Director of Public Prosecutions for the State of South Australia v Chau - [2024] SADC 117

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Application)
DIRECTOR OF PUBLIC PROSECUTIONS FOR THE STATE OF SOUTH AUSTRALIA v CHAU & ORS
[2024] SADC 117
Judgment of his Honour Judge Burnett
27 September 2024
CRIMINAL LAW - PROCEDURE - CONFISCATION OF PROCEEDS OF CRIME AND RELATED MATTERS - FORFEITURE OR CONFISCATION
EQUITY - TRUSTS AND TRUSTEES - IMPLIED TRUSTS - RESULTING TRUSTS
EQUITY - TRUSTS AND TRUSTEES - EXPRESS TRUSTS CONSTITUTED INTER VIVOS - QUISTCLOSE TRUSTS
EQUITY - GENERAL PRINCIPLES - EQUITABLE CHARGES AND LIENS
The applicant, the Director of Public Prosecutions (the DPP), has sought a declaration pursuant to s 56B of the Criminal Assets Compensation Act 2005 (SA), that the sum of $57,000 that was seized from the bank account of the second respondent, Jayme Nham Ngoc Chau (Mr Chau), has been forfeited to the Crown under s 56A of the Act. Mr Chau has been convicted inter alia of trafficking in a large commercial quantity of a controlled drug and is therefore a prescribed drug offender.
The interested party, Ms Tami Dizon (Ms Dizon), the mother of Mr Chau, opposes the making of such a declaration. She has also applied for an order excluding the $57,000 from a restraining order under s 36 of the Act and an order excluding property from forfeiture under ss 59 and 60 or s 76. The opposition to the making of the declaration and the seeking of the exclusion orders rests on the same basis, namely that Ms Dizon contends that she holds an equitable interest in the $57,000 that was seized such that Mr Chau was not the owner of that property nor was it under his effective control.
Ms Dizon advanced the sum of $57,000 to Mr Chau by way of an oral loan agreement. The loan was made for the purpose of assisting Mr Chau to have sufficient funds to construct a house on vacant property that he owned. That purpose was not fulfilled. The oral loan agreement included a term that if Mr Chau did not repay the loan, Ms Dizon was entitled to place a caveat on the property.
Ms Dizon claims that she has an equitable interest in the $57,000 because of:
(1)an equitable charge or equitable mortgage arising out of her right to place a caveat over the property of Mr Chau;
(2)a resulting trust;
(3)a Quistclose trust.
Held:
1. Ms Dizon does not have an equitable charge over the property owned by Mr Chau. The granting of an authority to lodge a caveat, by itself, is not sufficient to evidence an intention of the parties that the property be appropriated for security for the repayment of a debt: Taleb v National Australia Bank (2011) 82 NSWLR 489; Complex Scaffolding Solutions Pty Ltd v Douehi [2014] NSWSC 230 applied. Further, such an equitable charge would only operate in respect of the property owned by Mr Chau and not in relation to the $57,000. The equitable charge would not be enforceable because there is no writing or act of part performance: s 29(1) of the Law of Property Act 1936 (SA) applied.
2. The $57,000 is not held on a resulting trust for Ms Dizon. There was no voluntary payment to Mr Chau. The $57,000 was advanced pursuant to a loan arrangement. Where a party makes a voluntary payment to another party, there is a presumption that the payor did not intend to make a gift to the payee and the money is held on trust for the payor. The presumption may be rebutted by the counter presumption of advancement or direct evidence of the payor’s intention to make an outright transfer: Westdeutsche Landesbank Girozentrale v Islington Borough Council [1966] AC 669 applied. The presumption of a resulting trust cannot apply where there was no voluntary payment and the payment was a loan or created a debt: Hancock Family Memorial Foundation Ltd v Porteous (2000) 22 WAR 198 applied.
3. The $57,000 is not held on a Quistclose trust in favour of Ms Dizon. Where moneys are advanced by one party to another, with the mutual intention that they should not become part of the assets of payee, but should be exclusively used for a specific purpose, there will be implied a stipulation that if the purpose fails, the money will be repaid and the arrangement will give rise to a trust: Australasian Conference Association Ltd v Mainline Constructions Pty Ltd (in liq) (1978) 141 CLR 335 applied. There must be a mutual intention that the moneys be used exclusively for that purpose or repaid on the failure of that purpose. The failure to pay moneys into a sperate bank account will usually be fatal to such a claim: Ausintel Investments Australia Pty Ltd v Lam (1990) 19 NSWLR 637; Gliderol International Pty Ltd v Hall (2001) 80 SASR 541 applied.

Criminal Assets Confiscation Act 2005 (SA) ss 3, 5, 6, 6(1)(b), 24, 34, 34(1)(b)(ia)(A), 35, 36, 36(1), 47, 47(3)(a), 56A, 56A(1), 56A(2), 56A(3), 56B, 58, 59, 60, 60(1), 74, 74(6), 75, 76, 76(1), 78, 80, 220; Controlled Substances Act 1984 (SA) s 32(1); Law of Property Act 1936 (SA) ss 26, 29(1)(a), referred to.
