of the $30,000 for legal fees, he could not explain how he had reached that figure. Thirdly, while Ryan admitted discussing the first lump sum payment with his father, his denial that subsequent payments had been discussed lacked credibility given their close relationship and proximity. The size of these payments and their effect upon the loan account is such as to make the absence of any discussion extremely unlikely.
I do not accept that the lump sum payments were made for the repayment of a debt owed by Ryan to his parents. In my view, these payments were of moneys owned by Ryan and in respect of which his parents had no interest. In those circumstances, the payments represented a detriment to Ryan and are evidence which supports an inference that Ryan had an interest in one or other of the properties. As to which property, the other evidence needs to be considered.
The fortnightly payments of $714 are conceded as being equivalent to the minimum repayments on the loan account. There is no evidence as to market rentals so it is impossible to say whether this amount bore any relationship to what might be fairly payable as rent. It is possible that the minimum repayment amount was a fair market rental. It is curious, however, that the minimum repayment for a loan which covered both properties was thought to be a fair amount for the rental of one of them. What is, perhaps, more significant is the evidence of Ryan and Brian Miffling as to how this figure was reached. Ryan's evidence in this regard was wholly unconvincing. He initially told police that the rent was $150 per week. It was only in the affidavit filed in these proceedings that he claimed it was $350 per week. However, when tested about this he said he had no recall what the rent was. He also claimed to have no idea that the amount that he paid equated with the minimum repayments. Brian Miffling was similarly inconsistent in regards to the rental payments.
As to the statement to the police by Chloe Curran on 19 December 2009 that Ryan had 'taken over' the mortgage, I accept that this was not a considered answer and was made in stressful circumstances. I place no great weight on it, other than to note it is consistent with other evidence that Ryan had, in fact, assumed responsibility for the mortgage. It is also consistent with Ryan's statement to police that the amount paid in 'rent' was 'about minimum payments'.
It is relevant to also take into account the relationship between the relevant parties. Ryan is likely to have relied upon and trusted his parents to hold his interest in 6 Lawley Street without the need for any formal agreement. This is consistent with Brian Miffling's statements that familial pecuniary arrangements were based on trust. Such an agreement would, in any event, be unlikely in circumstances where the likely purpose was to protect an asset from possible future confiscation. Furthermore, the amount paid in lump sums more than met the initial purchase cost of 6 Lawley Street and had the effect of relieving Mr and Mrs Miffling of any real continuing financial cost arising from the purchase of it. It is extremely unlikely in these circumstances that the effect of the payments was anything other than the passing of beneficial ownership of 6 Lawley Street in its entirety to Ryan.
In my view, the only reasonable inference that can be drawn from the whole of the evidence in this matter is that Ryan did indeed take over the mortgage in 2009 in the sense that he assumed responsibility for the minimum mortgage repayments. When this is taken together with the fact of the lump sum payments into the loan account and the fact that he and Chloe Curran assumed occupancy of 6 Lawley Street in early 2009, the only reasonable inference that is available is that Ryan had acquired beneficial ownership of 6 Lawley Street.
The fact that the property continued to be registered in the name of Ryan's parents is readily explained by the fact that by the time he commenced living at 6 Lawley Street, Ryan had recommenced drug dealing. It can be inferred from this that despite effectively acquiring the property, Ryan had nothing to gain by it being formally transferred into his name and it thereby being at risk of confiscation in the event that he was arrested and convicted.
As regards the renovation work done on the property by Brian Miffling, the evidence in this regard is at best unclear. Exactly what work was done, when and at what cost, was not explained. To the extent that Brian Miffling may have done some renovation work to 6 Lawley Street whilst Ryan was still in prison, in my view, such work is not relevant as it is not the State's case that Ryan had an interest in the property at that time. His interest is said to have arisen following the lump sum payments which commenced in 2008. As to subsequent renovation work, I accept that some such work was done and was very likely to have been done by Brian Miffling. There is evidence that Brian Miffling drew $20,000 on the loan account for this purpose. That is a factor I have taken into account but I do not consider that it weighs significantly against the compelling evidence of the lump sum payments and the minimum fortnightly payments of the mortgage of $714.
I do not place any reliance upon the circumstances of the 2005 purchase of Patterson Street, other than to provide background. Whilst there was some suggestion that that purchase may have been at less than true market value, there was insufficient evidence in that regard and the State did not ultimately rely on that suggestion.
As regards the submission that any claim by the State could not exceed the interest that Ryan had in 6 Lawley Street at the time that the drug trafficker declaration was made, I accept that that is so. The effect of a drug trafficker declaration is to confiscate to the State any property owned or effectively controlled by the offender as at that date. The fact that Mr and Mrs Miffling may have continued to make repayments on the loan after Ryan was arrested and imprisoned does not, in my view, disprove the existence of an interest by Ryan in the property. Clearly it was consistent with their claim to ownership of the property that Mr and Mrs Miffling would continue to make minimum payments. Whether that has changed the interest that Ryan had in the property as at the time of confiscation, I am unable to say, however, it does not change my view that Ryan had such an interest. I would note, however, that any continuing obligation met by Mr and Mrs Miffling has only related to the reduced balance which is less than the amount borrowed to purchase 7 Patterson Street.
In my view, when the evidence is taken as a whole the only reasonable conclusion that can be drawn is that some time in early 2008 Ryan Miffling and his parents formed a common intention for Ryan to acquire ownership of 6 Lawley Street by making lump sum payments to Mr and Mrs Miffling and by taking over responsibility for repayments on the loan account. In reliance on that common intention Ryan made the payments and thereby acted to his detriment. It was intended that the property continue to be held in the name of Mr and Mrs Miffling in order to shield it from any possible future confiscation proceedings. Nonetheless, in my view, by virtue of these arrangements the whole of the interest in 6 Lawley Street held by his parents as registered proprietors was held on trust for Ryan as at the date of the drug trafficker declaration. Accordingly, that property was owned by him as at that date and is subject to confiscation.
If I am wrong in my conclusions in regards to the existence of a trust then I would conclude that the property was effectively controlled by Ryan Miffling at the relevant time. This is because the evidence establishes that the property was held for Ryan's ultimate benefit. I draw that conclusion based upon the relationship between the parties, the lump sum payments that were made, Ryan taking over of responsibility for repayments on the loan account and his occupation of the premises from early 2009.
Conclusion
For the above reasons I conclude that 6 Lawley Street, Collie was owned or effectively controlled by Ryan Miffling as at the date that the drug trafficker declaration was made. In these circumstances, that property was confiscated to the State pursuant to s 8 of the CPCA.
If the court finds that property has been confiscated under s 8 of the CPCA the court must, pursuant to s 30(2) of the CPCA, make a declaration to that effect: Hendricks v The State of Western Australia [2002] WASC 86 [19] and Re Smith; Ex parte Director of Public Prosecutions (WA) (No 3) [2004] WASC 157 [15]. Accordingly, the declaration as sought by the State is made.
0
10
1