Ausintel Investments Australia Pty Ltd v Lam (1990) 19 NSWLR 637; Austin v Sheldon [1974] 2 NSWLR 661; Australasian Conference Association Ltd v Mainline Constructions Pty Ltd (in liq) (1978) 141 CLR 335; Barclays Bank Ltd v Quistclose Investments Ltd [1970] AC 567; Calverley v Green (1984) 155 CLR 242; Carreras Rothmans Ltd v Freeman Mathews Treasure Ltd [1985] Ch 207 at 227; Champion Homes Sales Pty Ltd JKAM Investments Pty Ltd, Hotray Pty Ltd v JKAM Investments [2014] NSWSC 952; Commissioner of Stamp Duties v Livingstone (1964) 112 CLR 12; [1965] AC 694; Compass Resources Ltd v Sherman (2010) 42 WAR 1; Complex Scaffolding Solutions Pty Ltd v Doueihi [2014] NSWSC 230; Connell v Lavender (1991) 7 WAR 9; Coolbrew Pty Ltd v Westpac Banking Corp [2014] NSWSC 1108; Cradock v Scottish Provident Institution (1893) 69 LT 380; Crampton v French [1996] ANZ Conv R 156; Director of Public Prosecutions (DPP) v Mouroufas [2010] SADC 91; Director of Public Prosecutions v CRD [2022] SASC 36; Director of Public Prosecutions v George (2008) 102 SASR 246; DPP v Green [2008] NTSC 2182; DPP v J Walsh Nominees Pty Ltd [1990] WAR 25; Gatward v Alley (1940) 40 SR (NSW) 174; Gliderol International Pty Ltd v Hall (2001) 80 SASR 541; Hall v Director of Public Prosecutions (2015) 122 SASR 12; Hancock Family Memorial Foundation Ltd v Porteous (2000) 22 WAR 198; House v Caffynm [1922] VLR 67; Iaconis v Lazar (2007) 13 BPR 24; Legal Services Commissioner v Brereton (2011) VR 126; McManus RE Pty Ltd v Ward (2009) 74 NSWLR 6623; National Provincial & Union Bank of England Ltd v Charnley [1924] 1 KB 431; Nelson v Nelson (1995) 184 CLR 583; O’Day v Commercial Bank of Australia Ltd (1933) 50 CLR 200; Palette Shoes Pty Ltd v Krohn (1937) 58 CLR 1; Solicitor-General v Bartlett [2008] 1 NZLR 87; Swiss Bank Corp v Lloyds Bank Ltd [1982] AC 584; Taleb v Director of Public Prosecutions [2014] VSC 285; Taleb v National Australia Bank Ltd (2011) 82 NSWLR 489; The Director of Public Prosecutions v Vitale [2020] SADC 55; Voukidis v C & O Voukidis Pty Ltd (in liq) [2018] VSC 267; Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669; Wirth v Wirth (1956) 98 CLR 228; Zamia Investments Pty Ltd v Mesana Pty Ltd [2011] QCA 274, considered.

DIRECTOR OF PUBLIC PROSECUTIONS FOR THE STATE OF SOUTH AUSTRALIA v CHAU & ORS
[2024] SADC 117
Introduction

These proceedings concern the circumstances in which a declaration may be made under s 56B of the Criminal Assets Confiscation Act 2005 (SA) (the Act) that particular property has been forfeited under s 56A of the Act.
The applicant, the Director of Public Prosecutions (the DPP), has sought a declaration that the sum of $57,000 that was seized from the bank account of the second respondent, Jayme Nham Ngoc Chau (Mr Chau), has been forfeited under s 56A of the Act. Mr Chau has been convicted inter alia of trafficking in a large commercial quantity of a controlled drug contrary to s 32(1) of the Controlled Substances Act 1984 (SA) and is therefore a prescribed drug offender under the Act.[1]
[1] Criminal Assets Confiscation Act 2005 (SA) s 6A (‘the Act’).
The interested party, Ms Tami Dizon (Ms Dizon), opposes the making of such a declaration. She has also applied for an order excluding the $57,000 from a restraining order under s 36 of the Act and an order excluding property from forfeiture under s 76. The opposition to the making of the declaration and the seeking of the exclusion orders rests on the same basis, namely that Ms Dizon holds an equitable interest in the $57,000 that was seized such that Mr Chau was not the owner of that property nor was it under his effective control.
Statutory Framework
The long title to the Act assists in the construction of the Act and ascertaining the objectives of the Act.[2] The long title is “An Act to provide for the confiscation of proceeds and instruments of crime; to provide for the confiscation of property of certain drug offenders as an additional punishment for their offending and for other purposes”.
[2] See D.C. Pearce “Statutory Interpretation in Australia” (LexisNexis Butterworths, 9^th ed., 2019), [4.60].
By way of overview, the statutory framework of the Act provides for the making of a restraining order under s 24 preventing the property specified in the order from being disposed of or otherwise dealt with by any person. The Act subsequently provides for forfeiture of the property after conviction. Forfeiture may occur in three different ways:
1.Pursuant to s 47 of the Act, the court must, on application by the DPP, make an order for forfeiture where certain criteria is met, including that the property is the proceeds of, or an instrument of crime;
2.Pursuant to s 56A, where immediately on a person becoming a prescribed drug offender (as defined), a forfeiture order is deemed to have been made; and
3.Pursuant to s 74, property is forfeited at the end of the relevant period (as defined) if a person is convicted of a serious offence and at the end of the relevant period, the property is covered by a restraining order that relates to the offence.
In each of the three instances, the court may make an order excluding property from forfeiture pursuant to s 58, s 59 or s 76.
The power to make a restraining order is contained in s 24 of the Act which provides:
(1)A court must, on application by the DPP, make an order (a restraining order) that specified property must not be disposed of or otherwise dealt with by any person (except in the manner and circumstances, if any, specified in the order) if satisfied that—
(a)     a person has been convicted of, or has been charged with, a serious offence, or it is proposed that the person be charged with a serious offence; or
(b)     a person is suspected on reasonable grounds of having committed a serious offence; or
(c)     there are reasonable grounds to suspect that the property is the proceeds of, or is an instrument of, a serious offence (whether or not the identity of the person who committed the offence is known); or
(d)     there are reasonable grounds to suspect that a person has committed a serious offence and has derived literary proceeds in relation to the offence.
(2)An application for an order under this section must specify the property to which the application relates.
(3)...
(4)Subject to subsections (5) and (5a) and Division 3, the court must specify in the restraining order all property specified in the application for the order.
(5)The court may only specify property in a restraining order made under subsection (1)(a), (b) or (d) or if satisfied that there are reasonable grounds to suspect that the property is—
(a)     in the case of a restraining order made under subsection (1)(a) or (b)—
(i)property of the suspect; or
(ii)property of another person (whether or not that other person's identity is known) that—
(A)is subject to the effective control of the suspect; or
(B)is proceeds of, or is an instrument of, the serious offence;
…
A person may apply to exclude property from a restraining order under ss 35 and 36 of the Act. Under s 34, the court may make an order excluding property from the restraining order. Section 34(1) relevantly provides that the court may exclude specified property from a restraining order where:
(a) An application is made under section 35 or 36; and
(b)    The court is satisfied that –
(i)The property is neither proceeds nor an instrument of unlawful activity; and
(ia)    -
(A)    if the suspect has been convicted of the serious offence to which the restraining order relates-
·the suspect has not become a prescribed drug offender as a result of the conviction; or
·The suspect has become a prescribed drug offender as a result of the conviction, but the property was not owned or subject to the effective control of the suspect on the conviction day of that offence or is property that should not be subject to the restraining order in accordance with section 24(5a).
The deemed forfeiture provisions are also relevant to these proceedings. Section 56A provides:
(1)Immediately on a person becoming a prescribed drug offender, a forfeiture order (a deemed forfeiture order) will be taken to have been made under Subdivision 1 by the convicting court.
(2)A deemed forfeiture order applies to all property owned by, or subject to the effective control of, the prescribed drug offender on the conviction day for the conviction offence other than the following:
(a) …
(b) Property that has been excluded from a restraining order under Part 3, Division 3.
Section 56B provides that:
A court may declare that particular property has been forfeited under this Subdivision if-
(a)The DPP applies to the court for the declaration; and
(b)The court is satisfied that the property is forfeited under this Subdivision.
Under ss 59 and 60(1) of the Act, a person may apply for an exclusion order where a forfeiture order specifies the property of that person.
In her application, Ms Dizon referred to the application for exclusion being made under s 76 by which property may be excluded from forfeiture under Division 2 of Part 4.
Under s 74:
(1)Property is forfeited to the Crown at the end of the relevant period if-
(a) A person is convicted of a serious offence; and
(b) either –
(i)at the end of the relevant period, the property is covered by a restraining order that relates to the offence; or
(ii)…
The relevant period is defined in s 74(6) as comprising the six-month period starting on the day of conviction or if an application has been made to exclude the property from the restraining order or forfeiture, until that application to exclude property from the restraining order or forfeiture is finally determined.[3]
[3] The Act (n1) s 75.
Section 76 provides only for limited circumstances in which an order excluding property from forfeiture under that Division will be made in the context of a prescribed drug offender. Section 76 will, in such a case, only operate to exclude protected property of the person (provided other criteria is established). Protected property is defined in s 3 as property that is of a class declared by regulation. The money that is the subject of these proceedings is not protected property.
Pursuant to s 220 of the Act, the DPP bears the onus of proving, on the balance of probabilities, the matters necessary to establish the grounds for making the order applied for. In this case, therefore, the DPP has the onus of establishing that there are grounds for the making of an order pursuant to s 56B.
Factual background and findings
The relevant factual background is contained in affidavit material filed by the DPP and Ms Dizon and evidence given by Mr Chau and Ms Dizon. The factual background is of relatively narrow compass. The evidence filed by the DPP related to matters necessary to prove the formal requirements for the making of a restraining order and a forfeiture order. There was no dispute as to those matters.
Mr Chau was the son of Ms Dizon. Mr Chau was the owner of the property at 17 Redward Avenue, Greenacres (the Greenacres Property), having purchased that property in November 2020. Mr Chau gave evidence that the purchase price was about $200,000 and he had paid a deposit of $40,000 with the remainder of the purchase price being funded by the Commonwealth Bank of Australia (the CBA), the mortgagee. The Greenacres Property has been vacant land at all times. There is no dispute about any of these matters.
The property at which Ms Dizon lived was 20 Brunel Drive, Modbury Heights (the Modbury Heights Property). That property was owned by Ms Dizon’s husband, Mr Rolando Dizon, but I am satisfied that Ms Dizon had an interest in that property. Ms Dizon said that she paid the mortgage for that property as her husband lived interstate. The Modbury Heights Property was sold on 13 August 2021 and on settlement the sum of $225,975.19 was paid into the St George bank account of Mr Dizon. Ms Dizon’s evidence was the account was held jointly with her husband. She said that the account was the home loan account and that she had access and authority to make transactions on the account. The settlement statement of the conveyancer is addressed to both Mr Dizon and Ms Dizon. The settlement statement and bank statement provide confirmation of these matters.
On 13 August 2021, Ms Dizon transferred to Mr Chau the sum of $57,000. She gave evidence that the money was transferred to Mr Chau for the purpose of assisting in the construction of a house on the Greenacres Property. She said that the money was loaned to and was to be repaid by Mr Chau. That money was transferred by Ms Dizon into the Bank SA account of Mr Chau. The notation “Tami” appears on the bank statement. On 26 August 2021, Mr Chau transferred that money into his account with the CBA in two tranches of $50,000 and $7,000 respectively. The notation on the bank statement of Bank SA records in relation to the transfer of the $50,000 “House dep Jayme chau”. The notation in respect of the $7,000 transfer records “House Jayme chau”. The CBA account of Mr Chau was the account from which his mortgage was paid. Mr Chau said that he transferred the money into his bank account with the CBA because that is where he had his home loan. He said that he paid his mortgage payments from his income as a barber. These transactions were evidenced by bank statements, and there is no dispute about them.
Ms Dizon gave evidence, both in affidavit and orally, that Mr Chau told her that he was short on the funds to build a house on the Greenacres Property and needed to borrow some money, $57,000, for that purpose. She said that she could loan him the money once she had sold the Modbury Heights Property and secured a new property for herself. She said that the loan was not in writing and there was no time frame for paying back the money. She said that there was no interest to be paid on the loan.
She gave evidence that she had a conversation with Mr Chau in which she said that if he did not repay the loan, she would place a caveat on the Greenacres Property. She gave evidence that Mr Chau acknowledged this statement during that conversation. She said that she had previously placed a caveat on her husband’s ex-wife’s property to enforce payment of a debt.
Ms Dizon said that she has eight children, one of whom has a disability and requires ongoing financial assistance. She was not in a position to make a gift of the money to Mr Chau. She said that he had not repaid the money.

Mr Chau gave evidence that he had a plan to borrow money to build a house on the Greenacres Property. He said that he borrowed money for that purpose from his mother, Ms Dizon, but had not got to the stage of borrowing the rest of the money from the bank. Mr Chau said that he intended to obtain the balance of the funds by way of a loan from the CBA. He said that he spoke to Ms Dizon in about July or August 2021 at which time she had not sold the Modbury Heights Property. He gave evidence that he asked her whether she would have any excess money from the sale of the property so that he could borrow it to build a house on the Greenacres Property. He said that Ms Dizon agreed to that proposal. He said that at this time they had not discussed a particular sum. The loan was not documented in writing. He said that there was no discussion about when the loan would be repaid other than it would be repaid if he sold the Greenacres Property. He said that there was no discussion about interest rates. Mr Chau gave evidence that Ms Dizon said that if he did not repay the loan, she would place a caveat on the property. He said that he had no problem with that.
Mr Chau was arrested on 5 September 2021 and charged with, inter alia, trafficking in a large commercial quantity of a controlled drug. He said that he therefore did not take any further steps to secure finance and construct the house on the Greenacres Property. No construction has taken place on that property. He said that he needed to save some more money before proceeding with the building of the house and that would have likely taken about three months. He confirmed that he had not repaid the $57,000 to Ms Dizon.
Mr Chau pleaded guilty to the charges on 4 March 2022 and was sentenced on 6 May 2022.
I make the following findings in relation to the monies advanced by Ms Dizon to Mr Chau.
First, Ms Dizon had some surplus funds from the sale of the Modbury Heights Property, settlement of which occurred on 13 August 2021. This was the evidence of Ms Dizon, which was not contested and is supported by the settlement statement prepared by the conveyancer for the sale of the Modbury Heights Property.
Secondly, on 13 August 2021, Ms Dizon transferred the sum of $57,000 from these surplus funds to Mr Chau which was deposited into his bank account with Bank SA. This was the uncontested evidence of Ms Dizon and Mr Chau and is supported by the bank statements.
Thirdly, on 26 August 2021, Mr Chau transferred that sum in two tranches of $50,000 and $7,000 respectively to his CBA account. There is a notation on the bank statement recording that the transactions were for a “house dep” or “house”. The CBA account was the account from which Mr Chau made his mortgage payments. The $57,000 was mixed with other funds held by Mr Chau in that account. This was the effect of the evidence of Mr Chau and the bank statements of his Bank SA and CBA accounts.
Fourthly, the advance from Ms Dizon to Mr Chau was for the purpose of assisting in the future costs of building a house on the Greenacres Property. The balance of the funds were to come from a loan from the CBA, although no steps had been taken to secure that loan. The actual cost of the construction had not been determined. That was the evidence of Mr Chau and Ms Dizon and is confirmed by the notation on the Bank SA account of Mr Chau. I do not consider that the fact that the notation refers to “house dep” in one instance is a reason to reject that conclusion. That notation supports the position that the loan was for a purpose connected with the house, even if it is not precisely accurate.
Fifthly, the sum of $57,000 was loaned by Ms Dizon to Mr Chau. Mr Chau and Ms Dizon gave evidence to this effect. The context in which the money was advanced supports this conclusion. Ms Dizon has eight children. One of her children has a disability and required additional financial assistance. Ms Dizon was not well off and was certainly not in a financial position to able to make similar payments to her other children. She was in a position, because of the sale of the Modbury Heights Property, to make the advance to Mr Chau. There was no reason why she would prefer Mr Chau to her other children by giving him such a sum of money and not giving similar amounts to the other children. It would be expected that Mr Chau and Ms Dizon would agree that he had to repay the money, particularly in circumstances where the money was to be used to build a house on Mr Chau’s property and it was contemplated that he would sell the property. Mr Chau was living at that time with his partner at another property. I do not consider that the fact that the money was advanced from an account of Ms Dizon’s husband is contrary to this conclusion. Even though the Modbury Heights Property and the bank account from which the $57,000 was paid were in the sole name of Ms Dizon’s husband, she was authorised to use the account and advance the $57,000. As husband and wife, they could be expected to have a joint interest in the property and the money. The settlement statement was addressed to both of them.
Sixthly, the loan agreement was entirely oral. There was no discussion about an interest rate or when the loan would be repaid. That was the evidence of Mr Chau and Ms Dizon. The informality of the loan is not a reason to conclude that the money was a gift and not a loan. The money was advanced in a family context where it was not unusual that such arrangements would not be documented. In the absence of any express term as to repayment, a term will be implied that repayment will be either on demand[4] or within a reasonable time or more likely, in the present case, once the building had been completed. It follows from these findings that I reject the submission of the DPP that the payment of the $57,000 from Ms Dizon to Mr Chau was a gift. The lack of formality, including the lack of writing, is not surprising in the context of a family arrangement.
[4] Zamia Investments Pty Ltd v Mesana Pty Ltd [2011] QCA 274, [33].
Seventhly, there was a statement by Ms Dizon that she would place a caveat on the Greenacres Property if the loan was not repaid. I accept the evidence of Ms Dizon on this matter. I accept her evidence that there was a previous occasion where she had placed a caveat on a property.
Procedural history
Following the arrest of Mr Chau on 5 September 2021, he was released on bail. He was charged on 30 November 2021 including for the offence of trafficking in a large commercial quantity of a controlled drug.
He pleaded guilty to all charges on 4 March 2022 and was sentenced on 6 May 2022.
On 18 October 2021, the DPP filed an originating application in which it sought orders, inter alia, restraining Mr Chau from disposing or dealing with specified property, including the money in the CBA account which had been seized and deposited into the Crown Solicitor’s Trust Account.
This Court granted a restraining order on 28 October 2021.
Ms Dizon, as an interested party, filed an application on 13 April 2022 pursuant to ss 36(1) and 76 of the Act seeking to exclude the property from the restraining order and forfeiture.
On 8 March 2023, the DPP filed an amended application in which it sought a further order that a declaration be granted pursuant to s 56B of the Act that the money that had been seized from the CBA account of Mr Chau and deposited into the Crown Solicitor’s Trust Account had been forfeited to the Crown on 4 March 2022 pursuant to s 56A of the Act.
It was accepted by the DPP that Ms Dizon had made the application within the time specified in the Act and no issue was taken as to the timing of the application.
Issues for determination
Pursuant to s 56A(1) of the Act, a forfeiture order is deemed to be made by the convicting court immediately on a person becoming a prescribed drug offender. Mr Chau was convicted on 4 March 2022 and the deemed forfeiture order operates from that date even though he was sentenced later. Section 56A(2) provides that the deemed forfeiture applies to all property owned by or subject to the effective control of the prescribed drug offender on the conviction day except, relevantly for present purposes, property that had been excluded from a restraining order.[5] Therefore, deemed forfeiture under s 56A only operates over property that is owned by or subject to the effective control of the prescribed drug offender on the conviction day.
[5] The Act, s 56A(2)(b).
The question that arises for determination is whether the $57,000 was owned by Mr Chau or whether it was under his effective control on 4 March 2022. The same question will arise in determining whether the Court should order that the $57,000 be excluded from the restraining order. Under s 34(1)(b)(ia)(A) of the Act, where a suspect has become a prescribed drug offender as a result of the conviction, but the property was not owned by or subject to his or her effective control on the conviction day, the Court may exclude that property provided further that the owner’s interest in the property was lawfully acquired and it was not contrary to the public interest for the property to be excluded from the order.
The Court will therefore not make a declaration under s 56B of the Act unless it is satisfied that Mr Chau either owned or was in effective control of the $57,000 that had been seized from his CBA account and deposited into the Crown Solicitor’s Trust Account. It would not make the order because under s 56A(2) the deemed forfeiture order would not operate over the property. It would also not make the order because the property would be excluded pursuant to s 34(1)(b)(ia)(A).
The same question arises if Ms Dizon applies for an exclusion from the forfeiture order pursuant to ss 59 and 60 of the Act. In that case, if the forfeiture specifies Ms Dizon’s property, there is a basis for an exclusion order. Pursuant to s 56A(3), the Act applies to a deemed forfeiture as if it were a forfeiture made under s 47(3)(a). If this route is taken, the relevant question is whether it is the property of Ms Dizon that has been forfeited. Ms Dizon must establish an equitable interest in the $57,000. However, because the DPP is seeking a declaration under s 56B, I consider that the onus is on it to establish that the $57,000 was owned by Mr Chau or under his effective control.
Ms Dizon also made an application that the $57,000 be excluded pursuant to s 76 of the Act. That is not the appropriate provision for exclusion in this case for two reasons. First, s 76(1) only applies to forfeiture that was made under this Division, that is Part 4, Division 2. The forfeiture order in this case was made under s 56A which is in Part 4, Division 1. Secondly, in the case of a prescribed drug offender, s 76(1) only excludes from forfeiture, property that is the protected property of the person (as defined in s 3).
In any event, s 74 of the Act, which is the source for forfeiture under Division 2, only operates if at the end of the relevant period (being the period when the application for exclusion is finally determined), the property is covered by a restraining order. This in turn raises the same question under s 34(1)(b)(ia)(A), namely whether the $57,000 was owned by Mr Chau or under his effective control.
Determination
Construction of s 56A
Ms Dizon submitted that s 56A must be read in light of s 56B and although s 56A contains a deemed forfeiting provision, the property is not legally forfeited until there is a declaration made under s 56B. I do not accept that submission. The express terms of s 56A provide that forfeiture is taken to have been made immediately on a person becoming a prescribed drug offender which occurs on the conviction day. That was the effect of the decision in Hall v Director of PublicProsecutions[6] where the Court held that a person was convicted on the day upon which the trial judge accepts and proceeds on the jury’s guilty verdict or a defendant’s plea of guilty. Section 5 of the Act also mandates that approach. The property is then automatically forfeited on that day (or automatically at the end of the extended period provided for by ss 74 and 75, in cases where forfeiture is made under s 74).[7] Section 56B does not interfere or delay that process. Section 56B is facilitative. There may be a dispute as to what property was forfeited under s 56A, as there is in the present case. It is only property of the convicted prescribed drug offender or property that is under his or her effective control that is forfeited. Where there is a dispute, the court will have to determine what property, if any, has been forfeited and it will be appropriate in such a case that the DPP seeks a declaration under s 56B.
[6] (2015) 122 SASR 12; [2015] SASCFC 19.
[7] Ibid, [25], [28]. See also Director of Public Prosecutions v George (2008) 102 SASR 246, [44]; [2008] SASC 330.
Ms Dizon submits that she is the equitable owner or has an equitable interest in the $57,000, such that this money is not owned by Mr Chau or under his effective control for the purposes of forfeiture under s 56A(2) or for the purposes of determining whether the property should be excluded from a restraining order under s 34(1)(b)(ia)(A). Ms Dizon has contended that she has an equitable interest in the $57,000 because of:
1.   An equitable charge or equitable mortgage arising out of her right to place a caveat over the property of Mr Chau;
2.   A resulting trust;
3.   A Quistclose trust.
In the absence of finding that an equitable interest in the property was created or declared, the evidence establishes that Mr Chau was the owner of the $57,000. The money was in his bank account and moved by him from one account to the other. Until an equitable interest is created, the owner is regarded as the legal owner of an undivided interest.[8] In Commissioner of Stamp Duties v Livingstone,[9] the Privy Council held:
When the whole right of the property is in a person, as it is in an executor, there is no need to distinguish between the legal and equitable interest in that property, any more than there is for the property of a full beneficial owner…Equity in fact calls into existence and protects equitable rights and interests in property only where their recognition has been found to be required in order to give effect to its doctrines.
Ownership and effective control
[8] S Hepburn “Principles of Equity and Trusts”, The Federation Press, 6^th ed 2020, [4.2].
[9] [1965] AC 694, 697; [1964] 3 All ER 692.
Before considering the question of ownership and effective control, there is an antecedent question, namely whether the fact that a third party might have an equitable interest in property is sufficient to conclude that the prescribed drug offender or the offender is not the owner of the property.
“Owner” or “owned” is not defined in the Act. “Property” is defined in s 3 as including an interest in property, and in turn, an “interest” is defined as including “a legal or equitable estate or interest in the property or thing”.
Words such as “owned” will take their meaning from the context in which they appear. A person who is beneficially entitled to land may properly be recognised as the owner of the land.[10] Ownership carries with it the right to exercise all rights that are capable of being exercised with respect to that property including the right to possession of the property and the right to sale.[11] The purpose of the Act, as evident from its long title, is to provide for the confiscation of property belonging to certain drug offenders as additional punishment. It is not to punish third parties who might have beneficial ownership of the property in question. The structure of the Act is to recognise and protect the interests of third parties. In these circumstances, if Ms Dizon is the beneficial owner of the $57,000 because the money was held on either a resulting trust or a Quistclose trust for her, then I consider that she was the owner of the property such that it could not be said that Mr Chau was (in those circumstances) the owner for the purposes of s 56A or s 34(1)(b)(ia)(A). This was the conclusion reached by Judge Dart in The Director of Public Prosecutions v Vitale,[12] where His Honour held:
A right to an equitable mortgage is a property right. The DPP says it can be forfeited by operation of the Act, with no right to compensation. The wording of the Act would need to express that intention with great clarity for that to be the position.
[10] Austin v Sheldon [1974] 2 NSWLR 661, 670-671.
[11] Gatward v Alley (1940) 40 SR (NSW) 174, 178; Palette Shoes Pty Ltd v Krohn (1937) 58 CLR 1.
[12] [2020] SADC 55, [23]. Approved by Parker J in Director of Public Prosecutions v CRD [2022] SASC 36, [73].
The situation may be different in relation to any right accruing to Ms Dizon as a result of having the right to place a caveat over the Greenacres Property of Mr Chau. The right to lodge a caveat over real property may, in some circumstances, give rise to an equitable charge over that property. An equitable charge however is not equivalent to ownership, even equitable ownership. In these circumstances, Ms Dizon’s remedy would be to make an application under s 80 of the Act for an order under s 78 that the interest held by Ms Dizon be transferred to her or that an amount equivalent to the value of that interest be paid by the Crown to her.
It follows from the above analysis, that if the $57,000 was held on a resulting or Quistclose trust for Ms Dizon, then Mr Chau would not be the owner of that money for the purposes of the Act. Ms Dizon would be entitled to the exclusion order (there being no issue that the money was lawfully acquired by Ms Dizon, nor any submission or contention that it was not in the public interest to make an order) and I would not make the declaration sought by the DPP under s 56B.
Under s 56A, a deemed forfeiture order will also apply to property that was subject to the effective control of the prescribed drug offender, that is, Mr Chau. Section 6 of the Act does not define “effective control” but sets out the principles that the court is to apply when determining whether property is subject to the effective control of a person. Section 6 relevantly provides:
(1)For the purposes of this Act, the following principles apply when determining whether property is subject to the effective controlof a person:
(a)     Property may be subject to the effective control of a person whether or not the person has an interest in the property;
(b)     property that is held on trust for the ultimate benefit of a person is taken to be under the effective control of the person;
(c)     …
(d)     …
(e)     property may be subject to the effective control of a person even if one or more other persons have joint control of the property.
(2)In determining whether or not property is subject to the effective control of a person, regard may be had to—
(a)     shareholdings in, debentures over or directorships of a company that has an interest (whether direct or indirect) in the property; and
(b)      a trust that has a relationship to the property; and
(c)     family, domestic and business relationships between persons having an interest in the property, or in companies of the kind referred to in paragraph (a) or trusts of the kind referred to in paragraph (b), and other persons.’
The High Court in New Zealand in the Solicitor-General v Bartlett[13] considered the phrase “effective control” in the context of confiscation of the proceeds of crime and held:
These [referring to R v Walsh[14] and Connell v Lavender[15]] cases support the proposition that, when considering the issue of tracing the proceeds of crime, the court is entitled to consider the real, de facto position of the respondent in relation to the property. The intent is that the respondent should not profit from his crime purely because of the legal structure by which he chooses to organise his assets. In order to determine whether the respondent had effective control of the property, the court must ask whether in fact the respondent had the capacity to control, use, dispose of or otherwise treat the property as his own.
[13] [2008] 1 NZLR 87, [27]; Approved in the Director of Public Prosecutions (DPP) v Mouroufas [2010] SADC 91, [15], (‘Mouroufas’).
[14] [1990] WAR 25.
[15] (1991) 7 WAR 9.

The above decisions in Bartlett and DPP v Walsh and Connell v Lavender were followed by Riley J of the Northern Territory Supreme Court in DPP v Green[16] where it was held that where a respondent was not able to dispose of the property, charge it, develop it or otherwise use it in such a manner as to treat it as his own, he was not in effective control of the property.
[16] Supreme Court of the Northern Territory, unreported no 82 of 2008. Referred to in the Mouroufas, (n9), [16].
These criteria suggest that if there is a trust over the $57,000, Mr Chau was not able to dispose of the money, charge it or otherwise use it as his own and therefore was not in effective control of the money. That conclusion is supported by the terms of s 6(1)(b) of the Act which states that property held on trust for the ultimate benefit of a person is taken to be subject to the effective control of the person. That suggests the converse is true also: that where beneficial ownership is vested in a particular person, the property is not in the effective control of some other person, in this case, Mr Chau. Such a conclusion accords with the purpose of the Act, namely, to expand upon the formal legal position and capture assets in respect of which the prescribed drug offender demonstrates the characteristics of ownership, despite not holding any legal or beneficial title to the asset.
The position in respect of the equitable charge is different in that Mr Chau retains the right to deal with the Greenacres Property. It follows that Mr Chau was in effective control of that property on conviction day for the purposes of s 56A.
Although I have found that if Ms Dizon had an equitable charge over the Greenacres Property, Mr Chau would remain the owner of the $57,000 and it was under his effective control on conviction day, I will proceed to also consider whether Ms Dizon can establish that she in fact held an equitable charge.
Equitable Charge or Equitable Mortgage
The claim by Ms Dizon that she has an equitable charge over the Greenacres Property and that will operate to prevent forfeiture of the $57,000 and/or provide the basis for an exclusion order fails for four reasons.
First, the equitable charge could only operate in respect of the Greenacres Property. It gives a right to seek an order for the sale of that property. It does not give any right in relation to the $57,000. As Peter Gibson J in Carreras Rothmans Ltd v Freeman Mathews Treasure Ltd[17] held:
The type of charge which it is said was created is an equitable charge. Such a charge is created by an appropriation of specific property to the discharge of some debt or other obligation without there being any change in ownership either at law or in equity and it confers on the chargee rights to apply to the court for an order for sale or the appointment of a receiver, but no right of foreclosure.
[17] [1985] Ch 207 at 227; [1985] 1 ALL ER 155; See also National Provincial & Union Bank of England Ltd v Charnley [1924] 1 KB 431 at 449-450; Crampton v French [1996] ANZ ConvR 156; O’Day v Commercial Bank of Australia Ltd (1933) 50 CLR 200.
Secondly, s 29(1)(a) of the Law of Property Act 1936 (SA) provides that no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by his agent thereunto lawfully authorised in writing, or by will, or by operation of law. In the present case, there is no writing. The alleged equitable charge could only arise through the oral conversation between Ms Dizon and Mr Chau about the placing of the caveat. That is not sufficient. There is no act of part performance that could avoid the operation of s 29(1)(a) as payment has been held to be an equivocal act that is not referrable by itself to the existence of an agreement.
Thirdly, an equitable charge arises out of an agreement between the parties. No specific words are required to create an equitable charge, but the court must be able to objectively ascertain that the intention of the parties was that the property should constitute a security for the debt or other obligation.[18] The granting of an authority to lodge a caveat, by itself, is not sufficient to evidence an intention of the parties that the property be appropriated for security for the repayment of a debt. Bryson AJ held in Taleb v National Australia Bank Ltd[19] referred to the following statement by Young CJ in Eq in Iaconis v Lazar:[20]
[61]The circumstances that there was a debt and that there is to be a caveat, together with the nature of the caveat, certainly direct attention to whether it was intended that the debt should be protected by a charge or some other interest. It is quite likely that there was some such intention in the mind of one party or of both, but if that intention is not found expressed or by implication in their document there is no equitable interest. Authorisation to lodge a caveat does not create by necessary implication the conclusion that there must have been an intention to create an equitable interest, and that there must have been the further intention that that interest should be a charge over the property.
[18] Cradock v Scottish Provident Institution (1893) 69 LT 380 at 382; Champion Homes Sales Pty Ltd JKAM Investments Pty Ltd, Hotray Pty Ltd v JKAM Investments [2014] NSWSC 952, [70]-[71].
[19] (2011) 82 NSWLR 489, [59]-[61].
[20] (2007) 13 BPR 24, 937.
Robb J in Complex Scaffolding Solutions Pty Ltd v Doueihi[21] summarised the position as follows:
[W]here the only right given to the creditor is to lodge a caveat, it might be difficult to determine whether the parties intended the lender to have a charge over the relevant property. A mere right to lodge a caveat, without more, should not give the creditor a charge: see Taleb v National Australia Bank, Coleman v Bone and Iaconis v Laza However, it may be, when all of the circumstances are considered, and the relevant term is construed in its context, the court should find by implication that the parties intended that the creditor would be entitled to a charge: see Murphy v Wright. Where the relevant term uses words such as 'charge' and 'mortgage' the conclusion that the term was intended to create a security in favour of the lender may be relatively easy to reach. [citations omitted].
[21] [2014] NSWSC 230, [30].
Fourthly, under the terms of the discussion between Ms Dizon and Mr Chau, Ms Dizon would only have the right to lodge a caveat in the event that Mr Chau did not repay the money. That would mean that an equitable charge was not created until that time. The equitable charge was not in existence on conviction day for the purposes of s 56A. Mr Chau could not have an equitable interest in the Greenacres Property as of that date.
Counsel for Ms Dizon in his closing submissions made reference to the oral agreement to advance the $57,000 as creating an equitable mortgage. That will fail for the same reasons as stated above but for the additional reason that the mere right to lodge a caveat could not give rise to an equitable mortgage, as it does not demonstrate a binding intention to create a security in favour of the mortgagee.[22] Further, under s 26 of the Law of Property Act no action can be brought upon any contract for the disposition of land or an interest in land unless in writing. There is no writing or act of part performance in the present case.
Resulting Trust
[22] Swiss Bank Corp v Lloyds Bank Ltd [1982] AC 584, 594-5.
Ms Dizon has contended that the $57,000 is held by Mr Chau on a resulting trust in her favour. She has submitted that the resulting trust arises because she advanced the money to Mr Chau for the purpose of Mr Chau using that money, in conjunction with further moneys that he intended to borrow from the CBA, for the purpose of constructing a house on the Greenacres Property. That purpose failed because Mr Chau was arrested and the construction did not proceed. The $57,000 remained with Mr Chau until it was seized by the police and deposited into the trust account of the Crown solicitor. Ms Dizon has not been repaid.
Relevantly, for the argument of Ms Dizon, there is a presumption of a resulting trust in the following circumstances:[23]
Where A makes a voluntary payment to B or pays (wholly or in part) of the purchase of property which is vested either in B alone or in the joint names of A and B, there is a presumption that A did not intend to make a gift to B; the money or property is held on trust for A (if he is the sole provider of the money) or in the case of joint purchase by A and B in shares proportionate to their contributions. It is important to stress that this is only a presumption which presumption is easily rebutted by either by the counter presumption of advancement or direct evidence of A’s intention to make an outright transfer …
[23] Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669, 708; [1996] 2 All ER 961.
It is the voluntary payment that may trigger the presumption of a resulting trust.[24] A payment is voluntary if there was no valuable or good consideration.[25] There has been no voluntary payment in the present circumstances where the payment by Ms Dizon to Mr Chau of the $57,000 was by way of loan and was not a voluntary payment. That was the evidence of both Ms Dizon and Mr Chau and I made a finding to that effect. The presumption of a resulting trust cannot apply if in substance, the payment amounted to a loan or a debt.[26] Alternatively, a presumption of a resulting trust can be rebutted where it is established that the transferor either intended to lend or give the property. In those circumstances, a resulting trust cannot arise.[27]
Quistclose trust
[24] Wirth v Wirth (1956) 98 CLR 228, 236; [1956] HCA 7; Nelson v Nelson (1995) 184 CLR 583, 600; Calverley v Green (1984) 155 CLR 242, 249; [1984] HCA 81.
[25] Voukidis v C & O Voukidis Pty Ltd (in liq) [2018] VSC 267, [284]; House v Caffym [1922] VLR 67, 79-80.
[26] Hancock Family Memorial Foundation Ltd v Porteous (2000) 22 WAR 193, [56]; [1999] WASC 55.
[27] S Hepburn “Principles of Equity and Trusts” The Federation Press 6^th ed, 2020, [37.3.1]; See J Glister “Is there a Presumption of Advancement” (2011) 33(1) Syd LR 39.
Ms Dizon also contends that she holds an equitable interest in the $57,000 by reason of a Quistclose trust that operates in her favour. Again, that contention relies upon Ms Dizon advancing the money for the purpose of Mr Chau using it in the construction of a house on the Greenacres Property and that purpose failed.
The theoretical basis of the Quistclose Trust, as explained by Lord Wilberforce in Barclays Bank Ltd v Quistclose Investments Ltd,[28] was the existence of a primary trust that the money that was advanced would be applied for the purpose that had been identified and then a secondary trust that was implied that if the primary trust could not be carried out, the money would be repaid to the lender. Lord Wilberforce held:[29]
There is surely no difficulty in recognising the co-existence in one transaction of legal and equitable rights and remedies: when the money is advanced, the lender acquires an equitable right to see that it is applied for the primary designated purpose (see In re Rogers, 8 Morr. 243 where both Lindley L.J. and Kay L.J. recognised this): when the purpose has been carried out (i.e., the debt paid) the lender has his remedy against the borrower in debt: if the primary purpose cannot be carried out, the question arises if a secondary purpose (i.e., repayment to the lender) has been agreed, expressly or by implication: if it has, the remedies of equity may be invoked to give effect to it, if it has not (and the money is intended to fall within the general fund of the debtor's assets) then there is the appropriate remedy for recovery of a loan. I can appreciate no reason why the flexible interplay of law and equity cannot let in these practical arrangements, and other variations if desired: it would be to the discredit of both systems if they could not. In the present case the intention to create a secondary trust for the benefit of the lender, to arise if the primary trust, to pay the dividend, could not be carried out, is clear and I can find no reason why the law should not give effect to it.
[28] [1970] AC 567, 581-592.
[29] Ibid.
Australian authorities have not adopted this two trust approach and have adopted a single express trust approach. Thus in Australasian Conference Association Ltd v Mainline Constructions Pty Ltd (in liq),[30] Gibbs CJ held:
Where money is advanced by A to B, with the mutual intention that it should not become the assets of B, but should be used exclusively for a specific purpose there will be implied a stipulation that if the purpose fails the money will be repaid, and the arrangement will give rise to a relationship of a fiduciary character, or trust ...
[30] (1978) 141 CLR 335, 353.
The mere presence of an intention to lend money for a purpose is not sufficient to establish a trust.[31] There must be a mutual intention that the moneys be used exclusively for that purpose or repaid on the failure of that purpose.[32] Thus, in Ausintel Investments Australia Pty Ltd v Lam,[33] Meagher JA held:
Here there was no agreement, express or implied, as to how the money should be treated if no allotment of shares took place; nor, more importantly, was there any evidence of a mutual intention that the moneys should not become part of the appellant’s general funds.
[31] Coolbrew Pty Ltd v Westpac Banking Corp [2014] NSWSC 1108, [57].
[32] Compass Resources Ltd v Sherman (2010) 42 WAR 1, 10-11; Legal Services Commissioner v Brereton (2011) 33 VR 126, 150-151; [2011] VSCA 241.
[33] (1990) 19 NSWLR 637, 647-648.
The failure to pay moneys into a separate bank account will usually be fatal to a claim for a Quistclose trust.[34] In Gliderol International Pty Ltd v Hall,[35] Nyland J held:
Further, in my view three things tell against the existence of a Quistclose trust in this case. First, the moneys were paid into the company’s account, and not into a separate account. This is an important factor tending to suggest that a Quistclose trust was not intended: Re Australian Elizabethan Theatre Trust at 499 [(1991) 30 FCR 491, 499)] per Gummow J.
[34] Taleb v Director of Public Prosecutions [2014] VSC 285; McManus RE Pty Ltd v Ward (2009) 74 NSWLR 663; [2009] NSWSC 440.
[35] (2001) 80 SASR 541, 549; [2001] SASC 355.
In the present case, the moneys were paid into the Bank SA account of Mr Chau. He gave evidence that this was just another account and that he had multiple accounts. It was then transferred into his CBA account because “that’s where my home loan’s with”. The mortgage repayments were deducted from this account. The bank statement that was in evidence reveals that there were other transactions on this account. There was approximately a further $21,000 in that account.
There is no evidence other than the oral discussion as to the purpose of the advance (and the notation to that effect on the bank statement) that the mutual intention of the parties was that the money would be used exclusively for that purpose and were to be repaid on the failure of that purpose. The monies were paid into a general account where it could be expected that they would be mingled with other funds.
For these reasons, the contention of Ms Dizon that she is the beneficial owner of the $57,000 on the basis of a Quistclose trust fails.
Conclusion
Ms Dizon is not the beneficial owner and does not have a beneficial interest in the $57,000 that was seized from Mr Chau and deposited into the trust account of the Crown Solicitor. It follows that the DPP has established as at the conviction day of Mr Chau, that Mr Chau was the owner of the $57,000. Therefore, I am satisfied that there has been a deemed forfeiture of that sum pursuant to s 56A of the Act. The DPP is therefore entitled to a declaration pursuant to s 56B that the money has been forfeited. Ms Dizon is not entitled to an order pursuant to either ss 34, 59, or 74 excluding the $57,000 either from a forfeiture order or a restraining order.